Nik Darlington 7.19am
Full text of the Rt Hon Stephen Dorrell MP’s speech to the Tory Reform Group in Parliament yesterday evening.
WINNING WITH THE COALITION
The TRG has always had a soft spot for Disraeli. His most ardent admirer couldn’t describe Disraeli as an unbending man of principle. (He had a more obvious – though often no less flexible – competitor for that accolade). But he was a supreme practitioner of the art of politics – and he can lay a better claim than anyone else to be the founder of the modern Conservative Party.
Indeed so attractive is Disraeli’s combination of humanity and purpose that Ed Miliband is the second Labour leader in 20 years to attempt to cloak himself in Disraeli’s clothes. Like Tony Blair before him, Miliband is attracted to the slogan “One Nation” but, also like Blair, he faces the problem that his party cannot reconcile Disraeli’s aspiration with its own inherited prejudices.
Does Miliband celebrate success, or does he envy it? Does he embrace excellence and challenge others to emulate it, or does he regard it as evidence of injustice? Does he want to empower the innovators, the people who get there first, or does he prefer to preserve the appearance of equality by moving at the pace of the slowest?
In short does he believe that human progress is powered by disruptive individuals who challenge the societies in which they live, or does he believe that progress is a collective endeavour?
Disraelians have clear answers to these questions. They draw on the traditions of Burke, Pitt, Canning and, ironically, Peel. They know that successful societies evolve and that inherited institutions provide continuity and stability; but they also know that they must be constantly changing in response to new challenges and that it is the interests of every citizen to ensure that individuals are responsible for their own actions and, critically, encouraged to test out new ideas.
As David Cameron puts it – “There is such a thing as society; it’s just not the same thing as the state”. When Ed Miliband can repeat those words to his party conference and receive a standing ovation he will have earned the right to speak of One Nation.
England does not love coalitions
But it isn’t that aspect of Disraeli’s legacy on which I want to focus this evening. Instead I want to address directly his famous dictum that “England does not love coalitions”. This observation is often quoted to challenge the present government – and to suggest that it is somehow abnormal for politicians with different personal and intellectual roots to work together to create a stable government.
Such people misunderstand both the historical context of Disraeli’s remark and, more importantly, the conclusions which he and his successors drew from it.
It is ironic to reflect that until Disraeli lost office to Gladstone in 1868, his only experience of stable single party government was the government of Robert Peel which he worked so hard to destroy during his first parliament as an MP.
Seen in this context, his observation about coalitions was less an observation on the normal state of mid-nineteenth century politics, and more a statement of a problem which is faced by all leaders in an open political system.
If a government is to achieve results which endure, it has to give itself the political space to achieve substantial change. It needs authority – what the Romans called auctoritas – and that cannot be achieved if the survival of the government itself is always subject to negotiation in the shifting sands of parliamentary politics.
It was his experience of those shifting sands in the 1850’s which encouraged Disraeli to build the foundations of the modern Conservative Party in order to provide himself with a stable Parliamentary majority – and with it the political authority he needed to carry through the social reforms for which his government of the 1870’s is remembered.
He understood that his generation would never form a stable Parliamentary majority solely on the basis of its traditional support from the landed interest. He therefore challenged his party to reach out beyond its comfort zone and win support in the fast growing cities of Victorian England.
He repeatedly declared it to be his central purpose to “improve the condition of the people” – and he went on to organize and mobilize them to give him the authority to deliver on that pledge.
Salisbury and Chamberlain
Furthermore, and perhaps even more surprisingly to his party, Disraeli’s successor, Lord Salisbury, a representative of the landed interest if ever there was one, continued Disraeli’s work by attracting into the Conservative Party the Chamberlain Liberals – who became the foundation of the “Birmingham” tradition which played such an important role in the Conservative Party during the first half of the twentieth century.
There are, therefore two key lessons for us in the story of Conservative politics in the second half of the nineteenth century.
First, the whole point of the Party organization which Disraeli created was to reach out beyond the party’s core constituency and create a basis of support for Conservative politics among people who would never previously have thought of themselves as Conservatives.
Second, Salisbury’s alliance with Chamberlain introduced into Conservative politics the radical, non-conformist spirit of Birmingham which ensured that the new party organization was able to express the ideas and aspirations of the new voters whose support it was seeking.
Cameron and Clegg
The fact that Disraeli adopted the name Conservative for his new organization was part of his political art. He would have understood the absurdity of Blairite rhetoric about Britain as a “young country” – and he would undoubtedly have been memorably sarcastic about it – but he also understood something which is ultimately more important.
If a political party is to secure sufficient authority to allow a government to govern it has to reach beyond its comfort zone. It must challenge itself to broaden its appeal. It must learn to articulate the ambitions and aspirations not just of its established supporters, but of those whose support it seeks.
Disraeli was not interested in creating an instrument for the complacent defence of self interest; he sought to maintain the trust of the traditionalists while reaching beyond them to embrace a changing world.
Our challenge is, as it always is, to do exactly the same.
That is why David Cameron was so right to lead the Conservative Party into coalition with the Liberal Democrats in 2010, and why the record and programme of the Coalition Government are so deserving of the support of all Conservatives.
It is worth reminding ourselves about the choice that Cameron faced.
He could have relied on the ideological certainties of the comfort zone. He led the largest party in Parliament so he could have formed a minority government drawn from a single party which had been supported by 36% of the electorate and set out to deal with the most serious economic recession since the 1930’s on the basis that every important vote in the House of Commons would have required him to negotiate a new coalition of support.
It would have been to re-create, almost precisely, the circumstances which led Disraeli to make his remark about coalitions – it was made at the end of the budget debate in 1852, just before a critical vote which brought the government down as a result of a parliamentary deal on the opposition benches.
The alternative course was to learn from the experience of Disraeli, Salisbury and Chamberlain. They demonstrated the importance of looking beyond parliamentary deals and creating a stable government based on a parliamentary majority which reflects popular support.
The Coalition Agreement of 2010 has provided the basis for a government which has a parliamentary majority of 78, drawn from parties which were supported by 59% of the electorate.
Coalition succeeding and retaining public support
Sceptics argued at the time that the Coalition Agreement would not hold and that the government’s authority would prove to be illusory. They said that ministers would be unable to work together. They were wrong about that. They said that the Government’s parliamentary majority would prove to be unstable. They were wrong about that. They said that party members would not support the Coalition. They were wrong about that too.
In fact the Coalition has so far confounded the sceptics on virtually every count. They expected it to be a weak government which was unable to confront the key issues facing our country. In the event it is proving to be an effective government which is carrying through necessary but uncomfortable changes across the full range of government activity – and retaining remarkable levels of public support as it does so.
Mid term opinion polls can usually be relied upon to produce lurid headlines for governing parties – and voter support for both the Conservatives and the Liberal Democrats has certainly fallen since the General Election. It is however worth noting that despite these mid-term doldrums, Labour has been unable to establish even a minimal lead in public opinion over the combined votes of the coalition parties.
Voters are well aware that our country faces major issues and they would rightly be unforgiving if they felt that their government was absorbed by the machinations of parliamentary politics. In fact, while they don’t like everything it does, they see a government which has secured and is using the political authority necessary to address the challenges we face.
From the day it was formed, the most urgent challenge facing the Coalition has been the need to restructure our economy to allow us to compete successfully in the global market place. Meeting that challenge requires the Coalition to address two issues, both of which are work in progress.
First, it was essential from the beginning, and remains essential today, that the government has a credible plan to bring its own budget under control.
You don’t have to believe that the banking crisis was “made in Downing Street” (which it wasn’t) to recognize that the scale of our government deficit was the result of decisions made there – by, among others, Ed Balls and Ed Milliband. Despite their protestations of political virginity, the two Eds were in it up to their elbows. They spent when they should have saved; they ran deficits when they should have run surpluses.
The result was that the Coalition inherited a structural deficit in our public finances which qualified us for life membership of Club Med and threatened Britain with a crisis of confidence in financial markets.
The fact that Britain has retained its triple A rating and, more importantly, is able to borrow at roughly German interest rates despite running a government deficit comparable with Greece, is due to the fact that the Coalition has demonstrated that it is willing to take the steps necessary to put our public finances back on to a sustainable basis.
The broad basis of its support is key to its political success. Some elements in the Coalition would have preferred sharper spending reductions (for example on overseas aid spending, or possibly on health); others would have attached a lower priority to holding down the tax burden. But none of them would have been able to carry their policy either in the House of Commons or, more importantly, with the public because they did not command sufficient public support.
The Coalition exists because none of its members believe, like the two Eds, that the solution to excessive debt is more borrowing. The electorate took a decisive step away from that approach in 2010, and the Coalition has agreed a deficit reduction programme which commands the confidence of the financial markets in part because its broad political base enhances its credibility.
The two Eds continue to argue that we need to borrow more – indeed it is an interesting intellectual speculation to wonder in what circumstances they would acknowledge the need to borrow less – but the fact of the Coalition has made it impossible for them to win that argument.
But economic policy is not just about deficit reduction. When governments borrow too much they undermine the stability of an open economy which destroys the opportunity for growth. Having established a credible programme of deficit reduction, the Coalition has also recognized the need to ensure that the engine of growth is reignited.
Growth is not created in Whitehall. It is the result of businesses meeting demand for goods and services at prices which consumers can afford to pay. It is a process of continuous product, service and process enhancement driven by new insights about a changing world.
Furthermore it takes place in markets which are always changing, and where the pace of change is quickening all the time. Continuing technical advances, instant communications and the continuing process of globalization, represent unprecedented forces for economic change which are generating new growth opportunities, in particular in emerging economies, which, in turn lead to new challenges and opportunities for western economies.
For virtually every business this combination of circumstances creates a demand for radical change. The challenge for our society is to ensure that our political and social structures reflect the sense of urgency which this relentless process demands.
That is why the Coalition has introduced a wide range of measures to target investment funds at priority areas and reduce regulations which restrict the ability of businesses to respond to the demands of their customers. It is also why the House of Commons will tomorrow be considering further changes to the planning system to reduce its ability to constrain economic development.
Once again the Coalition is able to draw strength from the breadth of its base. Economic change is uncomfortable; it impacts on the daily lives of every one of us. It requires us to surrender the familiar and trust in our ability to conquer the unknown. It requires us to unlearn the old lesson about “holding on to nurse, for fear of finding something worse”.
That is why it is important to engage people in the process – to demonstrate that growth is not motivated by a desire to pour more concrete on green field sites in order to pay higher bonuses to bankers. Growth provides the means to deliver environmental objectives, housing improvements, as well as improved job prospects and improved public services. But growth can only happen if businesses are able to change in response to the demands of their customers.
Establish a Growth Commission
An idea was suggested to me recently which I believe the government should consider as a way of further reinforcing electoral and political support for this process of economic change. It is based on the experience of Sweden in the 1990’s, when they faced some familiar economic challenges – unsustainable public finances coupled with an uncompetitive private sector.
The Swedes established an Advisory Commission, independent of government, which performed the dual function of challenging government to make changes which were necessary to allow their economy function more effectively and – by making the case for such changes in public from outside the political world – help the government win public and political support to carry them through.
It is not unlike the system of independent advice, publicly given, which John Major’s government established after Black Wednesday to improve the quality of policy making on interest rates in the days when they were determined in Whitehall. No-one argues for a return to “political money”, but the Swedish precedent provides an interesting option for maintaining, and further reinforcing, the Coalition’s core commitment to build a more open and competitive economy.
Reforming public services
No political priority is more sensitive than the requirement that all public services, and in particular health and education, must deliver equitable access to services which meet high quality standards as well as high standards of efficiency.
This sensitivity arises because we are all involved both as funders through our taxes and as actual or potential service users. If the whole community feels itself to be affected by decisions taken about these services, it is inevitable that the politicians will also take an interest in those decisions – indeed the politicians would be taken to task by voters if they did not.
For example the changes which are currently faced by health and care providers are as fundamental as the changes faced by any global trading business. Our hospital sites may now look relatively modern following the substantial investment of recent years, but the system in which they work is fundamentally ill-suited to the times. In healthcare, as in every other sector, consumer demands and developing technologies are driving a ferocious pace of change.
But the changes which are required – which will lead to a smaller hospital service and much greater emphasis on community-based services – will challenge public perceptions; people will be asked to transfer their trust from visible structures to largely invisible systems, which experience has so far taught them are often unreliable. They will be inclined to believe that service levels are being reduced – although all the evidence actually points to significant improvements in outcomes if the system is refocused towards early intervention and prevention.
Health and Wellbeing Boards will have the ability to prepare the way for these changes by looking beyond the silos created by history and re-imagining a care system built around the needs of the patient. Their roots in local communities will strengthen their ability to carry through radical change, but it is also – once again – the breadth of the political base of the Coalition which offers the opportunity to carry through fundamental change.
Public services need to be open to disruptive new ideas. Closed systems are too easily convinced of their own excellence; mediocrity goes unrecognized and shiboleths go unchallenged. We need to encourage challenge in a system which instinctively distrusts newcomers.
But if we are to maintain public confidence during this process we need to demonstrate both nationally and locally that changes are being implemented in order to improve the quality of service delivered – not simply to save money. It is a task to which the Coalition is singularly well-suited.
The final issue on which I want to touch this evening is another which, contrary to general perception, I believe the Coalition is well placed to address.
Most observers will tell you that they have been pleasantly surprised that Coalition minsters have been able to agree policies on deficit reduction, student fees, planning and civil nuclear power, to name but a few, but they go on to say that “they’ll never agree on Europe”.
In other words, we have been wrong every time so far, but we are right this time.
In fact the Coalition parties have a broad measure of agreement about Europe.
No-one favours joining the Euro; nor does anyone favour joining the economic union which it is increasingly clear that our continental partners intend to create.
Those are decisions made, but the debate in Britain continues to muse about the likelihood of the failure of the Euro and the “threat” of a developing superstate.
The real issues we need to face are quite different.
The developing economic union is our largest overseas market. It would be odd if it were not – it is the largest market in the world and it is on our doorstep.
It is sometimes argued that we run a trade deficit with the economic union and that it therefore has more at stake in its relationship with us than we do with it.
That is vainglorious nonsense on two counts. Firstly we are a significantly smaller share of their total trade than they are of ours; secondly, and much more importantly, it ignores completely the biggest shared economic interest of all between Britain and the economic union which lies in the City of London.
London is quite simply the world’s premier financial market. It is hugely in the interests of both Britain and our partners that Europe as a whole is able to benefit from the opportunities that London’s pre-eminence creates.
Financial services may not be the fashionable theme of the moment, but sometimes in life it helps to be uncool.
London’s financial services sector is part of our national competitive advantage. We should nurture it and promote it – and we should understand that to allow it to be separated from its natural economic hinterland is simply absurd.
Absurd from the UK point of view – but equally absurd from the point of view of an economic union which badly needs access to all the capital resources and trading opportunities it can create.
In other words I believe the European argument has changed fundamentally over the last decade. Our partners have decided to create an economic union and we have chosen not to be part of it. It is a decision made. On both sides. Job done.
It will be for our grandchildren to decide whether we were right; they will write the history, not us. Our job is to make our decision work.
And that is where the role of the Coalition is so important.
Different parts of the Coalition will express this analysis in different language, but there is a shared understanding of the importance of the endeavour. Just as the broad basis of the Coalition helps it to win authority to tackle difficult issues of economic and social change, so I believe it can be the ability of the Coalition to reach beyond the comfort zone of a single party which creates the opportunity achieve a real change for the better in our relationship with the rest of Europe.
And so we are back to Disraeli.
He built the Conservative Party as a permanent coalition between the landed interest and the Victorian cities. His coalition was further broadened when Chamberlain made Birmingham a Conservative slogan.
That coalition held office for two thirds of the twentieth century, but towards the end of the century it ignored Disraeli’s challenge and retreated into its comfort zone.
In 2010, David Cameron challenged both the Conservatives and the Liberal Democrats to leave their comfort zones and face the realities of office in a Coalition that has the right to speak for the majority its compatriots.
In doing so the Coalition has demonstrated both its ability and its willingness to face issues which other governments have regarded as too hot to handle.
The Coalition Agreement is David Cameron’s answer to Disraeli’s challenge.
The issue for the future is simple.
The Coalition Agreement comes to an end.
Disraeli’s challenge does not.