Matthew Lesh is the Head of Research at the Adam Smith Institute.
As the flus from last week’s Conservative Party Conference slowly fade, it is worth turning our minds back to a conference that we must never forget.
It was the autumn of 1980. The country was facing economic turmoil. Decades of Keynesianism was taking its toll with high inflation and low growth. But there was a leader, a radical neoliberal, who refused to accept the status quo or allow the doomsters to take her off course. “You turn if you want to, the lady’s not for turning,” Margaret Thatcher told Conservative Party Conference.
Thatcher unashamedly spoke not just of policy change but creating “a new independence of spirit and zest for achievement”. She called her administration “one of the truly radical ministries of post-war Britain”.
Boris Johnson’s party conference speech last week has been lauded for its political nous: get Brexit done, and fund the NHS and other public services.
This makes a lot of political sense, particularly for the party’s ‘Go Midlands, Go North’ strategy: the plan to win northern Leave working class areas who traditionally voted Labour Party.
But Johnson’s spending is frustrating to many free marketeers, who have traditionally found their home in the Conservative Party. Boris speaks of a “dynamic enterprise culture” and the Conservative Party’s history in pioneering “free markets and privatisation”. But so far there has been little meat on the bone, while the party is giving up its reputation for fiscal conservatism by committing to big-spending plans.
Politically, this approach undermines support from economic liberals in London and the Southeast. This danger is heightened by the likes of Sam Gyimah’s defection, signalling the acceptability of the Liberal Democrats to Tory economic liberals. With the Lib Dems also winning over the likes of Chuka Umunna there’s a danger the two main parties are seen by voters to leave the centre stage to the Liberal Democrats — and leave governing alone to the scrap heap of history.
To get a strong majority, Boris needs to win both Chelsea and Fulham as well as Stoke-on-Trent. He needs to be able to hold up his economic credentials to win back Remain-voting Conservatives voters – not just give them another reason to abandon the party.
But this balancing act is nothing new. Thatcher, despite some reforms to childcare and housing subsidies, oversaw a huge increase in social spending. She declared that the NHS is “safe with us” and bragged about “enormous increases in the amount spent on social welfare to help the less fortunate”. David Cameron similarly declared that the NHS is “safe in my hands,” while cutting taxes, introducing free schools and reforming welfare.
Thatcher and Cameron balanced public spending with undertaking fundamental free market economic reform to boost the economy. To ensure the Conservative Party remains a broad coalition, it is important that Boris’ free market rhetoric is given meaning. There needs to be some meat on the bone. The Conservative Party will be much weaker if it does not have a serious economic policy offering that creates a clear distinction with Labour.
On the political left, while many may disagree with their approach and ideas, there is undeniably a radical reimagining of policy and a clear agenda: a four day work week, shutting down private schools and nationalising industry.
Some on the Right have chosen to respond to the emboldened Left by adopting parts of their agenda in the hope of placating and preventing the worst. But, as Theresa May’s premiership displays being Labour-lite and adopting policies like the energy price gap, or nanny state policies like the sugar tax, simply does not work.
The Neoliberal Manifesto, a joint project between the Adam Smith Institute and 1828 released last week at the Conservative Party Conference, presents a positive vision for Britain’s future. In the past, the word “neoliberalism” has been twisted by those seeking to manufacture a strawman on which to blame every societal ill.
But it doesn’t have to be this way. Neoliberals are champions of freedom. We want government to protect and facilitate your ability to flourish; we believe in the power and ability of each individual; we believe in doing what is most effective; we are optimistic about the future; we support market intervention to address specific issues but reject paternalism; we are cosmopolitan and outward-looking to the world.
The manifesto calls for a liberal, free market approach to trade that encompasses cutting tariffs and pursuing deals based on the principle of mutual recognition. It declares that need to reform Britain’s outdated planning laws to allow for the building of more houses to fix Britain’s housing crisis. The manifesto also calls for a simpler, fairer tax system by getting rid of stamp duty and allowing capital expenditures to be expensed in full immediately.
On migration, it calls for a liberal system that brings the most talented people to our nation. On education, it explains the need for more choice. On innovation and technology, it calls for an optimistic approach defined by permissionless innovation. It also calls for a liberal approach to drugs and personal choices, a compassionate but cost-effective approach to welfare, and addressing climate change without sinking our economy.
Many of these ideas are radical, and today can be expected to receive a mixed reception. But we think that our politicians should lead from the front, not the back. These policies are not designed with the idea of what may or may not be popular today, but rather setting the agenda for the future.
While not every action she took was immediately popular, Thatcher’s agenda transformed the country for the better and proved a politically successful formula across three general election victories. Cameron similarly won a majority after undertaking difficult decisions.
If the Government does not have an offering for people who want lower taxes and the state to live within its means, they risk unexpected losses. Johnson can follow in the footsteps of successful leaders with his own liberal, free market agenda.