The single most important domestic policy decision that the Conservatives must take is what to do about public spending. After the snap election went so wrong last year, many Tories rushed to blame ‘austerity’. Gavin Barwell, now Theresa May’s chief of staff, said this was one of the principal reasons he had lost his Croydon Central seat. Even the Chancellor, Philip Hammond, admitted that the public was weary of the long slog to balance the books.
This belief — that the public has had enough of austerity — explains why the Tories aren’t behaving as governments traditionally do. Normally, they make tough fiscal choices in the early years of a parliament in the hope of being able to increase spending or cut taxes, preferably both, as election day approaches. Instead, the Conservatives are already loosening the purse strings. On Tuesday, in his low-key spring statement, Philip Hammond said that if the economy continued to outperform expectations, then there would be even more money available for public services.
But better-than-expected growth alone won’t provide the level of extra revenue most Tories believe is now needed for public services, and the NHS in particular. There is now a strikingly broad consensus in the party that the health service needs substantially more cash. Even Jacob Rees-Mogg, the driest of those tipped for the Tory leadership, is campaigning for that.
There are three reasons for this consensus. First, the Vote Leave pledge to spend the £350 million a week the UK ‘sends to Brussels’ on ‘our priorities such as the NHS’ has turned Tory Brexiteers into advocates for increased health spending. They want the extra money to show that the promises made during the referendum campaign are being honoured — and because that campaign taught them just how potent this offer was.
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