Osborne: On fairness, “it is the right in British politics which is now making the running”

George Osborne’s speech to Demos today tackled a number of major themes, tying all together to a Conservative notion of fairness. Following the release of the Unfair Britain dossier (PDF), the speech  set out the party’s vision of a fair society and how to achieve it. The content was striking in places for its intellectual self-confidence in meeting and tackling head on the left’s principles. Some highlights:

Reliance on the state: “At the root of the left’s failure on fairness in government is a stubbornly-held by severely mistaken belief, best expressed in Gordon Brown’s assertion that “only the state can guarantee fairness”. It is a belief with which I profoundly disagree, and a belief which helps explain how so much money could have been spent in the last decade, but so little achieved.” He noted that since 1997 education spending has doubled and NHS spending tripled.

The three characteristics of a fair society: “on each, it is the right in British politics which is now making the running”.

1. “… people are properly rewarded for their effort and ability”. Notably, Osborne did not start by defining fairness in terms of the disadvantaged.
2. “… equality of opportunity, so that people can achieve their aspirations regardless of their background and no one is left behind. And I believe here in Britain my party is now winning the argument that the progressive goals of reducing poverty and increasing mobility are best achieved by Conservative means”.
3. “ … the current generation should not saddle the next generation with the costs of its own mistakes, be they environment, social or fiscal”.

Policy: Osborne detailed at some length the ways in which Conservative policies on welfare reform and education would contribute towards reducing poverty and increasing opportunity. In public services, the state cannot guarantee fairness through monopoly provision. Osborne noted Gordon Brown’s claim that by 2020 Britain would require 14 million skilled workers, and observed that the assumption that a Prime Minister could know this, and ensure it, was the essence of state planning.

Ideology: At some length, the Shadow Chancellor discussed philosophical and ideological figures, praising Adam Smith and Friedrich Hayek, and quoting approvingly the “invisible hand” and the “asymmetry of information” that ensures the state can never have access to all the knowledge that the free market makes use of. He then spent some time stressing a belief in the need for some intervention and his opposition to entirely unfettered free markets, distinguishing between conservative and libertarian ideals. He cited John Rawls in support of the view that society needed not merely economic liberalism but equality of opportunity – but “we reject the goal of guaranteeing equality of outcome”. This means the Conservative Party will advocate for consumer credit controls and charges for non-domiciles. In answer to questions, he said that ideology did matter, and there were ideological differences between politicians on the role of government. But there was a continuum of views rather than a straightforward binary ideological battle.

Poverty: “We all agree that relative poverty matters as much …”, Osborne began before correcting himself, “… matters as well as absolute poverty”. He praised the report of the Centre for Social Justice, and noted how sharply the benefits trap impacts on someone currently on 100 a week: for every extra pound that they earn above this, they get to keep only 6 pence.

Taxation: Turning to the third part of his notion of a fair society, Osborne attacked Brown strongly for increasing debt that future generations would be required to repay. “… all the leaks and briefs coming out of Downing Street at the moment suggest that the Prime Minister is preparing to try to buy his way out of trouble, by bribing people with their own borrowed money”. Again, language suggesting increased government spending is an electoral bribe is notable for its intellectual confidence, given how often in recent years this charge has been made about tax cuts, not higher spending. He denied that his proposed tax changes were overly beneficial to the well-off, and mentioned that of the three tax announcements made at last year’s conference, by far the most popular was on inheritance tax – even if this change did not affect as many, people’s aspirations for the future do contribute to their current conception of fairness, and they identified most with this proposal.

Osborne concluded by arguing that just as Conservatives had in his political lifetime won the arguments on the free market, now Conservatives are winning the argument that goals such as reducing poverty and ensuring equality of opportunity must be done by conservative means. This is the new centre ground of British politics.

Comments

[ACT]

What intellectual self-confidence? He openly admits that his purpose is achieve progressive goals. That's not 'self confidence', its wholesale surrender to the ideas of the Left. As for tosh like, ensuring no one is 'left behind', well does even Osborne believe that particular lie? Seriously, is there any way Osborne can believe that to be true? That any form of political action can ensure no one is 'left behind'?

And as for the tommyrot about 'debt for future generations' - quite right too! If we have any faith in the basic productive capabilities of a capitalist economy, they will be *much* richer, per capita, than us, just as we, per capita, are much richer than the generation which before us, and they were than the one which went before them, and, but hopefully you get the point. Just as it would have been madness for, let's say, the 'generation' of the 50s, to have subscribed to this mantra about 'no debt for future generations', and as a result, over-burdened itself with liabilities, at the cost of actually living in that present, so too would it be idiotic for us, today, to presume that the future shouldn't bear costs, given quite how much it will also inherit. Costs which, as I say, and as all of you who claim to believe in capitalism should say too, they'll find easier to bear than us, what with them being richer than us.

This, of course, is exactly the calculation made in every day life by real people: what do *I* spend today? what will *they* spend tomorrow? And it's absolutely the same calculation government needs to make.

[Charlie Elphicke]

ACT, I totally disagree. This is a complete tour de force and could even be a keystone of a Conservative Government. There are just too many people left behind, or left out altogether.

It is not just an affront to common decency. We are simply not getting the best out of our people and they in turn are not realising their full potential. So this is not just about wellbeing and all that - it's just as much about what will make the country grow faster and become richer. From my perspective, it is all things Conservative.

[ACT]

Of course you disagree, you're a PPC. Try imaging yourself as a PPC in Dave's brave, new, free-thinking, progressive-goal-achieving party who agreed with my argument. If you were *that* PPC, do you really think you'd rush along here and type out your doubts about Osborne's, probably insincere, certainly left-wing twaddle? Of course you wouldn't - under your own name - because, unlike Boris, if you did, you'd get squashed pdq.

[Dorian Grape]

Hi Act

‘He openly admits that his purpose is achieve progressive goals. That's not 'self confidence', its wholesale surrender to the ideas of the Left.’

Quite the reverse dear boy. It is the confident and correct assertion that the state is not and demonstrably has not been the means to the desired end. No matter how much money the state throws at the malaise the sickness deepens. Our money, my money has been little more than palliative and anything but a cure and as such has been wasted to the detriment of those who now bear the debt: Us.

If the state focused cash injecting model was presented as a new wonder drug to NICE would it ever be allowed to reach the NHS? It has been as about as useful as MRSA.

[Tony Makara]

'Fairness' can only come about by allowing people to earn and keep more of their money. The state can only artificially redistribute snippets of wealth, and in so doing create a dependency culture, in which working people cannot live independently of the state, but are in fact beholden to the state to top up their wages. The bestway to achieve fairness is to reduce the tax burden on business, so that it can flourish and grow, and to take the lowest earners out of the tax regime altogether. Labour's tax-credit system is like the master feeding his hungry dog with its own tail. It is a flawed system that must be replaced with a fair system of taxation.

[Andrew Lilico]

We don't all agree that "relative poverty" - i.e. relative income - matters at all.

Equality of opportunity is a terrible aspiration.

Rawls' is a very poor model to copy.

HOWEVER...

The point that we want to use Conservative methods to pursue social justice goals is precisely where we should be positioning ourselves, and we should be heartened by Osborne's insistence that the state is not the only (often not even the best) way to deliver fairness.

[johnC]

'It is a flawed system that must be replaced with a fair system of taxation.'

Exactly right, but in the report of the speech which I have just read on the BBC website Osborne explicitly ruled out abolition of the tax credits system - despite describing it as a failure - and in fact said that a future Conservative government would strengthen it. It is this sort of unimaginative and timid thinking which makes me despair. The whole tax credit system, which employs armies of bureaucrats in collecting and recycling taxes usually inaccurately and inefficiently, should be scrapped in favour of a substantial raising of allowances and lifting the poorest out of the tax system altogether.

[Ulster Tory]

Surely there was an opportunity there for a soundbite such as, "Labour throw money away to fail to CURE, the Conservatives will spend wisely to PREVENT."

This kind of true fairness policy is one of the reasons I joined the Conservative Party, and one of my personal ideologies.

[Tony Makara]

On the question of debt, this is often used to supplement poor wages as living-standards fall behind aspirations. The problem with our service-sector heavy economy is that we can't provide for better wages based on productivity, again this is a reason why we need to support manufacturing and agriculture. The service-sector, which is the tail-end of the economic process, can only really pay for better wages through increased pricing, whereas the productive industries can do so through increased volume of product. The more people we can employ in the hard industries the less will be the demand for credit.

[John Moss]

Biggest round of applause I got as a Candidate in 2005 was for acknowledging that all politicians wanted the same: Healthier, wealthier, wiser people living in a safe and secure environment, we just diagreed about how we got there.

In that sense, "Progressive" goals are the same as "Conservative" goals, at least as far as Joe Public understands it, as opposed to us wierd political people who argue about detail lost on the vast majorityof the electorate!

Osbourne's speech follows that theme and fleshes out some of the differences of "how". Note Labour's attack line - the Tories have no policies - not true, but if you repeat a lie often enough.........

This is a fine effort to rebutt that and to build on the radical/liberal/conservative themes many of us have been pushing for years.

[London Tory]

@Charlie Elphicke

You forget that many citizens in this country wilfully choose to be 'left behind', through a mixture of human nature and the malign influence of the Welfare State. We cannot legislate against the former, we can do something about the latter.

The Welfare State was set up with the noblest of intentions after 1945, but has since become a huge ball and chain to this country in so many ways. It now closer resembles the 'Client State', making great swathes of the population dependant on it when in fact they should be standing on their own two feet, whether that be through free methodone, a bus pass on New Deal, or JSA while you do 'a bit on the side'.There are hundreds more examples of this largesse/state bribery. The Welfare State also employs a vast army of wasters who would fail to hold down a job in a competitive labour market- all of whom feel equally beholden to tick the Labour box at election time.

Just as the trade unions and inflation were Thatcher's dragons, so the Client State must be Cameron's.

[Iain]

"'Fairness' can only come about by allowing people to earn and keep more of their money. The state can only artificially redistribute snippets of wealth"

It also means that the state shouldn't seek lower wages with mass immigration. If Cameron and Osborne say they will keep tax credits, they are by inference saying that the wages are too low and the state needs to subsidise them to make them a liveable wage. This is muddled and confused thinking, it also suggests the employers are deluding themselves by paying low wages, for if the state is having to subsidise their wages with tax credits, it is in the end coming out of their tax bill.

The very fact of the need for tax credits suggests that we should call a halt to all immigration, and when the CBI bleats that they can't fill their job vacancies, we should remember that what they are in fact saying is that they can't fill their jobs vacancies for the level of wages they are paying. The solution to their problems of staff recruitment then becomes very clear, that is if we believe in the market and market mechanisms. The issue of fairness, wealth gap, poverty begins to resolve its self without any state interference with complex Heath Robinson methods of redistribution.

[James G]

Osborne's vacuous article in today's guardian:

"Conservatives will tackle the root causes of poverty and spread opportunity by harnessing the private and voluntary sectors to help people into work."

"Conservatives have always stood against the utopianism of controlled economies"

It is the conservatives who are now the most obsessed with utopianism. They appear to be saying that their goal is a perfect society where everyone is in work as opposed to what they call a "broken" society where some people claim benefits. But all societies create marginalised minorities. The question is how do you treat them. In the 19th century, with little state intervention and no benefits, society still created many millions of unproductive and marginalised members. The difference with today is that most of these people died in the gutter at the age of 25 with their mouths wide open. And this despite a much stronger church and voluntary sector and stronger families in closer nit communities. So much for 19th century responsibility and morality.

The voluntary sector failed to intervene effectively in the 19th century which is why the state progressively took over, with cross party concensus, not for utopian reasons, but for pragmatic and humanitarian reasons, in order to support the market economy. And the resulting improvements in public health, social mobility, law and order and individual liberty were central to the west's post-war economic success.

What evidence do the conservatives have that going back to 19th century solutions will produce anything other than 19th century results (or perhaps worse given that church and family are now weaker)?

The conservatives are stuck in the 19th century, but are unable to learn the lessons this century taught their forebears. Claiming, falsely, that state intervention was designed to produce a "perfect" society, they seek to discredit the welfare state by pointing out that society is not perfect. This sounds like a clever soundbite for those who don't have 5 minutes to look a little closer at the issues.

Spending less on benefits will mean spending more on the police when many more people, cut adrift in our 21st century materialist, individualistic society, turn to crime. We are slowly seeing the welfare state replaced by a repressive state.

Sorry, you will never live in your perfect society Mr. Osborne. Your utopian ideology blinds you to this reality. But what is sad is that you cannot even come up with new ideas: yours is a "nostalgic" utopia, glorifying old solutions that didn't work in the 19th century, let alone the 21st.

[Tony Makara]

Interesting points as ever Iain. Migrant labour is certainly a factor in keeping wages low, as is paradoxically the minimum wage which serves to pull wages down to its level rather than making wages move up a level as Labour promised. These factors combined with an economy that is 75% service-sector based, with its part-time employment culture, means that people are trapped on low wages and needing state top-ups credit just to get by.

It seems with this problem the more we dig, the more we find, as contributing factors leading to poor living-standards. It used to be a given that having a job would leave you with enough to save out of each pay packet. Those days are gone, now even disposible income is often supported by credit. We need to get back to a culture where people don't have to look to the state or their bank to get by, where the sound values of saving return. Credit used to be about investment, like paying for a new garage or starting up a business, now its about paying for the summer holiday, or even the monthly shopping. Its a quick-fix culture that is literally damaging peoples lives as they drown in debt.

[Dorian Grape]

Hello James G,

Did Osborne mention the 19th century or advocate Victorian social provision as a model? Osborne House was Victoria’s favourite holiday destination but that’s as close as close to Victoriana as he gets.

Your extrapolation is predicated upon a false premise as Disraeli might have said.

The target here is the bastard child of the late 19th century beardy-wierdy Karl Marx and the gang and the grotesque consequences of state directed economics and state enforced ‘fairness’. The pursuit of the socialist vision of Utopia was the learned lesson of the 20th century about how not to do it along with the national socialist variation upon a theme.

The way forward is to cherry pick the viable elements of the progressive agenda and blend pragmatically with the more minimalist tendencies of the centre Libertarian right. Which is what Osborne is doing.

[Eveleigh Moore-Dutton]

I like the points you make Tony Makara. I have downloaded the document and am keenly looking forward to a good read despite having a number of very pressng things I really should be reading.

I really do wonder, however, about the correspondent above who says,
"the conservatives who are now the most obsessed with utopianism. They appear to be saying that their goal is a perfect society where everyone is in work"

I certainly am not aware of any Conservative promising a perfect world - I would ceratinly consider them to be either charlatans or baying at the moon. I believe that the Conservatives are saying that things could be so much better if people got a decent chance to make the most of themselves and the opportunities around them. Encouraging dependence on the state for things that people could reasonably do for themselves damages self esteem and it harms society. The reason it does these things is because it stops people experiencing the wonderful feeling one gets from being self sufficient and it stops people from taking responsibility for themseles, their families and their neighbours.

[Ulster Tory]

Whilst James G may be in a time warp, the Conservative Party simply isn't. Using examples 2 centuries old simply doesn't support an economic argument. Times and climates have changed - GO and DC are tuned in to what we need now, and in the future.

[David Sergeant]

James G makes a point worth noting. Of course Osborne is not suggesting we go back to a Victorian type of welfare, however, given his stress on voluntary organisations it is an easy simplistic jibe to make to knock Osborne in the eyes of people who don't have the time to read everything. An obvious left wing spin which, like all the others on the way, needs watching.

[Iain]

"as is paradoxically the minimum wage which serves to pull wages down to its level rather than making wages move up a level as Labour promised. "

Not really paradoxilly, for I have seen this effect in other market situations, notably in commodity 'stabilisation' schemes, where in putting in a supposed floor it actually becomes a market target. This is not really surprising for when buyers and sellers are trying to feel out where the price equilibrium is located, the very presence of a fixed floor/ceiling price distorts the market, and as I said becomes the target.

It also lets politicians off the hook of their mass immigration policy, for I have lost count of the number of times when a politician has sought to imply that having the minimum wages gives employees an insurance policy against the malign effects of their mass immigration. Odd really for as a class politicians avarice knows no bounds, yet they expect skilled people to be thankful to them for lowering their wages to the minimum.

[Tony Makara]

Eveleigh Moore-Dutton, thanks, it certainly is important to strive for a society in which everyone can work, not only in terms of lifting the crushing burden of welfare, but also because it ends alienation. This is particularly important for young people who need the structured responsibility of work to help them mature into adults. Because the problems of benefit dependency has not been tackled over a generation, we now see grown men in their late thirties who dress and act like teenage boys. For these men time has stood still, they have not matured emotionally because they have lived a passive lifestyle, one in which they have not had to fend for themselves or support their offspring.

I've had a lot of stick for supporting the concept of public works programmes, but I believe these are necessary in times of high unemployment to bring people into a structured work environment and to help people develop and mature. Work isn't just about money, it is a culture, a lifestyle, a way to connect with the rest of society. If we don't strive to provide work for everyone we will be leaving people behind and they will live a retarded life.

[James G]

So the conservatives have finally turned their backs on welfarism.

Yes yes, but what are you proposing to replace it that's new?

Using the voluntary sector?

That's not new. It was done in the 19th century!

And it failed. Which is why it was replaced by state provision.

Eveleigh Moore-Dutton wants everyone to "(experience) the wonderful feeling one gets from being self sufficient and (take) responsibility for themseles, their families and their neighbours."

This is cuddly utopianism. I will repeat again: every human society creates marginalised non productive members. And post industrial countries with large population densities such as Britain create lots of them. You cannot change this!

In certain pre-industrial societies families were self sufficient and everyone was a productive member of society, from dusk till dawn. But this is because the unproductive members were allowed, quite simply, to die. "Survival of the fittest" In a democratic country like Britain this would be unnacceptable to people. Moreover, with our large cities and complex living patterns, a pre-industrial social model, however evocative sounding, is probably unworkable.

Dismantle the welfare state and you will have to replace it with a repressive state as the crime rate shoots up. Either way, it is not going to be easy to shrink the state in a post industrial, individualistic, densely populated, democratic country like britain.

So for god's sake stop trying to achieve perfection and try to be a bit practical!!

[Tony Makara]

James G, would you support FDR-style public works programmes for the long term unemployed? That is, converting JSA into a community wage, paying labour undertaken at the going rate, offsetting that against rent and council tax rebates etc. This would be a way to help the jobless and the state would be getting something back for its money in terms of manpower. Such systems were used to great effect in the USA and Europe in the 1930s/40s, providing work for millions and improved infrastructure for the nation.

[James G]

Most park keepers or dustmen using state of the art equipment would be horrified at the idea of having to coordinate an army of benefits claiments brandishing brushes and spades, similarly, the last thing the army wants is the reintroduction of conscription.

So to have any hope of functioning properly I can see this being an expensive scheme. More expensive than benefits. Do we really want the state to become such an active player in the economy, employing over a million extra people? And what about the towns and cities with 40% unemployment?

I think we need a more subtle approach based on local communities not a grandiose soundbite that will bbe scrapped once in office.

Unemployment is still relatively low, there is no need for this. If we do see 1930's levels of unemployment, then I would be in favour, but I would never be happy with telling people to break rocks for nothing.

The danger is getting into a situation where we punish the poor in order to feel better about ourselves: remember this is the country that, to its shame, invented the workhouse. Surely we need to keep an eye on all our civil liberties, especially where the state is concerned?

[Tony Makara]

James G, of course any such works programme would have to target certain areas, such as the young and those with young families. Although I think anyone who wants to apply should be allowed to. I fully agree with you that any work undertaken should be fully-waged. The latest work-for-dole proposals being put forward by James Purnell are actually illegal under artile four of the human rights act and it would be interesting to see the implications if someone on workfare took the government to court to ask for the going rate of pay, it could be very embarrassing for the govt and blow the work-for-dole scheme right out of the water. Of course they are counting on not receiving such a legal challenge, but it could only take one person to pull the rug from under them, if challenged in the courts.

The thing that I find most attractive about public work schemes is that they could also incorporate tiers of training and over say a 12 month period could mould a person from being trapped on benefits to being waged, skilled and with proper work experience. Not like Gordon Brown's New Deal in which people were made to sit in a charity shop all day with no prospect of work at the end of their stint. The main thing is that we must keep pushing senior politicians to do more and not just sweep the problem under the carpet.

[Michael A]

Charlie Elphicke - you'll need to speak up.

It's hard to hear you with your head that deep in George Osborne's colon.

It's vacuous nonsense.

[Matt Wright]

Excellent speech from Osbourne and absolutely the right positioning for the party. In fact unlike what James G is saying, Osbourne is wishing to harness the voluntary with the state not go back to the 19th century.

[James G]

"harness the voluntary with the state "
That's what newLabour has been doing for the last 10 years.

I see! so the conservatives don't want to massively increase the voluntary sector to take over from the state as in the 19th century after all- they merely want to continue newLabour policies, but with a moralising tory spin.

[Matt Wright]

It's always going to be about balance.