Hegemony and Economic Consensus

In postwar British politics, there existed one long period of consensus, and there currently exists another - the former being the 'Butskellite' consensus, and, currently, the market economy consensus, created by Margaret Thatcher.

Butskellism involved agreement between Labour and the Conservatives that governments should employ Keynesian economic policies, maintain full employment, increase public service spending and spend its way out of inflation. After the assembly of the welfare state by Labour between 1945 and 1951, Conservatives, under Churchill, were forced to accept the new order and reject the old laissez-faire attitudes of the 1930s. It appeared that post-war conditions required a larger and more interventionist state, to help reconstruct the nation after the Second World War. This idea persisted, largely unchallenged, until 1979, although some on the right (Enoch Powell, Arthur Seldon, etc) knew that this approach could not last forever, without dangerous consequences. The toxic combination of trade union power and poor control of public spending caused devaluation of the pound, rampant inflation and unemployment.

The Thatcher Years caused the Labour Party to think differently. Failures at the ballot box on four successive occasions forced those on the centre-left to revise their obselete economic policy, and accept what the Conservative Party had created: a dynamic, lower-taxing, lower-spending market economy with democratic trade unions and widespread ownership of shares.

Under Blair, Labour rescinded its commitment to public ownership and its 1997 manifesto declared that they would stick to Conservative spending plans for the first three years of its government, to attempt to prove to the public that its stewardship of the economy would be sound.

Labour has increased taxes at least 100 times since 1997. It has poured billions into the NHS, education, the New Deal and countless failed IT projects and bureaucracies. It has transformed the UK's 1997 budget surplus into a defecit; a defecit which now gives the Chancellor no room for manouevre in the current climate. Taxpayers' money has been treated with a reprehensible arrogance, which is synominous with New Labour's attitude across the board.

Labour seeks to create another consensus. It is, in essence, a market economy shackled by high and wasteful government spending and interference, one that is uncompetitive, and completely unsuitable for the twenty-first century. The political power afforded to New Labour at the ballot box has come at a high price, both figuratively and literally. Their politics has been cynical throughout, attempting to portray the Conservative Party as an irrelevance, our policies as incoherent and, worst of all, paradoxically, attempting to simultaneously demolish the record of the 1979-97 governments and yet claim their legacy for themselves.

The Conservatives must not accept Labour's spending plans at the next election, when we are elected to government. I would rather we endured another 11 years in opposition than were prepared to abide by such thriftless and reckless policy. We are not a Party of big government and not even a century in opposition should change our minds. After all, we were right in 1979 and we are still right now. Labour must not succeed in binding the hands of future generations when it comes to formulating policy for a successful UK economy. Conservatives must cut tax, and spend effeciently. Whilst I appreciate that the electorate must be convinced of our economic competence, in the same way that Labour had to make the case before the 1997 election, there is now a growing appetite for tax cuts and deregulation. Brown's cavalier spending is beginning to cause damage. Those who need to renew fixed-rate mortgages this year may discover this, to their cost.

We must be bold and united in putting forward the case for lower tax and smaller government. We must not succumb to the idea that public spending is somehow untouchable. It would be a betrayal of Conservatism, Thatcherism, and most importantly, the British people. If government has to tax at all, it has to spend the proceeds wisely and fairly. Labour have failed to do this and have squandered their years of economic and political plenty, and will be punished at the next election.