Conservative Party leadership candidate Michael Gove has delivered his first major leadership bid speech. Speaking at the Policy Exchange think tank, he launched into an impassioned defence of free market capitalism, while exposing the effects of globalisation and freedom of movement.
But he also said, when asked by journalists, that he did not envisage that a Prime Minister Gove would invoke Article 50 this year, sparking fresh concerns that no Conservative Party leadership candidates are keen to start negotiating Britain’s way out of the European Union, as voted on by the public.
Launching his campaign with an intensely personal speech, Mr. Gove established his credentials as a free-thinking reforming Tory, establishing what he called his “vision to transform our country for the better.”
In particular he focused on the need to ensure the benefits of free trade and open markets are felt by every sector of society, something which globalisation has failed to achieve.
Highlighting the lack of fundamental fairness in the current system which leaves too many behind, he said:
This referendum has laid bare divisions in our country that are deep and damaging.
It laid bare the truth about globalisation, free movement and the faltering march of progress in recent decades. People have been left behind. Our society is stratified, unequal.
Change, globalisation, has broken the British contract which said that if you work hard and throw everything you have got into building a better life, then that better life can be built. The referendum showed in stark relief that there are two Britons, those who can reap the benefits of globalisation are those who are flotsam and jetsam in these powerful flows of global capital and the free movement of labour.
For millions, the dream of home ownership is receding and wages are stagnating. For millions of our fellow citizens, this isn’t a Brave New World, it’s an uncertain new world. And for all Britain’s power and prosperity, for millions, far too many, this is still not a land of opportunity.
This is a country where your schooling, your postcode, your background matters far too much, and it is the passion of my life and the motivation of my leadership to change that for good.
These challenges call not for business as usual, but for a big and a bold vision. It also calls for honesty about the strengths and weaknesses of our current economic model.
Look, I’m a passionate supporter of free markets, free trade and free enterprise. In the last two decades, free enterprise economics has lifted millions out of poverty across our planet.
But let’s be honest about it. Let us in particular, those of us who are politicians on the right be honest about it. In our country, far too often, rewards have gone not to risk takers and job creators, but insiders in our financial system, and big businesses who have rigged the market in their interests.
As research from the Nobel prizewinner Daniel Kahneman has made clear, far too many people in financial services are paid vast fortunes, as if they are outstandingly skillful, when in many cases, they are simply lucky.
Research also shows that many of the big mergers and acquisition deals don’t create shareholder value, they don’t put money in your pocket. But they do generate huge fees for the consultants who engineered the deals and handsome payments for the management and the board that pushes them through.
And the problems with excess pay at the top are not confined to financial services. Privatisation has brought huge benefits to Britain in the 1980s. The contrast between the British Leyland of my childhood and the British car industry today couldn’t be greater
And since the 1980s, privatisation has spread around the world to communist Vietnam and Maoist China. But it’s become discredited in Britain.
Why? Because of how many privatised companies dealt with pay. Hired managers were paid huge sums as if they were successful entrepreneurs putting their own money on the line. In many cases they do a poor job, then get huge payoffs and pension contributions, and then they go on to lecture people on average and below average wages about the need for greater labour market flexibility.
Too many of these people act as though they were Steve Jobs, but in fact they are really behaving like David Brent.
Since the 1990s the pay of top Chief Executives has increased from around 60 times average income to around 180 times average income. Many of the wealthiest also use their money and connections to exploit an overly complex tax system to avoid paying their share.
These practices discredit the way that the free-market system currently operates, not just in the eyes of those on the political left but in the view of genuine entrepreneurs, real job creators, and above all, working people.
That is why we need to change. And it has been at times of radical change in our history that we have made the greatest economic and social progress.
The democratic revolution that began in the 17th century in this country which made our political institutions more accountable went hand-in-hand with the scientific breakthroughs of the Enlightenment, pioneered by Newton, Hooke and Boyle. And together they laid the groundwork for the industrial revolution of the 19th century which made the United Kingdom the workshop of the world.
Well, we need similar radicalism and ambition today. As we renew our democracy and take back control of our laws, so we must think how we can reform capitalism, give shareholders more control over how public companies operate and ensure once more that pay incentivises the right sort of corporate behaviour.
But Mr. Gove has now left the door open for a massively eurosceptic candidate, perhaps Dr. Liam Fox or Andrea Leadsom, to demand that Article 50 is invoked immediately after the Tory leadership challenge.
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