The Conservative Reader

This issue: The missing supply side reforms, the downsides of diversity, and the myth of European sovereignty.

Sep 23, 2022

We think conservatives need to talk more and get better at sharing ideas. So we are starting this newsletter so we can share with you the best newspaper columns, policy reports and books that will stimulate thinking and promote new ways of doing things.

We will send an email out every Friday lunchtime, so please do look out for it. And expect plenty of content about the things we think make conservatism such a compelling body of thought: identity and belonging, community and commitment, market economics, national resilience and good government.

Best wishes, Nick and Will

Towering columns

Martin Wolf on the economic consequences of Liz Truss for the FT:

Thatcher did liberalise labour markets, curb trade unions, privatise nationalised industries and slash top tax rates. Her policies (which included promotion of the EU’s single market), as well as those of later governments, also strengthened competition in product markets. Overall, today’s UK is a low-tax country, by the standards of other high-income economies. It has a deregulated economy, in which the successful are well rewarded, but those who do less well are penalised. Such Thatcherite aims then are now a reality.
What then did Thatcher and those who followed her fail to achieve? They did not liberalise the biggest distortion in the economy, which is land use. They did not transform the skills of the population, which has been made harder by the conditions in which many children grow up. They failed to address defects in corporate governance, which bias spending against investment. They allowed the search for safety in corporate pensions to shift portfolios away from the supply of risk capital to business to ownership of government bonds. This in effect turned the plans into state-backed pay-as-you-go schemes.

Aris Roussinos on Europe’s myth of sovereignty in an age of strongmen for Unherd:

The latest military assault by Azerbaijan’s oil-rich dictator Ilham Aliyev on tiny, democratic Armenia places the European Union, once again, in an awkward position. On the one hand, as EU leaders never cease to remind us, the continental bloc stands for liberalism and democracy against the rising tide of Eurasian autocracy. On the other, European leaders such as Ursula von der Leyen, who signed an EU energy deal with the very same Aliyev just a few months ago, feel somehow compelled to place the continent’s fate in the hands of anti-democratic strongmen, whether bullied by autocrats like Erdogan or Lukashenko pumping migrants towards Europe’s borders, or dependent on dictators like Putin or Aliyev for Europe’s energy needs.
It is unnecessary to debate whether this situation derives from hypocrisy or bad diplomacy. It is both, and at the heart of it, lies the fundamental conundrum facing EU geopolitics: how to defend Europe’s liberal-democratic ideology in a hard world where it is too weak to enforce its will, and the continent’s nearest neighbours are emboldened towards swift, decisive action by their total rejection of Europe’s moral norms. What the self-proclaimed moral superpower lacks is a basic understanding of power: where it lies, and how to use it. But worse, Europe’s leaders lack the fundamental willingness to act strongly and decisively in defence of European interests.

Douglas Murray on the downsides to diversity for The Spectator:

Northern Ireland is still riven by ethnic tensions going back to the settlement of Protestants in the early 17th century…So why would anyone expect it to be different with the planting of Muslim, Hindu and other minorities in Britain? Ancient enmities do not die out because they are transplanted to the East Midlands. Nor can they be solved by the introduction of the occasional youth centre where people may play a bit of ping-pong.
There are all sorts of advantages to a multi-cultural society. But the downside is that we are only one internet rumour, flag-attack or ethnic chant away from civil unrest. Not my own preferred state for the country, but then I didn’t make the rules, and it’s hardly surprising that at such moments the people who did choose to keep their heads down.

Adrian Wooldridge on the making of monarchical pageantry for Bloomberg:

Brett’s emphasis was always the same. Make the royal family more splendid than it had ever been before — more than the other dynasties of Europe. He rifled through old books to find examples of court customs and interviewed aging courtiers who had memories of Queen Victoria’s 1838 coronation (14 years before his own birth). But, he complained, “The ignorance of historical precedent in men whose business it is to know is wonderful.”
The rustiness of the royal machine, however, meant that Brett’s grand plans were often poorly executed. Indeed, the grander his plans became, the more opportunities there were for cock-ups. During Victoria’s jubilee, a reception for MPs turned into a stampede, rather like a crowd being let onto the pitch after a football match, while a reception for colonial dignitaries degenerated into a bear fight, with footmen ragging the guests and outraging elderly ladies with their foul language.

Wonky thinking

The Centre for Policy Studies analysed the impact of capital allowance reform:

Based on our original economic modelling, each of the reform options outlined by the Treasury would reduce marginal effective tax rates on new investment and boost investment, wages, and economic growth. Their most ambitious option – a watered-down version of full expensing for plant and machinery – would have the greatest impact, increasing long-run GDP by 0.7 percent. Going beyond the Treasury’s initial suggestions by extending genuine full expensing to structures and buildings would more than triple the economic impact of capital allowance reform, boosting long-run GDP by 2.5 percent.

The IFS examined the impact of tax cuts and energy guarantees on the UK’s public finances:

The combination of higher spending and substantial tax cuts leaves borrowing running at a much higher level than forecast in March. Importantly, even once the Energy Price Guarantee is assumed to have expired in October 2024, our forecast has borrowing running at about £100 billion a year, over £60 billion a year higher than forecast in March. Almost half of this increase in borrowing would be due to the new tax cuts. At around 3.5% of national income, borrowing would be not far off double the 1.9% of national income that it averaged over the 60 years prior to the global financial crisis, when growth prospects were considerably higher. With investment spending running at about 2½% of national income, this would leave a persistent forecast current budget deficit of around 1% of national income. Without new tax cuts, the current budget would have been forecast to remain in balance.

Book of the week

Our chosen book this week is The Quest for Community, by Robert Nisbet. Written in 1953, Nisbet was influenced by the experience of fascism and communism, but his analysis is apt for today with the decline in public confidence in democracy and the dangers of populists, extremists and ideologues. Where there is a belief that community has been lost, he warned, there will be a conscious “quest” for community in the form of associations that offer moral refuge. Social disintegration – whether it is real or perceived – will cause us to abandon truths and values that do not promise communal belonging and clear moral status.

“Genuine freedom is not based upon the negative psychology of release … its roots are in positive acts of dedication to ends and values. Freedom presupposes the autonomous existence of values that men wish to be free to follow and live up to. Such values are social in the precise sense that they arise out of, and are nurtured by, voluntary associations which men form.”