Conservative Party Modernisation 2: From Big Society to Small StateBy Martin Smith on 6 April 2015
It has been forgotten, especially by George Osborne, that in 2007 when David Cameron was Leader of the Opposition and preparing for the election campaign he committed a future Conservative government to Labour’s public expenditure plans. These plans were based on increasing spending on health, education and welfare. The commitment was part of a wider modernization strategy intended to create a distance from the ‘nasty party’ label. Cameron aim was to demonstrate the party’s commitment to the welfare state as he recognized its electoral popularity. In developing his big society strategy, Cameron made a promise to maintain public services and a continued role of the state. As he said: ‘We are not proposing laissez-faire. The state has a hugely important responsibility to ensure, clear, basic standards are met, the rights of users are maintained and independent inspection is carried out in our public services….’
Despite the commitments to welfare, the financial crisis and the subsequent policy of austerity has led to a considerable re-evaluation of the role of the state under the Conservative led coalition. Indeed, Conservative plans for public spending by 2018 take overall spending close to levels in the United States and follows trajectories similar to Greece rather than those of European Social and Christian democratic states (see figure 1). The Conservatives have been developing a very different vision of the state and its role in social relations than the one that has dominated modern Britain even through the Thatcher years.
Figure 1: Government spending as a percentage of GDP in selected countries
This change is a consequence of a conflict between the Conservatives’ electoral strategy and their governing strategy. The Conservative governing strategy has been built around eliminating the deficit in order to differentiate the party from their feckless predecessor and demonstrate that they have a long-term economic plan. This requirement for fiscal stringency is limited by the recognition that the three areas of highest welfare spending: health, education and pensions are extremely popular. Hence the Conservatives, have committed themselves to maintaining increases in health spending, the triple lock for pensions, and in the first term increased education spending and a real terms freeze for the second. Hence, between 2009 and 2014 there was a 2.5 per cent increase in health spending whilst overall education spending reduced by about 1 per cent but schools in the most deprived areas saw real increases in spending.
The resolution of the conflict between deep spending cuts and commitments to core welfare services has been twofold: the first is dramatic cuts in limited aspect of welfare and other state and the second is a wider reconfiguration of the role of the state-society relationship. The Conservatives have been very aware that certain elements of welfare (those focused around benefits and social assistance) are not popular electorally. In addition, local government expenditure, which delivers many elements of welfare –for example social care – has been cut dramatically.
The consequence is the development of a dual welfare state linked to electoral constituencies. The core welfare state supported by a working class and middle class electorate retains universalism and high levels of state support. The element of welfare focused on the poorest and the least likely to vote Conservative, or at all, is seeing the system sinking into a minimal, residual welfare system through making benefits more incentive based, introducing a benefits cap, targeting and an overall cut in benefits. The Conservative model follows that of the US where benefits for working aged people without children are at little more that safety net levels. A considerable shift from the social citizenship envisaged in the postwar welfare state.
The changes in welfare are part of a profound change, in the role of the state and in particular the public/private balance. Whilst the privatization of government activity has continued since the 1980s what we have seen in recent years has been a fundamental nature of the public/private divide. Whilst government have traditionally sold off assets and contracted out services, what we are seeing now is the integration of the private sector into the state. The most obvious example is the delivery of NHS services through private companies. But the integration of public and private is widespread. Increasingly it is the case that even in core services like the police many services are being provided by private companies. Similarly in local government faced with cuts of 33 per cent in their budget between 2010 and 2014 councils have looked to the private sector to provide a wide range of services at local government to the extent that contractors and local government officials work together in delivering public policy.
The Conservative modernisation strategy in relation to the state was based on a commitment to core welfare provision, but with a greater role for the voluntary sector – through the Big Society. Part of the detoxification of the Conservatives was to demonstrate a commitment to the welfare state. The reality has been complex. The acceptance of the austerity narrative as the basis of an economic policy centred on deficit reduction has led to pressure to cut expenditure. However, the government has been caught between a desire to cut spending and an electoral imperative to maintain widely used welfare services such as health, education and pensions. Hence policy has been based on substantial cuts in public spending, though these have been concentrated on defined areas of welfare benefits and transfers. These cuts have created a residual benefits system but they have not produced large cuts in spending. The irony for the Conservatives is they are only likely to get the scale of cuts they desire if they cut health, education and pensions.
Martin Smith is Professor of Politics at the University of York. His recent publications include: Institutional Crisis in 21st Century Britain, (Co-edited with Dave Richards and Colin Hay), Palgrave, 2014 and ’Globalisation and the Resilience of Social Democracy: Reassessing New Labour's Political Economy’. The British Journal of Politics & International Relations, 16(4), 597-623. He tweets @po1mjs.
This is the third in a series of blogs on Conservative Party modernisation, based on a selection of papers from the forthcoming special issue of British Politics on 'Conservative Modernisation From Opposition to Government'. The issue, which is edited by Peter Kerr, Steve Kettell and Richard Hayton, was the product of the 'Whatever Happened to Conservative Modernisation' workshop event hosted by the University of Leeds in September 2014, and organised jointly by the PSA Conservatives and Conservatism Specialist Group and British Politics'.
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