Wednesday, September 23, 2009

David Cameron and the End of Thatcherism

British Tory leader charts "more consensual" way forward

However British history books remember the current Conservative party leader, it won't be as "Iron" David Cameron.

Cameron continued his efforts to distance himself from the political legacy of Margaret Thatcher recently, as he spoke very candidly of the woman still known to Britons as the Iron Lady.

If -- some say when -- his party wins the next British general election (slated for sometime in 2010), Cameron has insisted that he will not address Britain's current fiscal status the way that Thatcher did during the 1980s.

Thatcher is remembered by many as one of the neo-conservative "big three" of the 80s, along with US President Ronald Reagan and (oddly enough) Canadian Prime Minister Brian Mulroney.

In the parlance of British conservatism, Thatcher was an avowed "dry". She favoured the reduction of government spending, tax cuts, controlling the growth of the money supply (thus impeding inflation) and reducing government regulation. Tories who opposed Thatcher's direction were lumped together with the label of "wet". (The phrase seems to have fallen out of vogue in the British Conservative party since the 1980s.)

Looking back on the 1980s, Cameron doesn't see Thatcher's program as an overwhelming success, and he says he wouldn't emulate it now.

"We never in the 1980s actually managed to cut public spending," Cameron noted. "The rhetoric was out there about the weight and the burden and all the rest of it, but ... this is a far more serious problem than we faced in the 1980s."

"This is something we need to do with the public sector, not to the public sector," Cameron continued. "This is very important: this is not some 1980s-style approach about cutting public spending."

The stage for Thatcher's conflicts with the civil service was set earlier. She was deeply angered by a prevailing view within the public service of the day that the role of civil servants was to manage Britain's decline from its Imperial status.

Cameron is apparently determined not to repeat that experience.

Cameron is avoiding outright criticizing Thatcher, however, as he realizes that this could alienate the right wing of his party.

Daniel Hannan, the Conservative Member of European Parliament who has been somewhat troublesome for Cameron on the health care file, recently outlined what he believes Cameron could learn from Thatcher.

According to Hannan (and Charles Moore, a Thatcher biographer), Thatcher's greatest political strength was her ability to give just as much information as she needed, and not tip the rest of her hand too early.

"Margaret Thatcher did extraordinary things, rescuing a country that Labour had demeaned and indebted. But these things were only vaguely hinted at in the 1979 manifesto. Although the broad outlines were clear – we would live within our means, the trade unions would be put in their place, Britain would stand up to the USSR – the policies were inchoate," Hannan wrote.

"Those who clamour for more detail from David Cameron would do well to look at what Thatcher was saying at this stage in the cycle – that is, in late 1978," he continues. "Although the direction she intended to take was evident, she was careful not to box herself in with detailed commitments. She knew her Milton Friedman well enough to understand the concept of dispersed costs and concentrated gains. If you promise to disband a particular bureaucracy, you will alienate its employees without winning commensurate thanks from the taxpayers whose burden you would ease"

"The way to tackle the structural cause of high spending and high borrowing is to ensure that budgets are set by elected representatives (who must answer to taxpayers) rather than unelected officials (who benefit from higher expenditure)," Hannan concluded. "At the same time, spending money as closely as possible to the ground is more efficient than setting budgets in Whitehall. In other words, the solution to our debt crisis is localism – which, as a happy consequence, would also solve our democratic crisis."

A new focus on localism would require the effective dismantling of some bureacratic organs that were set up by Tony Blair's Labour government to manage various quality of life indexes.

Public servants would almost certainly oppose the dismantling of such bureaucracies -- public servants tend to oppose anything that threatens their own job security -- which could be taken as contrary to Cameron's promised consensual approach.

But one shouldn't make the mistake of assuming that Cameron doesn't intend to take on the public service unions at all. he noted that the unions, who recently advocated increased government spending, were "not [being] particularly realistic about the scale of the problem".

Cameron has also noted that he may address public service pensions as an issue. "Is it sacrosanct? No. Is there need for reform? Yes. Do we need to look at its affordability? Yes. Do we need to look at its costs for people who are on relatively high salaries? Yes we do."

Even in Cameron's promised shift away from Thatcherism as an ideology, it seems there may be some nuggets of Thatcherist methodology in Cameron's approach.

Whether or not David Cameron can overcome objections wtihin his party to a shift away from "dry" Thatcherism toward a "wetter" progressive conservatism is another matter entirely.

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