At times of economic crisis, successful governments need vision as well as competence. Recent events have called the coalition’s competence into question. What about its vision?
As I argue in a new report, ministers have yet to present anything in the way of a novel philosophy. Coalition policies are sold in Labour language, and tested against Labour benchmarks. It seems that Cameron and Clegg aspire simply to be more competent, slightly less spendthrift versions of Blair and Brown.
Vision is vital, because a government that is going to rescue Britain from crisis has to stand for something, and voters need to know what that something is.
That we are in a crisis is beyond question. The economy continues to deteriorate, and we have failed to find new drivers to replace private borrowing and public spending. Governments have tried sharp devaluation, £520bn of deficit financing, £320bn of QE, and three years of near-zero interest rates, yet Britain is still in recession.
Since all traditional macroeconomic levers have failed, we need radical policies to rebalance the economy and promote private sector growth. Big changes require big ideas. There is little sign, as yet, that this government has these ideas.
All of this makes a depressing contrast with Britain’s great visionary governments. Back in 1945, everyone knew that Attlee’s Labour administration stood for the welfare state and Keynesian economics. In 1979, with Britain nearly broke, everyone knew that Thatcher stood for de-regulating the economy and breaking the power of the union barons.
Everyone knew what those governments stood for. Can anyone really say the same of the current government?
Let’s be clear that we do not need another synthetic ideology. After thirteen years of New Labour’s vacuous blend of free market economics and social interventionism, voters are preternaturally attuned to spin.
The electorate, and, in particular, working people in the &”squeezed middle”, are discontented. Median wages are falling ever further adrift of the cost of living, prices for essentials continue to soar and taxes have risen. There may have been little state austerity thus far, but enormous hardship is being felt by working people. Unless we can sort the economy out, this can only get worse.
What, then, should the Government stand for? I contend that it needs to stand for two things.
The first of these is reforming our capitalist system so that it serves everyone, not just a privileged minority. Capitalism should reward success, not failure. It should benefit shareholders (which means most people), not just executives. Contracts should be entered into freely by parties bargaining from roughly equal positions. This does not describe the current system, which is a bastardised version of capitalism
The aim of reform should be to bring ‘capitalism-in-practice’ back into line with ‘capitalism-in-principle’. Rewards for failure need to be stamped out. Executives must not prosper when shareholders suffer. Bonuses should be held in rolling accounts so that deductions can be made if performance deteriorates.
The second aim should be to roll back the incursions both of the state and of big business into the freedom of the individual. A new Equity Court should have the power to overturn companies’ &”terms and conditions” when these are unfair to customers. Local authorities’ surveillance powers should be scrapped, as should officials’ ability to circumvent the judicial process by inflicting on-the-spot fines, or to demand admission to inspect people’s pot-plants or hedges.
Reforming capitalism so that it serves the majority, and strengthening the individual against the collectivist and the corporate, are inspiring visions. This is where government should be taking Britain.
Tim Morgan is the author of The quest for change and renewal: how to fill the centre-right ideology gap published by the Centre for Policy Studies. You can watch a short cartoon introducing the report’s themes here.