Muted table-banging greeted David Cameron as he entered the cabinet room last Monday to sit with the first all-Conservative frontbench in 18 years.
The TV cameras were in attendance and the newly elected ministers, caught on film making awkward small-talk moments before the prime minister’s entrance, were careful to avoid any ostentatious self-congratulation.
It may also have crossed some minds that the manifesto clutched in the prime minister’s hand contained a series of spending, and indeed cutting, commitments many had been convinced would be whittled away in coalition talks under a hung parliament.
Cameron sketched out his vision of “blue-collar Conservatism” to much sage nodding. But the next five years, with a European referendum looming, problems in Scotland just begun, unfunded pledges to finance and major cuts to make, will present major obstacles to Cameron’s hope that this 2015 election can prove a watershed in UK politics, keeping Labour out for a generation.
Cameron’s majority – however slim – has gifted him renewed authority to push through an agenda that might not please all parts of his party. Privately, even the most critical backbenchers agree he has given himself time to earn their loyalty for a manifesto full of giveaways and constitutional positions over which many have grave doubts. But this grace period will not last for ever. And Labour will surely move out of the doldrums in due course. During the campaign, Cameron pledged a first 100 days of blistering action – and he knows this is what will be required.
The Queen’s speech
As MPs gather on 27 May to hear the speech spelling out the government’s legislative plans, protesters will be gathering outside Downing Street. “The Tories think the election has given them licence to unleash five more years of savage austerity,” said Helen Pattison of Youth Fight for Jobs. “This protest will send a signal to Cameron and his friends. Attempts to smash our future will be met with fierce resistance on the streets, in workplaces and on campuses.”
The Conservatives’ fiscal plans involve reducing spending in 2019-20 to about the same share as it was in 2000-01. The average cut for unprotected departments – everything apart from health, education and international development – in the last parliament was around 20.6% and that is set to be repeated. It is against this background that Cameron plans a charm offensive in areas of the country long written off by Tory leaders.
His vision of blue-collar Conservatism, designed to attract working-class voters who feel left behind by Labour, will have to be forged in the red-hot atmosphere that will inevitably come with a major shrinking in the size of the state.
At the heart of the speech will be a bill to permanently ensure that anyone earning a minimum wage and working 30 full-time hours will not pay any income tax. The current personal allowance ensures that this will be the case anyway until 2020. It will be the next prime minister’s task to find the cash to keep this pledge beyond then, as the minimum wage rises. But the mood music is all-important.
There will also be a bill creating three million apprenticeships, paid for, the Tories claim, by reducing the benefit cap and introducing work requirements for school-leavers seeking to claim out-of-work benefits. In reality there was a fall in the number of apprenticeships created in 2013-14, and of the 147,300 increase in apprenticeship starts between 2009-10 and 2013-14, 103,700 were taken up by people aged 25 and over. “This is despite apprenticeships being presented as a way of reducing youth unemployment,” said Tony Dolphin, chief economist at the IPPR thinktank.
But clamping down on the welfare culture and enabling people to get in to work is key to that blue-collar message. Other major pledges will be to double free childcare to 30 hours a week for three- and four-year-olds and extending the right to buy to housing association tenants. Stakeholders in both those sectors have their worries.
“It is incredibly important that nursery providers are funded properly to make these plans sustainable,” said Purnima Tanuku, chief executive of the National Day Nurseries Association, who claimed its research shows 85% of nurseries in England making losses on the current 15 hours a week of free childcare, which pays an average of £809 a year for each funded child.
Ruth Davison, director of policy and external affairs at the National Housing Federation, said of right-to-buy: “It won’t help the millions of people in private rented homes who are desperate to buy but have no hope of doing so, nor the three million adult children living with their parents because they can’t afford to rent or buy.”
PREDICTION: The Queen’s speech will be about framing this government as about blue-collar Conservatism. The policies to be sketched out here will prove insufficient.
Climate change talks and green issues
In 2006, Cameron sought to redefine the Tory image by hugging a husky and talking green. Owen Paterson, a committed climate change sceptic, then took hold of the Department for the Environment Food and Rural Affairs and slashed funding for adapting to climate change by 40%. In 2013 Cameron was reported to have demanded that the government “get rid of all the green crap” from bills in an attempt to bring down costs.
Some Tory insiders claim none of that reflects Cameron’s genuine interest in tackling climate change, which they say has remained consistent, despite some of the rhetoric. The next few months will show if that is the case.
Ben Caldecott, associate fellow at the Bright Blue thinktank, a champion of the modernising wing of the party and co-founder of the Conservative Environment Network, said he believed Cameron’s commitment to green issues would come to fruition at this year’s global climate change summit.
“There was a clear manifesto commitment for the UK to try to secure an ambitious agreement at the Paris climate change negotiations in December,” he said. “The prime minister has been entirely consistent on that. It is a priority aligned with his interests and concerns for international development.
Caldecott added that observers should not be too influenced by the experience of the coalition years when green objectives appeared to have slumped down the Tory agenda. “In coalition we had a situation where the Liberal Democrats were in the energy and climate change department and by virtue of having a Liberal Democrat secretary of state some people in the party thought the department was fair game for criticism, which was obviously counterproductive for the department”, he said.
“Now that it is an all-Conservative team dealing with climate change, and the ministerial appointments have been very good I think, it becomes easier for the party to get behind an ambitious agenda for climate change and other environmental issues. There may very well be backbench grumblings, as there are on all sorts of issues, but what is important is that the frontbench is behind it and that such criticism comes from a tiny minority.
“Two things stand out as priorities outside the Paris talks. First, getting domestic energy-efficient refits back on track. The green deal did some things for energy-efficiency improvements but we need to do a lot more. How we improve that framework is important.
“The other thing that was talked about before the election is that Cameron signed a letter with Clegg and Miliband committing to phasing out the unabated use of coal. That is a significant commitment – one of the first countries to use coal for energy to commit to be one of the first to phase it out. The question is, how quickly can that happen?”
PREDICTION: Cameron will try to reinvent himself as green and push for an ambitious settlement in Paris because this an issue about his legacy, and he knows climate change is not going to go away. Cameron has bought in to the agenda and progress can be expected.
Negotiations ahead of the EU referendum
On no issue is speed believed to be quite so important to Cameron’s hopes of a successful government than the future of Britain’s place in the European Union. It is now, before his most troublesome backbenchers feel they have the authority to lay down their demands, that Cameron needs to set out his own thoughts on what he wants to achieve from a renegotiation with the EU before a referendum, advisers believe.
An early date for the referendum will be necessary because of elections in France and Germany in 2017. Leaders there would not take kindly to British demands. So it looks extremely likely that the referendum will be held in May or October next year, rather than in 2017, as the prime minister seeks to lance the boil of what is a toxic issue for Tory leaders.
Cameron aims to lay out his wish list at a summit of EU leaders in late June. Germany has made it clear that it will not rush to change EU treaties, and eastern European ministers have spoken out against curbs on proposed migrant workers’ rights, which discriminate against their citizens. But the prime minister thinks there is still enough wriggle room to please enough of his backbenchers and – for now – his most outspoken critics are willing to give him time .
Mark Pritchard MP, a Eurosceptic who helped drive Cameron towards a pledge of an in/out referendum, said: “The parliamentary party needs to allow the prime minister the time and space to renegotiate with Brussels. And his hand will be strengthened by having a united rather than divided parliamentary party.
“On the back of this election outcome, this is the time of maximum strength for the prime minister and he needs to be given the backing to use that in the British national interest rather than have his hand slapped.”
PREDICTION: Cameron will never be able to match some backbenchers’ demands. The question is whether frontbenchers will equally be left disappointed by his renegotiations. If so, the party will split horribly.
A summit between Cameron and Nicola Sturgeon in Edinburgh on Friday was described by the Scottish first minister as “constructive and businesslike” after the prime minister confirmed he would consider additional proposals to beef up Holyrood’s tax and welfare powers. The SNP complained that a draft Scotland bill putting into legislation proposals formed by the Smith commission into further devolution watered down a promise that Scottish ministers could introduce new benefits or increase existing ones. In response, the prime minister said he could add extra powers going beyond the commission, which gives Scotland almost full control over income tax, air passenger duty and housing benefit. So far, so rational.
Sturgeon is holding back on demands for fiscal autonomy. She is aware that Scotland’s economy has been weakened by the low oil price and fears a black hole in the books. Cameron knows that if further such autonomy is granted, his backbenchers will demand reform of the Barnett formula, which delivers UK government funding to the Scottish executive.
Last week Owen Paterson, a leading figure on the Tory rightwing, said: “Scotland cannot treat England like some sort of piggy bank that can be raided. We should give the Scots responsibility – I want to see them raising the money they spend.”
There is an uneasy calm – and it is in Sturgeon’s gift to unleash a storm. She will seek to retain the SNP’s overall majority in Holyrood in May 2016. That may be the time for her to make bigger demands and subsequently put on a show about the Tory failure to live up to them. At this stage, the carefully calibrated plans for English votes for English laws, in which there is a veto for English MPs over legislation purely affecting them, will look unfit for purpose to many rightwingers. One senior Tory backbencher on the party’s right said: “We aren’t talking about this at the moment. But we will. That will be when the problems arise.”
PREDICTION: It is a matter of time before the SNP decides to push the buttons of the Tory rightwing and set off a row that could ultimately split the UK. Cameron’s challenge is to ensure that Sturgeon looks unreasonable, even in Scotland, if she tries it.
Schools and the looming crisis
Nicky Morgan’s reinstatement as education secretary was greeted with relief by many teachers. Michael Gove’s tenure was traumatic for some.
The Conservative manifesto certainly suggests no let-up in terms of the academy or free school programme. Weak school leaders will be forced out and an additional 500 free schools will be established, according to its pledges. Yet at least the curriculum overhaul and aggression towards those representing teachers appears to have been put to bed, unions believe.
However, amid all the highly charged arguments about structures, one major issue is yet to be tackled: the 500,000 additional children due to flood Britain’s schools. Ty Goodman of the Education Foundation, a cross-party thinktank praised by both Gove and shadow education secretary Tristram Hunt, said: “There will be a ‘capacity crunch’ across education with tighter budgets, the urgent need for more school places and the recruitment and retention of quality teachers.
Funding will be a challenge, particularly in FE colleges, with budgets set to shrink, while pupil numbers will increase.
“Shrinking budgets and an increase in pupil numbers could be a difficult double whammy and needs careful negotiation with the Treasury ahead of the next spending review.”
Goodman added: “Nicky Morgan has received a big vote of confidence from the prime minister in her handling of the Department for Education during the coalition. Nicky’s attention to workload issues for teachers, taking the heat out of key debates and prioritising the growth of ‘character’ development are to her credit. Her challenges are to allow changes to really consolidate in the system and to push forward with thoughtful and pragmatic reform.”
PREDICTION: It has yet to be seen how the population surge is to be addressed. Concerns abound that under the free school programme schools are not being established where they are needed. With budgets under threat, there is trouble afoot, Gove or no Gove.
The issue of airport expansion
How to achieve greater airport capacity in the south-east of England will cause an almighty argument in the Tory party – and soon. Sir Howard Davies, former director general of the CBI, is running the Airports Commission, which will report in June or July. The government charged him with recommending where expansion should take place. He has ruled out Boris Johnson’s idea of a new airport in the Thames estuary. The choice is now between expanding Heathrow (with a third runway or extending one of its existing two), and building a second runway at Gatwick. Strictly speaking, Davies’s decision will not be binding on the government, but it would be extraordinary if ministers rejected it. The chancellor George Osborne is thought to favour Heathrow but has never said so explicitly. Since losing his seat at the election, former business secretary Vince Cable has said he thinks the government will probably press ahead with Heathrow.
But if Davies does plump for expansion at Heathrow, there will be fireworks. Before the 2010 general election, Cameron said: “No ifs, no buts, no third runway at Heathrow.” Johnson, mayor of London and now MP for Uxbridge and South Ruislip, is vehemently opposed to Heathrow expansion and has reiterated that view recently, saying it would be “catastrophic” for Londoners, with unacceptable levels of pollution and noise.
If Johnson becomes Tory leader in a few years’ time, could he reverse the whole process? Cabinet ministers Philip Hammond, Theresa May and Justine Greening – all of whom have seats in the south-east – are also against Heathrow expansion, and said so in their election campaigns.
PREDICTION: The final choice will be a test of government commitment to the environment. Informed sources say Gatwick is not out of the running. Davies has ordered a new consultation on air quality and Gatwick supporters have been encouraged by Osborne’s appointment last week of Greg Hands, another opponent of Heathrow expansion, to the job of Treasury chief secretary.
The Conservatives’ pledge to cut £12bn from the welfare budget offered both Labour and the Liberal Democrats an easy target during the election campaign. The former chief secretary to the treasury, Danny Alexander, even unearthed some documents suggesting who would lose out.
In reality, it is unlikely that work and pensions secretary Iain Duncan Smith will ever spell out where those cuts will hit, despite Osborne’s announcement of an emergency budget on 8 July. When the coalition capped benefit rises at 1%, it was not, in the main, the jobless “shirker” who suffered. Nearly two-thirds of the pain fell on working households, by cutting the amount they could have expected in tax credits and child benefit. Those sort of moves do not fit well with Cameron’s vision of a blue-collar Conservative revival. Instead, according to Nick Faith, director of the Westminster Policy Institute, whose founders include former Downing Street adviser Sean Worth, the government will seek to ameliorate the hurt that is inflicted through a major housebuilding programme, while hoping that economic growth will ease the challenge by bringing in greater tax receipts.
Faith said: “The Tories are going to have to think very carefully about how they implement £12bn cuts. And they can find a lot of additional savings through structural reforms. You can bring down the housing benefit bill, which is about £20bn a year, by simply building more houses.”
Faith said the changes at the Department for Communities and Local Government were a sign of that commitment. “Greg Clark, the new secretary of state in the department, is massively in favour of incentivising people to accept new development. I think there will be a big drive on housebuilding in this parliament, and Osborne has signed up to that.”
PREDICTION: For all the attempts to soften the blow, £12bn is a huge target. It is unlikely that the Tories will be able to achieve it and keep their vision of blue-collar Conservatism alive. It is yet to be seen whether that vision is more important to Cameron than keeping to his deficit reduction plans.
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