‘Choice’ is a word that is used liberally in Conservative thinking — whether it be about schools, hospitals or consumer goods. It is when consumers have choice, goes the argument, that providers of goods and services are forced to up their game. Choice brings diversity, inspiring new ideas and allowing for their success. It is not clear that the same rule applies to Conservative leadership elections.
Never before have Conservative MPs been presented with such a broad array of candidates. Ten made it to the first ballot, rather than the more usual four or five. It is hard to argue that the quality of the contest has improved as a result. On two of the most substantial issues — Brexit and the economy — there is a worrying paucity of ideas.
Boris Johnson, Sajid Javid and Dominic Raab all want to use the threat of no deal to extract a better deal from the EU. There is logic to that, and it should have been Britain’s bargaining position all along, but none has explained how in the current mood of parliament they would avoid their plan B — i.e. an actual no deal — being derailed by a parliament which seems intent on preventing it. Or how they would overcome the civil service’s resistance.
Raab and Esther McVey have both suggested they might prorogue parliament to get there. That would be staggeringly anti-democratic and plans are already afoot in parliament to block such a move.
Andrea Leadsom wants a ‘managed withdrawal’ with a temporary trade deal — something with the EU has ruled out. Jeremy Hunt said he was prepared for no deal but is still undecided as to whether this would constitute political suicide. Matt Hancock wants a time limit on the backstop, which the EU has also ruled out. Michael Gove wants to renegotiate and extend article 50 even further into the yawning future — a continuation, in other words, of May’s policy of put-it-off-until-tomorrow. Rory Stewart wants somehow to plug on with May’s failed deal, which has already been heavily rejected by the Commons three times.
Beyond Brexit, the debate has descended into a contest over who can dream up the biggest and most uncosted tax cuts — in a way that exposes how little thought they have put into the subject. The deficit may be well down on what it was, yet still the government is spending £24 billion a year more than it takes in revenue.
Against that backdrop, Johnson’s proposal to shift the threshold for the 40p tax rate from £50,000 to £80,000 is so radical as to be unserious and unworkable. Ditto Dominic Raab’s promise to take 5p off the basic rate of tax. The sentiment is right, but the abject lack of pragmatism raises concerns about thoughtlessness.
In his on-stage interview with The Spectator, Gove mocked advocates of tax cuts as ‘one club golfers’ as if to make a virtue of his lack of economic agenda. Soon afterwards he declared radical plans to replace VAT with a US-style sales tax. To even propose the idea suggests he has never looked into this carefully. Yes, a sales tax is simpler — but it’s only effective at the lower, US-style rates of around 5 per cent. A 20 per cent tax needs a VAT-style paper trail to be remotely enforceable, because the incentive to not declare it is far stronger. It’s unlikely that Gove has ever heard of, let alone read the work of, the 2020 Tax Commission which looked into this (and far more) a few years ago.
Being careful with public funds ought to be one of the Conservatives’ biggest strengths. Instead the party is beginning to look innumerate. Theresa May started the rot by failing to provide costings for her 2017 manifesto, ceding the initiative to Jeremy Corbyn who did provide costings — albeit ones which relied on fantasy.
If we end up with the no-deal Brexit which several of the candidates are prepared to contemplate, a radical economic agenda will be vital. A chancellor would have no option but to take drastic action to attract investment to Britain. That’s why Sajid Javid’s economic proposals are the most coherent. His idea of restoring the top rate of tax to 40p, as it was through almost all of the Labour years, would do the most to attract entrepreneurs and might even help raise revenue — given that the increase of the top rate to 50p is generally accepted to have raised nothing.
When taxes are too high, they make everyone poorer: but lowering them is an art, one that was mastered by Nigel Lawson. His radicalism was matched by patience and thoughtfulness: a combination that is much needed now. Within Tory circles Javid is mocked for being a former financier, which is itself worrying. Some in the party might find it déclassé, but economic expertise can come in handy.
The winner of the leadership election will be walking into an emergency which requires intensive negotiation and alliance-building. With Brexit, the Tories face a challenge as great as any in our peacetime history. It’s no exaggeration to say that the future of the country depends on their finding the right man or woman for the job.
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