Cameron right to back strivers – but words aren’t enough

LET us hope David Cameron actually means what he says. His speech to the Tory party conference yesterday was the best he has made in years. He outlined a different vision for Britain, appealing to the strivers who want to work hard and get on in life, a crucial audience whose disenchantment with the Tories is the most important reason for their electoral woes.

There were powerful moments. He exposed the philosophical absurdity underlying Ed Miliband’s view of tax cuts, described by the Labour leader as the government writing people a cheque. “Let me explain to you how it works,” Cameron said. “When people earn money, it’s their money. Not the government’s money: their money. Then, the government takes some of it away in tax. So, if we cut taxes, we’re not giving them money – we’re taking less of it away. OK?” It was strong stuff, marred only by the fact that the coalition has increased taxes so much, and that it inevitably describes tax cuts as a “cost” to the Exchequer. Still, this was progress.

The other powerful passage was when Cameron rejected class war. Usually, he is put on the defensive by attacks from the left but not this time. “I’m not here to defend privilege, I’m here to spread it,” he argued. That is exactly what all pro-aspiration governments should be trying to do: they should not hit the already successful, but allow as many people as possible to become successful. They must encourage wealth-creation, not seek to redistribute existing wealth. Cameron also delivered a passionate defence of Michael Gove’s education reforms and Iain Duncan Smith’s welfare overhaul, making the case in moral terms for improving children’s education and allowing the poor to regain their dignity by moving out of dependency.

The problem with all that, of course, is that this was just a speech. Nothing has really changed. No new policies were announced. The government’s current ones remain inadequate to boost growth; the aspirational classes continue to be hammered. The PM often makes grand statements which he then fails to follow-up. He must stick to this line of argument but also, crucially, remember that actions are what matter, not just words.

BAE’S CHAIRMAN MUST GO
SOMEBODY needs to pay the price for the failure of BAE’s proposed mega-merger with EADS. The deal looked doomed from the moment it was announced; it was naive in the extreme to imagine that a transnational “merger” (though it looked more like a takeover of BAE) of this nature, involving the French, UK and German governments, as well as the Pentagon, would ever be possible. This was not just about business: military procurement is governed by the rules of corporatism, not of the free-market. To pretend otherwise is silly. It is therefore strange that David Cameron backed this doomed deal.

To add insult to injury, it wasn’t just the politics that was wrong: the commercial aspects of the deal were equally flawed, with BAE shareholders justifiably angry at the terms of the deal.

So who should go? The obvious candidate is Dick Olver, the chairman. He ought to step down and be replaced at the earliest opportunity. Ian King, the chief executive, is an experienced and competent boss who should have known better than to back the transaction. His task must now be to rebuild the trust of his investors, and especially of Invesco’s formidable Neil Woodford, and to map out a way forward for the company. At the very least, he should have one last go at building a successful, independent, UK-based world class manufacturer.

allister.heath@cityam.com
Follow me on Twitter: @allisterheath

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