Nadhim Zahawi is MP for Stratford on Avon.
Trust matters in every social interaction. Whether people trust one another; whether they see the democratic system as fair; whether they think government can keep them safe; whether they see business as a force for good; or whether they think the social contract is being upheld. All these things determine if a country prospers or falls apart.
Events of recent years have corroded Britain’s social glue. The public see the welfare system as unfair on those who work hard and end up paying for it. Secrecy and lies cost their trust in our intelligence agencies. It’s hamstrung our ability to combat terrorism at home and abroad. Regulators asleep at the wheel led to the financial crisis. It required hundreds of billions of pounds of public money to avert a depression. All the while, the bankers acted as if they’d done nothing wrong and pocketed millions. The expenses scandal destroyed trust in politicians just as the pervasive hacking by newspapers and BBC pay-outs came to light. It all created the impression that the entire establishment was in it for themselves.
This earthquake has coincided with a world that’s become more unstable. People feel confident when it looks like governments are in command of events. Recently, they have been at their mercy. Leaders look powerless to reimpose control. This has been the case with the migrant tragedies in the Mediterranean, Greece’s debt crisis and Islamic State’s conquests in Iraq and Syria. Labour’s dreadful mishandling of the Iraq War and subsequent political cowardice only adds to this lack of confidence in government. It weakens Britain’s ability to protect itself and play a leading role in managing global affairs
That things have come to this is politics’ failing, not the British people’s. When bankers’ greed brought down the financial system, it was not the working people that failed, but a failure of government to lead with foresight. The Conservatives can meet the challenges facing the country with frankness and vigour. We’re the only party with the ambition and confidence to tell the truth, candidly and boldly.
Since coming to power, we have acted to restore the public’s faith. Not with spin or by waiting out the storm, but by working to make institutions worthy of that trust again. The mistakes that led to the banking crisis will not be repeated. Banks are being forced to alter their pay schemes so they can claw back bonuses based on long-term performance. This will curb reckless behaviour. The types of products they can sell are also more closely regulated, to ensure clearer valuations and prevent risks from being hidden by complexity.
These tough new regulations are overseen by the Bank of England, where responsibility for financial stability has been passed. It’s an institution famed for its sense of proportion and responsibility. The Bank will act to deflate bubbles and curb excessive borrowing before they become dangerous and can take sophisticated measures to do this beyond the blunt tool of base rate changes.
The public may never trust the financial sector properly again, but compared to the costs of trusting them blindly, this is acceptable. What is important, however, is that the public believe government when it says that it’s making changes to prevent future abuses and crises that will require bailouts. We can never take our eye off this ball again.
To match its reputation for securing Britain’s future, the Government now has a hard earned reputation for paying its way. We know that it is necessary to take hard choices. Because of this we have already cut the deficit by half and will run a surplus by 2019. We have to make sure that Britain is not desperately vulnerable to external shocks as in 2008. Labour’s Corbyn antics show that they are yet to grasp this reality, let alone take those tough decisions.
Their thirteen years in government didn’t only leave us vulnerable, but stretched Britain’s social contract to breaking point. People stopped believing that if you saved and worked hard, you could get ahead. Labour’s open door immigration policy made people question a welfare system where you could take out without ever putting in. This Government, though, has capped welfare, is renegotiating our relationship with Europe, is introducing a National Living Wage, and has cut taxes for the lowest paid. This ensures that work always pays more than welfare. It is the only way to restore trust.
Beyond the sound management of the economy, David Cameron is making the case for counter-terror and counter-radicalisation measures to keep us safe. These require constant justification if people are to except the police powers required to answer this threat. But this will require more than just surveillance. The Prime Minister has shown that the Conservatives have the confidence not to shy away from a debate on values. While the Left refuse to have these conversations for fear of causing offence, Conservatives never waver from making the case for freedom and democracy.
As Liz Kendall said recently, “If you believe that a strong economy, sound public finances and backing businesses are simply Tory values, the Tories will be in power for ever.” Sadly for Liz, her party have embraced protest over governing – only a One Nation Conservative Government can rebuild the trust lost by Labour’s failure to govern or lead.