Brexit Shreds Margaret Thatcher's Tory Legacy

(Bloomberg Opinion) -- Britain’s parliament is in recess and Prime Minister Theresa May is taking a break. So, naturally, her would-be successors are out campaigning for the top job.

The volley of op-eds, broadcast interviews and speeches may look premature. May could cling to office until at least December, the next time Conservative lawmakers can officially challenge her – or she may go sooner. Either way, there’s a sense she won't last long, especially with her party trailing Labour in the opinion polls.

Whoever takes over will inherit a big problem – and I’m not talking about Brexit. Somewhere along the way, the party of Margaret Thatcher has lost its voice on economics. There are the same familiar paeans to freedom, growth, tax cuts and deregulation – but these days they just sound like platitudes. There is no convincing narrative, no new vernacular, no signature policy to rally behind.

No problem, argue leading Tories. Once it can move beyond Brexit, the party will coalesce, ideas will flow, and voters will return. As Environment Secretary Michael Gove reportedly put it, goods things will happen once his colleagues can start speeches with the words: “Now that we have left the European Union.” His frenemy Boris Johnson put it more colorfully in his weekly Telegraph column:

Just as there is a great pent-up tide of cash waiting to flood into this country, as soon as we have got the thing done, so there is a pent-up tide of Tory ideas and energy that for the past three years have been kept out by the Brexit monomania.”

This is wishful thinking. Firstly, Brexit isn’t going to be over anytime soon. Passing May's Withdrawal Agreement will simply move the battle over Europe on to what the future relationship between Britain and the EU will look like. The European Research Group, a group of Tory MPs pushing for a hard break with the EU, will argue for a simple free-trade agreement, while moderates will press the case for staying in the single market or at least a customs union.

Divisions over Britain’s relationship with Europe have bedeviled the Conservatives for three decades; there is no reason that they will end when negotiations with the EU are set to continue for a very long time.

Secondly, the party’s credibility hasn’t just been dented by Brexit; it has been decimated. This goes far beyond May’s own failure to deliver on her promise to take the country out of the EU. There were countless deceptions by leading Tories, starting with the famous claim put on the side of a bus that leaving would free up 350 million pounds ($458 million) a week to spend on the National Health Service.

The government constantly minimized the economic costs of leaving, until leaks forced it to own up. Tory proponents of a no-deal exit – at least two of whom would like to be prime minister – misrepresented the reality of what doing business on World Trade Organization terms would mean, minimizing the costs involved.

An informed voter cannot now look at a single Tory claim without consulting the fact-checkers. In a rare case in which a falsehood gets called out, the Independent Press Standards Organization ruled that Johnson’s claim in his weekly column that the public support a no-deal Brexit was a “significant inaccuracy.” In defending their columnist, the Daily Telegraph argued that the work could not be “reasonably read as a serious, empirical, in-depth analysis of hard factual matters.” What are voters to think?

Then there was the sheer dogmatism of Brexit that led the party to break faith with its traditional base, especially owners of small- and medium-sized businesses. This won’t hurt a bit, Brexiters promised. And when it was clear that leaving would do exactly that, voters were told they would be grateful in the long run.

That same dogmatism has also driven away voters, especially younger ones, who had been drawn to the party by David Cameron’s effort to strike a more socially liberal and inclusive tone. The average age of a Conservative voter has risen to 51 from 47 at the 2017 general election. Among 18-24 year-olds, only 14 percent say they would vote Conservative; 62 percent would vote Labour.

Thirdly, and worse even than having lost the trust of voters, Conservatives have lost their voice on economics. There appear to be no big ideas for boosting the country’s anemic productivity, fixing its overburdened, underfunded health service, or reducing knife crime. The party has become identified by austerity more than any other idea.

Labour, by contrast, has one: unabashed socialism, with some modern tweaks. Whatever you think of it, it’s a vision clear enough to put on the side of a bus.

Some Conservatives are keenly aware of the need for the party to find a new way to talk about economic policy and to address today’s problems. It was, in fact, Cameron who told a Davos audience in 2009:

“It’s time to assert a fundamental truth: that markets are a means to an end, not an end in themselves. Markets are there to serve our society, not suck the joy out of it or trample over its values. So we must shape capitalism to suit the needs of society, not shape society to suit the needs of capitalism.”

Others in the party have echoed similar language, with Gove perhaps going furthest in attempting to define the terms of a new Tory economic compact. But policy hasn’t followed. May’s agenda hasn’t always lacked ambition – in industrial policy, for example. But there is little real activity, with occasional populist attacks on tax-dodgers or illiberal clampdowns on internet giants.

Partly, this is a crisis of free-market liberals everywhere. It is easier to bid for populist votes instead. But it will be damaging for the future of Britain’s polity if Conservatives cannot find a new economic language and purpose. The drift in U.S. Republicans, whose expedient support for Donald Trump has pulled them away from their core principles and alienated many traditional conservative voters, is a case in point.

In an essay for Medium last week, former government advisor Stian Westlake argues that the current sterility on economic policy stems not from Brexit but from the rigid culture that dominates the Home Office, which May previously ran. Today’s Conservatives are about managerialism. Even today’s free-marketers, he says, lack conviction; you get the sense they think the big battles are long past.

If so, a new leader with fresh ideas could change the debate and the approach to economic policy-making by putting it back at the center of Tory thinking. It couldn’t come soon enough. The latest Survation poll shows the Conservatives down 8 points at 37 percent, with Labour at 41 percent. The leadership candidates can hope all they want that those numbers will change in their favor once Brexit is delivered. But without a serious, credible economic policy offering to counter Corbyn, I wouldn’t bet on them.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Therese Raphael writes editorials on European politics and economics for Bloomberg Opinion. She was editorial page editor of the Wall Street Journal Europe.

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