Cabinet libertarians take on the levellers-up

In 2012 five ambitious new Conservative MPs published a manifesto for the future of Britain and the Tory party. Britannia Unchained was brutal in its assessment of the country’s failings and radical in its free market solutions. British workers “are among the worst idlers in the world”, said the authors. “Whereas Indian children aspire to be Doctors or businessmen, the British are more interested in football and pop music.”

The political rising stars denounced the “bloated state, high taxes and excessive regulation” and railed against a welfare system that “has ballooned beyond all recognition, corroding the UK work ethic”. They urged their fellow Conservatives to “stop indulging in irrelevant debates about sharing the pie between manufacturing and services, the north and the south, women and men” and instead focus on cutting taxes and slashing red tape. “Britannia Unchained is unembarrassed about its support for business, the profit motive and the individual drive of the wealth creator,” they wrote.

With the promotion of Kwasi Kwarteng to business secretary last week, four of the five authors of Britannia Unchained are now in the cabinet. Dominic Raab is foreign secretary, Priti Patel is home secretary and Liz Truss is international development secretary, giving the libertarian “freedom-fighters” influence over both domestic and foreign policy. Only Chris Skidmore, until last year universities minister, is absent from the top table.

Boris Johnson, in search of a big idea to underpin his personal ambition, has clearly been impressed by the clarity of the group’s free market vision. A copy of Britannia Unchained was visible in his car shortly before he became prime minister. Rishi Sunak, the chancellor, has played into this agenda too, with plans for low-tax, low-regulation free ports and a “Big Bang 2.0” reform of the City of London.

Now that Britannia has been “unchained” (as Brexiteers see it) from the EU, the free marketeers should be reaping the rewards. Instead, gaps are appearing on supermarket shelves because supplies are being squeezed by new Brexit red tape. Businesses are warning about the cost of extra bureaucracy and Scottish fishermen have halted exports to EU markets because additional regulations have made it impossible to get fresh langoustines and scallops to France quickly enough.

At the same time, the pandemic has forced the government into eye-watering levels of public spending. “Debt is never just about debt. It is a symptom of the irresponsibility that runs underneath, an attempt to enjoy more than one is prepared to pay for,” says Britannia Unchained. Yet now the country is on course to borrow £400 billion in the current financial year. Public debt has soared above £2 trillion and stands at more than 100 per cent of gross domestic product, its highest since the 1960s.

Instead of rejecting what the pamphlet describes as “the false belief in the value of industrial policy” and “the tendency to insist that ‘something must be done’ by the government every time a company fails”, the chancellor is pouring billions of pounds of taxpayers’ money into propping up businesses hit by the coronavirus crisis while setting out to reshape the economy. And of course, far from following a libertarian approach to the pandemic, the government is interfering in individuals’ lives to an unprecedented extent with a raft of Covid-19 restrictions.

Meanwhile, the discussion about the balance between north and south does not seem quite so “irrelevant” for a prime minister who owes his position to the northern “red wall” seats that switched from Labour to the Conservatives at the last election. The importance of these voters also makes it tricky for the government to light a bonfire of workers’ rights.

One former cabinet minister says the “wriggling worm of reality” is eating its way through the ideological dreams of the free marketeers. “The danger is that far from being Britannia Unchained we start to see new and different shackles,” he says. In his view the chancellor will have to “face down” his laissez-faire colleagues in the coming months.

The tension between the Britannia Unchained faction, who want to remove the dead hand of the state, and the Levelling Up brigade, who want to extend the power of government, is going to be a defining theme this year. It will dominate the internal Conservative Party debate in the way Europe once did and the battle lines are already being drawn Inside and outside the cabinet. There are differences about whether and when taxes should rise as well as disagreements over welfare policy.

The most immediate conflict is over the £20-a-week uplift to Universal Credit that is due to end in April. With the country facing restrictions of one sort or another until the spring, it is surely inevitable that Mr Sunak will reverse the planned cut, even if cabinet libertarians object.

The strain will also run through public health and climate change. Ms Truss once declared that the government should “not be able to tell us what our tastes should be”, insisting “too often we’re hearing about not drinking too much, eating too many doughnuts or enjoying the warm glow of our wood-burning Goves — I mean stoves.” That was a dig at Michael Gove, then the environment secretary, but her argument is also at odds with the prime minister’s promise to tackle the obesity crisis and turn Britain into the “cleanest, greenest country on earth”.

The row over planning reforms, which saw a Britannia Unchained liberalisation abandoned following a revolt from shire Tory MPs, was an early example. There is a growing backlash to a “free trade” approach to foreign policy too, with backbenchers pressing the government to take more account of human rights abuses in China and to resist the dilution of food standards in trade talks with the US.

“So far when it’s been ideology versus reality I’m afraid ideology has looked like it’s winning but I don’t think it will in this case,” says Lord Patten of Barnes, the former Conservative chairman. “If they try to implement that rag tag of ‘neoliberal’ promises they can say goodbye not only to the ‘red wall’ but to quite a lot of the ‘blue wall’ as well.” The prime minister will soon find his Britannia Unchained instincts in conflict with his levelling-up ambitions. Unlike his famous views on cake, it will be impossible to have it both ways.

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