Bim Afolami: The Olympic model of spotting and developing talent should be applied to academia

26 Jul

Bim Afolami is MP for Hitchin & Harpenden.

As the Olympics begins, I have a giddy sense of excitement. The coverage is the BBC at its best. I start to care about events you barely knew existed (Men’s 10m Air pistol anyone?), and cheer on each British athlete with immense fervour.

There is something magical about the Olympics. It isn’t just the hype. It is the stories behind each and every champion. There is something special about the sacrifices they have made, spending their teenage years in a mixture of holiday training camps in addition to the relentless grind before and after school, and seeing all of that effort culminate in competing at the very highest level.

We rightly applaud and celebrate them, and we also praise their highly focused coaches and families who have helped develop their extraordinary single-minded focus on achievement from a young age.

After the failure of the Atlanta Olympics in 1996, during which Team GB only won one gold medal, finishing 36th in the medal table – below Belgium, Algeria and Kazakhstan – it prompted a period of furious self-flagellation in the media and serious soul searching among administrators.

Due to the brilliant decision of John Major as Prime Minister to introduce the National Lottery, this provided the funds for the “World Class Performance Programme” to start diverting funds into elite sport. It allowed athletes to devote themselves entirely to their training, paying their living costs and delivering a wide range of support services, from physiotherapy to sports science and nutrition.

Extra funds were also invested in greatly improved facilities across a range of different fields. The talent development programmes that made sure promising athletes were funnelled into their best sport at a younger age. All of this work has led to Team GB hugely improving its performance at Olympic Games, finishing 4th overall in Beijing 2008, 3rd in London 2012, and 2nd in Rio 2016.

Why do we think about academic and intellectual achievement so differently? Why do we regard the selection of children for academic ability and potential so anathema, yet ruthless and narrow selection for sporting prowess is regarded as rightly necessary to develop the leading stars of the future?

We need to focus on developing our brightest and most talented people, in a range of different fields, from a young age – and do this irrespective of their social background. As the Prime Minister often says, talent is evenly distributed in this country, but opportunity is not. We need to rediscover meritocracy in Britain.

The truth is that in order to do so, one is confronted by a difficult problem. How to discover and develop talented children in the population at large when the ladder of opportunity has so many rungs missing? And how do you give the best possible opportunities to such children once you have discovered them?

Adrian Wooldridge, Managing Editor of the Economist, in his new book The Aristocracy of Talent argues that the way to do this is to revive two ideas that were at the heart of the meritocratic movement until the “progressive” reforms of the 1960s: IQ testing and academic selection.

We know the arguments about the 11 plus – the Left argues that dividing the country between sheep and goats at 11, on the basis of one test at a very young age, does immense harm to those who failed in the process; the Right retorting that it gave unique life chances to bright working class children who were identified early and given life changing opportunities.

The best way forward is to learn from the failures and successes of the past. We don’t need a national 11 plus in the old style. We need more of a variegated school system that has lots of different types of schools from technical schools to music schools and arts schools, but which also makes room for highly academic schools in the state sector.

We have already provided the material for this with school academies – Brampton Manor Academy, for example, is situated in Newham, East London, with one in five children eligible for free school meals. The sixth form is highly selective (on the basis of GCSE grades), and it cultivates a highly academic atmosphere, with intensive Oxbridge training as well as a host of extracurricular subjects. Last year it won 55 places at Oxbridge – their method is working.

The Government could push this revolution further by allowing academies to select at 11 – not with an 11 plus, but with IQ tests developed precisely to avoid being susceptible to intensive tutoring that is all too common in preparation for that exam. This would not just be for the typical “academic” subjects.

For example, we should turbocharge the intake for our university technical colleges (which start at 13-14 years old) by scouring the country and actively selecting children with special aptitude in technical, engineering and design skills. These are the children who will go on to build our future high tech manufacturing capacity, or develop the sort of innovative ideas that will help us achieve Net Zero by 2050.

Wooldridge argues that, in addition to this, we could create a system of fully-funded national scholarships, awarded on the basis of a combination of IQ and social need, that would allow children to study at any school in the country – opportunities to be selected for this would happen continuously throughout secondary school, lest late developers be missed.

Private schools would be forced to open up a certain number of places to these students. These national merit scholars would be given free university education in return for agreeing to spend at least 10 years working in the public sector.

This would address the public sector’s growing problem with attracting high flyers, particularly in IT and tech. It would repair the fraying link between public service and intellectual excellence. As government and governing becomes ever more complex, and we demand more from our teachers and other public servants, we should try and ensure that more of the most academically able students are incentivised and trained for life in public service.

I know that real life is not the Olympics. Yet training and developing our most able young people for the future will not just be important for identifying hidden talent, but it will benefit all of our society. It is mad that the only type of selection that is verboten in the state sector is academic, when the wealthy can just pay for it.

Let’s rejuvenate the idea of meritocracy, and truly ensure that the most talented, from every background can get to the top. We might end up with better technical skills in industry, better civil servants, better teachers, and yes – much better politicians!

Bim Afolami: The big question facing Johnson. What does fiscal conservatism mean in an age of the big state?

12 Jul

Bim Afolami is MP for Hitchin & Harpenden.

Over the next few months, the Prime Minister and his Government will set out the key policy choices in two key areas – the spending review and planning reform. The political choices made here will tell us a great deal about the Prime Minister’s brand of conservatism, and therefore where the Party is heading.

The Spending Review that takes place this autumn will set out departmental spending for 2022/2023. The easiest option for the Prime Minister, especially bearing in mind our new political coalition (which includes many more voters of lower and middle income than under previous governments), is to plough as much cash into public services as possible to build back better after Covid.

The NHS faces a huge challenge over this winter not just with Coronavirus, but also with treatment backlogs piling up. There are challenges with education catch-up funding, as well as local government shortfalls. Any government seen to be failing on those fronts would face a major problem come election time.

However, the medium term fiscal challenge is daunting. The UK saw the fourth largest increase in government borrowing (as a percentage of GDP) among 35 advanced economies in 2020 (after Canada, Norway and Singapore). Even if our economic bounce back is stronger than originally thought (and there is evidence for this), there are real risks to the Government’s fiscal plans from the fact that the increased government spending, due to Covid, means that some departments will have less money to spend for the rest of the parliament.

Compared to the spending plans pre-pandemic, in autumn 2020 spending totals in government departments were cut by £14.5 billion a year. At the same time, overall public spending is still forecast to be higher as a share of GDP in the medium term than it was pre- pandemic.

The fundamental choice is this: is the Prime Minister going to be a Conservative who wants to continue with a high level of public spending, accepting higher borrowing and higher taxes; or will he seek to pare back the state, introduce more private sector funding where possible, and take on those who seem to want higher spending for everything at every turn?

Although the second course is one that many traditional fiscal conservatives (and the Treasury) would favour, let us not underestimate the sustained political effort that would be required to make that argument at this stage.

Not increasing government spending, or indeed at times cutting it, is not popular. During my four years in Parliament, I have seen numerous instances of Conservative governments trying to hold the line on spending and suffering real political damage (i.e: concern over school funding in 2017/18).

Yet seeking to keep higher levels of spending and borrowing not only increases the risk of inflation (which is creeping up anyway due to global macroeconomic factors), but it also cuts to the heart of why so many people vote Conservative – an understanding that we are careful stewards of the public finances and will maintain good economic conditions.

Throw in the wider commitment to increase spending in order to “level up” the North, and many traditional Conservatives will start to take flight. My view is that the only way to help square this circle is to rediscover our concern for the importance of public service reform – to work on improving the public sector so that it can produce better outcomes without huge increases in spending. Without the ability to achieve better outcomes in public services, at a time when the state is a bigger part of people’s lives than since the 1960s, we will suffer badly at the next election.

Planning reform looks no easier. Even leaving aside the Parliamentary reality that many southern MPs are yet to be persuaded of the merits of reform, the decisions made will have a huge impact on the perception of who this Conservative Party is for. Who are our people?

In many areas of the Home Counties, where the increases in housebuilding will be the most politically salient, many traditional Conservatives regard significant housebuilding nearby as an attack on their sense of place and home. Even a cursory look at the results in the last local elections and the Chesham and Amersham by-election makes it clear that housing has the power to be electorally explosive.

Ultimately, there will need to be some more house-building in the South East (there already is!) and across the country. There may be a short term political price to pay for doing so in certain areas – that is the nature of being in government and having to take tough decisions.

But how do we limit the political damage and get the houses we need? We must ensure that development happens in the right way: protecting and enhancing our environment, sympathetically extending communities or creating new ones, and with local support. Neighbourhood Plans are a good feature of our current planning system which enable residents to set out what developments in their area should look like. We must ensure that these form a key part of the new process so that residents have more control over their local environments.

Modern conservatism will always treasure our past and champion the future. We have no future as a party – or indeed, as a property-owning democracy – if younger people cannot get on the housing ladder. But even if we achieve a large increase in the number of new homes, the evidence shows that it won’t put more than a small dent into affordability. As George Osborne’s former economic adviser Rupert Harrison said last week: “a decade of effort might knock two or three per cent off prices at best, just a few months of price growth at current rates. The reality is that high house prices — and indeed high prices for all assets — are a global phenomenon, and for almost 40 years there have been much more powerful forces at work: a huge fall in the interest rates set in financial markets”.

To improve home ownership amongst the young, we need to do more than just build more houses. We also need to change the mortgage market to allow for longer term (over 20 or 25 years) fixed rate mortgages which help solve the affordability problem for young people without much of a deposit. If we can do this and genuinely show younger people we are governing to help them get on in life, this will be recognised by them and (hopefully) by their parents and grandparents. If we allow the broken system to continue as it currently stands, we many retain the support of the few but be increasingly resented by the many.

These choices are not just normal mid-term difficulties. How the Prime Minister approaches them will determine the shape of how the modern Conservative Party is perceived. What does fiscal conservatism mean in an age of the big state? How will we push all levers to ensure that younger generations will be able to afford a decent home of their own whilst retaining our existing support?

Bim Afolami: What southern MPs in traditionally Tory seats should learn from Northern ones in the former Red Wall

28 Jun

Bim Afolami is MP for Hitchin & Harpenden.

Lyndon Johnson is said to have remarked, after signing the US Civil Rights Bill of 1964, that the Democrats had “lost the South for a generation”. And so it proved.

From the late 1870s to the mid-1960s, the conservative whites of the Deep South held control of state governments, and overwhelmingly identified with and supported the Democratic Party

Meanwhile, the Republicans had significant strength in the North East and in the West (for example, in California – the home state of both Ronald Reagan and Richard Nixon).

Thirty years later, the Republicans held a majority of southern state governorships and seats in both houses of Congress, whilst liberal Republicans in the north east and west coast were becoming an endangered species (now largely extinct). Major realignments happen in politics.

In March 1962, the Liberal Party won a by-election in Orpington, a seemingly safe seat for the Conservatives, prosperous, suburban and on the edge of London, with a 22 per cent swing – resulting in a majority of almost 8,000.

The Conservative leadership was terrified by the result. In his diary of that night, Harold Macmillan noted that “we have been swept off our feet by the Liberal revival and made the world safe for Liberalism.” On election night, the newly-elected Liberal MP declared “There is not a safe Tory seat in the country.”

Does that result sound familiar? Yet, by the 1964 election, the Liberal Party only managed to increase its seats from six to nine, and by 1970 it was back down to six seats. Sometimes, the promised realignments do not occur.

After the terrible by-election result in Chesham and Amersham, southern Conservative MPs in Remain-leaning seats, particularly in the commuter belt, are wondering what the result means. In the run-up to election day, more and more of us started to feel that we might lose it.

But none of us thought it would be as bad as that. Some have been quick to proclaim doom for these sorts of seats as a Brexit corollary of the Conservative advance in the “red wall” in the North and Midlands. Other explanations are less ideological – and put the result down to planning reform first and foremost, or a need to have more focused and targeted messages for southern voters.

It is hard to know the truth, and having knocked on lots of doors it is my sense that all of these accounts have some truth to them. Yet in one sense it doesn’t actually matter what the explanation is. Rather: what is the impact on southern Tory MPs who hold these seats, and on their constituency associations and councillors?

The psychology of Conservatives in the Home Counties has changed profoundly as a result of this result, combined with relatively mediocre results in May’s local elections, in three principal ways.

First comes is the scary realisation that the electorate is more volatile now than since before Brexit. Voters are less attached to their party of choice, and are shopping around at each election more than ever before. Very little can be taken for granted if a seat with a comfortable 15,000 majority can be lost on a 25 per cent swing. The 2015 and 2017 elections demonstrated the highest voter volatility in British election history, with 2019 being the sixth highest.

Secondly, southern Conservatives have started to think of themselves as facing similar challenges, and are starting to share best practice on local campaigning and incumbency. In the past, MPs tended to think of themselves as those who were either in a safe seat or in a marginal – and informal groupings tended to gather on that basis. Now, as the Party’s electoral fortunes look to be increasingly different in different parts of the country, these regional groupings tend to be more resonant.

Third, many southern Conservatives have decided that planning reform is the new “third rail” of politics – an issue that cannot be touched without causing immediate political death. The way that the Lib Dems cynically lied and exploited the issue in Chesham and Amersham has convinced many that doing anything at all will be a great political mistake on the scale of the Poll Tax. This is going to be an extremely difficult issue for the Government and the wider parliamentary party to crack, because we all know that the planning system is broken, and needs quite significant reform. Something must be done. This one will run and run.

Overall, southern MPs are feeling a little less comfortable, and that is not altogether a bad thing. As my former boss in the City used to repeat to me on a regular basis, only the paranoid survive! Undoubtedly, there will be more marginal seats in the south of England at the next election than we have recently been used to: we will be threatened by the Liberal Democrats, Labour, and the Greens, all aided by significant tactical voting.

When I look at the newer “Red Wall” MPs, I see campaigning acumen, vigour and toughness, borne out of several years having to fight extremely hard against an entrenched Labour Party. Combined with this raw campaigning toughness, many of these MPs are developing new ideas and expanding the Conservative base in their areas. There is a new, grittier, more northern conservatism that is pro-industrial economy, pro-worker, and pro-Green because of jobs and living standards: pro-low tax but not at the expense of public services.

Southern MPs need to engage more fully in the debate about the changing nature of conservatism. We should work together with our northern colleagues as one united parliamentary party and also not be afraid to champion ideas that will have real resonance in the south.

Good examples are Claire Coutinho of East Surrey) and David Johnstone of Wantage, who are working on a project with the Social Market Foundation on how to close the “Opportunity Gap”, which seeks to examine ideas on how to end inequality of opportunity. As we emerge from Covid 19, there is a huge debate to be had about the nature of the new British economy, how to deal with the generational divide between young and old, and the politics of net zero and the environment.

Many of these issues will be seen differently in Hitchin than Hartlepool: we must develop a policy framework that is flexible enough to embrace our broadened church and our incredibly varied country. The next election may well be fought very differently in different regions.

But this cannot be policy in a soulless, technocratic way. Policy without a philosophical underpinning never takes root properly. We need to recognise that the days of Cameroon hyper-liberalism (in both an economic and social sense) are gone. Nothing yet has yet taken its place. Let’s work with our northern colleagues to redefine Conservatism for the 21st century in a way that suits both north and south, leaver and remainer, young and old.

Bim Afolami: The Government’s Net Gain initiative will be transformative – but its implementation must be sped up

17 Jun

Bim Afolami is MP for Hitchin & Harpenden.

Preserving what is good about our country so we can safely pass it on to future generations is at the heart of Conservatism. It is something that – as Tory MPs – we should all care about. Whether “Leaver” or “Remainer”, North or South, rural or urban, all of us share a common duty to conserve those vital parts of our shared heritage which make Britain great.

Our natural environment – our hedgerows, woods, moors and heaths – is one key element of this shared heritage. Indeed, the preservation of our country as a green and pleasant land is something we can unite around. Lady Thatcher recognised this with her pioneering work on the environment which culminated in the Environmental Protection Act, but this Government has continued this tradition.

From our commitment to Net Zero; to the Prime Minister’s undoubted personal enthusiasm for green projects; to the Government’s 10-point green plan that will transform our economy and will result in the creation of 250,000 new jobs, there can be no doubt in the public’s mind about the Government’s determination to ensure that we “build back greener”, and I believe this mission statement can bring the Party together as we look to deliver on our manifesto over the rest of this Parliament.

The Environment Bill (currently going through the House of Lords) is a worthy next step in the Conservative march towards establishing ourselves as the champions of the environment. It is a truly momentous piece of legislation and contains a number of brilliant policies.

One of those initiatives is “Net Gain”, a world-leading initiative that will ensure that various types of property are developed in such a way that the biodiversity value of the site (i.e. the sum total of habitats currently there) increases at the end of the build. According to the Government’s studies, this will save 9,644 ha of habitat per year, and will create an additional 5,428 ha.

Net Gain has a long history. For years it has been called for by academics and campaigners. The version of the policy set out in the Bill itself has been in development for nearly a decade, and was announced by Michael Gove over two years ago. The eyes of the world are on us as we become the first major economy to take such an ambitious step. Get it right, and countries around the world will start emulating what we’re doing – with major gains for the whole planet. It is very exciting that it is finally about to see the light of day – as long as we don’t allow some in Whitehall to delay this crucial initiative.

Buried away in the response to the response to a recent consultation is a proposal from the Government for a two year “stand still” transition period. In other words, we are about to voluntarily delay this policy. This puts at risk the destruction of 19,288 ha of habitat – that’s over 30,000 football fields. Without a considered rethink, we risk turning a flagship policy we have been developing for 10 years into something that looks like backsliding.

Let me be clear – as often with major policy changes, there are sensible reasons for a transition period. There are various things that have to be prepped – local authorities will need additional resources; there are strong arguments for brownfield sites to be exempt for at least two years; and we need to make sure that small developers can easily access the tools they need to comply with the new rules. But all of these points are arguments for a two year phasing in of the policy, not a two year stand still.

To meet the (rightly) lofty ambitions set by the Prime Minister, the Government should be bold and set out a better plan for the Net Gain transition period. They should announce a phase-in with the details described above, so we can start restoring our environment from next year after the Bill gets Royal Assent.

And they should set out a plan for rolling out the new technologies that small developers can use to comply with these new requirements (an obvious thing for the Government and Natural England to do is to set up an accreditation scheme that reviews and approves these new technical solutions to ease the transition).

If parts of the policy aren’t ready by the time the Bill gets Royal Assent (such as the purchasing of offsite plots and biodiversity credits) then those bits of the policy can be held back. But let’s try and do as much as we can as fast as we can – we shouldn’t stop the whole policy just because one or two bits need a little extra time.

Property developers, both large and small, have rightly welcomed Net Gain. The industry is ready, and we should be too. It is time the Government shows the sort of ambition the Environment Secretary recently championed and that we have committed to in the G7 2030 Nature Compact.

Instead of committing to a course that results in the destruction of 30,000 football fields worth of habitat, let’s announce that we are going to save 30,000 football fields. That would be a worthy next step in the Government’s path, and would turn a potential own goal into a bright, ambitious win which the Party can get behind.

Bim Afolami: The politics of Net Zero are more perilous than we think

14 Jun

Bim Afolami is MP for Hitchen & Harpenden.

I was in the chamber of the House of Commons when Theresa May’s government legislated for a legally binding target for the UK to reach Net Zero by 2050.

It felt momentous at the time, and it was a big moment. Strangely, though, during the debate in the chamber, the remarks were uniformly positive, from all sides.

Now let me be clear: I strongly support the Net Zero target and did at that time – it is the right thing to do. But in politics when you see something as momentous as this go through without a dissenting voice, an alarm bell should ring that says: “have we thought through all the implications of this?”

There are two areas where we may be politically vulnerable in the coming years on the environment, and on reaching Net Zero by 2050 in particular.

First, the need to significantly limit, and preferably nullify, any direct economic cost on working people, or else risk a considerable political backlash. With the threat of inflation rising, the cost of living agenda is likely to return to the front and centre of British politics very soon. This will be politically resonant for the sort of middle income, Red Wall voters who have been increasingly supporting the Conservatives in recent elections.

Second, there is the twin threat from the other side of our political coalition. For many liberal-minded, Remain-leaning Tory voters in the south, our strong support for the environment is one of the key reasons for their support. If there is any hint that we are rowing back, their loyalty will be severely tested – especially if Labour and other opposition parties can effectively make the case that we are failing to reach our own carbon emission targets.

Our record on reducing UK carbon emissions whilst growing our economy is the best in the G7, and one of the best in Europe. Yet the vast majority of actions we have taken are about decarbonising power generation. Aggressively moving towards renewable energy since 2010 has been remarkably successful, but we have barely begun to tackle many of the aspects that affect people’s day to day lives – for example, the need to retrofit homes in order to make them more fuel efficient, ensuring traditional boilers are replaced, or ensuring electric vehicles are affordable to the ordinary family.

To be frank, these actions will require a lot of money, up front, from the Treasury. We cannot think it will be sufficient to cover the costs just for the lowest income voters – most voters will need environmentally sustainable options to be heavily subsided and affordable. Most middle income or even wealthier voters are not remotely prepared or willing to pay significantly more tax on fuel, or on flights, or to rip out their existing heating systems, or many other invasive things that academics and policy experts suggest will soon be required to reach Net Zero.

The Committee on Climate Change envisage phasing out oil and coal heating by 2028, gas boilers in homes by 2033 at latest, and by 2030 in public buildings. Lots of change is coming. The new upcoming Heat and Buildings Strategy and broader Net Zero strategy (both expected this summer) will be scrutinised heavily on the twin axes of both policy effectiveness and additional costs.

The cost of living used to be a major issue in our politics. It was a dominant issue during the 1960s, 1970s, and 1980s. The 1990s and 2000s saw benign economic circumstances until the financial crisis.

After it, something strange happened to our economic debates. We stopped talking about economic policy in relation to ordinary people – real incomes, prices of goods and taxes, and focused our political capital on getting public support for measures to reduce the deficit. Although May’s government started to home in on cost of living as a potential issue for the “JAMs” (voters “just about managing”), this issue was soon subsumed within the Brexit fog.

I believe that that the politics of cost of living is about to return, and it presents a real political danger for the Government and the Conservative Party.

Andy Haldane, the hugely respected former Chief Economist of the Bank of England, has openly talked about the “tiger” of inflation stalking the land. The economy is recovering quickly, and the immediate consequence is that too much money (from extremely cheap debt and accumulated savings built up over Covid) is chasing too few goods and services.

There are also labour shortages and supply chain difficulties in many sectors, which is constraining supply. A resurgence of inflation is the central scenario for growing numbers of businesses he says. By way of comparison, inflation in the USA is already at 4.7 per cent, up from 4.2 per cent for April, reflecting the overheating US economy. And the recovery, in both the USA or the UK, is nowhere near complete.

You can see where I’m going with this. Increased costs from Net Zero policy, combined with general inflationary pressures, looks like significant cost of living increases for ordinary people. Even with a growing economy, that will present real challenges to our well-earned reputation for economic management.

From a Net Zero perspective, then, how do we do the right thing and insulate ourselves against political attack at the same time? There should be three principles underlying our approach.

First, we need aggressively to embrace the long-term economic opportunities of getting to Net Zero by 2050, and we need to communicate that clearly so that people understand what this means for their day to day lives. Households living in energy poverty typically spend a higher proportion of their income on their energy bills. Improving the energy efficiency of dwellings by installing insulation, more efficient heating and cooling systems and more efficient building fabrics can decrease energy costs, and enable higher levels of disposable income.

Energy poverty also has a negative impact on the NHS, with more avoidable hospital admissions and use of non-primary health care services. Living in energy poverty increases the risk of acute respiratory, cardiovascular, and musculoskeletal problems, which often result in lengthy hospital admissions, particularly in winter. The Treasury is going to have to be brave and invest a lot of money up front.

Second, the cost impacts on the vast majority of voters must be minimal. If we try and force voters to retrofit their homes with new insulation, or install new low carbon boilers, at the personal cost of thousands of pounds, this will be a political disaster. Even for the voters who can afford significant expenditures, this will be seen as unfair and heavy-handed, and large numbers of them will either refuse (or be unable) to comply.

The third principle is this. We need to face down those who are starting to say that the costs of Net Zero are too much, or it is too difficult. In a world where countries are becoming more and not less committed to the need to limit global temperature rises, the UK cannot afford to hold back. The macro economic opportunities for reindustrialising huge parts of the North and Midlands – creating hundreds of thousands of jobs, whilst using the traditional strengths of the service economy in the South – is too great to ignore. We can not only be international leaders, but help the domestic economy go through a job rich transformation.

The debate how we reach Net Zero by 2050  will define our politics over the coming decades. We must ensure that we have an ambitious, world-leading approach that builds on our strengths. But we must also ensure that we don’t alienate voters along the way.

Bim Afolami: Conservatives need a new economic vision

14 Sep

Bim Afolami is MP for Hitchin and Harpenden.

Covid-19 gives us the chance to examine deeper questions about the nature and direction of economic policy. I believe it is time to have a rethink of our economic philosophy as a Conservative Party, and rediscover some fundamental Conservative principles – which are, and always have been, much broader than support for market economics. We need to embrace an active enterprising state, reformed and reforming, that can help drive an enterprise nation forward. And one with strong environmental credentials, which can deliver an everlasting environment.

Much of current Conservative economic thinking was set in the Thatcherite revolution, succinctly described by Nigel Lawson in 1984 as “increasing freedom for markets to work within a framework of firm monetary and fiscal discipline”. I agree with that and believe that articulates a simple truth at the heart of macroeconomics which is still true.

However, the greatness of Thatcher was not ideological. It was because she was radical in reaching solutions for the economic problems of that time in ways that were rooted in Conservative principles of freedom, opportunity, self-reliance and prosperity on the basis of hard work.

We need to do the same today. Conservative thinking on economic policy has become muddled in recent years. We profess to believe in a balanced budget, but we do not want to reduce government spending. We often talk about reducing bureaucracy and regulations – yet our tax code continues to become more complicated and the quangocracy goes from strength to strength. We believe in devolution, yet the Treasury keeps its iron grip on all major infrastructure decisions. We need to be clear what and who we are for and show how timeless Conservative principles also apply to our new age.

The economy should benefit the person with ideas rather than inheritance. It should support families and communities rather than allowing multinationals to rip them apart in the name of efficiency – the family and small communities are the bedrock of society. It should unashamedly help the British business grow and scale here at home – and be better at supporting our national champions in different sectors. Finally, as climate change worsens, we should aim to make the UK the cleanest economy in the world, truly a Conservative act, conserving our green and pleasant land for our descendants.

I believe that there are five principal, significant, long-term economic problems in the UK at the moment, and that Conservative economic thinking needs to provide a sensible response to them. These are: (i) poor investment and productivity growth; (ii) too much SME debt and too little equity; (iii) growing fiscal challenge; (iv) unbalanced growth – the need to level up; and (v) climate change.

To deal with these we need an enterprising state, which can help power an enterprise nation.

An enterprising state

Central government needs to be a macro-enabler. It needs to use its broad strategic oversight to enable the private sector and devolved parts of the public sector to do transformative things.

The Government has set out its clear intention to build and deliver much more and better infrastructure. Yet the way for us to achieve this cannot be for the Treasury to control every single infrastructure decision of any consequence. We need to facilitate private investment in infrastructure, by allowing many more development corporations to be set up using innovative financing models that allow money to be raised locally.

We should establish a UK Sovereign Wealth Fund (long championed by John Penrose MP) that would create a pot of savings that could pay for state pensions and benefits. The Fund would provide an intergenerationally fair solution that would take some of the burden of these costs from being shouldered by future generations. It would also be an ‘anchor investor’ providing long-term investment capital for British entrepreneurs and start-up businesses and would help provide equity to UK SMEs which have too much debt to grow.

An enterprising state cannot be governed by command and control from Whitehall. We need to give local areas and cities the ability to experiment with different ways of doing things, to learn from their own experiences and from each other. This should have two aspects.

The first is that all regions (particularly in England) need to have a greater degree of fiscal autonomy. We should allow regions to (i) raise local income, sales and tourism taxes (all up to a limit); (ii) make decisions on infrastructure to allow them to give private companies the ability to build and operate new infrastructure; and (iii) give local public services much more freedom on procurement.

The second aspect is that the enterprising state needs to remember that economic growth and success can often come from investment in non-economic things by local people. Investing in a village hall or local library may not have an ostensible economic benefit, but improving the local environment of a small town can have incalculable improvements to the lives of those who live there, and can have significant economic benefits through increased desirability and investment.

An enterprise nation

We Conservatives know that prosperity does not fundamentally come from government. It comes from people willing to start and sustain a business.

We should reduce NI for new hires, keep taxes on the self-employed low, and maintain the difference between capital taxes and income taxes – capital taxes should be low because we should reward those who take risks.

The central government should also work with the private sector to help the UK’s technological landscape. Emerging technologies like blockchain should be utilised to help revolutionise our approach to trade and SME finance through a Centre for Distributed Systems, established in a partnership between the government and the private sector.

On the environment, we need to see this as an economic challenge and opportunity. The state’s role should be twofold. First, the Government needs to continue to issue binding targets for decarbonisation in key areas and give more targets across different areas of the economy.

The second aspect is to provide, and to help corral, the finance required for every aspect of decarbonisation. This finance will be needed to help ensure that there are very few barriers for individuals, communities and businesses which prevent them transitioning into a low carbon future.

Lubricated by this finance, inventors and innovators will be able to take advantage of the UK’s position as the first major country to turbocharge our approach to net zero and export its technologies across the world. This could be transformative for the UK, and the jobs created across all industries will be created all over the country, at different skill levels. Levelling up to save the planet.


What I have tried to do here is to sketch out a new economic vision for the Conservative Party. We can build on the achievements of the past 30 years by addressing our modern weaknesses. We have every chance of leading in the world in a new type of Conservative economics just as we did in the 1980s. We can achieve it.