Michael Heseltine is the father of National Conservative economics

Heseltine may think Nigel Farage is basically Hitler but the glorious irony is that the economic policies of Reform trace directly to his ideas on growth and regeneration

The dog didn’t bark. There were no carefully coded speeches tantamount to rebellion. The bars (probably because the booze is too expensive) weren’t filled late into the night with plotters. It was, for all that the media so wanted a bloodbath, a rather uneventful Conservative Party conference that culminated in a speech from Kemi Badenoch that even her biggest enemies found unable to criticise. Some sensed a vibe shift within the party, away from the managerialist programming of Sunak and toward something more ideological, a refounded Thatcherism made real by the presence of the great lady (or at least her clothes) at the conference. Some, of course, saw this as a sort of dying spasm from a doomed party:

“Gawping at ladies’ dresses, meanwhile, the Tories have clearly left the usual party-political state of self-delusion and entered a collective hallucination. Rather than stage a fightback, the foot-soldiers of the modern Conservative Party have retreated into nostalgia, yearning for the last time they were an ascendant force, forging a new national character with brutal efficiency, and taking aim against socialist Britain and the statist blob.”

Much was made of the conference being ‘empty’, how the Conservative Party, trailing in the polls, is irrelevant. Not in government, not the triumphal opposition party, just a crumbling (and unloved) edifice of a largely forgotten past. Nigel Farage’s Reform trolled the Tories by announcing that twenty or so of the party’s two thousand and more councillors had defected to reform. I assume, knowing as I do about the venality of councillors and the cruelty of local ward party committees, that these escapees are motivated less by a love of Nigel than by a desire to preserve their own careers.

It matters, however, that the Conservative Party is dusting the cobwebs of Thatcher and Thatcherism. Not because of that supposed nostalgia Jonny Ball wrote about in the quoted passage above (although why not be nostalgic about a leader who literally changed world politics), but because the the ideas behind Thatcherism are still current and relevant. We’re told, I’ve written about it, that Thatcher’s election in 1979 ushered in an era of ‘neoliberalism’ that is only crumbling today as an angry public confronts the ‘globalists’ and demand good old-fashioned pre-1979 state-directed economic nationalism. For writers on the right like Gavin Rice the argument is plain:

“All I would say is that the UK has had a 40-year experiment with neoliberalism in various forms (from Thatcher through Blair-Cameron to Truss) and the outcomes are dire.”

Rice leads the ‘Future of Conservatism’ programme at think tank Onward UK and has adopted the essentially leftist ideas of ‘neoliberalism’ and ‘globalism’ to paint laisser faire economic policies as the reason for Britain’s economic troubles: “...a cluster of economic policies which essentially embrace unilateral laissez-faire in trade, financialisation, offshoring of industry, indifference to import dependency and regional inequalities, indifference to hostile trade partners like China”.

The curious thing here is that the Conservative Party abandoned most of laissez faire Thatcherism in 1990 after the great lady departed Downing Street. And the progenitor of the interventionist big government Toryism that the new nationalist right think they’ve just discovered was someone they’d see as an enemy: Michael Heseltine:

“But at the core of Heseltinism, today as in the past, is an active embrace of the role of government in stimulating and channelling that private-sector growth. The most famous thing that Heseltine ever said was that he would “intervene before breakfast, before lunch, before tea and before dinner”. It was also where he was truest to himself – and where he was right.”

A glowing review from Martin Kettle in The Guardian of Heseltine’s ‘No Stone Unturned’ review of growth in 2012. It is here that we find the central elements of National Conservative economic thinking: industrial strategy, targeted protectionism, import substitution, and a nostalgic focus on large-scale manufacturing. The problem is that there is no evidence that you can use these strategies to turn round sclerotic growth in a high cost, developed economy. If we look at state-led economic development strategies in the UK, their record is very poor. Before 1979 Britain, with collapsing nationalised industries, high inflation and unemployment, was hardly a poster child for industrial strategies and regional economic development schemes. Heseltine’s approach post-1990 (and arguably before then as the Westland debacle showed) is founded on the idea that business leaders - usually property developers in my experience - and public sector leaders work together in planning for growth:

“These tired old policies are accompanied by a familiar litany of how business-style public sector management is needed, how economic development is driven by “innovation strategies” and some ridiculous obsession with “British ownership” as if that is somehow significant in our economy. What Lord Heseltine presents is simply his inevitable dirigiste, managerialist vision of how government should be organised. And it’s presented with panache and conviction.

The problem is that this agenda failed to regenerate the North when Britain was booming. Why on earth does anyone think that this agenda will regenerate the North when Britain isn’t booming? There is nothing at all in Heseltine’s prescription that will take us one inch nearer a more dynamic, entrepreneurial economy. Instead we’ll have an economy designed and run by a closed sect of business managers working hand-in-glove with a closed sect of public sector managers.”

Of course one of the flaws of Thatcher’s government (if not her ideology) was the view that the problems of poor government were a consequence of its lack of business-style direction. We still see this conceit in the likes of Zia Yusuf from Reform pretending that local government can be transformed by external teams pointing out savings and efficiencies. Something that the Party has quickly discovered isn’t so simple as their local leaders (sufficiently distanced from Nigel, Richard and Zia) sheepishly announce they will have to raise council tax.

The great revelation of Thatcherism wasn’t laissez faire liberalism but rather the realisation that the barrier to economic growth wasn’t the lack of government direction but too much of that government direction. Hardly a day passes without another example of how bureaucracy and the conflicting priorities of government agencies combine to prevent people from creating growth, jobs and wealth. At the heart of this is the UK’s planning system which Labour and Reform say can be made to work with some tinkering and the employment of more planners. But the problem with the planning system is that it is a planning system deciding not just where you can build but how you should build and what you can do in a building once you’ve built that building. The deregulation of finance - the ‘Big Bang’ - under Thatcher transformed Britain’s economy but left the task half finished. Indeed, since the 1990s we have seen (think OfCom, OfGen, OfWat and dozens of other regulatory agencies right up to the latest one seeking to direct Britain’s successful football industry) the gradual expansion of regulations, mostly but not always delivered through the existing planning system, to the detriment of economic growth and opportunity. As a result we have too few houses, madly expensive energy, crumbling transport infrastructure and an economy maintained solely by public borrowing.

This economic approach has nothing to do with ‘neoliberalism’, ‘globalism’, the WEF, or Margaret Thatcher, yet those are the things that ‘National Conservatives’, Reform UK and the ‘Future of Conservatism’ programme blame for our economic problems. It is true that Conservatives are not liberals, that we have a belief in the national interest that trumps the most ardent of laissez faire programmes. Today conservative thinking about the economy is dominated by the myths of Thatcherism and directed by the interventionism championed by Maggie’s nemesis, Michael Heseltine.

Heseltine may think Nigel Farage is basically Hitler but the glorious irony is that the economic policies of Reform and the National Conservative right in general track back to the New Deal in America and to the modern interventionism and state-direction championed by Heseltine. And, as I said about his growth report in 2012: Heseltine was wrong in 1982, wrong in 1992. He’s still wrong in 2012. What’s shocking is that people continue believing Heseltine was right by reheating his litany of failed ideas for growth and economic development.