Skip to Content

Coffee House

Crap and courage of convictions: the political problem with Osborne’s payday loan plan

26 November 2013

3:21 PM

26 November 2013

3:21 PM

There is still a great deal of heat and rather a little less light over George Osborne’s decision to ‘step in where government needs to step in’ and cap the cost of payday loans. Does this mean he’s actually a lefty? What is he up to?

Writing for the Telegraph, David Skelton, founder of the very thoughtful Renewal campaign to broaden the Conservative party’s appeal, argues that this is ‘the right thing to do and it sends a powerful signal that the party will tackle rip-off companies and help the vulnerable’. But Allister Heath argues in his City AM column that this is not the right way to help those in financial difficulty, pointing to research suggesting that caps could actually lead to lenders becoming more aggressive in chasing borrowers who default and an increase in the price of loans.

Skelton is concerned with the message that the Conservative party is sending out, and so is the Chancellor. Remember that George Osborne is a political strategist, famed for ‘weaponising’ policy to make life awkward for his opponents. But in the past few months he’s had to use policy weapons as a defence, rather than to attack Labour, as Ed Miliband has built a stronger narrative on making markets work for consumers. Hence his repeated references in his Today interview yesterday to the importance of government stepping in where it needs to in order to fix markets. It’s just that the solution is indeed a bit of a Lefty one, rather than one that fits with his own convictions.


Fair enough, some might say. Politics isn’t about purity: that’s for think tanks and other people whose ivory towers aren’t rocked by polls. But there is a difference between worrying about your message to voters, and lacking courage in your convictions. You do not need to respond to Labour’s diagnosis of broken markets with the same solutions that Labour proposes. Just because Labour is shouting the loudest about the problem doesn’t mean they’ve got the best solution.

It is this failure to have the courage of its own convictions that has landed the Conservative party in a bit of a stew in the past few months. Did David Cameron really believe what he was saying in opposition about the environment, which led him to support the Climate Change Act and the resulting green taxes that he’s now got designs upon? The ‘green crap’ row that the party is now embroiled in, with modernisers who really did believe it up in arms against those senior figures who think ‘vote blue, get real’ is a better party slogan, shows the risk of making decisions based upon political expediency.

Privately, senior party figures feel that the modernisers have sufficiently weak power to barely register them as a threat at all. They think that so much of the agonising that even influential members of the modernising clique did over welfare cuts, immigration and the like has been thoroughly disproved by the reality of government, with the public by and large backing the Tories to the hilt on welfare reform, demanding more on immigration than the modernisers ever thought the Tory brand should endure. This makes it alright to ignore their fretting, or so the theory goes anyway.

The only problem is that the party doesn’t seem to be learning the mistakes of the last round of ‘crap’, as it was dubbed last week. Its current approach to problems seems to be to ignore them until Labour has succeeded in framing them as evil and presenting its own Labour-ish solution to them, then buckling, in this case with a reform to payday lending regulation that is out of Labour’s own playbook, not a free market one. That suggests that only Labour has solutions to social problems and phenomena, which is untrue and damaging to the Conservative brand. So the Conservatives damage their brand by failing to give a strong initial response to issues such as payday lenders, food banks and zero hours contracts, and then damage their brand again by giving a response to payday loans dictated by the opposition, not their own beliefs. At no stage do they attempt to argue that their own market-based worldview provides perfectly adequate solutions to these problems. And later, that can lead to backtracking when the same politicians, or their successors, try to correct the road map of policy to fit the party’s convictions once again. It looks messy, and does very little for the Conservative message that everyone was worrying about in the first place. Yes stand up for the little guys, but do it using a policy you actually believe in, rather than the most politically expedient one.


Show comments
Close