We need proper Conservatism now to save the economy
The UK is a great country with many advantages. It has the potential to be vibrantly successful, particularly as it has started to decouple itself from the European Union. It has huge natural resources in oil and gas to be exploited, a legal system which is respected around the world, as well as the English language and a vibrant financial centre which is second to none – although somewhat constrained at the moment.
But all of this is irrelevant if the UK’s ruling class, both at the political and bureaucratic level, is incapable of harnessing its strengths and creating a vision for the future.
It all started in the Blair-Brown era when the Civil Service was weakened and politicised and Left-thinking placemen were appointed to the quangos and quasi-governmental institutions. Government expenditure was increased significantly as incentives to encourage enterprise were reduced through increasing levels of taxation and bureaucracy.
In their 12 years in power, the Conservatives, first in coalition, then on their own, have done nothing to change this. We are now faced with the highest levels of taxation in generations. On top of this, they have been in the thrall of minority pressure groups and allowed the woke agenda to take hold. It is now rife in schools, universities, the Civil Service and, to some degree, business.
We have completely lost the culture of enterprise and have developed instead a dependency culture with millions of people who could work not looking for jobs. This has been accelerated through the Covid period with an expectation that government must provide for all our needs. Working from home is becoming the norm rather than the exception.
How do we change this? It can only be done with radical thinking to replace the anaemic rate of growth which we have experienced over the past 15 years – slightly better but not very different to that of the EU.
While we have accumulated an exceptional level of debt over the Covid period, our overall level of debt at 90 per cent of GDP is not one which is unsustainable. It is considerably lower than many other countries we compete with. The arbitrary rule imposed by the Treasury to start repaying this debt within the next five years is nonsensical. Germany, for example, only fully repaid its World War II debt several years ago.
Insolvency is about a country’s ability to sustain debt levels over the medium term. By growing the economy above the trend rate we have seen in recent years, we can shrink the level of debt as a percentage of GDP.
Yes, Liz Truss was right. We need measures to liberate the economy and rekindle the spirit of enterprise, both at the individual level so that people are encouraged to work harder, and at the corporate level to encourage investment.
At a recent meeting with business leaders, the Prime Minister said: “I’ve got your back.” Has he? As chancellor, he introduced an increase in National Insurance, an anti-business tax, and raised the rate of corporation tax, an anti-business measure. He introduced a windfall tax on energy companies which has caused them to stop investing, and has refused to continue offering VAT rebates on purchases by foreign visitors which has driven them to other destinations, harming retail, hospitality and travel businesses. Companies now prefer to be listed in New York rather than London.
The Prime Minister, having grown up with parents running a small business and worked in the City, must understand these realities.
The Government needs to create a climate which says we are open for business and in which people feel justly rewarded for their efforts. Good people are already leaving the country in droves. We need a complete overhaul of policy and a properly Conservative government.
Sir Rocco Forte is chairman of Rocco Forte Hotels
