Labour, Ukip - threat to free trade

Wednesday 21 May 2014

George Osborne will launch a stinging attack on Labour and Ukip, warning they are threatening the political consensus in place since Thatcherism that Britain should be an open market economy.

The Chancellor will say that since the fall of the Berlin Wall, governments have championed free trade and welcomed foreign investment, a situation now threatened by "parties on the left and populist right".

In a speech to the CBI, Mr Osborne will apparently take aim at Opposition policies such as an energy price freeze and indexing the minimum wage to average earnings, claiming Labour wants to "pretend that they can re-establish control over all aspects of the economy".

Meanwhile, in what many will see as a jab at eurosceptic Ukip, the Chancellor will warn the party takes advantage of "the understandable anxieties of a population unsettled by the pace of globalisation, and peddles a myth that Britain can stop the world and get off". These "pull up the drawbridge" policies will lead Britain into an economic decline that will adversely affect the poor more than the rich, he will say.

Calling on supporters of free markets and "competitive" tax rates to "make your voice heard", Mr Osborne will say: "For all of my adult life, since the fall of the Berlin Wall in the year I left school, there has been a political consensus in this country that Britain's future lies as an open, market economy. Since then, under governments of all political persuasions, we have championed free trade - and welcomed foreign investment - and built competitive, open markets under the supervision of robust independent regulation.

"Sadly, that consensus that we put the national economic interest first - ahead of opportunist party advantage - is under threat for the first time in twenty five years. Political parties on the left and the populist right have this in common: they want to pull up the drawbridge and shut Britain off from the world. They want to constrain foreign investment in our economy, and deprive us of the British jobs that it has created in industries from car manufacturing to energy.

"They want to set prices, regulate incomes, impose rent controls, wage war on big business, demonise wealth creation, renationalise industries - and pretend that they can re-establish control over all aspects of the economy. Whether from the left or the populist right, we now see a deeply pessimistic, depressing, anti-business agenda. It takes advantage of the understandable anxieties of a population unsettled by the pace of globalisation, and peddles a myth that Britain can stop the world and get off.

"It portrays the changes to the international economy that have lifted hundreds of millions of people out of poverty, and opened vast new markets for Britain, as nothing more than a race to the bottom. But price and incomes controls, re-nationalisations, and erecting the government as the enemy of business and wealth creation will lead Britain down a path of relative economic decline. So we ask the people of Britain: reject the forces of pessimism on the left and the populist right."

Meanwhile, the Chancellor will insist that despite "a real sense of optimism" in Britain it will take another six years to fully secure the economic recovery.

He will say: "It has taken time, and effort, and belief, and sacrifice to bring our country back from the brink to the real sense of optimism that is growing in Britain today. But it would be a grave mistake to think our job is done, or think we can go easy and slow down. Our task to secure our country's economic future is not even half done. This is a decade long turn around job we have embarked on - and we are determined to see it through."