The liberal consensus has been broken. A new group of voters, who have not been well-served by liberal policy approaches, are now a crucial part of the Conservative electorate. There is no Conservative majority without them.
But will the party adjust its offer accordingly? Or will it pretend that their new voters were magically converted after 40 years to the cause of unadulterated neo-liberalism, lower taxes, deregulation and zero investment in their neighbourhoods?
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So far, and despite the anguished words of Thatcherite commentators, Number Ten has played a very smart game.
We’ve had a massive infrastructure commitment – HS2 — which will hugely enhance the capacity and connectivity of the North. There’s the very sensible immigration policy that limits the supply of wage-killing cheap labour while keeping the UK open to the high skilled workers that we need. There are signs that the ‘Green Book’ Treasury rules for public investment will be overhauled to address their bias to London and the South East. A serious, though sadly failed, attempt was made to save FlyBe — which at least indicates a willingness to intervene on behalf of regional economies. And if the Treasury is no longer the home of orthodox austerity, then that too is to be warmly welcomed.
So reasons to be hopeful.
And yet the challenges are enormous. To make a real difference to their new voters’ lives, the Government needs to act on an unprecedented constructive scale. This runs counter to Conservative sensibilities – especially the abiding faith that the market will provide. But the evidence of market failure in the last 50 years is all around us — in the regional and structural inequality of our country.
So what should a reforming, radical, Red Tory government actually do about it? Here are ten policy areas and the changes we need to see:
1. Think local
If place is the biggest penalty that the working classes pay, then place is where we must begin. We desperately need competent, driven local authorities that have the power, depth and range to decisively transform the places they are the stewards of. Unfortunately, at present we have fractured and dispersed control between different levels of local Government, Local Enterprise Partnerships (LEPs), Police Forces, health bodies, etc. So we need to abolish as many local quangos as possible and fold them into a unitarised powerful system of local government.
These single tier authorities should be empowered to be wholly transformational. For instance, by giving them control over things like Job Centre Plus — reforming it around the needs of the local labour market, and by embracing regional tax raising powers after all we have conceded varying income and corporation tax to Scotland and corporation tax to Northern Ireland and more people live in the North than in either of those nations combined.
Robert Jenrick is one of the most gifted ministers in the Government, but the department he has recently inherited (Housing, Communities and Local Government) hasn’t had visionary or ambitious leadership since Greg Clark left in 2016. Ministers have basically sat on the devolution agenda for the last four years, delivering proxy versions of the Manchester deal.
We need a Minister who can advance this at the scale it requires. No more small amounts of money distributed through endless competitive tenders to negligible effect please – aggregate large amounts to cities and counties if they can raise their game and come up with credible, yet ambitious, plans to transform their communities.
2. Level up health outcomes
The 10-year plan for the NHS recognises that chronic conditions in an aging population account for the vast majority of the huge upsurge in A & E attendance. Nationally, Accident and Emergency visits are up 22% over the last nine years. That’s almost 24 million attendances.
Yet nobody has pointed out the obvious: the NHS can only do so much about the long-term health conditions driving these admissions, like obesity, dementia or diabetes. The NHS remains an acute service that struggles to help anyone outside of a hospital ward.
Given that ‘a boy born today in the most deprived area of England can expect to live about 19 fewer years in good health and die nine years earlier than a boy born into the least deprived area.’ We need a new localised health institution that genuinely tackle such a pernicious inequality.
Understanding of public and total population health has increased so has an appreciation of the factors that decisively influence these outcomes. Economic growth is the most important of these, but things like education, air quality, housing, infrastructure and civil society are also decisive.
So, if the NHS is not, and never has been, in a position to deal with these issues at their root, who is — or ought to be? The obvious answer is the local state. Properly figured it, not the NHS is the body for public health in the 21stcentury.
Any genuine shift to preventative health care requires a new partnership between the NHS and properly empowered local authorities. If we want to tackle the place-based factors driving unequal health outcomes, then it’s time to devolve centralised health powers to these new institutions.
3. Repurpose our universities
Education is one of the great divides – broadly speaking the ‘anywheres’ get a lot out of the current system and the ‘somewheres’ not nearly enough. The revolution we need in education is not just to distribute it more fairly, but also more appropriately, meeting a wider range of needs. As things stand, employers in the UK invest under half the EU average in continuous training, and investment per person has fallen 14% in real terms since 2007.
Given the impact of technological and other forms of change on the jobs market, life-long learning has to become the norm for the whole population. Enabling the acquisition of new skills means stimulating demand and supply at the same time. At ResPublica, we’ve proposed a compulsory educational contributions scheme paid into by employers, Government and workers that would create the demand.
But who should provide the supply? Further Education, even when it was properly funded, was poorly done. We need to repurpose our universities, so that high-level, short course training is available in every local economy. And we need local authorities to be able to shape those courses to the present and future needs of resident industry.
4. Create the MIT of the North
In 2015, ResPublica called for the creation of a world-leading applied tech university in the North of England — an equal to MIT (Massachusetts Institute of Technology).
I’d initially considered the idea that Oxford and Cambridge might found a shared Northern campus called Oxbridge (Francois Mitterrand did something like this with the grandes écoles in France). However, the evidence suggests that applied tech is what really drives University-led renewal of regions – so the MIT of the North was born.
We had initial interest from the newly elected Government before it was watered down into something that won’t make any difference at all – a heightened degree of collaboration between existing players. This I fear might be the fate of too many of the Johnson grands projets. It’s the big initiatives that can shift the dial.
As I have argued before on UnHerd, our regions don’t only suffer from missing infrastructure, but also from missing people. To prosper, regional economies need to attract and retain the most talented people. Universities are one of the best ways to pull them in — especially when excellence in teaching and research can be translated into highly innovative locally-based enterprise.
5. Invest in joined-up infrastructure
Infrastructure investment can make all the difference, but by its very nature its value is maximised when it joins up with other investments. However, we lack the mechanisms to finance the whole place upgrades that can really turn around a local economy.
Funding a new school here, a new bridge there etc is better than nothing, but also a missed opportunity. There are scores of projects in a city region like Greater Manchester that could generate a decent return, so instead of choosing between them why not do the lot?
If we fund everything in an area that would produce a return of say £5 for every £1 invested we could risk pool all the projects in one single offer, the cost of capital would fall as would the cost of delivery— especially in a global economy with a savings glut and shortage of investment opportunities.
There is no reason we can’t do ‘whole place’ public-private joint ventures that minimise risk, maximise public return and crucially deliver at scale.
6. Relocation relocation relocation
This is a huge agenda, which should include reforms like shifting the tax burden from income to wealth, but I’m going to focus on how we might shift private sector investment out of London and into the rest of the country.
Levelling up isn’t just about how government spends it money — we need change business incentives too. Let’s start with generous tax relief on the expenses of relocation, plus long ‘holidays’ from business rates. The creation of quality jobs where they’re needed most should also be rewarded by the tax system (as opposed to across-the-board cuts in corporation tax). So that business investing outside London can get lower rates of corporate tax.
The same goes for productivity boosting capital investment by offering the most advantageous tax relief possible for that redirection of capital into areas starved of significant investment. Obviously, none of this is consistent with the principle of ‘tax neutrality’ — but I’d rather have a more balanced economy and a fairer country than a neutral tax system.
And while we are talking about relocation – the public sector should lead the way. The hard-fought struggle to get Channel 4 out of London should establish a norm for all publicly-funded cultural organisations.
That injunction should apply to any publicly founded body. Whole swathes of Whitehall itself, like the great departments
7. Stop penalising the family
The family is the great ‘unthought’ of modern Conservatism – so consumed it has been by extreme individualism. This can’t be excused as a reluctance to tell people how to live their lives. In fact, we actively penalise family life. Single people without family responsibilities in the UK pay 8% less tax than the OECD average, while single-earner married couples with two children pay 26% more.
The system is especially unfavourable to single earner families just below the average wage. These are the JAMs — the ’just about managing’ and we make their lives much more difficult than they have to be, they pay pernicious marginal tax rates on their income sometimes keeping just 30 pence in the pound of what they earn, if there on housing support its less than 10p.
Only the upper middle class can do what most mothers (and it usually is the mothers) want to do which is stay at home longer to look after their children. A good way to ameliorate some of this would be to make tax allowances fully transferable for parents. And then set out to equalise the pernicious treatment of families under the UK tax system.
8. Home ownership for everyone
Red Tories believe in making markets work for the many not just the few. But you can’t have capitalism for all if most people don’t have capital.
Economically and socially, we suffer from a chronic asset deficit, which Conservatives have ignored for too long. For far too many people, especially the young, wealth is no longer attainable by hard work and prudent saving.
Instead we see a re-feudalisation of society, the division of our country between owners and renters and the permanent subjugation of those who rent to those who own. The leftwing economist Thomas Piketty has warned that the returns from the ownership of capital will, without state intervention, outstrip the rest of the economy (including wages). In the UK we’re proving him right: wealth is growing faster than income and is twice as unequal in its distribution.
We must spread asset ownership more evenly, but how? Compulsory enrolment in pensions has helped, mutualism seems incapable of making a difference, but what else to do? Working within the grain of the British psyche, mass home ownership has to be a big part of the answer.
ResPublica advocates a National Housing Fund that would function as a guaranteed buyer of homes built to rent for ten years. After this period, we could start selling a third of those houses to their original tenants at the value they were when originally rented – thus distributing assets and equity across the country. Ally this policy with land value capture and it becomes even more feasible. Indeed, there’s no reason why local authorities couldn’t do the job themselves.
9. Majorities have rights too
Perhaps the most profound aspect of the liberal dominance of the last few decades is how every site of value production and generation is dominated by the group that is the least representative of the values of the country – liberals. They run the BBC, the Arts Council, the NHS boards, the educational establishment and the civil service. Indeed, virtually every public body has on it an overwhelming majority of if not economic liberals then certainly social ones.
There is little or no representation of social, cultural or religious conservatism. And recent Conservative governments have done nothing to redress the balance. Because in part so many of them are social liberals obsessed with rights-based thinking. But rights never tell you what is right and their deployment only functions to empower the already powerful.
Rights must be regulated to the order where they belong — secondary or tertiary outcomes of prior shared principles of obligation, duty and care. Yes nobody ever talks about this nor do they ever address the needs of majorities and think instead their cultural and political task is to unhome the beliefs, memories and aspirations of the majorities that made the nation. Little wonder then that they produce enmity, polarisation and fracture.
That must change. This Government must act to ensure viewpoint diversity, legislate for the protection of free speech and recognise that majorities have rights too and that norms need defending and upholding.
The values of the entire nation need to shape our future, not just those of a hostile elite.
10. Go big or go home
My final test is the key to all the others: ambition. This Government must go big post-Brexit. It has to break free of the austerity-constrained incrementalism that has defined Conservative governance since 2010. This is why we should welcome the alignment of the Treasury with No 10. The Treasury needs to be a driver not a break on reform.
If it makes sense to speak of Boris and virtue, he does have the great merit of thinking big and backing the bets he originally made. His Government will only progress on the basis of constant, impactful, ambition decisions and implementation.
Levelling up the land requires nothing less.
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