Conservatives must remember that small government is better government
Labour’s tax-raising, interventionist approach is strangling the economy. Conservatives must make the positive case that individuals, families and businesses make better decisions for themselves than distant bureaucrats, says Brandon Lewis
Among its many crises and policy reversals in the past few weeks, a leaked memo from Angela Rayner revealed that a vocal subset of the party is quite eager to raise taxes on savers and pilfer from pensioners.
That pressure has not only come from the party’s left flank. Now – following the International Monetary Fund’s warning last week over the country’s ‘fragile’ economic outlook – speculation abounds that Rachel Reeves will have to break her fiscal rules and raise taxes in order to balance the books.
To date, Labour has been consistent in its desire to broaden the government’s reach and drive state-forced interventions. Much criticism has been levied against the party for mucking about in ways that are overly focused on scoring political points rather than making fundamental changes to the country’s prospects. (Rayner’s allegedly self-leaked memo on tax hikes, which was glowingly received on the party’s left, is a case in point.) In all, their efforts have done little more than to bloat the government with unnecessary spending and add sand to the gears, stultifying services and grinding economic growth to a halt.
What is left is a government devoid of the sort of dynamism and competitiveness that operates as the true springboard for opportunity and long-term prosperity. Meanwhile, the discussion of alternative economic visions among Conservatives has failed to adequately articulate the ways in which growth can actually become possible.
Returning to growth
To support the UK’s return to a period of energetic economic momentum, the Conservative party properly differentiate itself from Labour by setting out a clear and concise fiscal policy. It must signal that individual and social opportunity, change and growth are achievable without such heavy-handed interventions.
Unfortunately, the party long ago stopped making a positive case for why smaller government can be more effective. Much of this is due to the fact that when Conservatives float tax cuts, the natural question from opposition parties is what frontline services will be cut as a result. Confronted by this, too many Conservatives shirk from what may very well be our strongest argument: that smaller government is good governance.
Specifically, when we talk about a smaller state, we are talking about increased trust.
Conservatives must make the affirmative case that families, communities and businesses simply make better decisions for themselves than distant bureaucrats. Reducing state overreach is not about cutting services or abandoning people to the whims of fate, but about empowering them to take control of their lives, invest in, and meaningfully contribute to their communities.
Crucially, a smaller state does not mean gutting public services. In fact, the state must remain focused on areas it excels in: national defence, law and order, infrastructure and support for the truly vulnerable. An overly bloated government often hinders the delivery of services, bogging them down in bureaucracy and restrictions.
To help unlock growth from the bottom-up, Britain needs to confront the long-standing economic stagnation that’s set in from overtaxation. Corporation tax has burdened re-investments and flatlined international investments while taxes are at their highest in years with middle earners stuck in an ever-widening tax trap. Taken as a whole, the current system is a drag on productivity and growth.
A smaller state with a simpler, fairer tax system would boost take-home pay, support greater spending across the economy, and signal internationally that Britain is open for business again.
Brandon Lewis is former chairman of the Conservative Party