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		Lessons of the 2005 General Election May 7 2005 "The tumult and the shouting dies, The Captains and the Kings depart..." Rudyard Kipling, "Recessional" ...but don't worry, they'll be back in four years, if not sooner. This year's General Election is over. The Conservative Party has made some progress, but not enough. Blair's wings are clipped, but he is back in Downing Street with a working majority. Perhaps, with splendid poetic justice, we shall see Gordon Brown take over as Prime Minister just as the economic consequences of his tax and spend binge come back to haunt him. Two of my former colleagues from the European parliament, Robert Goodwill (Scarborough) and Theresa Villiers (Chipping Barnet), were returned as MPs to Westminster. In my own East Midlands region there was fierce joy as we re-took Northampton South, Kettering and Wellingborough - seats we should have won in 2001 - but heartbreak in Corby, in the High Peak and in other seats where excellent candidates had fought relentless campaigns, but found that the national tide did not rise far enough to sweep them to victory. Sharp images remain. The splendid work of local hunts in one constituency after another, as they leafleted and canvassed in all weathers, and were rewarded, nationally, with the dismissal of twenty-nine anti-hunting MPs. The extensive signage in rural areas, so that you could identify constituency boundaries by the names of Tory candidates on the posters. The widespread theft and vandalising of Conservative signs by the opposition. A chance encounter with Labour ex-minister Frank Dobson in Scarborough, where we hi-jacked his photo opportunity and ensured that our man, Robert Goodwill, appeared in the picture in the local press. Now, as the dust settles, it is time to ask what lessons we need to learn from the election. Pragmatism must be informed by principle Many commentators agreed that this was one of the most effective and professional campaigns we have run for years. Yet too often our policies seemed to be ad hoc, reactive, pragmatic responses to circumstance, lacking a coherent vision. Two frequent comments from voters on the doorstep illustrate the problem: "I don't know what the Conservative Party stands for". And "There's no difference between the main parties these days". It is not enough to approach each issue with a clean sheet of paper, with one eye on public opinion, and hope to come up with a coherent Conservative view. We must start from clear conservative principles. Of course our principles must be applied in a modern, pragmatic way that suits the circumstances of the 21st century. We must be as relevant and voter-friendly as we can. But unless the principles inform the policies, we shall end up with a rag-bag, not a vision. Since we seem to be in danger of losing sight of conservative principles, let's just recall what they are. Liberty. Small government. Low taxes. Enterprise and free markets. Personal responsibility. Family and nation. American Republicans will immediately recognise these as "Jeffersonian principles", but they are the basis of conservative thinking the world over. These are the touch-stone against which every policy prescription must be tested. Let's take a practical example: ID cards. Labour was in favour, to help fight terrorism, control immigration and prevent social security fraud. Lib-Dems were against, on civil liberties grounds. The Conservative position (as far as I could see) was that it was a difficult question which we should like to think about after the election. We seemed to be weak and indecisive, allowing the Lib-Dems, on this issue, to be "the real opposition". If we had gone back to our principles of individual liberty and limited government, we should have seen straight away that we should oppose ID cards. They are about big government controlling the individual, a deeply un-conservative position. Of course we should back up our principled position with pragmatic arguments - ID cards did not prevent the Madrid bombings, new arrivals would not have ID cards for months, the government record on implementation of vast computer data-bases is appalling (think Child Support Agency), and the proposed budget would be much better spent on more effective control of ports and airports. But a principled approach would have avoided indecision, and given us the right answer immediately. A second area where we lost sight of principle was in our approach to health and education. Our policies were fine, but because we failed to explain the principles behind them, they were poorly understood. How else is it possible that journalists could write that "For both major parties the buzz-word is choice - so there is little to choose between them"? Labour uses the language of choice, but fails to understand it. The difference between Labour and Conservative on the NHS is (or should be) that we both agree that the government should pay for healthcare, for those who want it to. But Labour believes that the government should also manage and deliver healthcare, whereas Conservatives know that the market can do it better. Would you rather buy healthcare at Tesco, or at the Co-op? Our failure to communicate this concept was dramatically illustrated to me by an interview with a voter, who lived in a remote location where only one hospital was within a reasonable distance. "Choice is no good to me", he said, "It's the local hospital or nothing". But the purpose of choice is not merely to pander to the personal preferences of the individual patient. The plain fact is that choice drives quality. Even if only a proportion of patients can exercise that choice, for geographical or other reasons, the fact that some can do so will still drive quality. The patient unable to exercise choice still benefits from the general rise in standards. The Lib-Dems argue that rather than offering choice, we should ensure that every hospital offers uniformly high standards. They fail to see that choice is the mechanism that will deliver those standards. The vexed issue of taxation again illustrates the failure of principle. Oliver Letwin was determined, quite rightly, that we should only promise what we could deliver, with elaborately detailed costings to show where the money would come from. But so determined were we not to be depicted as "slash and burn" tax cutters, that we were reluctant to admit the obvious truth - that we should be alert to additional savings that could be made, we should look for additional supply-side growth generated by our modest early tax-cuts, and that as opportunity offered we should deliver further tax cuts, because we believe in low taxes and small government. The ill-judged dismissal of Howard Flight resulted from this reluctance. All he did was to state the obvious at a private meeting. Yet an excellent MP was lost to the parliamentary party - and with bitter irony, his constituency association in Arundel replaced him with an equally enthusiastic tax cutter, Nick Herbert. Which brings me to my second lesson. Come the election, it's too late to sell a difficult concept to the electorate. Norman Tebbit, ever perceptive, made this point during the last week of the campaign. And sources close to Oliver Letwin's office said the same to me privately. We all know about the Laffer curve. We know that lower tax rates do not necessarily reduce total revenue, and that raising tax rates does not deliver proportionate increases. But this is a deeply counter-intuitive idea. And it would be deeply counter-productive to try to make such a difficult point, however important, however valid, in the middle of a General Election. It would be a gift to Labour's spin machine and to the gutter journalists at the Mirror (whose election-day coverage was beneath contempt). However unjustly, they would caricature this key economic insight, and the caricature, not the message, would stick in the public mind. But when the Lib-Dems said that they would finance their additional expenditure plans by raising income tax by ten points, to 50%, on salaries over £100,000, no one actually pointed out that this would simply not raise the amount that the raw arithmetic suggested - if it raised any additional revenue at all. There was a time when we could debate this issue in a relaxed way, and sleep easy in our beds as it was postponed for a few more years. We no longer have that luxury. All over Eastern Europe countries are now implementing flat-tax/low-tax régimes, and proving yet again that low-tax régimes deliver equal or higher revenue, linked to higher growth. The first impact is on adjacent countries like Austria and Germany, but we in the UK are not immune. If we insist on keeping high and progressive taxes, we will lose investment and jobs, and we will deny ourselves the growth and prosperity we deserve. So is it impossible to sell difficult and counter-intuitive ideas to the electorate? No. But we need to start now, not four weeks before the next general election. And it is too big a task for the Conservative Party alone. We need a coalition of business groups, the CBI, the IoD, the Federation of Small Business, the British Chambers of Commerce. Perhaps the Tax-Payers' Alliance could have a co-ordinating function . I am concerned about the demand of Sir Digby Jones, Director General of the CBI, for lower business taxes. To the general public, and to Labour MPs, this will smack of fat cats asking to shift the tax burden on to the shoulders of the masses. Sir Digby should demand lower taxes, period. After all, companies' employees, pensioners and shareholders pay taxes too. Europe: our biggest failure of principle. The European issue scarcely surfaced during the election, yet as I argued in these pages (EJ, April 2005), EU treaty obligations could affect all five of our key domestic policy commitments. Tested against conservative principles, the EU fails dismally. Its bloated, intrusive, prescriptive regulatory regime and its unaffordable social model run directly counter to the principles of liberty, responsibility, low taxes and limited government. More fundamentally yet, it is undermining the independence and indeed the very existence of our nation. If the Conservative Party is not the party of an independent, democratic, sovereign Britain, it is nothing, and deserves to be nothing. Yet our EU policy is a two-headed monster. On the one hand, we are rightly committed to repatriating powers on fisheries, foreign aid, and social policy, and to amending or abrogating parts of the ECHR insofar as they obstruct our other policies. We have hinted that our shopping-list for repatriation will get longer. Yet on the other hand, we insist that Britain will remain "a full and committed member of the EU". These two propositions are clearly incompatible, indeed mutually exclusive. And because they are incompatible, they are simply not credible. This ambiguity was Michael Howard's way of buying Ken Clarke's silence during the election, and it worked. But post-election, it is unsustainable. It is time to recognise that the EU is a political union, and is fast becoming a quasi-state, in which former member-states will be quasi-provinces. Most of our laws are made in unaccountable foreign institutions, where we have no control and little influence. What little influence we have is progressively diluted by successive waves of EU enlargement. Neither the Conservative Party nor the British people want to be part of such a political union. It is time to say so. Equally, we cannot credibly re-negotiate our terms of membership if we have given up our trump card - the threat of withdrawal - before we start. Our policy of "Renegotiate as full and committed members" is a nonsense. We need a new policy of "Renegotiate or quit". Most Conservatives I meet - indeed most people I meet - want a relationship with the EU based solely on free trade and voluntary intergovernmental cooperation. In principle, I am indifferent whether we call this "associate membership" or "withdrawal", although I concede that "associate membership" might work better in presentational terms. I believe it is the historic task of the Conservative Party to lead our country out of the morass of the EU's political union, and I believe that the British people will give that task their overwhelming support.