Text of an article published in Crossbow, the Bow Group magazine.

Nobody trusts politicians. A poll conducted in 2009 found that less than one in five Britons believed politicians told the truth. Even journalists were more trusted.

And yet when it comes to the economy, many Britons have a reverential faith in politicians. They are encouraged by the Labour party and others on the left. We are told that, in the absence of Government spending, the economy will collapse. Without ‘investment’ from the state, the country cannot grow. Without politicians watching over our economy like guardian angels, no prosperity can ensue.

It is this fear-mongering that explains in part the difficulty the Coalition is having in convincing the British public of the need for fiscal retrenchment. Britain is a nation of sensible, hardworking people. Most accept that spending more on debt interest than on defence annually is unsustainable. But many fear that as the Government retreats, so too will the economy.

Here the Coalition needs to assert some economic truths and dispel some falsehoods. An economy does not grow because bureaucrats command it to. It grows when wealth is created by entrepreneurs and businesses, leading to new or more efficient technology and better, cheaper goods and services. As businesses expand or are started, jobs are created.
Tax receipts flow to the exchequer. Living standards rise.

Without a robust, healthy and profitable private sector, the public sector simply cannot exist. Libraries, schools, hospitals and six-figure council chief salaries are dependent on a steady flow of money from the productive part of the economy. Government does not have money of its own. Every penny the Government spends has been taxed, borrowed or printed. The lavish promises of politicians are underwritten by working men and women. However, in a brilliant inversion of the truth, left-wing commentators suggest that without public spending there can be no growth – a clear case of wanting to put the cart before the horse. This idea must not go unchallenged.

It is not sufficient for the Coalition to explain the scale of the fiscal crisis, or to point out that the bond market will punish viciously a country thought to be unable to put its finances in order. There must be an explicit encouragement and celebration of profit-making and enterprise. Ministers must make the intellectual and moral case for free market capitalism, and not shy from the fiery debates this will involve.

To choose the battlefield is to have a natural advantage. Conservatives succeeded in forcing a national debate about our dire finances. We must now turn our attention to the growing divide between those who welcome private enterprise and those who look upon it as a necessary evil; good only for producing the money needed to fund public spending.

It is essential that the simple, positive facts underpinning the effectiveness of the free market are used to counter the pessimistic untruths promulgated by those whose answers to our problems are the stale old solutions: bigger government, more taxation, more borrowing and more bureaucracy. The rich diversity – and yes, inequality – of the human race, with each individual leveraging his or her unique skill set in pursuit of self-interest, drives the dynamism of the economy.

The British people will need a positive reason to vote Conservative come the next election. In the 1980s, Ronald Reagan wooed American voters with an upbeat campaign: it was “morning in America”. They responded by re-electing him in an historic landslide. The choice for the British people is not between rampant Government spending and poverty, but between stagnation and prosperity. Conservatives need to make this clear, and be confident that voters will choose prosperity.

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