Taking a long view: Radical ideas for the Conservative’s manifesto

Mark Littlewood
Follow Mark
IF YOU’RE keen to catch sight of what the Conservative party might look like in a decade’s time, you should make your way to the Sonata room at the Hyatt Hotel in Birmingham at half past seven this evening. A fringe meeting there, organised by the Institute of Economic Affairs and the Free Enterprise Group of market-leaning Conservative MPs will spell out their radical ideas for the sort of policies which should be included in the 2015 manifesto.

Of course, the headlines of the conference are being driven by day-to-day issues of political management: are the rumblings against Cameron’s premiership registering at all on the Richter scale? Has the vital debate about airport capacity in the South East merely become a cypher for whether you would prefer Dave or Boris as Tory leader? Can Osborne’s negative poll ratings fall any further?

However, what is becoming increasingly clear is that the coalition’s dreary day-to-day approach – preaching the need for dramatic reductions in public spending, but not producing them – is failing to deliver us to the sunlit uplands we were originally promised. The UK economy remains stuck in the foothills.

Dire economic times demand imaginative out-of-the-box thinking. A flatlining economy necessarily expands the envelope of what is politically possible. It also obliges politicians to take greater risks. A “steady as she goes” strategy is no longer intellectually credible, nor is it likely to curry favour with an increasingly disillusioned, even desperate, electorate.

Among the ideas being put forward by the Free Enterprise Group this evening are ensuring that tax thresholds rise with earnings, taking those on reasonable but middling incomes out of the 40 per cent tax bracket; finding a way to introduce a brake on future governments ratcheting up colossal debts; helping small businesses escape the throttling consequences of red tape; and a novel approach to economic immigration through the issuing of enterprise cards.

The authors of the report readily concede these are all ideas in their embryonic development, not a fully detailed, minutely costed policy platform. But the direction of travel is clear. Kwasi Kwarteng MP, the group’s convenor, argues that “fostering free enterprise through reforming public spending, cutting taxes and getting the welfare budget under control needs to be at heart of our political agenda”. The Prime Minister and chancellor might claim to sympathise with such sentiments, but Kwarteng and his colleagues in the Free Enterprise Group appear to be willing to start undertaking the intellectual legwork to match the soundbite.

If we want to help companies get off the ground, we need to allow them to be flexible and risk-taking, not to make it a terrifying prospect to move from sole trader status to taking on a few employees. Why not allow the first dozen employees of any start-up to be treated as self-employed for the purposes of employment law and taxation? True, such employees would not have the rights and privileges afforded to those who work in established industries or in the public sector, but isn’t this preferable to leaving them on the welfare rolls?

And if we are really serious about getting people off welfare and into work, the reforms presently being introduced by Iain Duncan Smith will need to be seen as a first step, not the final word. The insanity of a system which often makes a life on benefits more lucrative than a life of gainful employment will, the coalition promises us, be ended. But this is not sufficient. Those who are able to work, but presently seem incapable of finding employment, should be expected to spend around 30 hours a week working in the community which provides for them. This leaves plenty of time over to apply for jobs and will also help to promote a culture of working.

In his speech yesterday, George Osborne made a half-smiling, half-serious call for the workers of the world to unite. Hot on the heels of Ed Miliband invoking Disraeli and a One Nation agenda, one might assume that politics has been turned on its head. But the truth is that Britain needs a workers party in the true sense of the word. One which rewards grafters and strivers. Today’s manifesto suggestions by the Free Enterprise Group show there are some Conservatives who wish their party to position itself in just this way. Their ideas should be challenged, refined, welcomed and applauded.

Mark Littlewood is director-general of the Institute of Economic Affairs.