Dr Liam Fox is a former Defence and International Trade Secretary, and is MP for North Somerset.
It is still possible for the Conservatives to win the next general election. Despite the apparent gloom within much of the party, the combination of an improving economy, the fact that we are defending such a large majority, and the effects of the boundary changes will all act in our favour.
However, even those as naturally optimistic as me can see that all is not well. Despite Rishi Sunak bringing much-needed stability to the process of government, the polls still look daunting. What can be done?
The first thing, as I have often argued, is to create a compelling narrative. Politics is best told in stories, creating a consistent picture that voters can easily understand. It requires us, not simply to set out policies, but the ideas and philosophy behind them. In other words, we need to have more ‘why’ in our politics to augment the necessary ‘what’.
The second is to make clear what sort of society we want and who are, as Margaret Thatcher would have said, “our people”. During the late 1970s, there was a growing desire for homeownership. It came at a time when millions were trapped in post-war council properties, unable to change the colour of the front doors, never mind get onto the property ownership ladder. Thatcher understood that by dramatically widening ownership, people who had never previously voted Conservative would understand that they shared our basic values. Owning their own home gave people pride and dignity, something that was being denied by a socialist state. At the time, many in the party said that selling council houses at a discount of 50 per cent was irresponsible, but she understood that to be credible we needed to do something entirely emblematic and totemic.
Today, our society has changed a great deal, and although the concept of homeownership has become deeply entrenched, there are other trends that we need to understand if we are to have the same political relevance, and reflect the aspirations of the next generation, as we did in that most seminal time for our party.
It goes without saying that we need to ensure that more young people who choose to do so can get onto the housing ladder, and that means fundamentally shifting the supply and demand equation, and getting away from inflated house prices as being an alternative to more traditional savings. We also need to accept that a substantial proportion of people are happy in the rented housing sector – something that is the norm for many of our continental neighbours.
But what is the equivalent of the 1980s home ownership revolution today? If we really want to create a genuinely deep-rooted free-market society then we must do more to help those who are the wealth creators – the innovators and creative talents represented by our small businessmen and women. Contrary to what most people will surmise by watching our broadcast media, obsessed as they are with the public sector, 82.5 per cent of all jobs in this country are in the private sector, with only 17.5 per cent being public sector jobs. Of those private sector jobs, 61 per cent are in the SMEs – small and medium-sized enterprises. In other words, over 50 per cent of all jobs in the United Kingdom are now in small businesses.
Does that give you a clue as to who the Tory party should be appealing to come the next election?
The Conservative Party should be the natural party of choice for every white van man and woman across this country, and the natural home for every white coat man and woman in our emerging tech sector. We need to re-engineer and sell our policy offers in a way as dramatic as we did in relation to home ownership. Too many people who have the natural aspirations to build the business and create wealth in our country do not currently see the Conservatives as their natural allies.
That needs to change. We need to look at the tax system, our regulatory frameworks and the ability to access scale-up capital if we are to create this political alliance for the future. Jeremy Hunt, in his Autumn Statement and his Spring Budget next year, needs to set out how the Conservative Party, and only the Conservative party, can be trusted to unleash the full talents of our small business sector.
We already have a good story to tell, but if we have to do something extremely totemic and emblematic again, in the way we did with council housing, then we should do it. This will require us to have enormous discipline in other fiscal areas if we are to be able to create the sort of credible offer that can create a generational affinity for our party. It was the act of faith in selling council houses in the 1970s that enabled us to gain political support for our wider reforms and which kept is in government for 18 years without the need for any coalition.
We also need to ask ourselves if we are focusing on the right economic metrics, especially GDP as a measure of growth. As McKinsey put it back in 2015, “GDP as a unit of measure has not kept pace with the changing nature of economic activity and is not well suited to accounting for services with no output that can be measured easily by counting the number of units produced. Nor does GDP lend itself to assessing improvements in the quality and diversity of goods and services full”. I couldn’t agree more. We need to find more accurate measurements of growth, reflecting the predominant nature of services in the UK economy.
We also need to be clear about the differences between growth and wealth creation. True wealth creation can only occur when we take our unique IP and turn it into goods and services that do not exist today, or better goods and services than already exist. Any fool can borrow tomorrow’s money and spend it today and call the increased economic activity growth. After all, every Labour government since the war has deployed the tactic. It is a world away from wealth creation or sustainable prosperity. We need to orientate our policies towards that wealth creation, and specifically that which can be generated by setting the creative talents of our innovators free in an open and competitive economy, ensuring that adequate sources of finance are available to them for scaling up so that we do not lose our IP abroad. A wealth-creating Conservative Party with a compelling narrative and credible offers is still something worth voting for.