Tories Need to Be More Honest About Their Economic Failures

I don’t know what I expected. A reference to the financial crisis fallout, perhaps? The state’s Brown-era spending bloat? The endless bottlenecks from housing and infrastructure failures becoming more binding? Or even regret at the front-loaded tax hikes and capital spending cuts of Cameron-era austerity? The answer I got, instead, was “high immigration”.

Now, recent waves of immigration have brought trade-offs that economic liberals like me underappreciated. But blaming a failure to curb a factor of production for stagnant growth is not serious economic analysis. It is the comfort zone politics of motivated reasoning: that because Conservatives want less immigration, that policy must bring huge economic benefits, too.

Unfortunately, that mindset lingers. Sir Mel Stride, the shadow chancellor, is, by all accounts, an accomplished businessman. But his conference speech did not suggest the party had spent its “pause” on policy doing deep thinking about its economic legacy either.

There was no accounting for the UK’s weak growth during their tenure. No reflection that the Cameron years underweighted supply-side reform. No ambition to make raising the sustainable growth rate a Conservative mission. Instead, we heard that “growth has tanked” under Labour. A rank, partisan evaluation.

Stride’s speech failed to mention “productivity”, “investment”, “markets”, “incentives”, or “liberalisation” — terms you might expect to anchor a Conservative growth plan. The impression given was that the Conservatives did not do much substantively wrong in office. And to the extent that better policy could influence future growth, substituting Labour technocrats for Tory ones was the necessary medicine.

Stride would say that he did re-articulate commitments to “sound money, low taxes, entrepreneurship and hard work”, core Conservative principles in the 1980s. But after nearly a decade and a half in power, the question is not whether you can recite the lyrics at Thatcherite karaoke, but whether you governed by those principles.

Thatcher’s policies were rooted in desiring market-led efficiency. The two bits of tax policy Stride announced instead sought to tilt the tax code towards groups Tories want to be seen to back. In the year of our lord 2025, Conservatives are still banging on about saving high streets as a core priority, for example. Stride pledged to eliminate business rates for shops and pubs. That is a carve-out, not a reform. And one that, by exempting older urban forms, prioritises nostalgia over efficient land use. Business rates, after all, partly tax land, something economists generally support.

The second wheeze was a “first job bonus”. The first £5,000 of a new worker’s national insurance payments would be funnelled into a government-run account, to be used for housing or savings. It’s a convoluted gimmick: labour taxes diverted to a hypothecated Isa, to pump more demand into a broken housing market. Why not remove barriers to building homes?

The only area Stride showed Conservative contrition was his repudiation of the deficit-busting Liz Truss mini-budget. A future Tory government, he said, would cut by £47 billion, a pretty hefty 3.5 per cent of total government spending.

But the details suggest oppositional comfort zone politics again. Savings from reforming unsustainable NHS and state pension spending that’s driving our long-term fiscal woes? Zero. Instead, the cuts come from hoped-for welfare reforms (£23 billion), reduced foreign aid, a civil service cull, ending asylum hotel use, and scrapping net zero “vanity projects”. All welcome, but mainly a sop to Reform.

The Conservatives clearly want to position themselves as a serious alternative to an unpopular Labour and a populist Reform. But the road to seriousness surely requires both more introspection about their own economic failures and more rigour in their policymaking.