Big-government Tories have left Labour an open goal

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For anyone who thinks the Conservative party is turning back towards its small state beliefs, may I present the Football Governance bill. This measure creates a new regulator for the business of soccer, designed to license owners of lower league clubs to help ensure they do not drag their team into insolvency.

For some Tories, this is a more benign aspect of identity politics, which recognises pride in the place where you live, but it is hard to think of a measure less in tune with the party’s self-image. Nor does the desire to safeguard communities sit easily with a party which unapologetically ripped the centre out of towns by closing uneconomic mines and steel plants. Heavy industry can go, but football is seemingly such an essential activity it requires a regulator to protect businesses which struggle to attract 5,000 paying customers a week. Apparently Accrington Stanley is a right, not a privilege.

This is no isolated electoral calculation, although the 2019 election increased Tory representation in towns with lower league clubs. Other examples of Conservative big government initiatives include a huge expansion of state-funded childcare, a phased ban on smoking and the continued growth of in-work welfare benefits — not to mention the net zero commitments against which some MPs are now kicking. It is possible to justify any or all of these measures. What is not possible is to see them as the actions of a government which believes the state has got too large. And if this has left Tories feeling uneasy, it has created a significant opportunity for the more interventionist Labour party.

It is true that the chancellor is seeking greater productivity from the NHS and lower welfare costs from getting more people back to work. And that Rishi Sunak curtailed HS2. But this is hardly a record to cheer economic liberals. A party that cannot even keep the state out of soccer is not likely to roll back the frontiers of Whitehall.

The same is true of public spending. The Tory right is far better at demanding cuts than it is at supporting them. There are free-market Conservatives salivating over the progress of Javier Milei in Argentina. Yet there is no evidence that they are ready to engage in the gruelling task of cutting public expenditure. The last to try this was George Osborne and all the subsequent leaders of his party triumphed by opposing further austerity. Theresa May and Boris Johnson’s governments saw the voters they were wooing were socially conservative but economically left-leaning.

The chancellor, Jeremy Hunt, has promised unspecified savings to fund cuts to National Insurance. But you will struggle to find a leading Conservative setting out, seriously, what the government should stop doing. 

Since 2016 the Tory agenda has been underpinned by a belief in the “active state”, one that intervenes to promote regional growth, improve workplace skills and invest heavily in science, clean energy and technology. 

Thrown into opposition, Conservatives may shift back towards small-statism. But it is not clear that they would be willing to campaign openly on real cuts to spending or that the electorate would reward them if they did.

But if this is all rather difficult for Tories, it has made life far easier for Labour, as shown by Rachel Reeves in her Mais Lecture on Tuesday. What the shadow chancellor hailed as a “new model of economic management” is uncannily close to Johnson’s, albeit pursued with more conviction. Where once Labour might have feared appearing statist, its path has been smoothed by political consensus created by the Tories.

For her central argument is familiar, namely that insecure times demand the benign presence of a “strategic” — or active — state to build up UK resilience to geoeconomic forces. This is not, she insists, another name for big government, not least because power may be decentralised. But the opaque phrase includes planning reform to secure more homes and key infrastructure by overriding local objections, more rights at work, the ambition to shape industrial policy through what Labour likes to call a partnership with business, a new public utility investing in clean energy and a more receptive approach to regulation.

Reeves’ primary prescriptions are less a wildly new economic strategy than a period of political stability to reassure investors and business. She largely backs Hunt on welfare changes to boost the workforce and on unlocking pension fund investment in UK business and infrastructure. Reassurance comes with her prioritising growth to fund Labour’s ambitions.

Her talk of the strategic state is more cautious than Tony Blair’s but the still-influential former premier is pushing an expansive vision to include active use of citizens’ health data, driving forward AI in public services and the forced merger of small pension funds. 

There is a scenario in which a Labour government disappoints voters and is speedily replaced by a more economically liberal Conservative party. But even without the twin shocks of the pandemic and energy crisis, the Tories helped wean the country off leaner public services and the belief that the state cannot be the answer to every problem. 

It is going to take hard work to rewin that argument. The demands on government are growing and an interventionist Labour party finds itself playing on a pitch the Tories rolled.


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