Denis Staunton: Theresa May has a radical agenda for Britain

In her calls with other European leaders recently, Britain's prime minister Theresa May made one thing clear: leaving the EU means just that. There will be no retreat from the referendum decision, no attempt to water it down or to return to the EU by the back door.

Beyond that very little is certain. May has made veteran Eurosceptic David Davis secretary of state for exiting the European Union. But much of his role is a mystery, including who in Brussels he sees as his interlocutors and which council formations, if any, he will attend.

A Europe minister under John Major, Davis once knew his way around the European institutions, but he may need a quick refresher course. Only a few weeks ago he was talking about striking individual trade deals with France and Germany, apparently unaware that those countries cannot strike bilateral deals because the EU negotiates on trade for the union as a whole.

Liam Fox, another old Eurosceptic warhorse, is secretary for international trade, with a brief to scope out trade deals for Britain after Brexit. But here too there are unanswered questions, including whether he will participate in the formulation of EU trade policy in the meantime.

May has outsourced the early stages of the Brexit negotiations to the Brexiteers – “if you Brexit, you fix it”, was the phrase around Westminster this week. But she will take personal charge of driving her radical domestic agenda.

May’s remarks as she entered 10 Downing Street on Wednesday, and her speech in Birmingham on Monday, signal a new direction from the free market liberalism which has been the Conservative orthodoxy for decades.

Principles

“This is a different kind of Conservatism, I know. It marks a break with the past. But it is in fact completely consistent with Conservative principles. Because we don’t just believe in markets, but in communities. We don’t just believe in individualism, but in society. We don’t hate the state, we value the role that only the state can play,” she said in Birmingham.

This embrace of the activist state is reflected in the fact that May's business secretary Greg Clark is styled secretary of state for business, energy and industrial strategy.

Downing Street said this week that industrial strategy will focus on improving productivity but in Birmingham May outlined a more ambitious agenda.

She promised to intervene to protect important industrial sectors if companies are threatened with hostile takeovers and to change boardroom rules to introduce workers’ representation on company boards.

Many at Westminster saw in May's speech the hand of her close adviser Nick Timothy, who she has appointed her joint chief-of-staff. Last March Timothy wrote in conservativehome.com about the tension within the Conservative Party between the ideologies represented by former leader Iain Duncan Smith and former chancellor George Osborne.

Duncan Smith’s approach has been called Easterhouse modernisation, which focuses on fighting the kind of poverty found on the eponymous Glasgow estate, and Osborne’s has been dubbed Soho modernisation, which is all about social liberalism.

“Easterhouse requires a focus on fighting extreme poverty rather than helping people who might be just a little better off, but for whom life is still a struggle. Soho often focuses on causes, like the pursuit of ‘general wellbeing’ and support for ‘green taxes’ that are far removed from – and sometimes run directly against – the interests of ordinary families,” Timothy wrote.

Timothy favours a third approach under which the government would continue to help the very poor and would fight injustices based on gender, race and sexuality but would focus relentlessly on what he calls “ordinary working people”.

Stagnant wages

Many such people backed Brexit, less because they care about the EU or even about immigration but because they have seen their wages stagnate, prices rise and their towns die at the hands of market forces.

For such people Westminster and Brussels are equally remote and indifferent, and May has made it her purpose to address their concerns.

“When you add all of these things up, the only surprise is that there is so much surprise in Westminster about the public’s appetite for change,” she said in Birmingham.

The make-up of her cabinet reflects the class dimension to the change in direction, with fewer privately-educated ministers than any since Clement Atlee’s in 1945.

Atlee's government marked the last great change in Britain's political direction until Thatcher's election in 1979. If May follows through on her reorientation of the government's role in the economy towards a more interventionist Rhineland model of capitalism, Britain as it leaves the EU could be on the verge of another. Denis Staunton is London editor