Senior Tories in “red wall” seats have warned Conservative leadership candidates that the party will lose the next general election unless they recommit to getting the country on balance and boosting investment in the UK’s poor regions.
The warnings come as economists and business figures pushing for a rise in northern England say the whole project – which was at the heart of the Conservatives’ 2019 manifesto – risks being downgraded as successor candidates Boris Johnson’s are competing to offer more generous tax cuts and money to ease the cost of living crisis.
In Friday night’s televised debate on Channel 4 between the contenders, the tie was barely mentioned. Instead, much of the debate has focused on the importance of the tax cuts, which economists say, if implemented, will leave little room for needed investment in poorer areas.
Last night Tory backbencher Jake Berry, who chairs the 50-strong Northern Research Group (NRG) of Conservative MPs and was minister for northern power from 2017 to 2020, told the Observer that if the next prime minister does not deliver on the 2019 Manifesto Mr. promises that his party will be severely punished by red wall voters. Berry agreed that if the party now deviated from its 2019 manifesto, there would be understandable rumblings of a snap election.
“These votes were lent, they were lent against a promise of performance and a promise of action,” he said. “If performance and action are lacking, don’t be surprised when they don’t show up in two years.
Jim O’Neill, former chief economist at Goldman Sachs: “The country is in desperate need of a coherent economic strategy – and there is still little sign of one being on offer.” Photo: Adrian Dennis/AFP/Getty Images
“It depends on whether we want to win the next election. Of course, we could become a party that only concentrates on restoring the blue wall in the south of England, but [if we do that] we’re going to lose.”
John Stevenson, the Tory member for Carlisle, added: “We must not forget that the part of our last manifesto on which our large majority was based was the equalization agenda. It is essential that the next leader commits to this program. Berry and Stephenson support Tom Tugendhat, who is calling for tax cuts as well as a broader national growth strategy to create a less economically divided country.
The NRG has called on all leadership candidates to sign a joint statement committing to the equalization agenda, including plans for a minister for the north, greater devolution and a new spending formula to ensure poorer areas do not be abandoned. By Friday, all candidates except Kemi Badenoch had signed the statement.
However, economists see no sign of a coherent economic policy that would lead to success in equalization. Jim O’Neill, a former chief economist at Goldman Sachs who was a minister under former Tory chancellor George Osborne, said: “I would like to see, and the country desperately needs, a coherent economic strategy and there is not much sign of one that still available.
“Rishi Sunak has a fiscal framework and willingness to drive investment that is better than anyone else, [who are] obsessed with tax cuts, which would simply add to inflation fears and lead to faster and higher rate hikes by the Bank of England.
“But they need much more serious plans to increase productivity, increase skills, improve education and stop the pretense of decentralization, and actually do it. Leveling up, even as a slogan, seems to be absent from the debate, but they need to seriously address these issues. Otherwise, growth will not recover much and the next leader will struggle as much as the last two.
Henri Murison, director of the Northern Powerhouse Partnership, which Osborne chairs, said the leveling had already been a disappointment as promises on rail and other investment plans had been broken. If the Tories were to demote it, it would mean changing the manifesto and require a general election, he argued.
Tory backbencher Jake Berry said if the party deviated from its 2019 manifesto it would be punished by redwall voters. Photo: Jonathan Hordle/REX/Shutterstock
“The mandate that Boris Johnson got was to raise the bar. If this government is not ready to come to terms with the new prime minister, then they should call a general election.
Ben Zaranko, senior research economist at the Institute for Fiscal Studies, said: “The question for any candidate who wants to cut taxes as a share of national income over the long term is where the accompanying spending cuts will come from. An aging population means we will almost certainly have to spend more on health and social care just for these systems to grind to a halt. There seems to be general agreement that defense spending should increase, or at least stay at NATO’s target of 2% of GDP.
“It is hard to see how the size of the state can be meaningfully reduced without substantial reductions in the welfare state, the range and quality of public services or grand ambitions such as equalization.”
New analysis by the IPPR think tank has shown that cutting the basic rate of income tax from 20 to 19% would cost the Treasury more than £5bn, with little of that going to the lowest earners. The analysis shows that around half of the total tax cut will go to the top fifth of households, with just 2.6% finding its way into the pockets of the poorest.
Labour’s shadow secretary Lisa Nandy said all five candidates were “vying for the mantle of Margaret Thatcher” in a way that was “reminiscent of the 1980s”.
In areas such as her Wigan constituency, she said it was “going down very badly”.
“Now you have a group of people stepping forward to take over who look a lot like the traditional Tories cut in the clothes of the 1980s, which was the worst period in living history except now. Whoever wins will have a big challenge ahead of them.”
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