A lot is at stake in the Conservative leadership contest, and not just for the Tory party. Good government is made better by the presence of an effective opposition. And that has been missing for the past eight years.
The members now have a clear choice to make. The traditional qualities of a Tory leader are a blend of aggression and intellect that works at the despatch box and the kind of charisma that can revive the party in the country and lead it away from its failure at the past three polls. But the reality is that, as Conservative members cast their vote, this country needs some other qualities in a Tory leader as well. We need consensus as much as we need an effective opposition.
Take three issues: pensions, local government finance and the challenge of globalisation.
The next report of the Pensions Commission is due at the end of November. We can all agree that we need a stable, long-term policy framework to solve the pension issues that we face. But can we agree on what that solution should be, or even the broad direction? If the government accepts the recommendations of the Pensions Commission, will the Conservative party buy in or opt out? Will a new leader be willing to negotiate a consensual approach or will he want to oppose? Pensions policy needs political consensus. We have seen too many changes in the past and we need a stable system now that will provide security for the long-term.
Local government financing also demands a long-term solution. Abandoning the revaluation of properties sine die and putting off reform until after the next election will create unfairness and mistrust unless a clear way forward is laid out. Again, we are waiting for an external report to recommend the shape of future policy. And, in the meantime, the chancellor will again have to find temporary solutions to the problems faced by housing-rich, income-poor council tax payers. A radical, long-term approach is needed but it will work only if it can be built on consensus. Will the new Tory leader be willing to seek that?
This week there is a summit at Hampton Court on the policy implications of globalisation. There will be some stark analysis made available to ministers. The chancellor has recently published his own view of how to take advantage of the opportunities: through structural reform to create greater flexibility in product, labour and capital markets, balanced with policies that ensure fairness. We have all become workers, producers, investors and consumers in a complex network of inter-linked global markets. In each of those personae, we need to see long-term policies that will deliver prosperity and security. But to achieve that will require political consensus: consensus here in the UK and consensus that we can export into continental Europe. Will the Conservative members deliver a leader who will take part in that consensus-building or reject it?
The UK system of elections is admired in continental Europe for its ability to create strong and decisive government. Much of Europe has to rely on unstable coalitions and on the policy compromises that emerge from protracted (and often secret) negotiations. But our confrontational system of government and opposition has its problems as well. Without the necessity for coalition agreements, UK policy on long-term issues has always suffered from the ebb and flow of policy tides that reflect the changing composition of the House of Commons.
Eight years of a consistent vision under the present chancellor have delivered a stable and predictable approach to the economy. We need to be able to build on that experience now and make the benefits of consistency work on a broader platform. The challenges that we face have an increasingly long-term look about them and we need a consistent approach from those in and out of power if we are to meet them. That does not mean cross-party agreement on everything but it does mean achieving political consensus on key long-term issues.
The Tories will rightly want to choose a leader who looks like a winner. But there would be advantages in having a leader who could not only look credible in the Commons but make a meaningful contribution on those long-term issues as well. Statesmen can accept the constraints of consensus and work within them when the national advantage in doing so is clear. The risk we all face is that Conservative members choose a politician not a statesman.
The writer is managing director, Goldman Sachs International, and former member of the Council of Economic Advisers, HM Treasury