One of the key themes to David Davis’s speech at the Centre for Policy Studies yesterday was the need for radical supply-side reform to improve the growth potential of the UK economy.
Davis, as with many backbench Conservative MPs, feels that the Coalition is not pressing on quickly enough with much needed deregulation, tax reform, banking competition, high-return infrastructure investment (i.e. not HS2) and a pro-growth energy policy.
If this doesn’t occur, he fears we may well be in for a decade, if not decades, of underachievement and disappointment.
He challenged the Chancellor and the government to use the Autumn Statement as an opportunity to deliver more radical market-orientated reform. But the prospects don’t look great. Thus far, the only suggested policies include a government backed small business bank (which has disaster written all over it), and some modest changes to Green Belt planning laws.
With the reshuffle occurring today, there still seems to be that air of complacency that with a few small alterations on the supply-side and bit more discipline within the Conservative party, all will be well for David Cameron and this government.
This seems wishful thinking.
One of the primary justifications for the formation of the Coalition in 2010 was to form a ‘strong government’ in the national interest. And yet, increasingly we hear from Conservative MPs within government that it is difficult to undertake radical change because they are in Coalition.
If this is the case, then by what definition can the Coalition be described as strong? Having a large voting block to vote through moderate policies is hardly what most people envisaged.
Indeed, the apparent failure of the Coalition so far on the economy (as evidenced on the attitudes from business and the public) is now threatening to undermine the very concept of Coalition itself.
Some commentators have already noticed this phenomenon. In a recent YouGov poll, 61% of people thought said they thought that being in coalition made it more difficult to develop an economic strategy, whilst just 34% believed the current Government would be able to ‘get us out’ of our economic situation.
The way to solve this, according to many commentators, is a more consensual approach. Conservatives are told to ‘get behind the government’ and ‘embrace the Coalition’. More discipline is said to be needed within the Conservative party. Fewer rebellions or backbench MPs sounding off on the economy is said to be desirable.
But for the group of Conservative MPs who feel that the government hasn’t got the appetite for the reforms they think necessary, this would be a most irrational action.
It’s not their reputations on the line if coalition doesn’t work. The failure of the concept itself threatens the Liberal Democrats existentially, and will have a much more significant effect on them than on the overall Conservative party. Nick Clegg’s party were the only major political force extolling the virtues of shared government going into the last election whilst many Conservative backbenchers warned that a hung Parliament would inevitably lead to political paralysis and an inability to deal with the country’s problems.
For a backbench MP with strong views on how to revive our economic fortunes, being a sheep on government economic business therefore makes no sense. In fact, it’s getting to the stage where they have very little to lose from speaking out. Liberal Democrats regularly attempt to put clear blue water between their party and government action, and unless Conservative MPs begin to differentiate themselves more forcefully, they will merely be tied to the record of coalition compromise.
The only rational thing for unhappy backbenchers to do is speak out in favour of the policies they support.
If the Conservative MPs with radical ideas can influence the direction of the Government, and it works, they would surely be rewarded handsomely by the electorate at the next election.
If the Government fails to deliver on the economic reforms the Tory critics see as necessary, Conservative backbenchers would still at least have a robust answer going into the 2015 election: ‘coalition prevented the much-needed reforms’, and they would likely change the leadership of the party accordingly.
And if by chance the Coalition, on current policy, manages to defy economic logic and preside over a robust recovery, then outrider Conservative MPs would be viewed little differently from their outrider Lib Dem counterparts who regularly pontificate at the moment.
It’s difficult to see a significant downside for them. As Davis said yesterday, often in times like this it is inaction which is the course most fraught with risk.