There’s another month to go until we have a new Prime Minister, but pro-market Conservatives can already start breathing a sigh of relief.
For a start, both contenders for the top job have pledged to cut tax.
Jeremy Hunt has promised to cut the rate of Corporation Tax from 19 per cent to 12.5 per cent, while Boris Johnson proposes slashing income tax for three million people by increasing the 40p tax rate threshold from £50,000 to £80,000, and also raise the National Insurance contribution threshold.
The two have also stressed that they would cut tax for the low paid.
This is backed up by their broader rhetoric. Both men talk favourably of wealth creation, free enterprise, and celebrating success.
These used to be familiar Conservative themes, but we didn’t hear much about them from Theresa May or Philip Hammond.
But beyond the two leadership finalists, there’s another important outrider for the free market agenda in the Conservative ranks – someone who ended up not throwing her hat in the race, but should not be forgotten.
Liz Truss, the chief secretary to the Treasury, is a familiar face at libertarian think tanks and has been increasingly outspoken on both social and conventional media.
She contemplated standing, but was tarnished in the eyes of some Brexiteers for being a cabinet minister under May – regarded as a liability rather than qualification given the recent difficulties. So she threw in her lot with Team Boris.
Might Truss be rewarded with a promotion? Could she be the first female chancellor of the Exchequer? And if not – with others like Sajid Javid and Jacob Rees-Mogg in the running – there is speculation that she could at least become the next business secretary.
At any rate, her ideas will be in the ascendancy. Truss has been rather isolated in putting forward the capitalist case around the cabinet table. Soon, she can expect to have rather more allies.
For Truss, the case for capitalism is not about pleading for special interests. She is unapologetically pro-business, but in a straightforward way.
Yes, she is in favour of reducing regulation and cutting taxes, but far from the corporatist approach of the state managing the economy by defending vested interests, Truss is a champion for “disruptors”.
She recently tweeted: “If people are looking for ways to reduce business rates, what about the £18bn of business subsidies?”
As an approach for spurring economic growth, this is the right idea. Eliminating subsidies would boost small businesses that tend to be less adept at Whitehall lobbying, making the playing field fairer and more competitive, while reducing business rates at the same time comes with the social advantage of helping to revive our struggling high streets.
But the call to scrap business subsidies is brave. With this sort of change, those who lose out – big businesses – make a lot of noise. The gratitude of those who benefit tends to be less deafening.
Keith Joseph argued that for every job artificially maintained, several are sacrificed as the viable private sector is squeezed harder, but it is the jobs saved by subsidies – or lost by their removal – that are the ones that can be identified.
Still, Truss’ policy would dramatise an important chance to reboot our economy by making the system much fairer and more open. Capitalism could no longer be caricatured as a rigged arrangement where cronies are favoured by cosy politicians.
The arrogant attempts of officials in Whitehall to “pick winners” by producing “industrial strategies” have never worked and never will.
Older readers will remember the funding for DeLorean car production in Belfast. Much older readers will recall the Atlee government’s futile spending of taxpayers money on the groundnut scheme in Tanzania.
The second-guessing of business by politicians and officials – with “innovation funds”, “growth funds”, “professional support”, “promotional support” and the like – are both patronising and expensive. It would be much better to get out of the way, cut regulation, and allow the entrepreneurs to get on with their own ideas.
This is a battle worth fighting. It would be worth putting up with some sniping from establishment business lobby voices such as the CBI if it reignites the spirit of free-market capitalism among disillusioned younger voters.
Of course, if Truss were to be made business secretary, it’s hard to see what would be left of the department after she had been there a year or two.
Maybe it would be closed down, and Boris would find her another department to abolish. Digital, Culture, Media and Sport, perhaps?