Politics

Growth is not enough — the Tories must show they're not the party of the rich

Cameron must counter Miliband's promise to freeze energy bills with a 'retail offer' of his own

26 October 2013

9:00 AM

26 October 2013

9:00 AM

The mood was grim when David Cameron, George Osborne and their advisers convened for a crunch meeting on 4 February this year. The economy had shrunk in the final three months of last year; the country was on the verge of a triple-dip recession, unprecedented in modern times. The government was in dire political straits.

Those present discussed the situation with appropriate solemnity. But the tension was broken when Rupert Harrison, the Chancellor’s chief economic adviser, passionately declared that the economy would be going ‘gangbusters’ by late summer, early autumn. Ed Llewellyn, the Prime Minister’s chief of staff, chuckled and joked that he would take a note of that confident prediction.

Eight months on, and as Downing Street aides like to point out, the ‘gangbusters’ note hangs proudly on Harrison’s office wall. Consistent growth has, at long last, returned and the government is waiting for official confirmation that the economy has grown at a robust rate for a second successive quarter.

On current trends, Britain could be looking at the economy expanding by around 3 per cent next year. Not quite ‘gangbusters’, but a dramatic improvement from bumping along the bottom. To improve the mood further in Downing Street, it turns out that the country never went into a double dip. The Office for National Statistics’ initial figures were — as so often — just wrong.

The turnaround is a reminder that it is often darkest before the dawn in politics. It also shows just how quickly economic conditions can change, for better or worse. So we should treat the Westminster assumption that things are going to get better between now and the next election with appropriate caution. But the political conversation is moving rapidly away from the confines of austerity. The party conferences were, this year, once again dominated by talk of new government programmes and extra spending. For their part, Tory MPs are increasingly hopeful of a pre-election tax cut.


The Treasury is trying to stop this shift. It is quick to point out that, even with the return to growth, the deficit will still be more than a £100 billion this year. This gap between what the government brings in and what it spends won’t be wiped out just by the economy returning to health. Instead, it will require continuing, deliberate cuts to the budgets of government departments. Osborne himself tried to concentrate minds on that point by using his conference speech to announce that he wanted the government to be running a surplus by the end of the decade. There was an economic and a political reason for this declaration. The economic one was that government debt is alarmingly high, both in absolute terms and in relation to GDP. If it is not reduced, the country would struggle to cope with another global recession.

The political rationale was that the Tories’ greatest advantage over Labour is on dealing with the deficit. The more the Tories can make the next election about who you trust to get the deficit down, the better it’ll be for them. Also this fiscal plan means that the Tories can claim that if Labour breaks from it, interest rates and mortgage rates will go up. But the Tories know that deficit reduction alone will not be enough. After Ed Miliband’s promise to freeze energy bills for 20 months if elected, the Tories are all too aware that Labour intends to campaign on the ‘cost of living crisis’.

The Tories have no desire to play on Miliband’s turf. But must try to neutralise this issue; hence Cameron’s intervention on energy prices and green taxes at PMQs this week. They know they have to make sure ‘we’re all in this together’ applies to the joys of recovery as much as it did to the pain of recession.

Osborne’s ministerial allies are much struck by numbers showing that because of tax cuts, disposable incomes are going up despite prices rising faster than wages. They believe that this shows that letting people keep more of their own money should be the Tory response to the cost of living squeeze. This view chimes with the party’s natural instincts. Tory MPs are rarely happier than when Cameron is declaring at Prime Minister’s Questions that ‘if we want to help with living standards, the best way to do that is to cut people’s taxes’. It reassures them that the next election, unlike the last, with the Tories’ muddled message about ‘joining the government of Britain’, will be fought on ground they are comfortable with.

Number 10 staff are quick to add that Cameron’s increasingly regular invocations of tax cuts at PMQs are ‘manifesto thoughts’. I understand that this year’s autumn statement will contain no ‘giveaways’ beyond the commitment to keep fuel duty frozen.

For the Tories, there are two particular challenges beyond maintaining their poll lead on economic competence. First, they need to come up with their own ‘retail offer’ to voters. When it comes to the campaign, they have to be able to tell voters how they would be better off under the Conservatives. To be credible, these policies have to be in place long before the election is called. As Lynton Crosby, the Tories’ campaign chief, complained after the 2005 election, ‘You can’t fatten a pig on market day.’

The second is to show that the proceeds of growth are being shared. Too many voters see the Tories as an essentially southern party, something Downing Street is trying to counter via infrastructure and the promotion of northern Tory voices. If the recovery boosts the south more than anywhere else, this stereotype will be strengthened. It is worth noting that outside London and the south and east, employment is still below pre-crisis levels.

But perhaps the most damaging charge against the Tories is that they are the party of the rich. In a recent YouGov poll, 84 per cent of voters said the Tories represent the rich. Another poll showed that people thought the Tories were twice as likely to cut taxes for the better off than the poor. If the Tories are going to counter this perception, they are going to need a set of policies aimed at helping low-earners specifically.

A triple-dip recession would almost certainly have doomed the Tories. Growth alone, though, won’t keep them in Downing Street. To stay in office in 2015, Cameron and Osborne will have to show that the proceeds of growth are being shared.

Got something to add? Join the discussion and comment below.

You might disagree with half of it, but you’ll enjoy reading all of it. Try your first 10 weeks for just $10


Show comments
  • berosos_bubos

    Raise the 23% ceiling to provide an incentive to work harder. Taking people out of tax altogether means they’re disenfranchised from the promise of further tax cuts in the future.

    • Colin

      I couldn’t agree more. By breaking the link between working, earning and contributing, the state is conditioning citizens to become part of the something for nothing brigade. Everyone who earns should pay tax, even if it’s a paltry amount.

  • simmo70

    BROKEN BRITISH POLITICS –RUSSELL BRAND TO OPEN THE DEBATE ON CORRUPT
    POLITICS AND THE UNDERCLASS

    Why does it take just one celebrity to be able to voice their
    opinion on the subject that is on the lips of the Majority of the Population
    and Jeremy Paxman virtually gave him Licence to express himself as he wanted in
    the interview.”Its time of the revolution” .It’s about time someone stood up
    for the underclass.

    He was totally correct about Cameron & Osborne taking
    the EU to court over Bankers Bonuses the EU want to curb them ,but we the
    Taxpayer are paying £1 Million for the Government to challenge this.MP’s want
    11% pay rise – what happened to Austerity .

    Russell Brand put into words in 10 minutes what I have
    been saying for the last two years ,but unlike him we the Public are restricted
    in condemnation of Politicians .He has never voted and I totally agree with him
    “would anyone vote for Savile to be head of a Children’s Home”.Which brings to
    mind why did Savile have his own office at Stoke Manderville Hospital and so
    much Authoritiy because Ken Clarke was Home Secretary at that time and gave it
    to him .Clarke having been interviewed earlier this year concerning the
    allegation of child abuse at the BBC .

    All Parties are guilty of the same BS about the Economy
    it is an impossibility to maintain a stable economy and have High Employment
    and low inflation .Many Politicians have degrees in Economics and know
    economies fluctuate and always will but peddle their BS according to the state
    of it to suit their agend’s .Time this
    one sided corrupt Political system was revamped .BSB

    http://brokenbritishpolitics.simplesite.com

    • Colin

      Did you actually listen to what brand was saying?

      I genuinely thought the interview was some kind of comedy spoof. And, by the looks of Paxman, he did too.

    • madasafish

      The underclass are funded by the non-underclass. So stuff them.

    • GUBU

      So Russell Brand managed to articulate in ten minutes what you have been saying for two years?

      I can do that in two words – semi-literate nonsense.

      • Colin

        That’s three words, actually.

        • GUBU

          Let’s not quibble in the face of this torrent of ill-informed guff.

          • Colin

            Fair point.

          • simmo70

            So why are you bothering Grub

      • simmo70

        Grub – nothing more constructive to say or is that your total monthly output

    • RaymondDance

      Russell Brand … surely no-one takes that pretentious little narcissist seriously?

      • Tom Tom

        He’s bi-polar so you can cover all options

  • Chris Kimberley

    the real problem is that the recovery doesnt exist outside of the southeast and london in particular, politicians are too wrapped up in westminster BS to notice

    • Tom Tom

      especially Master Forsyth of Westminster School and Cambridge married to Allegra Stratton of BBC Newsnight and also of Cambridge……..they have no doubt heard of Overseas Territories north of Watford but have little idea how they live

    • DWWolds

      According to the local paper it appears to be starting in Nottingham.

    • terregles2

      Outside of the southeast magic bubble an increasing number of people can only find jobs offering a zero hour contract. It is good news for the unemployment figures but dreadful news for the ordinary working people who do not know from week to week whether they will get 10 hours work or more or less than that. Some economic recovery.

      • alabenn

        Do not talk nonsense, most jobs are full time and there is plenty of work outside London, there is plenty in the North East if you want it.

        • terregles2

          Sorry you seem to be confused and just a shade abrasive and confrontational.
          I did not say I was seeking employment. I am fortunate enough to be in highly paid employment as is my husband. We are living a very comfortable lifestyle and thank goodness do not have any financial problems. My friend who manages an employment agency has commented on the increase in the number of companies who are wishing to employ people on a zero hours contract.
          You say they could all get full time employment in the north east. North east of where?
          Depending on the location you are referring to it might mean that people should move south.
          My friend certainly does not talk nonsense she comments on the reality of the requests of the companies that she deals with.

          • HookesLaw

            I suspect the ‘you’ was intended for use in the general not the particular, personal, ‘you’. I thinkl its you, the personal one, who is abrasive.
            The fundamental point being made was sound.

          • terregles2

            Well if you do not think telling someone they are talking nonsense is rude and abrasive then suffice to say we all have different standards.
            There are some people now being offered zero hour contracts. Previously a zero hour contract in the UK was unheard of that is now not the case.
            If you have never heard of them in the area that you live and work then you are very fortunate.
            Please though do not tell others who know several people who have been offered one that they are talking nonsense. If only we were.

  • Tom Tom

    Stuffing the ballot boxes is the only possible way…….once you get out of Public School NIrvana James Forsyth and see the state of shops and streets across the country you get a feel for that sucking sound as money is extracted from the pockets of vast swathes of the population leaving them in penury

    • Alexsandr

      yes and that includes 40% taxpayers
      the 40% band has been eroded by inflation. £40,000 pa isnt rich. The higher rate tax should move to 50 or 60k asap

      • Algernon the Sceptic

        You’re in for a shock.
        The 40% tax band begins at £32,011 since 6th April 2013.

        • Alexsandr

          you add in the personal allowance to get to a start point of roughly 40k

      • Tom Tom

        That was deliberate policy to create flat rate tax – did you read about Bloomberg, Mayor of New York having a $20 million mansion in London and paying just £2643 in Council Tax……that is another regressive tax

    • mikewaller

      I am genuinely amazed that you cannot see declining living standards to be an inevitable consequence of a global economy from which the UK has no prospect whatsoever of escaping. Much as we made few complaints when our standard of living was massively underpinned by billions of foreigners on a few dollars a day, they ain’t going to be too concerned as our standard of living reduces. All politicians of any stripe can do is to fiddle about at the edges.

      The present minor up-lift in economic activity is in part to be explained by the massive degree to which the economy shrank in 2008 and the extent to which things are being talked up by the press and government. Early on, Cameron et al tried telling the truth about us having to compete for our lives against hundreds of millions of newly industrialised workers. However, Miliballs and co banged on so successfully with the nonsense that it was all the governments fault, the coalition switched to dragging out any seeming success story to the tune of “Happy days are here again”. Of course it just ain’t true and except for the very fortunate few, never will be again. Sadly, in the words of another song, “Truth hurts”and hurt costs votes so all parties are forced into the business of selling fantasies. For example, UKIP’s is so fantastic that I expect Disney to snap any day now.

      • Daniel Maris

        A lot of truth in what you say but the difference of course is we are starting from a v. high tecnological base – to that extent our future is in our hands in a way it never is for a poor country.

        There’s no way we can compete against hundres of millions of low paid but well educated and highly proficient Chinese workers. But this doesn’t mean we have to surrender to the forces of globalism.

        This is why we need to rethink the economy, making it more home-orientated. This would have been an absurd proposition a couple of decades ago but now technology makes this goal realisable.

        We can produce our own energy. We can recycle maybe as much as 80% of the materials we use. We can develop new home-produced materials for use in industry. We can make use of new technologies such as 3D printing and robot production. We can use polytunnels and farm towers for industrial production.

  • ethanedwards2002

    All ignoring the obvious truth that UKIP will make sure that the Tories cannot win by neatly splitting the vote. If the Tories want to win they must address the EU issues and now. An in Out Vote in two thousand and eleventy ten just isn’t going to cut it.
    Which is effectively saying that unless Camoron either makes a deal with UKIP (won’t happen) or holds a EU referendum now (also won’t happen) or stops the EU waste and meddling (also won’t happen) then he’s toast. Say hi to Premier Millibrain. Going to happen and its all flimflam man Camerons fault.

  • CaptainDallas

    Sorry to burst your bubble, but there’s no growth either – unless you’re confusing growth with a housing bubble in London?

    • HookesLaw

      Or even 1 million jobs created.

  • Quinn.

    No Government in the Modern time has increased its share of the Vote in a General Election, Since Cameron Failed to win the Last General Election & Labour is 20% ahead in the Key marginals, he has little hope. It will be down to the next Tory Leader in 2020 to save what is left of the Conservative Party

  • McRobbie

    The trouble is that the tories always have to talk about economy and entrepreneurialism and therefore growth and no one wants to hear about it now..labour can get away with the soft nice touchy feely subjects like welfare and price control and lowering cost of living. However the left never really have to explain how we are going to afford the welfare state they keep promising nor how they can really control prices to regularise the cost of living or how they can create jobs that aren’t paid by more taxes..for the very reason the tories are criticised, because labour would have to talk about the same issues of economy stupid and creating businesses to get jobs. We are sick of austerity ( although there is plenty out there going on fancy holidays..including welfare receivers…drinking all weekend incl welfare receivers.. betting every day..incl welfare receivers..driving cars..incl wr’s..smoking incl wr’s. and generally spending ..incl wr’s) and we want to go back to the good old days when brown and co could throw our money around..but its been spent now (thanks labour) and we need to accept we are in the real world..no matter how many price freezes milliee will throw up, we will have less in our pockets to spend on the good life….thanks labour.

  • dodgy

    “How the Tories can Win the Next Election…”

    Next Week: “How to nail Jelly to the Ceiling”…

  • aanpakkuh

    An outright majority for the Conservatives following next election constitutes nothing short of a miracle.

    Miliband has shown he’s a very opportunistic and ruthless politician, jumping on the press regulation bandwagon to help out Murdoch haters and competitors BBC and Guardian, while blaming energy companies for the tax rises he forced on them as energy minister only three years ago. Hence Miliband seems unlikely to shy away from exploiting Labour’s electoral strenghts in full, which are:
    -5.5 million employees in public sector;
    -2 million on out-of-work benefits for several years;
    -millions on means-tested benefits;
    -unions that will provide not just financial support (I used to get Labour brochures with the union postage stamp) but also manpower and womenpower to door-step and get the votes out;
    -constituency boundaries to Labour’s advantage;
    -postal votes.

    Not all of the voters referred to above will vote Labour but those who do have dependents and friends. Given Blair polled 9.5 million last time he won election, Miliband will really be seen as failure if Conservatives win outright majority in 2015 (or 2014 if Clegg wrecks the coalition as he seems to be wanting to). Miliband will show himself to a professional client state politician.

    My bet is that Mr Forsyth will be drinking champagne at BBC studios during election night 2015. Beeb-ers and their acquaintances tend to down quite a few bottles at occasions Labour has the upper hand, I’ve been told.

    • Pip

      You forgot to mention the millions of naturalised immigrants vote.

  • Algernon the Sceptic

    No one wants the tories to win, not even most of the tories.

    Vote UKIP

  • malcolm scott

    the recovery is pretty solid everywhere with job insecurity but not a great amount of job losses.the real problem is perception.keynsean left wing ecomomists look like rbs bankers to the sensible,but do the public care?.do these odd ecomomists care?
    the wizard of oz money tree,and deficit are a problem because people dont really relate to it.
    a token hand out does.the tories must become like the loony left for a while and throw away their sensible hats and join the mad ranks of borrow(more) and spend brigade.

  • simmo70

    BROKEN BRITISH POLITICS –CAMERON & CLEGGS COALITION PROGRAMME-LIES
    DECEIT COERSION CORRUPTION POVERTY

    Before the last Election Cameron and Clegg jointly wrote
    the Coalition Programme for Government.

    They entitled it Freedom ,Fairness & Responsibility
    .They set out the reforms to everything from Banking to Universities and
    Further Education 116 categories in all ,it was updated in 2012.Let us take two
    examples from two categories Banking and Civil Liberties .We all know what
    happened to Tuition Fees .

    Banking –we will give the Bank of England control of
    Macro-Prudential Regulation ,basically to give the BoE regulation to reduce the
    risk of financial instability .’Why should a Financial Privately owned Company
    have Laws made for them to protect themselves at the expense of others’ .

    Civil Liberties – We will protect the Historic Freedoms
    of Defence by Jury .’So why introduce CCP’s Closed Court Procedures whereby you
    have no Representation and appear before a Judge in Private’.

    Scrapping of the ID Card scheme and the storage of
    Internet and Email Records – ‘GCHQ and the USA’s NSA have the latest hi tech
    knowledge to monitor billions of internet items per second and share this
    information .But at least they are admitting our Emails are recorded and stored’
    .

    A ban order will be introduced for stronger consumer
    protections ,including measures to end unfair Bank and Financial transaction
    charges .’My Bank must come from another planet because it’s unfair charges are
    still in place’.

    Why put all this BS in print ,it has to be for a reason
    ,who are they trying to impress it certainly isnt us because we know anything a
    Government does is not in our favour nor has any of the above.BSB

    http://brokenbritishpolitics.simplesite.com

  • george

    The Tories must show that they are not the party of 20% — twenty percent, people! — of every sales transaction. Where did government ever claim for itself the RIGHT?! I trade with my neighbour freely and the government, having already taken its various dues in other ways — council rates and stamp duty, anyone? — now wants to rob me in this way, as well.

    Eh. When a family does not have enough money to pay the bills, the meet the rent, it tightens its belt. When did the national government EVER tighten its belt? Does it tighten its belt, cut out the unnecessary expenses, find ways to be more efficient and if need be, go without? Don’t make us all die of laughter — just kill us with poor diets and heating deficiency, to say nothing of not being able to better our lives in a supposed liberal democracy. Oh, the humanity.

    The Tories are in bed with the Lib Dems who are Reds-Lite (hello, Labour!, what’s that song of yours again?), to bring Britain to its shins, having already brought it to its knees. I feel nothing but disgust for the way you all roll over and say stroke me again with the leather, master! Where is democratic accountability and when will the English get as angry as the facts warrant?

  • Mukkinese

    But they are the party of the rich…

  • Pip

    More limp wristed Propaganda from ‘Establishment Mouthpiece’ and disingenuous Hack Forsyth. What he actually means is the Tories must now pretend after 3.5 years of lying, conniving, feathering their own nests and ensuring their Bankster and Corporate funders and friends are enriched at the expense of the working and middle classes, that they are now suddenly on the side of the common people. The fact is the only side any LibLabCon Politician is on is their own and anything Cameron or the Tories pretend to do is little more than electioneering because they are on the home straights to the GE and they sense they are in deep doodaa due to UKIP and their own mismanagement and Cameron’s duplicity and dishonesty. Any Political Commentary that attempts to talk about the Economy whilst failing to debate the EU and Immigration is akin to a Doctor debating how to stem the blood loss from a wound whilst ignoring the 10 Inch blade wedged firmly in that wound. The Spectator is becoming little more than a Pro Tory Rag, utterly shameful.

    • HookesLaw

      Thats a lot of pixel’s worth of garbage.

  • john

    The headline contains a nice thought but as the Tories are the party of the rich – it’s not much help. Even more, they are the party of the London rich and these people have zero interest in anything beyond the North Circular.

  • The article reads, “Consistent growth has, at long last, returned and the government is waiting for official confirmation that the economy has grown at a robust rate for a second successive quarter…On current trends, Britain could be looking at the economy expanding by around 3 per cent next year.”

    Firstly, where is this “growth” coming from, and secondly, is this “growth” growth?

    The Guardian reports (October 10, 2013), “The bank (Bank of England) is known to be extremely concerned at the level of business investment, which has continued to fall this year despite the pace of recovery picking up since the spring and many commentators describing it as a well-advanced and sustainable expansion of economic activity.”

    Ah, a dearth of business investment, as one would expect when the Bank of England, again according to The Guardian, “…kept the base [interest] rate at 0.5% and the level of its monetary stimulus to the economy, known as quantitative easing, at £375bn.”

    In other words, the “growth” is coming from the buying and selling of stocks and other assets, which is consumption, and consumption is not growth. Growth is an increase of the capital stock, where the saved capital increases the supply of consumption goods in the future. That’s why such investment is called productive or growth. Government economists have perverted the term “growth” to mean anything that money is spent on. It isn’t. Growth (or productivity) can only take place via an increase of savings for investments, the investments leading to greater future commodities on the market at a lesser price. That’s why in a free-market, capital-saving inducing economy the monetary unit appreciates, which further encourages savings because people tend to withhold present consumption when its taken for granted that future consumption goods will have a lower price.

  • global city

    It is not so much about being monied, rather the trouble that the Tories now have is the sense that the they are the establishment, the old guard, the landed gentry, the piss reeking tweed set at the very top of society who have no care or no connection with anyone else. Old money snobbery, closed to all, insufferable sense of their own incontestable superiority, mockingly contemptuous even of most of their own politicians as low brow.

    A modern, libertarian/centre-right leaning, entrepreneurial and aspirational party could take the ground that the Tories currently claim (quite falsely in my view) as their own. Most importantly, one not contaminated by the mustiness and nastiness of the old ruling order could sweep the board. There is a great misconception that the northern folk and the poor are anti enterprise and aspiration. They are not, and most who vote Labour are certainly not political Socialists. Such a modern centre-right party could make great inroads in those places too.

    Are the Tories able to divest themselves of that old guard, Magic Circle who have sold the country out to the EU as they see that the only others on a social level with them are the Ruritanian elites that infest the EU institutions.

    There is now a strong understanding amongst ‘the little people’ that the ruling clique has sold the rest of us down the river and that clique is manifest in the current Tory parrty.

  • tolpuddle1

    But the Tories are the party of the rich and of those who want to be rich and s** everyone else.

Close