Nadhim Zahawi is a member of the BIS Select Committee, the Party’s Policy Board and MP for Stratford on Avon.
Our economic record will rightly be at the heart of this election campaign. But what really matters to people is not where we’ve come from but where we’re going. We can be proud of the recovery we’ve delivered, but we should also be talking about the kind of growth we want to see in the future. We need to make a Conservative case that it will be balanced, sustainable and, crucially, that it will be widely shared.
During the pre-crash era it was widely assumed that ‘sharing the proceeds of growth’ was mainly about spending on public services and redistribution through the benefits system, an assumption still held of most of the Labour Party. In this Parliament, we’ve changed the terms of that debate. Now, cuts to income tax and a better skills system are seen as the most important policy levers for boosting living standards across the board. Even Labour are getting in on the act, pledging the restoration of the 10p rate and more apprenticeships.
Unlike Labour, however, we have a track record of delivery, with increases to the personal allowance at every Budget and the rebirth of the modern apprenticeship as a high quality, mainstream alternative to university. In the next Parliament we’ve said we’ll go even further, raising the personal allowance to £12,500 and delivering three million more employer-led apprenticeships.
The Prime Minister’s speech to the British Chambers of Commerce last month, in which he called on firms to take advantage of the growing economy and give their workforce a pay-rise, opened this debate up beyond Westminster. So many politicians talk as though we alone were responsible for the contents of each individual’s monthly pay packet, yet as Conservatives we know that it’s business, not government, which is the ultimate source of society’s prosperity.
In contrast to Labour, we’ve always been supportive of firms which took the responsible decision to hold down wages in order to protect jobs. But we’re no longer in a slump. Having delivered some of the fastest growth in the developed world and the most competitive corporation tax, it’s absolutely right that we now call on business to work with us on driving up pay.
Creating a more widely shared prosperity means more than just tax cuts and higher pay however, it’s also about economic rebalancing. As Matt Hancock has put it, we need a country that’s ‘divided not by wealth but by economic specialism’. Rather than look at a region’s local strengths and worry that it’s not diversified enough let’s back those strengths, we should argue for more high-tech manufacturing in the Midlands, more life sciences in East Anglia, getting shale out of the ground in Lancashire and yes, continuing to ensure that London remains the financial capital of the world. That way the whole economy becomes more diversified.
The good news is that regional rebalancing is already beginning to happen. Jobs are now growing faster in both the North East and in Yorkshire and the Humber than in London. I think my all-time favourite statistic from this Parliament is that Yorkshire alone has created more jobs since 2010 than the whole of France. The Chancellor’s Northern Powerhouse, which Paul Goodman wrote about on this site last week, is a core part of this rebalancing strategy, linking up the great cities of the North into a single giant business cluster, so employers have an unrivaled pool of talent from which to recruit.
Some have dismissed this as an electoral ‘ploy’, which I find an odd criticism to make. Leaving aside the fact that Whitehall will be ceding power to predominantly Labour-run local authorities – at least to begin with – we should be unashamed of the fact that support for Conservative policies tend to increase as regions become more prosperous. If you can see the benefits of a proactive, pro-enterprise strategy: jobs re-shoring, companies opening new offices, young people in apprenticeships rather than on the dole, then of course you’ll be more receptive to our message.
But while cities are crucial, as a party that’s deeply rooted in rural life, we also need to make the case for devolution to the shires – something that Greg Clark has led the way on as Cities Minister. Enclaves of rural poverty, lack of infrastructure and the economic neglect of coastal towns can all be better tackled by people on the ground with the powers and the cash to get things done. As this website has long argued, it’s vital that we ensure rural areas get a chance to benefit from decentralisation under the next Conservative Government.
The Chancellor has said that it’s well within our reach to become the most prosperous major economy by the 2030s (that’s why it’s a long-term economic plan). This is a hugely inspiring vision and a stark contrast to Labour’s bleak narrative of a British economy in which everyone is either a predator or producer, a victim or a villain. But as we go into this election we need making the case that everyone will have a chance to share in that prosperity, whoever they are and wherever they live.