Thursday, 9 April 2009

Dan Hannan and the 'modern' Conservative party

Dan Hannan is the gift that just keeps on giving. Using nothing more explosive than mere facts, Sunder Katwala of the Fabian Society demolishes Hannan's argument on Fox News that the NHS has been a "mistake for 60 years." Surely this guy is just a media savvy crank and can be ignored? Well, David Cameron would certainly like it to be that way. The problem is that the Dan Hannan problem just will not go away because it's revealing of something rather more fundamental: the degree to which the Conservative party hasn't changed.

Right wing blogs such as Iain Dale, Guido Fawkes, and ConservativeHome were quick to laud Hannan's speech to the European Parliament where he assailed the Prime Minister and was rewarded with spots on US cable news and 2million YouTube hits. His speech was an articulate expression of extreme free market philosophy as his comments about the NHS were. ConservativeHome polled Conservative party members on the speech. 88% had seen it and 87% thought that Dan Hannan should get a prime spot at the Conservative party conference. Scan the 418 comments on the speech on Guido Fawkes, 50+ comments in each of a series of posts on Iain Dale, and scores in response on ConservativeHome, and you will see that Hannan's extreme free-market views have warm support amongst Conservative members and supporters.

This is David Cameron's Hannan problem. His core support is considerably to the right of where David Cameron positions himself in public. This explains why he has been unable to genuinely re-position himself on the centre-ground of British politics. He has not had a Clause IV moment because he can't have it and not shed significant chunks of support to either UKIP or the apathy party.

What this means in practice is that any Conservative government would most probably default right given any political dilemma. This needs to be understood. The difference between David Cameron and his re-positioning and Tony Blair's could not be greater. David Cameron has been noticeably quiet on Dan Hannan- see Jim Pickard in the FT on this. Tony Blair took his party with him and where it did not follow he took it on. David Cameron has done no such thing. How can you be a reformer without reform?

This is one of the reasons why the Tories have been so out of step on the economy and earlier this week George Osborne suggested that a Tory government may re-open pay deals for nurses, teachers, and police before have to beat a quick retreat. In practice, what it would mean is that a Conservative administration would be quite brutal in cutting public expenditure even as the economy may only be in the early stages of growth. They would repeat the Japan error once again- cutting too much too early leading to a double or treble dip recession and ultimately a greater level of public debt. The negative social impact of the early 80s increases in interest rates and indirect taxation and reductions in public expenditure in the midst of a recession are still felt today. The Bank of England is now independent but a Tory government could do an immense amount of damage with the wrong fiscal policy.

David Cameron will do everything within his powers to prevent Dan Hannan getting his speaking slot at the Tory party conference. That is partly to do with what he says. But more importantly, it will reveal exactly the ideological position of the modern Conservative party which remains Thatcherite to its very core. And that is the direction in which David Cameron will inevitably be pulled because he has done nothing to take it on either politically or intellectually.

The Dan Hannan problem- like the Rush Limbaugh problem that the Republicans have in the US- is very grave indeed. Dan Hannan will continue to get all the exposure he could ever wish for. That will communicate the reality of the modern Conservative party.

1 comment:

  1. Sorry but this appearst to be economically illiterate. There is no evidence that what you say about Japan is correct. While it is certainly true that an increase in public spending can increase demand, the real impact is that it ultimately hurts savers as more is spent on that which cannot be afforded. It is also reasonable to claim that the more money spent centrally, the less efficiently it is spent. Therefore, your government spending bias pushes up future tax rates and does not result in investment where it is best-required - this is something the market does better. Finally, surely you can see the point of view that people find it irritating in the extreme to have the government spending the public's money on pet projects, directed through quangos who have little accountablity with the public?

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