How the right lost its economic courage

The answer is the authorised biographer of Margaret Thatcher and former Telegraph editor Charles Moore. It was written a full 10 years ago, well before austerity had begun to bite, an era when pandemics were the stuff of wild imaginations.

Commentators, for sure, like to shock in order to get noticed. Moore’s column for his former paper in July 2011 certainly did that. The BBC, which he loves to bash and invites him onto programmes in order to bash it some more, couldn’t get enough of it.

That period was hardly tranquil It was scarred by the legacy of the financial crash, the narrative of greedy bankers, the European debt crisis and what was quaintly named the ‘credit crunch’.

Some Conservatives were already complaining about the ‘foreign’ super-rich, with more of an emphasis on the former than the latter. But the fact that some people were avoiding tax and taking wealth to an ‘excess’ did not, in the eyes of most on the right undermine the essence of the free market system.

The Conservative Party was not just a well-oiled machine. It denoted, so the literature went, sound finances, good old-fashioned thrift.

That’s why Moore’s attack was so extraordinary. Some of the lines were socialist gold dust. ‘It turns out – as the left always claims – that a system purporting to advance the many has been perverted in order to enrich the few. The role of the rest of us is simply to pay,’ he wrote. ‘People in general have lost faith in the free-market, Western, democratic order … They ask the simple question, ‘What’s in it for me?’, and they do not hear a good answer.’

What Moore would not have predicted was that views such as these would now be considered mainstream among his friends.

Covid-19 has changed everything. Yet the shift in the Tories’ economic priorities long predates it. Most of the time it remained behind the scenes.

One could draw a relatively straight line between Thatcher, Tony Blair, Gordon Brown and David Cameron. That was the era of globalisation and rigorous financial targets.

Brown and Blair saw a bigger role for the state, but more to support public services than to act as an economic driver. The private sector knew best; the markets were there to be reassured, not challenged. Under the coalition, these strictures found their apogee in year after year of austerity.

The Vote Leave campaign in 2016 marked the first moment in which a significant cohort of Conservatives parted company with these doctrines.

The £350 million for the NHS claim wasn’t just a piece of political disinformation; it was the first declaration that emotions would, in a new brave new Johnsonian world outside Europe, trump economic discipline.

And so it has come to pass: Rishi Sunak’s February Budget sent Tory MPs and their cheerleaders into whoops of joy in spite of jettisoning years of economic orthodoxy. Or rather because it did.

Johnson and Dominic Cummings based their thinking on three assumptions. The first was his political coalition. He had won so handsomely in December’s general election thanks to the so-called Red Wall of traditional Labour seats in the north and Midlands he had to start paying the voters back, literally.

Secondly, a number of Tories had complained for some time that austerity had constrained their ability to deliver. Governments are thanked for doing things, not for telling people they can’t afford to do them.

Thirdly, they saw it as an open goal to usurp Jeremy Corbyn. That advantage has now gone, although Keir Starmer has much road yet to travel.

The brief interlude that was Theresa May’s reign saw the Tories start the transition.

At the heart of it was Nick Timothy (one of only a handful of people in politics who make Cummings seem like Bambi). Timothy, proud of his Brummie working class stock, was one of the first concertedly to advocate a redeployment of resources away from London and the south east and to embrace the Keynesian notion of spending for the long term in order to boost the economy.

He and his boss were not in Number 10 long enough to see any of that come to fruition, as the policy agenda was subsumed by Brexit travails.

Now Johnson is seizing his chance. Covid works both ways in this endeavour. So damaged will the economy be that he will have to start the rebuilding from a much lower base.

On the other hand, he knows that the argument for spending has been won. Call it Tory War Communism. Conservatives invariably fall back on military terminology. Hence Johnson and Sunak hailing NHS workers who had died tackling the virus: ‘The nation will not forget you.’

At right-leaning think tanks and among the commentariat there appears to be a competition to see who can come up with the most wacky-lefty idea, to use their old terminology.

In the Times recently, Sky News’ economics editor, Ed Conway, proposed what he triumphed as a ‘terrible idea’. You know when journalists do that, by the way, what’s coming next. They argue that this very idea is ground-breaking and brilliant.

Borrowing from the gospel of Thomas Piketty, the French economist and author of the 2013 seminal work on wealth and assets, Capital in the Twenty First Century, Conway differentiates between earned and unearned income.

‘It all comes back to a long-standing issue with the economy, which is that we tax income far more than we tax wealth. Put crudely, those who work hardest pay most while those who sit on appreciating assets like houses pay far less,’ Conway argues. ‘If you’re looking for part of the explanation for the gap between rich and poor and old and young, here it is.’

Conway acknowledges that property or wealth taxes are hard to devise and even harder to collect. The super-rich know how to spirit their assets offshore. Instead, he suggests: go in once, but go in hard – a single capital levy.

A one-off 10% raid on all household net wealth would generate over a trillion pounds of revenues, he argues, enough to pay off all the costs of Covid-19, to provide for the NHS for generations and to reduce the national debt from wartime levels to something more like normality.

Anything else would saddle the younger generation with further hardship, while many older people continue to enjoy a reasonably good life. ‘Provided it is introduced very quickly with little warning there is scant opportunity for avoidance. Provided everyone understands it is a one-off rather than a recurrent annual tax, it shouldn’t affect incentives. Once it’s done, it’s done. Granted, a capital levy is, in economic terms, the nuclear button.’

I still scratch my head when I read ideas such as this coming from voices such as this. And I scratch it even more when they immediately gain currency rather than being dismissed as the rantings of a Trot.

The idea most likely to take off, in the UK and in other countries, is the Universal Basic Income.

That too has been rehabilitated from the fringes of politics into its mainstream. In the early stages of the US presidential campaign, one of the Democrat candidates, Andrew Yang, garnered attention by advocating giving every adult, irrespective of whether they were working or not, $1,000 a month. Yang didn’t get very far with his personal ambitions, but the idea has gained momentum.

Last December, the journal American Conservative – where else? – published a piece heaping praise on the plan, which has so far either been introduced or trialled in Alaska, Finland and a few other places.

It listed the advantages: it avoids nanny-state paternalism, it redistributes wealth from the rich big cities to the small towns, and it helps protect workers who are at risk of losing their jobs to automation.

Meanwhile, former Republican candidate in the 2016 election, Marco Rubio, takes to the pages of the New York Times to attack hyper individualism and ultra-consumerism.

America, he insists, needs a range of state-led industrial interventions to get it back working again.

Anyone who disagrees with these mantras is being pigeon-holed as small-government, ultra-libertarians.

Yesterday’s fiscal disciplinarians are today’s dangerous ideologues; yesterday’s extremists are today’s patriots.

Corbyn is gone, removed to the fringes of political life. Bernie Sanders has tried twice, only to be swept away.

It will come as a scant consolation to either to think that their brains have been transplanted into the next generation of Conservatives.