Theresa May Sets A New Policy Direction

Theresa May’s determination to set a new policy direction is becoming clearer, as the new prime minister begins ditching key parts of David Cameron and George Osborne’s agenda.In her first four weeks in office, the prime minister has taken a more confrontational stance on Chinese investment and high executive pay, while re-embracing industrial policy.“It’s a big surprise,” said one Conservative MP. “She pitched herself as a continuity candidate in the leadership election.” Some MPs have questioned whether Mrs May has the mandate to reshape policy radically, having not fought a general election.Aides suggest that Mrs May will largely stick to promises included in last year’s Conservative manifesto but that other policies are up for grabs.The 2015 Conservative manifesto committed the government to keeping Britain in the European single market, increasing NHS funding every year, and spending 0.7 per cent of gross national income on international development, among other policies.Mrs May was not closely involved in drawing up the document, which owed much to Jo Johnson, then head of Mr Cameron’s policy unit and now the universities and science minister.Her government has already backed away from two manifesto commitments — the promise of a fiscal surplus by 2020, and the “ambition” of reducing net migration below 100,000 a year. Instead, the chancellor Philip Hammond is preparing to “reset fiscal policy” in the Autumn Statement, and the home secretary Amber Rudd has spoken of reducing immigration to “sustainable levels”.Both of those changes are largely driven by circumstance: before he was sacked as chancellor last month, Mr Osborne himself had spoken of delaying the surplus target in response to Britain’s decision to leave the EU.Mr Cameron had hoped his legacy would be an emphasis on “life chances”, improving the education and justice systems that he argued were affecting some of the poorest in society.Mrs May has promised to further that agenda, saying she will also lead “a one-nation government”. Her joint chief of staff and key policy adviser, Nick Timothy, is a supporter of Mr Cameron’s target for 500 new free schools by 2020.Her attack on high pay is also arguably an extension of one of Mr Cameron’s policies — his government passed legislation giving shareholders a binding vote on directors’ pay. Mrs May has said she will go further by mandating an employee representative on boards.Mrs May’s government has revived the prospects of some rightwing politicians such as Liam Fox, and some favoured ideas such as grammar schools. But her focus on high pay and life chances may allow her to retain Mr Cameron’s electoral legacy.“What’s still there is the positioning of the party towards the centre, at least rhetorically,” said Tim Bale, a politics professor. “It strikes me that she’s going to retain that.”David Cameron made Britain the first G7 country to spend 0.7 per cent of its national income on international development — a commitment that even new Canadian prime minister Justin Trudeau has declined to match for the moment.The appointment of Priti Patel as international development secretary suggests that Mrs May is preparing to take a more critical approach. Ms Patel has previously called for the Department for International Development to be scrapped and has said that aid should be used to “leverage” forthcoming trade deals.That contrasts with the Cameron government’s emphasis on directing aid to fragile states that may be at risk of war or security threats. Significant reforms to overseas aid would “break the cross-party consensus that has emerged over the last 10 years”, said Stephen Doughty, a Labour MP.Ms Patel’s special adviser, Robert Oxley, has also been a critic of government policy on aid. In a previous role at the TaxPayers’ Alliance lobby group, he called the 0.7 per cent target an “arbitrary” figure that means “there is little incentive for officials to deliver value for taxpayers’ money”.Downing Street has said the target, a manifesto commitment, will be maintained. Nonetheless, recent economic downgrades mean that, in absolute terms, spending can be lower than previously forecast while remaining 0.7 per cent of national income.In addition, the government could move more of the spending away from DfID to other departments, such as the Ministry of Defence, where it is “is not necessarily subject to the same rigour or standards”, said Mr Doughty.Reducing overseas aid would be popular with many Conservative supporters: an online petition by the Mail on Sunday calling for aid to given “only for truly deserving causes, on a case-by-case basis” gathered 235,000 signatures this year.Credit: Financial Times