In office but not in power
Plus: Who is in Burnham's team? The Left doesn't understand what investment means
The Prime Minister kept his jacket on for PMQs despite speculation that sartorial standards might be relaxed due to the heat. But power is rapidly leaving him. Kemi Badenoch showed no mercy - mocking the Labour MPs for cheering him in public while betraying him in private:
We probably have another three weeks of Starmer at PMQs to go.
A coronation looks even more likely with the news that Darren Jones - ‘Chancellor of the Duchy of Lancaster, Chief Secretary to the Prime Minister and Minister for Intergovernmental Relations’ - is backing Andy Burnham rather than attempting his own challenge. Jones says there is ‘room to borrow a little more.’ He thinks that’s ‘what the market wants.’ Given that the Government borrowed £23.3 billion last month, well above forecast, that was a bold statement.
Below you’ll find all the latest pieces from CapX, plus what we’re reading from around the web.
CapX
Today’s Takes
Fresh thinking from CapX
Burnham’s people
Max Young
‘Expect across-the-board tax rises packaged up with the ex-mayor’s 'Manchester' vibes’
The advisers who hold his ear will try to act fast, thinking that they have learnt the lesson from Starmer’s processology. Chief among them is Miatta Fahnbulleh, a protege of Ed Miliband and former head of the 'power-powered' think tank the New Economics Foundation. Such views do not bode well for growth. Expect across-the-board tax rises packaged up with the ex-mayor’s ‘Manchester’ vibes. Read More
What the Left doesn’t get about investment
Mani Basharzad
‘Investment isn't a magic variable that automatically creates growth simply by increasing it.’
If investment is not guided by markets, it is guided by politics. And politicians simply do not have the incentives to allocate capital in the most efficient way - not because they are bad people, but because they do not bear the consequences of poor decisions. Read More
The Capitalist
From Disraeli’s One Nation vision to Thatcher’s Right to Buy, aspiration was once the animating principle of British conservatism. Yet after 14 years of Conservative government, the housing crisis has torn up the old promises of reward for hard work. In the 1990s, a first-time buyer couple saving 5% of their wages could afford a deposit in three years. Today it would take 24.
How did the Conservative commitment to encouraging aspiration slip away - and what would it take to restore it?
Mario Creatura, a former special adviser to Theresa May in Downing Street, joins CapX editor Marc Sidwell to discuss ‘A Blue Hope’, his new report for the Centre for Policy Studies co-authored with Oliver Middleton. 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…
The CapX Reading List
The best of the web today
What did Starmer actually achieve?
Katie Lam
‘If there was a silver lining to Starmer’s tenure as Prime Minister, it was his weakness – which made it possible for Kemi Badenoch and the Conservatives to force him into u-turn after u-turn.’
Regardless of the churn at the top, the fundamentals remain the same. Labour will not secure our borders, they will not cut our ballooning welfare bill, and they will not do what’s necessary to keep our country safe. They are simply not dispositionally or ideologically capable of making the trade-offs that we need to make in order to fix any of these problems. Read More
How Britain lost the art of economic warfare
Oliver Harvey and Sahil Mahtani
‘British policymakers should recognise that the world of multilateral institutions engineered to reduce barriers to trade in goods and services as well as other forms of international economic transactions is long gone.’
As an island nation, the UK’s critical supply chains rely on secure shipping lanes, ports and undersea infrastructure, such as subsea cables. Britain has 51 major ports moving 400+ million tonnes a year. If energy cargoes, refined fuels, fertiliser inputs, basic metal products, or components get disrupted, that is a problem. Read More
A Brexit Decade ?
Tom McTague, Morning Call
Stat of the day
And if you want more...
- A step forward for free speech in our universities – (CapX)
– Peru has a new leader (Foundation for Economic Education)
– Why much of Manhattan would be illegal to build today (The Daily Economy)
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The Capitalist continues to get the house price comparison wrong, as has been pointed out many times - because it adjusts the 1990s income figure for inflation but not the house price. The non-adjusted income/house figures (median household incone, median house price) are £12,400/57,000 and £37,100/235,000. A 10% deposit for each house price saving 5% of gross income is thus 9 years and 13 years. An increase of less than 50%, not the multiples claimed.