Time for the ‘Good Right’ to redefine conservatism1
March 9, 2015 by Paul Goldsmith
Would you like lower earners to pay less income tax? Well, we could have a consumption tax on the very wealthy. Are you fed up with housing benefit bills going up and up? The state could build more homes again. Are you not Ok that your taxes are going towards subsidising big companies paying low wages? We could have a higher minimum wage. Sound like some proper left-wing solutions to inequality right?
Well, think again. Because those policies come under the same list as the suspension of ‘futile green policies’, a great emphasis on the family, renegotiation of Britain’s relationship with Europe, and a reduction in the power of public sector unions. All policies that could be like catnip to those on the right.
The key to understand what is going on with a combination of the above policies is that the ‘Good Right’ is not trying to appeal to the hard left or the hard right, it is aimed at those for whom the current political alignments just don’t work. The ‘Good Right’ are a new movement who believe on more social mobility, higher pay for the losers from globalisation, more investment in infrastructure (particularly in the north), a more representative House of Commons, and, most importantly, more warm, affordable homes for families who can also get a stake in their communities.
Led at the moment by Tim Montgomerie, the former Editor of the ConservativeHome website and Comment Editor of The Times, the purpose of the ‘Good Right’ is to recast Conservatism away from the toxicity of some of Margaret Thatcher’s legacy. Montgomerie says “Voters across the world remain attracted to the Right’s familiar ingredients of value for taxpayers’ money; support for the family; high standards in education; a tough approach to crime; intolerance of welfare abuse; patriotic self-determination; and strong national defence and border control. What voters haven’t seen enough of is conservatism’s heart and vision. They haven’t seen enough conservative commitment to build a society where everyone has a chance, everyone has a stake and where no one is left behind. A conservatism that doesn’t just want to reduce the state but knows how to make the government work for the people.”
So what are the policies in the Good Right’s draft manifesto?
1. MORE HOUSEBUILDING, MORE HOME OWNERSHIP
Creating a propery owning democracy the Harold Macmillian way is NOT the same thing as Margaret Thatcher’s initiative to allow council tenants to buy their homes. Macmillan achieved it by a state supported house building programme whereas Thatcher merely reduced the level of social housing on offer to those unable to afford shelter. Housebuying would reduce the future cost of housing benefits, and this new housing stock could be built to the highest environmental standards so long term energy efficiency can be secured. The ‘garden city’ idea of converting greenfields in prosperous parts of Britain can more than pay for itself as the price of land is so much cheaper. The ‘conservative’ part of this is that when people own property they have a stake in the cohesiveness and cleanliness of the community, which then becomes part of their support structure. Yes, house prices will fall as supply of housing increases. Yes, some people won’t like the idea of building on the green belt. But making housing more affordable rewuires housing to be built, and the gains are more than the costs on this.
2. HIGHER TAXES ON EXPENSIVE PROPERTIES AND LUXURY GOODS, LOWER TAXES ON THE LOW-WAGED
The idea here is for tax to be more progressive (the rich pay a higher proportion of income and wealth in tax) and more efficient (less reduction in jobs, hard work and products and services as a result) WITHOUT increasing the overall tax burden. So, local authorities should be able to levy new council tax bands on high value properties and a ‘super consumption tax’, otherwise known as a tax on luxury goods, can help eliminate the deficit. The idea is to lower income taxes for low earners by using consumption taxes (far more efficient) in a progressive
3. HIGHER WAGES FOR LOWER-PAID BRITONS
I have written about this occasions, noting how higher pay can improve motivation and result in a ‘multiplier effect’ as the higher income for low income earners normally results in higher consumption, which in turn can create jobs. But there’s more. If employers are faced by above -inflation increases in the minimum wage they might be encourage to invest in upping the skills of their workforce to make the value of what they produce higher too. Until there is clear evidence of a negative impact on job creation this should happen every year.
4. ABANDON PLANS TO RAISE THE INCOME TAX THRESHOLD AND TARGET ALL SPARE FUNDS ON INCREASING WORK INCENTIVES THROUGH THE UNIVERSAL CREDIT
The ucoation are constantly trumpeting the fact that they have raised the income tax threshold and will continue to up to £12500. But there are two problems with this. The first is that this just lowers tax for everyone (with 85% of the benefit from it going to the highest 50% of earners. This leads to the second issue, which is that people already on low incomes don’t benefit at all from it if the threshold is higher than their pay. Under the Universal Credit, Iain Duncan-Smith’s attempt to reform welfare and make work pay, there are various allowances that can be used to increase incentives to work as they would target reductions in income tax at the lowest earners only. This would be far more socially just.
5. A RENEGOTIATION WITH EUROPE THAT CUTS ENERGY AND FOOD BILLS – AND PROTECTS THE INTERESTS OF THE LOW-PAID
It’s all very well blaming UK governments for the rising cost of living, but much of it is beyond their control. Being part of the EU means that we are subject to numerous regulations that lower the standard of living for the lowest-paid. The Common Agricultral Policy, with its myriad of subsidies and protectionism, raises food prices. EU energy policy manages to inflate gas and electricity bills and disadvantage UK manufacturers in the global marketplace without actually cutting global emissions. Meanwhile, the complete freedom of movement of labour is wonderful for employers and the wealthy whilst being at the expense of the lowest paid. Is that really what the EU was created for?
6. MORE INVESTMENT IN NORTHERN INFRASTRUCTURE TO CREATE A MORE BALANCED ECONOMY
There are many reasons to exploit shale gas, including the cutting of our energy bills and a reduction in our reliance on rogue governments for imported energy. But the highest deposits are in Northern England and it is they who should thus benefit most from the proceeds of it. This can address the north south decide directly by paying for a massive upgrade in Northern infrastructure.
7. OPEN UP PRIVATE SCHOOLS TO THE BRIGHTEST PUPILS FROM LOWER INCOME HOMES
This is particularly close to my heart, as my school already has a vision of 25% of its intake being on scholarships by 2024. But our intention is to find that through donations. This idea suggests funding it by the state on on a means-tested basis. Nothing could give social mobility more of a long-term fillip than that.
8. A WISER STATE, FOCUSED ON LONG-TERM STRATEGIC NEEDS
The ‘Good Right’ points out that the political parties at the moment are too stuck in their own ideological silos. Labour engaged in blindly defending the State as the best agent for change and progress, and the Tories blindly defending the private sector for the same reasons. The truth is that Government is the only economic agent with the money to invest enough in infrastructure, science and long-term research and still be able to do so even in lean times. Whitehall should also have the freedom to pay more to reforming civil servants, funded by stronger “equivalence” tests to reduce the current pay, perks and pensions premium that is currently enjoyed by most public sector workers and so staunchly defended by the public sector unions without any commitment to improve quality of work or efficiency.
9. GOVERNMENT SPENDING THAT IS MORE FOCUSED ON THE MOST DESERVING CORNERS OF THE NATION
There is a reason why the Bsrnett formula is so obsessively defended by Scots. They get more money from it than anyone else in Britain. But there are parts of Wales, Cornwall and many seaside towns desperately in need of help, but unable to access it because the Barnett formula simply doesn’t take account of need. Just as the UK Government prioritises the needs of pensioners, even rich ones, at the expense of the young, the Barnett Formula prioritises Scottish people, even rich ones, at the expense of areas of the country that need the money more. There should be a needs-based assessment for regional funding and a reduction in the benefits enjoyed by better off pensioners Ito help reduce the deficit and also fund early intervention programmes.
10. FAMILY HUBS TO REPLACE CHILDREN’S CENTRES AND MEASURES OF SOCIAL PROGRESS TO BE PRODUCED ALONGSIDE MEASURES OF MATERIAL GROWTH
Talking of early intervention programmes, the most important time for government to get involved in supporting a person is their first five years. At the moment, there is a very narrow obesession with redistributing income to fund services such as children’s centres, but with no real measure of social progress to go with that. The ‘Good Right’ argue that what is needed are ‘family hubs’ – the family being by far the most important institution that conservatism celebrates. These would provide support services to focus on underlying causes of disadvantage that aren’t just material, but also social, such as family breakdown, addiction, indebtedness and social dislocation.
11. REFORMS OF POLITICAL FUNDING THAT CREATE A MORE COMPETITIVE CAPITALISM AND A MORE DYNAMIC PUBLIC SECTOR
At the moment politics is riven by the influence of people who donate to political parties. Allowing wealthy people to donate what they want encourages crony capitalism, and allowing unions to donate what they want accords a privileged status to public sector workers that is unaffordable without reform. It would be far better for political parties to be funded by small donations that attract charitable relief than to continue with the status quo or resort to direct state funding.
12. FINANCIAL ASSISTANCE FOR PEOPLE OF LIMITED MEANS TO ENTER PARLIAMENT
It has been estimated that the cost of becoming a Tory MP is about £40,000. This includes the loss of earnings as you campaign plus the cost of funding the campaign. This is all very well if you come from a rich family or have worked in high paying jobs, but it restricts who can become an MP and when. The Good Right suggest a £1 million bursary scheme to help people from a more diverse background to become Conservative MPs.
I would be interested to know your thoughts on this, whatever your political hue.
It’s all about definitions of course – but for me – most of the above (except for point 7 on Private Schools – the very existence of which is incompatible with meritocracy and social mobility) – could be seen as centre-left social democracy. So what makes any of it ‘right wing’? A sensible balance of the best of the state and the best of the private sector. Essentially a capitalist economy but with the state playing a role in ameliorating the worst excesses and social consequences of me me me selfishness. There are some Ayn Rand/Milton Friedman loving Americans who would describe all this as tantamount to socialism!