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Westlake Legal Group > Harold Macmillan

A brief history of Fiscal Rules

Wilkins Micawber told David Copperfield:

“Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”

Unfortunately, Micawber relaxed his Fiscal Rule and instead proceeded on the basis that “something will turn up” to avoid misfortune. He ended up in a debtors prison before going to Australia for a fresh start.

British Governments have also shown a temptation to ditch financial constraints. Harold Macmillan said:

“The real truth is that both a break and an accelerator are essential for a motor car. Their use is a matter of judgment but their purpose must remain – to go forward safely. Or in economic terms, expansion in a balanced economy.”

Thus we had the era of stop-go. A temporary stimulus before an election in one Budget. Then the breaks slammed on in the next one forced by the Government running out of our money. The stop-go policy made it hard for British industry to make investment decisions, to modernise machinery and increase productivity. How could there be any confidence in getting a return on such investment with the economy so erratic?

Then we had the Harold Wilson and the pound being devalued. Next, there was Ted Heath and the Barber Boom. Then we had Jim Callaghan and Denis Healey going “cap in hand” to the IMF.

Only when Margaret Thatcher became Prime Minister in 1979 did we see some kind of discipline restored to the public finances. For all the talk of cuts, there was an increase in public spending during her premiership. But it was kept under control, even if the phrase “fiscal rules” was not used. It was at an affordable, manageable level. While Macmillan compared the public finances to a car, Thatcher compared them to a household budget:

“When I was in Government before we did all our expenditure in what was called real terms, you know what I mean, you forgot all about inflation and you said we are entitled to so many schools, so many teachers, so many school meals, so many school books, etc., regardless of the price when it comes to it. So you did all of it in what was called volume terms and sometimes you could say, “Well look, if we’re going to have this amount of increase in pay we shan’t be able to have those number of books or buildings.” And they said, “Oh, don’t be so absurd, that doesn’t come in the Treasury calculations, we do it in volume terms,” and I was getting very unhappy then and I said well no-one in their sane senses says at home, “I can have three tons of coal, I can have twenty joints of sirloin a week, I can have so many clothes, regardless of the cost of those things.” You say, “I have got so much to spend and I have to have accordingly so much on food, so much on clothes, so much on holidays.”

“Now it’s only just in the last two years that we have gone from that volume expenditure regardless of cost to, say, “Look each department, this is going to be the amount of cash you’re going to have this year and we can tell you for the next four years. We can tell you the amount we’ve built in for increase in pay, the amount we’ve built in for increase in inflation but because we’re pulling down the amount of inflation you’re not going to get full compensation for everything. We want inflation down.” Now we’ve moved to that. There’s nothing, ought to be nothing, astonishing about this, this is the way every household has to budget, this is the way every business has to budget. But this is the way the Treasury never budgeted until now and this of course is much better control of public spending.” 

Of course, some sneered at this comparison with a family budget was terribly unsophisticated. Between 1979 and 1990 our National Debt fell, as a percentage of GDP from 44.5 per cent to 26.6 per cent. Instead of the Public Sector Borrowing Requirement (PSBR) we got used to talking about the Public Sector Debt Repayment (PSDR). But during the John Major and Ken Clarke era, public borrowing returned with a vengeance. Each year generous spending limits would be set – then even those would be cheerfully broken. By 1997 our National Debt was back up to 42 per cent.

But if anybody was worried about the Tories being profligate would it not stand to reason that a Labour Government would be still more spendthrift? It was to provide reassurance (to the voters and the markets) on this point that New Labour started fiscal rules. In his Budget speech in 1997 our new Chancellor of the Exchequer, Gordon Brown announced:

“My first rule—the golden rule—ensures that over the economic cycle the Government will borrow only to invest, and that current spending will be met from taxation. My second rule is that, as a proportion of national income, public debt will be held at a prudent and stable level over the economic cycle. To implement those rules, I am announcing today a five-year deficit reduction plan. Those rules and that plan will ensure an historic break from the short-termism and expediency that have characterised the recent fiscal policies of our country.”

The second rule came to be known as “the sustainable investment rule”. It was set out in the Code for Fiscal Stability which was approved by the House of Commons in December 1998. It stated that public sector net debt as a proportion of GDP “will be held over the economic cycle at a stable and prudent level.” This meant that “other things being equal, net debt will be maintained below 40 per cent of GDP over the current economic cycle.” I suppose the “sustainable investment rule” is not quite as catchy as the “golden rule”. But older readers might recall references to “prudence with a purpose” or “no return to boom and bust”. Brown would always give himself some wriggle room with these rules. Would it be all right if “other things were not equal”? Who is to decide how long the “economic cycle” is? In 2009/10, the last financial year of the Labour Government the state ran a deficit of £155 billion. National Debt rose to 65 per cent of GDP. Brown presided over it zooming past a trillion pounds.

One might have concluded at this point that “fiscal rules” didn’t seem to amount to much. But new versions have been offered.

George Osborne became Chancellor of the Exchequer in 2010. He offered us his “fiscal mandate”. The independent Office for Budget Responsibility was established to keep track of his progress. In his Budget speech in 2010, Osborne declared:

“The formal mandate we set is that the structural current deficit should be in balance in the final year of the five-year forecast period, which is 2015-16 in this Budget. This mandate is structural, to give us flexibility to respond to external shocks; current, to protect the most productive public investment; and credible, because the OBR, not the Chancellor, will decide on the output gap. In order to place our fiscal credibility beyond doubt, this mandate will be supplemented by a fixed target for debt, which in this Parliament is to ensure that debt is falling as a percentage share of GDP by 2015-16. I can confirm that, on the basis of the measures to be announced in this Budget, the judgment of the OBR, which we published today, is that we are on track to meet those goals. Indeed, I can tell the House that, because we have taken a cautious approach, we are set to meet them one year earlier, in 2014-15. To put it another way, we are on track to have debt falling and a balanced structural current budget by the end of this Parliament.”

Yadder, yadder, yadder. National Debt in 2015 was 83.7 per cent of GDP, up from 82.1 per cent the year before. Of course, we are still waiting for a balanced budget. Though I suppose I gave himself a bit of Brownesque obfuscation. Who is to decide which bits of the deficit are “structural”?

By 2015 surely it would be obvious to all that these pompously worded undertakings mean nothing? But Osborne decided the answer was to come up with new fiscal rule. These were embodied in a Fiscal Charter.

“Mandate for fiscal policy

In normal times, once a headline surplus has been achieved, the Treasury’s mandate for fiscal policy is:

    • a target for a surplus on public sector net borrowing in each subsequent year. 

For the period outside normal times from 2015-16, the Treasury’s mandate for fiscal policy is: 

    • a target for a surplus on public sector net borrowing by the end of 2019-20. 

For this period until 2019-20, the Treasury’s mandate for fiscal policy is supplemented by:

    • a target for public sector net debt as a percentage of GDP to be falling in each year.”

By the next year, Philip Hammond was the Chancellor of the Exchequer. He announced:

“In view of the uncertainty facing the economy, and in the face of slower growth forecasts, we no longer seek to deliver a surplus in 2019-20.”

Disappointing. But the good news was that we were getting some new fiscal rules:

“Today I am publishing a new draft charter for budget responsibility with three fiscal rules: first, that the public finances should be returned to balance as early as possible in the next Parliament and, in the interim, cyclically adjusted borrowing should be below 2% by the end of this Parliament; secondly, that public sector net debt as a share of GDP must be falling by the end of this Parliament; and, thirdly, that welfare spending must be within a cap set by the Government and monitored by the OBR. In the absence of an effective framework, the welfare bill in our country spiralled out of control, with spending on working-age benefits trebling in real terms between 1980 and 2010. As a result of the action that we have taken since 2010, that spending has now stabilised.”

But then Sajid Javid became Chancellor last year and he told us that the rules were to be replaced again:

“I’m announcing new fiscal rules that if elected will allow us to take advantage of the opportunity to invest in our future and our public services but without squandering the hard work of the British people.

“Like anyone who budgets whether it’s a household or small business or large business, I know that we must keep track of what we’re spending, and what we bring in.

“We can’t run an overdraft forever on day-to-day spending, so I can confirm that our first rule will be to have a balanced current budget. What we spend cannot exceed what we bring in.”

“Now, while we must retain spending if we want growth to continue and get stronger in the future, then we need to invest in it. Taking the opportunity offered by those historically low borrowing rates.”

 “Investment in long-term projects like road and rail will not exceed 3% of GDP.”

That brings us up to date and fevered speculation that Rishi Sunak might well have something to say about fiscal rules in the Budget next month. Does it really make any difference? There is something to be said for having a goal in life.

It could be worse. While in cash terms the National Debt keeps piling up there has been some very modest progress in recent years wih it falling as a percentage of GDP. It was 85.7 per cent in 2015. It is 84.0 per cent now.

But a lack of seriousness about sticking to the specific limits that are announced just invites ridicule. For the last 30 years when it comes to the public finances the diet always starts tomorrow.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Does Johnson have the guts to tackle the rigged housing market described by Halligan?

Home Truths: The UK’s Chronic Housing Shortage – How It Happened, Why It Matters and How to Solve It by Liam Halligan

This is the only book I have ever taken into the Terrace Cafeteria at the Commons – where it is my custom to take a late lunch of jerk chicken and rice each Wednesday after sketching PMQs – in whose contents a member of staff has shown an immediate and passionate interest.

He told me he has no hope of ever buying a place to live in the district, just south of the river and within easy reach of the Houses of Parliament, where he was born.

That district, once quite cheap, is now, like everywhere else in the middle of London, prohibitively expensive for anyone on a modest income. If he is ever to get his own place, he will have to move a long way out, and the injustice of this rankles with him.

Liam Halligan sets out in this book what went wrong with the housing market:

“The average UK home now cost eight times average annual earnings, over twice the historic norm. This crippling affordability multiple rises to twelve times across London and the south-east…

“While the UK needs around 250,000 new homes a year to meet population growth and household formation, housebuilding has failed to reach that level since the mid-1970s. There’s a huge backlog shortage of homes, built up under successive governments over decades, which has seen property prices spiral way ahead of earnings. As a result, millions of young adults are stuck in shared, rented accommodation and have put their lives on hold.”

This is an enormous political opportunity for whoever becomes the next Labour leader. Millions of people are stuck paying extortionate rents for year after year, unable, unless they have rich parents, to get together the deposit needed to buy a house.

And this used not to be the case. Halligan was born in 1969, in the suburban, semi-detached, 1930s house in Kingsbury, London NW9, which his parents, who had both left school at the age of 16 without any professional qualifications and did not go to university, had been able to buy on a mortgage, after 25 years owning this little patch of Metroland outright.

For a long time after Halligan’s parents put down roots, home ownership remained a realistic aspiration:

“When I left home back in the early 1990s, over 45 per cent of 25-29-year-olds owned their own home. Since then, that figure has plunged to less than 25 per cent. Even professional couples with impressive qualifications and relatively high incomes are increasingly ‘locked out’ of the property market as prices keep rising faster than earnings…

“Since the end of the Second World War, one of the basic features of the UK’s free society – the ‘British Dream’ – has been that anyone who works hard and saves for a few years should be able to buy a decent home at a reasonable price. As such, the chronic unaffordability of housing, in many parts of the country, is now the major economic and political scandal of our time. It is disgraceful that over recent decades, a combination of cowardice and neglect on the part of successive governments means that, for countless young adults, the dream of home ownership is being cruelly denied.”

The language is not elegant, but it is hard to deny the truth of what Halligan says. In the mid-1930s, 85 per cent of new houses cost less than £750, equivalent to about £55,000 in 2019.

After the passing in 1947 of of the Town and Country Planning Act, almost all new building required planning permission. That, one could say, was the root of the problem, for it has led to an artificial shortage of building land, which in turn has caused the grotesque inflation of house prices.

But Halligan thinks the 1947 Act worked well, for it provided for “betterment” – the greatly increased value of land once it had planning permission – to be paid to the state. This kept land prices down, and gave local authorities the revenue needed to build the roads and other public services which the occupants of new houses required.

Landowners hated having to sell land at existing-use value, i.e. cheap, and under the Conservative governments of the 1950s, that side of the 1947 system was gradually dismantled, until under the 1961 Land Compensation Act, landowners gained the right to receive full value for all sites, including any prospective “planning gain”.

Land prices almost at once started to rise, and landowners, whether private or public, gained a perverse incentive to hold on to their land for as long as possible, in the confident expectation that it would become more and more valuable.

The market in land is horribly rigged, and favours owners over prospective buyers. As Halligan points out, the UK house-building industry, in which many small firms used to participate, is now dominated by an oligopoly of very large firms, who invest in a scarce resource, building land, which they do all they can to keep scarce, and on which they build an inadequate number of often shoddy rabbit hutches.

What is to be done? Halligan, who writes as an economist, wants the 1961 Land Compensation Act reversed, and has interviewed Sajid Javid, now the Chancellor of the Exchequer, who served as Secretary of State for Housing, Communities and Local Government from 2016-18, and described the reform proposals which were being developed under his leadership:

“When I was Secretary of State, we worked on a fifty-fifty split of the valuation between local authorities and landowners.

“This would be an efficient and morally justifiable tax. The state is expected to create the infrastructure around new housing, and that needs to be paid for – so fifty-fifty makes sense.”

Javid was “frustrated” when Theresa May removed this measure from the 2017 Housing White Paper. He told Halligan:

“She just didn’t get the the impact of this housing crisis on ordinary families, ordinary working men and women – so the White Paper was gutted, all the strong ideas removed. It is vital we now take radical steps – once Brexit is done, housing is easily the most important domestic policy issue we face.”

Boris Johnson has not yet said very much about housing as Prime Minister, but one hopes he agrees with the Chancellor. For what they do about housing will give a good indication of where their sympathies lie.

Halligan says “there has not been nearly enough resolve to tackle the entrenched supply-side vested interests benefiting from the status quo”.

He means house-building companies such as Persimmon, whose iniquitous behaviour he describes at considerable length, also quoting the memorable condemnation of them in the Commons by Robert Halfon (Con, Harlow):

“On Saturday, I met a group of Harlow residents, many of them on Government Help to Buy schemes, who moved into homes built by Persimmon Homes that are shoddily built with severe damp and crumbling walls. In the eyes of my residents, Persimmon are crooks, cowboys and con artists.”

This was in July 2019, at Theresa May’s penultimate PMQs, and she said in her reply to Halfon:

“We have already announced our intention for a new homes ombudsman to protect the rights of homebuyers and to hold developers to account.”

A new ombudsman is an empty gesture. This distorted market, which enables house-builders to make vast profits from shoddy work carried out at the expense of people in desperate need, requires root and branch reform.

But Halligan underestimates the vested interests which stand in the way of reform. Many an owner, or part-owner with the building society, of a small, shoddily built house (I write as someone in that position myself) enjoys thinking, with a certain ineffable complacency, of its enormously inflated value, supposedly several times what it cost to buy.

These prohibitive prices have to come down, and that is a message Johnson and Javid will be reluctant to convey, especially as according to Halligan, senior Treasury officials believe that tackling the housing shortage “will spark another banking collapse”.

One of the happy side effects of the last banking collapse should have been a collapse in property prices, so that people of modest means could once again afford somewhere to live.

But instead, the property market froze, owners stopped moving house, and there was no proper correction to prices, which remain grotesquely high.

My inclination, as a conservative, is to believe that property rights are one of the most sacred guarantees of liberty itself. But since 1947, the state has removed the right of the owner of a piece of land to build on it.

It was beyond Halligan’s scope to describe how some of the tawdry speculative building of the 1930s created a demand for planning controls. In any case, he loves those 1930s houses, grew up in one of them and reminds us that their praises were sung by John Betjeman.

If the nation is going to control what can be built, the nation should also take some of the profits which are reaped by landowners and developers who gain permission to build.

Some years ago, I examined for ConHome how Harold Macmillan managed, as Housing Minister in the early 1950s, to fulfil the Conservative pledge to build 300,000 dwellings a year, which Labour thought was impossible.

He did it by employing every lever, public and private, which was to hand, by sanctioning every single application to build council houses, and often by giving orders in the wartime manner. His achievement paved the way for the Conservative election victory in 1955, for him to become Prime Minister in 1957, and for the Conservatives to win again in 1959.

He had demonstrated that the Tories were better than Labour at providing for the welfare of the people. Not that everything he did was admirable, for as I remarked in that piece:

“Some of the housing built at this time was so repulsive that to this day it makes people deeply suspicious of all new building.”

Will Johnson evince Macmillan’s ruthlessness and flair, or will he fob people off with an ombudsman?

On Tuesday of this week, I attended a reception held at the Commons by ConservativeHome for new Tory MPs, and spoke to a number who feel a burning desire to repay the trust which has been reposed in them by former Labour voters.

But as I entered the Palace of Westminster from the Underground station, I passed a number of rough sleepers already settling down for the night in the white-tiled tunnel.

What a shameful sight. Something here is terribly amiss. Those rough sleepers, so visible in most of our towns, have something to do with the intolerable cost of getting a roof over one’s head, which in turn has something to do with the intolerable cost of property, which in turn proceeds from the artificial scarcity of building land created by the state.

The buck stops with the Prime Minister. Does he have the guts to act?

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Andrew Gimson’s election sketch: Johnson plays his greatest joke on the Corbynistas

When Boris Johnson won election in 2001 as Member for Henley, he urged people to “go back home and prepare for breakfast”.

This morning he ended his speech in the Queen Elizabeth II Centre with the words: “Let’s get Brexit done, but first my friends let’s get breakfast done too.”

For the Prime Minister is a traditionalist, loyal to every joke he has ever cracked; though at the same time he is a moderniser, constantly seeking to improve on the jokes he has told before.

And today he has played perhaps his greatest joke of all. For as we arrived in the hall where he was to speak, we were greeted with signs announcing “The People’s Government”.

Such placards are unwelcome to anyone of a conservative disposition, for they smack of totalitarianism.

But how much more of an insult they are to the Corbynistas, who imagined they were the ones who would be forming The People’s Government.

In their hands, the term would have become an excuse for oppressing anyone who dared stand in their way. They are incandescent with rage to find their slogan stolen from them by a man who, to their incomprehension, turns out to be closer to the people than they are.

Johnson has proved himself more popular than the Corbynistas. This Tory Democrat has shown, like Benjamin Disraeli, Lord Randolph Churchill, Stanley Baldwin, Harold Macmillan and Margaret Thatcher before him, that he knows how to express a patriotism which distresses intellectuals, but delights the wider public.

Like his illustrious predecessors, Johnson has formed a potent alliance with the working class, which sees that its interests are better defended by the Conservative Party than by a bunch of grumpy middle-class socialists.

The Prime Minister is such a difficult opponent because he uses jokes to tell the truth. When his opponents allow themselves to become enraged by his seeming frivolity, they make the error of underestimating the potency of his message.

When Johnson was elected Mayor of London in 2008, he promised in his acceptance speech to “work flat out” to gain the trust of those who had voted against him, and also of those “whose pencil hovered for an instant” above the ballot paper before deciding to back him.

Today he declared that he realises those Labour voters who backed the Conservatives for the first time in this election “may only have lent us your vote”, and he promised never to take their support for granted.

So amid the jokes, a note of humility could be detected, and also a wonderful rapport with his audience. Here is a Tory democrat who with sublime impertinence has stolen the socialists’ clothes.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Skelton on One Nation, and how Tories must take the lead in reviving towns which have been left to rot

Little Platoons: How a Revived One Nation Can Empower England’s Forgotten Towns and Redraw the Political Map by David Skelton

The rhetorical star of this book is Benjamin Disraeli. He did not invent the term “One Nation” – that distinction belongs, as Lord Lexden never tires of reminding us, to Stanley Baldwin.

But Disraeli is by far the most enjoyable and inspiring Tory for One Nation Conservatives to quote, and Skelton uses him very well. He reminds us that Disraeli rebuked the Whigs, after the Great Reform Act, for trying to establish “a utopia composed purely of wealth and toil”, based on a “spirit of rapacious covetousness”.

The Conservatives are today widely thought to be actuated by a “spirit of rapacious covetousness”, and to care only about the rich. The injustice of this claim does not make it any less damaging.

And the claim is in any case not totally unjust. Parts of the kingdom have been left behind, excluded from the prosperity enjoyed by the rest.

Labour is at least as to blame as the Conservatives for this sin of omission. That is one reason why Labour support in Scotland collapsed: for many decades it had taken its impoverished heartlands for granted.

And it is why Labour is now vulnerable in its English heartlands too.

Disraeli understood the alliance the Tories could make with the newly enfranchised working class. Skelton contends, convincingly, that the Tories can now connect with the patriotic working class which for decades has felt disenfranchised, but which in the 2016 referendum seized the chance to make its presence felt.

In his opening paragraph, Skelton reminds us that “of the 42 former coalfield areas, some 41…voted for Brexit”. He himself is from Consett, in the north-west corner of County Durham, which felt shut out from from politics since the closure in 1980 of the great steelworks on which for over a century the town’s fortunes had rested, and where men were proud to work:

“The steelworks was home to world-leading engineers, metallurgists and chemists and dozens of different types of craftsmen who passed these skills on to apprentices.”

One of Skelton’s grandfathers was a foreman fitter in the works, the other was a miner, or pitman as they preferred to be known, in the Durham and Northumberland coalfields.

There was immense local pride in the Consett works, and local control until nationalisation, which meant decisions about the future were taken hundreds of miles away, and essential investment in modernisation took second place to the need for public spending cuts.

A year after the closure of the works, a third of the men in Consett were unemployed. Low-paid, insecure jobs, for those who could get them, and low-quality training programmes whose chief purpose was to keep others off the dole, did not restore the dignity of labour to these craftsmen, but became a daily humiliation.

Nor did either of the main political parties have much to offer. Labour, a party created by the trade unions, ceased to take much interest in the fate of the working class once the power of those unions had been broken.

The unions could bring the country to a grinding halt: not an ideal state of affairs, but one which gave the working class, or its leaders, undeniable clout.

Here was a ladder of advancement for gifted trade union organisers who could get a political education, gain selection as Labour MPs and rise into the Cabinet. That stream of recruitment has pretty much dried up, and the party finds itself in the hands of an urban middle class which feels a greater affinity with Brussels, Berlin and Paris than with Consett.

Skelton’s chief purpose in this book is to trace the One Nation tradition in Conservative politics, and to argue that it needs to be rediscovered. He does it very well: again and again, one wonders if he has thought of, say, Iain Macleod, and up an apposite quotation pops.

Harold Macmillan is the hero of this account:

“He was probably the last Prime Minister with a genuine belief in ‘Toryism’ and the real importance of balancing economic efficiency with social justice. He had a burning desire that we must never again become ‘two nations’ and was convinced that government and private enterprise had an important role to play, together, in preventing that from happening. He believed in modernising industry and the country, but without the managerial indifference of Heathism or the retreat into liberal economic determinism. His One Nation was a profound belief in the common good and the fundamental national unity that makes us stronger.”

Under Margaret Thatcher, Macmillan’s spirit of pragmatic intellectual compromise started to sound a bit wet. Some of her Government’s successes – the Nissan works outside Sunderland, the start on regenerating Liverpool and the London docks – would not have happened without the state playing a leading role, but this was not the story she and her admirers told.

The Conservatives were gripped, in Skelton’s phrase, by “myopic economic liberalism”, the illusion that if only the Government got out of the way, recovery would occur of its own accord.

In Consett, this was not the case. It was a steel town which now produced no steel, and could not pull itself up by its bootstraps. Its most able and enterprising young people left: they went off to university and never came back.

Forty years on, Skelton reports, Consett is in large part a dormitory town for people who work in Newcastle or Durham:

“In contrast to the beauty of its surroundings, its town centre is still pockmarked by a collection of charity shops, bargain stores (including Consett’s enormous ‘Barry’s Bargain Store’, which has taken over the whole of the old indoor market), travel agents and bookmakers.”

Our country contains hundreds of towns like Consett. Often the handsome old buildings bear witness to former pride and prosperity, eclipsed in recent decades by demeaning and self-perpetuating shoddiness.

Few people with energy or talent want to settle here, or shop here, or set up new businesses. For about half a century many of these town centres have been left to rot, however prosperous and pretty the surrounding villages may be.

Skelton remarks that policy makers in London pride themselves on the regeneration of a dozen cities. He quotes with approval Lisa Nandy, Labour MP for Wigan, who says

“this consensus that began under New Labour, and was embraced by George Osborne, sees cities as engines of economic growth with surrounding towns at best anchored to them and pulled along in their prosperous wake. This is a model that has neither provided nor defended the things that matter most in our towns: thriving local high streets, shared community institutions like libraries, post offices and community pubs, good public transport, work that gives dignity and meaning, green open spaces and time with families.”

Any Tory who wants to understand how a revived One Nation tradition can help to revive our towns should read Skelton’s book.

In a recent piece for ConHome, he itemised some of measures, including world-class infrastructure, the creation of “prosperity hubs” and a vocational education revolution, needed to transform our forgotten towns. This list, enlarged upon in the final chapter of the book, will not make every Tory heart beat faster.

There is, however, a Conservative with a remarkable command of language, and declared One Nation sympathies, who can take forward the revival of these neglected towns with a brio worthy of Disraeli and Macmillan.

Boris Johnson has recently been at pains to emphasise that we will remain a European nation: rhetoric with which he wishes to reassure Remainers that he does not intend to lead a retreat into barbarous isolation.

But in the forthcoming general election campaign, he will doubtless also seek to persuade working-class patriots who voted Leave, and who feel an intense love of country, that the regeneration of this nation must extend to its unloved towns.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Ryan Bourne: To help grow prosperity, let’s focus on people and not places – such as towns

Ryan Bourne is Chair in Public Understanding of Economics at the Cato Institute.

Stian Westlake describes it as the “Strange Death of Tory Economic Thinking”. Conservatives have ceased telling an economic story about why they should govern, and how. Sure, there’s still the odd infrastructure announcement, or tax change. But, since Theresa May became leader, the governing party has shirked articulating a grand economic narrative for its actions.

This is striking and problematic. From Macmillan to Thatcherism to deficit reduction, the party’s success has coincided with having clear economic agendas, gaining credibility for taking tough decisions in delivering a shared goal. But, arguably, deficit reduction masked a secular decline in interest in economics. David Cameron and George Osborne, remember, wanted to move on to social and environmental issues until the financial crisis and its aftermath slapped them in the face.

Now, with the deficit down, economics is in the back seat. Fiscal events are low key and economic advisors back room. To the extent the dismal science is discussed, it’s as a means to other ends, or a genuflect to “Karaoke Thatcherism.”

In short, I think Westlake is right: the Tories do not have an economic story and, post-Brexit, it would be desirable if they did. So we should thank both him and Sam Bowman (formerly of the Adam Smith Institute), who have attempted to fill the vacuum. In a rich and interesting new paper, the pair set out to diagnose our key economic ailments and develop a Conservative-friendly narrative and policy platform to ameliorate them, even suggesting reform of the Right’s institutions and think-tanks in pursuit of the goals.

Such an effort deserves to be taken seriously, though not everyone will agree with their starting premises. It is assumed, for example, that Conservatives believe in markets and want to maintain fiscal discipline, which bridles against recent musings from Onward or thinkers such as David Skelton.

But, again, the key economic problem they identify is incontrovertible: poor economic growth. Weak productivity improvements since the crash have been both politically and economically toxic, lowering wages, investment returns, and necessitating more austerity to get the public finances in structural order. And the nature of modern innovation, arising from clusters and intangible assets, means that growth that is experienced isn’t always broadly shared.

Their agenda’s aim then is to achieve both concurrently: maximize the potential of the economy by taking policy steps on planning, tax policy, infrastructure, and devolution, to increase investment levels, allow successful cities and towns to grow, and to connect “left behind” places to local growth spots through good infrastructure. None of their ideas are crazy. Indeed, I would support the vast majority of them.

And yet, something bothered me about their narrative. In line with the current zeitgeist, they too discuss “places” and their potential, as if towns and cities are autonomous beings. My fear is this focus – shared by those who want to regenerate “left behind” areas – creates unrealistic expectations about what policies can achieve in a way that undermines a pro-market agenda. Importantly, it warps what we should really care about: “left behind” people, not left behind places.

A people-centred narrative recognises that just as firms fail in the face of changing consumer demands and global trends, so high streets, towns, cities, and even regions will shrink too. As Tim Leunig once said, coastal
and river cities that developed and thrived in a heavy manufacturing, maritime nineteenth century world might not be best placed to flourish in a service sector era of air and rail.

A true pro-market policy agenda would admit -and that’s ok. Or at least, it should be, provided we understand that raising growth and sharing prosperity requires adaptation, not regeneration. That means removing barriers for people either to move to new opportunities or have control to adapt their situations to ever-changing circumstances. This might sound Tebbit-like (“get on your bike”), but really it’s just saying policy must work with market signals, not against them.

Today though, interventions actively work in a sort of one-two-three punch against inclusive growth and adjustment. First, we constrain the growth of flourishing cities. Tight land use planning laws around London, Oxford, and Cambridge contribute to very high rents and house prices, and prevent these places benefiting from growing to obtain thicker agglomeration effects.

This contributes to the “left behind” scandal, but not in the way people imagine. When rents and house prices are higher in London and the South East and we subsidse home ownership or council housing elsewhere, it’s low productivity workers from poor regions that find it most difficult to move given housing cost differentials. As a result, they get locked into poorer cities and towns that would otherwise shrink further. That’s why Burnley, Hull and Stoke are the most egalitarian cities in the country, whereas prosperous London, Cambridge and Oxford are the most unequal, even as inequality between regions has intensified.

Having restricted people’s mobility through bad housing policy, we then impose one-size-fits-all solutions and subsidies which dampen market signals further. National minimum wages, fiscal transfers, national pay bargaining, and more, might be designed to alleviate hardship, but they deter poorer regions from attracting new businesses and industries by trading on their market cost advantages. Then, to top that off, we compound the problem further by centralising tax and spending powers, preventing localities from prioritising their spending and revenue streams to their own economic needs.

Now, as it happens, Bowman and Westlake’s policy agenda is perfectly compatible with assisting  “people” rather than “places,” precisely because it’s market-based. They advocate planning liberalisation, a flexible right to buy, and stamp duty, all of which would improve labour mobility. They prioritise infrastructure spending based on benefit-cost ratios, making investments more profitable with sensible tax changes, and devolving more transport power to regions and localities. All, again, will help facilitate areas adapting to changed economic conditions, rather than reviving Labour’s failed top-down regeneration attempts.

But pitching this as a city and town agenda still risks creating the false impression that the net gains from “creative destruction” nevertheless can be achieved without the destruction, and that all places can thrive in the right policy environment.

One can understand why they framed it in this way. Their aim is to persuade the party and its MPs of their platform. Anti-market commentators would call them fatalistic and “abandoning” places if they acknowledged the downside, as if facilitating more free choice amounts to design.

Successful past Tory economic narratives, though, willingly acknowledged hard truths. Deficit reduction entailed tough choices to curb spending. Thatcherism entailed making the case for letting inefficient industries fail. If a new Tory vision is serious about raising productivity growth and spreading opportunity for people, it will have to confront the inevitable market-based adaptation for some places.

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Andy Street: My seven tests to find the right Prime Minister for the West Midlands

Andy Street is Mayor of the West Midlands, and is a former Managing Director of John Lewis.

So the race is on, and the stakes could not be higher. The prize may be the ultimate one, but the responsibility is daunting: to unite the party, to deliver Brexit, but more significantly – to defeat the twin perils of Jeremy Corbyn and Nigel Farage, to turn our backs on false populism, and demonstrate that the centre of British politics can once again deliver radical thinking and dramatic outcomes for our citizens. It’s been done before, by Macmillan, Thatcher and Cameron, and no less a re-invention is required now.

Against that background, I have decided that instead of endorsing a candidate I should set out seven tests for any future Prime Minister.  These are chosen not from a factional or ideological standpoint, but from what I see doing the job of Mayor. I firmly believe they are in the interests of the people of the West Midlands.

They build on the strong economic legacy of the last nine years and on the value set of Theresa May. They also accelerate the radical thinking started by David Cameron towards devolution, whilst acknowledging the challenges of urban Britain which have persisted whilst government has been focused on Brexit.

So, the West Midlands needs a Prime Minister who –

1) Is restless in tackling the real issues which matter locally

That means providing well-paid jobs, quality housing, and skills for the fourth industrial revolution, as well as facing the challenges of climate change and the future of our town centres. These are the issues that voters care about. They want to see innovation and tangible outcomes.

A new leader will also support and recognise the crucial role of public services locally; the NHS, Councils and the police, and fund each of them appropriately.

The key will be leadership, both to galvanise original thinking and to deliver real change through government at all levels.

2) Understands the Power of Business as a Force for Good

The new Prime Minister will value responsible businesses which create jobs, drive the economy, and support wellbeing. That means giving them what they need: stability, infrastructure, skills, transport, and fair taxation. In particular, hard-working small businesses and entrepreneurs must know that they are valued. We must forge ahead with adopting new technology such as gigabit broadband, 5G and online public services.

3)  Champions realism over Ideology

First and foremost, the new Prime Minister must deliver a Brexit which honours the referendum result whilst meeting the economic needs of the West Midlands. Then they have to win the argument that a modern, mixed economy can work for everyone, and thus deliver the aspirations of the millennial generation. They will be unfaltering in sharing their economic vision and ideas, and thus restore public confidence and hope. While protecting the market’s freedom to deliver, they must be willing to intervene where necessary, for example in the provision of affordable homes.

4) Recognises the Importance of the Regions

With three quarters of The UK’s GDP generated outside London, vibrant nations and regions are critical to our success. Cities, towns and rural communities need the support of Government to create a strong but more balanced economy, and a fairer society.

A firm pledge to support HS2, as part of a comprehensive investment in addressing historic underinvestment in regional infrastructure, is the most clear signal of a commitment to Britain beyond London. HS2 is the modern hallmark of a One Nation party, as it will literally unite the country and drive regeneration in the Midlands and the North. Turning back on this commitment would be unthinkable.

The new Prime Minister will also understand the critical importance of communities who have not shared in economic success, and be a passionate advocate of addressing the underlying issues of driving aspiration and opportunity.

5) Sees the Role All Our Communities Have to Play

Our new Prime Minister needs to be a visible champion of all faiths, ethnicities and under-represented groups. They must demonstrate that they believe in the unique power of communities to work together to create a harmonious country where mixing is a source of innovation and enrichment.

They must be brave and principled in addressing any injustices, as May pledged.

6) Reaches Beyond the Comfortable to Those Who Are Struggling

The new Prime Minister must truly believe that the ultimate test of any society is the way in which it supports the less fortunate.

For example, the British public know that homelessness and the use of foodbanks in the UK today is wrong. They want someone who understands, listens and has a serious plan to sort it out.

They will face up to social challenges: how do we, as a society, support those with mental health problems, and how do we respond to communities blighted by crime and substance abuse? However, all of this requires more than just warm words – there must be a concrete plan of action, with serious Government cash set aside to tackle such issues.

7) Lives life as an optimist

Finally, we need a Prime Minister who believes in Britain, the British people, and our role in the world as an example of liberal values and individual rights.

A new Prime Minister must bring a new lease of life to the country, and a new wave of optimism after the gruelling Brexit debates of the last few months. They must lead Britain as an outward-looking, internationalist country, that takes global responsibility naturally.

He or she must be a unionist, but with a respect for the differences between our nations and regions, cherishing what makes us proud locally, but as part of one United Kingdom.

For us in the West Midlands, this means grasping opportunities such as Coventry hosting the City of Culture in 2021, and Birmingham welcoming the Commonwealth Games in 2022. We need our Prime Minister to be a cheerleader around the world.

Above all else, the new Conservative leader must be someone who can win. We are at a historic moment for the party and the country. Our new leader will need to navigate the waters of Brexit negotiations, and fight Corbyn. But they also need to set out a powerful new domestic agenda which lifts up and inspires communities like ours in the West Midlands. The stakes couldn’t be higher, and I hope that MPs, members, and the country will make a good choice.

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From magic circle to one member one vote: a short history of Tory leadership contests

The choice of the next Conservative leader, and Prime Minister, must be seen to be fair. Only an open and democratic contest, conducted according to equitable rules, will confer legitimacy on the victor.

But what does the word “democratic” mean in this context? A Conservative leader needs the support of three electorates whose priorities often conflict: the Party’s MPs, its members, and the wider voting public.

In 1963, Humphry Berkeley, a young Conservative MP, described the party’s then method of choosing its leader as “more appropriate for the enstoolment of an African chief”.

At that time, the new leader “emerged” following  “the customary processes of consultation” within the Tory tribe, an opaque process conducted by senior figures.

In 1957, when Sir Anthony Eden, his reputation shattered by Suez, resigned citing ill-health, Lord Salisbury (known as Bobbety, and unable to pronounce the letter “R”) and Lord Kilmuir interviewed members of the Cabinet to see whether their preferred successor was  Rab Butler, whom the press expected to win, or Harold Macmillan.

Kilmuir described in his memoirs how this was done:

“Bobbety and I asked our colleagues to see us one by one in Bobbety’s room in the Privy Council Offices, which could be reached without leaving the building. There were two light reliefs. Practically each one began by saying: ‘This is like coming to the Headmaster’s study.’ To each Bobbety said: ‘Well, which is it, Wab or Hawold?’”

It was by a large margin Harold Macmillan. In 1963, when he in turn, his reputation impaired by the Profumo affair, resigned citing ill-health, Rab Butler was again regarded as the favourite, and was again beaten, this time by someone not even thought to be in the race.

The victory of the 14th Earl of Home took almost everyone by surprise. He was able to disclaim his hereditary peerage thanks to recent legislation passed as a result of a campaign by a Labour MP, Antony Wedgwood Benn, who had become Viscount Stansgate on the death of his father but wanted to stay in the Commons.

Home, who had left the Commons in 1951 on inheriting his peerage, re-entered the House at a by-election as Sir Alec Douglas-Home. But some of Butler’s supporters were deeply upset by his defeat, and Iain Macleod wrote a celebrated and profoundly damaging article for The Spectator in which he suggested the leadership race had been fixed by “the magic circle” of senior Conservatives, eight out of nine of whom had been to Eton.

This was by no means the first time the Conservatives had felt a need to show themselves more democratic in their leadership procedures. As early as 1922, Bonar Law had refused, after the famous Carlton Club meeting at which Tory MPs voted to break up the coalition with Lloyd George, to accept the King’s invitation to form a Government until he had himself been re-elected as Conservative leader.

As Robin Harris writes, in The Conservatives: A History,

“The Conservative Party was not yet democratic in its procedures. But without adumbrating any new doctrine, the Carlton Club meeting had imposed a new quasi-democratic reality, one which no leader would be able to overlook. At a further party meeting held on Monday, 23rd October [four days after the Carlton Club meeting] at the Hotel Cecil, Law was proposed by Curzon, seconded by Baldwin, and duly elected by unanimity. Later that day he took office as Prime Minister.”

Law’s main need was to try to hold together a badly divided party, in part by showing it was united in accepting his leadership.

Home’s main need, four decades later, was to show that the Conservatives were adapting to the more democratic and classless atmosphere of the 1960s, when it was no longer tolerable for politicians educated at Eton (as Eden, Macmillan and Home all were) to appear to be sharing out the prime ministership among themselves, especially from January 1963, when Hugh Gaitskell, the Labour leader and a Wykehamist, unexpectedly died, and was succeeded by Harold Wilson, known already for his plain man act:

“The Right-wing Establishment has never tried to embrace me or buy me off. That’s probably a compliment. Lady Whatsit or Lord So-and-So haven’t plied me with invitations. I don’t do much socialising and my tastes are simple. If I had the choice between smoked salmon and tinned salmon I’d have it tinned. With vinegar. I prefer beer to champagne and if I get the chance to go home I have a North Country tea – without wine.”

After leading the Conservatives to a narrow defeat in the 1964 general election, which he reckoned he might have won if Macleod and another Butler supporter, Enoch Powell, had “pulled their weight”, Home set about the necessary process of democratisation. In his autobiography, The Way The Wind Blows, he wrote:

“After the widespread criticism of the methods which had been used in my own selection as Leader, I decided that for the sake of any future holder of the post, the processes of change must be reviewed.

“The ‘Magic Circle’ of selectors had almost everything to be said for it. The Whips and the experienced Conservative Parliamentarians knew the form of every runner in the field; they knew the Members of Parliament who had to work and live with the chosen Leader; and they could operate quickly and quietly in collecting views. It was the latter ‘advantage’ which caused the trouble. Some felt that candidates favourable to the establishment had the edge over anyone who might at any time have been rebellious, and there were always those who, stirred up by the media, were ready to charge the ‘Magic Circle’ with rigging the result.

“I was not particularly worried about such happenings until the accusation that the last result had been jobbed began to reverberate through the Constituencies and to affect Party morale outside Parliament. I then came to the conclusion that, with all its disadvantages, it was necessary to adopt a system of election of a leader, where from start to finish everything was seen to be open and above board. I was in the best position to see that business through.”

The rules decided upon by Home, with the help of Lord Blakenham, the Party Chairman, William Whitelaw, the Chief Whip, and Berkeley, who submitted a memorandum, were as follows.

The leader would be elected by Conservative MPs, with the process presided over by the Chairman of the 1922 Committee. Candidates needed a proposer and a seconder. If on the first ballot, a candidate received both an overall majority and 15 per cent more of the total number of votes cast than any other candidate, he would be elected.

If not, a second ballot would be held, with an overall majority sufficient for victory. If there was still no winner, the three candidates receiving the highest number of votes would go forward to the third and final ballot, in which each voter had to indicate two preferences, marking his paper “1” and “2”.

No provision was made for annual re-election. Home later said that “once a party had elected a leader that was that, and it had better stay with him”. He may also have assumed that any leader who became deeply unpopular with his own MPs would have the decency to step down.

These details are taken from A Conservative Coup: the Fall of Margaret Thatcher  by Alan Watkins. Soon after setting up the system, Home himself stepped down, and in 1965 the Conservatives held their first leadership election.

Reginald Maudling was the favourite, Edward Heath a strong challenger, and Powell ran as an outsider. The result of the first ballot was: Heath, 150; Maudling, 133; Powell, 15.

As Watkins observes, to satisfy the 15 per cent rule, Heath needed a majority of 45, whereas he only got one of 17. But Maudling and Powell now withdrew, leaving Heath the only candidate nominated for the second round, whereupon Sir William Anstruther-Gray, Chairman of the ’22, declared him the winner, a result confirmed at the ceremonial party meeting held six days later.

Heath was the Tory answer to Wilson, but here was an early sign that the rules could not cover all eventualities, including the resignation of candidates who saw they had no chance of winning. And Watkins makes another crucial point:

“The rules were not properly understood by many Conservative MPs, either in 1965 or on the three subsequent occasions on which a modified procedure was used. It was not merely that they tended to become glassy-eyed whenever percentages were mentioned: they were also what Anthony Crosland would have called ‘frivolous’ in their attitude to elections. They failed to understand that elections were a serious business which produced important results. They regarded them much as dissatisfied Conservative voters looked upon by-elections, as an opportunity to register a protest. Thus several Conservatives voted for Mr Heath, not because they wanted – still less because they expected – him to win, but because they wanted to administer a shock to ‘the old gang’ as represented by Maudling.”

By the end of 1974, when he led the party to two general election defeats, Heath was unpopular with many of his own MPs, whom he treated with quite remarkable rudeness. He was on very bad terms with Edward du Cann, the Chairman of the ’22, but in November acceded to his suggestion that there should be a review of the leadership rules.

Heath asked Home, who was by now once more a peer, to carry this out. In December, Home’s committee recommended that an annual election should, if requested, take place, and that the 15 per cent “surcharge” should be of all Tory MPs, not just of those who voted – a provision which made victory on the first ballot more difficult.

After much indecision among Heath’s opponents, Margaret Thatcher declared her willingness to stand. The assumption was that she would not win. On the first ballot she got 130; Heath, 119; Hugh Fraser, 16.

That was a tremendous shock. New candidates entered the second ballot, and the result was even more shocking: Thatcher, 146; Whitelaw, 79; Sir Geoffrey Howe, 19; Jim Prior, 19; John Peyton, 11. She had won an absolute majority of 18, and would remain leader for 15 years.

By 1989, she was unpopular, and Sir Anthony Meyer ran against her as a stalking horse. She got 314 votes to his 33, but 24 more MPs had spoiled their ballots, and three had abstained, so the total opposition to her was 60.

In November 1990, Michael Heseltine mounted his challenge. On the first ballot she obtained 204 votes to his 152, with 16 abstentions. She was four short of the 15 per cent “surcharge” of those entitled to vote.

This was a failure for Thatcher, who was quite soon persuaded that she would have to step down. But as soon as she had done that, things became very difficult for Heseltine, whose guns were trained on her, his whole campaign predicated on the assertion that he could save Tory MPs’ seats and she could not.

Nick Budgen, the MP for Wolverhampton South West, was keeping me in touch during this tumultuous period with the attitude to Heseltine of Thatcher’s supporters in the constituencies, and reported: “Their main feeling is stop that long-haired bastard. They don’t much care what animal they use to stop him.”

John Major and Douglas Hurd entered the second ballot, so there were two animals to choose from, of whom Major soon looked the better bet, though Budgen, with characteristic perversity, said he was supporting Hurd, as he would like to be betrayed in style.

The voting in the second ballot was Major, 185; Heseltine, 131; Hurd, 56. That left Major two short of outright victory, but Heseltine and Hurd at once conceded defeat.

Major led the party to victory in the 1992 general election, but his credibility never recovered from the debacle of Black Wednesday, in September of that year, when the pound was forced out of the Exchange Rate Mechanism.

By the summer of 1995, he was so fed up with the attacks on him by the Eurosceptics in his own ranks that he resigned and told them to “put up or shut up”. Michael Portillo’s supporters installed some telephone lines, but Portillo declined to put up. John Redwood did put up, but got only 89 votes to the Prime Minister’s 218.

The final leadership contest under these rules took place following Major’s immediate resignation after the 1997 general election, in which the Tories lost 171 seats, leaving an electorate of only 165 MPs.

In the first round of voting, Kenneth Clarke got 49 votes, William Hague 41, Redwood 27, Peter Lilley 24 and Michael Howard 23. Howard was eliminated and Lilley stood down.

In the second round, Clarke got 64, Hague 62 and Redwood 38. The latter now tried and failed to transfer his support en bloc to Clarke, and Hague won the third round by 90 to 72 votes.

As party leader, Hague introduced reforms to the election rules to make them more democratic. From now on, MPs would whittle the contenders down to the last two, between whom party members would choose.

These rules, and the elections held under them, have recently been outlined in a briefing by the House of Commons Library. Even if one has lived through this period and taken a close or even morbid interest in the successive contests for the Tory leadership, it can be difficult to remember what happened, so here is a summary.

In the first round of voting in 2001, Portillo got 49 votes from MPs, Iain Duncan Smith 39, Clarke 36, Michael Ancram 21 and David Davis 21.

By the third round, Clarke was on 59, Duncan Smith on 54 and Portillo had 53, so was eliminated.

The members proceeded to give Duncan Smith victory by 155,933 to Clarke’s 100,864 votes.

In 2003, 25 MPs requested a vote of confidence in Duncan Smith’s leadership, which he lost by 75 to 90. In the subsequent leadership election, only Michael Howard was nominated, so he was elected unopposed.

In 2005, Howard made an outrageous attempt to exclude Tory members from their decisive role in the electoral process, by changing the rules in order to return the final decision to MPs. This was beaten off by determined opposition led by Tim Montgomerie, founder in that year of ConservativeHome.

In the first round of the 2005 leadership contest, Davis received 62 votes, David Cameron 56, Liam Fox 42 and Clarke 38.

In the second round Cameron got 90, Davis 57 and Fox 51.

The members gave Cameron victory by 134,446 to Davis’s 64,398 votes.

There was no further contest until 2016, when in the first round Theresa May got 165 votes, Andrea Leadsom 66, Michael Gove 48, Stephen Crabb 34 and Fox 16. Fox was eliminated and Crabb dropped out.

In the second round, May polled 199, Leadsom 84 and Gove 46. Gove was eliminated and Leadsom dropped out, so the members never got to vote.

While writing this article, I needed to check a quotation, and happened on a piece by Ferdinand Mount, written just after Cameron had overtaken the favourite, Davis, in the 2005 race:

“what is different about this startling result is that Cameron looks like being the first Tory leader to be chosen, primarily and deliberately, because his electors – both Tory MPs and party activists – think he is the man that the public at large would prefer. So far at least, they are putting popularity before ideological soundness.

“Sounds obvious, especially after three thumping defeats. But look back over the past half-century. If popularity with the public had been the criterion, not a single one of the party’s leaders would have made it. Instead, the Conservatives would have been led successively by Rab Butler, Reggie Maudling, Willie Whitelaw, Michael Heseltine and Ken Clarke.”

In the present race, as on previous occasions, MPs and activists will have to decide whether to put popularity before ideological soundness. The result will probably turn on which of those qualities they regard as more important.

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Richard Ritchie: Christianity and politics at Easter. Do the Gospels present a manifesto?

Richard Ritchie is the author of The Progress Trust (Without Hindsight: A History of the Progress Trust 1943-2005). He is Enoch Powell’s archivist and is a former Conservative Parliamentary Candidate.

Eastertide presents Christians with an obligation, as well as an excuse, to think about something other than Brexit. But it is probably no exaggeration to say that anyone interested in politics who professes also to be a Christian is bound to wonder whether the political beliefs he or she advocates meet with the approval of Jesus Christ.

This presents a problem – because while Christ has a great deal to say about morals and motivation, his words are not so easily transcribed into political practice. An obligation to feed the hungry and protect the poor, for example, is not necessarily achieved by the introduction of a wealth tax. But if a Conservative’s sole reason for opposing such a tax were the dislike of having to pay it oneself, he would be on shaky ground. And even then, it’s not simple. Can anyone be confident of the purity of one’s motives? And yet, if pressed too far, scrupulosity might easily lead towards political paralysis.

For socialists, it’s easier. Christians with left-wing views almost always tend to think that their politics are consistent with their faith, and one can see why. Literal readings of the parables all lean towards condemning the rich for having too much and for lacking compassion. Hence, the need, in the eyes of many on the Left, for redistribution – although a redistribution dictated by the state rather than freely offered by individuals which, it could be argued, is not at all what Christianity is about. It’s hard to see why simply paying taxes should help to get one into heaven. But it is not just politicians of the Left who make this mistake, and who seek to mould Christ’s teaching into a political philosophy. Margaret Thatcher, for example, used the parable of the talents to justify capitalism. But Doctors of the Church remind us that these talents represent God’s grace – not money in the bank.

This is why for a ‘literal’ reading of the parables, one might more accurately substitute ‘superficial’, because it is clear that they were never intended be interpreted from a single standpoint. Almost every parable has a deeper theological meaning, which is peculiar not only to Christian morality but also to the very nature of Christ’s Church. If anyone doubts that, they only have to read Harold Macmillan’s great friend, Monsignor Ronald Knox. His Mystery of the Kingdom interprets the parables as being primarily about Christ’s purpose in creating his Church and the characteristics which it will hold – including the presence of good and evil within it.

But this doesn’t mean that an avowedly Christian politician should expect to end up politically in the same place as, say, a Muslim or an atheist. One’s religion should make a difference – and then the question is whether a religious person has a duty to ensure that the law of the land reflects his religious values.

Most today would say not, but again it is not that simple. A recent essay by the Pope Emeritus, Benedict XVI, has recently been published, in which he returns to his favourite theme of ‘absolute’ rather than ‘relative’ moral values. He challenges today’s central assumption that morality should be determined exclusively “by the purposes of human action that prevailed.” He concludes that the current approach to morality means there can “no longer be anything that constitutes an absolute good, any more than anything fundamentally evil.”

Any Christian whose conscience is in the same place as Pope Benedict would have found it necessary to oppose, in his words, “the unprecedented radicalism” of the 1960s. In particular, he singles out the proliferation of pornography as a serious source of evil which no Christian politician should have countenanced, however ‘libertarian’ his or her outlook. But he goes further in the following passage, which goes to the heart of the dilemma facing any Christian politician:

“After the upheaval of the Second World War, we in Germany had still expressly placed our Constitution under the responsibility to God as a guiding principle. Half a century later, it was no longer possible to include responsibility to God as a guiding principle in the European constitution. God is regarded as the party concern of a small group and can no longer stand as the guiding principle for the community as a whole. This decision reflects the situation in the West, where God has become the private affair of a minority.”

Most people today would say :“and a good thing too.” Religion should only be “the private affair of a minority.” But that is not what a Christian politician should think, whether of the ‘right’ or of the ‘left’. One doesn’t have to be a Roger Scruton to note, in Pope Benedict’s words, that “in the twenty years from 1960 to 1980, the previously normative standards regarding sexuality collapsed entirely.” Christian politicians are under an obligation to challenge a morality based entirely on private judgment and relativity, especially if they conclude that these normative standards are endangering the spiritual welfare of children.

It is because socialists in particular have liked to claim for themselves a monopoly of Christian morality – except, of course, when it comes to sexual morality – that the politics of this country has drifted into a religious ‘no man’s land’, where everyone is judged by the standards of the BBC and nobody asks difficult questions. But however important issues such as the distribution of wealth or child poverty should be to a Christian, it does not follow that the Gospels contain a political message or solution.

All we know is that ambition and material sufficiency can be barriers to holiness – and the more comfortable we are, the greater this danger. Such thoughts don’t write a manifesto: at best they only provide the moral foundations on which a manifesto is based. And Christ’s resurrection certainly doesn’t help us out on Brexit – unless it be to remind us of the Christian virtues of temperance and respect. Perhaps that should be the focus of our Easter meditation before political hostilities recommence.

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Profile: Amber Rudd – moderation-preaching, whip-defying, No Deal-opposing. And sought by leadership contenders for support.

Amber Rudd this week downplayed reports that she will back Boris Johnson in the Tory leadership race. She is unlikely to make a public declaration of her preference until the race is under way and we can see who the candidates are.

But she makes no secret of the considerations which will guide her choice. Since her return in November to the Cabinet, its soft Brexiteer members have looked much better organised.

Rudd, David Gauke, Greg Clark and David Mundell together broke a three-line whip and refused to vote against a motion to take no deal off the table. They defied collective responsibility and got away with it.

Their refusal to vote with the Government upset a considerable number of colleagues, and almost certainly leaves Rudd out of contention as a figure who could reunite the party when Theresa May steps down.

But whoever does take over as leader will need a team that embraces both wings of the party. And as one of the leading figures in the One Nation group, whose formation was announced by Nicky Morgan in her piece on ConHome on Monday, Rudd has a representative value, even if, as is probable, she could not persuade its 40 or so members to vote as a bloc.

A week before Morgan’s piece appeared, Johnson wrote in his Daily Telegraph column that “we need to get back to explaining our One Nation Tory approach, and the vital symmetry between great public services and a dynamic free market economy….business can only flourish if the public sector creates the right seed-bed for growth: safe streets, high skills, good health care and the rest. One Nation Tories understand the need to satisfy both sides of the equation, and it is a profoundly moderate creed”.

He evidently proposes to unite the party by reaching out to One Nation Tories like Rudd. And she has indicated a certain receptivity to such an approach, for example in an interview for The Mail on Sunday last November, when she described herself and Johnson as “good friends”, and added that unlike Jacob Rees-Mogg, he is “not socially illiberal”.

She backed Johnson during his brief, ill-fated leadership bid in 2016 – having been deployed by the Remain campaign in the ITV television debate only a few weeks earlier, when she tried to derail Johnson by saying of him: “He’s the life and soul of the party, but he’s not the man you want driving you home at the end of the evening”.

Since the 2015 general election she had been Energy and Climate Change Secretary, her first Cabinet post, but she did not demand the promise of a job in some future Johnson administration.

She wanted a commitment on climate change, which Johnson was happy to give, though after her request was fed in to his chaotic campaign, nothing happened.

Some Conservative MPs, especially those who are likely to support other leadership contenders, regard the idea of a Johnson-Rudd alliance as a cynical ploy, comparable to the Molotov-Ribbentrop Pact, as one of them put it, and no more likely to work than the alliance between Ken Clarke and John Redwood in the leadership contest of 1997.

Once Redwood had been knocked out, most of his supporters refused to transfer to Clarke, whose views on Europe they found repugnant. They instead decided to back William Hague, who came through and won.

But while it was hard to imagine that Clarke and Redwood had ever enjoyed each other’s company, Johnson and Rudd are old friends.

This opens them to the accusation that they would form, as another observer with a deep knowledge of the party puts it, “a poshocracy”.

It is certainly true that like Johnson, Rudd possesses, through her family, a remarkable range of connections. But she also wins golden opinions from a considerable number of Conservative MPs.

As Keith Simpson, a Norfolk MP since 1997, says:

“I think she is a highly intelligent, feisty woman, with great courage, wonderful and classy, descended on her mother’s side from an illegitimate child of Charles II. One can imagine casting her as the headmistress in a 1950s St Trinians film. She was very much part of the Cameron/Osborne group, but that didn’t really damage her with Mrs May. A lot of them were put to the sword, but she impressed by her command of detail, and was very good at baiting Boris during the referendum campaign. She’s like Michael Gove – she’ll happily stop and chat to you, ask you what are you doing, what are you reading. She passes the dinner party test – would you want to go to a dinner party with them – because it wouldn’t just be about her. She has a genuine interest in other people.”

Poshness, as long as it is progressive, can still work in the Conservative Party, as David Cameron demonstrated.

In January 1957, Harold Macmillan, a businessman by profession, a member of the ruling class by education and marriage, a progressive and an Anglican by conviction, an opportunist when required, seized the Conservative leadership from under the nose of Rab Butler.

Tory MPs of an imperialist outlook wanted to believe that the Suez debacle of late 1956 had not been a fatal blow to British prestige, and Macmillan managed to give them the impression that some kind of victory had occurred, and that they could still win the next general election.

Harold Wilson, who within a few years would become Labour leader, watched the new Prime Minister’s performance with admiration: “Macmillan is a genius. He is holding up the banner of Suez for the party to follow and is leading the party away from Suez. That’s what I’d like to do with the Labour Party.”

It is possible that the next Conservative leader will need, after the humiliations of Brexit, to do something similar. Macmillan led the party to a great general election victory in 1959, when it won almost 50 per cent of the vote by appearing more modern, and more efficiently devoted to the people’s welfare, than Labour did.

Rudd belongs in that progressive Conservative tradition, and is acutely aware of the need for an election victory, her majority in Hastings and Rye having shrunk in 2017 from 4,796 to 346.

Momentum activists from all over the south coast see the chance to turf her out by converging on Hastings.

In an earlier profile for ConservativeHome, I sketched Rudd’s early life, but omitted to mention that like her parents, she is an Anglican, who worships at St Mary Abbots in Kensington.

Her marriage to A.A.Gill, which ended in divorce but not acrimony, suggests she would not be deterred by the challenge of managing a highly gifted but not entirely reliable man.

Rudd is now, as Work and Pensions Secretary, in charge of the implementation of Universal Credit, a task to which she seems to be bringing a certain realism.

As Home Secretary, the post she occupied from July 2016 to April 2018, she was unseated by the Windrush scandal, during which it looked culpably naive of her not to have realised that her department would set targets for the removal of immigrants, and would try to meet these by picking on people who in no way deserved to be treated harshly, having lived peaceably and lawfully in this country for  half a century.

She said she was unaware of any targets, after which a memorandum surfaced which had been copied to her office and which set “a target of achieving 12,800 enforced returns in 2017-18”.

The Guardian also published a letter from Rudd to the Prime Minister in which she spoke of an “ambitious but deliverable” target for deporting migrants. As soon as this came out, Rudd resigned.

Her defenders observe that the Home Office is an exceptionally difficult department to get any sort of control over, as shown by the large number of ministerial resignations from it over the years.

They add that it was her predecessor, May, who in 2010 established the “hostile environment” policy for immigrants, in the expectation that they would find it very difficult to prove that they had the right to remain, and could be pressured into leaving of their own accord.

Rudd’s critics say that because of her privileged background, she failed to understand the horrible predicament in which members of the Windrush generation had been placed, and the quite unreasonable demands for documentary evidence being made by the Home Office. Certainly the Home Secretary’s inexperience had been exposed.

It is by no means certain who Rudd will end up backing in the leadership contest. She could start by backing a member of the One Nation group, and switch in a later round to one of the other candidates.

But her endorsement will be eagerly sought, for she is respected beyond the circle of those who agree with her views on Brexit. Rees-Mogg told Sophy Ridge at the weekend: “I’ve always thought highly of Amber Rudd. She’s a long-standing friend of my sister’s as it happens and a person of first-class capabilities. I happen to disagree with her on the European issue.”

Not all Tory MPs are as charitable as Rees-Mogg about colleagues with whom they disagree. Rudd has deeply annoyed some on both the Remain and the Leave sides by that recent refusal, while a Cabinet minister, to vote with the Government.

Nor will some of her One Nation allies regard the prospect of Johnson as the next leader as in any way tolerable. And she herself might in the end decide to support Michael Gove, Jeremy Hunt or some other contender.

Tory leadership contests are very seldom predictable, and a relatively untried and unknown figure such as Matt Hancock could come through, in a John Majorish way, as the stop Johnson candidate.

But Rudd is one of the few members of the present Cabinet who does not give the impression of having had her personality flattened by the sacrifices demanded by a ministerial career. Her support is worth having because she is her own woman.

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Richard Ritchie: Brexit. Four great Commons debates that show how we got here – and what’s at stake.

Richard Ritchie is the author of The Progress Trust (Without Hindsight: A History of the Progress Trust 1943-2005). He is Enoch Powell’s archivist and is a former Conservative Parliamentary Candidate.

The reading of past debates in Hansard is a salutary exercise. I learnt this in researching my recent history of The Progress Trust where I was constantly impressed by how often political arguments seem to repeat themselves. But no more so than on the question of Europe.

Before joining the European Community, the Commons held three debates on the question of principle – four, if one includes the debate concerning the Labour Government’s refusal to countenance the Schuman plan in June 1950. All of them were considered historic by their participants. The final debate lasted six days (21st – 28th October 1971), sitting often until 2am and on one occasion until 7am.

In passing, it’s impossible to ignore changes in Parliament’s character between then and now. In 1971, speeches were still of unlimited duration, there were far fewer female contributions, and the Speaker (unlike now) was polite and impartial. The only time a Speaker came near to issuing a rebuke in all these debates was when Selwyn Lloyd on October 27 1971 exploded “It is really not tolerable that the Rt. Hon. Member for Leeds East (Denis Healey) should continue to interrupt from a sedentary position.”

But what strikes one most is how, with hindsight, the inevitability of today’s crisis is apparent. The issue of sovereignty was always acknowledged as crucial, and politics took precedence over economics from the start. Moreover, the Commons was always divided on the issue, with a constant sense from opponents of entry that the Government of the day was exceeding its democratic mandate.

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The debate on the Schuman Plan is instructive, because it shows how the Conservatives were as willing as Labour to say one thing in Opposition, and another in Government. Churchill criticised the Labour Government for its refusal to consider a plan which he himself, as Prime Minister, was to judge unacceptable. The kernel of the argument was whether Schuman’s plan necessitated a “supra-national authority” as claimed by Attlee, but denied by Churchill who described it as “an odious phrase.”

And yet, Churchill took Attlee’s view once he regained office. Incidentally, it was during this debate that Edward Heath made his maiden speech, urging the Labour Government to “go into the Schuman Plan to develop Europe and to coordinate it in the way suggested.” Heath, at least, was always consistent. The most striking comment was uttered by the left-wing intellectual, Richard Crossman – “The amount of enthusiasm for federal union in any country is a measure of its defeatism and of its feeling of inability to measure up to its own problems.”

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It was not until Harold Macmillan’s attempt in 1961 to join the ‘Common Market’ that the Commons again fully debated the principles involved – although only in respect of authorising negotiations. The debate contained many interesting statements, including Macmillan’s assurance that “it is quite unreal to suppose we could be compelled suddenly to accept a flood of cheap labour.”

Of special relevance to today was the distinction between applying for membership under Articles 237 and 238 of the Treaty of Rome. The Labour Party preferred the latter because it simply meant joining ‘a customs union’. But as Macmillan pointed out, this amounted to no more than becoming “country members” (it was typical of Macmillan to use a club analogy). He continued: “it would raise all the same problems without giving us any position in which we could share in the decisions of the Community in all its aspects.” In other words, precisely the same objection as is made today of Theresa May’s approach.

On the economic side, the debate was between those who feared economic exclusion from a large market, and those who felt this country was betraying its farmers, and the Commonwealth. On the political side, the argument was over sovereignty. Derek Walker-Smith was the main Conservative opponent of entry, urging the Commons to consider “the direction and destinations” to which membership would lead, and emphasising that “for the Community economic union is a prelude to political union.”

He was not alone in warning of what came to be known as the ratchet effect. The word ‘sovereignty” was discussed frequently during this short two debate in August. It’s a myth to suppose it was of lesser concern in 1961 than in 1971 or indeed today. And from the start, it was divisive. As the Conservative MP Sir Robin Turton warned, “there are hundreds of thousands of Conservatives who hold the views that I hold” on sovereignty, and continued “I fear that the Government will split not only the Commonwealth but the Conservative Party.”

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Because this attempt to join the Common Market was blocked by de Gaulle, the Commons was never required to debate the actual terms of entry. By the time Harold Wilson launched a second attempt to join the Community in 1967, there was a greater appetite to debate in detail the economic dimension.

A three day debate took place between 8th and 10th May, by which time Edward Heath was leader of the Opposition. While resentful of the lack of support offered by Labour to his negotiations in 1961, Heath offered the Government almost unequivocal backing on condition that, as he had stated a few months earlier, Wilson’s application was based on full acceptance of “the Treaty of Rome, the common external tariff, the abolition of the internal tariff, the common agricultural policy and the movement towards economic union.”

Wilson opened the debate with a speech lasting nearly one and a half hours, and most of it was devoted to economic matters relating to agriculture, the movement of capital and the Commonwealth. On the political dimension, Wilson was mostly interested in how membership would affect relations with Russia, and issues of peace and security in general. He was less concerned with ‘sovereignty’ although he did make the extraordinary claim that “by far the greater part of our domestic law would remain unchanged after entry.”

There was also greater concern than in 1961 over the dangers of exclusion. Sir Alec Douglas-Home argued “the country is in danger of being put out of business” although he conceded that “the difficulties of grafting Britain on to a Community which will achieve complete integration by 1970 are much greater than they would have been five years ago.” By 1967, immigration was also a much bigger issue than in 1961, but this did not prevent Wilson from echoing Macmillan in his emphasis that “the Government do not believe that there is likely to be any large net increase in the number of EEC nationals coming here to work.”

Backbenchers of both parties preferred to debate the issues of principle. Duncan Sandys, for example, was the precursor of Michael Heseltine in arguing that “in this age of super-states, Britain by herself is no longer in a position to exercise any really effective influence in international affairs.” Socialists such as Michael Foot feared a capitalist conspiracy (just as Corbyn does today). Internationalists argued that internationalism does not “reside behind tariff walls.” And it was the Ulster MP Captain Lawrence Orr who expressed most succinctly the sovereignty concern: “It is a loss of sovereignty which can never be regained. Once we sign the Treaty and are in, every kind of sanction could be used against us, and would be used against us, if we sought to abrogate it.” The Labour MP Manny Shinwell urged that more attention be paid “to what is being said on the other side, on the Continent”, a warning ignored by the Foreign Secretary, George Brown, who stated “we expect to get in.”

But what distinguished this debate from its equivalent six years earlier was that Conservative opponents of entry tabled their own critical amendment, albeit unsupported by the official Opposition. While only 26 Conservatives supported the ‘rebel’ amendment (although 62 MPs voted against the application itself), it was the first manifestation of divisions to come. Before leaving the 1967 debate, the temptation to quote Percy Grieve, Dominic Grieve’s father, is too great to resist in illuminating the family atmosphere in which his son grew up: “The changes in law resulting from accession to the Community would not affect the ordinary man or woman in this country, who simply would not realise the changes resulting in the laws dealing with commerce and restrictive practices.”

– – –

Everyone was agreed that the final debate of principle, in 1971, was different from its predecessors because here Parliament was asked to approve a final decision to join “the European Communities on the basis of the arrangements which have been negotiated.” Inevitably, therefore, the debate was not just about the principle but also the terms of entry.

The consequence of this was an inordinate amount of time was taken up by a boring quarrel between the two front benches as to whether Harold Wilson and the Labour Party had again changed their minds and could have negotiated something better. Wilson denied the former, and asserted the latter. Heath and the Conservatives in turn accused Wilson of subterfuge and lack of principle. It was a forerunner of what we are seeing today. Wilson had no more chance of winning better terms in 1971 than Corbyn has in 2019. But the farce of pretending otherwise has to be enacted, while the issues of principle are evaded.

However, a six day debate afforded plenty of opportunity to debate every angle, and the arguments expressed on this occasion retain a resonance for us today. Dennis Healey described the debate “as the end of the beginning of an argument which has lasted for more than 15 years.” Peter Shore put it better in saying “I sense that neither here nor in this country are we at the end of this great debate but rather at the beginning.”

When it came to the economic dimension, the quarrel was over familiar ground, although regional policy had assumed greater importance for Labour because of its radically different approach. Also, this debate contained for the first time detailed discussion over Britain’s net contribution to the EEC Budget, which the Government was keen to downplay but where Labour was ultimately vindicated – culminating in Margaret Thatcher’s struggle to reduce this country’s net contribution in 1984. Nevertheless, much of this argument was about statistics, growth rates and forecasts about which, like today, neither side had any justification for certainty. One could almost substitute the numbers cited then for the numbers extrapolated now, and be none the wiser. As in 1967, for Sir Alec Douglas-Home the question was simple: “Where do we find the jobs for our people unless we take advantage of an opportunity like this?”

But the political implications were not to be crowded out by disputes over “the terms” or economic projections. These implications now included to a greater extent than before the issue of defence, as Heath was suspected by an increasingly unilateralist Labour Party of planning an Anglo-French nuclear force. Essentially, the sovereignty argument was still between those who, like Keith Joseph, believed “it will never be requisite upon us once we are in the Community to take any decisions, or to join in any decision, against our national interest”; and those like the Labour MP Michael English who pointed out that “if every member of the Cabinet had a right of veto, there would be no Cabinet decisions.”

A Conservative MP called Peter Trew predicted “The British people could find themselves on a bandwagon travelling in a direction not of their choosing and at a speed which they could not control.” Tony Benn argued that defence and foreign policy “are to be put in for harmonisation with tariffs and taxation.” Derek Walker-Smith referred to “the new fashionable expression” of ‘elitism’ and concluded “If this is the product of elitism – government by community decree, with Parliament a rubber stamp – new elitism is old autocracy writ French. If this is elitism, then give me democracy.”

– – –

So, what are the main lessons of these debates for today’s MPs? It was Benn who said in the debate: “I think that history is unlikely to confirm any of our certainties expressed, and that what the historians will want to know is how deeply we thought about the possibilities.” Events have occurred which were not fully perceived. Perhaps the most important is the unification of Germany and the break-up of the Soviet Union. The second is the enlargement of the EU. It is harder now than then to argue that the EU does not embrace most of Europe. Another development not fully acknowledged was Scottish nationalism, although the Tory MP Lieutenant Colonel Colin Mitchell (known to his contemporaries as “Mad Mitch”) got it right when he argued that “nation states are being eroded, but are being eroded not only from above but from below as well, and with the weakening of nation states there are supra-national groupings and sub-national independence movements.” The Northern Ireland border was hardly discussed, although Stanley McMaster, the Unionist MP for Belfast East, feared the movement of labour from Eire to Ulster.

But just as striking are the similarities. For example, then as now there was concern over Britain’s influence in any alternative grouping. The Labour MP Ronald Brown, who was George Brown’s younger brother, stated “I object to this country joining any grouping (such as EFTA) in which we have a subordinate role. This is the great value of our joining Europe, that we will be on equal terms with our partners.” This is precisely what is argued by today’s critics of ‘Norway-plus’ and its variations. It was also frequently argued that the Government failed to listen to the Community. One can’t help wondering whether it would not have been better for everyone if the advice of “people of some authority” in the Common Market, quoted by George Brown in 1961, had been followed: “If you are coming in believing that this is no more than an economic arrangement, we would much rather that you did not come in.”

Finally, there is the issue of public consent. There were just as many complaints then as now over the Government’s attempts to influence public opinion and the illegitimate use of taxpayers’ money. There were frequent calls for either a general election or a referendum. Benn again put it best when he said “There are such sharp differences of opinion within each party that it would not be possible to decide the issue at a general Election, even if the leadership of the two major parties were taking contrary views.”

That was the dilemma then, as it is today. Parliament and Parties have always been divided on this issue. ‘Sovereignty’ was always the key concern, despite arguments over its meaning. The question now is whether those divisions within the Conservative Party which have been apparent ever since Macmillan made his first application (and before) are finally bringing about its destruction. If so, nobody can say they weren’t warned.

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