2 - The Conservatives and public spending since 2015

Summary

Introduction

Caught between the neoliberal desire for low-tax, free market, small state solutions, and a ‘One Nationism’ that demands higher spending and greater state intervention, Conservative governments from 2015 failed to establish a coherent and consistent approach to public expenditure. Five spending phases distinguish the 2015– 23 period, oscillating between two variants of New Right/neoliberalism and three more or less reluctant iterations of One Nationism (see Chapter 1 and Tables 1.1 and 18.1). First was the continuation of ‘Osborne economics’, best understood as a phase of ‘neoliberal austerity’ despite efforts to cloak it in a ‘we’re all in it together’ rhetoric. Second, a pragmatic Brexit-induced One Nationism appeared towards the end of Theresa May's premiership when ‘austerity’ was pronounced over and spending constraints were relaxed somewhat, this position extending into the Johnson era with its post-Brexit promise to ‘level up’. Third, a reluctant, ad hoc One Nationism was evident in the state-sponsored COVID-19 support packages and subsequent efforts to limit the effects of post-pandemic inflation and the cost of living crisis that accompanied the Russian invasion of Ukraine – reluctant because packages were either less inclusive (COVID-19) or on occasion less generous (cost of living support) than they could have been; ad hoc because throughout this period the government found itself at the mercy of events, continually having to revise proposed spending measures to keep abreast of the challenges it faced. Fourth, a radical neoliberal variant briefly appeared in the shape of the Truss government's tax-cutdriven approach to economic and fiscal policy, this interlude being replaced, fifth, by a paradoxical approach in the shape of the 2022 Autumn Statement and March 2023 Budget, which contain both One Nation and neoliberal elements – epitomising the Conservatives’ One Nation/neoliberal dilemma.

Beginning in 2015, the next section briefly examines Conservative assumptions about public spending during the run-up to the Brexit referendum. Attention is paid to spending under Cameron's second government (2015– 16) and May's two governments (2016– 19), a period that witnessed the eventual easing of austerity in the aftermath of the Brexit vote.