Business

The Tories risk forgetting a rich tradition of economic thinking

The writer, former senior adviser to UK prime ministers Philip Hammond and Sajid Javid, is a partner at Flint Global; he writes personally

Boris Johnson’s government is essentially “non-conservative”. That is the impression of the Tory leadership contest so far. Inevitably, the debate was dominated by the most successful leader of the modern Conservative party, Margaret Thatcher.

What we’ve heard best reflects only part of her philosophy: The Tory ladies lined up to remind campaigners of her aversion to tax cuts when inflation is on the rise. Furthermore, the argument ignores a much richer history of conservative economic thinking.

Conservative economics has grown and evolved over the past two hundred years. Robert Peel’s liberalization agenda in the mid-19th century was followed by a period of skepticism towards passport. With the rise of Labour, the party moved to define itself as anti-social, but the period after 1945, however, the period after 1945 saw the Tories make peace with the welfare state and preside over a mixed economy. Only under Thatcher did the restoration of the state take center stage.

However, this evolution should not be confused with a lack of principles. Throughout, the four basic tenets of Conservative economic thinking have endured. First, Conservative economics tends to be pragmatic, ideologically skeptical, and based on realism. Conservatism rejected intellectual rigidity, adapting instead to deal with the problems of the day.

Second, it welcomed economic change, both because of the progress it could bring and when needed to ensure political and social stability. The mission is to manage change carefully, with due regard for how people and communities must be protected.

The third important principle is the belief in the need for prosperity and shared opportunity. This theme stems from Benjamin Disraeli’s realization of the dangers of having “two nations”, rich and poor, to Harold Macmillan’s conservatism’s recognition of the “obvious obligation” of conservationism to those segments of society who do not share in economic progress.

Finally, there is the role of the state. Yes, Conservatives have always been wary of too powerful government – but this should not be confused with small-state liberalism. The Conservative approach saw the state as the issuer, rather than the controller, of economic activity.

It is these same principles that must now be applied to the challenges ahead. In the short term, that means managing the spike in inflation and the downturn it can bring. In addition, the next prime minister must set his sights on long-term challenges. With the recent increase in anemia, a plan to maximize it should be an absolute priority. But a true Conservative is a realist and has to admit that even the most flamboyant execution could see the economy grow more slowly than before, stifled. by inevitable structural factors: aging populations, the inevitable shift to more services, and receding globalization. . Therefore, the pursuit of growth cannot be used as a cover to avoid difficult decisions elsewhere.

In particular, lower growth means that two more challenges facing the UK are likely to increase. Levels of income and regional inequality in the UK are high by both historical and international standards. History tells us that low growth rates tend to see more intense battles over distribution, adding urgency to the issue. Lower growth also means that structural pressure on public finances cannot be ignored.

To address the immediate growth, inequality and fiscal challenges, Conservationism today must adapt once again; but it must be based on longstanding Conservative principles, not on empty promises of partial imitations of Thatcherism.

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