It’s the Economy, stupid

There is now a growing view amongst Conservatives, conveyed very well in David Gauke’s column yesterday, that Kemi should position Conservatives as a Centre Right party focussed above all on the economy.

That is a contrast with Reform which depends for its electoral success on its focus on migration. Giving that issue more salience just gives them a boost – though there does need to be strong control over migration for settlement. It may also be that the cultural issues which exercise Reform voters would not be quite so painful and fraught if living standards were rising now at 30 per cent per decade as they used to rather than struggling to get to 3 per cent a decade which is where we are now.

Robert Jenrick thinks things are so bad that we need a “revolution” but Reform have given little indication of what an economic revolution might look like.

Our performance on growth and living standards is now so poor that getting it back on track would be a “revolution” but it would be a revolution that got us back to the performance of Ken Clarke and John Major and indeed early Brown and Blair.

The hard part is now to do the hard graft of re-establishing the Conservative Party’s reputation for economic competence with serious grown-up policy making. There are parallels with what the party went through after its 1945 landslide defeat.

The first two years went in political confusion and disarray. Then the leadership created the process that led to the Industrial Charter and the Party united around an economic agenda which Margaret Thatcher was happy to fight on in her first parliamentary election. She subsequently described the 1950 manifesto as “a cleverly crafted document which combined a devastating indictment of socialism in theory and in practice with a prudent list of specific pledges to reverse it.”

First on the policy list is fiscal credibility. In the past decade Britain has made two big economic gambles – Brexit and the Truss budget. Neither of them has paid off: Farage was key to the first and warmly welcomed the second. And it does mean that the strangers whose kindness we depend on to fund our deficits will be looking for economic sense and fiscal credibility.

Reform cannot be trusted with the public finances. Mel Stride and Kemi Badenoch should carry on with the hard work of showing Conservatives can be trusted.

Britain has levels of investment, public and private, significantly below most of our competitors. Promoting effective public investment matters and that means speeding it up. Badger sets are still holding up major infrastructure projects when they aren’t even a protected species. This is absurd. And we should be going flat out to attract overseas investment, trying to get some advantage from Brexit. Grimly denouncing “black holes” in the finances or describing Britain as “broken” is no way to win over big international investment.

We can boost wages with more effective, more productive work.

The good news is that the increase in employment over the past decade, notably amongst families on low incomes, has to some extent offset the effects of cuts in their benefits. There is still more we can do to get young people working. This is where increases in the minimum wage could do most damage.  And it remains the case that people with a university degree are more likely to be working, more flexible and able to get back into work as business sectors shrink or grow, and more likely to be working into their fiftes and sixties. So perhaps tone down the attacks on universities just a bit.

The Resolution Foundation’s Economy 2030 Enquiry showed how important it is to revive our twin second cities. If Manchester and Birmingham performed like Frankfurt and Munich or Milan or Lyons our overall economic performance would be so much better. That means investing in radial transport links and also radical devolution. Andy Street helped shape that agenda and should be a key figure in shaping it again.

It means more investment in the golden triangle of London, Oxford, and Cambridge.

Too many Tories in the Southeast have been anti-development and instead quietly complicit in Angela Rayner’s shift in focus away from it. But it is a world class cluster. We should be investing in it and recognising that it is where a lot of the growth will occur so more building and more transport links are needed. As Science Minister I wrote to the Department of Transport over a decade ago urging them to prioritise Oxford Cambridge rail links. There is still a lot to do to deliver that. And the new post-Grenfell regulations requiring a second staircase for any building over 18 metres appear to be knocking back development in London – is there not a safe, sensible alternative option?

Public services could be so much better – and more cost-effective – by using modern technologies. But innovation is still painfully slow. There would be such a boost to national morale if we could actually see new technologies boosting public services. Steve Hilton and Dominic Cummings in their hey-day really did push that and the new generation of tech-savvy entrepreneurial Tories should be in the lead shaping that agenda.

There is a positive optimistic Centre Right political agenda here waiting to be grasped. It is optimistic about Britain – which has serious problems but is not broken.