Have the Tories lost the plot?

When exactly are the Conservatives playing at with their election campaign? A relentlessly disciplined and on message electoral machine has instead looked erratic and directionless. Personal attacks on Ed Miliband have transformed him from a weird nerd into a ruthless dude. Even the right-wing press that is meant to sing to the Tory tune sounds like it has forgotten the words.

I could be completely wrong about all of this of course. There are still 25 days to go till polling day: the UKIP vote could collapse in enough seats the see the Tories home: we could end up being brainwashed rather than bored by the endless repetition of ‘long-term economic plan’ and ‘hardworking families’; Lynton Crosby is a genius, the cross-over will come and the polls could be as wrong as they were in 1992.

For the moment though things seem to keep going wrong for the party that ruled Britain for most of the 20th century but hasn’t won a majority for 23 years. Just as at the last election, the Conservatives seem unable to win more than a third of the vote. For me, this is about more than just UKIP splitting the vote. A bit like with Labour in the 1980s, I’m not clear what the Tories stand for any more.

Three policies announced in the last week demonstrate that for me:

• Capping increases in rail fares to the rate of inflation seems neatly calibrated to appeal to commuters in the South East. The cap only applies to regulated fares, and the inflation rate in question is RPI where the usually lower CPI is used for everything else, but this still seems a remarkable departure for a party that believes in free markets. When Labour proposed capping energy prices that was socialism. When it proposed capping rents within tenancies that was ‘Venezuelan-style socialism’.
• Giving three days’ paid leave to workers who do volunteering looks like an attempt to revive the Big Society, a key idea in David Cameron’s plan to ape New Labour and lose the toxicity of the Nasty Party. But for free market fundamentalists this looks like a Labour policy.
• Increasing the inheritance tax threshold on family homes to £1 million (a ‘family home allowance’ that tapers off up to £2.35 million)  fulfils a longstanding Tory pledge, one that frightened Gordon Brown so much that he called off the election that never was. However, how is it ‘for hardworking families’ to hand extra inheritances to people who have done nothing to earn them?

The tactics seem clear enough – appeal to the Tore core vote, especially in the South East and repeat the same message of competence v chaos – even though what’s happened in the last week does not convey a great deal of confidence that they will work. The confusion is also demonstrated in a direct mail from David Cameron that I received last week as a voter in one of the 23 seats that the Tories need to win for a majority. He spends the whole of the letter attacking Labour and the SNP without mentioning the fact that the seat is held by the Lib Dems.

But where is the strategy in all of this? The move on inheritance tax is in line with Osborne’s plans to shrink the state and Cameron’s statement channelling Thatcher that ‘there is no such thing as public money’. However, if the unfunded spending commitment of £8 billion for the NHS does not show how nonsensical that is, then how about the £375 billion of quantitative easing that has inflated the value of all those £1 million homes? As for the moves to cap rail fares and force companies to give their workers extra holiday, they scarcely seem to come from the same party.

That makes the party’s message unclear in 2015 but it poses much more fundamental questions about its future. Above all, how does the inheritance tax cut fit with the idea that the central mission of the Conservative party should be a home owning democracy? From Skelton to Eden and Macmillan to Thatcher it was a defining idea that Conservatism should be about spreading the benefits of asset ownership to the have-nots as well as promoting the interests of the haves. Political philosophy aside, the electoral arithmetic of universal suffrage demanded it.

The  family home allowance is for main homes passed to children and grandchildren and will benefit those with homes worth between £650,000 and £2.35 million. However, an inheritance tax cut that only applies to housing  is the just the latest policy from Cameron and Osborne that does the opposite and pumps up house prices by inflating demand while doing nothing about supply. In Treasury papers leaked in March, civil servants warned that:

‘People will increasingly concentrate the value of the assets in their estates in the main residence, pushing up its value. It will also push up house prices and possibly rents. There is unlikely to be a corresponding increase in housebuilding because housing supply in the UK is price inelastic so this will make it more difficult for younger households to buy a house.’

How does it promote a ‘home owning democracy’ to give those who already have homes an extra incentive to spend as much as possible on them and remove any incentive to downsize in old age? And if becoming an owner in the first place becomes even more dependent on access to inherited wealth how does that promote long-term support for the Conservatives in the electoral democracy?

The Conservative manifesto may propose doing something about that by extending the right to buy to tenants of housing associations as part of yet another ‘housing revolution’. Leaving aside the social, financial and moral objections to the idea, that will make sense to the many Tories who, as Christian Guy puts it In Inside Housing this week, think that ‘the most successful privatisation movement of recent times has actually recreated the kind of statist block it was supposed to replace’. However, it will be a pale imitation of the glory days of the 1980s because across whole swathes of the country the tenants who are in work earn too little to be able to afford even discounted prices.

If the Conservatives really wanted to spread a home owning democracy, they would address the fundamental reason why ownership is falling: homes cost too much. They could choose to build many more homes and they could even choose to tackle a tax system that encourages over-investment in existing ones. Some in the party understand this but not enough. The Conservative priorities seem instead to be to protect the Green Belt, reduce inheritance tax and appeal to the self-interest of existing owners and buy-to-let landlords. In contrast to their key electoral message, they will be on the side of families who don’t need to work hard and did the right thing by being lucky enough to buy a house at the right time. It’s Help to Buy (if you have inherited wealth).

This may yet just be enough to win on May 7 given that 63 per cent of us the electorate still own their own home. As a housing policy it looks disastrous. As a long-term political strategy for the Conservative party when ownership is falling rapidly it looks like a road to nowhere.

UPDATE 10/5/2015: So it turns out that I was completely wrong and Lynton Crosby is a genius. Under our current electoral system, a strategy based on appealing to your core vote and concentrating relentlessly on the same wedge issues can deliver an overall majority. In mitigation, I can offer my later post about the Conservative v Lib Dem battle in Cornwall (the ponytail won) and its inkling about what turned into a blue ‘rinse’ in the South West. And I think my broader point about long-term strategy still holds true.