David Gauke is a former Justice Secretary, and was an independent candidate in South-West Hertfordshire at the 2019 general election.
We should not underestimate how grave the situation is for the Conservative Party and, more importantly, for the country. Britain faces a cost of living crisis, unsustainable public finances, low productivity, poor growth prospects and a loss of market confidence. The Conservative Party is blamed by the public for much of this, has lost its second leader in three months and is currently on a record low in the opinion polls.
All of this is as a consequence of many factors, some of them international and beyond the control of British politicians. But I want to focus on one in particular. The right of the Conservative Party is far too powerful. Whilst this remains the case, the Conservative Party is incapable of governing effectively or even rationally – whoever leads it.
Before we turn to the current shambles, let us go back to the summer of 2015. The Conservatives had just won a general election with a majority. By international standards, our economy was growing strongly, unemployment was low and getting lower, business investment was growing strongly, the deficit was falling. Labour was in the process of choosing an unelectable crank as its leader, and a period of straightforward Tory dominance was in prospect.
The Conservatives have remained in power since then, but there has been nothing straightforward about it. Brexit, of course, changed almost everything.
Leaving the EU was once a fringe view, even at a time when Euroscepticism was ubiquitous. But Conservative MPs on the right agitated for an In/Out referendum – some out of political positioning, a few out of principle. David Cameron conceded it and then found that a fringe position had become almost mainstream in the party. A populist campaign – £350 million a week for the NHS, stop the Turkish migrants – was enough to win.
The referendum result changed everything. It revealed how powerful the right had become, and also gave it the authority to speak for ‘the people’. Anyone who challenged the right’s interpretation of the Brexit vote was an enemy of democracy.
This meant that the departure from the EU became a bloody and protracted process because the beliefs and promises of prominent Leave campaigners could not be reconciled with reality. Those who attempted to do were dismissed as traitors.
Leave voters were justified in expecting the leadership of the Leave campaign to understand what they had campaigned for, but it was apparent that they did not. It was not possible to have all the benefits of membership of the Single Market but have complete regulatory autonomy. It was not possible to have control of our borders and avoid trade barriers with the EU. It was not possible to dismiss the issue of the Northern Ireland border, which leavers did until Boris Johnson and David Frost erected a border in the Irish Sea.
Reducing EU migration does not help public services but hinders them (we need the workers), and the damage done to the public finances by making the economy smaller does much more harm than the relatively small contributions we made to the EU budget. And trade deals with non-EU countries are of little economic value compared to the benefits of EU membership.
I mention all this not out of nostalgia for the heady days of 2016-19, but because this was the era during which a pattern was set. None of the points I set out in the previous paragraph are controversial amongst those with knowledge and expertise of the relevant matters. There is, I accept, a sovereignty and democracy argument over Brexit, but on the economics there is not. But the right of the Conservative Party thought it knew better.
And here we are again. The leadership debate over the summer shared similar characteristics to the post-referendum Brexit debate. One side argued that the experts should be listened to, that we should avoid taking risks and warned of irresponsibility. The other side dismissed this as defeatism and the failed old orthodoxies. It was time for change and Liz Truss offered change. The right endorsed her, along with a handful of careerists, whilst the old left and centre opposed her. But by now, there was not enough of the left and centre that remained within the party membership.
Naturally, everything blew up when she stuck to her approach in the mini-budget. The damage done was immediate as the markets took fright. Truss and Kwasi Kwarteng must take responsibility, but the UK was already vulnerable because of the damage done to our institutions and our reputation for good sense over the last six years.
It would be too much to hope that the right would learn any lessons from this. A fair few of the people who agitated for leaving the EU, blocked a smooth departure, installed someone so evidently unsuited to high office, put in place an economically damaging Brexit and then sought to rip up the deal, defended their rogue choice when in office, and then backed another inappropriate candidate to be Prime Minister have spent recent days rallying round the candidacy of Boris Johnson. They are fortunate that on this occasion they will not get their way. Johnson’s immediate return would be fatal for the party.
The reaction from some on the right to the collapse of the Truss administration has descended into paranoia. There is muttering about conspiracies by globalists – that markets are overruling democracies. It used to be the hard left that thought that it was an outrage if international investors refused to lend to us at the price of our choosing. Now it is hard of thinking Conservative MPs.
The Conservative Party is set to elect Rishi Sunak as its leader later today. But the right has not gone away. The medium term fiscal statement – still due on 31 October – is going to require substantial tax increases if the markets are to be reassured that the public finances are on a sound footing (the fiscal hole cannot credibly be filled by spending alone). The sums involved – in the region of £20 billion of tax rises I would guess – cannot be raised easily or from a small group of people or companies. The right are almost certainly not reconciled to this.
This will not be the only issue at stake. If we are serious about improving our growth prospects, Sunak will have to disappoint the right by liberalising immigration policy (as Truss, to her credit, wanted to do) and by cutting a deal on the Northern Ireland Protocol. Trouble with the right lies ahead.
It is the same old situation. Ministers are faced with reconciling reality with the demands of their ultras. The recent history of the Conservative Party and the country is the ultras have had their way on both policy and personnel, as their power has grown. The result – for both party and country – is now clear to see.
Sunak will be the first Tory leader in three not to have been picked by the right of the party, after their two previous choices went badly wrong. He will be fortunate if he escapes the fate of the last leader not standing as the candidate of the right – Theresa May – of the right making his position impossible. With tax rises soon to be announced, we may know soon enough.