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The Guardian - UK
The Guardian - UK
Politics
Andrew Anthony

Ken Clarke: ‘The idea that tax cuts will automatically produce growth is nonsense’

Kenneth Clarke at his home in Nottingham
Kenneth Clarke at his home in Nottingham. Photograph: Sophia Evans/The Observer

Kenneth Clarke was made Baron Clarke of Nottingham in 2020, having served as a Conservative MP for 49 years, and in a variety of government and cabinet positions, including chancellor of the exchequer and health secretary. He also stood three times for the leadership of the party, twice narrowly failing. He has cast his vote in the current Tory leadership election, but refuses to say for whom he plumped.

We’re facing a cost of living crisis, with growing inflation and the ongoing war in Ukraine. How should these problems be dealt with?
In the short term, we’ve got to go through probably a very serious economic crisis. I’ve felt for some time that we’re bound to have a very severe recession. And if we’re not careful, it’s going to be combined with very bad inflation, which does social, as well as economic damage. Brace yourself for it, but living standards generally are going to fall for the first time for a long time, and the main short-term measures should be to protect the very poor, very vulnerable and stop us seeing any increase in the number of people becoming destitute in this country. The government shouldn’t be asking themselves, what is the Daily Mail going to be saying tomorrow but what is the economy going to look like in a couple of years’ time when we have an election?

As a former chancellor of the exchequer, what do you think of the idea, put forward by Liz Truss in the Tory leadership campaign, that tax cuts will trigger economic growth?
The simplistic idea that tax cuts will automatically produce growth is nonsense. Everybody would do it if that worked. There’s a slight touch of the Argentinian or Venezuelan government about it. This is not a time for tax cuts because we have incurred enormous public expenditure, which I supported, to stave off the worst effects of Covid-19, leading to enormous public debts. Tax cuts will stimulate growth in demand, but the problems are with the difficulties in supply, so they will push inflation further up.

You’ve been involved in politics for nearly 60 years. How would you describe the political culture that we have at the moment?
It has completely changed since I started. The politics of the early 1960s was very class based. Parliament was more powerful than it is today, but it was rather a distant and remote institution from the general public. The two parties were based on totally different principles – the existing social order, stability, on the Conservative side, and the struggle of the working class and a future socialism on the Labour side. The tone of debate was less aggressive, less frenzied. In those days, people voted for the same party as their family and very few people changed their votes at elections. Nowadays people have more polarised opinions, and no particular loyalty to anybody. Their politics are really volatile, and conducted in a bad-tempered way with a media-dominated debate, which concentrates on personalities rather than issues and avoids anything of any complexity.

What about the politicians themselves, have they got worse, as it is often said?
When I find myself thinking that, I count to 10, because I know that this is what happens to veterans in every walk of life. Every elderly footballer, every elderly cricketer, every elderly politician, starts saying, what on earth are things coming to, why don’t we have people of the same quality today? But I suspect, when I was a young, keen beginner in politics, there were old boys in the House of Commons saying to each other, good grief what is the world coming to?

What have been the hinge events in your time in politics that you feel could have led to a better place had they gone in a different way?
I think the fall of Margaret Thatcher brought the division on Europe in the Conservative party to a bitter and destructive level that has continued ever after. Margaret was convinced that it was all some kind of pro-European plot that brought her down and the worst of her friends encouraged her to believe that, leading to an absurd division over the ridiculous Maastricht treaty. It was a real turning point in the atmosphere inside the Conservative party and began the destructive Conservative civil war, which cost us office in 1997 and caused disaster eventually for David Cameron, when he foolishly called a referendum in 2016. I was very angry because he announced it without consulting his cabinet at all. He just did it to appease the rightwing backbenchers, to get them to stay quiet. It hadn’t crossed his mind that he might lose the referendum.

Can you ever imagine the UK returning to the EU?
Not in the foreseeable, no. I satisfied my conscience by voting against article 50, when the courts overruled the government and said parliament did have a role. After that, I decided it was settled and all over. What mattered was the terms of our leaving because nobody had a clue what leaving the EU meant. And it was very important that we negotiated something that minimised the practical damage, which no member of the public had voted for, on issues that hadn’t even been considered in the referendum at all. We haven’t got Brexit done. It might be possible to develop a more tangible and grownup relationship with Europe over the next few years. But any idea we can go back into the European Union and sign up for the project again is for the birds.

Clarke with Tony Blair and Michael Heseltine at the launch of the cross-party Britain in Europe campaign, October 1999.
Clarke with Tony Blair and Michael Heseltine at the launch of the cross-party Britain in Europe campaign, October 1999. Photograph: Stefan Rousseau/PA

You stood three times for the Tory leadership and polls showed that you were the most popular with the general public, so how difficult is it to play to the party membership while still keeping an eye on the nation at large?
Two of the three times, I led at every every stage of MPs’ votes and all the rest of it, and lost at the final one because I was seen as too pro-European for the Conservative party members. The members are not typical of Conservative voters, let alone of the general public. My backers were always urging me to make a Eurosceptic speech in order to ease people’s fears. And I wouldn’t. I could see no point in compromising myself by promising things I didn’t believe in.

You once said the idea that Boris Johnson would become prime minister was “ridiculous”. How do you think he did?
He’s delightful company, very entertaining with a big personality, and he is highly intelligent, but he has a temperament that makes him unsuitable for political office. There’s no particular political subject that he has strong views on. He tried to get in apparatchiks to actually run the government, first Dominic Cummings and then, after he fell out with him, the country has been run by a lot of Carrie’s friends. He purged the party of some of its very best future leading figures and put Brexiteer yes men and women in the cabinet to largely disastrous effect.

Who do you think was the best leader the Conservative party never had?
In my personal opinion, it was a great loss for the country that we didn’t have Michael Heseltine as prime minister. But I didn’t vote for Michael after Margaret resigned, because I thought he would divide the party. Having wielded the knife, he couldn’t wear the crown. Had I known at the time that the party was going to rip itself apart anyway, I might have gone for Hezza.

Who will win the next general election?
You should never predict a general election with two years to go. In the present simplistic, polarised, populist, rancorous state of political debate, faced with the worst combination of problems, and war, the state of the health service and social care, who knows? It’s anarchic, the present situation, with nobody emerging on either side who can project to the public the confidence that they will make any significant difference.

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