It’s up to the Tories now to save the economy

Labour’s current proposals would destroy sterling’s value, send inflation soaring and deter investors

This time last year I was overseeing the policy announcements for Theresa May’s first conference as leader and working on the speeches she would deliver that week in Birmingham. As I did so, I coined a phrase that remains one of the most controversial of the Prime Minister’s career. “If you believe you’re a citizen of the world,” she declared, “you’re a citizen of nowhere. You don’t understand what the very word ‘citizenship’ means.”

The outrage in response was as vicious as it was synthetic. Leftwingers said it was racist and implied people from minority backgrounds could not be British. Liberals claimed it was a sinister demand that Remain voters should “conform” and “prove their allegiance” to Brexit Britain.

It was, of course, no such thing. As anybody who heard the speech knew, the Prime Minister was denouncing powerful people who have forgotten their obligations to fellow citizens. “Too many people in positions of power,” she said, “behave as though they have more in common with international elites than with the people they employ, the people they pass in the street.”

We all know who she was talking about. Take Amazon, which beats competitors by avoiding paying their fair share of tax. Or Facebook, which, until it was exposed recently, allowed advertisers to target users based on their anti-semitic beliefs. Or Youtube, where you can watch Isil propaganda and the sermons of the terrorist, Anwar al-awlaki.

Closer to home, we have broken markets, such as energy, that allow firms to rip off their customers. There is Bell Pottinger, the British company that whipped up racial hatred in South Africa for profit. Sports Direct, which admits it exploited its workers. The sad story of the BHS pension fund. And Uber, the taxi company that responded with outrage when London’s Mayor said its drivers required additional vetting checks.

It is not, as some have suggested, “unconservative” or “anti-capitalist” to hold these people to account. If we want to maintain support for free markets, the successful and the powerful must respect their obligations to society. But we who believe in capitalism must do more than that. For the crisis of confidence in free markets is not only down to the morality of the powerful few. It is also caused by the difficulties experienced by the many.

Average wages are lower now than a decade ago. The chance of owning your home has been falling for even longer. The result is a society struggling to cope with the growing divide between those with valuable assets and those without. One statistic proves this divide more than any other: in England, there are now more people who own their home outright than pay a mortgage.

Why, people are asking, would anybody support capitalism if they have no chance of owning capital?

That is the right question, but consider its pertinence when it is applied to a young person about to enter those unequal housing and labour markets with £50,000 of student debt. These are the reasons why, despite the implausibility, incoherence and insanity of the policies announced at Labour’s conference this week, many voters, especially younger voters, seem willing to give Jeremy Corbyn and John Mcdonnell a hearing.

It is also why the Conservatives must make the case for social and economic reform at their conference next week. On tuition fees, vocational education, adult training, house building, the cost of living, reforming dysfunctional markets, and ensuring economic growth and prosperity across the whole country, the Conservatives must be zealous reformers.

But they must do something else next week, something they have not had to do for 30 years. They must make the case for capitalism. For this is the new dividing line: while even Tory reformers are convinced capitalists, Labour’s leaders want to smash the system altogether.

Never mind Labour’s fiscal incontinence. Ending the benefits freeze, increasing public-sector pay by 5 per cent every year, scrapping tuition fees, bringing PFI contracts in-house, nationalising utilities, increasing renewable energy subsidies and building tidal lagoons would cost hundreds of billions and spark a new debt crisis. But that is not all.

What Labour have proposed this week would destroy sterling’s value, sending inflation soaring, wages falling, and the worth of people’s savings and pensions through the floor. It would require Third Worldstyle confiscation of private property and drive investors from Britain.

If voters do not believe these warnings, they may heed the Labour leadership. Mr Mcdonnell says in

Who’s Who his interests include “generally fermenting the overthrow of capitalism”. This week he and Corbyn have been open that their policies risk causing a run on the pound. We cannot say we have not been warned. The Conservatives must reform the economy, but they must also make the popular case for capitalism – and win the argument.