Property Owning Democracy

Aaron Bastani

The phrase ‘property owning democracy’, on which the popular conservatism of the 20th century rested, and with it a vision of the good society, was coined by the Scottish Unionist Noel Skelton in a quartet of articles for the Spectator entitled ‘Constructive Conservatism’, written in the spring of 1923. The previous November’s general election had seen more candidates from the Labour party elected to House of Commons than Asquith’s Liberals and Lloyd George’s National Liberals combined. For Skelton, the Fourth Reform Act of 1918, which massively extended the vote, and that electoral turnover – which was to prove terminal for the Liberals – meant that politics, and the Tories, could not proceed as before. It was only a matter of time before the forces of democratic socialism might challenge for a majority in the House of Commons.

To stave off the threat, Skelton hoped that the Tories might come to accommodate progressive attitudes on such issues as housing and pensions, and in so doing steal much of Labour’s thunder. 'Reform so that you may preserve,' as Macaulay had put it. No surprise then that Anthony Eden repeated Skelton’s words at the 1946 Conservative Party conference, in the shadow of the unexpected defeat of Churchill’s government the previous year. What had been an intellectual exercise two decades previously was now imperative in ensuring the return to power of the Conservative party.

Addressing a meeting of Saga customers last week – whose average age will have been about the same as the average member of the Conservative party (68) - David Cameron spoke of how he would like to increase the inheritance tax threshold to £1 million. Given that the deficit for 2014 remains around the £100 billion mark, with tax receipts much lower than expected too, any promises of tax cuts are hard to believe. Major spending cuts and tax increases will be required to eliminate the deficit after 2015 and, even then, an economythat has run only five budget surpluses in the last 23 years doesn’t seem structurally capable of it.

The Conservative Party failed to win a majority in 2010 despite facing – and outspending – a party that had been in office for 13 years, with a hopeless leader. In fact, the 2010 general election saw the Tories gain 3.5 million fewer votes than in John Major's defeat of Neil Kinnock in 1992. The party membership is shrinking and their extinction in Scotland is gradually being repeated in the English north and most major cities.

In the long term the Conservatives have no answer for this. In the short term, however – and by that I mean next year’s general election – they know it is crucial to shore up their ‘core vote’. That means the ‘saga generation’, on whom the party has become increasingly reliant in the last two decades, but it will also require at least some of their children.

Despite a dreadful overall performance, the Labour Party did better among 18-24 year olds than both the Conservatives and, surprisingly, the Liberal Democrats. That this cohort didn’t particularly favour the Tories in 2010, and has seen its pay decline more than anyone else since the beginning of the Great Recession in 2008, is no coincidence. Even for the more affluent members of this age group, the Conservatives have little to offer except an eroding welfare state; unaffordable housing, to rent or buy; underemployment; stagnating pay and a mass of (soon to be privatised) student debt. No answers on any of these issues seem forthcoming.

The electoral tranquilliser that might be presented by the Conservatives to the more affluent young, then, is this: you might not be able to earn or save much, but at least your parents can die in the knowledge you will withdraw equity from their home - now yours - to pay for your own children’s tuition fees, and, probably, private health care without the intervention of the taxman. Its a morbid vision but given nothing else is on offer – from any party – it might not prove entirely unattractive to its intended audience.

If inheritance tax is to be an issue at the next general election – the Institute for Fiscal Studies has said it should be scrapped altogether – what would constitute a progressive response? Surely for ‘meritocrats’ – a disposition allegedly shared by the majority of all of the main parties – a much higher rate of inheritance tax, without a threshold, would be more, well, meritocratic. If the major parties are averse to concentrations of power, economic, cultural and political – and it is precisely such concentrations that thinkers as diverse as Machiavelli and Nick Clegg have identified as being most injurious to individual liberty and the public good – then why not subject inheritance to much higher taxation? You might even be able to leave incomes alone.

Except that ‘meritocracy’ – conceived as a satirical idea by Michael Young – is no more than an ideological carapace for a craven politics of the powerful. The Tories, Labour too, need new Skeltons. If not, the demise that afflicted Lloyd George’s Liberals might, in time, come to beset them as well.