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Is “smaller state” a codename for forthcoming cuts?

Photo: Sky News

Writing in the Telegraph this weekend, new Downing Street Chief of Staff, Steve Barclay pledged to restore a smaller state, but does this shift represent a return of austerity?

As the Prime Minister attempts to regain control of the domestic agenda on a grand Levelling Up tour of the UK following months of party related activities and an ongoing police investigation, questions have been raised around the future direction of Number 10 under new leadership.

Concerns are being privately raised by ‘red wall’ MPs worried that the weakened Prime Minister has flipped his beliefs to placate the right of the Conservative Party. Many ‘red wall’ Conservative MPs are concerned that their vision of a bigger state, high spending Conservatism is taking a back seat to the more traditional libertarian, low spend Conservatism which could mean curtains for them at a future General Election.

A more enabling approach?

The Prime Minister has taken a more liberal approach towards the public purse since winning an 80-seat majority – largely caused by the pandemic, means that the party of ‘austerity’ is now presiding over £2 trillion of debt and over 100% debt to GDP ratio, a situation the UK has not been in since the middle of the last century. This leaves the Prime Minister on a collision course with his backbenchers.  

In his first intervention since being appointed into Number 10, Mr Barclay wrote in the Telegraph “it’s time to return to a more enabling approach. To trust the people, return power to communities and free up business to deliver.”

The pledges made by the new chief at Number 10 were designed to reassure backbenchers publicly that the Prime Minister was committed to reducing the size of the state, following years of criticism from the right of the Conservative Party.

With the UK facing the highest tax rate since the 1950s, many on the right of the Conservative Party were concerned that the lack of fiscal restraint by the Prime Minister would harm the party’s re-election chances at the next General Election. However, many ‘red wall’ MPs know that to achieve the levelling up agenda that was so critical to their own electoral chances means more spending – not less.

“It sounds like a return to austerity”:

If the new Chief of Staff was hoping that his public “reset” will be universally supported by the party, Number 10 may come to regret their decision to return to core Conservative values.

Mr Barclay wrote that Boris Johnson is “making the changes in government that will see us adjust to living with Covid, clear the backlogs, get the economy back up to full speed – and, crucially, he is taking a close look at where he can cut the size of the state.”

This will come as a significant worry for many Conservative MPs where polling is already showing signs of a significant lead for the Labour Party. With long standing criticism of the Conservative government of austerity harming deprived communities across the UK, ‘red wall’ MPs will not want to associate with a government committed to cutting the size of the state.

One high profile MP that represents a ‘red wall’ constituency in the West Midlands told Chamber that “we need to demonstrate that we are delivering and that requires money. I am deeply concerned by calls to cut the size of the state, it sounds like a return to austerity.”

Expect arguments when MPs return from recess next week.

What next for the Prime Minister?

Boris Johnson is not known for his ideological beliefs – the choice to back “Leave” over “Remain” at the Brexit referendum is proof of that. A Chief of Staff who is ideologically committed to cutting the size of the state will not necessarily sit comfortably with a Prime Minister who loves to be seen posing in a hard hat alongside a popular project. The gut instinct of those around Westminster is that the Prime Minister will choose the ‘red wall’ side in the battle of ideological control of the Conservative Party. With an ongoing police investigation, the Prime Minister will do all he can to associate with popular schemes.

Expect more photos of a hard hat Prime Minister appearing in a local newspaper near you…

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