Liam Fox – 2004 Speech to Politeia on the Case for Conservatism

The speech made by Liam Fox on 4 March 2004.

The last ten years have not been the easiest time to be a Conservative. Yet even in the most difficult times in politics comes the comforting knowledge that there may be a change in political thought and fashion which will bring about the opportunity for recovery.

I believe we are at such a time and that recent events inside the Conservative Party have hugely improved our ability to take advantage of it.

A renaissance of political thought has occurred.
It has become permissible, once again, to state openly the philosophical case for conservatism.
We are rediscovering our ideological self-confidence – and not a day too soon, given the damage which Labour is inflicting on our way of life.

We Conservatives must not fight our political battles on the ground of Labour’s choosing.

We must reaffirm our own identity.

We cannot get by with just explaining how we will change things – we have to explain why we say what we say.

The mechanics of public policy will never reach into the soul of a voter. And it is on that level that we must regain the initiative. Because Labour is transforming the society we live in, and transforming it for the worse – taking control of our lives, and depriving us of our freedoms.

The political battle in Britain today is still a battle for hearts as well as minds.

Throughout the last century the Conservative Party quietly, but resolutely, set itself against the utopian promises of the collectivists or the left who put their trust not in the people, but the state. As a result they were elected to govern by a people who shared their scepticisms and supported the party through bad times and good: in 1924 when they returned them to power, having rejected the false promises of ‘a new heaven on earth emanating from Whitehall’; in the 1940s when they closed ranks behind Churchill’s promise of ‘blood, toil, sweat and tears’; and, most recently of all, in the 1980s behind Margaret Thatcher’s resolution to set the economy and the people free.

Along with Sir Keith Joseph and others she battled to redefine the terms of debate. Her triumph was to persuade voters that they should no longer accept the ‘lowest common denominator’ that the state was prepared to offer. Her legacy was the proof that there truly was another way. This is a battle to be fought once more, but this time for keeps.

The Pocket Money Society

Twenty-five years ago, Sir Keith Joseph warned that Britain was becoming a ‘Pocket Money Society’.

It was a lucid insight into 1970s Britain.

First, the Labour Government was appropriating more and more of people’s take home pay. It was turning adults’ earnings into little more than children’s allowances.

Second, as well as leaving people with less and less of their own money, Labour was taking out of their hands the important decisions that affected them and their families. From the education of their children to saving for retirement, the big decisions increasingly became the function of a so-called benevolent state. Like pocket money, people’s earnings were there to be spent on the trivialities of life; not the serious stuff.

Keith Joseph’s perception of the ‘Pocket Money Society’ was largely descriptive of the economic facts, but it also contained a moral insight.

Only when people are trusted with responsibility are they likely to act responsibly.

Anyone who looks at Britain today can see that we are drifting back to the ‘Pocket Money Society’ that Keith Joseph warned of.

After two decades in which successive Conservative governments first halted, and then reversed, the growing reach of government, it is expanding again.

In 1979, the Labour Government spent 45 per cent of our national income. By the time the Conservatives left office in 1997 it was down to 39 per cent, and falling. Six years on, under Labour, it’s back up to 42 per cent, and climbing.

But, of course, people don’t sense expanding government in headline numbers. They experience it in their everyday lives, for instance as taxpayers who found last April that their take-home pay had gone down for the first time in years, because the Government had raised their taxes.

They experience it as small businessmen and women who, since Labour took office, have to work an extra six hours a week just to stay on top of the increase in official paperwork.

Those who work in the NHS experience it in growing red tape, and being obliged to put targets from Whitehall above the needs of their patients.

Even the pensioners who have worked hard all their lives and steered well clear of the social security state, now find they are drawn into a Kafkaesque world of forms and officials. They must now lay their lives bare on an official form and go cap in hand for welfare in retirement, as 60 per cent of them now do.

As we have become a wealthier nation, we should have extricated ourselves from the grasp of the State.

But the opposite has happened – the Government’s intrusion into people’s lives has not diminished. It has become all-pervasive.

It’s not just that the government is taxing more, with taxes appearing in every nook and cranny of life – new taxes on pensions, new taxes on business, new taxes on homeowners.

On top of that, working life is regulated, so that a nursing home manager with 30 years professional experience must now go to night school to get an NVQ if she is to be allowed to keep her job.

It gets worse. Safety regulations now threaten to make it compulsory for every new bath manufactured to come with a thermostat. The final insult is speed cameras which mushroom, not around accident black-spots, but on clear stretches of road – there not to improve our safety but to lighten our pockets.

Even circuses must now get an entertainment licence costing £500 for every new venue where they pitch their big top. From Post-war collectivism when the left rationed bread, we have now reached their new millennium madness, when they now tax circuses.

Labour’s Muddled Morality

None of these developments are coincidental. They are an objective of Labour’s policy. As New Labour’s intellectual guru, Anthony Giddens, wrote in his Blairite text ‘The Third Way’:

“There will never be a common morality of the citizenship until a majority of the population benefit from the welfare state.”

To them, expanding the State is a moral imperative. They believe it ‘re-moralises’ the people, no less.

In fact, what we are suffering under New Labour is no moral crusade, whatever the impression created through the language favoured by Saint Tony.

The truth is that greater freedom for the individual from the state is profoundly threatening to a party whose “project” is to gain control through the State apparatus.

It is threatening to New Labour to contemplate a future in which widening and shared prosperity gives people the chance to become more and more independent from government.

So to ensure their continued political viability it becomes imperative for New Labour to find ways – as many ways as possible – in which to leash people to Government. This explains why much of Gordon Brown’s agenda has been about finding ways to ensnare the middle classes in the welfare state – whether, for example, through tax credits for those earning £55,000 a year, or baby bonds.

And with their project for a bigger state comes their moral case for a bigger state.

Under the New Labour third way citizens are made to feel ashamed of their most virtuous aspirations

The successful are punished for their affluence.

Those who wish to stand on their own two feet are scorned for wanting independence.

There is a sinister, destructive and punitive attitude to those individuals whose self reliance threatens the socialist craving for control.

Like political drug pushers, the Third Way politicians peddle dependency through means testing, tax credits and handouts, so that, step by step, a free society becomes entangled in the dealer’s controlling web.

The Battle of Language

One of the Conservative Party’s most serious mistakes over recent years has been to lose the battle over language. We have to take back ownership of words and phrases which are the rightful property of those who believe in the freedom of the individual and the unacceptability of intrusive government – words and phrases which Labour has had the audacity to claim as its own.

Earlier this year, the Culture Secretary wrote an article for a newspaper under a headline “In your own interest, learn to love the nanny state.”

In the article, Tessa Jowell put forward words like ‘empowerment’, ‘enabling’ and ‘opportunity’ and sought to persuade the reader that these were the product of a bigger State.

It reminds me of George Orwell, in his essay Politics and the English Language, warning of how:

“a mass of words falls upon the facts like soft snow, blurring the outline and covering up all the details.”

In Orwell, we recognise New Labour.

The headline writer for Tessa Jowell’s article was being mischievous. Tessa Jowell did not herself use the expression ‘nanny state’. But the headline writer understood her meaning – and so do we. She meant the big State, which takes decisions on people’s behalf which it does not trust them to take for themselves. And he saw that her words – empowerment, enabling, and the rest – were attempts to cloak this reality in an attractive language.

Yet Tessa Jowell illustrates a point that we Conservatives must learn. It is not enough for us to have the right answers to the problems Britain faces. We must also set out the philosophical case – a genuine moral case – for our approach, not just its technical advantages.

At a Conference to celebrate the 90th birthday of that clear-sighted Conservative, Milton Friedman, fellow economist Martin Feldstein said how surprised he was that in Friedman’s Capitalism and Freedom there was no mention of the adverse impact of social security on national savings.

The explanation, he discovered, was that for Friedman, “giving individuals the freedom to choose for themselves might also increase economic efficiency, but freedom was the primary goal, and the resulting economic efficiency was a happy by-product.”

We should be no less forthright about the validity of the moral case for our reforms.

In advancing the moral case for Conservatism, we should start by recapturing words like ‘fairness’, ‘opportunity’, ‘enabling’, and ‘community’. Without a fight, we have allowed them to be wrested from us by the Left, and given an association with big government that they were never meant to have.

Fairness is one of the words most often abused by New Labour. Yet what’s fair about the patients in Bristol who went blind because pursuit of Government targets led to their follow-up appointments being delayed? What’s fair when law abiding citizens are afraid to go out at night because of the fear of street crime? What’s fair when those who have always paid their taxes find themselves pushed down the queue for public services by those who have contributed nothing. It is the opposite of fairness.

We must also take back ownership of words like competition, markets, and responsibility which we have allowed to be seen as somehow ethically suspect.

We must be ruthlessly clear about language, because clarity of language defines what is distinctive about our approach.

The Intruder State

That distinctiveness starts with being clear in our description of the problem we intend to solve.

This problem is not, as the headline writer on The Times’ would have it, that of a ‘nanny state’. That characterisation actually sounds quite benevolent, if a little suffocating.

New Labour’s enthusiasm for regulation, which it regards as the rightful successor to state ownership, means that this Government is becoming intrusive to a degree undreamt of even by Old Labour.

It is less the Nanny State than the Intruder State.

The State that has intruded into places where it has no right to be.

No longer does the Government call on you to pay your share, and having done so leave you in peace.

You now discover – to your horror – that the Government is in your home, with views on how you should bring up your children and in your workplace, with instructions as to how many hours you can work. Even your life savings are not beyond the reach of a Government which respects no boundaries in where it will go and what it will do to tax and to regulate.

The Intruder State has entered deep into lives of British citizens – and wherever it does, it robs them of control over their lives.

By stripping people of control, New Labour is creating a Britain of supplicant taxpayers, suffocated professionals and powerless citizens.

Supplicant taxpayers

As well as being taxed more by Labour, people feel they have less and less control over the taxes they have handed over.

In two recent ICM polls for Reform, it was found that 82% agreed with the statement “taxes have gone up but services haven’t improved much and there is a lot of waste”. Another showed that 88% said that the way we provide healthcare in the UK is in need of fundamental review. 74% said the way we run state education in the UK is in need of fundamental review, while 84% said the way we tackle crime is in need of fundamental review.

This is not surprising because it is true. More and more people feel that they are accountable to the Government, rather than the Government being accountable to them.

More and more people feel that they are accountable to the government, rather than the government being accountable to them.

Take the example of means testing and the rapid expansion of means tests. The means tested, rightly identified by Sir William Beveridge, as hated by the British people, has come back to stay. Means Testing, was, he said unfair; but even worse, it undermined the basic freedom as he put it ‘to save pennies for the rainy day’: because it penalised incentive, hard work, saving and enterprise. The lesson is as true today as it was when Beveridge was drawing up his famous report on Social Insurance.

People who never expected to be on social security, who have been self-sufficient and have paid their way throughout their working life, now find that they pay their taxes and immediately have to apply to the Government for welfare benefits to have a decent income. The more taxes rise, the more is handed out by the government to supplicant taxpayers. Sixty per cent of pensioners are now trapped by the means test – some twenty per cent more than in 1997.

It is madness to take more from people in taxes only to make the same people apply to have it back in social security benefits, the evil of ‘churning’, which Maurice Saatchi has put to the forefront of political debate, just as the economists have put in the economic debate. By making it impossible for people to look to their own earnings to keep themselves and their families, a government denies people control over their lives. By making people rely on the government for income, the state creates a nation of supplicant taxpayers.

It is not only the spread of the means-test that strips people of control. In Britain today, the people who pay for our public services have no say in how their taxes are spent on providing those services. Once their money is handed over to the Government, it is, to all intents and purposes, lost.

People sometimes talk of having a right to make the vital decisions over education or healthcare. But the reality today is that taxpayers have no rights, beyond the right to be allocated by the Government to a place on the waiting list of the Government’s convenience. Or the right for children to be sent to a school of the local authority’s discretion, irrespective of whether it is the school that the parents of a child want him or her to attend. Each year there is less and less pretence that such a right exists. The pretence to a ‘preference’ to be expressed by parents over the school best for their child is being abolished under the Stalinist procedures of the new Schools’ Admissions code. No the taxpayer must pay for the public services, but the taxpayer must then become a supplicant to the ever bossier government.

The frustration that taxpayers feel over this lack of control is clear from the appeals statistics for schools in our biggest cities. In some of the most deprived communities in Britain, one parent in every five goes through the ordeal of pleading with the Local Authority to be allowed to send their child to a better school than the one they have been allocated to. They put themselves through this Soviet-era nightmare even though more than four in five of these appeals will fail. The rest are forced to go to the Council’s choice of school, irrespective of their own wishes.

Suffocated professionals

If growing Government is creating supplicant taxpayers, it is also suffocating the professionals who are the people who truly run those services on which the public depends.

If you are a doctor or a nurse you know that your first responsibility must always be to your patients, not to the Government. Likewise, if you are a teacher, it is to your children, not to a distant Minister in Whitehall. You can never serve two masters.

Yet during the last seven years, the Government has made itself the master. It has, in effect, set about nationalising professionalism. NHS hospital targets – set in Whitehall – now compete with the doctor’s clinical judgment for primacy. A maximum waiting time of 4 hours in Accident and Emergency led to patients being forced to wait in ambulances outside the casualty unit for fear of starting the clock ticking.

In a single year, teachers in our schools were issued with 3,840 pages of Whitehall directives telling them what to teach, how to teach it, and requiring a similar quantity of paperwork in return reporting how it was taught.

Labour’s view of what motivates professionals is simply wrong. It is not money – which is why doctors find it insulting to find that bonus payments come tied to the achievement of Government targets. Still less is it a desire to comply with administrative priorities that make the Minister look good. The motivation of the people who care for the sick and teach the young is fulfilling a vocation, being able freely to exercise professional judgment – not about fitting in with the system.

So it is not surprising that the single biggest reason for teachers, leaving the profession is the sheer volume of paperwork which now stands between them and teaching.

It is not surprising, because these things follow inevitably from the suffocation of professionalism by big Government.

The Dilution of Parliament

It is not only taxpayers and the professionals who find control slipping away. We are all becoming disempowered in a democratic sense. Almost every week Parliament is forced by the Government’s majority to pass laws that curtail rights that many of us thought were a defining part of being British. The right to trial by jury. The right not to be detained without trial.

We see the House of Commons downgraded to Downing Street in Parliament. Reform of the House of Lords is mired in the PM’s crony-ist agenda. Constitutional changes on the hoof are destroying well tested conventions. Historic precedents are set aside to satisfy ministerial histrionics. Our judges have ever greater powers to make law.

And then we have the transfer of powers from Parliament to the European Union, over which we have no control and which we cannot hold to account. As a result of a steady flow of EU Directives, Europe is now the source of over 40 per cent of regulations affecting British businesses. The proposed European Constitution would further reduce our control over vital decisions such as those over foreign and defence policy. To crown it all, European law will take precedence over British law. And the Prime Minister has the cheek to dismiss the whole exercise as some ‘tidying-up’ affair?

These are developments which reduce still further our ability to control our own future. The intruder state is not only active at home but increasingly encroaching from across the Channel.

Liberation Conservatism

Just as Conservative Governments from 1979 reversed the growth of the Pocket Money Society, so the next Conservative Government must turn back the Intruder State.

That can’t be done by simply running the Government a little better than Labour, by introducing fewer new taxes, employing fewer bureaucrats and resisting a few more regulations from Europe.

That would slow the spread of the Intruder State. And it would certainly be better than the Labour alternative. But it would not live up to our responsibility to change the course on which Britain is heading.

That requires reform, not mere containment.

Conservatives once again have the appetite for serious reform.

I want to be part of a Government which will, at every opportunity give people back control over their lives.

It will give taxpayers control over the money that they hand over to the Government and restore to professionals control over their work, so that they can truly follow their vocation, rather than orders from Ministers.

The next Conservative Government will give people control over how they are governed.

This goes to the heart of why I am a Conservative. De Tocqueville, writing in 1848, expresses succinctly the difference between my conception of control and that of the Left:

“Democracy and socialism have nothing in common but one word: equality. But notice the difference: while democracy seeks equality in liberty, socialism seeks equality in restraint and servitude.”

Two particular principles guided me in my work as Shadow Health Secretary over the last two and a half years. These principles will guide the policy of the next Conservative Government.

Although rooted in Conservative philosophy – and, indeed, in plain good sense – they represent radical new departures for public policy in this country.

More Power to the Taxpayer

The first principle is this – when you pay your taxes, you should retain some control over how and where the money is spent.

It’s a simple principle. But it’s also a revolutionary one.

When we pay our taxes, the money generally goes to one of two purposes. The first is to pay for those things that can only be provided collectively: defence, for instance, or the cost of central Government itself. The other purpose is to make sure that every citizen receives what could be termed personal services which, while supplied to them as individuals, are nevertheless thought of as universally necessary: for example, health or education.

Over recent years, the British people have lost sight of the distinction between the two.

For that portion of our taxes which is paid towards providing a personal service, it is only right that the taxpayer should have some say over what they’re getting in return.

I believe it is imperative that taxpayers should have control, wherever possible of the spending made on their behalf.

The Conservative Party’s ‘passports’ for education and health will begin a process which will ensure that individual citizens are liberated from the suffocation of state monopoly decision-making. Instead of being offered choices designed for the State’s convenience, they will take control in the way which they judge best suits them. For too long, pupils and patients have been made to serve the system. The system must be made to serve them.

An End to Public Good, Private Bad

The second principle is related to the first. I believe that we should break down the artificial barriers that have been set up between the different providers of public services. There should be no distinction in practice, as there is no distinction in morality, between what is state-owned, what is owned by a charity or voluntary group, and what is owned by a company.

If a school provides an excellent education for children, it shouldn’t matter a jot whether that school is run by the Local Authority, or whether it operates as a City Academy not subject to LEA control, or whether it has been created by a group of parents, or by a philanthropist – or indeed by a company.

This is a moral argument as much as a practical one – but more importantly, it addresses the issue in terms of real human beings, not as abstract theory.

A carer in a nursing home is no better or worse as a professional whether that care home is owned by a specialist company or a Local Authority. A patient who has an operation in a not-for-profit hospital should not be a pariah because they didn’t go to the local NHS-owned hospital.

What matters is providing for the needs of the patient or the pupil. The Government should be prepared to fund what works, whatever its ownership.

Standards in our public services will rise significantly only when we give the people who provide those services real and meaningful independence.

A key element of breaking down these artificial barriers is therefore to dismantle the regulatory, legislative and cultural obstacles to professionals realising their vocation.

Implications for Policy

These two principles come together in a set of policy prescriptions.

First, as I have already described, taxpayers should keep control of the taxes they pay towards their health and education. They should receive an entitlement, which we have called a ‘passport’, which enables them to be treated in any hospital in the country, not at the one to which they are directed by the State. They should be able to send their child to the school that best suits that child.

Second, there must be freedom to supply. Hospitals which can treat patients well in return for the standard tariff should be free to expand to do so. Schools which can give children a good education should be free to expand, or indeed be set up, if they can do so for what the State is prepared to spend to educate a child.

Third, we must make sure that professionals in the public sector have the same independence as their counterparts in the voluntary and private sectors. That means sweeping away the culture of targets from central government, directives, form-filling and bureaucratic inspection.

Fourth, we need to make the Government accountable to Parliament once again, and make local democracy meaningful by creating a fairer balance between what is spent locally and what is raised locally. And we must continue to oppose the adoption of the European Constitution, which would transfer more control away from the British people to institutions that are remote and unaccountable.

Conclusion

There needs to be a new agenda. And it is defined in exactly the opposite terms from those which Giddens proposes.

Society can prosper only when individuals are set free from state dependency. Only when we are free to maximise our own talents do we have any chance of maximising the potential of the society in which we live.

Hand in hand with the empowerment of individual citizens must come the disempowerment of the political classes. Politicians must wean themselves away from their interventionist habits, whether legislative or fiscal. We must celebrate the concept of the market, representing as it does the combined wisdom of millions of people, and place it before the poor quality decision making by the Government machine.

We must welcome the very concept of competition. It is the means by which, in a free society, we relate our talents to one another without the interference of Government or law.

However, above all we need to create a new climate of aspiration. In some cases, that will entail rekindling the concept of aspiration, since it has been snuffed out in so many parts of our society by the false belief that the State can manage your choices for you.

For too many politics has become like the weather – something that happens to you, not something which you can affect.

And there is another duty we have. We must never forget where we have come from as a nation. Too many of the third way politicians seek not only to manipulate the present but to rewrite the past.

As a country, and as a Party, we should not be afraid to look back on, and learn from, our history. Britain’s centuries long and benign impact around the World did not happen by accident, but because visionary people chose to broaden their horizons, and in doing so introduced British values and institutions to all points of the globe.

And for those politically correct apologists who will inevitably throw up their arms in disgust at this characterisation of our history, I proudly assert this – for every so-called blot on our copybook, I’ll show you a hundred achievements, not something which your political role models could come within light years of matching.

So we have a clear and proud view of who we are and will clearly set out the principles behind the programme which we will be presenting to the country at the next election. It is a bold task, replacing the Intruder State with control for taxpayer professionals and citizens.

Our task is important because the issue is not only an economic one but a moral one. The Third Way socialism is trap which encourages people to surrender their personal freedom incrementally to the State. It results in the abdication of personal responsibility. It nationalises self reliance and strangles both individual aspiration and altruism.

The Conservative Party must be bold in making the case for conservatism. Our intellectual renaissance will be the foundation of our political recovery.

Let no-one accuse us, the Conservatives, of backing away from the problems that face our country. Let no one accuse us of ducking a fight. We will be honest with the public about our plans and the implications of our plans.

For I believe that if we explain those principles clearly, honestly and loudly enough in the coming months, we can convince people of what, in their hearts, they know to be right: that Conservatives, once again, have the answers.