Lord Frost of Allenton has published an essay on Policy Exchange which amounts to a personal manifesto. It is a what-needs-to-be-done kind of paper and whatever that is, according to him, must be “turbulent and disruptive” because it is “necessary”.
This sort of essay would normally be dismissed as nothing more than an ego trip from a failed politician but in some quarters it’s being claimed the former Brexit negotiator could soon be foreign secretary or even chancellor of the exchequer in a Truss cabinet (Liz Truss is his preferred candidate). The latter position seems likely to prove constitutionally difficult for a peer but others think he might wind up as her chief of staff. Either way, in a few weeks he could once again be at the centre of government, so what he says is important.
Frost thinks of himself as the Tories’ intellectual backbone, which tells us a lot about the current state of the party.
For many people the last six years has provided enough turbulence and disruption to last a lifetime, but it’s clear that for Frost, far from being ‘done’, Brexit is merely a pre-cursor to the main event.
The 26-page effort is grandly titled, Holy Illusions: Reality-based politics and sustaining the Brexit Revolt. Needless to say there is very little reality in it and the illusions are all in his own mind. It is mostly sophistry and waffle.
He acknowledges help from economists and commentators who reviewed the text in draft but want to remain anonymous. Reading the essay, you can understand why.
Britain finds itself in 1979 once again
The British Right have a habit of harking back to 1939 but Frost doesn’t quite go that far. He compares the task ahead with that facing the incoming Thatcher government in 1979.
“Just as in the 1970s,” Frost says, “the country faces many interconnected, serious but superficially very different problems. As on the instrument panel of a malfunctioning airliner, Ministers face a bank of flashing red lights, with no clear guidance for which should be tackled first and why, and little time to decide while the situation deteriorates further”.
This is to comprehensively disown the last 12 years of Conservative government and as Robert Shrimsley in the FT points out, is simply the latest example in the “ever shortening cycle of disavowal which characterises Tory politics”. David Cameron, Theresa May and Boris Johnson weren’t Conservative enough. What is needed is a second Thatcherite revolution, this time under Liz Truss. Make no mistake, Frost is administering the last rites to any idea of One Nation Conservatism.
The egocentric peer describes the pre-1979 Conservative opposition as, “not a group of inherently wise strategic thinkers” who “found it difficult to focus on the long run and the important under the pressures of managing day-to-day politics”. This is from a man who sat in cabinet with the likes of Johnson, Nadine Dorries, Dominic Raab, Jacob Rees-Mogg and Priti Patel.
Margaret Thatcher’s initial cabinet included Lord Carrington, Sir Geoffrey Howe, John Biffen, Francis Pym, Peter Walker, Jim Prior, Michael Heseltine and others. Whatever you thought of their policies they were at the very least serious men (and apart from Thatcher, they were all men) not remotely comparable to the third-rate nonentities and intellectual minnows we have at present.
Frost refers to “Stepping Stones”, a report prepared in 1977 for Thatcher by her favourite think tank, the Centre for Policy Studies (CPS). Much of that paper was about driving a wedge between Labour and the trade unions, persuading the electorate to reject socialism, breaking organised labour and developing a successful ‘communications strategy’ for the coming election, which Thatcher was to win two years later.
However, the document also created an “important intellectual underpinning” of the early years of the her government with the purpose, Frost says, of forcing decision-makers to contemplate measures that were other than the ones thought politically possible or administratively convenient, “and then to try to create the political conditions in which those measures were possible” [his emphasis].
It’s obvious that Frost sees Brexit (a “revolt against the system”) as simply having created the political conditions to try things which would have been politically or even legally impossible before. Buckle up at the back. Forget austerity and Brexit, you ain’t seen nuthin’ yet.
The most urgent task for the next prime minister, he says, is to is to establish a strategy to take advantage of the “tumultuous developments of recent years”, something he accuses Johnson of failing to do.
A re-run of 1979
Frost may be right in comparing today’s problems with those facing Thatcher in 1979, but he draws the wrong conclusions. The Stepping Stones report contains a lot of startling similarities with today. Whatever else you can say about the 18 years of Thatcherism, some things haven’t changed at all.
A hand-drawn diagram on page 65 explained that our economic problems at the time were:
- Balance of payments [or trade deficit]
- A declining share of world trade
- Declining profits as a percentage of GDP
The causes were (this is 45 years ago remember):
- Poor product design and quality
- Short term low risk corporate plans
- Capacity shortages in world trade booms
- Low productivity = high unit costs, low added value
- Recurring labour shortages
- Old plant and equipment
- Poor management
- Over manning, disputes, demarcation, excessive wage awards
It’s worth recording here that in the first quarter of 2022 we had the worst balance of payments (trade deficit) since records began in 1955.
The authors at the CPS thought the causes were symptomatic of a “social and political sickness” caused by – among other things – a lack of technical and managerial talent in industry, absence of government-industry partnership, inconsistent economic and industrial policies and a housing shortage. Sound familiar?
Their solution, or one of them, under ‘turnaround’ policies on page 11 was (I’m not kidding) to “de-regulate the private sector”. This was years before the single market and was to: “Scrap price, profit and dividend controls. Ease planning regulations and controls on building factories, etc. Remove deterrent legislation on employment protection. Experiment with ‘free enterprise territories’ for e.g. urban renewal.”
Frost’s solution is to try the same medicine again, only in stronger doses. Thatcher had a lot of industry and public infrastructure to privatise (much of which now looks like a serious mistake) and a lot of restrictive practices to get rid of. But what is Truss going to do?
It is as if Johnson, writing in March 2016 that leaving the EU “would be diverting energy from the real problems of this country – low skills, low social mobility, low investment etc – that have nothing to do with Europe” was right.
Germany and the single market
At one point in Stepping Stones (page 14) an attempt is made to define what an ‘economic recovery’ means and we get this extraordinary suggestion:
“For example, we might say that, of course we would like to be as rich as West Germany, our minimal goal in reality it [sic] to have halted the relative decline in our economy by the time our per capita GNP has shrunk to, say, one third of theirs” [emphasis in the original[.CPS report ‘Stepping Stones’ 1977
In 1977, the UK’s nominal GDP per capita was about 60% that of that of West Germany and falling. By 2019 it had increased to 92% that of Germany’s (IMF figures).
We can argue about the extent to which EU membership contributed to Britain’s improved position (or Germany’s decline) but the fact is that Thatcher’s solution was to champion the EU single market and to encourage global businesses like Nissan to invest here.
Frost’s answer is to eschew it.
The size of the state
One of the recurring central themes of the Frost doctrine is to “reduce the size of the state at least to the size of the Tony Blair years”. After 12 years of painful cuts to public expenditure, to the point where Michael Gove can suggest government is “simply not functioning” when it comes to providing the public with basic services, we have apparently ended up with a state sector larger than the Blair years.
I am not sure how Frost reaches this conclusion and I’m not convinced it’s true, except perhaps in the narrow sense as a percentage of GDP. In which case it is more of an indication of how GDP has not increased at the same rate as public spending.
He proposes three ‘pillars’ plus some short and long-term measures, both of which involve the familiar calls for tax cuts and bonfires of regulations. Yawn.
The first pillar is to begin “reversing the economic trends of recent years” while the second involves starting to “rebuild an effective state, capable of delivering results”. It’s not clear how all this squares with a smaller state. Frost’s third pillar is “to make a determined effort to re-establish the viability, the attractiveness, and the cohesion of the United Kingdom as a country and to bed in the view irreversibly that leaving the EU was the necessary precursor to achieving this” [our emphasis].
His short-term measures include “protecting the existing terms of Brexit” – whatever that means, and resolving the NI protocol issue “so as to put Northern Ireland firmly, durably and fully within the UK”. Lord Frost, wisely perhaps, fails to mention his role in negotiating the protocol in the first place.
He wants to see a sunset clause on EU legislation (without specifying which ones are to be scrapped), fracking restarted, the plan to deport migrants to Rwanda delivered, a new bill of rights, and a push back “against the pernicious politics of identity politics and group rights”.
In the long term, Frost’s goals include a strategy based on “reviving the country, rebuilding state capacity, allowing markets to work, and restoring individual liberty. It will need to include enterprise-boosting, trust-busting reforms to tackle vested interests, even where those interests are Conservative Party supporters”.
He believes we need more “rigorous and forceful targets for spending reduction” and “modernising” of the NHS. He also wants a “refreshed energy strategy that reverses the decline in energy production and supply” and a new benefits systems together with a reformed civil service and fundamental changes in Whitehall. The Equalities Act should be abolished, he says.
On climate change he is a denier and suggests the “current evidence does not support the assertion that we are in a climate ’emergency’”.
“What needs to be done will be turbulent and disruptive. But it is necessary,” says Lord Frost.
You have been warned.