Conservatives must be clear on capitalism
The Conservative Party is and always will be the party of business, Philip Hammond told the conference in Birmingham yesterday. It speaks volumes about the mixed messages that have been sent out in recent months that the Chancellor felt it necessary to include something once considered axiomatic in his keynote address.
He had evidently been stung by accusations from some business leaders that the Tories were responding to Jeremy Corbyn’s anti-capitalist rhetoric by watering down their own commitment to free market ideas. Michael Spencer, a former party treasurer and donor, said the Government had been “foolish on occasion to adopt some of the language of the socialists” in order to “buy” votes.
Whenever Theresa May talked about business, Mr Spencer said, “she seems to focus on the bad examples, as opposed to the vast majority who have been successful, invested their own money, paid their taxes and contributed to the economy.”
But it is more than the language, it is policy, too. A cap on utility prices may play well with voters but it is an intervention in the market that was roundly condemned when it was first proposed by the Labour Party. Moreover, now that the principle has been conceded it is hard to argue persuasively and credibly against more radical interventionism.
Mr Hammond gave a powerful defence of free markets and denounced Labour’s socialist agenda. But the Conservatives must avoid falling between two stools as they seek to champion capitalism while being terrified that Labour’s message that it has failed will resonate with hard-pressed voters.
The Chancellor, a businessman himself, knows the pressures the sector faces and the uncertainties caused by the Brexit negotiations. But it is also in his hands to help when he delivers his Budget later this month, the last before we leave the EU. Mr Hammond has brought it forward to avoid a clash with the expected climax of the Brexit talks in November. Whitehall insiders suggest this will be a fiscally cautious package because we will still not know what our trading relations will be with the EU. Perhaps that is the Chancellor’s instinct – his big announcement yesterday involved a new tax on digital services, when cutting taxes is the way forward. At such a time in our history we look to the Chancellor to demonstrate in policy terms that the Conservatives remain unequivocally the party of business and free enterprise.