The sound of the last two weeks has been the sound of pennies dropping. Following Theresa May’s speech at the Conservative Party conference, the penny dropped on international markets that Britain really is on course to leave the single market and the customs union in order to regain control of immigration. Those dropping pennies have led to a rapidly dropping pound.
In the UK, the penny also dropped that Mrs May is leading a government with a very different policy programme and philosophy to the one elected in 2015.
The end of the Blair – and Thatcher eras
It was already clear that there was a changed style from David Cameron – less flashy, not in search of a TV camera every day, more formal. In that regard it was common to hear talk at Westminster that the end of Cameron’s premiership was also the end of the Blair era.
After Mrs May’s conference speech an argument can be made that this judgement was far too timid: she represents not just the end of the Blair era, but of the Thatcher era as well. Since 1979 all governments have believed in the futility of trying to pick industrial ‘winners’. All have accepted essentially free market economic and business policies combined with redistributive public spending.
Mrs Thatcher emphasised economic liberalism; Blair retained a belief in the dynamism of free markets but pushed harder on redistribution, public service reform and social liberalism. The result was the broad consensus around the economic and social liberalism which David Cameron embodied. Received political wisdom was that any move away from that settlement towards a more interventionist approach, such as that offered by Ed Miliband in 2015, would always be electorally unsuccessful.
An interventionist approach
Yet here we are just eighteen months since the election with a policy programme that includes a proposal to put workers and consumers on company boards, a Ministry for industrial strategy, plans to intervene on energy prices, plans to allow local areas to create more grammar schools, and a Prime Ministerial philosophy that is ‘government can and should be a force for good’.
On the international side, the hard Brexit policy of exiting the single market – the same single market championed by Mrs Thatcher – has been combined with scepticism about foreign investment in UK assets, a potentially very restrictive immigration policy and Mrs May’s rather doctrinaire belief that ‘if you believe you’re a citizen of the world, you are a citizen of nowhere’ (how would she know?). This insular but understandable post-referendum tone has horrified some liberal Leavers such as Steve Hilton, who must have failed to notice the company he was keeping during the campaign. Unaccountably, he failed to spot that a desire to speed up globalisation and further internationalise the UK economy by welcoming more talented foreigners to our shores was not actually top of many Leave voters’ wish-list.
Taken together, the changes in domestic and international policy over the last few weeks mark the end of a 40 year political consensus starting with the rise of Margaret Thatcher. In the battle between an internationalist liberalism and a communitarian approach which emphasises preserving and strengthening national and local social structures, liberalism has had the upper hand in British politics since 1979. Following Mrs May’s speech it is hard to argue that it still does. Mrs May is the first female Prime Minister since Mrs Thatcher. She is also the first post-Thatcher era Prime Minister.
There is an irony that Mrs May’s post-referendum policy programme represents a break from Anglo-Saxon economic orthodoxy and a move towards a more continental European model. France has long sought to pursue more communitarian policies and French governments have been explicitly happy to trade the dynamism of liberal economics for the communitarian protection of traditional local industries and workers. That willingness to trade economic growth for community protections has now become the UK approach too.
The issue for Mrs May’s communitarian conservatism will be her lack of mandate. Nobody voted for more grammar schools or for workers and consumers to control companies they do not own. Nobody voted for a jolting break with liberalism. And of course the Conservative manifesto said: ‘We say: Yes to the Single Market. Yes to turbo-charging free trade’. However, she appears determined to continue without an election and there are strong political reasons to do so: Corbyn is unelectable but unassailable; Labour’s non-existent whipping gives her a workable majority; and there is a favourable boundary review to see through.
The Prime Minister has taken a 52:48 vote on one ill-defined issue as a mandate for radical change not just to Britain’s relations with Europe but to domestic policy as well. The word ‘revolution’ peppered her conference speech. She has been politically audacious and philosophically revolutionary. Post-Thatcher, but pure Thatcher too.
Measurement and evaluation