Tory Conference: Thatcherism is back

Posted on October 8, 2009 at 7:52 pm,

Following the media and blogosphere coverage of the Conservative Party Conference, I’m left with the impression that the Tory Party has abandoned all attempts to paint itself as anything other than the party that the country was desperate to see the back of back in 1997. Gone are attempts to spin the party as offering “Compassionate Conservatism” or as being eco-friendly. Instead, we have a party that is clearly looking to the interests of the rich and powerful rather than the interests of the poor, weak, and excluded. Like some other commentators, the Tory conference has left me very glad that I don’t support them.

I’m going to pull together a number of the policy announcements (yes, the Tories have policies for the first time since the last election) they made that show that the failed economics of the Thatcher/Major years are back at the heart of Tory thought. This post is intended as an overview of the whole thing, with links to more specific commentary elsewhere.

Firstly, Cameron said today that “more government got us into this mess”. He seems to have forgotten that “this mess” is a recession caused by banks exploiting a reduction in government regulation. The Tories also seem to have forgotten that the hole in the public finances is primarily due to the recession and can be solved by encouraging economic growth And shadow business secretary, Ken Clarke, wants to reduce regulation on business.

George Osborne seems to have adopted an economic theory apparently at odds with reality. He believes that high government debt levels are causing overseas investors to lose faith in the UK, when actually it seems as if investors are happy to back Britain. In any case, Britain’s level of public debt isn’t as high, in historical terms, as the big three parties are making out. Furthermore, talking about cutting public spending in the middle of a recession is somewhat at odds with what reputable economists will tell you. It took massive government spending to end the Great Depression of the 1930s, and attempts to curb it by cutting spending early on simply made things much much worse.

In the detail of his speech, Osbourne proposed reforms of the welfare system which would most likely harm the poorest. He wants to shift people from incapacity deficit to jobseeker’s allowance – thus cutting their income, but proposed nothing that would significantly increase their chances of getting a job. In fact, their proposals seem to be mostly a rehash of what already exists, plus an incentive to new small businesses that would disadvantage existing companies, hence undermining the goal of job creation. Given that there are already people who are unfit to work who have been refused incapacity benefit this comes across as somewhat heartless. And when you consider that, in the same speech, he effectively said that he would like to cut the new top rate of tax for those earning over £150,000 as soon as he possibly can, it seems even more so.

Another thing that seems to indicate that the Tories are only considering the rich is their council tax pledge – saying that the average family will save £200 on their council tax bill by imposing a council tax freeze means that the Tory definition of average is the richest 20%.

This last point, however, offers a ray of hope that they don’t mean all of what they say. If you’re trying to reduce a government deficit, then you don’t promise a de facto tax cut. In fact, if you’re serious about reducing the deficit then you should be proposing tax increases.

It’s also worth noting that many Tories on a local level seem to be taking the opposite track to those in Whitehall. Here in Coventry, for example, the Tory council are planning to waste one billion pounds on an incinerator that nobody wants. We can but hope that the Tories aren’t as committed to overly harsh cuts as they are trying to make out.