The United Kingdom is in the midst of the great pasty crisis of 2012 — which, incidentally, has nothing to do with the garb of exotic dancers. The pasty is a hot, meat-filled pie, which Prime Minister David Cameron proposes to tax. His recently announced budget both decreases the top income tax rate and increases the cost of a finger food generally eaten by laborers. Class warfare has ensued.
There is an economic logic to the pasty tax. British economic growth — now predicted at 0.8 percent for the year — is anemic. So Cameron seeks to encourage British competitiveness by cutting taxes on businesses and upper-income taxpayers. Given budgetary pressures, however, these tax reductions must be offset by closing tax loopholes elsewhere. One of those loopholes is the inexplicably favorable treatment given to bakeries over other hot-food vendors — pasty sellers don’t pay the value-added tax while fish-and-chips shops do. But one man’s loophole is another man’s lunch.
These are trying times for Cameron. Other proposed tax modifications — including changes in pension rules, the capping of tax relief for charitable donations and the imposition of a “stamp duty” on the sale of expensive residential property — have also been controversial. (The British, with admirable persistence, are still trying to make their various stamp acts work.) Cameron has taken hits from a donations-for-access scandal and a petrol supply panic. His approval rating recently dropped 16 points in a week.
Cameron is fortunate that his Labor Party opposition is as hapless and divided as ever. But he can’t be pleased by the relish with which some conservative newspapers and politicians have joined recent criticism. Some of this is pent-up frustration with coalition government. Sharing the harness with Liberal Democrats has forced conservatives to compromise on a variety of issues, as well as to downplay conservative accomplishments in the name of coalition unity. But British conservatism is also revealing internal strains, with application in the former colonies as well.
The first tension is between austerity and economic growth. Cameron’s budget cuts have reassured global markets. But a sustainable budget is not the same thing as a hopeful, competitive economy. Cameron wants to do more than balance the books of a declining nation. So he is right to adopt supply-side, tax-cutting, pro-business economic measures. Yet this has also required unpopular tax trade-offs and led to attacks on his “millionaire’s budget.” Republicans should expect a similar reward if they gain control of the White House.
A second tension results from a cultural shift. Cameron took leadership of the Conservative Party with the intention of rebranding it. He has been an outspoken advocate for gay marriage, a supporter of foreign assistance and a non-skeptic on climate change. Tim Montgomerie, editor of the ConservativeHome Web site, calls this Cameron’s project of “metropolitan modernization.” But not everyone is happy to be modernized. Many Tories remain suspicious of rapid cultural change, skeptical of global warming and primarily motivated by issues such as welfare dependence and crime. Some of the disaffected are moving outside the traditional party structure. Support for the right-wing UK Independence Party — which attacks the European Union, immigration, wind farms and gay marriage — has risen in polls.
Cameron is losing the unreconstructed right — a political trade-off he must have anticipated. But conservative activists would be more impressed by this repositioning if it had resulted in a majority instead of a coalition — or seemed to be leading toward a majority in the future.
A third tension relates to class. Cameron is generally seen as having a posh education (taking a first at Oxford) and posh friends. Cameronism is the movement of an urban, upscale, intellectual political class, which can appear dismissive of traditional, grass-roots conservatives. But, according to Montgomerie, some conservatives have begun to suspect that their party is “not too right wing, but too rich.”
British conservatives are celebrating a melancholy anniversary. It has been 20 years since they last won a majority in Parliament, under the leadership of John Major. Major was the son of a circus trapeze artist. He left school at 16, never graduated from university and spent time on unemployment. Major’s accomplishment was to extend a conservative appeal to the striving class — offering the promise of social mobility. And he won more votes than any prime minister before or since — more than Margaret Thatcher, more than Tony Blair.
Cameron — the smart metropolitan who would tax pasties — hasn’t duplicated that appeal. In America, Mitt Romney needs to — but it won’t be much easier.