POLITICS
Labour may spend more. The Tories must promise to spend better
BRUCE ANDERSON
The Tories have been warned. On Tuesday, Tony Blair not only attempted to halt his party's slide in the polls. He also set out his central tactic for the next elec- tion. The PM intends to trap the Tories in an electoral killing ground: taxation and spending. Each time a Tory spokesman mentions tax cuts, he will be accused of planning the destruction of every public service, and of threatening economic sta- bility. Whenever the Tories refuse to pledge themselves to adhere to Labour's future spending plans, Labour will claim that on day one, a Tory government would take an axe to existing spending pro- grammes. Mr Blair would have us believe that by the end of the first week of a Hague government, there would hardly be a school or a hospital left in Britain.
As one would expect from a Prime Minis- ter who never allows the truth to stand in the way of his personal convenience, this Blair strategy is based on two historical falsehoods and one big lie. The falsehoods relate to public spending and to the economy. Any- one who listened to Mr Blair on Tuesday could have been forgiven for assuming that from 1979 until 1997 there was no public expenditure in Britain. In reality, and despite her occasional rhetoric, Margaret Thatcher spent public money like a social democrat, especially on health. So did John Major. At various stages, the Thatcher and Major governments could both have been accused of being too lax over public expendi- ture and allowing it to increase at a higher rate than economic circumstances warrant- ed. Then and now, the Tory cuts were a fig- ment of Labour's imagination.
Mr Blair would also have us believe that the Tories spent 18 years wrecking the British economy, while Labour has taken only three years to produce an economic miracle. This is childish nonsense. It was the Thatcherite supply-side reforms of the Eighties that made it possible for Britain to become the most vibrant economy in Europe. Without them, none of the recent job creation that Mr Blair trumpets would have been possible. In the balance sheet of history, those successes far outweigh the failures in monetary management which led to the recession of the early Nineties — and even that was not a wholly profitless period. Inflation was not only cured during John Major's premiership; the cure seems to have created a new economic culture. For 30 years, Britain had been an inflatio-genic economy, and few commentators seriously believed that this would ever change. It has. By 1995, John Major had achieved the eco- nomic stability which Tony Blair now boasts of. The Blair government's sole contribu- tion to that stability has been to threaten its long-term prospects with a triple hazard. Labour market regulation, a switch in resources — via the stealth taxes — from productive to unproductive economic sec- tors, and plans to increase public spending at a faster rate than economic growth: unchecked by a new government, all three could undermine the stability which Mr Blair merely inherited.
Then there is the central Goebbelsian fiction: Mr Blair's £16 billion. After the PM's speech, Alastair Campbell was chortling around the press room, announc- ing that £16 billion amounted to £24 mil- lion in each constituency. So posters would appear everywhere, saying: 'The Tories would cut £24 million in your area. Ask them which hospitals and schools they intend to close.' £16 billion is a cunning fig- ure, in that it does not sound rounded up; unlike 15 or 20, 16 has an aura of exacti- tude. This is wholly spurious. The £16 bil- lion is solely a Labour guess as to what the Tories might do to the Blair government's plans for future spending, which now stretch well into the decade. Labour has no figures on which to base that guess, because the Tories have not yet published detailed expenditure proposals. They have made three specific points. First, that a Tory government would match Labour's planned expenditure on the NHS; second, that public spending should grow less rapidly than the economy did.; third, that in all normal circumstances there would be tax cuts. So the £16 billion is an invention, and even if the Tories persist in refusing to match all Labour's spending plans for 2003/4, this does not mean that they would have to start by sacking nurses and closing cancer units, as Mr Blair claimed on Tues- day. But it is a claim that he will repeat.
The Tories will have to come up with a rebuttal, both political and economic. The economic part is straightforward. It should be easy for Messrs Hague and Portillo to point out that Labour's spending plans vio- late the principles of good housekeeping and that money alone does not solve social problems. On Tuesday, Mr Blair admitted that his government should not have tried to run the Dome. But the Dome was a sin- gle, relatively simple exercise, costing only £1 billion. If they cannot run the Dome, why should they be entrusted with educa- tion or the NHS? If clever men like Peter Mandelson and Charlie Falconer made such a mess of the Dome, wasting £1 bil- lion in the process, why should anyone believe that John Prescott is the right min- ister to run £180 billions-worth of invest- ment in transport? That is a serious amount of billions to place in jeopardy. So the Tories should be able to argue that even if Labour were to spend more, they would not only be doing so at a higher rate than the nation could afford: a lot of the money would be squandered. Labour might spend more, the Tories should say; we will spend better.
But economics is not enough. Michael Portillo has admitted that under the Major government the Tories often sounded like the political wing of the Treasury. They often still do, even though they no longer control the Treasury. Pru- dence is vital, but it must be tempered by generosity and optimism.
If they are to turn Labour's negatives into their positives, the Tories have several cru- cial tasks in Bournemouth next week. If by the week's end Mr Hague does not seem papabile, his opinion-poll position could rapidly deteriorate. But one of his priorities ought to be to persuade the voters that it is not only safe to vote Tory if you believe in decent public services; it is essential to do so in order to ensure that they are sensibly managed. The Tories' recent preliminary manifesto, an impressive document, con- tained some of the detail which they could use to make their claim to be good man- agers of public services. It is now time to turn that detail into a political message.
As the Blairites will ruefully acknowl- edge, Mr Hague is good at exploiting the government's difficulties (though he is nei- ther as ruthless nor as opportunistic as the Blairites were from 1994 to 1997). But that is a necessary condition for winning power, not a sufficient one. The public are begin- ning to sense — correctly — that William Hague is tough. To earn their trust, howev- er, he will have to convince them that he is also humane. If he fails to do so, the £16 billion fraud could still win Tony Blair the next election.
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