Britain does not need a new conservative party

How the Tory party looks to some… More from MicroSoft Image Creator

In the local elections this month the Conservatives did very badly. Their leader’s attempt to suggest that they pointed to a hung parliament is delusional. I have heard the suggestion that they may do so badly at the next election that the Liberal Democrats will form the official opposition. The example of the Conservatives’ Canadian sister party in 1993 is quoted – they slumped from being governing party to just two parliamentary seats. The vultures are starting to circle, with at least two people (Matt Goodwin and Dominic Cummings) suggesting that a replacement party be built to cater for conservative voters, alongside the rising ambitions of Nigel Farage’s Reform UK. But that is folly.

First of all, I think the Conservatives are heading for a rout in the next general election – and probably their worst ever result. Some people simply can’t believe that such a reversal of the 2019 landslide is feasible; others suggest that the polls always narrow as an election approaches. Party managers at the Labour Party and Liberal Democrats are both (rightly) anxious to suppress complacency amongst their campaigners, and are happy to promote such talk. But this is driving through the rear view mirror, and reminds me of the sort of things some Lib Dems were saying before their polling disaster in 2015. History does help us judge the future, but you should never be slave to it. The Conservatives are in a unique predicament, and show now signs of understanding a way out.

But we can dismiss talk of the Lib Dems getting more seats than the Conservatives. They did manage to win more council seats at the local elections, which was quite a feat when the councils in contention weren’t particularly advantageous to the party (unlike last year). But that’s council seats: as you go higher up the election size, the Lib Dems rapidly disappear. The Conservatives won 19 out of 33 Police and Crime Commissioners in England; Labour won the other 14, and three more in Wales, where Plaid Cymru won one. The Lib Dems were nowhere in sight. Neither was the party in contention in any of the 11 regional mayoral elections (10 to Labour, one to the Tories). This shows that there remains a massive bedrock of Tory support in rural areas, which the Lib Dems (and Greens for that matter) can only tackle in a very localised way; the Labour vote is also very patchy here. Even when the Tories are doing very badly, the anti-Tory vote is very fragmented. In order to win one of the other parties has to convince the voters that the other potential challengers aren’t in serious contention; not only is that a hard case to make in many places, but they don’t have the campaigning strength to get that message across in these often massive constituencies. There will be no electoral pacts involving Labour – and if there is one between Greens and Lib Dems (there is no such talk that I’m aware of – although this did happen in 2019) it will be very limited in scope. The Lib Dems are focusing their campaigning efforts on a relatively small number of constituencies, although exactly how many is always under review. This number is not likely to be more than 40 seats; when they targeted much more than this in 2019, the result was disaster. The polls, and the local results, show that the party has no general groundswell of support, and it will only succeed in places where it has campaigning strength. The Greens may have more of a general groundswell of support, but their campaigning strength is much weaker. If they spread their efforts over more than half a dozen seats they will be seriously wasting resources; they are in serious contention in about three at the most – one of which (Brighton Pavilion – their only existing seat) they might well lose to Labour, after the retirement of the popular Jean Lucas. The insurgent right is at this stage only represented by Reform UK, which has little grassroots organisation, and is unlikely to present a serious threat in the Conservatives’ rural strongholds either – though their presence seems to terrify many Tories. The party should secure at least 100 seats even on a very bad night – and easily enough to surpass the Lib Dems’ practical maximum of 50.

The more interesting question is what happens after the election, and whether one of the right-wing insurgents can supplant the Conservatives, now much reduced in parliament. The obvious challenger is Reform UK, which is regularly polling third in national polls, and can even surpass the Tories in some demographics. But it is hard to take this party seriously as more than a nuisance. It is constituted as a limited company, under the legal control of a tight clique, led by Mr Farage. Unlike other political parties, there is no attempt to give grassroots supporters any kind of serious say. This limits any development of a serious grassroots organisation. This might work if Mr Farage could muster the sort of charisma and wealth that Donald Trump does in America. But he is not in that class, even if he is quite successful in drawing attention so himself: at one point it was hard to keep him off the BBC. And he isn’t a team player – indeed right-wing insurgency is not a team sport.

It is also hard to take Mr Cummings seriously. He masterminded the successful Vote Leave campaign in the EU referendum, one of the outstanding political achievements in recent British political history; one feature of this campaign, incidentally, was the sidelining of Mr Farage. He actually cares about making things work and designing coherent policy, rather than just grandstanding on the latest political fad. But he is tarnished by his association with Boris Johnson, for whom he was a senior adviser, though eventually falling victim to the chaos that afflicted the Johnson regime. His lack of political skill was evident – and especially his combative style of doing business. It is hard to imagine that he could put together a successful political party.

Matt Goodwin, whose name repeatedly comes up on these pages, is altogether more interesting. He is not the damaged goods that both Mr Farage and Mr Cummings are. He also applies an academic’s discipline to his thought and research. He runs regular polls and focus groups to give him a good understanding of potential supporters and resonant messages. This, apparently, has enabled him to find financial backers, and he is increasingly open over his plans to build a new political movement. His organising theme is his anger at political elites, whom he accuses of trying to impose their liberal values onto a majority of people, who don’t share them. In policy terms his main focus is on excessive immigration, but he also turns his ire onto multiculturalism, wokism and Islamic minorities. As an academic, he lives and works amongst these liberal types, and is very familiar with their complacency and limited vision (“luxury beliefs”) – and his academic research shows how much this is at odds with what the public at large thinks. He further points out that support for liberal policies tends to be in metropolitan areas, and concentrated in an electorally inefficient way. He thinks that this adds up to a political opportunity for a new conservative movement – citing Mr Johnson’s landslide in 2019 as proof that conservative voters form a substantial electoral majority. But that government, he says, was taken over by the liberal elites, and betrayed its voters, for example by opening the floodgates to immigration.

But life is hard for insurgent parties in British politics. It is commonplace to condemn the complacency and out-of-touchness of the existing political parties, and to say that there is an opportunity for a new movement – only for the whole thing to fizzle. None has succeeded since the rise of Labour more than a century ago – and that took a world war. There are three big challenges in particular: first is assembling a winning coalition of support; second is campaigning infrastructure; and third is developing a coherent policy programme.

I have talked about electoral coalitions before – with my image of a kaleidoscope. It’s all very well finding majorities to agree to particular polling questions on immigration, say, but political success means holding together disparate groups. It is not nearly enough to find disaffected voters with lower educational qualifications in the ex-industrial heartlands of North England, the Midlands and Wales. Mr Johnson succeeded because he managed to add these to more liberal metropolitan types wanting to end the Brexit chaos and assuaged by his greenery, and to the retired mass-affluent traditional Tories in the wealthier areas, and so on. This required a combination of political skill and charisma. I don’t see any of the putative Tory rivals providing this.

Then there is campaigning infrastructure. It is just about possible for a small but focused organisation to find 600 parliamentary candidates and get them nominated at election time. Rightwing insurgents have an advantage in that there are likely to be plenty of volunteers, but less so in that they are likely to be a fissiparous and ill-disciplined bunch – one reason for reform UK’s highly centralised power structure (which followed the chaos of Ukip, Mr Farage’s previous vehicle). Creating an organisation able to carry out campaigning – such as door-knocking and leafleting – in a wide enough number of seats is daunting. Campaigners imagine that they can make up for grassroots weakness with canny social media and publicity strategies, but that is an uphill fight against established parties who have the local organisation. The nearest any new movement that has come to succeeding here was the SDP in 1981 (which I was part of) – but this allied with an existing party (the Liberals), used many experienced politicians, and attracted higher-skilled liberal types with strong organisational competence. Current conservative insurgents lack these advantages, unless they can secure mass defections from the Tories, and then ally with it. And the SDP ultimately failed in its aim of replacing the Labour Party in spite of impressive polling numbers in its early days.

And then there is a coherent policy programme. In a political culture that seems to value winning elections (or referendums) more than governing or implementing viable political programmes, this might seem superfluous. Mr Johnson did not have it in 2019, and neither did Donald Trump in 2016 – and he still doesn’t. But you can’t succeed in government without it, unless you resort to repression and corruption. If electoral success depends on building a disparate coalition, unless they unite around a viable programme, this coalition cannot hold – and such a programme offers credibility. Mr Goodwin talks of the Tory government of 2019 betraying its voters – but that was always going to happen as it promised so many incompatible things. A central theme was cutting immigration to move towards an economy where lower skilled wages weren’t being undermined, and so creating a more equal society. But higher wages for less skilled people (and this did start to happen in the early days of the government) leads to inflation and puts pressure on public services, major employers of lower-paid people. That puts pressure on interest rates (and hence mortgage costs), and taxes and public services. The government was simply not ready for this dilemma, which meant betraying other parts of the coalition, and quickly buckled on immigration policy. I don’t actually think that Mr Johnson’s idea on low immigration was necessarily a bad one – but it needed to have coherent planning behind it, and answers to the resulting dilemmas. Mr Goodwin’s policy ideas seem to be similarly based on focus groups and polls, and not on any serious understanding of the practical trade-offs.

Even a charismatic and well-funded person such as Donald Trump, with considerable, if unconventional political skills, chose to co-opt the established Republican Party rather than set up in parallel with it. The conservative insurgents have no such leader, and even if a new party has strong initial success, it surely cannot succeed in the longer run in competition with the existing Conservative Party. They would only serve to offer a lifeline to a new Labour government, who might well find themselves struggling rather quickly.

It is much more viable for conservatives to bend the Conservative Party to their liking, and to promote a comeback as spectacular as Labour’s. Mr Goodwin suggests that the rump Tory party left after an electoral rout will be too dominated by Oxbridge types from the old elite. But the grassroots are more radical, and a strong conservative agenda offers a pathway back to power. The next election may over bar the voting – but the election after that is very much in play.

The Conservatives are unpopular because power has forced them to make hard choices

Bing Image Creator is much easier than trawling public domain photos, though it’s quite hard to realise your initial vision. This is supposed to represent the collapsing Conservative coalition – but it looks more robust than the reality

I have discovered Matt Goodwin. Of course I have long known about him, as he is frequently quoted in articles on British politics. He started as an objective-sounding commentator on the rise of British populism, and has been slowly morphing into an partisan advocate for it. But he still has a certain respect for evidence, unlike many of his fellow advocates. Which means that it is more useful to read and digest his output, and not dismiss it out of hand. Recently a friend quoted one of his Substack posts at length, and this was interesting enough for me to subscribe to his feed, though not enough to be a paid subscriber, which limits my access somewhat.

The post quoted talks about the death of the British Conservative Party. Most political commentators assume that the party will recover to some extent before the forthcoming General Election. This has been the pattern for pretty much for every governing party in Britain that had been lagging the opposition in the year before an election. Personally I am not so sure this time, and Mr Goodwin helps me to sustain that doubt – albeit that we have very different ideas about where this should lead. He thinks that nationalist populism will be reborn and triumphant in a new guise; I think that it will usher in a long period of mediocre Labour-led government.

Mr Goodwin’s argument is that the Conservatives won their substantial majority in December 2019 by “leaning in” to the populist trend evident elsewhere in the developed world, and mobilising a discontented group of voters angry at the level of immigration, the loss of national sovereignty and “woke” values infecting state institutions. These voters backed Brexit, and, he suggests, form a majority in 60-80% of parliamentary seats – evidenced, I suppose, by the referendum result in 2016 (whose parliamentary majority was much higher than its voting majority). This was main reason for the Tory victory, rather than the personality of the party leader at the time, Boris Johnson, or fear of the Labour leader, Jeremy Corbyn, he says. However, since that election, Mr Goodwin argues, the Conservative leadership have completely failed to live up to the expectations of these voters. Mr Johnson proved lazy and incompetent, filling his Cabinet with lacklustre loyalists. Subsequent leaders, Liz Truss and Rishi Sunak, have been out of sympathy with the populist project, in their different ways. Instead they listened to business lobbyists “addicted to cheap labour”, and to the liberal SW1 elite. The current government has no coherent ideology, and continues to be liberal on immigration in practice, if not in rhetoric. Whether this is a matter of their own policy preferences or sheer incompetence doesn’t really matter. The newly motivated 2019 voters have been betrayed, and will not be brought back to vote for the party, but will either stay at home or vote for the Reform party. It gets worse. The oncoming electoral disaster awaiting the party will wipe out all those MPs with populist sympathies, leaving the more liberal part of the coalition in charge – who will then blame the populists, and fail to rebuild the winning coalition. Or so Mr Goodwin suggests.

Mr Goodwin feels that the Tories have squandered an opportunity to drive forward a government true to the principles of low immigration and ultra-nationalism. It is worth developing that thought a little. The narrative prevalent in 2019 was that restricted immigration would boost wages for lower-skilled workers and enabled a redistribution towards many of the left-behind groups. This isn’t nonsense. A couple of years ago our local refuse collectors got a massive pay rise because restrictions to foreign lorry drivers had drastically increased pay for these workers. This was an example of this idea in action and working. So why has the government used the inflation crisis as an opportunity to squeeze public sector pay rather than try to draw in more local workers with more generous pay? It is not just businesses that are addicted to cheap immigrant labour, but public services are too. Generous public sector pay settlements in areas formerly reliant on immigrant labour would be a sign that the government believed their narrative. But, of course, it is in fact much harder than that.

I haven’t read much of Mr Goodwin’s work, but his narrative seems to be that a large majority of British voters are sympathetic to conservative values, especially over immigration and national sovereignty. These voters are being ignored or patronised by an “elite” of about 25% of the country, mainly university graduates, who have liberal values, and who control almost all the state institutions and big business. This dynamic is present across the Western world and is why populist movements of the right, from Donald Trump in the US to Marine Le Pen in France, and the AfD in Germany are gaining popularity. This narrative clearly touches on a grain of truth – but there are many problems with it.

Doubtless answers to polling questions and probing in focus groups can demonstrate majorities of the public supporting certain conservative views, and scepticism over immigration in particular. But turning these attitudes into both an election-winning coalition of voters, and keeping faith with them once in power, is a much more complicated business than Mr Goodwin allows. Those majorities can vanish very easily once the harder choices behind them are exposed. The 2016 Brexit referendum majority was a small one; populists have repeatedly fallen at the last hurdle in Europe – and their victories often aren’t what they seem. British media often report that the populist Geert Wilders “won” last year’s election in the Netherlands – but what they mean is that his party received more votes than any other. It was still less than 25% of the total vote, scarcely more than the serial British losers, the Liberal Democrats, get in a good year. Other winners, such as the populist coalition led by Giorgia Meloni in Italy only succeeded by making some major compromises to establishment politics – notably by dropping opposition to the Euro.

A particular part of the problem is that a critical part of the conservative coalition is formed by the mass affluent – people with a significant stake in financial assets such as property, pension schemes and other investments. Property investment are typically financed by mortgages. Shortly after the Brexit referendum I attended an event put on by an investment manager for the mass affluent (I too am part of this group, and I was one of their clients); I was taken aback that the overwhelming majority of people in the audience were pro-Brexit. These people were not the left-behind working classes of the Brexit legend. The mass affluent, and especially those with mortgages, have a huge stake in financial stability. Fulfilling the anti-immigration dream of rising wages for lower-skilled workers means letting inflation rip, at least in the short term. It is a wealth redistribution exercise, and inflation is one of the classic mechanisms by which such redistribution takes place. People imagine that a tiny mega-rich minority take the strain of wealth redistribution – in fact the pain goes much, much wider. Conservatives may be insouciant about the effect of conservative policies on economic growth – but that is largely because they assume that somebody else will face the pain. In particular high inflation leads to higher nominal interest rates, and that can cause the dreams of newer property owners to collapse, as their mortgage payments become unaffordable, and their property values plunge into negative equity. And those without mortgages will still see the real value of their assets sinking. High inflation is one of the reasons that Americans think their economy is in terrible shape, and blame President Biden for it – in spite of otherwise very good statistics. A conservative government can’t afford to let inflation get out of hand. Hence the tough line the present government is taking on public sector pay and the softer line on immigration.

In these circumstances it is hardly surprising that the Conservatives fell apart after 2019. They needed a strong dose of economic good luck to come anywhere close to fulfilling their promises. Instead they had the opposite – the Covid pandemic followed by the escalation in the costs of fossil fuels. Even a competent government would have found itself having to make impossible choices. It was Donald Trump’s good luck that he lost power in 2020, before the inflation surge took off. The main reason why Britain’s Conservatives are doing so badly while other conservative movements are doing so much better is that they are in power and the others aren’t, and therefore they cannot escape the blame for the economic mess. Their incompetence just compounds the problem.

The problem for all conservative populist movements is how to reconcile their hostility to immigration and free trade, and worship of national sovereignty, with maintaining a financially stable economy. This is not impossible – the Liberal Democratic Party in Japan has succeeded in just such an accomplishment – but it requires the cooption of those hated elites, who bring with them the administrative competence required, and not hounding them out of government. The Conservatives after Brexit did have an opportunity, but by selecting Boris Johnson as their leader in 2019, they threw away that chance. One of his first moves was expel almost all his most experienced MPs who had demonstrated administrative competence. He demanded that loyalty was the only prerequisite for ministerial office.

This is yet another example of a wider political lesson. Electoral success is gained by stitching together coalitions of voters who can agree on some things, but who also have conflicting vested interests. The creation of these coalitions, and holding them together in power is where the skills of political leadership lie. Elements of a coalition will aways end up feeling let down or taken for granted. This has happened with unusual speed to the Conservatives after 2019.

What of the future? Mr Goodwin is wrong to suggest (as I think he does) that a stable electoral coalition can be built on a radical populist base, i.e. based on very strict limits to immigration. But what is surely true is that no stable governing coalition can be put together without the support of conservative voters. The current Labour leadership clearly understands this, though many of its activists do not.

What of the Conservative Party? The odds are surely that it will reform and survive after losing the next election. A radical rival, based on the Reform Party perhaps, would undermine it but not destroy it, unless a particularly skilled leader emerges from the shadows that understands that it must ultimately make compromises. That leader is not Nigel Farage, Reform’s most successful leader, who effectively owns Reform. And even if the party goes down to a heavy defeat, unseating its most radical MPs, I don’t see that the rump party will reject radicalism. Too many of its centrist denizens have left, and its activist base remains radical. A long period in the wilderness beckons. Probably.

That bodes well for Labour, in spite of its evident mediocrity. But it too could be ruined by economic bad luck. There may yet be an opportunity for the 2019 conservative coalition to come back quicker than anybody expects. Opposition is much easier than government, after all.

Off balance

The think tank Reform is a master of guerilla tactics.  It claims to be one of the most influential of right-wing think tanks, but it cannot be described as heavyweight.  It flits from one subject to the next, making eye-catching claims and recommendations based on very thin research.  Its reports contain thought-provoking insights alongside assertions based on air, amid lots of right-wing waffle.  Its most recent offering Off Balance, which looks at economic growth, is a case in point.  Based on its headline claims, I had intended to use it as base to blog on the subject of the conflict between economic growth and the pursuit of happiness.  But there was nothing in the report that I could get any traction on.  I’m afraid this doesn’t say much for the quality of national debate on the economy.

That’s a pity because the report does contain a very interesting idea, on monetary policy, in its final chapter.  The muddle and confusion within which this gem is set will unfortunately detract from it.  This idea is that interest rates have been set too low in the US, UK and Euro zone (for different reasons), which distorted the market for savings and investment, and that this was the prime cause of both the financial crisis and the unbalanced world economy.  Because interest rates were too low, there was too much borrowing, too much consumption, asset bubbles, and not enough proper investment in the developed economies.  Interest rates will need to be higher if our economies are ever to rebalance properly.  This means that the conduct of monetary policy over the last two decades, including the development of inflation targeting, has been fundamentally flawed.  Loyal followers of this blog will recognise something like this case being advanced by this humble undergraduate economist (Time to rethink the Bank of England).  Unfortunately the report’s authors have little to say on how monetary policy should be conducted in the future, beyond better prudential regulation of financial services.

What of the the rest of the report?  At headline level it all sounds quite sensible: we need more free market policies, with three priorities in particular: reducing the deficit, reforming public services, and a better business environment.  Sensible, but potentially highly contentious in each case – but you won’t find much in the text that takes the debate forward.  In particular there is a deep confusion over the concept of competitiveness, most apparent in its airy claim that:

The future competitiveness of the UK economy demands a move to a high-wage, high productivity workforce.

This is candyfloss economics; its reasoning collapses as soon as you touch it.  Businesses compete; countries don’t (except warfare and sport).  If the country’s productivity stagnates, for example because our system of education is weak, then overall living standards will suffer: we will be able to consume less.  Period.  The exchange rate takes care of competitiveness.  The are very good reasons to improve our education system (the context of this quotation), but competitiveness is not among them.

I could go on, but honestly the report isn’t worth it.  At a turning point in our economy it is such a pity that so much of our debate about the subject is so lightweight.