Cameron: 'Time to re-imagine the state and to remake society'

Wednesday, November 11, 2009

As the state continued to expand under Labour, society became more not less unfair, the Tory leader David Cameron has said, and this must change. The era of big government has run its course.

The size, scope and role of government in Britain has reached a point where it is now inhibiting, not advancing, the progressive aims of reducing poverty, fighting inequality, and increasing general well-being, the Tory leader David Cameron has said, and he reckoned it was time for "a thoughtful re-imagination" of the role and size of the state.

Despite being called Thatcherite by Labour when the Conservatives trailed Cameron's speech, he claimed that because of its effect on personal and social responsibility, the recent growth of the state has promoted "not social solidarity but selfishness and individualism", two characteristics usually attached to the Thatcher years by her critics.

However, Cameron said that just because big government had helped to atomise society in the UK, it doesn't necessarily follow that smaller government would automatically bring everyone together again. "A simplistic retrenchment of the state which assumes that better alternatives to state action will just spring to life unbidden is wrong," he said.

There needs to be a new focus on empowering and enabling individuals, families and communities to take control of their lives, Cameron said, helping responsibility and opportunity to develop. This is especially important in education, the tool that will help to eradicate poverty and inequality. But the "re-imagined state" should not stop at creating opportunities for people to take control of their lives, he stressed. It should actively help people take advantage of this new freedom, helping to create the big society, directly agitating for, catalysing and galvanising social renewal.

"So yes, in the fight against poverty, inequality, social breakdown and injustice I do want to move from state action to social action," Cameron said. "But I see a powerful role for government in helping to engineer that shift. Let me put it more plainly: we must use the state to remake society."

The Tory leader said that not far from where he was speaking lay the "incredible wealth" of the City side-by-side with some of the poorest neighbourhoods in the country. He said it was time to bring these two worlds closer in a "multi-faceted endeavour – moral, social and economic".

He went on: "Of course in a free society, some people will be richer than others. Of course if we make opportunity more equal, some will do better than others. But there's a massive difference between a system that allows fair reward for talent, effort and enterprise and a system that keeps millions of people at the bottom locked out of the success enjoyed by the mainstream. We all know in our hearts that as long as there is deep poverty living systematically side by side with great riches, we all remain the poorer for it."

Cameron said it was important to focus on the causes of poverty as well as the symptoms because that was the best way to reduce it in the long term. And emphasis should be put on closing the gap between the bottom and the middle, not because that's the easy thing to do, but because focusing on those who don't have the chance of a good life is the most important thing to do.

For centuries, the state expanded to help achieve a fairer society, Cameron said, and up until the late 1960s it was generally successful. But since the immediate post-war period, the most significant extension of the state has taken place under the current Labour government. In 1997, government spending as a proportion of GDP was 38.2 per cent but next year it's expected to rise above 50 per cent.

"Margaret Thatcher's government introduced an average of 1,724 new laws every year," he said. "In 2007, Tony Blair and Gordon Brown passed a record-breaking 3,071 new laws. More than one in every three jobs created since Labour came to power have been in the public sector. Funding for the official list of quangos has grown by nearly 90 per cent."

Cameron said that Labour used to believe that the state's role was simply to provide the conditions for people to live the good life as they saw fit. However, Fabianism took hold and this encouraged a situation where the state commanded and controlled. Gordon Brown's budgets when he was Chancellor of the Exchequer –" top-down, fiddling, micro-managing" – were the quintessence of this approach.

"So did it work?" Cameron asked. "Did the rapid expansion of the state since 1997 succeed in tackling poverty? Did it reduce inequality? Well, it would be churlish to deny that some progress has been made. Indeed it would be rather amazing if there had been no progress. In the past decade, public spending has doubled. Health spending has almost trebled. Since 1997 the government has spent £473bn on welfare payments alone – that's as big as our whole economy in 1988. Much of this has been channelled through tax credits and income transfers and as a result, there has been a measure of success in lifting those just below the poverty line to just above it.

"But, quite apart from the fact that it turns out much of this has been paid for on account, creating debts that will have to be paid back by future generations, a more complete assessment of the evidence shows something different – that as the state continued to expand under Labour, our society became more, not less unfair."

He went on: "In the past decade, the gap between the richest and the poorest got wider. Indeed, inequality is now at a record high. The very poorest in our society got poorer and there are more of them. The incomes of the bottom ten percent actually fell by £6 per week between 2002 and 2008 before housing costs, and £9 per week after housing costs. The number of people living in severe poverty has actually risen – not fallen, risen – by 900,000 in the past 10 years. Youth unemployment has also increased, with nearly one million 16-24 year olds now out of work.

"And studies by the Sutton Trust indicate that social mobility has effectively stalled – people are no more likely to escape the circumstances of their birth than they were 30 years ago. If you think about it, these are astonishing facts."

Cameron asked how it was possible for the state to spend so much money, to devote so much energy, to fighting poverty, only for poverty and inequality to win the fight?

The Tory proposal was to make opportunity more equal, allowing education to play a key role, and to create a stronger, more responsible society. So there should be better early years provision for the poorest families, better education so if families fail, children have a second chance, and better adult education so people without skills can "lift themselves up later in life".

Cameron claimed that the 'big government' approach had spawned several perverse incentives that either discourage responsibility or actively encourage irresponsibility. For example, a couple with no children where the head of the family works 16 hours a week at minimum wage would be better off if they both claimed benefits. Parents with a disabled child could have more money if they put that child into residential care than if they looked after it at home. The pensioner who has saved their whole life gets little or no pension credit, but the person who hasn't saved gets their income topped up. And the elderly person who has saved, bought a house and has assets of more than £23,000 has to pay for residential care, sometimes by selling their home, whereas someone who didn't save gets it for free.

Cameron said: "When you are paid more not to work than to work, when you are better off leaving your children than nurturing them, when our welfare system tells young girls that having children before finding the security of work and a loving relationship means a home and cash now, whereas doing the opposite means a long wait for a home and less cash later, when social care penalises those who have worked hard and saved hard by forcing them to sell their home, rather than rewarding them by giving them some dignity in old age, when your attempts at playing a role in society are met with inspection, investigation, and interrogation, is it any wonder our society is broken?"

He added that what had come to matter most was not a person's place in society but their own personal journey and their right to pursue their own happiness regardless of others around them.

"Our alternative to big government is not no government," Cameron said, "some reheated version of ideological laissez-faire. Nor is it just smarter government. Because we believe that a strong society will solve our problems more effectively than big government has or ever will, we want the state to act as an instrument for helping to create a strong society. Our alternative to big government is the big society.

"But we understand that the big society is not just going to spring to life on its own. We need strong and concerted government action to make it happen. We need to use the state to remake society. The first step is to redistribute power and control from the central state and its agencies to individuals and local communities.

"I am confident that a major redistribution of power can really help us tackle our stubborn social problems and our three key approaches will be decentralisation, transparency and accountability. Our plans for decentralisation are based on a simple human insight – if you give people more responsibility, they behave more responsibly."

The Tory vision was a situation where Britons once again felt in control of their lives, but it would not happen in one parliamentary term, or even two," Cameron said. "Culture change is much harder than state control. It will take more than a generation. But it is because I believe the appetite for change is there that I know that change will come."

He concluded: "The era of big government has run its course. Poverty and inequality have got worse, despite Labour's massive expansion of the state. We need new answers now, and they will only come from a bigger society, not bigger government."