James Kirkup is Director of the Social Market Foundation.
The Social Market Foundation was created in 1989 to defend Britain’s open market economy by making markets fair. Markets exist in the real world, not textbooks, and so they need to work for real people – or people will start to listen to those who offer simpler, easier and ultimately harmful solutions.
We have no political affiliation. We offer our ideas to reasonable people in all parties. Like most people, we don’t care about ideology, just about results. We know the world is more complicated than the angry people on Twitter insist, and we think politicians should be more candid about that complexity. We are militantly sensible.
The Conservatives, like other parties, should address their manifesto to the voters of this centre ground. Theresa May has a good track record here, one that starts long before that fine-sounding speech in Downing Street last summer. She was a moderniser before the Cameroons, and a reformer too: she first proposed Free Schools.
She also anticipated Jeremy Corbyn’s “rigged” market narrative. In an important, under-read speech in 2013 she accepted that some markets don’t work well for the people in them, so the state should step in, “to make markets work for everyone, not just the executive class.”
She was right. Addressing consumers’ feeling of being powerless and ripped off is vital, to restore falling trust in responsible business and to stop them succumbing to easy populism. The Conservative manifesto should have fair markets – in everything from energy to cars – at its heart.
Fairness means making markets work better for the people who, for whatever the reason, can’t switch their business regularly.
There may be better ways to do this than capping prices, though. One option might be to make companies fight harder to keep loyal customers.
Here’s one idea: if you’ve been on a standard tariff without switching for three years, you should (unless you opt out) go into a basket of other loyal customers whose collective business is auctioned off and switched to the supplier who offers those customers the lowest price. Regular competitions that could see suppliers lose tens of thousands of loyal customers at a stroke might drive down prices for loyal customers.
Markets should be much more transparent, too. Why shouldn’t energy suppliers display, in every one of their public documents and online, the number (in thousands, not percentage points) of their customers on the most costly deals?
The private pension market needs a cleansing blast of sunshine: impenetrable and opaque fees eat up savers’ money, and deter some from even saving at all.
On state pensions, the triple lock has done its job, and moving to a double lock will save little money in the next few years. A better plan is to link pensions to a rolling average of earnings that includes recent figures and OBR projections.
Similar clarity and stability is overdue in health spending. The manifesto should promise an NHS funding rule to increase spending on health and social care by a minimum of the rate of GDP growth each year. If we can guarantee spending on defence and foreign aid, why not health and care? There should also be a new Office of Patient Outcomes to provide real independent oversight and make clear what each pound spent on the NHS delivers for patients’ health.
Tax breaks to help families with the costs of caring for older relatives at home should be explored – including the costs of adapting or extending that home. Likewise tax changes to encourage older home-owners to downsize.
May has advanced then retreated on corporate governance, amid talk of workers’ seats on company boards. She should start again by helping more workers buy a stake in their company. Schemes like Save as You Earn, which offer staff share options funded from monthly savings and are used by the likes of Tesco and Whitbread, should be made simpler and more generous. There’s a case for letting employees buy those shares from their pre-tax income.
And shares held by employees should carry more voting rights. Workers should indeed get more of a say and more of a stake – as owners. Call it a share-owning democracy, if you like.
On tax, May should bite the bullet and scrap a “tax lock” that can only tie her hands and distort policy. Having unbound herself, she should return to the question of National Insurance for the self-employed: there is a case for increasing tax rates for some, but they should get a proper package of new rights in return.
A central element of that package should be free access to training and adult education, which are the best ways to lift low-income workers up the wage ladder.
The Further Education sector that can provide much of that training should get more support, too. We’ll need a British workforce with better skills after Brexit. And people who live in the place they grew up in instead of going away to university deserve better: social mobility shouldn’t have to mean moving house.
On immigration, any move away from the blunt “tens of thousands” target would be welcome, as would acceptance that students are not the same as other migrants, regardless of what the statisticians say.
The manifesto should start a new, more honest conversation about immigration. The flipside of control is responsibility: once free movement ends, any migrant in the UK is a migrant we chose, here under rules set by British politicians. Conservatives should then “own” Britain’s immigration, saying loudly and publicly what many ministers today only say in private: immigrants are here because they make a vital contribution to industry, public services and the public finances.
Those contributions should be made much more visible and tangible, to dispel myths that newcomers take without giving back. As a start, the £250 million the Home Office expects to raise from its new Immigration Skills Charge should be used to make the Controlling Migration fund a meaningful one: it should fund new classrooms and GP surgeries, which would – literally – fly a flag proclaiming “Funded by Immigration”.
The implications of different levels and forms of immigration should spelled out clearly to voters by impartial, authoritative public servants pursuing their own remit beyond ministerial control: an OBR for immigration, if you like.
History will remember May for Brexit, but that doesn’t have to be all. This election will complete her conquest of the territory of Right: she can crush UKIP and put reckless No Deal Tories in their place. And with the right manifesto, she can buy herself a ticket home, to the sensible centre ground.