Overrated: Michael Heseltine

The author of the Prime Minister’s growth report is an illiberal corporatist

Overrated UK Politics
©ELLIE FOREMAN-PECK 

Michael Heseltine has always had a high opinion of himself. To judge from commentary on his recent report, No Stone Unturned: in Pursuit of Growth, that opinion is now widely shared. The political leaders, with their own spin naturally, welcomed it; the press, with qualifications, praised it; business groups apparently liked it too. Lord Heseltine should be pleased. It is always flattering for ageing grandees to be accorded relevance and reverence. Lord Heseltine frequently alludes to his 45 years in politics. During this period he has been remarkably consistent. Consistently wrong.

Heseltine likes to remind us that he is a successful businessman. But that is not how he made his name. He came to prominence as a protégé of Edward Heath. No Stone Unturned demonstrates that fact on every page. It might almost have been drafted by Ted himself. Its prescriptions are straight out of the Seventies, and its analysis entirely ignores the Eighties. This, of course, is understandable, if you understand Heseltine.

Heseltine lost the industry brief when Margaret Thatcher became Conservative leader because, as she explains in her memoirs, she felt “his interventionist instincts were out of place”. He took them with him to the environment department. Here his main achievement in office was to promote cut-price council house sales to sitting tenants. But it was Liverpool that really fascinated him. He is still convinced that he revived the place. Yet what truly happened is that old industries died, trade union power was broken, local militants lost out and—with a bit of encouragement from Heseltine—business moved in. This is how capitalism works.

The circumstances of his flouncing out of government in 1986 are equally instructive. The Westland helicopter crisis has many angles, but at stake was whether a private company was to decide its own future or whether government was to impose its preference. Heseltine, naturally, wanted to impose. He was a proponent of a European link-up, and Europe has remained an obsession. Only last  April, Heseltine was predicting that the euro would survive and that Britain would join it.

The Heseltine report contains a few unexceptionable observations. It is obviously true that industry needs a consistent energy policy. It is equally clear that government should stop dithering about airport capacity. But it is the underlying philosophy of a report like this that counts, and the philosophy here is muddled, backward and illiberal.

It assumes that government can create economic growth, that it can only do so if it has a “strategy”, and that this is, in practice, how successful nations behave. There is to be a National Growth Council chaired by the Prime Minister. Government money is to be centrally allocated to regions to “build economic growth”. Industry councils will be instituted. Chambers of commerce will be built up to add a touch of Germanic order.

The corporatist model is everywhere recognisable—regimentation, integration, coordination, committees, chains of command, and, above all, the exercise of Will. The tone is authoritarian, no messing with quirks or differences or alternatives. It is also belligerent: “We need to engage the war psychology,” he says. For Lord Heseltine, international commerce has a mercantilist flavour. Government must readily step in to stop foreign takeovers: “In today’s world it is difficult to see who else, other than national government, is capable of looking out for the longer-term interests of UK plc.”

Lord Heseltine is, nowadays at least, a throwback. This is not necessarily a criticism. If the Conservative party since the Second World War, when collectivism swept the field, had not contained a few irrepressible throwbacks to the thinking of Adam Smith and David Ricardo, the party and perhaps the country would have been lost. But Heseltine is a different sort of throwback. He has retained an undimmed confidence in a collectivist approach to economic policy that comprehensively failed.

In the 1980s, during much of which Heseltine was a senior if sometimes semi-detached Cabinet minister, thinking about the proper role of government in the economy changed. It was restricted to setting a framework. Government held the ring. It was not a player. Decisions on prices, wages, jobs, incomes, profits and investment were made through markets, not committees. Despite difficulties, and the occasional political upheaval from such as Heseltine, this strategy revived Britain’s economy and revolutionised its prospects.

The question remains: why did David Cameron and George Osborne commission the report? One can see why the modernisers like the idea of promoting the man who brought down Margaret Thatcher. But were they wise to do so now? The Heseltine proposals will not—most cannot—be implemented, which will annoy him. Embarassingly, they fit far more easily into the Labour party’s analysis. But there is another risk. By commissioning such a report the Prime Minister and the Chancellor suggest that they either reject or simply do not understand the economics of the free market. They may yet regret that-even if Heseltine does not.