Leader: New Times, New Tories

By embracing state intervention, the Conservatives are once more reinventing themselves and marginalising Labour.

In 2012 a group of five recently elected Conservative MPs contributed to Britannia Unchained, a paean to deregulation, tax cuts and privatisation. Two of its co-authors, Priti Patel and Dominic Raab, now hold two of the great offices of state (the Home Office and the Foreign Office). A further two, the International Trade Secretary Liz Truss and the Business Secretary Kwasi Kwarteng, are also in the cabinet.

Yet rather than shrinking the state, the Conservatives are now expanding it. On 20 May the government announced the creation of Great British Railways, a new state-owned body that will set timetables and prices, sell tickets in England and manage rail infrastructure. Though private companies will continue to run most rail services, they will be set new targets on punctuality and efficiency. The state, in short, will perform a more significant role than at any time since the privatisation of British Rail that took place from 1994 to 1997.

This policy reflects a pattern of government intervention: in the Budget earlier this year, Rishi Sunak announced that corporation tax would be increased from 19 per cent to 25 per cent in 2023, a move that will take the overall tax burden to its highest level since Harold Wilson’s Labour government in 1969. It was opposed by Keir Starmer’s Labour. Infrastructure investment, meanwhile, has been increased to its highest level as a share of UK GDP since the 1970s. Other interventions, such as the £1,040-a-year increase in Universal Credit payments and the furlough scheme to protect jobs, have been directly prompted by the pandemic. But there are deeper forces at work – and the right’s statist turn pre-dates the Covid crisis.

During the 2016 EU referendum, the Vote Leave campaign championed higher NHS spending and rejected neoliberalism. As prime minister, Theresa May sought to rehabilitate the state as an economic actor. Guided by Nick Timothy, her chief ideologue and author of a book on the crisis of liberalism, she denounced the “libertarian right”, as well as the socialist left. Mrs May struggled to translate rhetoric into policy, not least because she was mired in the Brexit wars, but her agenda has outlasted her premiership. The “Red Tory” vision that Phillip Blond elaborated in 2009 – a fusion of economic interventionism and cultural conservatism – has proved prescient.

Ben Houchen, the Conservative mayor of Tees Valley, who was in May re-elected with 73 per cent of the vote, is emblematic of what we are calling the “New Toryism”. In 2019 he delivered on his manifesto pledge to nationalise Teesside International Airport. He speaks of the region’s people as having “taken back control”. Rather than being fused with a libertarian programme, Brexit is being fused with a statist one as the Conservatives seek to retain former Labour voters.

As Philip Collins writes in this week’s cover story on page 22, Boris Johnson’s brand might be best understood as an English Gaullism: “Neither left nor right, affirming sovereignty over the nostrums of class, a strong state and exceptionalism in foreign policy.”

Mr Johnson, a consummate populist, has long recognised the appeal of grands projets and the threat that austerity poses to Tory fortunes. In some respects, this marks a reversion to a pre-Thatcherite conservatism, which was never wedded to free-market dogma. Tory prime ministers from Harold Macmillan to Ted Heath promoted a central role for the state in the economy.

This is an age whose challenges demand significant government intervention: the climate crisis, ageing populations, wage stagnation, renewed great-power conflict. The Conservative Party has the capacity to evolve and adapt. Depending on circumstance it has been Europhile and Eurosceptic, protectionist and liberal, isolationist and interventionist. This political shape-shifting has often left the more doctrinaire Labour Party adrift and marginalised – as it is under Mr Starmer.

In the late 1970s, as the postwar Keynesian consensus crumbled, the Tories rose with the new Hayekian right. Now, in radically different circumstances, they are leading the communitarian turn. Once again, Labour flounders as it struggles to understand the new times.