The second in a three-part series explains why social mobility and regional devolution are key to making a success of the new technology revolution.
This was first published on ConservativeHome on Wednesday 5 June the original article can be found here.
Stanley Baldwin said the Conservative Party stood for “real England” – a Party defined by voluntary organisations and Christian patriotism, little platoons and big national causes.
His Conservative Party of the 1920s faced an upstart opposition in a Labour Party that had usurped the Liberals to become the second party of British politics. Outlining the growing threat from Labour, Baldwin described them as being for a nation of class divisions and over-mighty trade unions.
Under Jeremy Corbyn, Labour has come full circle and is once again challenging the success and legitimacy of our free-market economy.
A century on from Baldwin, and despite being the natural party of Government, our Party has often struggled to break out from its vote base of shire counties and market towns. It’s over 30 years since we won a majority of over 21 at a general election.
But there are signs of change. Our electoral success in recent years has been driven by securing more votes in Labour’s industrial heartlands. Dudley, Mansfield, Copeland and Teesside have all elected Conservatives in recent years, whilst the West Midlands and Tees Valley have elected Conservative Mayors on a region-wide basis.
This Conservative momentum in areas once dominated by trade unions and the Old Left shows that our message of hope, personal freedom and low taxation can re-define our path to a majority.
Yet our progress in these Labour heartlands is not concrete and shouldn’t be taken for granted. A pro-Leave electorate that has trusted another party for so long will be looking to the Conservatives to not only deliver Brexit, but ensure they are not left behind by the next big technological revolution either. As I said in yesterday’s article [INSERT LINK], this commitment must be a central tenant of Conservatism 4.0 – Conservative ideology for the Fourth Industrial Revolution.
The last time our country went through a technological revolution we had a strong leader with a firm ideology. The computing revolution of the 1980s powered Britain to economic success – and political success for Thatcherism. Through deregulation and an unwavering belief in the free market, the City of London prospered from the Big Bang and our economy was transformed into a services-based powerhouse. From the stuttering, strike-crippled, state-dominated closed market that Thatcher inherited, the foundations were laid for rapid economic growth and the business-friendly, pro-innovation environment we enjoy today.
Our next Leader will also find themselves at an inflection point. They will have to harness the Fourth Industrial Revolution (4IR) as artificial intelligence, big data and automation change our economy and society beyond recognition – and ensure that every community and region benefits from the wealth that it creates. Whilst Margaret Thatcher’s transformation of Britain’s economy for the better is undeniable, there are mining and industrial communities who felt they were left behind as other parts of the country raced ahead. To win a majority at future elections, today’s Conservatives need to attract working class and northern votes, so we cannot allow the positive impact of the 4IR to be absent from any region or for its benefits to be inaccessible to any social group.
The 4IR will radically change how we work, regardless of sector or industry. Instead of dockers and miners being at risk of automation, in the near future it will be call centre operators, lorry drivers and factory workers. With a path to electoral victory that increasingly runs through industrial towns, every factory closure or job lost to robots without alternatives emerging, will make a majority harder to achieve for our next Leader.
That’s the reason why, whilst we still have an opportunity to shape the 4IR, our policies must be focussed on creating an Opportunity Society centred around social mobility powered by lifelong learning, high-quality education and skills training for everyone at every stage of their lives. Our Opportunity Society must be more than just a short-term policy objective. It has to be an integral part of the future of capitalism and a key part of Conservatism 4.0.
As robots slowly replace human workers, many on the radical-left are arguing for a Universal Basic Income (UBI), a minimum wage paid by the Government to every citizen regardless of their productive capacity. Every single country that has trialled UBI – from Kenya to Finland – has found it expensive and ineffective. Research by the International Labour Office has estimated that average costs would be equivalent to 20-30% of GDP in most countries. In Britain, this would be more than double the annual budget of the NHS, yet Shadow Chancellor John McDonell says a Corbyn-led Labour Govnement would trial it. These are just two reasons why we Conservatives should reject UBI as the solution to growing automation in the 4IR.
The truth is work has always paid, and work for humans will always exist. Work drives our economy, multiplies and makes the world richer. It takes people out of poverty and gives them purpose, and this will continue to be the case in the 4IR. In fact, many more new jobs are likely to be created than are lost to robots because the technology of the 4IR will drive economic growth, which in turn will create new and more interesting jobs, especially in new tech sectors such as advanced manufacturing, 3D printing, precision medicines and AI-powered creative industries.
Not enough is made of our job creation miracle since 2010 which has seen our economy put on 3 million new jobs. As we enjoy the lowest unemployment rates since the 1970s, we need to re-emphasise the value of work and the benefits to be derived from a good job. A UBI would be defeatist, signifying that humans had ceased to be useful in a world of machines, and be the antithesis of social mobility – there would be no need to work hard to move upwards on the income and living standards scale if we are all paid to stay at the same level. A UBI would also stall our economy through either crippling debt on the public purse or new taxes imposed on innovation. Similarly, Jeremy Corbyn’s proposed Robot Tax would simply mean a left behind country – a nation that fails to attract foreign investment and which becomes known for its anti-innovation approach to technology.
Instead, true devolution must be at the heart of delivering an Opportunity Society and making sure no community or individual is left behind. Our next Prime Minister must invest in the Northern Powerhouse and Midlands Engine so regional economic growth is put in the hands of regional leaders. The benefits of the 4IR, from new start-ups to overseas investment, must be enjoyed beyond the “Golden Triangle” of London, Oxford and Cambridge. As Juergen Maier who led the Government’s Made Smarter Review, argued, it’s about creating an “innovation climate” in regions such as the North. We cannot expect the heavy industries of the past to return, but instead our focus should be on ensuring the new technologies of the future are exploited in every area of the country to create new jobs and rising skills levels in every community. The Liverpool City Region understand this, and have already taken the initiative. They have launched LCR 4.0, an ambitious plan to support manufacturing and advanced engineering organisations in the region by funding practical support to transform businesses through digital innovation. By helping traditional manufacturers upgrade their technology, they enable firms to stay in business and keep their workers employed by becoming more productive. Conservatism 4.0 should support more initiatives like this.
Moving towards a system of local business rates retention will also encourage further investment in skills and business support from local authorities as they reap the rewards of encouraging local growth. There should also be more scope for local taxation and decentralisation as a central tenet of Conservatism 4.0 to empower local areas to evaluate their workforces and set-up true long-term strategies for delivering local economic growth, building on the work of existing Local Enterprise Partnerships and new Local Industrial Strategies.
Conservatism has always evolved and must do so again as we enter a new technological age by putting social mobility and reginal devolution centre stage. They are the two key building blocks to ensuring that every community and region can benefit from technology-driven economic growth. While Thatcherism delivered for the Third Industrial Revolution, we need a new brand of Conservatism to build an Opportunity Society for the Fourth. My final article in this series, published tomorrow, will set out the four principles that should guide us as we re-calibrate Conservatism in the Fourth Industrial Revolution.