How the Tories can fix Britain in time for the next election

Sam Bowman
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Conservative Leader Theresa May Addresses Party Conference
The next Conservative leader will have perhaps three years from now to change the country noticeably, and for the better (Source: Getty)

Theresa May failed because she did not show voters why the future was better with her, nor why the last seven years have been better with a Tory government.

The next leader must not repeat those mistakes.

May’s manifesto was a dog’s dinner, not just on social care but also policies like fox hunting and grammar schools that are a world away from most people’s problems.

Read more: Philip Hammond: Tories made a mistake not focusing on economy in campaign

And, because she expected to win anyway, she sidelined Philip Hammond and ignored the economy altogether – a mistake possibly even graver than the manifesto, given the enormous Tory lead on that issue and its importance to the Conservatives’ rationale for being in government in the first place.

But things may not be as bad as they look for her replacement. The Labour party’s internal coalition is fragile, and the DUP will not bring the government down if it risks putting Jeremy Corbyn into Downing Street.

Housing is key

So assuming May stands down in the near future, as is expected, the next Conservative leader will have perhaps three years from now to change the country noticeably, and for the better.

Housing is key. Rents in London and the rest of the South East – where the best jobs that younger voters aspire to are – are extraordinarily high by European standards, and only 34 per cent of 18-34 year olds now own their own home, compared to 54 per cent twenty years ago. Labour offered big policies on housing – the Conservatives ignored it altogether.

Do not push for more council housing, built on the cheap and doomed to be neglected by local government. Go for dense Bloomsbury-style terraces and Paris-style apartment blocks, built in traditional styles by the private sector. We can get that by limiting planners’ discretion over new developments, and liberalising design, infill and height rules, without ever compromising on safety.

Recognise that land is key to the cost of housing. Planning permission is so scarce in some areas that getting it can increase the value of land by over one hundred times.

Locals fight tooth-and-nail to stop new developments, something we can change by making them benefit from new construction too.

To do that, let councils buy land, grant that land permission for development, and sell it to the private sector – ready for building. The billions councils make from this can go towards filling in potholes, council tax refunds, and improving existing social housing.

Rethink tax

On tax, think like an economist. George Osborne’s corporation tax cuts were partly paid for by cutting reliefs for capital investments – a mistake he was warned against which deterred much of the extra investment the cuts should have delivered.

The next Prime Minister can fix that quite deftly. Boosting capital reliefs so that businesses can write off capital investments from tax immediately, just as they can with operating expenses like pens and paper, would effectively stop corporation tax from acting as a tax on investment without the change looking like a tax cut for the rich.

Done now, these two reforms will not only boost wages but they make them stretch further too – hopefully to be felt in time for the next election.

Brexit is where the biggest risk lies. Corbyn is a short recession away from taking the keys to Number 10, and even the most radical housing and tax reforms will not offset the damage of a hard Brexit.

But a Brexit that includes a transitional period in the European Economic Area as a route to a final, comprehensive deal may avoid that. We need a consensus approach that does not divide the country further. This is a minority government and on Brexit, the most important political event of our generation, it should act that way.

Look to other countries' successes

As for the next manifesto, focus on policies that have worked elsewhere.

Let local government issue municipal bonds for investment, as in Australia and the US; create a legal framework for long-term leases as in Germany; bring in Japanese-style track-and-train integration of the railways; copy Scandinavian models of childcare, which are much more affordable and less prescriptive than our own.

And show some compassion. Make Britain the most open market on earth for exporters from poor countries; give us the most humane animal welfare standards for food and farming in the world; immediately and unilaterally guarantee EU citizens’ rights; ditch the parochial and misguided migration cap.

An old warhorse like David Davis could be the right person for all this. He is well known for his independence on civil liberties, has credibility with Brexiteers, and believes that the Conservatives must focus on raising people up from the bottom of society, not just preserving the status quo.

A liberal like Sajid Javid may be a surprise contender too.

Whoever it is must recognise the one thing that May did not: voters will not be taken for granted.

Read more: BBC re-lives the madness of the Tory leadership campaign with TV drama

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