Skulking at the back of a packed room of politicians and journalists on Wednesday evening, an unkempt Stewart Wood, the Labour peer described as Ed Miliband’s éminence grise in the days when he needed one, was furiously making notes as a man in a T-shirt called for a clampdown on predatory corporate giants and the championing of the living wage.
Alongside him was the Labour MP Jon Cruddas, a policy wonk.
They weren’t at a Labour leadership hustings or an event staged by a leftwing thinktank. The Labour thinkers, fresh from their general election mauling, were attending a talk by a former adviser to David Cameron, Steve Hilton, at the Westminster offices of the Policy Exchange, a current Tory favourite, which boasts justice secretary Michael Gove as a former chairman.
They were watching a Conservative thinker spell out how David Cameron could steal Labour’s clothes … and perhaps its future.
Hilton, now a tech start-up entrepreneur in California, told the room: “I do believe that we need a revolution. I think that is not an overstatement of the kind of change that we need to see if we’re going to deliver the kind of society and economy that we all, I think, want to see happen in this country.”
One of the themes of his book, More Human, was, he said, “challenging some of these incumbent companies that actually don’t see themselves prospering by inventing brilliant new products and services, and supplying them in a way that delights people and treating their workers well and their suppliers”. He added: “I think that it is completely wrong that people should work hard and not be able to live on that.”
For all the criticism that Miliband and his agenda has received since their trouncing at the ballot box, none of these sentiments would have been alien to the former Labour leader. Indeed, however poorly Miliband had sold them over the past five years, they were some of the most popular parts of his manifesto.
In the packed room Hilton was in effect suggesting, albeit in idealistic language, that his former boss nab those policies from Labour and attach them to a party with economic credibility and an instinctive admiration for the entrepreneur to build an electoral coalition that could keep Labour out for a generation.
The question is whether Cameron – who many think let his 2010 talk of a Big Society drift – will or can do it.
The prime minister has set out his vision of a blue-collar conservatism that would be in sympathy with the Hilton mantra, and it has been striking how many cabinet ministers have in the weeks since the general election spoken of the need for the new Tory government to become the party of social justice.
Yet the looming problem is that the manifesto on which his party was elected with a majority, however slim, contains a plan to cut £30bn in spending including £12bn in welfare – which will inevitably hit people claiming in-work benefits – while cutting inheritance tax and raising the 40p tax rate threshold to £50,000 to help people receiving nearly twice the average national income.
And the right of his party won’t allow him to drop those pledges. “If you believe in backing aspiration, you need not just to help people where they have got to on the income and employment ladder, but to show them that, if they succeed, there will be a sensible balance between them paying more for the general good and keeping enough of their extra earnings to make it all worthwhile,” writes a former cabinet minister John Redwood in today’s Observer.
“That is exactly what the Conservative policy of raising the 40% threshold to £50,000 by the end of the parliament said. I look forward to progress on that journey being announced in the budget on 8 July.”
Not everyone agrees with Redwood, certainly, but it is in this tension that lies Cameron’s dilemma.
The Observer has learned that the work and pensions secretary, Iain Duncan Smith, is just one senior Tory figure who has become increasingly concerned that an opportunity to be genuinely “one nation” will be dashed before it has even begun.
An ally of the cabinet minister said: “Duncan Smith was surprised when the £12bn figure was announced before the election, but reconciled himself with the pledge because, like everybody else, he believed it would be whittled down in coalition negotiations when a hung parliament was elected.”
In an article for the Times last week, Duncan Smith’s former chief of staff Tim Montgomerie wrote a hard-hitting article entitled: This So-Called One-Nation Toryism Stinks.
“The middle classes shouldn’t be getting tax cuts, while those in tough, poorly paid jobs, who are already running out of money at the start of the month, are getting their benefits cut. That’s not one-nation conservatism; it’s two-nations conservatism.”
Those concerns are widely shared by other Tory modernisers who can sense that this could be their moment, but fear it will be lost. “I thought it [the Montgomerie article] was pretty powerful stuff,” said David Skelton, a former Tory parliamentary candidate in the north east and now a director of Renewal, which campaigns to broaden the Conservatives’ appeal to working-class voters.
“I think what you saw at the election was the Tories beginning to build a new electoral coalition and Labour beginning to lose their grip on the old one that Blair built up. The skilled working class deserted Labour in 2010 and didn’t come back at all in 2015, and they are having trouble with the working class vote as well.
“Their heartlands, the ones they could once rely on, are dwindling and dwindling. It has obviously disappeared in Scotland. In Stoke, the turnout was less than 50%, which is extraordinary. There is a really big opportunity for the Tories here while Labour is navel-gazing. There is a chance to dominate the political agenda and keep Labour down.
“For me, it is about translating the one-nation language into compassionate policies that always prioritise the moral mission to help the poor. So things like the living wage should be adopted as a Tory mission. There should be active efforts to encourage the private sector to pay the living wage. And also the northern powerhouse concept has been very important in getting the Tories a hearing in the north.
“If the Tories become entrenched and start using the right language, they start building up majorities. But the northern powerhouse needs to be expanded further so that it goes into those parts of the north-east and Yorkshire that were badly hit by de-industrialisation.”
Danny Kruger, a former Cameron speechwriter who has previously criticised the prime minister for allowing his ambition for compassionate conservatism to be hijacked by the right of his party, said the government needed to talk less about cuts and more about a welfare system that works.
“It goes back to the time when George Osborne was talking about strivers and shirkers and Iain Duncan Smith was not doing so. He [Osborne] needs to adopt Iain’s rhetoric, which is about welfare reform being for the recipients of welfare, not for the taxpayer.
“As much as anything, it is about Cameron himself leading. If I were him, I would move the whole government to the north-east of England … and say if the recovery doesn’t help the north-east it isn’t a real recovery and being quite political about this.” Such a move would certainly match the radicalism that Hilton demands. Time will tell if the prime minister shares his friend’s urge for a new type of Conservatism. Or whether the Labour scribblers at the back of Wednesday night’s event can scramble back into the game.
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