Blue Labour? The Tories have never been against increasing the size of the state when necessary

By Roshan Chandy

POLITICAL pundits have dubbed Boris Johnson’s New Health and Social Care Tax an example of ‘Blue Labour’ politics.

An idea that the Tories are trashing the pledges of no immediate rises on national insurance and VAT pledged at the last election and engaging in left wing big government intervention.

On paper, it does seem they are fundamentally going against the low tax, small state, deregulation rhetoric that became such a mantra in the Thatcher years, but the Tories have never been against increasing the size of the state when necessary.

They fundamentally believe the state should only step in when in exceptional circumstances and the pandemic is an exceptional circumstance.

The last time we had an exceptional circumstance like this was way back 1779 when William Pitt the Younger, bankrupted by wars with Napoleon, raised taxes on windows, servants, carriages and horses to finance national debt.

The exceptional circumstance there was war with Napoleon, the exceptional circumstance here is the Covid-19 pandemic which was, as Johnson has said, “in no one’s manifesto.”

How else are the Tories going to get the money that funds the NHS and the vaccine rollout as we head towards the dark months of winter?

The other way would be through borrowing, which they are not prepared to do as it will leave the country in monumental debt.

In fact, this new Health and Social Care Tax is necessary and the most economical way of covering the costs of full economic recovery.

What is hilarious and ironic is the moral superiority and arrogance portrayed by Keir Starmer and Labour by his line “the Tories can never again claim to be the party of low tax.”

When the Tories cut taxes, they complain. When they raise taxes, they complain.

Going further, there were around 2 million unemployed at the end of the last Labour government in 2010.

Sure, that’s not as much as the 3 million unemployed during the Thatcher years, but Ken Loach, the social justice filmmaker, claims that Blair was a “fake leftist” Tory-lite. When they get a Tory government, they complain. When they get a Labour government, they complain.

It’s hard here to understand what the Left really stand for anymore. They trash the Tories for privatisation and deregulation and the closures of the mines, but claim New Labour was a continuation of Thatcher’s economic policies.

An idea that every service should be nationalised and that the unions should hold the country hostage and the state having control of every living aspect of working life. That’s been in power before in so many parts of the world and it’s generally been rejected by every advanced society.

And yet Jeremy Corbyn talks about re-nationalising the railways and public utilities. He planned to raise the corporation tax to 26 per cent.

We weren’t living in exceptional circumstances so that tax would have just driven businesses offshore and nationalising railways and utilities would bankrupt Britain and risk dragging us back to the Winter of Discontent where the unions caused the widespread shutdowns of the railways and electricity. We’d be in a recession if we were under Corbyn.

Johnson’s circumstances are very different. The vaccine rollout has been extraordinary.

But winter is ahead of us which suggests Covid-19 cases could rise and are rising. He’s already put into work his plans for potentially re-imposing restrictions and the Health and Social Care Tax is the perfect way to fund the money needed to revitalise the NHS in its hour of need this winter.

What I wonder is how long this will last. The government has already spent £407 billion in the budget on our economic recovery. That’s a feat unheard for a Tory government who savagely cut spending, but, again, this is an exceptional circumstance and the “pandemic was in no one’s manifesto”. I wonder whether this precipitates a period of austerity much like what we experienced during the Cameron Years.

The Tories were universally disliked and loathed for cutting NHS funding, benefits and education. Austerity Britain was a Britain crippled by recession following the worst financial crisis in living memory.

The Tories didn’t want to make the cuts, but had to because government got too big, spent too much and doubled the national debt under Labour. Plus any government was going to have to either cut spending or raise taxes to fund the recovery – the latter of which the Tories were not going to as they have traditionally believed in keeping taxes low.

And now, they’re raising taxes. It’s unbelievable to think the low tax, low spending, low borrowing Tories are now becoming the very nanny state they constantly accuse their left wing rivals of being. But it has to happen. We live in an exceptional circumstance and that’s when the state should always step in.

If this marks them ‘Blue Labour’, then that’s okay. I just hope they reduce the size of the state, reduce taxes and cut spending once this crisis is over. Small government works, big government doesn’t and that’s been proven across history. We need a period of austerity in the next few years.

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Featured Image: EU2017EE Estonian Presidency @Flickr

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