John Redwood: Only the Conservatives hold out any hope of pulling Britain out of Labour’s doom spiral

Sir John Redwood is a former MP for Wokingham and a former Secretary of State for Wales.

Conservatives have never been more needed. The ideas Kemi Badenoch boldly set out in her Conference speech could pull the country out of Labour’s doom loop: they could re boot the economy for growth; they could remove the huge spending pressures from excessive low and no wage migration and from too many languishing on benefits rather than finding decent jobs; they could  rebuild pride in our country, direct public debate to the preoccupations of the majority, recreate an impartial rule of law, and arrest the collapse of British industry.

Badenoch’s task is as big as Margaret Thatcher faced in the 1970s. As a young man, I had predicted the Heath defeat and criticised the socialist economics of comprehensive wage, price, and dividend controls, with the disastrous monetary policy that underlay it. As a result, I was invited to advise the shadow team on public spending and the economy. All agreed public spending had to be controlled as we watched as the government stumbled into a bond crisis eventually paying 15.5 per cent to borrow; they followed up with an IMF loan which required some forced spending cuts.

Puzzling over how a future Conservative government could cut spending without taking benefit money from people who were struggling or without cutting an NHS and schools that were not overfunded, I told the politicians to concentrate on the huge, rambling, often loss-making nationalised industries. Every penny they lost, and every penny they spent on investment, was a direct charge on taxpayers appearing as public spend in the budget.

I developed plans for all of them. Some could be sold to the private sector to raise more investment money and free the state of all their investment costs; some needed plans and better management to stop the losses; many needed the injection of competition to force the pace of innovation and improvement.

The nationalised telecoms business did not have enough cash to modernise and expand so phones and phone lines were rationed. Privatisation led to a surge of extra capacity and to catching up with superior American electronic technology. The privatised electricity industry paid for an increase in output and a big switch from coal to clean gas, bringing down power prices at the same time. A liberated gas industry hurled new capital at making us self sufficient in natural gas.

Today we have a less extensive nationalised industry estate – but a much more over-extended forest of regulators and public bodies. The two largest loss makers, the Bank of England and the railways, are taking more cash from taxpayers than the so called black hole Rachel Reeves is trying to fill.

I have set out how the Bank’s projected losses of more than £20bn a year (per OBR forecasts) can be easily reduced substantially. The HS2 losses can be controlled a bit, and sales proceeds brought in from disposals of property no longer needed for the project. Cutting rail losses needs plans geared to getting more fare paying people and freight onto trains and boosting productivity.

Privatisation is criticised for allowing foreign ownership of key utilities. Critics overlook the fact that the Conservative privatisations blocked foreign takeovers by keeping Golden shares. The idea was dividends and interest payments would be made to UK pension funds and savers. Tony Blair and the EU threw away the Golden shares allowing foreign acquisition with predictably bad results.

Today, the Government builds into its plans the need to harness far more private capital for public purposes through the National Wealth Fund and Great British Energy. They say they wish to sweep away regulatory impediments to growth. Unfortunately they arrived in office with no roadmap to do this. So far they have mainly concentrated on planning, with no sign of much success.

The Conservatives can use their time in opposition this Parliament to propose a radical reshaping of public bodies, nationalised business and regulators. If the Government was sensible, it would steal some of these ideas as a necessary means to break out of its doom loop.

Instead, under Labour it has so far been unemployment up, benefit numbers up, inflation up, growth down, and job vacancies down. They are also setting out to undermine Michael Gove’s great successes in education.

Where is the plan to turn round the steel industry? How big are the losses? When will the outrageous costs of HS2 stop rising? When will the nationalised industries pay us a dividend instead of costing us a fortune? Bring on a new conservative revolution. Roll back excessive regulation, improve public sector management, introduce more private capital.