Cicero Policy Briefer

Issue 16, September 2007

Conservatives venture into world of policy

By Laura Chisholm

August is a good time for opposition parties to generate stories—the Government’s press machine grinds to a halt and journalists are looking for easy copy. Rolling 24-hour news channels have to find both stories and pictures, so the BBC must have been delighted when the Conservative Party’s Economic Competitiveness Policy Group published its report: not only was there some Conservative policy to cover at last, but it was also an opportunity to play the unfortunate footage of John Redwood MP failing to sing the Welsh National Anthem in 1993.

The starting point for the report is that Britain could be doing better. Most Conservatives have rightly accepted the UK’s progress needs to be acknowledged. Wild accusations that ‘UK plc’ is about to go under are kept to a minimum. The more accurate argument employed is that Labour have failed to effectively capitalise on the favourable economic conditions of the last decade. This narrative fits in with that around the NHS; Labour’s massive spending increases have improved the health service, but not enough. Opportunities have been wasted and improvements are down to luck rather than judgement.

The report makes recommendations to enhance Britain’s competitiveness in three key areas: regulation, tax and transport.

On regulation, the paper recommends an ‘annual regulatory budget’ to tackle the volume of red tape that burdens small businesses. This proposal ticks a box; every Government and opposition party promises to cut back on regulation and stop the ‘gold plating’ of EU regulations. As the CBI pointed out, though, “successfully cutting red tape is something all governments find enormously difficult to achieve in practice”.

More interesting politically is the recommendation to abolish inheritance tax on family homes. This tax seems to have taken on a symbolic significance in the debate on tax and the battle for the middle class vote. The report’s recommendation gave Shadow Chancellor George Osborne the chance to reiterate his position that he will not put tax cuts ahead of economic stability. He also acknowledged that the present structure of inheritance tax is unfair. It is more likely that the Conservatives will move to align the tax’s threshold with house price inflation than abolish it entirely. This may disappoint some, but really the party should be concentrating on tax cuts that will stimulate economic growth rather than Daily Mail headlines.

On transport, the report has some startlingly detailed proposals—fitting trains with rubber tyres, for example. Yet it glosses over the issue of how to square the need to increase our transport capacity with protecting the environment. There are no prizes for guessing which side Zac Goldsmith’s ‘Quality of Life’ group will come out on in this debate—though I think my money would be on John Redwood in a showdown.

The submissions the policy groups set up by Cameron challenge the party leadership to accept or reject core principles. In this case, the issue was tax cutting. Next up will be the economics of protecting the environment.

These working groups allow the Conservatives the chance to explore options and to be seen to be doing so. In this case though, the benefit of any counterintuitive proposals (e.g., significant investment in the railways and the savings scheme) might have been negated by the large bell marked ‘John Major’ that John Redwood sets off in people’s heads.

Can voters make the distinction between recommendations from a Conservative Policy Group and Conservative Party policy? Despite some cynics who think confusion means the Party can have controversial issues both ways, it is ultimately in the Party’s favour if voters understand what its policies are. Confusion could lead to the Party’s leadership being haunted by phantom policy pledges—and being punished at the voting booth when they don’t deliver them. Also, more broadly, the Party needs to establish its purpose in the eyes of the electorate. This won’t be achieved through the mood music created by these submissions, but by a sharp focus and consistency.

Laura Chisholm can be contacted on +44 (0)20 7665 9536 or click here to email.