Greg Clark MP is developing Conservative Party policy on social justice, and he has given us on his blog a flavour of the work in progress. He draws on two metaphors, the "linen shirt" of Adam Smith, and the "camel caravan" of the columnist Polly Toynbee. Toynbee's metaphor is of our nation as a camel caravan crossing the desert: "everyone may be moving forward, but if the distance between those right at the back and rest of the convoy keeps growing there comes a point at which it breaks up". This idea has attracted a great deal of interest, not least because Toynbee writes for The Guardian, and Conservatives usually find her ideas too left-wing for their liking. She favours greater redistribution of wealth from the rich to the poor.
Redistribution of wealth is, on the face of it, a good idea; but its biggest drawback is that it creates a poverty trap for those who benefit. For every extra pound they earn, the State takes away nearly a pound by reducing their benefits - yet Toynbee wants even more redistribution than we have now. Making our camel train into a tighter pack is an appealing image, but unfortunately it does not make it any easier for those at the back to move closer to the front. To put it another way, consider Adam Smith's linen shirt, "the want of which would be supposed to denote that disgraceful degree of poverty which, it is presumed, nobody can fall into without extreme bad conduct." The "linen shirt problem" is one that wealth redistribution can never solve: if those with extreme bad conduct can afford a linen shirt, then the talisman of good conduct will become a bowler hat. One's relative wealth may have improved, but not one's relative position in the camel train. Poverty is indeed relative, as well as absolute; but relative poverty is a matter of ranking as well as of wealth.
Relative poverty is not always bad enough to be a matter of public concern. Many families on benefits have as prosperous a lifestyle as an average family did 30 years ago. It helps if they earn a little undeclared income on the side (many do). A house, a car, family holidays, and occasional luxuries are possible - particularly if the house is provided by the State with most of its rent paid. Most of the early adopters of expensive consumer goods (satellite TV, Playstations) do not live at the smarter end of town.
In stark contrast, how is it possible for a young working couple to buy their own home, and start a family, if they do not wish to make themselves dependent on the State? Both partners must work, simply to pay the mortgage. If there is not enough money left over to pay for child care, then children are simply unaffordable. It is frankly much easier to start a family if one is housed and paid benefits by the State. We cannot improve upon this deplorable situation by redistributing even more wealth to low-income families. We tend to remember the dark side of Margaret Thatcher's social policy; we have all but forgotten one of her most positive ideas, the "property-owning democracy".
When politicians talk about helping the poor, they tend to focus either on wealth redistribution, if they are socialists, or on wealth creation, if they are conservatives. There is a third way to help the poor: to reduce their outgoings. There are two easy ways to do this. First, we should replace the council tax - a regressive tax that greatly burdens those on low incomes. Second, we should reduce the cost of housing, using the law of supply and demand, by building a very large number of new homes - we might need as many as five million. We should build an additional 500,000 homes each year, and stop only when the price of an average home has fallen back to its historic value - three times the average annual salary (of one wage earner, not two). A Conservative government must face down the Nimbies who oppose all new development; if necessary, they must grant planning permission for construction on surplus agricultural land, create whole new towns, and incentivise builders to build now, rather than to wait for possible higher returns in the future.
Unfortunately, Conservative Party strategists take a different view: they seem to think that their best chance of winning power is for their leader to avoid controversy, keep smiling, and get his picture taken with African children and polar bears (not necessarily at the same time), while waiting for New Labour to drown in its own incompetence and sleaze. This is indeed a recipe for winning office, and the Conservatives will surely do so at the next election or the one after that. But what is the point of a bland smiling leader winning office, and then either implementing an undeclared manifesto, or continuing the New Labour project under a different name? It would not be good for Britain, nor would it earn the Conservatives a second term in office.
I am not confident that the Conservatives will offer us any better than this. They want to reject the "Nasty Party" image, but they seem to imagine a false dichotomy between the nasty aspects of Thatcherism and New Labour's tax'n'spend, and they choose (or pretend to choose) some variant of the latter. The way for the Conservatives to change their image is neither to become like New Labour, nor to distance their leader from the party, nor even to adopt vacuous initiatives such as "hug a hoodie": it is to rediscover the aspects of Thatcherism that were genuinely liberating. Michael Howard had a glimmer - in the last General Election campaign, he pointed out the absurdity that someone working 20 hours a week at the minimum wage must pay income tax. Today's Conservative leaders simply don't "get it". It does not concern them that, at a time of unparalleled prosperity, more and more people are dependent on the State. Nor do they feel the hardship of people on average incomes who try to pay their own way. They want power for its own sake. They don't deserve it.