New Statesman & Society, 7 July 1995

John Major has claimed a conclusive victory in being re-elected to the Tory leadership – despite failing to get the backing of more than a third of his party. But how much does it matter who leads the Tories? Not a lot, say Paul Anderson and Steve Platt. Any leader would face broadly the same problems – and go for broadly the same ‘solutions’

Whoever they’d voted for, the Tories would still be in. For all the sound and fury in the press and on television, the underlying mood in the country towards the Conservative Party leadership elec­tion is “Who cares ?” The parliamentary excitement that Simon Hoggart, writing in the Guardian, described as “Glastonbury for the politi­cal classes”  – “they will endure any priva­tion, any discomfort and loss of sleep just to say they were there”  – was received with about as much enthusiasm in the nation at large as might have been conjured up at the Glastonbury music festival for a final-night set by a Young Conservatives’ skiffle band.

The reason is partly the general disaf­fection with politics  – and particularly parliamentary politics  – that is currently abroad throughout the democratic world. But it is also, more importantly, the fact that the Conservatives’ political project has run out of steam; and no amount of tinkering with the personnel who are meant to be running the locomotive will get it going again.

The Tories have opted to stick with John Major  – but none of the leadership options aired in the three years since the Black Wednesday debacle left the Tories economic credibility in shreds, let alone during the leadership election, would have made a blind bit of difference. Every conceivable alternative to Major  – a left-wing Tory like Kenneth Clarke, a right-winger like John Redwood or Michael Portillo, or a populist like Michael Heseltine  – would get the same answer from the electorate: we’ve found you out, you got away with it last time when you ditched Thatcher, but you can’t pull the same stunt twice.

Neither Major nor any of the other politicians floated as potential leader is a likely winner of the next election; none is even popular. The best bet in last week’s Economist /MORI opinion poll was Michael Heseltine. He, it seems, would have brought about just a 2.5 per cent swing to the Conservatives from Labour (reducing the current adjusted poll split from 55:31 in Labour’s favour to 53:34). Michael Portillo would have meant a 1.5 per cent swing away from the Tories; Gillian Shephard would have produced a 2 per cent negative swing, John Redwood one of 2.5 per cent. In other words, we are talking about marginal changes in voting preferences, which might have made a difference to Tory MPs in marginal con­stituencies (a 1 per cent swing either way amounts to about 20 seats won or lost), but which would have affected only the scale, not the likelihood, of a Labour victory at a general election.

If Redwood’s 89 votes and the 22 abstentions on Tuesday show that more than one-third of Tory MPs have no faith in John Major  – and refused to back him in what was in effect a confidence vote rather than a real leadership election  –  the result also reflects the lack of an electorally credible alternative leader. The scale of the revolt against Major should have been sufficient to prompt his resignation: as NSS argued last week, anything more than a 50-strong rebellion in a de facto vote of confidence for a Prime Minister with a Commons majority in single figures ought to have led to him handing in his notice. That it didn’t (and that there is no demand among Tory MPs for it to do so) reflects a recognition that Major is probably the Tories’ least-worst option to lead them into the next election. It says much about the parlous state of their party that a Prime Minister kneecapped by the third of MPs who refused to back him, limping along at the head of a divided government, is reck­oned a better bet at the polls than any available alternative.

But enough of electability: what of policy? On the surface, the election campaign was fought on the difference between John Major’s steady-as-she-goes brand of consolidatory Toryism and John Redwood’s bright, burning permanent revolution of Thatcherite orthodoxy. Much was made during the leadership campaign of the prospects, in the event of a victory for the right  – either immediately or later  – of a radical change in the theory and practice of Toryism. In reality, where is the difference?

The Thatcherite project, in both its original and its revanchist guise, is founded on four pillars of fundamental­ism: Euro-scepticism (better described as Euro-phobia); anti-statisrn (more accu­rately, anti-state service provision and public spending); economic laissez-faire (except where this interferes with “national” or other vested interests); and social authoritarianism.

Whether one compares Major and Redwood, or Heseltine and Portillo, or any other combination of possible candidates for the Tory leadership, the real differences in terms of the policy they would implement in office between now and the election are relatively minor. After all, these are all people who found it as easy to serve as ministers under Thatcher as Major, and who, with minor exceptions, would be just as happy to do so under any of a variety of potential suc­cessors. The Conservative Party has always been a coalition  – far more so than it sometimes appeared during the 1980s Thatcherite hegemony; and both its left and right wings have always had to trim their programmes to keep that coalition intact and their party in power. What is unique about now is not so much the differences within the party (which were every bit as intense at both the beginning and the end of the Thatcher premiership) as the failure of the party leadership to manage them.

Even on the question of economic and monetary union in Europe the gap is often as much one of rhetoric as reality. It was John Major not Redwood who told BBC’s Breakfast with Frost on Sunday, “I’m not a federalist and I’m not going to lead Britain into a federal Europe”, and that, “There is no possibility whatsoever of all the members of the European Union going forward in 1999 or for years and years and years afterwards, if ever, no possibility at all.” The Tory right may play a rhetorical nationalist card, but the truth is that they are not so far removed from Major in practice; and when it comes to the crunch, any Tory leader would be directed by the underlying economic imperatives  – it was Margaret Thatcher, after all, who signed up to the Single European Act.

On other issues, too, Sunday’s Frost interviews were illuminating. Redwood, reportedly hostile to universal state bene­fits, such as pensions and child benefit, was at pains to say that such reports were “nonsense”. On privatisation he said he was in favour of putting the Post Office into private ownership “but I don’t think it’s possible this parliament”. On tax cuts and public spending he was indetermi­nate. The autumn tax-spending budget may well include what he and his sup­porters seek anyway. The fact is that, regardless of their individual preferences or policy nuances, all of the potential leadership candidates would have been faced by the same objec-tive circumstances on taking office. First, they would have had to keep their party together  – hence no wild lurches to left or right. Just as the Europhobes are now demanding their pound of flesh in return for rallying behind John Major, so too would the left of the party have put the brakes on a Redwood- or Portillo-led party. The requirement for party unity militates against any substantial devia­tion from the course on which the Tory party has been set throughout this parliament.

Second, any leader would have had to have a constant eye on restoring the Tories’ position in the polls. While this might make attractive a touch of populist Euro-bashing and some tax or spending redistributions in favour of doubting Tory voters, we can expect the same sort of thing from Major as might have been produced by his rivals.

Third, and most important, there is the economy. Above all, this determines how much the Tories can give away in pre­-election tax cut sweeteners (see below). Short of a Lawson-like leap into inflationary hyperspace, there is not a lot of room for manoeuvre; Kenneth Clarke’s strategy as Chancellor is the only one available to them. And anyone who seriously believes, with John Redwood, that there is scope for pain-free cuts in public spending (he came up with the highly improbable  – and widely dis­missed  – figure of a £5 billion saving on “waste”) is forgetting the fact that the Thatcher and Major cabinets have spent 16 years failing to find any.

Major’s victory claims  – and the absurdly unquestioning way in which they have been taken at face value by some journalists who ought to know bet­ter  – cannot disguise the fact that noth­ing has really changed. Broadly the same policies will be followed by broadly the same team.

Inside his party, Major’s gambit has helped to coalesce a coherent right opposition, which, for all the warm words on unity earlier this week, will not go away and will continue to cause him trouble. Outside, although the leadership campaign and cabinet reshuffle may give him a short-term poll fillip, he remains the most unpopular prime minister since polling began.

There is a widespread and growing opinion among Tories now that they will lose the next election anyway, so it’s a matter of minimising the scale of the coming defeat and looking towards their route back to power. The experience of Canada’s Progressive Conservatives, who fell from power to holding just two seats in the last general election there, is telling in this light. Norman Lamont told his colleagues on Monday: “The Conserv­ative Party is facing a wipe-out, a Cana­dian-style defeat at the polls. Can we really go on with the kind of leadership we have had in recent years?” Clearly, the majority of his colleagues decided they could  – “for fear of finding something worse”.

The truth is  that behind Lament’s spectre of a Canadian-style wipeout is a growing view among some Tories that even this can now be regarded as acceptable as a means to the reformation of the party as one of the hard right. This is what has happened in Canada, where the formerly centrist Progressive Conservatives have refor­mulated themselves along Thatcherite lines and made an astonishing political comeback, winning control, for example, of Ontario in recent elections. But this could only happen to the British Conserv­ative Party in opposition after a substan­tial election defeat.

That’s the point at which people may really have to begin to care about who leads the Tories.

It’s not the economy, stupid

If theTories’ prospects in the next general election were a matter solely of the performance of the economy, they would have little to worry about. The past couple of years have seen steady growth, low inflation and falling unemployment-and all the signs are that Britain is on a long-term upward trend economically. If the “feel-good” factor is lacking, it is largely because of the depressed state of the housing market and the widespread fear of indebtedness that remains after the collapse of the 1980s house-price boom-and that, ironically, could be anything but a bad thing forthe economy as a whole.

The government’s economic strategy for the next election has been in place since soon after the pound fell out of the exchange rate mechanism of the European monetary system in September 1992.The idea, put simply, has been to use tax increases and public spending cuts both to dampen the inflationary pressures likely in any economic recovery (particularly one taking place after a big devaluation) and to reduce government borrowing, while keeping interest rates high enough to check inflation, but low enough not to undermine the recovery. The intention of the past two budgets was to reduce government borrowing to the level at which pre-election cuts in income tax would be feasible.

And that, broadly speaking, is what has happened. Growth is strong and export-led, and inflation is under control, partly because of the state of the housing market, partly because of tax increases, partly because of the weakness of the trade unions. Government borrowing is coming down.And everything points to the Tories being able to cut income tax in the run-up to the general election.

Last week’sTreasury summer economic forecast, which updates and revises the figures in last November’s budget, is admittedly not all good news for the government. Its forecasts of inflation and government borrowing are up on those in the budget, while the estimated growth rate is down. But the differences are small-and in the case of the public sector borrowing requirement almost unimportant because the trend in the next three years is so steeply downward.

The figure for the PSBR for 1995-96 – what the government needs to make up the difference between spending (just over £308 billion) and revenue (nearly £285 billion) – is forecast as £23.6 billion rather than the £21.5 billion estimated last November. The forecast for growth of gross domestic product is 3 per cent not 3.25 per cent, and that for end-of-year inflation 3 per cent instead of 2.5 per cent. Taking into account fiddling the figures, otherwise known as theTreasury’s predilection for pessimism in its prognoses(its growth forecasts this time are particularly gloomy, although some say that this also means that inflation will be higher than it thinks),the economy seems to be more or less on the track the Tories want. As Chancellor Kenneth Clarke put it last week, Britain is “well on the course for tax  cuts” – either this autumn or next year or both.

It would be wrong, however, to assume that the government has much room for manoeuvre. The tax cuts in the pipeline can only be modest – certainly not enough to cancel out the tax increases imposed since 1993 – unless there is either a significant further reduction in public spending, on top of the savage cuts already announced, or an increase in public borrowing. The former would be difficult to achieve without inflicting more severe pain on an electorate that gives every sign of having had enough: even John Redwood’s supporters couldn’t take seriously his proposal for saving £5 billion by cutting down on waste. The latter, unless it were packaged very cleverly, would ata stroke undo the government’s five years hard labour trying to prove to the markets that it would never again take the risks that the then Chancellor, Nigel Lawson, took with inflation in the late 1980s.

In other words, if the Tories want tax cuts – and they are the only thing they have left that resembles an electoral trump card there is no alternative to the strategy that Clarke has been pursuing over the past two years, whether European monetary union is a goal (the PSBR forecasts show that Britain will meet the Maastricht treaty’s convergence criteria on public borrowing in 1996-97) or whether it is ruled out. Labour’s best hope is that the Europe row eclipses this hard truth – not least because its only big difference with Clarke is that it would use the leeway in the public accounts not for tax handouts to ordinary voters but for spending on education, training, infrastructure and tax breaks for long-term investment, none of which has quite the same populist appeal.

The BBC wot done it?

Someone, somehow, managed to nobble the BBC. The coverage that BBC television gave to the result of the Tory leadership election was little short of blatant propaganda for John Major.

BBC2 was the only terrestrial television channel to cover the events of Tuesday afternoon live. At first, it did reasonably well: the chat in the run-up to the result was as competent as any warm, scene-setting flannel for the Trooping of the Colour or Royal Ascot. Then came the announcement – followed, to the shame of all concerned – by the most concentrated, most effective piece of Conservative Central Office puff-broadcasting put out on the television airwaves since the Gulf war.

The BBC had put the unctuous David Dimbleby into the chair for the programme: he proclaimed with a smile that the result of the ballot was a stunning success for Major. The corporation’s chief political correspondent, Robin Oakley, was then used as the sole instant analyst: he described Major’s victory in equally gushing terms. Next came 40 minutes, uninterrupted, of Tories declaring that less than two-thirds of the vote was a tremendous result for Major.

No matter that every newspaper apart from those in the Express stable had reckoned that much less than a 75 per cent vote for Major would be a disaster for the Prime Minister’s credibility – an opinion shared by all but the Major loyalists on the BBC staff. No matter that John Redwood’s vote was much higher than anyone had estimated it would be. And no matter either that the Tory leadership election had left the electorate as a whole stone cold.

By the time Tony Blair came on to say, somewhat ineffectually, that it wasn’t quite as wonderful for Major as Dimbleby, Oakley and Major’s other supporters claimed, the damage had been done. The TV coverage had set the agenda: from then on, everyone else was responding to its euphoric tone.

It is a measure of the dispassionate professionalism of the BBC’s rank-and-file political staff that it took only until the midnight radio news for them to inject some scepticism into the coverage – but even that was too late. Those responsible for the spinning on the Tory side deserve to enjoy at least several magnums of the best champagne: they did their job better than anyone could have expected. But everyone who sucked the Central Office line at the BBC deserves a brickbat.

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