WILL HUTTON (AUTHOR AND ECONOMICS COMMENTATOR) - 11th October 2009
GEORGE NEGUS: Will, good to see you again. I have to ask you
what's going on. Since when does an astute experienced political
observer like yourself predict an election nine months away from voting
day? I mean, is it really looking that bad for Labour that you would
punk that much?
WILL HUTTON, AUTHOR AND ECONOMICS COMMENTATOR: Well, I went to the
Conservative Party conference over this week and I was pretty convinced
that the Tories were a shoo-in. They've got to win 117 seats - it's the
7% swing, it is the biggest since 1945 - that is a big ask. But the
country has kind of made its mind up. Winning four consecutive general
elections for any government is difficult. The country of Britain has
really decided that it wants to give Gordon Brown a good kicking. And
people - the elections make up their minds some months before an
election. But actually, last week was not so good for the
Conservatives. And I now think speaking to you, at the end of the party
conference season, that actually the general election next May or June
is much closer now than I thought it would be. I think that David
Cameron and George Osborne, his Shadow Chancellor, made a couple of
serious mistakes last week and I think the Labour government and the
Labour Party's approach to handling the crisis looks a bit better. This
is not yet a racing certainty. It's good for Cameron, but not certain.
GEORGE NEGUS: So a few weeks ago - about a week ago, in fact -
you were
saying it was a certainty that Brown was gone.
WILL HUTTON: It has gone from 100% certainty that Brown was gone to a
90% certainty that Brown has gone. What really unnerved me about the
Conservative Party conference was on the economy - I think they are
about to make a monumental mistake. The reason why there is a deep
recession in Britain, and why so many firms are reeling, why
unemployment is moving towards 3 million is not because the state is
big. The reason why the state has become big in Britain is because
there was an absolutely first-order banking crisis. And had the
government not borrowed to the degree that it has borrowed, and had it
not intervened to actually prevent British banks from going bust - by
the way, our banking system was more precarious even than the American
banking system - there would have been a depression here. To say the
problem is the state when actually the problem was the banking system
is really arse about tit. I mean, it really is the wrong way around.
GEORGE NEGUS: Sorry, on that score, what can the Conservatives
do
differently to make quite sure they do not go down this wrong path? You
have actually given a lot of support to Brown and the whole stimulus
package as it were, which we have our own version of here. So what can
they possibly do in these totally unprecedented financial and economic
circumstances that would make them such a shoo-in?
WILL HUTTON: What you have to do is to be really honest about why
things have happened. I want to say that the Conservative Party is less
than honest about it because partly, ideologically, they don't want to
go to a place which says it was the markets, and it was deregulation
and it was the financial system that caused the problem, partly
because, literally, these people pay their bills - they are the backers
of the parties of the right - but also partly because intellectually
what they want to say is the state. But intellectually, it was not the
state that caused the problem. Maybe the margins, regulation could have
been better, or monetary policy could have been better, but this was
fairly minted not just in a British banking system, but the world
banking system. And they have to say we are going to put the banks
right, we are going to do what we have to do using government borrowing
until we have got the banks right. When the economy starts to recover
we're going to be very aggressive in getting the budget deficit down.
That is what they should be saying - saying nothing about the banks and
then just saying we're going to attack the state leaves you, I think,
intellectually in a wrong place. And also it means you have to do
things like freezing public sector pay, bringing the pension age
forward - now is going to be 66 in Britain - you won't get a state
pension if you're a man in 2016 - 66 is the date, and I am sure they
will lift it again for 2020. Now these things people do not want to
vote for particularly. They may be the right thing to do, but you find
yourself politically in the wrong place, and already the tracking polls
have got the Tory lead from 17% to 9%. And it wouldn't surprise me if
the Tories do not enter the election with just a 5% or 6% lead, in
which case it would be a hung parliament in Britain, not an overall
Tory majority.
GEORGE NEGUS: It sounds to me like what you're saying is that
if the
Tories are going to have to change their spots where the market is
concerned, where regulation is concerned, where intervention into
economy and the financial world is concerned. Are they capable of that?
As you say, they do not want to go to that, it is a pretty dark place
for a British Conservative to go.
WILL HUTTON: It is a dark place. But look, the Republicans in America
and actually, your conservatives in Australia, they have written their
story of the markets rule, enterprise rules, leave the market alone,
regulation is self-defeating, and actually capitalism is a much
complicated story as we have discovered. There is a kind of an
interdependency between state and market and business, which has to be
handled and managed and the parties of the right - used to do that. I
do not think the National Party of Australia or Republicans in America
or Conservatives in Britain were all of them, this kind of slightly
lunatic, ideological, civilised, free market people. I mean, that has
happened in the last 15, 20 years. It is anything calamity and what
part that the right have to do I think, is to get back in good order to
what it used to be 20 years ago.
GEORGE NEGUS: You seem to think they are capable of it -
capable of
actually getting themselves in there.
WILL HUTTON: I was standing in a taxi queue in driving rain with a
middle-ranking shadow minister and he said, "Will, we have a problem.
"We can't talk the good old-time religion, we have now discovered
markets fail and markets fail big time." And I said, "Precisely." But
on the podium talk, it is all of bonfires of controls and let's make
the market work - you know, you really haven't come up with a credible
way of managing our economy into recovery. It's all very well David
Cameron talking about the sunlit uplands as he did in his great speech
yesterday, and, by the way, there were things that Cameron said which I
really rather liked. I like the idea that a leader of the Conservative
Party got a standing ovation for saying we won an election in '79 when
he brought taxes down on the rich, I now want to bring the marginal tax
rate for people at 150 quid a week, which is 96%. Because benefits get
withdrawn so quickly, I now want to win a election to bring down that.
And he got a standing ovation for wanting to attack poverty. And I say
good on Cameron for that.
GEORGE NEGUS: Are you suggesting, Will, that the Conservatives
are
capable of moving, into, if you like, a soft, centre, left position and
they would be better at being soft, centre, left than the Labour Party
has ever been, particularly in the last few years?
WILL HUTTON: That is my view. My view is that one nation Tories and
Liberal conservatism, or there is this movement within the Tory party -
they called it Red Toryism. And I think it is very interesting
phenomenon known as Red Toryism. I talked to David Cameron's
chief-of-staff and a couple of leading Red Tories, a man called Phillip
Blonde for example, Jesse Helms, and he said, Cameron really loves
them, I really love them. How interesting, that is where Cameron sees
the kind of intellectual energy in his party no longer on the right,
but on his left. The trouble is that his rhetoric is still - and
actually the big story is very much on the right. And actually
electorates aren't stupid. In the end, there is a great intelligence in
a democracy. Turkeys do not vote for Christmas and I do not think the
British election will necessarily vote for a program that could leave
unemployment in Britain to 5 million. It is going to be a much more
contest election that thought.
GEORGE NEGUS: Will, I have to leave you there and I would get
back to
you because I want to find out when a certainty is really a certainty
before next June, but thank you very much for talking to us.
WILL HUTTON: Next time, I’ll get in early and you can ask
longer more questions. Thank you very much, I enjoyed it.