With the deaths of Geoffrey Howe and Denis Healey—and the publication of the second volume of Margaret Thatcher’s official biography by Charles Moore—we are reminded that an era is over. Giants have left us. And measured against the figures of the past—Thatcher obviously, but also Blair—our current crop of leaders don’t yet look up to the mark. They have narrow horizons. For them the world has become Europe. Europe has become the EU. And the EU an IN/OUT referendum. This is in a context where we have seen so much good come from the global spread of democracy and human rights and the global growth of capitalism. A world transformed but our leaders shrunk.
But it’s not all their fault. Voters get the politicians they want. And voters get the answers they demand.
Let’s go back to 1979. Margaret Thatcher was elected because of a catastrophic collapse of socialism and social democracy as an economic and political model. She had an answer on many of the big issues. Liberalising the economy. Letting managers manage. Tony Blair was a balance to her. Reforming public services and liberalising society. But they both dealt, however well, with the problems of the past.
Our world is different. Changed by a crisis of capitalism in 2008. A crisis to which there has been no adequate, let alone sustained political response from left and right. Instead British voters are offered a choice between kindergarten economics from the Tories and reheated 70s leftism from Labour. With a minority fantasy choice of populist "stop the world I want to get off" from the Greens, Ukip and the SNP.
Which brings us back to a big question—the size and shape of government. There are many reasons why this should be up for open discussion. There is a reshaping of government going on by stealth which will come into the open after the Spending Review—after the trade offs have been made behind the scenes.
If the Tories can’t have an open discussion about this because they are in government, what about the opposition? Unfortunately, the current Labour leadership haven’t seen a statist solution or a spending commitment they didn’t like.
Now, the Institute for Economic Affairs, the free market think tank which did so much to give Thatcherism intellectual spine, have launched a new project, the Paragon Initiative, to map out a future for government. This isn’t timed to match the Autumn Statement but instead to offer a researched critique of the size and scale of the state. Their starting point is the interesting fact that despite the massive privatisations of the 80s and the small government ethos of the Thatcher/Major years the UK still has a relatively high spending government.
This provokes three thoughts.
The first, that there was a reason why the privatisations of the 80s have endured. Privatisation won because evidence in its favour was accumulated and arguments were made and remade. Success was hard won, and celebrated as it happened. Experience emboldened and it went further successfully. It went round the world, and it still has places to go in the UK. What it wasn’t, when it won, was an assertion of private good, public bad.
Which leads to the second point. Some of the arguments on the right are that government and government spending are bad in themselves. And that more is therefore worse. There is balancing and opposite argument from the left—more of both are unquestionably beneficial. Those are views. And views with an honourable heritage. But neither are majoritarian projects and never will be in the UK.
Which is the third point. The public. They have strong views. There is a reason why privatisation is permanent—it is popular. But it hasn’t made government that much smaller. While it has retreated from making cars, forging steel, running airlines, drilling for oil and gas—it has expanded into other areas. Moved, in effect, from industrial production into social production.
In education, provision has expanded massively. Childcare is now essentially a government responsibility. The school leaving age has been raised for most to 18 in practice. And participation at university has soared—supported by loans but with the consequence that the student loan book is now one of the government's growing assets.
In health, spending has risen through Labour and Tory governments. It now matches average European spending and as importantly, it is protected from cuts by a bipartisan consensus.
On top of these traditional, if extended, responsibilities government now promises to solve so many other social problems now—from rough sleeping to jihadist extremism.
It is common knowledge that power abhors a vacuum but there is something more profound going on here. What if, for the public, government is both a burden and a luxury. By which I mean, everyone wants inefficient government spending reduced, red tape removed and bureaucracy reduced. But for most people the purpose of that is to free up resources to buy more of the public goods they actually want.
And as a rich country we will choose to spend more money on health and education—two obviously beneficial areas of consumption.
So, in sum, politicians should beware telling the public what they want them to hear. And would be better served by listening hard to the voters' demands. This is one of the questions of our age, the right answer, by which I mean the one that reflects and shapes the public's desires could be a winner as profound, and as popular, as privatisation was for a Thatcher and public service reform for Blair.
