Don’t panic! The pound may have plummeted. Government borrowing costs may have hit their highest level in thirty years. The Chancellor may be out of the country cosying up to China. But she has asked her Cabinet colleagues to come up with fresh ideas to boost growth. She’s even told them firmly to ‘cease anti-growth measures’. Isn’t it great to have the grown ups back in charge?
This less-than-reassuring news follows hard on the heels of a post-Christmas announcement that Rachel Reeves and Keir Starmer were reaching out to regulators for growth-boosting insight. If there’s any group even less likely to have the answers on growth than regulators whose very existence slows growth down, it is the current Cabinet. As Eliot Wilson wrote for CapX in November, Starmer’s Cabinet is ‘dominated by lawyers, political advisers and union officials’, with little if any significant experience of private enterprise.
It doesn’t have to be this way, and when Britain does finally elect a pro-growth party that remembers the spirit of economic dynamism that forged our heritage and understands the shakeup Britain needs, this current era will seem like a terrible dream. The answers on growth are, after all, simple – just not ones that Starmer’s Labour Party can readily accept. As Jon Moynihan wrote for CapX this week, growth needs ‘small government, low taxes and light regulation. All three are antithetical to Labour’s agenda and core supporters.’
Of course, as Moynihan also points out, those three principles have been sadly absent from much Conservative policymaking in recent years as well, which is part of why the British economy is in the state it is now.
At the same time, however, this should also be a source of hope. Britain’s stagnation can at times seem intractable, but the answers are within reach for a political party with the courage and principle to break with the failed consensus. In Canada, the Conservative leader and likely next Prime Minister Pierre Poilievre has successfully combined a populist tone with practical, conservative policies – like taking the regulatory brakes off housebuilding and cutting damaging taxes. These have not only taken him to the brink of power, but also won the support of startling numbers of young Canadian voters.
In the face of a raft of terrible news about Britain, it is important to remember that both our heritage and our potential remain extraordinary. As the must-read essay ‘Foundations’ pointed out last year:
The good news is that the hardest things to create are ours already. No government can legislate into being a respect for the rule of law, appetite for scientific discovery and entrepreneurship, or tolerance of eccentricity and debate. Such a culture takes centuries to build: it is the most precious inheritance that we have received from the generations that went before us. By comparison, what we must do is surprisingly simple
At the start of next week, in a welcome piece of good news, Starmer will be unveiling the AI Opportunities Action Plan drawn up by Matt Clifford, a genuinely world-class appointee. Clifford has said that he believes the UK can go back to being, per capita, one of the richest countries in the world. AI is a world-changing technology, like others that Britain has been in the forefront of developing and exploiting. We need the kind of ambitious optimism Clifford represents to shake Britain out of its malaise.
Plenty of thoughtful observers, here and in the US, see the extraordinary mismatch between our potential and our current self-wounded state. As the influential blogger Matt Yglesias posted on X last April, ‘The crazy thing about the shambolic UK economy is they’re at or near the leading edge on stuff like AI and pharmaceutical innovation. It’s an advanced society immiserating itself with bad land use policy and inadequate infrastructure.’ Another way to think about Elon Musk’s relentless attacks on Starmer – and apparent desire to see him out of office before the next election – is that he recognises the opportunity Britain presents, if it can only get its house back in order.
Kemi Badenoch’s Conservatives, therefore, need to resist their weakness for doomerism and become the optimistic foil to Starmer’s grim sanctimony. Winning politicians know how to inspire voters with a vision of a better future as well as criticising the present. That was true of Margaret Thatcher and Ronald Reagan, and still holds for Donald Trump and Pierre Poilievre.
Walter Russell Mead, in his book ‘God and Gold: Britain, America and the making of the modern world’ writes that for Anglo-Americans ‘dynamism is their tradition… they honour their past and acknowledge their roots by pressing on into the future… We are launching a space ship, not building a rest home’.
Under the Conservatives, and now under Starmer and Reeves, Britain has spent too long trying to turn itself into a rest home, run in the interests of its pensioners and preferring stasis to the risk and excitement of a dynamic economy. That is not who we are. Once our politicians remember this, it will not be our future either.
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