A revolution in local government
and an appeal to the centre

Today, George Osborne made a serious pitch for the Tory leadership post-Cameron. There was a lot to like in the Chancellor’s speech, but there was also plenty to alarm red-meat craving conservatives.

At the centre of his speech was what the Chancellor called “the biggest transfer of power to local government in living memory”. He wasn’t kidding.

The plans would give councils full control over the £26 billion a year raised from local business rates. Directly elected mayors will be allowed to charge up to 2p in the pound extra. The core grant from Westminster will be phased out entirely.

This is a genuinely radical idea – the sort that would normally be ditched as too ‘bold’ on the advice of some Sir Humphrey or other. Osborne is taken power away from the apparatchiks in Whitehall and giving it back to councils. Under these plans, local government could ultimately become self-financing. This is huge.

The Chancellor also announced the sale of £2 billion worth of shares in government-owned Lloyds Bank – the biggest privatisation since the early 90s. Members of the public will be offered a 5% discount and smaller investors will be given priority.

Meanwhile, former Education and Transport Secretary Lord Adonis has jumped ship from Labour to head up a new infrastructure commission, created to fast-track important projects across the UK like Heathrow expansion. This is a welcome attempt to challenge NIMBYism, albeit one wedded to the heavy hand of the state, planning reform would be much better.

Mr Osborne channelled the late Mrs Thatcher when talking about the importance of home ownership and popular shareholding. But throughout the speech the Chancellor called for former Labour voters to join him in the “new centre ground” of politics.

Do you know what the supporters of the new Labour leadership now call anyone who believes in strong national defence, a market economy, and the country living within its means?” Osborne asked delegates. “They call them Tories. Well, it’s our job to make sure they’re absolutely right.”

There is a conscious attempt among the Conservative leadership to re-brand the Tory party as the ‘workers party’. This is not a terrible idea: by supporting a low tax, low welfare society Conservatives back those in work whilst Labour defend unlimited benefits spending. It’s good politics and it happens to be true.

Still, whilsy extending an invite to anyone who shares the “common ground” is essential if we want to keep winning parliamentary majorities, there is a real danger here.

The Conservative governments of Harold MacMillan and Edward Heath thought that the only way to win elections was through consensus. In power, they did not reverse nationalisation or tackle rising inflation and high taxes. Instead they offered up a slightly different flavour of socialism to that offered by socialist Labour. Price and income controls and Keynesian stimulus spending became the order of the day.

As a result, the British economy continued to stagnate until the rise of Margaret Thatcher, a politician who rejected consensus politics entirely. Of course, Mrs Thatcher was also responsible for much neutering of local government in the name of combating hard left infiltration – a trend that Mr Osborne is now attempting to reverse.

Those of us who hold conservative values – patriotism, liberty, the free market – would be right to fear a return to consensus politics. But the problem goes further than Mr Osborne and his circle. We have allowed the left and the Tory modernisers to label us “the nasty party” (thanks Theresa). Our beliefs have become something to be ashamed of or embarrassed by. Until this changes those who govern us will continue to pander to the political left.

The speech reveals a deep contradiction within this Chancellor, so often vilified by his opponents as some sort of crazy free-market axeman. Osborne is clearly not wedded to the notion of a small state. His plans to get Britain building again are almost entirely government-driven. His appeals to Labour voters are deeply pragmatic and reveal an ambition to lead a new party of the political centre. Yet his approach to local government is to liberate and decentralise.

Which Osborne would dominate the Chancellor’s thinking if he were to become Prime Minister? Only time will tell. Tomorrow, his rival Boris Johnson gives his own speech to delegates at Manchester. Watch this space.


Chris has been a member of the Conservative Party since 2010. He believes strongly in individual freedom, personal responsibility, and the power of free markets to eliminate poverty by encouraging wealth creation. Follow him on Twitter: @cjmanby1989

Follow Conservatives for Liberty on Twitter: @Con4lib