David Gauke is a former Justice Secretary, and was an independent candidate in South-West Hertfordshire at the 2019 general election.
“Long term decisions for a brighter future.” The slogan for last week’s Conservative Party conference sounded good to me. We need some long term decision making if we are to address the big challenges we face. Low productivity, an aging population, climate change, the rise of AI and geopolitical instability all require us to pursue policies that will not deliver benefits for some years after they have been implemented but still have to be addressed.
All of that requires grown up politics, and Rishi Sunak has always struck me as being a grown up politician. He is evidently diligent, and has an interest in policy (which is more than can be said for one recent Prime Minister) and understands that one should not take risks with the public finances (which is more than can be said about another recent Prime Minister). He has demonstrated pragmatism and common sense in resisting calls for unfunded tax cuts, agreeing the Windsor Framework and deciding that the UK should return to Horizon Europe.
If one wants a Prime Minister who is administratively competent, wants to ensure that the public’s money is spent wisely and cares more about the long term good than the short term headlines, Sunak has generally looked like someone who passes those tests. In other words, he is a serious person. In that context, it has to be said that last week – and the announcement on HS2 – was not a good one for Sunak’s reputation.
By accident (the snap of a briefing paper that was carelessly on display in front of Downing Street photographer), the issue of HS2 had hung over the Government in recent weeks and this, presumably, resulted in the announcement in Manchester that a train line to Manchester was not going to be built. This was far from ideal.
On the merits of the decision, I am sceptical that Sunak made the right call, but have a degree of sympathy. If the future costs of completing HS2 have gone up considerably, it is perfectly reasonable to question whether the project is still worthwhile. There are very real downsides to dropping it, but there must come a point when the increased costs mean that continuing is no longer justified. In other words, the actual decision to scrap the second leg is one upon which reasonable people can disagree.
The problem is the process. Some will argue that complaints about process are tedious and only of interest to Whitehall insiders and that what matters is that the right decision is made. In this case, however, the process really does matter. A bad process will inevitably result in wasted taxpayer money, and will further undermine business confidence in the UK. Sunak, in failing to take the process seriously, has looked unserious himself.
We are told that scrapping the second leg of HS2 will free up £36 billion which will be spent entirely on transport infrastructure. In normal circumstances, having an additional £36 billion to spend on transport infrastructure would create a huge amount of work in deciding precisely how these funds would be invested. The Treasury would work very closely with the Department for Transport, Network Rail, National Highways, the devolved administrations and mayors and local authorities. Detailed cost benefit analyses would be drawn up of each of the potential replacement projects before these would be prioritised. It is a process that would involve hundreds of officials over many months, the equivalent of a mini-spending review.
It is perfectly clear that this is not what happened in respect of the Prime Minister’s conference speech. The decision on HS2 was rushed out because of media speculation, and the Government decided that it could not simply announce the scrapping of one project without announcing how it was going to be replaced. Given the fear of further leaks, a package was put together involving a small number of officials, plucking various ready-made projects off the shelf.
Predictably enough, it turned into an embarrassing shambles. Some projects that had previously been announced were included, as were some projects that had even been completed. Some of the announcements related to local projects for which the decision to proceed rested with regional mayors not central government. The overall package was described as being ‘Network North’, although it turned out that it was not much of a network and not exclusively in the north. Mark Harper, the Transport Secretary, conceded yesterday that the list of projects were not so much a programme of work but a list of examples of what could be achieved with the HS2 savings. That is certainly not the impression Sunak gave last week.
On the day of the announcement, when pressed on whether we could be confident that any of this would actually happen, Sunak pointed out that bus fares would be capped at £2 in November so people would soon see the benefit. So we are seeing investment in a train line for the future replaced with a subsidy for bus fares now. Hardly a long term decision for a brighter future.
This is a relatively small part of the £36 billion but the suspicion remains that we are going to spend less on transport infrastructure than was previously planned, despite Ministerial protestations. £8.3 billion is going to be spent on potholes. There are worse ways of spending taxpayers’ money than fixing potholes but this is maintenance not capital expenditure.
The wider point is that decisions on how to spend £36 billion appear to have been made in a haphazard and ill-informed manner. It may be unfair to assume that the constituent elements were chosen by an exhausted Prime Minister in his Manchester hotel room in the early hours of the morning but that is exactly what it looks like from the outside. One can see the political imperatives to keep the process tight (to avoid further leaks) and to make an early announcement, but this does not constitute “doing politics differently from the last 30 years”. In fact, it looks like Brownian micromanagement combined with Johnsonian frivolity. (Thankfully, Gordon Brown was never frivolous and Boris Johnson never micro-managed.)
What is disappointing is that Sunak should be better than this. It is understandable that he wants to change gear, take some risks, inject some energy into his policy agenda and identify dividing lines with the opposition. But the way he has gone about it has left him open to the charge of incompetence, short termism and hypocrisy. The best that can be said about this is that this looks uncharacteristic but it nonetheless undermines one of the strengths of his reputation.
This does leave an opening to Labour. The Tory attacks on Sir Keir Starmer’s flip-flopping may ring true but, as its conference gets going today with the Shadow Chancellor’s speech, there is an opportunity for Labour to set out its stall as a responsible Government-in-waiting, genuinely willing to take long term decisions and set a steady course.
The Conservatives should be the party that can demonstrate that it will be more careful with taxpayers’ money, determined to put in place a stable environment for business investment, and more willing to take long term decisions even if involving short term pain. The Tories should not be complacent and assume that Labour cannot occupy this vacated territory.