The Tories must water these green shoots

The economy and the narrative are starting to turn the Tories’ way. They need to take advantage

Governor of the Bank of England Sir Mervyn King ahead of his first-ever live television interview, at the studios of Channel 4 news

Governor of the Bank of England Sir Mervyn King Photo: PA

9:53PM BST 19 May 2013


Sir Mervyn King, like a Scotsman with a grievance, is rarely mistaken for a ray of sunshine – still less for the first cuckoo of spring. Yet in his farewell tour as Governor of the Bank of England, he is exhibiting something we have not seen in British politics for quite some time: a sense of economic optimism. Last week, at his final press conference in office, he announced that recovery was in sight, a remark he amplified in an interview yesterday in which he claimed to discern a “modest recovery” – which, while “we certainly can’t be satisfied with it”, is certainly better than no recovery at all.

Time – and the ongoing travails of the eurozone – will tell whether Sir Mervyn’s remarks will ultimately be regarded as a premature echo of Norman Lamont’s claim to have discerned the “green shoots of economic spring”, from a man demob-happy after two grinding terms of office in the most trying circumstances, or as far-sighted prophecy. We devoutly hope that he has called it right, and that the economy is finally healing from the wounds inflicted by the financial crisis – and a spendthrift Labour government that left us in a devastating fiscal position when the bust arrived. But it raises the question: if there is indeed a nascent recovery, what more could and should be done to foster it?

Part of the answer was offered by Sir Mervyn himself, with his call to stop demonising the banks – or rather, individual bankers. For the economy to function, it needs credit, which can only be provided by a healthy banking system (something which, Sir Mervyn claimed, the reforms now in train will eventually deliver). More broadly, government needs to focus relentlessly on wealth creation, and on supporting entrepreneurs and capitalists of all kinds. It is deeply gratifying that the number of new businesses being started is quite so high, but that needs to be accompanied by a reduction in the burdens on businesses that already exist. Consumers, too, must lose less of their money to sky-high taxation and an ever-increasing cost of living, so that they have the resources and the confidence to keep the economy moving forward.

Recently, of course, the Conservative Party has appeared anything but focused on such matters, preferring to engage in a series of increasingly traumatic disputes about Europe and the relationship between the party’s leadership and its base. These are, indeed, important issues. But the danger is that, by looking in on itself, the Tory party will fail to notice that the wider narrative might just be starting to go its way, and that it had better summon the energy – and unity – to make the most of it.