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Ed's July Update: How's Mrs May's Conservative Government doing?

Tuesday, July 11, 2017

 

Theresa May has survived into another month when in June it didn’t look as if she would. Although the Leadership of the Conservative Party and the survival of the Government still excite the political classes, major issues of the EU negotiations and Government spending are what the Government itself will have to sort out over the summer.

The Leadership

Although things could easily destabilise again, it looks like Theresa May will remain in office, not so much because there is no alternative but because there is no clear alternative. 

The Conservative Party is quite clear that it does not want her to lead them into another election but there is no heir apparent as when Eden succeeded Churchill in 1954 or Brown succeeded Blair in 2007. 

Either Johnson or Gove might have been in that position but Gove stabbed Johnson in the last leadership election and then fell on his sword.  Although both have been brought into the Government, they are now tainted in the eyes of many Conservative MPs. Johnson, potentially the stronger candidate of the two, has not been a great success as Foreign Secretary and getting his supporters to brief against David Davis has not endeared him to some MPs. 

The other alternative that has been debated in the party is to have either Hammond or Davis as interim Leader until Brexit negotiations are concluded in 2019 and then have a leadership election with a new generation of MPs standing.  

A Leadership election is difficult while Brexit negotiations are happening and might well open up the divisions in the Party over the sort of Brexit that is negotiated. Of course, if Hammond or Davis were installed and were reasonably successful, it is not that easy to get rid of a Prime Minister, so potential candidates and their supporters could just prefer to keep going with May.

Government Stability

The Conservatives do not want an election at present. This is not just because Labour is ahead in the polls and Corbyn more popular than May but because, despite being still the largest party, the election result has been the biggest shock for the party since the equally unexpected result in 1945.  

At the beginning of the campaign the party machine was looking at the possibility of winning seats that Labour has held since 1935 but in the actual result they lost constituencies to Labour such as Canterbury and Portsmouth South for the first time in history. The reassessment of public spending, tax cuts and student fees may not end up as fundamental as when the Conservatives’ accepted most of Labour’s programme in the 1945-50 Parliament but it is still taking place. Of course, it is much more difficult to rethink things in Government than it was in Opposition back then

The Conservative-DUP agreement may well provide stability, even for five years. The association of one of the British parties with the Conservatives can be disastrous as the Liberal Democrats found in 2010, but the North Ireland political system is quite separate. For the DUP it is pluses and no minuses. They can keep Jeremy Corbyn, who is seen as pro-Sein Fein, out of power, and gain a major programme of spending for their constituents, although Catholics will benefit from the spending as well.  It is surprising that the agreement took so long.  Maybe the Conservatives didn’t take DUP susceptibilities into account or maybe the DUP, used to brinkmanship in negotiations over power sharing in Northern Ireland, were happy to go to the wire.

Of course, it will be a major task for Government Whips to manage Parliament. 

There will be policies that either the DUP or small groups of Conservative are unhappy with and the House of Lords will feel that the Salisbury Convention, which holds that the Lords will not vote down or delay a Government manifesto commitment no longer applies because the Conservatives did not get the voters endorsement for their manifesto. Even so there is no reason in the short term why the Government should collapse.  

With DUP support a majority of 13 is enough to defeat any motion of no confidence from the Opposition and see through the Budget.  The Government can lose votes in Parliament and survive as the Labour Government did between 1974 and 1979 though it does sap morale. A problem might occur if the Great Repeal Bill runs into problems and May has to call a motion of confidence to get that through but compromises can still be worked out. 

The Fixed Term Parliament Act, which is now unlikely to be repealed, does provide a bit of leeway. Before the Act a Government resigned on losing a motion of no confidence as Callaghan did in 1979 but the legislation now allows 14 days for the Government to go back and win the vote a second time. So if a junior Foreign Minister takes the wrong plane back from Uzbekistan or a Conservative MP has just gone into hospital and the Government loses by one vote then things can be retrieved.  The No 10 Chief of Staff has been talking to the Lib Dems about getting mutually agreed legislation through and there might be behind the scenes agreements on some areas but it is very unlikely that the Lib Dems would prop up the Government unless policy on Brexit changes dramatically.  

The other issue is what type of Government we will have. 

Academic debate has talked about Prime Ministerial Government, especially under Thatcher and Blair, with decisions taken by the Prime Minister with one or two ministers and key advisers, as against the more traditional Cabinet Government where key decisions are taken collectively. A third form developed during the Coalition with the Quad of Cameron, Osborne, Clegg and Alexander clearing decisions that both Conservative and Liberal Democrats would support. Over the last few weeks we have had none of these.  

Before the election Government Ministers were awed by May’s popularity in the polls and were kept in line by her two advisers who reputedly treated them very badly.  Now they are liberated from that and the extent to which individual ministers are saying what they want is unprecedented. 

Hammond and Davis criticised their own election campaign, views are being aired in public about public sector pay and the Health and Education ministers are openly talking about the need for more spending. 

In Italy, before the system was reformed in the 1990s, ministers looked after their own empires and attacked each other in public and it was chaotic. The Italians could manage it but in the UK the continuation of this sort of public briefing will lead to the collective nervous breakdown of the Government. May will have to restore Cabinet Government over the summer period, because she will not be able to restore the power of No 10, or the Party are likely to say that she must go. She has appointed Damien Green as her Deputy Prime Minister and Gavin Barwell, recently defeated as MP for Croydon Central, as her Chief of Staff. They are both likeable and good at smoothing things over, but it has to be seen whether they are tough enough to help her restore order

Developing Policies

Governments exist to do things. Normally an incoming Government has a manifesto to implement.  Academic study has shown that, despite public cynicism, Governments do actually carry out the great majority of their election promises in some form or another.  

In preparing the election manifesto May’s team assumed that they could pursue a Hard Brexit because this would bring Leave Labour voters across to them win them Labour seats in the North and Midlands, that no one would believe the anti-austerity rhetoric of Corbyn so they could carry on with public expenditure cuts, even at the expense of elderly voters, and that they could ignore young voters because not many turn out to vote. The collapse of these assumptions means that the manifesto is in tatters. 

Many working class voters, especially amongst the C2 social category, did support the Conservatives and it won them Stoke-on-Trent South, NE Derbyshire and Mansfield, all for the first time since the war, but that was all. Even where there was a pro-Conservative swing it only cut into Labour majorities to a degree. Middle class Remain voters and young people turned out to vote Labour and some older people abstained or also maybe voted Labour. Labour did well in London and the other big cities and in a range of medium sized cathedral and university towns, especially in the South.  Some seats defied the electoral trends of the past 80 years. Labour won the more middle class seats of Portsmouth South and Plymouth Sutton and Devonport while failing to gain the more working class seats of Portsmouth North and Plymouth Moor View. Labour also did well in the swing constituencies either side of the Pennines such as Keighley, Colne Valley and High Peak, probably more middle class than they used to be with commuters to the big cities moving here, though the freeze on public sector wages may also have had an effect in these northern towns whose economies have relied more heavily on public spending. 

We may have been through what political scientists call a realigning election with a socially liberal/social conservative divide becoming more important than class, or it may be a temporary effect of the EU Referendum result. There has always been a Conservative working class vote or the Conservatives would not have won elections in the 20th century but for the party to depend more on working class than middle class votes may create an existential crisis for how it sees itself and the same in reverse for Labour.

The May Government has the problem then of trying to carry out a programme of action, without a Conservative Majority, at the same time as assessing how it regains the support of the social groups whose vote it has just lost and carrying out Brexit negotiations that will fundamentally recast aspects of the British economy. It could be argued than even the Governments of the 1970s did not face such a difficult set of tasks. 

Where's the Government's Attention?

The Government is now turning its attention to the following areas:-

The EU negotiations

May’s speech in the Autumn was designed to set a number of red lines around the EU negotiations that would amount to what has been called a ‘Hard Brexit’, including leaving the Single Market and the Customs Union and avoiding any jurisdiction of the European Court of Justice which regulates EU affairs.  

It is always difficult to know what the electorate is really saying in a general election but it looks like they did not see this approach as so important that they wanted to give the Conservative an overwhelming endorsement. Ed Vaizey, an MP on the liberal wing of the Conservative Party, said on television the day after the election that Hard Brexit was dead.

May’s Government depends on a group of new Scottish MPs just as much as it depends on the DUP and they are conscious that their country was strongly Remain. Two groups that were quiet before the election are now finding their voice. Business, especially the City, are saying that access to the European market is vital and are finding support from the Chancellor. Senior civil servants have spent years negotiating with their European counterparts and the EU Commission and are only too happy, behind the scenes, to point out all the problems. If Theresa May had won the expected 100+ majority she might have imposed the version of Brexit that she really wanted despite her autumn speech.  Now she is too weak to remove any of the three Hard Brexit Ministers, Fox, Davis and Johnson and has brought in Gove, another of the Brexiteers, to shore up the Government.  Their vision seems to be quite different. 

Rather unfairly, the Guardian has publicised that Davis has a map of 18th century Europe in his Department, an era when Britain was starting to expand its Empire and able to keep out of European affairs – it is probably actually somewhere down a corridor. More controversially Fox has a picture of Cecil Rhodes in his ministry. Davis may compromise, as those exposed to European negotiations often ‘go native’, but behind the Brexit ministers there are a group of Conservative MPs who do not want any compromise at all. Theresa May has to balance these two groups, just as John Major tried to in the 1990s with limited success. 

As well as largely leaving Cabinet ministers in the posts they held before the election, with just Liz Truss demoted from Lord Chancellor to a junior post in the Treasury after her contretemps with the judges, the second line Ministers of State have also largely stayed in post, which has created some stability.  Academics have often pointed out that by the time ministers have managed to get an understanding of their policy area they get reshuffled elsewhere so at least the Government teams will be relatively knowledgeable, though with a weak Prime Minister this may also allow them to be more independent. However, most of the Ministers of State were Remainers in the Referendum and the nerves of Leave MPs have been calmed to some degree by putting Stephen Baker, their chief organiser, into second place in the Department of Exiting the EU. Bringing your critics into the Government where they have to obey the whip has always been a tactic of Prime Ministers but he doesn’t show any inclination to keep quiet so far.

The Brexit negotiations have actually started and it is too early to say what will actually emerge, except that it looks like the David Davis has already accepted that the bill for leaving the EU has to be settled early.  EU citizens will retain a range of rights, though will no longer be able to vote in local elections, but Theresa May’s red line that the European Court of Justice will have no jurisdiction in the UK is causing problems. International agreements typically have a court to arbitrate on disputes and so the compromise, if the EU agrees, would be to set up a new Court involving both sides.

Michael Gove, the new Environment Secretary, has already entered the fray from the Hard Brexit side by giving notice of Britain’s withdrawal from the 1964 London Fisheries Convention that allows vessels from other countries to fish in the 6 to 12 mile zone around UK waters. The effect is largely symbolic, as the vast amount of foreign catches are in the 12 to 200 mile zone but signals an intention to the EU, with whom an agreement will have to be made about this wider area. It was something that the Fishing for Leave pressure group has seen as an acid test of the government’s intentions. This should be a policy area in which Brexit yields benefits, as EU fleets catch in UK waters four times the whole UK catch in EU waters including our own country.  EU quotas were generally disliked by the industry unlike in agriculture where the National Farmers’ Union overall supported staying in the EU.  However, things are not simple.  The EU quotas were broadly in line with the size of each country’s catch before the Common Fisheries Policy began and have also related to sustainability of the fishing stock.  The failure of British Governments to support small scale UK fleets and to allow large Continental firms to register as British, have weakened our industry, something the 2015 Conservative manifesto promised to change, but it can’t suddenly be expanded. A change in quotas will have to be negotiated and there is the extra complexity that British fleets fish in Norwegian waters and, in return, Norway gets a proportion of EU quotas. George Eustice, the fisheries minister and a Leave supporter as might be expected from a Cornish MP, will have the job of piloting the Fisheries Bill through Parliament over the next year or so.

Public Spending

We may have to wait until the Autumn Budget to find out what the Government’s policy of public spending is going to be.  

The Conservatives thought that their policy of balancing the books, even if the date at which this would be achieved gets extended every few years, was a plus with the voters, especially elderly voters.  

Out on the campaign trail Conservative MPs found that the public sector pay freeze and cuts to local services were a vote loser with much of the working population, some of whom were facing reduced state benefits that have supplemented their incomes and helped to pay their rents. The debate on what to do next is taking place in the open, something that Prime Minister’s Press Secretary, Bernard Ingham for Margaret Thatcher and Alistair Campbell for Tony Blair, with the support of a strong No 10 would have stamped out within 24 hours. 

Gove and Johnson have questioned the public sector pay freeze, the Health and Education Secretaries have questioned continuing public expenditure cuts and Cameron and Lawson have weighed in from the sidelines about the need to continue existing policies. The Chancellor has said austerity is not nice but we have to be cautious. With economic indicators suggesting a down turn the Government has to think what to do next, as neither lower interest rates nor quantitative easing are now options. If wages don’t increase then what is left is infrastructure borrowing and this can be paid for by borrowing rather than tax increases. Hammond announced a National Productivity Investment Fund of 23bn in the autumn, much less than Labour and the Liberal Democrats promised in their manifestos. The Transport Secretary and the Communities Secretary have recycled bits of this in their announcements at the beginning of July on spending on road schemes and on infrastructure developments that would make house building possible. These are mostly projects that local areas have been lobbying for so they shouldn’t be controversial, but the problem, as always, is getting them going quickly.

Young People

The final debate that has just started for the Conservatives is how to get the young vote, though actually Labour had a lead in all the age groups up to 49 according to YouGov’s post-election survey.  

Damien Green has already talked about the need for the party to modernise and questioned university tuition fees. No 10 and Jo Johnson, the Higher Education Minister, dampened down the speculation that developed about a potential change of policy. 

The problem with young voters goes well beyond university fees.  Brexit, fox-hunting, zero hours contracts and the housing crisis all help to determine the image of the party in their eyes.  The Government’s Housing White Paper in February was not well received and the only reform proposed to the private rented sector has been the abolition of letting agent fees.  The turnout among 18-19 year olds was, according to YouGov, still only 57% and among 20-24 year olds 59%, so if that increases further next time the Conservative will be in yet more trouble. Conservative strategists will have to do some thinking.

Read Dr Ed Gouge's Profile here

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