May 10, 2021 - 2:14pm

Pennies are dropping all over Labour-land. They’ve finally realised that they’re not running against Thatcherism anymore, but a very different kind of Conservative Party.

Here’s Owen Jones making the point in a BBC interview over the weekend.

The interesting thing here is that he understands that the Tories aren’t just running on a platform of “national populism”, they’re also mixing it with “state intervention in a way that Cameron & Osborne didn’t do”.

Except that’s not quite right. The Conservative shift to intervention in the economy started well before the premierships of Boris Johnson and Theresa May.

As Chancellor, George Osborne pursued a policy of austerity, thus limiting the scope for the strategic investments of levelling-up agenda. However, spending more money isn’t the only way that a government can intervene in the economy. 

For instance, it was Osborne who introduced the National Living Wage — i.e. a long-term plan to raise the minimum wage to levels that few expected a Conservative government to ever support. Another example was the Apprenticeship Levy on employers to help pay for training — a key area of weakness in the British economy. 

A low wage, low skill economy is ultimately an unproductive one — doomed to fall behind countries where business invests in its workforce. Even a Davos-friendly neoliberal like Osborne understood that the state ends up subsidising cheap-and-nasty business models through the tax credits system and other means of supporting the working poor. 

I don’t say any of this to credit Cameron and Osborne as the true architects of the subsequent realignment of British politics. For a start, they were clueless as to the political potential of Brexit. Furthermore, the economic Darwinism of their “global race” rhetoric couldn’t be further removed from the post-Brexit positioning of the Conservative Party (“an economy that works for everyone” under May; “levelling-up” under Johnson).  

Nevertheless the Tory move away from free market fundamentalism is not a recent development. It’s been underway for a decade or more. Bit-by-bit the Conservatives have come to accept three basic facts. The first is that the modern state is simply too big not to have an impact on the market. The second is that business needs to be protected from its own worst instincts. 

The third is that one doesn’t have to choose between recognising the benefits of capitalism and seeing that market forces can be channelled to serve the common good. It took the Conservatives a while to become fully conscious of these realities.

Nevertheless, the signs of their dawning enlightenment were there to be read years ago. Labour, blinded by its Thatcher-hatred, ignored what was going on and has paid the price.

Peter Franklin is Associate Editor of UnHerd. He was previously a policy advisor and speechwriter on environmental and social issues.