Theresa May has promised to ditch the right-wing free market dogma of Cameron and Osborne, and return to true Conservatism with more state involvement and an emphasis on wealthier pensioners paying more for care. May’s manifesto appears to reject Cameron’s laissez faire capitalism: “We do not believe in untrammelled free markets. We reject the cult of selfish individualism”.
May’s Tories are suspicious of markets and business and have an attitude to inward investment that verges on protectionism. She even took a leaf out of Ed Miliband’s book by committing to cap domestic energy prices, targeting an industry she accuses of not working properly. It is also astonishing May has gone for a hard-line approach to immigration. Her “tens of thousands” target is unachievable. Noticeably missing from her manifesto, however, so was Air Passenger Duty and although the Davies Commission on airport expansion did get a mention it was only to confirm a Conservative government would respond to the commission’s recommendations after the election!
On the Labour front, it is no surprise that left-wing ideas are in full view. Labour has produced a manifesto in the image of its leader. It is a manifesto that most Labour MPs don’t believe in. As with all manifestos, it contains good and bad proposals. A national investment bank and regional development banks, operating in the gaps left by commercial banks, seems like a sensible proposal.
In the context of Brexit, however, I am not so sure about Labour’s plans to raise corporation tax from 19% to 26% at a time when Britain’s appeal to foreign investors is being undermined by our exit from the single market.
One thing that does annoy me is being asked whether Brexit is having an impact. Brexit hasn’t happened yet. Although the uncertain economic climate caused by an impending Brexit has already had many negative effects. The latest grocery sales figures show that the fall in the pound is taking its toll. Apparently, families have spent an average £27 more on groceries in the past 12 weeks, with coffee, fruit, vegetables, butter and fish seeing price rises. It’s no surprise to learn Aldi and Lidl grew at their fastest rate in the past quarter to reach a record joint market share of 12%. It doesn’t take a rocket scientist to work out that if families must spend more on their groceries, they will have less to spend on their holidays.
Last week, The Times was suggesting Britain could be heading for another property recession after figures showed the longest sustained fall in house prices since the peak of the financial crisis. Economic uncertainty around Brexit is clearly affecting the housing market and it can only be a matter of time before it affects holiday budgets.
Whatever the outcome of Thursday’s vote, it is clear that what we need is a period of stability. It seems equally certain that is precisely what we are not going to get. Brace yourselves for a bumpy ride.
Steven Freudmann is ITT chairman
