Below is a transcript of a speech delivered by the Rt Hon Robert Jenrick MP at an event hosted by the Centre for Policy Studies on October 16 2024.
I would like to begin with a simple observation: we’ve been here before. Let me set the scene.
Britain is hit by a series of energy price spikes driven by conflicts around the world. Governments attempt to spend their way out of trouble, sending inflation careering to double digit highs. The public finances begin to spiral. The nadir was reached in 1976, when Labour Chancellor Denis Healey was forced to beg the IMF for a bailout.
Years of failed economic orthodoxy and stale adherence to outdated ideas had left Britain on the brink. Labour’s unwillingness to think again looked certain to doom our country to years of slow decline.
And then things changed. In 1979, Margaret Thatcher took office.
As Keir Starmer is currently demonstrating, it’s not enough to just change leader and hope for the best. You need someone who gets what’s wrong and has a proper, well-thought-out plan to set things right.
And Mrs Thatcher had a plan. Together with Sir Keith Joseph, she had founded the Centre for Policy Studies, which – with the famous Stepping Stones programme, and much more – went on to produce some of the most important intellectual work underpinning the Thatcherite revolution.
The Conservative party had gone away, licked its wounds, and come back with a new vision.
It ended the drama. It ended the excuses. It focused solely on delivery.
At its core was a foundational reassessment of the link between the state and the economy. Breaking with the failed Keynesian orthodoxy, shrinking the size of the state, revolutionising the City of London, and putting us on a course to the growth and stability we desperately needed.
Today, a similar task faces us. The litany of problems is well known.
Real wages are barely higher than they were in 2008. Public sector productivity is lower now than it was in 1997. The national debt has soared above 101% of GDP and the cost of borrowing is rising. The benefits bill for working age people is over £48 billion each year, and if something doesn’t change Government spending will rise above 60% of GDP in the coming decades.
We are funding a larger state that performs less well and we have an economy that is trapped in a cycle of low growth. And these two things are inextricably linked. We can’t understand our economic failures without talking about the state. Because rather than standing back and letting prosperity flourish, too often the Government gets in the way of entrepreneurs and business.
Of course, the Labour party would also lay the blame for economic underperformance at the state’s door. But they’d argue the problem is too little government, not enough regulation.
There is no public policy issue they believe can’t be solved by creating another quango or arms-length body. Brexit should be unpicked, and Britain brought back into the EU’s regulatory orbit. Taxes should rise on business, even if – as Rachel Reeves has herself conceded – that will hurt jobs and make the UK less competitive.
The wrong diagnosis is giving rise to the wrong solutions.
The Labour party doesn’t understand this because it doesn’t want to.
Conservatives know that growth comes from the genius of the individual, and the discipline of the market. The Left believe it is directed from the centre.
It’s no wonder that no Labour chancellor since 1970 has left office with the tax burden lower than when they entered it. And it’s no wonder that Rachel Reeves is preparing to follow them in the upcoming budget.
In contrast, the Conservatives dragged Britain back from the brink in the 1980s. We did it again in the 2010s, restoring the public finances and giving markets confidence in our government. But while we steadied the ship this time after the tumult of the pandemic and the global energy price shock, we didn’t do enough to get it moving again.
We started taking advantage of Brexit freedoms with changes like the Edinburgh reforms, but we didn’t do enough to take advantage of newfound opportunities. This is why we paid the price at the ballot box.
Now we need a credible plan to get Britain going again, kick-start the economy back into life, and rethink the relationship between the state and its citizens.
It’s a daunting task, but one that I believe we are up to. Here is how we achieve it.
It begins with understanding the role of Government.
When David Cameron and George Osborne entered Downing Street in 2010, they were left a note saying simply: ‘I’m afraid to tell you there’s no money left’. The same will almost certainly be true when the next Conservative government takes charge.
The state has become bloated and inefficient, and the Conservative party – regrettably – lost focus on that overarching need to reform public services, keep the state small, keep taxes low and allow the market economy to thrive.
Ordinary, hard-working people pay their taxes expecting us to take no more than we need, and to spend their money with the same care and thought that they would. Too often, this has been false.
People can see this. They can see it in the NHS, where funding has risen 26% since the pandemic, where there are 16% more doctors and 11% more nurses and health visitors — with barely any more patients being treated.
They can see it in the dire state of care homes around the country. They can see it in the spiralling costs of government infrastructure projects like HS2.
They expect us to take good care of the economy, and to keep it stable. But when we abandoned fiscal responsibility in the mini-budget, the market took fright and working people suffered. That was a damaging episode – and under my leadership, we will return to being the party of sound money. We will, of course, remain the party of low taxes, but we will be the party that stands for cutting taxes responsibly.
It is inarguable that we must find a way to a smaller, smarter state.
We need to hold public sector leaders accountable for their failures. Senior managers in NHS England have presided over plummeting productivity – some have even denied there’s a problem.
It’s the perfect illustration of our current plight. There is no incentive to get on with the hard work of reform without skin in the game at the top. So we will restore that.
We will slash the number of civil servants back to pre-Brexit levels, cutting over 100,000 jobs worth of bloat. Instead, we will attract the very brightest and best – including, where appropriate, paying the competitive salaries required – and harness the productivity of the private sector.
We will invest in the automation we desperately need to speed up government work, replacing IT systems that have been left to rot for decades.
We will also embrace the possibilities of artificial intelligence and machine learning to speed up our work, and find further efficiencies.
If we can do this, we can create the room we need to cut taxes, and restore incentives to invest and grow.
We can find further savings, too.
The welfare system is not functioning as it should. Just as Mrs Thatcher found in the 1980s, more and more people have been tossed on the scrapheap, trapped in a cycle of dependency and inactivity. The number of those claiming disability benefits has risen by a third since the pandemic.
It’s right that those who are genuinely unable to provide for themselves are looked after. But we should not be blind to misuse of the system. In 2011, 20% of those sent for work capability assessments were signed off as unfit to work. Today, it’s 65%.
We are not two or three times sicker than we were just over ten years ago. Yet the number of new people claiming disability each month has doubled.
Labour now have a choice: proceed with Mel Stride’s reforms, which would see 400,000 fewer people on long term sickness and disability payments, or consign the country to a crippling welfare bill.
They need to tighten up work capability assessments because too many indicators show we are medicalising normal human stress, signing off as incapable those for whom work could be a valuable source of support and self-esteem.
They also need to impose tougher sanctions on those who refuse to take up suitable jobs. They should shorten the claimant review point for the long-term unemployed from 18 months to 12 months, so those failing to comply with their conditions can have their benefits removed sooner.
If we can get people back to work, we can cut taxes responsibly.
I am setting a simple target: we will bring the inactivity rate back down to its pre-pandemic level, bringing almost 500,000 people back into the workforce. Increase GDP, increase tax revenue, reduce spending – a win for everyone.
If we can get the disability and incapacity caseload back to 2019 we can take roughly £12bn off the working age benefits bill. And almost 2p off the basic rate of income tax.
No more excuses about the tax burden. Just delivering what we promised.
To help these people back into the economy, we need to be able to give them the skills they need to succeed. We are expected to spend almost £5bn this year on adult skills programmes, but this money could be spent far better.
That data shows that, for many people, it’s apprenticeships that provide the largest boost to earnings – the Government should be funding courses that work, not ones that don’t.
We will put funds into courses that deliver for the people taking them.
We will do this at the university level, too.
One in five graduates ends up financially worse off than if they’d never gone to university. That is a moral scandal. Young people are being sold a better future, and then left out of pocket with worthless slips of paper.
The last Conservative Government delivered a revolution for our young people. Nick Gibb and Michael Gove oversaw a revolution in England’s schools, and a dizzying rise in the international league tables. Now we need to do the same for those leaving school.
We are sending people to university who would benefit far more from building practical skills. It’s time to end Tony Blair’s failed experiment with higher education, close down failed institutions, and replace them with apprenticeship hubs for young and old alike, giving people the real chance at a better life they deserve.
We should never again be reliant on foreign labour for the brickies, welders and electricians that build this country and power our economy forward.
If we were to withhold student loans to the worst performing 10 per cent of courses for graduate outcomes, we would have 130,000 fewer students going to university. With this funding we could fund the biggest expansion of apprenticeships and vocational skills programmes in a generation. We could expand the 100 per cent funding for small businesses taking an apprentice younger than 19 to include SME and enable universities to become new Institutes of Technology.
No drama, or excuses – just delivering the real-skills we need.
We should give the next generation a chance in the working world, too.
Britain’s housing market is a national disgrace. High rental costs are decimating the finances of young people trying to start families. High house prices are putting the dream of homeownership far out of reach for too many.
Simple economics tells us we don’t have to look far for the answer. Immigration has soared, and housebuilding has stagnated. As the CPS has pointed out, we are 1.3 million homes short of the number we need. It shouldn’t be surprising that prices have risen.
As Minister, I got housing starts up to their highest level since 1987 and changed housing design codes to mandate beautiful building. But we need to go further.
The Labour Government seems to think you can fix things by declaring arbitrary targets. But as always with central planning, they’re going to build homes in the wrong places. They’ve imposed a 1,300% increase in Redcar and a 623% increase in Burnley, even while London and Birmingham have seen their targets slashed.
The simple truth of the matter is that we don’t need the state to tell us where to build. We just need to look at prices.
Labour slashed the housing target for Tower Hamlets by 58%. The average rent in Tower Hamlets is £27,000 a year. In Redcar, it’s £6,900. Where do you think needs more housing?
The market is screaming at us to build in London, in Manchester, in our city centres.
Rather than settling for urban sprawl, we need to build densely, and we need to build beautifully. We can protect our countryside by better using the space we have.
Our plan is simple: to unpick the housing deficit, add the million homes we need, and add them in London, Manchester and our other world cities.
There is so much value to be unlocked by fixing Britain’s broken housing market that we can do this without creating winners and losers.
We will zone urban areas for densification, speeding and simplifying the planning process, and we will work to ensure that residents in the suburbs can decide on densification and share in the value created.
No more drama or excuses, just delivering the homes Britain desperately needs.
The potential for growth is huge. In the United States, economists have estimated that reducing restrictions on house building in just three large cities to the ‘average’ for the rest of the country could have increased US GDP by around 9% in the 45 years leading to 2009.
In Britain, the distortions to our housing market are, if anything, larger – and so too are the gains from simply allowing people to live where they want to, rather than forcing them to spread to the outskirts of our cities.
Alongside dismantling the vetocracy, we will tackle the other great barrier to British growth.
British companies are facing the highest electricity prices in the developed world, driven up by a combination of short-sighted policymaking, and a failure to adopt low cost technologies.
Cheap, secure and abundant energy is a critical part of the modern economy. As the world shifts to making greater use of digital services, we need to be able to build and power data centres if we wish to remain competitive.
At the moment, Ed Miliband is gambling our energy security on a combination of expensive, unreliable renewables, cutting the gas that fills the gap when the wind doesn’t blow and the sun doesn’t shine, and overseeing the closing of our nuclear power plants. We are spending billions to subsidise a less secure grid.
Rather than heading for a future of ‘demand management’ – a polite euphemism for brownouts and shutdowns – we should be embracing an ideology of energy abundance.
And we can do so by learning from our friends overseas.
South Korea builds nuclear plants at a fraction of the price of Hinkley Point C. We can make use of their expertise, build low cost plants based on their specifications, and provide the solid, reliable baseload the industries of the future need.
But to do that we need to cut through the crippling environmental assessments, fast-tracking planning, and identify the brownfield sites to build them on.
If we treated securing cheap, reliable energy as the national emergency it is, we would be building five Korean-style nuclear reactors by 2032. 28GW of baseload capacity, providing almost a quarter of forecast demand, and the platform our grid needs to work.
No more excuses about spiralling energy bills. Just delivering the cheaper, secure energy the British people deserve.
It’s a simple agenda: Rather than a big state that fails, we need a small state that works. Rather than treading further down the path to ever more government intervention, we need a lighter touch approach.
It comes back to the fundamental rewriting of the relationship between the citizen and the state that Thatcher oversaw.
We need to create an economy where risk taking is rewarded, and the private sector free to deliver the growth we need.
And it is within our grasp to achieve it.
Letting people build houses, cutting energy prices, stopping paying people not to work and cutting the benefits bill, stopping subsidising worthless degrees giving young people the skills they need. Vitally, we need to bring accountability back to government, cut the waste and cut the tax burden. The rewards are huge. If we get the basics right, we can watch Britain boom again.
That’s my plan.
No drama, no excuses. We need a Conservative Party focused on delivery, grounded in the concerns of ordinary people and serving the British people once again.
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