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Downing Street refuses to explain how Theresa May would 'reform capitalism'

The new PM's new policy chief has a history of backing radical right-wing free market ideas

Monday 25 July 2016 18:22 BST

Theresa May speaks to the media outside Downing Street (EPA)

Downing Street has refused to elaborate on how Theresa May would reform capitalism – after it emerged her new policy chief drew up plans for a radical wave of right-wing free market policies.

The Prime Minister pledged to crack down on irresponsible behaviour by large companies following revelations about Sir Philip Green’s time running collapsed shopping chain BHS.

But asked to explain how the PM’s rhetoric about changing capitalism would actually translate into policy, a Downing Street spokesperson on Monday declined to float or suggest even a single policy.

“I’m not going to start setting out policy – it’s right that a government that only took office ten days ago takes some time to think about these policies carefully and we’ll set further approaches on this in due course,” she told an official briefing of journalists in Parliament.

She later added: “I wouldn’t encourage speculation on this area. The point I would make is we need to take the time now to look at what the issues and the drivers are and to look at what the policy options are. I don’t think we should get ahead of ourselves.”

The lack of clarity came after it emerged that Ms May’s new policy chief, George Freeman, developed plans during the last government for a lower minimum wage in poorer areas and opt-outs for corporations from employment protections.

In 2013 Mr Freeman co-authored a paper arguing that the minimum wage and public sector pay should be “regionalised”.

‘The Innovation Economy Industrial Policy’, a pamphlet which he co-wrote with fellow MP Kwasi Kwarteng, suggests reductions in the minimum wage and public sector pay could help the poorest areas.

There have been calls to strip Sir Philip Green of his knighthood (Getty)

Other suggestions included slashing corporation taxes, abolishing subsidies for green energy, and exempting corporations from paying tax or having to follow employment rights for their first three years.

The Conservative MP has been appointed to chair Ms May’s policy board.

“Over the next few months, I will be working with the Prime Minister and her team helping set out key areas of the new Government's programme on the deep economic and social reforms we need to make the economy work for everyone in our society,” he said in a statement on his appointment.

The 6 most important issues Theresa May needs to address

Show all 6

1/6The 6 most important issues Theresa May needs to address

The 6 most important issues Theresa May needs to address

Brexit

The big one. Theresa May has spoken publicly three times since declaring her intent to stand in the Tory Leadership race, and each time she has said, ‘Brexit means Brexit.’ It sounds resolute, but it is helpful to her that Brexit is a made up word with no real meaning. She has said there will be ‘no second referendum’ and no re-entry in to the EU via the back door. But she, like the Leave campaign of which she was not a member, has pointedly not said with any precision what she thinks Brexit means

Reuters

The 6 most important issues Theresa May needs to address

General election

This is very much one to keep off the to do list. She said last week there would be ‘no general election’ at this time of great instability. But there have already been calls for one from opposition parties. The Fixed Term Parliaments Act of 2010 makes it far more difficult to call a snap general election, a difficulty she will be in no rush to overcome. In the event of a victory for Leadsom, who was not popular with her own parliamentary colleagues, an election might have been required, but May has the overwhelming backing of the parliamentary party

Getty

The 6 most important issues Theresa May needs to address

HS2

Macbeth has been quoted far too much in recent weeks, but it will be up to May to decide whether, with regard to the new high speed train link between London, Birmingham, the East Midlands and the north, ‘returning were as tedious as go o’er.’ Billions have already been spent. But the £55bn it will cost, at a bare minimum, must now be considered against the grim reality of significantly diminished public finances in the short to medium term at least. It is not scheduled to be completed until 2033, by which point it is not completely unreasonable to imagine a massive, driverless car-led transport revolution having rendered it redundant

EPA

The 6 most important issues Theresa May needs to address

Heathrow expansion

Or indeed Gatwick expansion. Or Boris Island, though that option is seems as finished as the man himself. The decision on where to expand aviation capacity in the south east has been delayed to the point of becoming a national embarrassment. A final decision was due in autumn. Whatever is decided, there will be vast opprobrium

PA

The 6 most important issues Theresa May needs to address

Trident renewal

David Cameron indicated two days ago that there will be a Commons vote on renewing Britain’s nuclear deterrent on July 18th, by which point we now know, Ms May will be Prime Minister. The Labour Party is, to put it mildly, divided on the issue. This will be an early opportunity to maximise their embarrassment, and return to Tory business as usual

EPA

The 6 most important issues Theresa May needs to address

Scottish Independence

Nicola Sturgeon and the SNP are in no doubt that the Brexit vote provides the opportunity for a second independence referendum, in which they can emerge victorious. The Scottish Parliament at Holyrood has the authority to call a second referendum, but Ms May and the British Parliament are by no means automatically compelled to accept the result. She could argue it was settled in 2014

AFP/Getty

The Financial Times reported on Monday that Ms May was considering new legislation to curb sky-high directors’ pay and improve corporate governance. She has previously suggested that worker representatives could be elected to company boards.

The renewed interest in reforming capitalism comes after a report by the House of Commons Work and Pensions Select Committee laid the blame for BHS’s collapse on Sir Philip’s head.

Labour’s shadow business and energy secretary Jon Trickett was among voices calling for the boss to be stripped of his knighthood. The frontbencher argued that the Government should launch “an immediate and thorough review of how such companies are governed”.

“The Select Committee’s damning report shows how Phillip Green extracted millions from BHS over 15 years and then sold it to a bankruptee who went on to receive further millions from the company,” he added.

“But a range of well-known accountancy, banking and other companies who had a duty to provide professional independent advice failed to prevent the actions described in the report.

“This left 11,000 loyal hard-working people without a job and a massive pension deficit. No one should be allowed to keep a knighthood after such actions. He must also pay back the millions of pounds to the pension fund."

Downing Street’s spokesperson was clear that Ms May “has already set out that we need to tackle corporate irresponsibility and reform capitalism so that it works for everyone, not just a privileged few”.

“That means in the long run doing more to prevent a responsible and reckless behaviour,” she said.

“Of course, it’s right now that we look carefully at the policies linked to that and work out the best way forward.”

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