The Free-Market Right Has Lost Its Way

Don’t get me wrong — hearing Nigel Farage blast the Conservatives for excessive spending, taxing and regulating warms the cockles of my libertarian heart. The Reform Party’s “contract” with voters plays many of the tunes loved by those of us favouring smaller government, pledging a hefty £150 billion in annual spending cuts to enable broad tax reductions and tackle NHS waiting lists. Toss in some land-use planning reform, a commitment to axing Tory landlord and nanny state regulations, plus a drive for public service efficiency — what’s not to like for classical liberals?

Well, aside from the stringent immigration policy and dumb Buy British proposals, the general lack of seriousness of Reform’s document, for starters. Farage’s fiscal plans for this cocktail of karaoke Thatcherism laced with populism appear to have been sketched on the back of an old fag packet. Any party that claims it can fund major tax cuts by cutting £50 billion in government waste, increasing tax collection efficiency and miraculously adding one million people to the workforce is peddling fiscal snake oil.

Inevitably, cutting spending this deeply would hurt. It would be less damaging to completely rethink the state’s role, shutting down entire programmes rather than just slicing budgets to the point where nothing functions effectively. And I’d welcome those retrenchment plans, if they existed. Yet neither the Reform Party nor Tory free marketeers have done any real groundwork for that government-slimming agenda. It’s all mantras and vibes and, again, putting the tax cut cart before the spending restraint horse.

It’s not just on the public finances where Britain’s free-market right are failing the economic seriousness test. There’s a startling disinterest in macroeconomics among these politicians and activists, meaning there’s no narrative of what went right or wrong with deficit reduction in the 2010s, nor indeed the government response to the pandemic. Moreover, there’s a clear reluctance to recognise the undeniable costs associated with new Brexit trade barriers.

Neither the Conservative nor Reform manifesto today mentions monetary policy, despite the fact we’ve just experienced the worst inflation since the 1980s. Reform’s contract talks about competition authorities once, but only to suggest they regulate supermarket prices to favour farmers. In contrast, Farage’s manifesto has nothing to say at all on any of artificial intelligence, free trade agreements or China.

To be clear, the shortfall in serious economic thinking isn’t confined to Britain’s free-market right. One Nation Toryism’s promise of “levelling up” and industrial policy substituted buzzwords and regional cronyism for well-evidenced policy. Cross-party promises of “green jobs” and net zero opportunities amount to pure trade-off denial. Meanwhile, Labour’s ambition to accelerate economic development must be seen to be believed given the party’s commitment to stakeholderism, legal activism and tacking social goals on to projects.

Yet, it’s the free-market right where the decline of serious economic thinking is most evident. Margaret Thatcher’s transformative policies were ultimately grounded in a rigorous analysis of Britain’s economic woes. She stepped into Downing Street with a robust set of complementary macroeconomic and microeconomic plans, specifically designed to tackle the twin menaces of high inflation and rampant union militancy.

Today’s self-described Thatcherites and small-staters lack such clarity, despite Britain’s obvious long-running challenges of sluggish growth, Brexit and an over-extended state. The absence of well-thought-through proposals and pitch-rolling from Britain’s right both allowed the Conservatives’ statist drift in government and destroyed the party’s reputation for competence when the faction’s half-baked ideas were tested. What Britain’s Thatcherites need isn’t a new party, it’s to take economics seriously again.