Ministers must avoid the whiff of defeatism

The era of free money is well and truly over, with the Bank of England raising interest rates yesterday to their highest level since 2008. The overly indebted might complain, but this is monetary policy returning to normality. Britain can no longer rely on money-printing and ultra-low rates to create an illusion of prosperity. The country will have to work a lot harder to secure economic growth.

Unfortunately, the Government is in no mood to create the conditions to achieve this. As we report today, its economic strategy appears to be limited to importing vast numbers of migrants, mechanically flattering GDP figures. Having raised the tax burden to an intolerable level, there is already evidence that businesses are leaving the UK. Little effort has been put into making Britain more attractive through regulatory reform. If anything, the weight of red tape has grown since Brexit, reflecting a safety-first political culture in which risk-taking is judged to be unwise.

This is one of the reasons the Government’s decision to reduce the ambitions of the Retained EU Law Bill is so troubling. It may well be the case that the Bill had become impractical, and it is plausible that the Civil Service proved resistant to removing EU laws from the statute book. However, the result is that the Government looks both defeatist and lacking in grip over the machinery of state. It becomes much harder to believe its promises of further deregulation to come.

Sadly, this is part of a pattern. The country may be only a year away from a general election that present indications suggest will return a Labourled government. Instead of using this period as an opportunity to outline a distinctive Tory agenda, ministers seem more inclined to tread political water. In the case of regulation, they appear terrified of upsetting the army of Left-wing campaign groups that denounce any change to environmental rules or labour law as heralding climate collapse or a return of the workhouse. Ministers rarely puncture such absurdities.

Voters might appreciate the return of relative calm after the political storms of recent years. It is positive that the Tories are seeking to restore their reputation for competence. But the danger is that, by failing to get on the front foot, the terms of debate are being set by the party’s opponents. Is it any surprise that many Conservatives are left unenthused, wondering whether they are already living under a social democratic government?