Lansons Conversations

Our reflections from the Conservative Party Conference 2016

This year’s Conservative Party Conference was strikingly upbeat. It was also, in marked contrast to Labour, packed, with the secure zone itself notably larger than in previous years, and most fringes over-subscribed. The elevated mood was perhaps not surprising given that the party, unlike Labour, has emerged from the fall out of the EU Referendum relatively unscathed and, crucially, united following a bloodless leadership campaign.

However, the elation of the activists was balanced by a feeling of caution – even some despair – amongst the business contingent, with many deeply concerned about the direction of travel on Brexit, and looking to the Prime Minister to bring much needed clarity. Arguably the Prime Minister’s opening announcement – that she would trigger Article 50 no later than the end of March 2017 – heightened business concern, with many expressing real worry at the failure to announce any push for transitional measures before Article 50 is triggered, and the apparent prioritising of immigration controls above all other considerations.

The reality is perhaps more nuanced. At a fringe event Brexit Secretary David Davis, declared that he wants to see all the facts before he makes a decision on the UK’s negotiating positioning, whilst the declarations of ‘red lines’ over immigration were seen by some as instruments to retain the support of the arch Brexiteers that now fill significant seats around the Cabinet table. Instead, Theresa May and Chancellor Philip Hammond used their conference speeches to promote the role of the State in creating prosperity. To mitigate against the perceived risks of a possible ‘hard’ Brexit, the Conservatives announced a new industrial strategy that will play a greater role in supporting markets where they are underperforming and step in where they become dysfunctional. This new approach, coupled with the Chancellor’s announcement that he will remove the 2020 target to reduce the budget deficit, is part of a strategy to position the Tories as custodians of the centre ground of British politics, and re-enfranchise despondent Remainers who had been so dejected by the country’s decision to leave the EU.

This contributed to the sense of a serious pivot away from the liberal economic approach of Cameron and Osborne, with various fringes also looking at the need to ‘reign in’ capitalism and engender a wider sense of business responsibility – and the ways this could be done. In that regard, the Conservatives are clearly making a push towards disenfranchised Labour voters who might have approved of elements of the business strategy of Ed Miliband – and now see no home for their views with Labour under Jeremy Corbyn. The conference was therefore an opportunity to showcase that the centre of gravity of the Conservative Party, and perhaps the country, has fundamentally shifted.

Whilst May senses an opportunity to appeal to the moderate, centrist voter, in the wake of Labour’s internal strife, there was a clear desire to be seen as true to the principles on which the Leave argument was won. Indeed, in a somewhat remarkable reversal, it is now perhaps the pro-EU, moderate, Tory MPs that are now seen as the rebels, with Leaver Peter Bone MP declaring “I’m mainstream now.”