Confident Tories aim to take Labour’s territory

George Osborne At Reception

Like most Conservatives, Patrick McLoughlin, the transport secretary, is in a cheery mood as he heads for his party conference in Manchester.

The city is not exactly Tory territory. In fact it is a sea of red. Since the local elections on 7 May, Labour has held every seat on Manchester city council – all 96 of them – and within its boundaries there is not a single Conservative MP. In Greater Manchester as a whole, there are now just five Tory MPs out of 27.

But can that change? McLoughlin certainly thinks so. On Tuesday he will officially open a revamped Manchester Victoria station, which has been modernised at a cost of £44m. Modernisation of stations up and down the country – King’s Cross, St Pancras, Birmingham New Street and now Manchester Victoria – is just a part of what he calls a “massive investment in infrastructure the like of which we have not seen since the Victorians”.

“In 2009 Manchester Victoria was voted the worst station in the country,” he says. Now it boasts a proud new look. “Places that people did not want to spend any time in are now becoming destinations in their own right.”

The message is that the north is getting its share of public investment and the Tories are on their way. The transport secretary, in an interview with the Observer, talks about connecting up the great cities of a new “northern powerhouse” with fast trains crossing the Pennines in a few years’ time, on routes that for too long have been tortuous endurance tests for passengers and symbols of northern neglect.

“How do you get that greater connectivity between Liverpool, Manchester, Sheffield, Leeds and York? That is vitally important to give those big cities the same options that London has had.” That will soon include, he adds, trappings of advancement so far confined to the south, including “an Oyster card for the northern powerhouse”.

Well before Jeremy Corbyn became leader of the Labour party, George Osborne was forging ahead with the northern powerhouse concept, stealing ideas about how to devolve power to city regions from Labour’s policy review that Ed Miliband’s party was too timid to take up, and promoting them as the Tories’ own. This week they will place rocket boosters under the whole idea.

Some of the ground has already been prepared before conference. On Friday the chancellor announced a second “northern powerhouse” – alongside Greater Manchester – with a Sheffield combined authority with its own elected mayor. The new mayor will have control of transport budgets, bus services and strategic planning. Labour leaders in local government, as much as Osborne himself, enthuse about the plans. Some of them will be at the Tory conference this week.

The chancellor is driving a wedge between parts of Labour local government and the Corbyn-led national party, which complains that it is all just a ruse to allow Westminster to blame councils for cuts imposed by the Treasury. One prominent figure in a Labour council told the Observer that he and others were now “much more interested in talking to them [the Tories] than talking to Corbyn and his gang”.

The Conservative strategy is clear. To answer the charges that they are just the party of the south and the rich, they are promoting themselves as champions of a “re-balanced” national economy. But, after a Labour conference in which Corbyn took Labour back to the left, it does not stop there.

The Tories in Manchester will also claim to be the party of the workers. The three themes of the conference will be “security, stability and opportunity”. The intention is to play, in each case, on fears among working people that the new leftwing Labour leader would imperil the economy and with it jobs, the security of the nation (by abandoning Trident) and the ladder of opportunity that investment in national infrastructure can bring. McLoughlin contrasts the level of investment that he says has been possible in the railways, because of the involvement of private companies, with Corbyn’s plan to renationalise rail, which he estimates would involve a cost of £10bn merely to buy back rolling stock. “The idea that British Rail was a wonderful organisation is for the fairies,” he says, raising the spectre of a return to appalling levels of service. “To go back to a nationalised system is just bizarre.”

Osborne’s plan for a new “national living wage” is part of the same appeal to working people, he says. “We have a chance to show that, with us, people who work get rewards at whatever level they are at ... it certainly becomes our constituency.” Conservative deputy chairman Robert Halfon is even planning to set up a Conservative trade union movement for workers fed up with militant trade union bosses.

Former Tory minister Damian Green says: “With Labour going off into the wild red yonder, we have the opportunity to make clear for a generation that we are the mainstream, moderate, centre-ground party and the one that best represents all working people.” Tory claims to the mantle of the workers’ party will be helped by the publication of a report from the independent Resolution Foundation which shows that the proportion of low-paid employees across Britain is set to fall to its lowest level since 1985. The lifting of the legal wage floor associated with the national living wage will reduce the extent of low pay across Britain from 21.4% in 2014 to 18.8% by 2020, according to its Low Pay Britain 2015 report. While the authors warn that Osborne’s summer budget will have weakened work incentives and reduced incomes for many low-income households by cutting tax credits, they say the chancellor has grounds to claim that the “low pay landscape is set to be transformed”.

But if the Tories head to Manchester confident following their election win and the arrival of Corbyn, they know that in itself spells danger. As David Cameron and Osborne try to position the party more on the centre ground, many on the right feel the field is now so clear, and the Labour opposition so unthreatening, that it is time to drive further right.

Divisions over Europe will explode in a series of meetings on the conference fringe, as rival “In” and “Out” campaigns gear up for the referendum promised by Cameron by the end of 2017. McLoughlin, who is in favour of staying in, today exposes divisions over Europe at the highest levels of the party, insisting that the positive case for membership must now be heard “rather than always looking on the negative side”. He says life outside the EU will not be a “land of milk and honey” and that many British companies such as EasyJet say they would not exist without the EU. It is a message in stark contrast to those uttered by many of his cabinet colleagues.

There are also deep and unresolved cabinet splits over whether to expand Heathrow to provide more airport capacity for the south-east. At least five cabinet ministers, as well as Boris Johnson, a likely candidate to succeed Cameron after he steps down in 2020, are against, while Osborne, probably now the favourite to step into Cameron’s shoes, is in favour.

Jostling over the succession is already beginning. A decision on Heathrow was expected by Christmas but now that appears to be in some doubt. McLoughlin said an announcement would “hopefully” be made by then, but he could not promise it would, or indeed that it would be made before next May’s London and council elections.

It was simply the firm intention, but that was as much as he could say.

A row is also brewing over Tory plans to slash tax credits for 3.2m lower-paid households, who will lose an average of £1,350 a year from next April. Johnson has joined forces with Frank Field, ex-Labour minister and chair of the work and pensions select committee, who is demanding that anyone earning under £13,100 be exempt from the cuts.

Fieldsays that the Tory plans, as they stand, are a real opportunity for Labour to counter Conservative claims to be the workers’ party. Plenty of other Tories also fear the cuts to tax credits could wreck their strategy of becoming the party of working people and give Corbyn an issue on which to focus his attacks and unite his troops. There are whispers about a possible U-turn by Osborne, which would not please the Conservative right.

Asked whether he thought the Tories were now strong enough to destroy a divided Labour party for good, McLoughlin poured cold water on the idea. Not least because, as a former chief whip, he knows better than most that his own party, for all its upbeat talk about stealing Labour’s clothes and conquering the north, is still just as capable of tearing itself apart as Labour.

The workers’ party? The two offers

UNIONS

Conservatives

The Tories are pushing an anti-trade union bill through parliament, which will make it harder for unions to call strikes, particularly in key public services. But, sensing there are even some Tory-inclined people in unions, they have announced plans to set up a Conservative union movement.

Labour

Corbyn’s party opposes Tory attempts to curb union powers and change the rules under which union members pay money to the Labour party. They see the bill as an assault on the democratic rights of workers and a bid to bankrupt the Labour party.

WAGES

Conservatives

The Tories say their plans for a national living wage (£9 by 2020) show they are acting to curb low pay and reward strivers. It was the surprise announcement in the post-election budget, to sweeten the pill of cuts to in-work benefits. Tory MPs say it has given them cover for benefit cuts.

Labour

While backing a living wage in principle, Labour says the Tory plans are a con as many people in work will be worse off due to cuts to tax credits announced in the same budget by George Osborne in the summer. They say the chancellor has taken away more than he has given many families. Corbyn wants to campaign against the tax credit cuts and backs a £10 minimum wage.

WELFARE

Conservatives

The Tories believe cuts to welfare are broadly popular with working people who dislike the idea of something for nothing. They say the introduction of universal credit means it will always pay to work in future, and that the new system will increase incentives for people to come off benefits. They are cutting the benefit cap from £23,000 to £20,000 outside London.

Labour

Corbyn is against a benefit cap, and made that clear in his first days as leader. He says it leads to social cleansing (poor people having to move away from their homes) in areas of the UK where rents are high. He wants to introduce rent controls to ensure people can afford local housing costs.

NORTHERN POWERHOUSE

Conservatives

Osborne has stolen Labour’s ideas for the devolution of powers to new city regions, particularly in the north, to boost local economies and create jobs. New powers for city regions, with elected mayors, have already been announced for Manchester and Sheffield.

Labour

The party has been outmanoeuvred by the Tories over devolution and the northern powerhouse. Osborne has even invented a catchy name for Labour’s plans. Now Corbyn seems to be pretty down on the idea, saying that the Tory plans are a ruse that will allow central government to blame the newly empowered councils for cuts in the long term.

IMMIGRATION AND REFUGEES

Conservatives

To protect British workers from losing out to workers from overseas, and keep their supporters happy, the Tories have taken a hard line on immigration. They want to ban EU workers from claiming in-work benefits for four years from the time they enter the UK. Cameron was against admitting more refugees until the summer crisis forced him to do so.

Labour

Corbyn has softened Labour rhetoric on immigration. The party would take more than the 20,000 refugees the Tories say they will admit from Syria. They oppose plans for a four-year ban on EU migrants claiming in-work benefits.

Powered by Guardian.co.ukThis article was written by Toby Helm, for theguardian.com on Sunday 4th October 2015 00.07 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010