The main story in The Sunday Telegraph focuses on calls by "Leading Tories" to end Labour’s "overtaxing, overborrowing and overspending". Lord Forsyth, John Redwood and CentreRight’s Simon Chapman are all quoted. We have long argued that George Osborne was wrong to match Labour’s overspending but public expenditure is only one ingredient of economic policy. What does the rest of Tory growth policy look like? Here’s our good, okay and ugly guide to where we are…
Monetary policy: The Conservatives will strengthen Bank of England independence.
Free trade: The Conservatives are probably the most anti-protectionist party in Europe. Long may that remain so.
Long-term bills: The Conservative Party’s social reforms – reducing welfare, strengthening the family and reducing drug dependency – should deliver progressive reductions in the demands on the welfare state. The reforms will also encourage economically and socially creative citizens.
Education and skills: Far too many children in Britain are trapped in underperforming schools. Michael Gove’s Swedish-inspired revolution will start to change that. Also welcome are Mr Gove’s concerns about science and maths teaching and John Hayes’ work on skills.
Taxes: This ingredient almost deserves to be in the ugly category but for some interesting ideas on tax simplification and promises on stamp duty, inheritance tax and the adoption of Andrew Lilico’s Fair Fuel Stabiliser. The overall picture, however, is that Brown has levied 100+ extra taxes, many falling most heavily on the poor. The Tory response is timid. This timidity flows from a white flag policy on supply-side economics (ie rejecting the fact that certain tax cuts at least partially pay for themselves by generating growth and discouraging avoidance) and more importantly adherence to Labour’s spending plans (see below).
Regulation: We can hope that Conservatives will operate a lighter touch and even adopt some of John Redwood’s reforms as set out in his Competitiveness Report. Also welcome are Tory ideas to undo some of the damage done by Gordon Brown’s financial regulatory regime. What we don’t need however are headline-chasing announcements like the one on Chapter 11 bankruptcy. Chapter 11 stops bad companies from failing (customers of US airlines will know what we mean).
Transport: Theresa Villiers has been congratulated by others (Charlie Elphicke and Dan Hannan) for her campaign against the BAA monopoly but overall Tory transport policy is disappointing. On Radio 4 last Saturday Ms Villiers said that the party will have radical ideas by the time of the General Election; including on high-speed rail. Let’s hope so.
Energy: Alan Duncan should be commended for forcing the party to abandon its ‘nuclear energy is a last resort’ policy but there’s little sense of urgency from the party leadership about Britain’s looming energy crisis. A few micro generation projects will not be enough to keep British industry going.
Public spending: This is the ugliest of our economic policies. Conservatives should not be pledging to continue the biggest ever peacetime increase in public spending when ordinary Britons are having to cut their own budgets. A flexible freeze on public sector recruitment, scrapping of centralised IT projects, abolishing ineffective quangoes like the RDAs and market-based reforms of the public sector could all be introduced to start bringing spending under control. Dan Lewis has suggested other disciplines.