Times they are a changing on tax and immigration?
Conventional wisdom since 1997, confirmed in 2001 and 2005, has been that if the Tories run on tax and immigration, they will only motivate their core vote and cannot win a general election.
Gordon Brown has been a fervent believer in this view and in the last three elections, it was probably true.
But is it still true?
There is a possibility that what was true in British politics no longer holds. It is just possible that if Labour and Brown continue to base their strategy on the old beliefs, they could suffer and if Cameron gets the balance right between his centrism and these more traditional issues, the Tories could benefit.
Taxation first. One of Labour’s significant achievements in office prior to now was to persuade the British people that more money could rightly be spent on public services. Gordon Brown was the man who put the money in and the man who put up National Insurance to pay for it.
But now, six years after the gallons of cash have been poured in, are things different?
A lot has happened since then. A lot of people were sick of the dilapidated schools and hospitals that the Tories had bequeathed Labour. Public services were in need of investment, many people felt, and had been underfunded for too long. There was a sense that investment was required and Labour had shown in its first term that it could be trusted to spend the money.
But the money has now gone in. There have been improvements. But has the money all been well spent?
Far more important, though, is the economic reality that while the economy has grown every year since 2001, levels of average household disposable income have not grown significantly. People are not feeling richer.
There are a number of reasons for this. Taxes have gone up substantially and a lot of people have been dragged into the higher rate of income tax. Interest rates have risen substantially since their low in 2002-3 which has increased mortgage payments. Council taxes have increased massively. And utility bills, energy bills in particular, have risen substantially since their low point five years ago. Meanwhile, for those leaving university, tuition fees are now here and for first time buyers, houses are unaffordable.
The net result of all this is that people do not feel better off and they increasingly feel that they want their own money back.
That’s all theory, but the incredible and almost instant impact of George Osborne’s proposals on inheritance tax and stamp duty on the opinion polls shows that this could be a new underlying reality.
If the Tories can show that their proposed tax reductions are fully costed and not reckless, could their time have come to win some electoral advantage on tax for the first time since 1992?
Next up, immigration.
Historically, the practice of the left has been to denounce the Tories talking about immigration as racism or playing to the gallery. That worked to an extent in 2005, for example, when Michael Howard made life hard for Labour in some marginal constituencies by talking about immigration but was roundly condemned by others for it. And Howard never really looked like he represented the change that the Tories needed to make a strong comeback, although he did a good job of stabilizing the Tories after the disaster of IDS’ leadership.
But a lot has changed. At the 2005 general election, the full impact of the 2004 enlargement of the EU was not yet being felt. Most EU countries had refused to take in migrants from the new EU members and so Britain, which allowed unrestricted entry, received the bulk of them.
There have been huge beneficial effects of this influx, of course, in terms of reduced inflation and additional hard working labour leading to increased economic growth.
But there have also been a lot of problems – e.g. local public services unable to cope, lack of employment opportunities for some existing British citizens etc. But perhaps most damaging for Labour, they lost control. They didn’t know how many eastern Europeans had entered the country and they under-estimated it. Now it turns out even the official statistics are wrong and have underestimated the numbers by 30 per cent.
It was easier for Labour to paint the Tories as racist when immigration was about black and white. But now it is much more about the fact that the migrants are hard working and in many ways very welcome, but should we not control their numbers far more competently and effectively to avoid excessive social problems?
If the Tories can get their language right, they can tap into this and it will be far more difficult for Labour to paint them as the nasty right wing party of yore. David Cameron hopes that having focused on the ‘softer’ social issues since he became leader and positioned himself in the centre ground, he will be allowed the freedom to look at this more traditional issue without being painted as a right wing extremist. If he succeeds, Labour will be seen as the party that lost control of the UK’s borders.
The government is sensibly bringing in the points-based system of immigration, restricting the entry of new EU members Bulgaria and Romania and stepping up the border defences. But will voters see them as the people who can be trusted on the issue when they are shutting the door after they deliberately allowed the horses to bolt?
It is very early days. But Gordon Brown may regret it if he bases the next general election campaign on what were the successful assumptions of the last three.