James Kirkup

James Kirkup is Director of the London-based Social Market Foundation


Kicking off our series, The Year Nothing Changed, James Kirkup looks at how Theresa May could have responded to voter concerns over the past year. 

 

Political analysis should make more use of the counterfactual. Asking “What If” isn’t just about intellectual entertainment, it allows the useful re-examination of political decisions and the consequences. The Government of Theresa May is ripe for that examination, as ministers are lost and local elections loom, because things really didn’t have to be this way.

The Prime Minister is doing her best to play a very bad hand of cards, but this is a hand she dealt herself. Perhaps if she’d done things differently over the past year, that hand would contain rather more aces today.

1. Brexit for all

The first lesson Mrs May should have drawn from the 2017 election is that there was no absolute electoral endorsement for the sort of Brexit she had proposed before the poll.  Having called the election to request a mandate for a Brexit that takes Britain out of the single market and customs union, she should have accepted that her failure to win a majority – and the relative success of a Labour Party whose Brexit stance was deliberately ambiguous – meant that the “will of the people” was unclear and possibly contradictory.

National leadership, therefore, lay in uniting moderate Remainers and moderate Leavers around a Brexit that did end our EU membership but retained membership of the Single Market. To do that, she could have made a “big, open offer” to Labour centrists: accept that Brexit must indeed happen, and in exchange you can take seats on Cabinet committees overseeing Brexit strategy, with the aim of an EFTA-style deal.

May is fully aware of the need to compromise over Brexit, and willing to call the bluff of the Tory Leavers
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That would have meant clashes with some Tory Leavers, but the row would have been less violent than you might think; although people now choose to forget it, many of those Leavers did once support EFTA or something similar.

To be fair to Mrs May, her record over the past year suggests that she is fully aware of the need to compromise over Brexit, and willing to call the bluff of the Tory Leavers: she has successfully tiptoed over their “red lines” on the EU budget, transition and the ECJ, and may yet repeat the trick over the Customs Union. But politically, socially and economically, Britain would be happier if she’d been bolder about the need for compromise.

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 2. Immigration reset

But wouldn’t EFTA mean free movement continued? Yes, although there is, and always was, more scope for national restrictions on the movement of EU nationals than is often recognised in the UK.

Politically, though, Mrs May could have seized the moment to start a new national conversation about immigration, seeking a new tone and a far more pragmatic approach that accepted the commercial, fiscal and social advantages that come from openness. Public opinion would have been favourable to an immigration reset: polls show public anxiety about immigration has been waning since the referendum in 2016.

If she’d throttled back on immigration, Mrs May might have pre-empted the Windrush scandal, or at least taken the sting out of it
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Mrs May, having built a reputation as an immigration hardliner, had a big reserve of political capital and credibility to spend on such a reset: who could question her commitment to listening to voters unhappy about the issue? She was perfectly placed to make another big, open offer to embrace EU nationals and other migrants, welcoming them into a new, 21st Century idea of Britishness.

And if she’d throttled back on her hostility earlier, she might have pre-empted the Windrush scandal, or at least taken the sting out of it. Today she’s being forced to move by public opinion, but she could have moved first, leading not following on immigration.

The immigration dilemma
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 3. A real social mobility plan

But what about the concerns of working-class voters, who tend to be more worried about immigration than their wealthier neighbours? This is where Mrs May should have followed through on the “burning injustices” agenda she set out in Downing Street in 2016, with a real focus on social mobility.

Instead of leaving this issue to the Department for Education, which naturally focuses on schools, she should have taken personal charge of the social mobility strategy from No 10, driving action not just in the education system but on economic policy, transport and local government. She could have even addressed wider cultural issues, confronting systemic prejudice against white-working class kids and asking awkward questions about the quality of parenting different children receive.

The PM should have taken personal charge of the social mobility strategy from No 10
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She should also have been bolder on the education front, delivering the sweeping “parity review” of post-18 education funding her manifesto promised, in order to send a message that the people who don’t go to university matter as much as the people who do.   Revisiting the tax status of private schools – also signalled in that manifesto – would have been symbolically important too. And instead of driving Alan Milburn of the Social Mobility Commission to resign in despair at inaction, Mrs May should have offered him a crossbench peerage and an office in Downing Street to make it all happen.

Where's the social mobility plan?
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4. A stakeholder economy

If a real social mobility strategy could have helped poor kids do better in the education system and the labour market, a real industrial strategy would have done more to ensure there were more good jobs for them to compete for, especially in the places where they grow up and might want to remain as adults. Social mobility shouldn’t have to mean geographical mobility and Mrs May could have done more to deliver an industrial strategy which would encourage business to develop outside London and the South East.

Social mobility shouldn’t have to mean geographical mobility
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Part of that encouragement could have been delivered via meaningful reform on corporate governance, ensuring that executives had a strong legal duty to consider stakeholder interests including regional development when running their firms. Slaying the dragon of “shareholder value above all” would have allowed the corporate cash currently earmarked for dividends and buybacks to be used investing in productive capacity and higher-wage jobs around the UK. And new rules on ownership could have given the people doing those jobs a better chance to own a stake in the company they work for.

Buyback greed
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 5. Borrow and build

Having embarked on a real rebalancing of the UK economy, Mrs May could have backed up that agenda with real public spending on infrastructure, including a substantial programme of public housebuilding. That would have required explicitly changing the Government’s fiscal targets, committing to run a primary surplus not an absolute one.

This is hardly revolutionary stuff: Sir Jeremy Heywood, the Cabinet Secretary, is among those said to have advocated this change in the last year; it is also supported by forward-thinking Tories such as Nick Boles. It would have required Mrs May to call the gilt markets’ bluff, but her reward would have been the scope to spend billions more building a new, fairer economy that would, in time, have delivered higher wages and a more sustainable distribution of wealth.

Further reading
Home Truths – Part III: The nine drivers of a broken market

By Liam Halligan