‘In politics, you don’t have that time. Your political capital is draining away like an egg timer. So you have to do your big things really early.’

Britain is in trouble. Its economy is stagnant, and its politics are in turmoil, with Andy Burnham set to be our seventh prime minister in a decade. Yet former chancellor Jeremy Hunt has a surprisingly upbeat take on Britain’s potential – if our politicians can be bold enough.

In this episode of The Capitalist, he sits down to discuss his new book, ‘Can We Be Rich Again?’

Hunt advocates a radical programme for growth, and has a warning for Andy Burnham – reform welfare on day one, or see your administration fail like Keir Starmer’s.

For Hunt, scrapping the pension triple lock is now an economic and moral necessity. And he says we’ve got devolution completely wrong; if that’s Burnham’s big idea, he needs to fix it, fast.

We also discuss why our hidden strengths mean Britain is still on course to become the world’s fifth-biggest economy, and why its best days can still lie ahead.

Below, you’ll find some short excerpts from our conversation.

Marc Sidwell
Editor, CapX

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On the welfare stakes:

‘If [Burnham] ducks welfare reform, he will have to put up business taxes, and the economy will continue to be in the slow growth lane... But if he confronts welfare reform... he could save potentially £56 billion a year within five years...

If he is scared off welfare reform, he’s misunderstanding why Keir Starmer ended up having to resign.

When Starmer ducked those welfare reforms, Labour backbenchers began to realise that they had a veto on anything the government did – and essentially it made him an impotent leader...

The moment Andy Burnham arrives as Prime Minister is when his authority is at its highest. That is the moment he can win the argument with the Labour Party...

But if you don’t even try, then Andy Burnham is very soon going to find himself in the same position as Keir Starmer and Rachel Reeves.’

On the triple lock:

‘I would like to replace the triple lock with an inflation guarantee that says the state pension will always match inflation.

It’s something I’ve given more thought to after leaving office.

The savings are not as big as they would be from the working-age welfare bill. But the thing that my research uncovered, and that really struck me as significant, is that although the triple lock has done a good job at helping to reduce pensioner poverty – and pensioners used to be the group most likely to be in poverty – every year that we’ve had it, the country has been in deficit.

So what that means is that the pensioners who are benefiting from above-inflation increases in their pension are seeing that partly funded through more debt on their children and grandchildren.

And I think if pensioners understood that, they might think differently about whether it’s actually fair.’

On devolution:

‘I’ve long been a supporter of decentralising power... But we’ve done devolution totally wrong in this country.

Greater Manchester had more devolution than any other region in England – still three quarters of its income comes as a grant from London.

So to work, devolution needs to be funded devolution... If Andy Burnham as Mayor of Greater Manchester wanted a new ring road, he has to bang on the door of Number 11 Downing Street and persuade the Chancellor to give him the money – and that’s why Manchester’s GDP per head is still only around half of London’s.

The biggest single thing we could do to make devolution work is to say to all local authorities: any planning decisions you make, you get to keep all the extra tax revenues generated... It could add 0.3 to 0.5% annual GDP growth, which over time is a pretty significant amount.’

Why Britain’s leaders need to be radical:

‘I’m nervous about these labels like centrist, or left or right – I think we have to be radical...

The times I’ve left office disappointed is where I haven’t been radical enough; the times I’ve left office proud is where I took bold decisions.

You can get a bold decision wrong, as my predecessor did with Liz Truss and the mini-budget – but it’s really important not to confuse that with boldness being a bad thing.

We’ve got so much potential in this country: three of the world’s top ten universities, potentially overtaking Japan to become the fifth largest economy in the world... and the third largest tech sector outside America and China.

But at the moment there is an inertia, which is why we need bold and radical policies.’

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Mario Creatura, a former special adviser to Theresa May in Downing Street, joins CapX editor Marc Sidwell to discuss ‘A Blue Hope’, Mario’s new report for the Centre for Policy Studies. He explains what pushed ambition and opportunity off the Conservative agenda – and how to bring them back.

Below, you’ll find some short excerpts from our conversation.

Marc Sidwell
Editor, CapX

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What does aspiration mean to you as a Conservative?

It’s an incredibly important question, and it gets to the heart of why we chose to write the paper in the first place. Fundamentally, we were looking at the warnings coming out of the polls and the by-election results – what they hold for the Conservative Party in particular, and how we rebuild a centre-right offering that the general public can really get behind.

One of the key lessons from that is that Keir Starmer and the Labour Party had no vision. Andrew Neil termed it the loveless landslide. They won not because they were offering something new, innovative and hopeful for the country, but simply because they were the next best thing to remove the Conservatives from office.

And so from our point of view as the authors of this paper, we asked: what is the animating vision that can fill that gap? For us, that’s aspiration.

Can an aspirational message beat the message that ‘Britain is broken’?

The declinist doom loop is a self-perpetuating problem, and social media has a massive role to play in that. It self-perpetuates when people feel there is a lack of justice – but it doesn’t offer any solutions. It has no path out of the quagmire.

The aspirational message is a harder one to land, because it requires people to believe in something almost intangible. Which is why we’ve tried in the paper to make it tangible – to build a credible framework grounded in polling data, one that looks at different values and translates them into the concerns people are facing in their day-to-day lives.

Why should a young voter pick the Conservatives?

Aspiration and the Conservative Party have a history that is inextricably intertwined.

And there is a reason for that.

Conservatives believe that work should be rewarded, that saving should mean something. That home ownership should be within reach and that children should have fundamentally better chances in life than their parents.

That if you start a business it should be encouraged rather than punished, and that all of the effort you put into your life, all of the responsibility that you have for your life, the contribution that you make to your community should be recognised and encouraged.

And for me there’s only one party that is doing that and that’s the Conservative Party.

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A decade on, with some senior Labour figures openly discussing a return to the EU, Lord Elliott joins The Capitalist to look back at how Brexit was really won, and to make the case for why the battle isn’t over yet. He draws on his new book, ‘Ten Years On: The Untold Story of Brexit’, to reveal what really happened inside the campaign – and why he believes the argument for British independence remains as urgent as ever.

Below, you’ll find a short excerpt from our conversation.

Marc Sidwell
Editor, CapX

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Was it a shock to you when David Cameron resigned after the Brexit vote?

We’d sort of convinced ourselves that he wouldn’t resign, whatever the result.

And certainly that very week. I know that with some of the key Conservative players on the campaign, at least Michael Gove, Boris Johnson, they were very concerned about Cameron resigning.

And there was also talk about letters from Remain MPs and Leave MPs saying that Cameron should stay on. And that was a big topic of conversation.

I think realistically, had we thought about it with a cold towel on our heads, we’d have realised that perhaps he was going to resign having committed so heavily to the referendum.

Has Brexit delivered?

Brexit was all about taking back control.

And once control was back in the UK, it’s really up to UK parliamentarians and voters to decide what happens.

Some things I like.

So, for example, if there’s deregulation in certain areas, it helps free up the economy. And I think the tech regulation, for example, at the moment with AI, that’s really helped us thrive.

Some things I really detest.

So for example, the VAT on school fees, that wouldn’t be possible were we to be back in the single market.

So I hate the fact that’s happened, but you’ve got to accept as a Brexiteer that it’s all about UK politicians making UK laws.

What should we be doing to make the most of Brexit?

We need to be going for growth – and of course the Labour Party talked about it to death before the last election, and sadly didn’t deliver. But really at its core that’s what the British people want.

We’re in a situation where we’re doing minusculely better than France, Germany, Italy – so we’ve outperformed them, but we’re still at historically low levels of growth compared to before the financial crisis, for example.

And if we carry on on the current trajectory, we’re going to slip behind Poland very soon in terms of GDP per capita, and behind Turkey by 2043.

So that’s the trajectory we’re on as a country. We need to reverse that.

The solutions are out there. And they’re the same solutions that the Centre for Policy Studies talked about and championed in the 1970s and 1980s: lower taxes, lighter government spending, smarter regulation, free trade, sound monetary policy. It’s the very same solution we need to do now in order to get back to growth

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Independent economist Damian Pudner argues that the Government is running out of options quicker than many believe. Rachel Reeves can continue hoping for growth, or raise taxes or spend less. She and her colleagues aren’t doing much more than talk about the first, they’re running out of room on the second, and they will not discuss the third. That, Pudner concludes, is how you end up with the IMF knocking on the door.

Each week we bring you Despatch – an example of the best writing from CapX, read aloud. For hosted conversations, listen to The Capitalist, every Wednesday.

I think the important thing to remember is that almost every single UK politician I’ve ever heard discuss these matters is a slack-jawed moron when it comes to technology policy.

Keir Starmer is giving tech companies three months to activate on-device content scanning and age verification across all smartphones and tablets sold in Britain – or face fines and potentially criminal liability. Framed as a child safety measure, the proposal has drawn fierce criticism from privacy advocates, civil liberties groups and free speech lawyers who warn it amounts to building a mass surveillance infrastructure under the pretext of safety. The messaging app Signal has already said it will not comply – will others follow?

In this week’s episode of the Capitalist podcast, Preston Byrne, free speech lawyer and counsel to some of the internet’s most controversial platforms, joins me to discuss what this proposal could mean for Britain’s tech sector.

Below, you’ll find a short excerpt from our conversation.

Marc Sidwell
Editor, CapX

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Preston Byrne on UK tech policy

I think the important thing to remember when it comes to internet policy is that everybody in Parliament, almost every single UK politician I’ve ever heard discuss these matters, is a slack-jawed moron when it comes to technology policy.

And this is not an exaggeration. These people have no idea how the internet works. They have no idea how computers work.

The policies that they’re proposing are sufficiently over-broad and described in such general terms that it doesn’t really provide a whole lot of guidance to tech companies as to how they could comply with them, except by doing what we’ve seen Ofcom do over the last year, which is that they kind of make it up as they go and political pressure is applied on the agency or on Parliament to do more.

…

There are plenty of applications that if a parent wants to do this, they can lock down their kid’s phone so that a kid can’t get messages.

These tools already exist, right? And they’re optional.

All of the tools that Apple has: you can make sure that your kid can’t download apps that are unauthorised. You can lock down a kid’s phone plenty.

What the UK is proposing to do here in this case – and it remains to be seen what exactly they will do. We’ll have to wait and see what statutory instrument the DSIT secretary decides to publish for approval. But in this case, everybody’s best guess is that what will happen with the age verification on devices is that the UK will compel the manufacturers to require an age verification solution, which will be provided by an age verification company.

And you won’t be able to access the internet as in anybody in the UK – adult, child or otherwise – without first getting your identity verified, which is an intrusion on privacy.

But if you’re just talking about child protection as the objective, the tooling already exists. The issue is that nobody uses it because what happens?

They lock down the phone. You know, the kid goes and uses the phone. There’s some feature that needs to be unlocked. The parent gives up and they say, okay, well, we’ll turn off the feature because we want the kid to go use the phone.

So this is something where if you want to, as a parent, protect your child from the internet, you already have the tooling available to do that on a voluntary basis without the government intruding in American companies’ supply chains and encryption to do it.

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Each week we bring you Despatch – an example of the best writing from CapX, read aloud. For hosted conversations, listen to The Capitalist, every Wednesday.

Soumaya Keynes and Chad Bown argue that with great powers now using trade as a weapon, there can be no simple return to the settled order of rules-based global trade that dominated the late twentieth century. Their new book, ‘How to Win a Trade War’, provides a tour through the toolkit of the trade warrior.

In this week’s episode of the CapX podcast they join me to discuss the new world of economic conflict, why tariffs are like a party drug – and how trade wars can still spiral out of control.

Below, you’ll find two short transcripts from our conversation.

Marc Sidwell
Editor, CapX

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Chad Bown: How China weaponised trade

China fundamentally has a different view of international trade and interdependence that has become increasingly clear over time.

And maybe the sharpest articulation of this was President Xi Jinping in his dual circulation speech, which happened around 2020 or so, where he said that he envisions a world where the rest of the world becomes dependent on China for their supply chains. But China is not dependent on the rest of the world for its supply chains.

And when you think about what really is underpinning a rules-based trading system, it is a willingness to be interdependent with one another, right? I export to you and yeah, we’ll have frictions, but generally we will engage in this trade.

And with that, China was signalling, no, we want a very asymmetric relationship. We want to live in a world where you’re dependent on us. We’re not dependent on you. And then sometimes we’re actually going to weaponise that. And we’re going to take advantage of your dependencies on us to get our way.

And that, I think, is something that’s different. So when we’re talking about economic security now, it’s not just dual-use goods and military security and bombs and missiles and things like that. It’s really the ability to weaponise features of our fundamental economies that we have to deal with.

Soumaya Keynes: A lesson from Britain’s cable empire

My favourite example is Britain’s dominance in telegraph cables at the end of the 19th century.

So we were massively dominant, we effectively controlled international communications networks.

We could surveil other countries. We could censor other governments’ communications. And those other governments hated it.

When we abused our power, when we censored their communications, they said, nope, we don’t like that. We’re going to try to build rival networks. We’re going to turn to wireless communication technology. We’re going to wriggle around.

But what ended up happening is that the advantages that we had, that Britain had, as this dominant provider of telegraph cables, the factors that set up that initial dominance were the same factors that made it really hard to find alternatives.

And then the other thing is that Britain moved to prevent those rival networks being set up.

So actually the end of that story – and there’s a lot more detail in the book – but the end of that story, is it took decades for Britain’s dominance in communications to be truly destroyed.

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Each week we bring you Despatch – an example of the best writing from CapX, read aloud. For hosted conversations, listen to The Capitalist, every Wednesday.

Prominent figures on the centre-right have started to argue that we need government intervention through industrial policy to deliver on our economic goals, rather than relying on free-market approaches.

But is the promise of industrial policy just an illusion? In this week’s episode of the CapX podcast I sat down with Samuel Gregg, President of the American Institute for Economic Research to discuss:

• Why some conservatives are embracing industrial policy

• Where free market advocates went wrong

• How only cutting over-regulation and tax can deliver for voters

• What today’s politicians can learn from Adam Smith

You’ll find links to watch or listen to the full episode below, as well as the full text of my guest’s recent article for CapX on the same topic.

Marc Sidwell
Editor, CapX

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Watch on YouTube; listen on Apple Podcasts or Spotify.

Dear conservatives, industrial policy is a dead end

It’s no secret that the strong commitments to free markets that, at least rhetorically, marked many conservative parties from the 1980s until 2015, are no longer so robust. Full-throated support for free trade, for example, is hard to find in Donald Trump’s Republican Party.

Other Western centre-right parties have proved more resistant to protectionist sentiment. Yet influential voices across the Right in Britain are now insisting that we should take a fresh look at another form of interventionism: industrial policy. This is classically defined as government interventions into specific economic sectors to produce outcomes different to those that would otherwise have been delivered by markets. Some commentators have even suggested that Communist China provides us with a contemporary case study of industrial policy’s effectiveness.

Industrial policy is in fact already widespread in Western societies. State subsidies, special tax write-offs, outright capital grants and joint public-private enterprises are rife in developed economies. The differences are really about scale and form.

One reason why many governments have often been reluctant to acknowledge the degree to which they promote such practices are the well-documented economic and political problems associated with industrial policy.

Among other things, these include: 1) the fact that governments cannot know everything they would need to know if they were to design successful industrial policies; 2) the massive opportunity costs associated with diverting scarce resources to less productive economic sectors; 3) industrial policy’s inherently political nature and its consequent susceptibility to political machinations and rampant cronyism.

Then there is the reality that the world’s economies are littered with powerful examples of industrial policy failure. Japan was once considered the poster child for industrial policy success. In the 1980s, many American commentators insisted that unless the US imitated Japan’s extensive use of industrial policy, it risked being supplanted by Japan as the world’s economic superpower.

The irony is that from the early-1990s onwards, Japan started slipping into its ‘Lost Decades’ of stagnation, and there is little doubt that industrial policy played a leading part in facilitating that decline. Indeed, one of the most comprehensive studies of industrial policy’s long-term impact upon Japan concluded that it produced ‘little, if any positive impact on productivity, growth, or welfare’.

This track record should cause conservatives to be more wary of industrial policy, including the current Chinese variety.

That China’s economy has grown spectacularly since 1979 is not in dispute. Equally true, however, is the damage that Beijing’s heavy turn to industrial policy since 2012 in the form of cash subsidies, tax benefits, credit subsidies, land subsidies and top-down coordination by the state is inflicting on that same economy.

As was underscored by a May 2026 analysis of Chinese industrial policy prepared for the US Chamber of Commerce, Beijing’s ‘industrial policy of everything’ is ‘compounding wasteful spending and inefficiency in the economy’. Massive public spending is also crowding out private sector investors. Another ominous development is how industrial policy in China is ‘steadily drifting’ towards bolstering ‘legacy and struggling sectors’, much as it did in Japan from the 1950s onwards.

Similar observations are made in a mid-2025 IMF study of Chinese industrial policy. It estimates that the misallocations stemming from industrial policy are reducing China’s annual total domestic aggregate factor productivity by about 1.2%.

Magnifying these problems is the way in which Beijing’s ‘everything industrial policy’ is resulting in overproduction of goods like EV cars, steel, cement, chemical fibres, aluminium products and solar panels. This forces Chinese companies to engage in unending price wars that undermine their domestic profitability, thereby making them even more reliant on the Chinese state.

Defenders of industrial policy invariably respond to such criticisms by pointing to apparent industrial policy successes. These range from specific examples like Taiwan’s semi-conductor industry to something as momentous as the East Asian economic miracle. But here too there are problems.

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First, industrial policy advocates have enormous difficulty in establishing cause and effect. As a 1993 World Bank analysis of the East Asian economic miracle begrudgingly acknowledged, ‘It is very difficult to establish statistical links between growth and a specific intervention and even more difficult to establish causality. Because we cannot know what would have happened in the absence of a specific [industrial] policy, it is very difficult to test whether interventions increased growth rates.’

Second, closer examination of purportedly successful industrial policies invariably reveals a different story. For example, industrial policy played an at-best peripheral role in important economic developments such as the Internet’s emergence or Taiwan’s rise as the world’s premiere semiconductor producer.

Of course, if governments throw enough money at something, they will get some results. But the long-term damage in terms of opportunity costs, overproduction of goods for which there is weak demand, severe capital malinvestments and unbridled cronyism are there for all with eyes to see.

These economic truths underscore the folly of playing the industrial policy game. If British conservatives are serious about reversing their nation’s steady drift towards state capitalism and something akin to the economic misery of the 1970s, industrial policy is precisely the wrong way to go. The only ‘national champion’ Britain’s centre-right should be promoting is the force that has consistently delivered sustained prosperity: the creative and disciplined power of free markets.

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As president of the American Institute for Economic Research, Samuel Gregg has spent years making the case for free markets. But he knows that dismissing the new consensus is not enough. It needs to be understood, and engaged with on its own terms.

He joins Marc Sidwell to map how far the turn away from free markets has gone, why it’s proved so seductive across the political divide – and what those who disagree are going to have to do about it.

• Why Britain’s gilt yields are the highest in the G7

• How the ‘Burnham premium’ could cost every working household £300

• Labour’s plan to borrow an extra quarter of a trillion pounds across a single Parliament

The speech is followed by a candid Q&A, in which Stride tackles the prospects for a Tory-Reform deal, the case for keeping the triple lock and the limitations of the OBR. You’ll find links to watch or listen to the full episode below, as well as an excerpt from the transcript.

Marc Sidwell
Editor, CapX

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Watch on YouTube; listen on Apple Podcasts or Spotify.

Transcript

Today, our country is paying more to borrow than any other major western economy.

The yield on 10-year gilts is now sitting consistently above 5%.

Meanwhile, average yields across the rest of the G7 currently sit at about 3.5%.

That is a very significant premium. It is a damning verdict by markets on the current government.

And it has serious implications for all of us, costing us billions more in debt interest.

The immediate context, of course, is the chaos surrounding the leadership of the Labour Party.

But beyond that, it is about a deeper problem with economic and fiscal policy in our country.

And while politicians frequently complain about reckless borrowing, too often those same politicians have nothing concrete to say as to what they would do about it.

Or worse still, they come out with a list of fanciful and unfunded promises of their own.

That is not responsible.

It is not honest.

And it is not leadership.

Any serious party worthy of governing our country must have a clear answer as to what they are going to do about our rising debt.

I want to make a very clear statement – not just about what has been going wrong, but about my own party’s commitment to putting it right.

The most immediate problem, of course, has been political instability.

Last week, you could literally map the fluctuations in yields against the news reports on the latest resignations or rumours of leadership challenges. On Friday, for example, the market jumped 18 basis points, in response to the news that Josh Simons would be stepping aside for Andy Burnham.

To put that in perspective, if that increase was sustained across the Office for Budget Responsibility’s forecast, it would add nearly £2 billion to annual debt interest spending, and would cost £5.4 billion cumulatively across the five-year forecast. That’s £300 for every working household in this country.

There is now a ‘Burnham premium’ on our borrowing costs.

As we all know, if there is one thing markets dislike, it’s uncertainty.

But this is not just about uncertainty.

It is also about what the political context means for policy.

Markets do not care about personalities – they care about the fundamentals.

And there are two important fundamental factors here.

One is the prospect of a new Prime Minister coming in with a plan to borrow even more and to raise taxes, with no understanding of how markets will react.

On this latter point, Burnham has previously said the Government is too ‘in hock to the bond markets’.

One of his parliamentary backers said the bond market would need to, quote, ‘fall into line’.

He also suggested last month that we should treat defence spending as an exception to the fiscal rules – as if borrowing for defence is somehow different to any other borrowing.

Or you can look at Angela Rayner and the litany of tax rises she wants to bring in.

And even Wes Streeting, positioned as being more moderate, with his past comments on significantly increasing capital gains tax.

Investors are rational. If they see leadership hopefuls queuing up to borrow more or mismanage the economy, then they price that in.

The other factor is what the Prime Minister’s weakness means for the policy direction of the existing Government.

Even if Keir Starmer struggles on, it’s very plain that his Government is in hock not to the bond markets, but to his own backbenchers.

Policy is being dictated by those who are addicted to tax and spend, with no appreciation of the trade-offs or any capacity to take the difficult decisions that are sometimes needed.

And we see the consequences. Last week, the Prime Minister delivered a reset speech – which seems to have become a monthly fixture these days – in which he pledged to nationalise steel. A direct sop to the Left of his party.

The King’s Speech contained no measures to control the ballooning welfare bill, because there is no prospect of reforms making it past those who sit behind him.

This is a government unable to take tough decisions and increasingly compelled to lurch to the Left – a recipe for more borrowing, more taxes and higher inflation.

Again, investors are rational. The market can see what is happening, and they price it in.

So, it is not just the prospect of a change of leadership which is driving up gilt yields, it’s what the attendant pressures are imposing on current policy.

But beyond the recent chaos in Downing Street, there are other, deeper factors at play…

You can read the speech in full on CapX. For the full event, with Q&A, watch or listen to The Capitalist.

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Our borrowing costs are the highest in the G7, higher even than Portugal, Spain and Greece – not primarily because of the deficit or the debt stock, but because Britain has become an inflation outlier, and markets are pricing in the risk that the situation gets worse. 

When Josh Simons stepped aside for Andy Burnham on a single Friday, yields jumped 18 basis points. Stride puts a number on it:  Burnham penalty that if sustained would cost the equivalent of £300 per working household.

The broader charge sheet against the current government includes: a deficit that ran 75% above inherited plans in Labour's first year and again in its second; a quarter of a trillion pounds in additional borrowing across a single Parliament; fiscal rules changed to permit more borrowing the moment they became inconvenient; and a Prime Minister too weakened by his own MPsto make the welfare reforms even his Chancellor admits are needed.

Against this, Stride sets out the Conservatives' golden rule – for every pound of savings identified, at least half goes to deficit reduction – and makes the case that the Tories' plan is the only serious fiscal commitment on offer. Reform's numbers don't add up, he argues, and its representatives have said so themselves on air. Labour's leadership contenders are, in their different ways, each a version of the same problem.

Following his speech, the Shadow Chancellor takes questions on quantitative tightening, the triple lock, the OBR's limitations, defence investment and the EU.

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Mani Basharzad of the Institute of Economic Affairs argues that the Manchester model rests on borrowing that bond markets are already pricing with suspicion, a council that is among the most indebted in the country, and a breezy confidence that infrastructure debt is categorically different from any other kind. (It isn't.) Then there is the welfare question: Burnham has shown no appetite for restraint. And the wealth taxes he has quietly signalled would do to capital what rent controls do to housing.

The deepest problem is one of logic. Burnham wants growth and expanded welfare. He wants business confidence and more borrowing. He wants reform and the preservation of every existing structure. As Ludwig von Mises observed, you cannot split the difference between the government and the market. There is no third solution – only planned chaos.

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Kallum Pickering, chief economist at Peel Hunt and columnist for The Telegraph, joins CapX editor Marc Sidwell for a lucid diagnosis of what is really going wrong with the British economy, why the markets are spooked, and what a change of Labour leadership could mean for the country's already precarious fiscal position.

Pickering's central argument: Britain's borrowing costs are the highest in the G7 not because of its deficit or its debt, but because of its inflation record. And that inflation, he contends, is not bad luck — it is the predictable consequence of two decades of policy choices that have systematically rationed Britain's own factors of production. 

Land, labour, energy, commodities: each has been constrained in turn, shrinking the economic pie even as demand has grown. The result is an economy that borrows to fund current consumption while steadily eroding the private sector's productive potential.

Even as the predictable leadership tension rolls on, the underlying problem, Pickering argues, will not change with the occupant of Number Ten. His prescription is neither complicated nor politically fashionable: deregulate land, labour and planning; cut government spending by three to five percentage points of GDP; let taxes follow. But above all, fix energy. Britain has 25 per cent less electricity available to it than in 2005. Until that changes, every other reform is working against the tide.

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The gap with our peers runs to roughly £100 billion annually. A new report from the Jobs Foundation makes for uncomfortable reading, but it also offers concrete proposals for what to do about it.

Marc Sidwell is joined by Andrew Allum, international strategist and one of the report's authors, to discuss what it will take to close the investment gap – and whether Britain still has the political will to try.

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Recorded live at the Margaret Thatcher Conference in London, Charlotte Crosswell OBE chairs a conversation with Louis Mosley, Executive Vice Chair and Head of Palantir Technologies UK, and Tom Westgarth, Head of Growth at Fractile, on what it would take for Britain to translate its genuine and underrated AI advantages into lasting national prosperity.

The case for optimism is more concrete than you might think. Palantir employs one in five of its global workforce in Britain. Google DeepMind, builder of one of the world's three serious frontier AI models, is headquartered here. ElevenLabs, now valued at $11 billion, was spun out of Palantir's NHS team by Polish engineers who came to London for university and stayed. UK AI startups raised £7.8 billion in the first quarter of 2026 alone.

As for jobs: anyone claiming certainty is, as Mosley puts it bluntly, lying. But the collar flip – where the barista outlasts the barrister – may be closer than comfortable.

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A columnist for The Telegraph and author of Good Slut: How Money, Sex and Power Set Women Free, Zoe joins CapX editor Marc Sidwell to make the conservative case for winning over feminists at the next election. Her argument is simple and unfashionable: throughout history, the ability to earn money and keep it has been the most reliable route to female autonomy — more so, in many contexts, than legislation or social movements alone. The reflexive anti-capitalism of contemporary feminism, she contends, is not just intellectually confused but actively harmful to the women it claims to represent.

Zoe traces how feminism, born from the socialist left of the 1970s, was briefly hijacked by the Sheryl Sandbergs of the early 2000s before swinging back hard against so-called neoliberal feminism — leaving young women with a politics that discourages ambition, pathologises wealth and mistakes destruction for progress. The polling bears it out: young women are now among the most enthusiastic supporters of anti-capitalist parties.

Nobody, right or left, is making much of an economic argument at all: cultural questions are more vivid, more emotionally compelling and considerably easier than engaging seriously with how prosperity is actually created. But Zoe thinks that style of politics might be reaching its use by date.

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But Dr Gerard Lyons, research fellow at the Centre for Policy Studies, isn't arguing for abandoning the green transition. Instead, he says the way Britain is pursuing Net Zero is making the country poorer, less competitive, and more exposed to exactly the kind of international shocks that good energy policy is designed to absorb.

The problem is substitution over addition — replacing fossil fuels before the renewable system is ready to carry the load, and loading the cost of transition directly onto household and business bills. The fix, Lyons argues, requires treating the energy transition as long-term infrastructure, financed through borrowing and repaid over generations. It requires nuclear — urgently, and at scale. It requires a stable tax regime for the North Sea. And it requires fixing a market design that means consumers pay gas prices even when the wind is blowing.

Britain led the world in cutting emissions, and it could yet lead the world in doing so affordably. But Lyons warns that the current path risks making the green transition synonymous with economic pain — and that is a political and economic failure the country cannot afford.

Despatch brings you the best writing from CapX's unrivalled daily newsletter from the heart of Westminster.

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