In a wide-ranging column (10th July 2022) covering energy and education as well as economics, Roger Bootle provides his own mini-manifesto for the next Prime Minister and leader of the Conservative Party.
First up, divisions between No.10 and No.11 over economic policy must be put aside if the country is to extricate itself from the current mess which threatens to engulf us.
“It is tempting to think that the Prime Minister can leave economic policy to the Chancellor, and quite a few Prime Ministers have done exactly that. But in current circumstances, this would be both unwise and dangerous. For a start, there is a real danger of the Chancellor effectively being captured by senior Treasury officials. Many good judges believe this is exactly what happened with Rishi Sunak.”
We can no longer simply rely on in-house Treasury orthodoxy. A stronger hand and a longer-term vision are required:
“The Treasury is both powerful and limited in its vision. It has a strong institutional culture which obsesses over the linked issues of Government expenditure, borrowing and public debt. It is really a finance ministry, rather than a department dedicated to the promotion of economic growth.
Short of putting together a new version of Harold Wilson’s Department of Economic Affairs, at the very least we require a strong prime ministerial hand on this issue because many of the things which could strengthen economic performance lie beyond the narrow financial realm and stretch across many spending departments.”
Second, the days of ‘cakeism’ are over. Priorities need to be established even if that means upsetting vested interests.
Efficiency drives are essential and a necessary precondition for attracting much higher levels of investment if the country's productivity record is to improve.
“Prime among such measures must be tax reductions and a reform of the tax system. It is ludicrous that a Conservative government is presiding over the highest tax burden since the late 1940s. But this is not to say that cutting taxes is either easy or provides a panacea. On the whole, Rishi Sunak was right that tax cuts do not pay for themselves – at least, in the short run. But they can pay for themselves longer term if they incentivise both businesses and individuals to base themselves here and to strive for success."
But lower taxes have to be paid for. This must entail tough public spending commitments:
“This must include parsimony with regard to day-to-day spending, the avoidance of expensive white elephant projects like HS2 and a radical rethinking of the role of the state in key areas of national life, especially the NHS.
Progress on deregulation and tarrif-reduction has also been extremely disappointing. More needs to be done there. Meanwhile on energy
"The Government could reduce green levies, remove the ban on fracking and encourage greater use of our North Sea resources. Underpinning all this should be a recognition that in today’s circumstances, it is not appropriate to continue to pursue net zero at the same speed. The objective can be retained. We simply need to pursue it more cleverly and with more patience."
Elsewhere the government needs to tackle the Unions head-on:
“The last three Conservative governments have not liked to be seen as opponents of organised labour. But the time has arrived to confront unions head on and reduce the devastation that they can cause the economy. It is not the Government’s job to try to be nice to everyone. It has to face down the power of special interest groups in order to promote the wellbeing of the whole of society.”
Finally, with five million people claiming out-of-work benefits at a time when many vacancies remained unfilled, it is surely right to call time on the current higher education system:
“The waste of resources involved in sending about half of our youngsters to university, in many cases to collect worthless degrees, is appalling. That proportion should be drastically reduced, thereby releasing armies of young people for gainful employment, with more emphasis placed upon apprenticeship schemes.”
The full article can be read here with a link to the original beneath it:
CREDIT: Chris Radburn/PA
Comments