Tax Cuts, the DUP and the Conservative Party Libertarian Counter-Revolution

Peter Brooks Tories
Source: Peter Brooks from The Times Newspaper

The deal the Conservative Party struck with the Democratic Unionists to retain their Commons majority raised some interesting issues about the Neo-Conservative project. Moreover, viewed in the context of their election campaign confusion over tax cuts the deep Tory fault lines are laid bare.

In earlier blogs I described the abrupt change in the nature and direction of the Conservatives since the accession to the leadership of Theresa May.  In these blogs I pointed to a close meshing of ideologies  between Donald Trump in the United States and Theresa May.  You can read these posts here and here but the essence of my argument is the Conservative abandonment of the pursuit of neo-Libertarianism to a largely Neo-Conservative outlook.

Although the situation is a complex one the difference hinges on the size of the Government.  Neo-Libertarians want to shrink the State and cut taxes, with the austerity policies of David Cameron and George Osborne providing a perfect cover.  Neo-Conservatives, however, favour a much larger state (though not at the citizen level) with higher taxes to support it.  Like the Neo-Libertarians they want the state withdrawn from the business of extendeing personal rights and protections (the Welfare State) and see a big project (Brexit for example) as the best way of mobilising patriotism, maintaining social cohesion and justifying the destruction of those rights.

It wasn’t supposed to be like this

What went wrong? In my posts I pointed to an influential figure in American right wing politics, David Brooks.  A central plank of his idea ifs that you cannot rely on consensus or inclusive politics to drive through a neo-Conservative programme, but instead it must be spearheaded by a closr-knit family (the Trumps) or a strong (and stable!!) individual (supposedly, Theresa May).  To the disappointment of the neo-Cons, in the US Trump is proving too incoherent, unpredictable and ill-disciplined to really make an effective impact.  As we have seen in our UK election, Theresa Mat has proven to be uninspiring, uncharismatic and incompetent. Any similarity between May and a Boudicca/Britannia figure evaporated very swiftly during the campaign and she proved to possess almost no talent to persuade anyone to follow her in a bonfire of rights in exchange for national greatness.

The split surfaced during the Conservative election wobble over tax cuts and deficit reduction.  For example, there was Chancellor Philip Hammond wanting to tear up the Osborne rule book on fiscal policy and not commit himself to deficit reduction.  The trashing of George Osborne’s policies led him to launch a vitriolic attack on May and her policies in a Radio 4 interview. The telling comment was:

Both Theresa May and Jeremy Corbyn are offering in very different ways a retreat from international liberalism and globalisation

That Osborne would criticise the socialist Corbyn for being illiberal is predictable, but the attack on May was telling, partticularly this more pointed interview. He claimed the campaign had destroyed the work of himself and David Cameron in winning socially liberal parliamentary seats such as Bath, Brighton Kemptown and Oxford West and Abingdon, which were won by Labour and the Lib Dems.

Tax Cut Dithering and a Real Fault Line

Osborne’s comments could be dismissed as revenge for his sacking, if it were not for a confusing few days where leading Conservatives seemed reluctant to rule out tax rises before settling on a vague and largely unconvincing statement of being the ‘party of low taxes’!  You can get a flavour of the debate from reading this short Daily Telegraph leader article. It stated:

In recent weeks, neither Mrs May nor Philip Hammond has been prepared to reaffirm the 2015 Tory promise not to put up income taxes or NICs. Now, with Labour apparently committed to keeping taxes steady for 95 per cent of earners, the spotlight will fall on the Tories to match the pledge. Yet an attempt by the Chancellor to increase NICs in the Budget was only blocked because it represented a breach of the 2015 election manifesto “tax lock”.

Interestingly, and amusingly, this article was written on 7th May with the article complacently assuming May would win an overwhelming majority. The Telegraph’s frustration (clearly, you will note, in the neo-Libertarian camp) hints at the surface cracks which revealed the profound split in the party below. Remember, Neo-Libertarians want a smaller Government with low taxes against the big Government neo-Conservatives whose plan requires more resources.

Enter the DUP!

So where does this leave the Parliamentary agreement with the Democratic Unionist Party? For Theresa May it is a two-edged sword. Although the neo-Conservative plan is for bigger Government, the spending should be targeted at ensuring a successful break with the EU whatever the financial cost.  The DUP, however will almost certainly demand spending for local communities in Northern Ireland, aggravating the pressure on the public finance at completely the wrong locus for the neo-Cons.  Although the DUP largely avoided the issue of rights in their 2017 election manifesto their ethical background is clearly in favour of limiting same-sex and women’s reproductive rights.  This is much more palatable to a neo-Conservative project which rejects Government interference un extend personal rights as an unwelcome distraction.

Where does this leave the neo-Conservative project in Britain? Basically, badly damaged and on life-spport.  The whole plan was a presentation of Theresa May as a strong forceful leader rallying the British people to the sunny uplands of a global success story.  Unfortunately for them the fact that Theresa May was not that leader has meant that the plan has seriously unravelled. But the plan is still there and even if killed off could possibly be replaced by a return to the equally destructive neo-Libertarian ideology of George Osborne and Michael Gove. We can only speculate whether a stronger more charismatic leader could have repaired the split by simply securing a big Commons majority thus winning across the many Tory MPs who lack any ideological anchor but like the idea of a Conservative prime Minister issung orders.  For the moment we can just be thankful the the machine ground to a halt and with the ineptitude shown over the appalling Grenfell Tower disaster it appears as though the project may die altogether. But beware the neo-Libertarian counter-revolution!

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