Wednesday 02 October 2013 10:36 pm

Cameron must now translate his vision into concrete action

THERE is, of course, a place for soundbites. David Cameron’s speech yesterday had those in spades; some were even pretty good. The Prime Minister spoke up for the profit motive, for enterprise, hard work, improved standards in education and called for a land of opportunity. He defended business from the vicious attacks of Ed Miliband, sought to position himself as the champion of the aspiring classes and decried the deadly NHS scandals that caused so much suffering. He said that tax cuts and wealth creation “are not dirty elitist words, they are not the problem” but are the solution, and that business, not the state, creates our prosperity.

I had a few caveats, however. There was still the odd hint of the old attacks on Labour that had such a disastrous effect on the public discourse in recent years, including an implicit justification for hiking capital gains tax (based on the flawed analysis that it ought to be directly comparable to income tax, and that its rate has to be higher than the basic rate paid by those on low wages). It’s unclear what he meant by “in place of the casino economy, [we want] one where people who work hard can actually get on.” Is this yet another attack on traders and investment bankers, and thus nonsense that contradicts the rest of his speech? If he is in fact rightly saying that he is against the moral hazard created by government guarantees and bailouts, then he needs to take another look at his own policies on subsidised mortgages, ultra loose monetary policy and everything else that is continuing to fuel artificial risk in the economy.

This stuff jarred with the new, pro-enterprise message, as did support for his silly big government schemes such as help to buy. He backed the unaffordable HS2 project, wrongly claiming it would make the UK less London centric (it would merely allow a few thousand people to commute daily to the capital from further afield).

On balance, however, this speech smacked of a genuine attempt at presenting an alternative vision, one based around unapologetic, aspirational conservatism. It was the sort of message the Tories should have spent the past few years relentlessly trying to communicate. Their failure to do so is one reason why the debate has shifted the wrong way on so many issues: you can’t spend 15 years failing to make the case for capitalism, and then suddenly argue that the profit motive is good and hope to convince a sceptical public that hasn’t been confronted with such arguments since the 1990s.

Many have indeed fallen out of love with what passes for capitalism in this country, partly because the current mixed economy – a strange hybrid characterised by elements of a market economy combined with massive government interventions, mandated costs that are passed on to consumers, myriad tax and benefit induced disincentives, a large and inefficient public sector, endless distortions, negative real interest rates, bailouts and regulatory barriers to competition – is riddled with problems. All of these need to be tackled to ensure real capitalism, not the current corporatism, and sustainable prosperity. This takes us to the real flaw in Cameron’s speech: it was void of any actual policies, save for a vague pledge on benefits for under-25s. Yet to stay in power, he needs to outline clear, simple pro-market measures that will make people better off.

Cameron insisted that “we don’t dream of deficits and decimal points and dry fiscal plans…our dreams are about helping people get on in life” but he needs to show exactly how he will achieve this. Grand visions aren’t enough. There are left-wing, socialist ways of attempting to do so – Ed Miliband outlined some; in my view they don’t work. There are pro-market, pro-capitalist ways of doing this; in my view they would work. David Cameron now urgently needs to match his sentiments with action.

allister.heath@cityam.com
Follow me on Twitter: @allisterheath