Jesse Norman: Labour's claim to fairness is flawed

Gordon Brown wants "fairness" to be the battleground of the next general election. This at least is clear from a fin-de-siècle-style Labour conference last week which saw MPs and delegates swinging hourly from euphoria to despair to plotting and back again. In his speech, the Prime Minister tried valiantly to turn the current financial crisis to political advantage. Only Labour, he suggested, genuinely wanted and could, in fact, deliver a fairer Britain. Only Labour really believed in transparency, responsibility, integrity. Only Labour was on the side of pensioners... the poor... children... hard-working families... the people.

The truth is that Labour's credentials on fairness are far worse than they would like us to believe. The UK now has the greatest gap in life expectancy between rich and poor of any developed country. According to the Institute for Fiscal Studies, there are 900,000 more people living in severe poverty now than in 1997. And there are 2.5 million pensioners living in poverty now; 100,000 more than in 1997. These groups include some of the most vulnerable people in Britain. So much for Gordon being on their side.

This is fairness as redistribution. What about fairness between generations? Well, Gordon has spent £1.2 trillion over and above the 1997 level in the decade since then. After a 15-year boom we should have a budget surplus. But in fact we have a 3 per cent budget deficit: the highest in the industrial world after Pakistan, Egypt and Hungary. And that does not even include the £100bn of PFI debt which Mr Brown has hidden off the national balance sheet. But today's debt is tomorrow's taxes – not an enticing prospect for young people now who increasingly believe, rightly, that Mr Brown has picked their pockets.

Of course, we do not need to be bound simply by the Prime Minister's narrow and idiosyncratic ideas of fairness. We can ask, where is the fairness to taxpayers of losing £2.7bn a year in benefit fraud and error? Where is the fairness to rural communities of closing thriving local Post Offices? Where is the fairness to soldiers who have to endure "disgraceful" housing? Enough. The real argument on fairness between Labour and the Conservatives is not so much about ends as about means. And the ugly fact of the matter for Mr Brown is that the state, far from always enabling progressive social goals, has often undermined them.

The UK now has an incredibly complex benefits system; a savings system that often deters saving; police forces that face upwards to their political masters; schools that have more new buildings but less freedom to teach; a criminal justice system that offers less support to victims; and an NHS that is struggling to raise its performance in the knowledge that weakening productivity means fewer operations, more sickness and earlier death. Meanwhile, 3.8 million more have been brought into the tax system, 2.7 million of them among the less well-off, and the poorest fifth of the population pays a higher percentage of its income in tax than the richest. What is progressive about all this?

If we are to have better public services and a better society, we need to rethink the shape and purpose of the state itself. And, however sincere Mr Brown may believe himself to be, this can never take place while he is Prime Minister. As Einstein remarked, we cannot solve problems with the same kind of thinking we used to create them.

Since 2005, the Conservatives have been deeply engaged in this process of rethinking, and have placed the ideas of fraternity and social responsibility at the heart of British politics. This has required the creation of a new political viewpoint. We now need to do the same for economics.

In Compassionate Economics, I suggest that this rethinking must start with our conventional economic models. These textbook ideas have exercised a long monopoly in the minds of our politicians, none more than Gordon Brown. And by feeding back into society, they have pushed us towards a default picture of human beings as merely economic agents. Within government the result is poor policy, over-centralisation and micro-management.

These ideas have created huge suspicion at globalisation, anger at the spread of clone towns, anxiety about loss of national identity, and public concern at the spread of consumerism. It seems as though we are in the midst of a culturally unsustainable corporate capitalism, yet one to which there is no alternative. But we need something bigger – we need a new political economy. Fifteen years after Francis Fukuyama announced in The End of History and the Last Man that capitalism had won, we still lack a principled intellectual basis for defining what kind of capitalism we want. That, Mr Brown, is what we need: not cheap shots from a forgotten class war.

Jesse Norman is the Conservative parliamentary candidate for Hereford and South Herefordshire ( jessenorman.com). 'Compassionate Economics' is pub-lished by Policy Exchange next month