11 - Labour market strategies and welfare policies: the Conservative record

Summary

Introduction

The post-2015 period has been characterised by considerable government instability. Once David Cameron resigned from office after the 2016 Brexit referendum, Theresa May became Prime Minister. Forced to leave in July 2019, she was replaced by Boris Johnson. In December 2019 Boris Johnson secured an 80-seat majority in Parliament on the promise to ‘get Brexit done’, only to be ousted from office in July 2022 following a multitude of scandals. During the summer of 2022, Liz Truss, former Foreign Secretary, campaigned on a platform of deregulatory supply-side and tax cut reforms, and was handed the keys to Number 10 in early September. Newly appointed Chancellor Kwasi Kwarteng, co-author (with Liz Truss) of Britannia Unchained (2012), announced a mini-budget consisting of unfunded tax cuts on 23 September 2022. Hostile market reaction provoked the demise of first Kwarteng and then Truss, and the nomination of Rishi Sunak as leader of the Conservative Party and Prime Minister on 24 October 2022. With Sunak in charge, large parts of supply-side shock therapy policies were put to rest.

External shocks – the COVID-19 crisis, the war in Ukraine and the rising costs of food and energy – clearly considerably limited the ability of post-2019 Conservative governments to roll out a coherent programme (Peele, 2021), as noted throughout this book. In fact, there has been a pattern of stop and go between One Nation Toryism – a form of socially compassionate paternalism in the tradition of Disraeli – and a small state, low-tax vision promoted most clearly by the hard Brexiter European Research Group. This small state vision is incompatible with the ‘levelling up’ imperative formulated by Boris Johnson to appeal to red wall voters in the north of England and the Midlands.

Welfare and employment policies, which were prominent issues in the 2015 Conservative election manifesto (Conservative Party, 2015), did not define the politics of Conservative governments after the Brexit vote. The Department for Work and Pensions continued to operate within the parameters of tight spending controls set by the Treasury and the Office for Budget Responsibility.