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Editorial: The Tories’ tax dilemma reflects deep concerns about the stability of British capitalism

CLASHES over taxation at the Conservative Party conference point to divisions on how to establish a new political consensus in Britain.

In the great Sicilian novel The Leopard the nephew of the Prince of Salina utters the famous line that “everything must change for everything to stay the same.”

The dilemma facing these nobles was how to maintain their power and wealth in a land where church and king no longer commanded respect.

The predicament of Britain’s ruling class is not dissimilar. The super-rich may not appear to be under immediate threat as the Prince of Salina is by the landing on Sicily of Garibaldi’s Thousand.

They have had a good pandemic, with British billionaires’ wealth growing by a staggering £290 million per day. 

Their favoured party, the Conservatives, won a thumping majority at elections under two years ago, routing a socialist opposition. Believe the pundits, the Cabinet ministers, even the current Labour leadership, and these developments show that British voters have a deep-seated distrust of radicalism and will only reward parties which lurch rightwards. 

But if Labour is plagued by existential anxiety over its failure to win an election in the last 16 years, Johnson can point out that the last 11 years of Tory government have not reflected consistent public support. 

The Conservatives failed to muster a majority against Gordon Brown in 2010: the radical programme of privatisation and cuts known as “austerity” implemented by David Cameron was only possible because the Liberal Democrats were prepared to connive at it. 

The resulting Lib Dem collapse in 2015 benefited the Tories in most areas, granting Cameron a majority, but the actual rise in the Conservative vote was minuscule (0.8 percentage points) and the majority a wafer-thin 12 seats. Theresa May lost it in 2017. 

Boris Johnson can boast that his 2019 victory was actually the first secure Conservative win since 1992, 27 years earlier.

But it is not that victory but the circumstances that now preoccupy the government. 

If the Conservatives have managed to retain power for 11 years despite a palpable lack of public enthusiasm, that is because for most of this period both the government and the opposition have been unpopular. 

This indicates alienation from the political system itself. Some Tories get this. Their 2019 landslide rested on presenting themselves as the anti-system party, the party of the anti-Westminster revolt that was Brexit. Johnson distanced himself from his predecessors and their cuts. 

Now, as the country emerges from a pandemic that made state intervention a necessity, the old divide resurfaces. Did the Tories mean what they said when they championed state-led investment? Or was it a ruse to beat a socialist opposition?

Many Conservatives are ideological Thatcherites for whom the cuts must resume. Yet neoliberalism is in trouble globally, as “free market” systems prove unable to compete on innovation, investment or raising living standards with China’s planned economy. In the US President Joe Biden defends state intervention precisely because otherwise “China is going to eat our lunch.” 

Even more worryingly for the Tories, if they could only secure a stable majority by posing as opponents of the very Establishment they serve, how fast will public support fall away if the mask is dropped? Given an energy crisis, a supply crisis, rising bills and falling incomes, shrewder MPs know the answer is pretty fast.

This is why Sunak stuck to the tax-and-spend line today and faced down the Thatcherites. But the contradiction remains. 

The Conservatives represent a ruling class determined to maximise its profits and minimise its obligations to the public. The public attitude to that ruling class has been increasingly mutinous since the bankers’ crash of 2008. 

This is the context in which another resurgence of the radical left haunts Tory nightmares — and that should encourage socialists not to give up.

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