What is the meaning of Theresa May’s wobble?

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Last night 22 people were killed in Manchester Arena in a terrorist attack. The attack was on people attending a concert popular with young girls, and many children were victims. I am in shock , like most of my countrymen. As ever, we have few facts, but the news media must make these go a long way, as they endlessly recite the same reports, along with vacuous speculation, to the exclusion of all else. Nobody is thinking about the election. For anybody that wants a little relief from the awfulness of the news, and the emptiness of news coverage, I offer the following. I had mostly written this article on yesterday’s political events already, and so I decided to finish it and publish anyway. But I expect most readers will not be very interested, as we cannot stop thinking about those families caught up in last night’s horror.

At first I thought it was a sign of strength. The Conservative manifesto launched last week was everything Labour’s was not. It challenged the party’s supporters, and suggested that the Conservatives had the toughness to take on difficult decisions, where Labour were behaving like Father Christmas. It confronted some of the more difficult questions facing our society with something a bit more substantive than empty slogans and goodies all round. But then yesterday the Tory leader, Theresa May, backtracked. It was a very clear wobble. What are we to make of it?

The proximate cause of the wobble seemed to be a sharp narrowing of the gap between the two big parties in the opinion polls after the Conservative manifesto launch – Labour moved up into the low thirties while the Tories dipped from the upper-forties to the mid-forties. Labour (echoed by the Lib Dems) were trying to make hay from the Conservative manifesto. There were quite a few items they picked up on, including cuts to school lunches, and the softening of the policy on annual increases to the state pensions. But the main fury was devoted to the proposed policy on paying for social care.

The plan was to make people liable for the full cost of nursing care if, for example they suffered from dementia, down to the last £100,000 of personal wealth, and including the value of people’s homes – though the idea is that the home would not have to be sold before death. Two things upset people. The policy wonks in particular were alarmed at the lack of a cap to these costs after which the state would pay (the current policy has a cap set at £72,000). This meant that there was no attempt to spread the risk, which might allow an insurance market to be established. Relatives faced the prospect of massive inheritances disappearing in the event that their loved ones suffer a slow departure rather than sudden death. But the critics mainly focused on forcing people to sell their houses. Suddenly previously leftish politicians discovered the sacred right of people to pass their wealth on to their children. The Lib Dems’ Tim Farron has been spitting fury.

More reflective types, including me, thought that there was something in the government proposal. The money has to be found from somewhere, and assets at death look easily the best place. We might like the idea of spreading the risk (e.g. by increasing inheritance taxes on everybody), but there is little evidence that the public has the stomach for that. This proposal exposes rich people the most, and at least confronts the issue honestly. Never mind. Tories were branded as the nasty party, preying on people’s inheritances.

I think Mrs May night have weathered this storm except that she had not developed the policy in consultation with her own side. The manifesto was imposed on the party by a tiny band of trusted confidantes – Mrs May does not do open consultation. Conservative ranks were visible fraying. So the wobble. Mrs May said that the proposals would be put out to consultation, and that there would be a cap after all. And that means significant costs being picked up by the state, to be paid for in some unspecified way.

What are the implications of this? The central theme of the Conservative campaign has been competence. This has been damaged a bit, but not in a way that enhances the standing of the opposition parties. These are still intent on hoovering up a protest vote, rather than setting out a credible programme for government.

As a Lib Dem I know what this means. My party has made the harvesting protest votes a core skill; the trouble was that support evaporated as soon as people thought they might take a share in power. And it was even worse when the party actually did so in 2010 as it could not meet so many conflcting expectations. Labour might have been testing the same self-destructive dynamic if their attacks on the Tory manifesto had gained traction.

There are, in fact, much more worrying aspects to Conservative policy. First is the drive to reduce immigration. The weapon of choice is to add to the burden of red tape on businesses. Those business people who supported Brexit so that it would reduce bureaucracy are going to get a rude awakening. Second is a refocusing of funding for early years education and support. The neediest families will suffer the most from changes to schools and local authority funding. The longer term consequences of this are likely to be dreadful. Britain’s lower crime rates are in large measure due to a reduction in rates of youth crime. This is surely related to increased levels of early years intervention put in place by the Labour government before 2010, and now being dismantled at an accelerating pace. And then there is a move to increase the number of secondary schools selecting children on an academic basis. When the main challenge to the system is to raise the educational attainment of the less academic, this looks like a costly distraction.

But however harmful these policies look, together with an alarming vagueness from Mrs May on the biggest job her government faces, negotiating exit from the European Union, would we trust a Labour-led government? Though the party has adopted the Blairite slogan “for the many, not the few” their policies nevertheless add up to a massive concentration of power to an elite in central government, whose competence is open to question. It looks distinctly Venezuelan.

But the Manchester attack puts all this on hold. Campaigning will be suspended, perhaps until the weekend, as we all take in the shock of what has just occurred. This will act as a bit of a reset button. When politics resumes, it will not be in the same place as before. But speculation on its impact at the moment serves no useful purpose.

8 thoughts on “What is the meaning of Theresa May’s wobble?”

  1. Matthew,

    It still seems too early to get back into political discussion. I’m still feeling rather numb after Monday night’s events. But your comment ” It looks distinctly Venezuelan” sounds rather odd.

    The phrase ” a massive concentration of power to an elite in central government” can apply to any number of successful countries. Singapore, South Korea, China even.

    Venezuala has a problem because it allowed its economy to become too dependent on oil. So when the price crashed it found itself in big trouble. It would have been in exactly the same amount of trouble even if the same decisions have been made more democratically.

    The hope prior to the Thatcher era was that the discovery of large amounts of North Sea gas and oil would bring in the finances to regenerate UK industry. It all seems rather naive now. Instead, we caught the so-called Dutch Disease which meant that the money flowed in, the currency rose too high and the Government could do without the industry!

    So a more democratic government didn’t do much better for the former industrial areas of the UK. On the other hand, Germany, which didn’t have any significant finds of oil or gas, did much better industrially. There wasn’t a tempting alternative to bring in quick money.

    Norway has perhaps learned from the mistakes of others. It isn’t totally immune from “Dutch Disease” but the Govt does seem to be well aware of the problem.

    1. Well Venezuela may seem a little far-fetched, but I know the government there has (or did have) many admirers in Jeremy Corbyn’s circle. It had a perfectly decent democratic mandate to start with, but the regime used it to concentrate power and make political loyalty the key to government appointments instead of competence. I see that tendency in Labour’s far left too, though at least they seem to have no plans to politicise the army. Yet. And, no, the far left has not achieved complete control of the Labour Party, but the fact that it is a battlefield of warring factions doesn’t help.

      The oil price roller-coaster may have been a lot to do with Venezuela’s troubles, but these have been exacerbated by politicisation. The nationalised oil company was purged of politically unreliable managers, and that has meant that oil production volumes have plunged as well as the price. And the way the economy became so dependent on oil was no doubt a reflection of the lack of economic management skills – it was much easier to run the country that way than try to support or protect non-government controlled businesses to diversify the economy. Mexico, for example, has coped much better with the oil economy than Venezuela.

      I think Labour’s policy on tuition fees is an example of this. Abolishing fees means a reimposition of central government controls on university funding, of which an arbitrary control on intake would be one part. The reason that fewer people from poorer backgrounds go to university in Scotland than England is because of funding limits imposed by the Scottish government in place of fees. Labour supporters may imagine a rapidly growing set of state services under a Labour government, but after an initial shift, past experience suggests a dismal period of pressure and decline – especially since Labour have so few ideas on how to expand productivity in the private sector.

      I suspect we have a philosophical difference as to the centralisation of political power. To my mind it is an information problem which becomes more severe the bigger the political unit. Singapore is successful because it is small – would it be doing so well if it had stayed as part of Malaysia? China is actually not nearly as centralised as people think – one reason why they are finding corruption so hard to beat (lacking local democratic controls to keep it in check – while the central authorities lack the means). A lot of the ingenuity of the economic reform programme was in aligning the incentives of local elites to encourage rather than block it. South Korea may have been controlled by a small elite in politics and in the chaebol, but it was not the sort of politicised control with state-controlled industries that Jeremy Corbyn’s supporters seem to favour. And it is past its sell-by date anyway.

      Labour has its strengths from my point of view – it recognises the need for state-sponsored interventions, and the need for the expansion of state-funded services. But the culture of political control and the indifference to managerial competence I find alarming – and I quite understand why so many people would feel that the Tories are the lesser evil. I will cop out of that choice by voting Lib Dem in a seat where Labour have given up anyway.

  2. We might disagree on some things but not everything. I think you are right in saying that there is something in the government proposal to fund soclal care. It’s just a pity they made a complete hash of presenting and explaining it. By refusing to put a figure on any cap they are digging themselves into a deeper hole.

    From a socialist perspective, though, the scheme lacks fairness. Anyone fortunate enough to have parents who can cope without much social care will get their inheritance. Those who aren’t so fortunate won’t end up with much at all.

    So the sensible thing would be to tax everyone when they die – and not before – and regardless of the amount of care they’ve needed. I’d much rather pay taxes after I’ve gone! I can’t see why that would be such a hard sell. It just needs some setting aside of political prejudice to go for the fairest solution.

    1. And I do agree with that Peter! But it is a surprisingly hard sell. The Tory turnaround when Gordon Brown was PM started with a Tory promise to cut inheritance tax (incidentally stymied by the Lib Dems in coalition, though I gather the Tories didn’t fight too hard over that one…).

  3. the indifference to managerial competence I find alarming

    I know there is a general charge of incompetence. But, the opponents of State run industries and services would say that, wouldn’t they? They say the NHS is bloated and bureaucratic and offers the taxpayer poor value for money.

    Of course the NHS isn’t perfect but neither would be any suggested alternative. It would be worse and more expensive. Anyone who is familiar with the US system knows the horrendous problem of finding monthly payments for health insurance. Then the problems they face if they make a claim which is disputed by the insurance companies. They offer trained doctors higher salaries for justifying why the sick can’t be treated than actually treating them. Or so I’m told. I’d need to check that 🙂

    Similarly the old British Rail used to get a bad press. But from figures I’ve seen, the State subsidies are higher now we have privatisation than they were previously. There were a lot of dedicated and highly competent people who made BR work. There still are in the NHS.

    1. The private sector can certainly do incompetence. I suspect that it is competition that is the real driver of efficiency rather than ownership – and a lot of the long-term contracts used in privatisation don’t improve things at all. But the nationalised industries (like the NHS now) often have superb technicians, and often enough very decent customer-facing staff. It is management where things so often break down. The middle managers are bullies (the number of times I have heard that of the NHS…), and the senior ones more interested in a political agenda. It is astonishing how badly run so many nationalised industries were in the 1970s and 1980s (BR was surely one of the better ones). Politicians become more embroiled in protecting jobs and adjudicating pay rather than in actually delivering the results the public want. The strong union influence is surely not benign here. Vital though their role is, unions should be kept a mile from management decisions. These are the people that want to build submarines and then not arm them, in order to protect jobs.

      Actually I don’t think most Tory politicians understand management much better. New Labour tried to but usually failed. Too many politicians learn their trade in think tanks and PR. But at least Tories recognise efficiency as a virtue. I suspect too many Labourites of labelling it “austerity” and resisting all attempts at reform.

  4. Vital though their role is, unions should be kept a mile from management decisions

    That’s always been the American way. US managers talk of hiring and firing quite openly. That’s not the way to promote organisational efficiency and loyalty IMO. Individuals need to feel part of an organisation and not just hired help. Loyalty has to be a two way thing.

    The German approach, with worker directors and union involvment, is, or was, much more enlightened. I suppose that is considered a bit old fashioned now. The Hartz reforms were a move away from all that.

    It really depends on what sort of society we want. Do we want the so-called efficiency that no doubt exists in Mike Ashley’s factories? Zero- or short-hours contracts guaranteeing next nothing to keep workers under control? If workers complain, there’s no need for disciplinary procedures: there’s just no more hours for them. So yes, we do need workers and unions involved in management decisions. Its the only way to stop this kind of worker abuse.

    1. “Vital though their role is”. I don’t think that is the American attitude at all. They would rather do away with unions and any form of labour-protecting law to give management the free-est possible hand. In my career as a manager and as a chair of school governors, I have repeatedly been frustrated by job protection legalities, and (in the school role) by unions. I feel they get in the way of quick, decisive action. And yet, in both cases, I think they are a good thing, because I know what managers can get up to when you take the restraints away. That extra management friction does help those with less power.

      Where my opinion turns is when unions get involved actively in management to shape overall strategy and priorities, rather than being consulted on tactics. They are simply not good at this, and will pushes businesses towards bad decisions. The German solution might be a workable compromise – I’m agnostic on that. But Germans have a different, more collegiate, management culture anyway.

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