Britain's new Prime Minister Theresa May leaves Bute House, in Edinburgh, on July 15 after a visit to hold talks with Scotland's First Minister Nicola Sturgeon. (AFP PHOTO/AFP/Getty Images) (AFP/Getty Images)
LONDON — When she addressed a Conservative conference in 2002, then as the first female chairman of the party, Theresa May told a stunned audience that the Tories risked being known as “the nasty party.”
In her first speech as Britain’s prime minister last week, May overtly sought to show that the party has a heart, striking a sharply different tone from her predecessor. During his six years as leader, David Cameron instituted a period of austerity in the wake of the global financial crisis that began in 2008, making sweeping cuts to public spending, especially to welfare payments.
But standing outside the official residence at 10 Downing Street, May said she would fight the “burning injustice” of poverty, race, class and gender, and would work to make Britain “a country that works for everyone.”
“I know you’re working around the clock, I know you’re doing your best, and I know that sometimes life can be a struggle,” she said, addressing families trying to make ends meet. “The government I lead will be driven not by the interests of the privileged few but by yours.”
The divisions in British society are not just between rich and poor or white and black, but also between young and old. Housing prices have increased so much in recent years that very few young people can get on the housing ladder, leading to a vast divide in assets between one generation and the next.
Analysts were struck by May’s words, which echoed those of Ed Miliband, leader of the center-left Labour Party until the last election. “When it comes to taxes, we’ll prioritize not the wealthy, but you. When it comes to opportunity, we won’t entrench the advantages of the fortunate few,” May said.
Later, Philip Hammond, the new finance minister, elaborated, saying that austerity was the right response to the economic crisis of 2008 but that the British economy was now entering “a new phase.” Britain voted last month to leave the European Union, the 28-nation bloc where people and goods can move freely.
“This really does mark a shift in rhetoric from what came before,” Kitty Stewart, an expert on social policy at the London School of Economics, said of May’s pronouncements.
The new prime minister’s approach is politically expedient, drawing a line under the Cameron era.
[Theresa May vows ‘bold, new’ future for Britain as E.U. exit awaits]
Her priorities could reflect her very different background. Cameron was the epitome of the British toff, schooled at Eton and a member of the Bullingdon Club, a group for wealthy men at Oxford University. But the new prime minister is the state-school-educated daughter of an Anglican vicar.
Still, the new approach also reflects the mood of the country. Many of those who voted to leave the E.U. live in areas of northern England where the economy is in bad shape as a result of industrial decline and are struggling to get by.
The new government needed to “recognize that life has not been fair and that the government hasn’t been doing enough for people on the margins,” Stewart said.
Torsten Bell, the Labour-
affiliated director of the Resolution Foundation, a think tank focusing on living standards, said May’s tone was “spot on.”
“People have felt a visceral squeeze,” he said. “For most of the population, there hasn’t been a rise in income since 2002, and their standard of living isn’t where it’s supposed to be. That’s the dominant feeling in large parts of the country.”
Cameron’s government cut billions from the welfare budget in an attempt to rein in the country’s deficit, currently running at more than 4 percent of gross domestic product, an uncomfortably high level.
Benefits for those looking for work or unable to work have been frozen or capped, while a range of tax credits were abandoned, hurting the lowest-income households and pensioners most of all.
[Theresa May and Angela Merkel: Europe’s two most powerful women have a lot in common]
There were 3.9 million children — or 28 percent — living in poverty in the country last year, according to the charity Child Poverty Action Group, with “poverty” defined as being in a household that earned less than 60 percent of median income.
Take the area of Tower Hamlets, a cluster of public housing complexes in London’s East End that has long been one of the poorest parts of the capital. Grocery stores selling organic wine and fresh-baked ciabatta have crowded out the cut-price markets and pound-stretchers, as the British call their dollar stores. Hipsters on skateboards glide around immigrants in headscarves.
Longtime residents in this part of London are not optimistic about May’s ability to alleviate their struggle.
“Whoever is there [in Downing Street], nothing changes. It’s always about the government, not about the little people,” said a woman working in a dry-cleaning store who declined to give her name.
In a nearby discount store selling shower heads, Indian spices and more, shopkeeper Ali Mohammed said the negative effects of Brexit are already being felt.
“We import lots of things, and already the prices are going up. People are surprised — they ask us why, but there’s nothing we can do,” Mohammed said. “Life has become really bad around here.”
Indeed, the Brexit decision has introduced a new period of economic uncertainty for Britain, with the Bank of England warning of tough times ahead.
Carl Emmerson, deputy director of the Institute for Fiscal Studies, which analyzes public finances, said that Britain’s economic situation is not in the best shape for the country to be increasing public spending.
“If we had voted to stay in the E.U., it wouldn’t have been the best of times, but with the decision to leave the E.U., it looks more likely that growth will be lower and inflation will be higher,” Emmerson said.
Several of May’s initial proposals have surprised analysts, notably her suggestion that companies should have workers on the boards of directors — an idea so violently opposed by big business that even Labour prime ministers did not dare promote it.
May’s remarks outside 10 Downing Street last week had echoes of the statement that Margaret Thatcher made in the same spot 37 years earlier, when she promised to heal the divisions in the country.
[Theresa May to become British prime minister in fast-track political transition]
But then, during the 1980s, Thatcher presided over a series of industrial changes that triggered a huge increase in income inequality.
An early test of May’s commitment to helping the poor will come in September, when the government is set to decide whether to raise the minimum wage. Economists are looking to see whether the new government tries to slow down the proposed increases.
The new prime minister also has inherited tax and benefit changes, due to kick in next April, that the Resolution Foundation estimates will mean a drop in incomes for the bottom quarter of society over the coming four years.
“Brexit is going to push up inflation over the next few years, and that will hit benefit changes even harder,” Bell said, saying that this will also provide a test of May’s commitment. “Will she change course on the benefit cuts?”
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