Ben Fletcher is the Conservative candidate to be mayor of Cheshire and Warrington. He was previously CEO of Boots Opticians and CFO of The Very Group.
The debate about political economy sparked by Tony Blair’s recent essay is an opportunity that we should seize.
In stimulating this debate, he has done our party a service because he has moved the discussion onto terrain where the best answers for our country come from the right of politics. However, we should reflect honestly that one of the issues with the 2010-2024 governments was the absence of a clear, consistent view of the political economy.
It is to Kemi Badenoch’s credit that she is doing the work to put this in place.
As a party we need to win two big arguments that we have won in the past but which are now much less accepted than they were. The first is about free markets, the second about equality.
Free markets are the most effective means of creating wealth and improving living standards that human experience and intelligence have been able to create. Not only are they effective, they are deeply human. Free markets appeal to natural human self-interest: to improve one’s lot, and that of one’s family, to achieve status and dignity, to create free exchange to mutual benefit.
The left of politics is seeking, and in some instances succeeding, to persuade voters that free markets have failed, and this failure is the cause of the very low growth in GDP per capita we have experienced. The reverse is true.
For free markets to function well, they need competitively priced labour, energy, and capital. The signal between supply and demand needs to be clear.
Today, government interference in this is greater even than the 1970s. Through the minimum wage the government sets the price of labour for a broad range of the economy. It deeply distorts the cost of energy through subsidies, taxes, and price regulation. And our cost of capital is structurally higher due to our failure to bring public expenditure under control, in part due to subsidies masquerading as necessities.
In addition, regulatory burdens across all industries have increased; adding costs, distorting the price mechanism, slowing the system. The regulatory burden also has the effect of entrenching the power of larger companies who have the means to deal with it.
We now have a situation where the functioning of free markets has been systemically undermined, and, at the same time, voters are told that it is the unfettered operation of free markets that has caused the relative decline in their living standards. Voters are understandably angry about the lack of progress in their own living standards, and the decline in the quality of the place they call home as evidenced by potholed roads and poor public spaces. In this context it is easy to believe there is some magic pool of previously untaxed resource that can balance the books.
But there must be a mea-culpa: As a party we lost confidence in the capacity of the free market. In the absence of a clear view of the political economy, we became part of the problem. Some of the worst aspects of this government build on decisions made when we were in office, from the pricing of labour, to the rising costs of energy, to poorly thought-out regulation. I saw first-hand working in large companies some of the burdens we placed on business and individuals. And even now, we are occasionally tempted to reach for an interventionist solution rather than a free market one
The question is why?
Part of the answer lies in the response to justifiable voter anger about the costs of the financial crisis, and the lack of accountability for those who caused it. The reassurance of greater regulation was part of the response. Another is that we were lulled into the security of low interest rates as a new norm, allowing us to believe additional costs could be navigated.
More important, I think part of it is to be found in succumbing to a leftish view of equality. We should give the left credit: they have been able to fashion the concepts of fairness and equality to deliver outcomes (narrowing the gap!) that are harmful to long term growth and individual prosperity. In this the left is supported by a range of think tanks, charities, and a sympathetic media. In a world in which many voters living standards have not progressed, it is easy to succumb to a view that the issue is with those who ‘have’. No wonder Andy Burnham and Wes Streeting have staked out this territory in responding to Blair’s essay.
Often on the mayoral campaign trail I am asked what I am going to do to ensure greater equality. To which the answer is: equality of what? Equality before the law? Absolutely. Equality of opportunity? Uncompromisingly. Equality of outcome? Impossible.
Because the stark truth is this. You cannot have both a meritocratic society and a more equal one. The logic of equality of outcome leads relentlessly to a place where the successful are penalised, and the indolent rewarded. For everyone to be wealthier meritocratic effort needs to be encouraged and rewarded. This argument must be made to the electorate.
We should not be shy of stating that our policy goal is not equality of outcome but prosperity. For every person and family to be better off than they are today. If some people become much better off, so be it. They will contribute the tax revenue needed to deliver our public services. We should start talking of solving the income per capita crisis, as much as the cost of living crisis.
We should also want for every place to look and feel more prosperous. At times the party assumes that this follows from people and families becoming wealthier. This isn’t necessarily the case. The public also judge growth through the quality of their community. Well intentioned initiatives such as Pride in Place are no substitute for properly thought out plans to improve infrastructure, transport, and public places.
The window has opened for a candid and bold conversation with the electorate, on a terrain that is naturally Conservative. Voters know the system isn’t working and we need to offer them a new economic settlement that emphasises personal, family, and community prosperity. This means rewarding personal responsibility as we dismantle the Ponzi schemes that are our welfare and university systems. It means cutting back the subsidies, dressed up as necessities that distort free market pricing. It means reducing welfare to invest in infrastructure and skills. It means comprehensive tax reform to reward hard work and risk takers. It means hacking back regulation that slows growth down. It means continuing to devolve meaningful power to allow for grater policy innovation.
Ronald Reagan said each generation needs to win the fight for freedom.
We’ve learned the same is true for the economic freedom that delivers prosperity. The facts of economic life, as once famously observed, are Conservative. We should relish the fact there is a debate for ideas and make our case with confidence.
Ben Fletcher is the Conservative candidate to be mayor of Cheshire and Warrington. He was previously CEO of Boots Opticians and CFO of The Very Group.
The debate about political economy sparked by Tony Blair’s recent essay is an opportunity that we should seize.
In stimulating this debate, he has done our party a service because he has moved the discussion onto terrain where the best answers for our country come from the right of politics. However, we should reflect honestly that one of the issues with the 2010-2024 governments was the absence of a clear, consistent view of the political economy.
It is to Kemi Badenoch’s credit that she is doing the work to put this in place.
As a party we need to win two big arguments that we have won in the past but which are now much less accepted than they were. The first is about free markets, the second about equality.
Free markets are the most effective means of creating wealth and improving living standards that human experience and intelligence have been able to create. Not only are they effective, they are deeply human. Free markets appeal to natural human self-interest: to improve one’s lot, and that of one’s family, to achieve status and dignity, to create free exchange to mutual benefit.
The left of politics is seeking, and in some instances succeeding, to persuade voters that free markets have failed, and this failure is the cause of the very low growth in GDP per capita we have experienced. The reverse is true.
For free markets to function well, they need competitively priced labour, energy, and capital. The signal between supply and demand needs to be clear.
Today, government interference in this is greater even than the 1970s. Through the minimum wage the government sets the price of labour for a broad range of the economy. It deeply distorts the cost of energy through subsidies, taxes, and price regulation. And our cost of capital is structurally higher due to our failure to bring public expenditure under control, in part due to subsidies masquerading as necessities.
In addition, regulatory burdens across all industries have increased; adding costs, distorting the price mechanism, slowing the system. The regulatory burden also has the effect of entrenching the power of larger companies who have the means to deal with it.
We now have a situation where the functioning of free markets has been systemically undermined, and, at the same time, voters are told that it is the unfettered operation of free markets that has caused the relative decline in their living standards. Voters are understandably angry about the lack of progress in their own living standards, and the decline in the quality of the place they call home as evidenced by potholed roads and poor public spaces. In this context it is easy to believe there is some magic pool of previously untaxed resource that can balance the books.
But there must be a mea-culpa: As a party we lost confidence in the capacity of the free market. In the absence of a clear view of the political economy, we became part of the problem. Some of the worst aspects of this government build on decisions made when we were in office, from the pricing of labour, to the rising costs of energy, to poorly thought-out regulation. I saw first-hand working in large companies some of the burdens we placed on business and individuals. And even now, we are occasionally tempted to reach for an interventionist solution rather than a free market one
The question is why?
Part of the answer lies in the response to justifiable voter anger about the costs of the financial crisis, and the lack of accountability for those who caused it. The reassurance of greater regulation was part of the response. Another is that we were lulled into the security of low interest rates as a new norm, allowing us to believe additional costs could be navigated.
More important, I think part of it is to be found in succumbing to a leftish view of equality. We should give the left credit: they have been able to fashion the concepts of fairness and equality to deliver outcomes (narrowing the gap!) that are harmful to long term growth and individual prosperity. In this the left is supported by a range of think tanks, charities, and a sympathetic media. In a world in which many voters living standards have not progressed, it is easy to succumb to a view that the issue is with those who ‘have’. No wonder Andy Burnham and Wes Streeting have staked out this territory in responding to Blair’s essay.
Often on the mayoral campaign trail I am asked what I am going to do to ensure greater equality. To which the answer is: equality of what? Equality before the law? Absolutely. Equality of opportunity? Uncompromisingly. Equality of outcome? Impossible.
Because the stark truth is this. You cannot have both a meritocratic society and a more equal one. The logic of equality of outcome leads relentlessly to a place where the successful are penalised, and the indolent rewarded. For everyone to be wealthier meritocratic effort needs to be encouraged and rewarded. This argument must be made to the electorate.
We should not be shy of stating that our policy goal is not equality of outcome but prosperity. For every person and family to be better off than they are today. If some people become much better off, so be it. They will contribute the tax revenue needed to deliver our public services. We should start talking of solving the income per capita crisis, as much as the cost of living crisis.
We should also want for every place to look and feel more prosperous. At times the party assumes that this follows from people and families becoming wealthier. This isn’t necessarily the case. The public also judge growth through the quality of their community. Well intentioned initiatives such as Pride in Place are no substitute for properly thought out plans to improve infrastructure, transport, and public places.
The window has opened for a candid and bold conversation with the electorate, on a terrain that is naturally Conservative. Voters know the system isn’t working and we need to offer them a new economic settlement that emphasises personal, family, and community prosperity. This means rewarding personal responsibility as we dismantle the Ponzi schemes that are our welfare and university systems. It means cutting back the subsidies, dressed up as necessities that distort free market pricing. It means reducing welfare to invest in infrastructure and skills. It means comprehensive tax reform to reward hard work and risk takers. It means hacking back regulation that slows growth down. It means continuing to devolve meaningful power to allow for grater policy innovation.
Ronald Reagan said each generation needs to win the fight for freedom.
We’ve learned the same is true for the economic freedom that delivers prosperity. The facts of economic life, as once famously observed, are Conservative. We should relish the fact there is a debate for ideas and make our case with confidence.