The Tories will make a huge mistake if they allow Labour and the nay-sayers to frame the election around the theme that the Tories crashed the economy.
An onslaught already has begun, with the FT insisting that a ‘feel-bad’ factor hangs over the UK election.
Even Conservative-supporting papers insist that Rishi Sunak chose a July election because the dire state of the public finances would not sustain a third tax-cutting financial statement in the autumn.
There is an upbeat story to be told and it is much more powerful than the economy has ‘turned the corner’.
It is about a Britain which is a magnet for foreign investment. Great research universities are churning out spin-offs in AI, cyber-security, pharma and much else which is the envy of the world.
Britain bounces back: The current spate of ‘Britain for Sale’ takeovers is about predators seeking to gain access to excellent British enterprise
The current spate of ‘Britain for Sale’ takeovers is about predators seeking to gain access to excellent enterprise.
Thoma Bravo has seen the fantastic opportunity in Cambridge cyber-security trailblazer Darktrace.
The opening private equity bid for share platform Hargreaves Lansdown speaks to UK financial services skills. The unwanted Daniel Kretinsky siege of IDS, owner of the Royal Mail, is about the ‘Czech sphinx’ seeing the opportunity in the fast-growing GLS logistics operation.
Private equity and overseas predators want what we have in terms of trading skills, technology, science and invention.
Conservatives happened to be in charge when the economy stagnated and inflation surged during their 14 years at the helm.
The austerity and stagnation were a consequence of Labour’s neglect of financial probity in the run-up to the 2007-09 financial crisis.
I had a high regard for the late Alistair Darling when he was Chancellor and the coolness with which he handled the implosion of the financial system.
But Darling was less than pleased when after a conversation, in which he predicted hard times ahead, this paper suggested we were heading for an age of austerity.
Sluggish output was down to the Labour legacy of a whopping budget deficit which left his successor George Osborne with little choice but to squeeze public spending.
Covid-19 and Russia’s war on Ukraine were events beyond the control of any government. The UK’s responses were more or less in line with the rest of the other G7 rich nations.
In spite of all the negativism, inflation has been brought down rapidly and Britain genuinely is emerging from the doldrums faster than European competitors.
Only the US, with the heft of the magnificent seven behemoths – Apple, Amazon, Google-parent Alphabet, Meta Platforms, Microsoft, Nvidia and Tesla – is better placed.
The Liz Truss interlude was troubling. It is often compared to domestic crises, such as the collapse of the banking system in 2007-08, in terms of aftershocks.
A temporary surge in gilt yields was quickly assuaged and the Bank of England’s belated battle against inflation led to higher mortgage costs.
Fixed rate renewals have been costly for families but, harsh as this may be, there have been remarkably few defaults and no reports of keys of abandoned homes being pushed through estate agent letter boxes.
Pain has been remarkably diffused. Moreover, the period of falling real incomes, which so delighted Government critics, is long over as inflation tumbled.
It is a great pity for the Tories that Andy Haldane left the Bank of England after the monetary policy committee decided to ignore his advice that the inflation genie was out of the bottle. His judgement now, as told to LBC, is that Bank policy ‘still has a chokehold on the economy.’
It would be nice to think that the independent Bank of England would be brave enough to forget that the country is in an election campaign and acted in the best interest of growth, jobs and prosperity by lowering bank rate from the current 5.25 per cent in June.
That would demonstrate a change in economic fortunes and provide an immediate boost for home-owners, consumers and already soaring business confidence.
It is the gift which could change election fortunes for Rishi. That’s probably why rate cuts will be damagingly delayed.