Two cheers for David Cameron's economic responsibility speech

David Cameron is scheduled to get to his feet at this time and deliver a major speech entitled The Conservative Plan for a Responsible Economy.  The speech begins with a strong declaration that the Conservative Party's support for bank recapitalisation was genuine but will not extend to other aspects of economic policy.  The speech lists existing Tory promises including a two-year council tax freeze, investment in high speed rail, tax simplification and investment in green technologies - but offers no new policies yet.  Instead Mr Cameron promises that "over the coming weeks and months we will set out many more ways to help families through the downturn."  What the speech lacks - and what we had hoped for - are ideas to help prevent "the downturn" being as serious as now seems likely.  As a long-term framework it is promising but there is not the sense of urgency that we have seen from, for example, Boris Johnson (calling for substantial infrastructure spending) and John Redwood (calling for large interest rate cuts).

So we give it two cheers: One for the analysis of Brown's mismanagement and one for the long-term vision of economic responsibility.  It disappoints on ideas to beat the looming recession.

The Tory leader will begin by repeating his Party Conference declaration that his Conservatism is about more than freedom: "Over the past decade, we have seen a total breakdown of economic responsibility. From the government, as it has spent and borrowed without restraint. And from our financial sector, which has taken decisions which have harmed the rest of our economy. So it is not more freedom that our economy needs; it is more responsibility. Just as this Party under my leadership has stood for social responsibility, now it must stand also for economic responsibility.  We’ve had irresponsible capitalism presided over by irresponsible government. Instead, what we need is responsible free enterprise, regulated and supported by responsible government."

And exactly as ConservativeHome predicted Mr Cameron is ready to style the Conservatives as the party of the real economy: "Because though Gordon Brown is trying to rescue the banks, we now need a plan to rescue the economy."

Mr Cameron will say that Labour excess has made Britain particularly vulnerable to the global crisis: "The Chancellor who prided himself on prudence came to believe that he uniquely in the history of economics had ended the trade cycle and abolished boom and bust. So he thought the good days would never end, and borrowed and borrowed and borrowed, and racked up the biggest government deficit in the developed world.  And he stood aside as our households racked up over a trillion pounds of personal debt. So when the boom did turn to bust and the value of assets fell our financial system was hit harder than most. The Government couldn’t complain about financial institutions lending too much money because the Government itself was borrowing too much from them."

Gordon Brown ignored the debt and excesses of the City for too long: "Four years ago he was telling the city: “I want us to do even more to encourage the risk takers”. Two years ago, he was dismissing calls for what he called a “regulatory crackdown” on the City.  And only last year, he was celebrating what he called a “golden age for the City of London"… Now he’s describing that very same time an “Age of Irresponsibility”.  “A Golden Age” to an “Age of Irresponsibility” – in less than a year."

Brown's policy mistakes have (1) left us in a deeper economic hole than competitor economies and (2) left us too indebted to easily reboot the economy: "Gordon Brown’s policies – his entire economic strategy - has fundamentally failed. The first result of this failure in domestic policy in the UK was a debt-induced asset bubble in the private sector that has now burst, generating both downturn and serious threats to the stability of our financial system. The second result of this failure in UK policy is that our Government – having spent all the money in the good years - is less able to help people in this country get through this downturn than the government of almost any other developed country."

Tory economic policy will have three pillars: "Fiscal responsibility - the Government must live within its means. Financial responsibility - you cannot build an economy on debt. And a balanced economy - as you cannot rely on unsustainable growth in a few areas to increase prosperity for everyone."

An extra levy on City firms to fund a higher quality of regulation: "For too long, City firms have been able to poach the best regulators.  So we will ensure that we get more good staff at the FSA, paid for by an increased levy on the City, and introduce a system similar to the Shareholder Executive so that banks send their best people to the FSA on secondment."

70% of Britain's economic growth has come from just three sectors: "Over the past decade, seventy percent of our economic growth has come from just three things. From housing – which is now declining. From the financial sector – now in turmoil. And from government spending – now slowing. And in addition, much of the growth has been driven by immigration – an unsustainable basis when you consider the impact on public services and our national infrastructure."

The Conservatives are developing a radical plan to rebalance the economy: "We have to broaden our economic base to include more science, more hi-tech services, more green technologies, more engineering and more high-value manufacturing, drawing upon a much wider range of industries, markets, people, towns and cities."

David Cameron's concluding remarks:

"We will only build an economy that is strong and there to last if we… apply the same philosophy as I have been advocating in the social sphere for the last three years… the philosophy of responsibility.  To repair the broken society, in the long-term, we need social responsibility.  And to repair the broken economy, in the long-term, we need economic responsibility.  That means… a responsible fiscal policy, bolstered by independent oversight… a responsible financial policy, bolstered by a renewed role for the Bank of England… and a responsible attitude to economic development, that fosters more balanced economic growth.  And today, it’s only the Conservative Party that is offering that change."

Download PDF of Conservative Plan For A Responsible Economy.

Comments

[Malcolm Dunn]

Don't know why Iain. London Tory just seems to want Cameron/Osborne to shout louder (that really worked for Hague, IDS,Howard didn't it?) and ACT spouts his usual mindless anti Conservative garbage.

[Andrew S]

Ken Clarke for shadow chancellor! Very popular and knows what he's on about...

[M Dowding]

The way Cameron pronounces "Change" is now irritating me.

" We need CCccHhhhange"
It sounds as though he is slurping soup whilstspeaking!

Most annoying!

Posted by: Freddie Fencepost | October 17, 2008 at 09:41

Alan Johnston calls for grown up politics. i.e Don't criticise Labour failings! Duh?

[M Dowding]

The true scale of Cameron's political failure
ACT,

Crewe and Nantwich, Henley?
What a pathetic, typical smarmy oik you are, Sir. If this were Guido's blog I would be a tad more explicit.
Labour are doomed by failure in every corner of our lives. Education trashed, I quote your stupid hero, Blair "Comprehensive education a failed experiment". Create grammar schools but call them city academies.
Social cohesion and the gap between rich and poor. Why are the most deprived areas in the Land Labour constituencies with money hosed at them for ten plus years yet remain a slum cess pit life style? What have their labour MPs done for them. Glasgow East shot that rabbit, by golly. You socialists and your dogma are an utter disgrace. I was borne into poverty and good old fashioned Conservative values helped me out plus a lot of tough hard work, now wrecked by this pathetic Government and it's raid on pensions and usual economic incompetence. As for "Brown and Darling most trusted on the economy" BBC poll today. Who did that poll? OCL? "Gordon's Pollster Deborah Mattinson Slammed for Dodgy Polling". Bet Campbell and Lord Sleaze, (enobled for corruption) are on that board of directors!
Dave Cameron is a more honest and decent human being than anyone of you socialist cretins. Alan Johnson wants grown up politics, pah! As for George Osborne, if DC rates him in that job, works for me. Now if he dumped Caroline Spelman we could really dig into the high ground.
As for Labour's spinmeisters, how much of our taxes are funding their life style? As for The Labour Party's economic brilliance, they are bankrupt without the corrupt union barons' largesse with their members funds. How much do unions payout for unemployed members versus Labour party donations? Come on Draper, Campbell trolls, tell us from your cosy, secure well paid offices, how much for the real workers of the UK.

[ACT]

While I'm sorry that Cllr Dunn finds 'mindless' my 'garbage', and not, as it is meant to be, bigoted, unreasonable and ungenerous, he's notably wrong on one point. It's most certainly not 'anti-Conservative'. That the Cllr Dunn thinks that standing up for Thatcherism, and arguing against the nationalisation of private commercial error is anti-Conservative says, I'm afraid, more about his relationship with Conservatism than it does mine. But if we wants to accuse me of being an Anti-Cameron Tory, by all means do.

[ACT]

And thanks for that rant from Mr Dowding too. One teeny-tinsy interruption of reality though: of the two people he dilates upon, me and Dave, only one of us declared himself to be the 'heir to Blair'. Otherwise, I can only agree with all his criticisms of Blairism, Draperism, Socialism, crooked partisan pollsters and all the rest of it. That said, it's probably a great kindness that M Dowing hasn't yet worked out quite why Cameron declared himself to be the heir to Blair, Blairism, Draperism, Socialism, crooked partisan pollsters and, well, you get the picture (welat any ratel, everyone but MD does).

[sally Roberts]

"Come on Draper, Campbell trolls, tell us from your cosy, secure well paid offices, how much for the real workers of the UK."

Agree with you, M Dowding - as I agree with many of your sensible posts!

We have to be careful though - if we accuse people of being trolls we may end up simply getting our wrists slapped by the Editor...

[David Sergeant]

Conservative MP's just can't be bothered to do the dirty work of politics, and even after 10 years in opposition Labour are more hungry to cling onto power than Conservative MP’s, ambitionless, who’ve contented themselves with an easy life in opposition.

Posted by: Iain | October 17, 2008 at 15:20

I think this says it all but unfortunately it has been like this for a long long time. I suggest Cameron was reacting to this, a starting point is that Brown is as responsible as anyone for this mess and in comparison to other countries comes out as the most incompetent finance minister in the western world. Would you want to rely on him to solve the problems?

The Brown bounce is politics, Cameron's response has to be politics. It beggars belief that people on this site are demanding detailed policy proposals from the Brtish opposition party when governments all over the world don't know what to do.

Right now it's the politics stupid and, as ever on such occasions, the left are better at it. And not just the MPs, Geoff Randell merely demonstrates he is as much a right wing wimp as the rest when, so help me, he turns the situation on its head to attack the Conservatives.

[David Sergeant]

I have just checked a local newspaper and Osborne turned up in Lancashire to-day with a plan to get local authorities with Icelandic bank accounts off the hook. That's pretty detailed, the government havn't a plan but it's much more fun having an anti-Osborne hysterical outburst than getting the head down to what is happening and what plans (particualy Conservative plans) exist.

[ChrisD]

"I have just checked a local newspaper and Osborne turned up in Lancashire to-day with a plan to get local authorities with Icelandic bank accounts off the hook. That's pretty detailed, the government havn't a plan but it's much more fun having an anti-Osborne hysterical outburst than getting the head down to what is happening and what plans (particualy Conservative plans) exist."

That is interesting David, because I see that David Cameron's speech is already disappearing into the ether. I made the point on PB.com yesterday that the big story still to unfold was collapse of the Icelandic banks and the ramifications for organisations in the UK. The reporting in the mainstream media has been slow and random so far, with no joined up narrative that shows the true scale of the damage.

While Brown is accepting plaudits for saving our banking system, he is not yet being put under enough scrutiny about the fact that we have just been hit by a devastating failure of the banking system in another country, with many vital UK organisations being badly stung. This is being handled very badly by the government, and mark my words, its another 10p tax fiasco sitting bubbling over on the back burner.

Saw some of the most bare faced cheek on Labourhome yesterday, when a regular there posted an article and held up a newspaper article as proof that the FSA were not too blame! I am unable to link to it because the site appears to be down at the moment.
But, if a Labour luvvie is desperately scrambling around posting old newspaper articles, then you can bet that this is going to be one very big political hot potato.