May defends UK economic model in olive branch to business

[LONDON] Theresa May defended Britain's economic model as "the greatest agent of collective human progress ever created" as she seeks to underline the differences between her Conservative Party and Jeremy Corbyn's Labour opposition.

Free-market economies "led societies out of darkness and stagnation and into the light of the modern age," the prime minister said Thursday in a speech to mark 20 years of Bank of England independence.

"It is unquestionably the best, and indeed the only sustainable, means of increasing the living standards of everyone."

A year after raising the hackles of business by taking a wipe at "elites", Mrs May is seeking to reinforce the Tories as the party of business by contrasting her approach to the state interventionism on display at Labour's annual conference in Brighton this week.

Mrs May, who started her professional life at the BOE in 1977, stressed the need to keep the country's debts under control while still spending on public services.

"To abandon that balanced approach with unfunded borrowing and significantly higher levels of taxation would damage our economy, threaten jobs, and hurt working people," she said.

"Ultimately, that would mean less money for the public services we all rely on."

The speech comes a day after Mr Corbyn reaped rapturous applause at a jubilant conference, where he described Labour as "a government in waiting" after depriving Mrs May of her parliamentary majority in June's general election. 

Labour proposals include the nationalisation of railways as well as energy and water utilities, and bringing in rent controls.

The Conservatives estimate that pledges made by Labour since it published its election manifesto total £312 billion (S$568.33 billion).

Mrs May's speech is the latest olive branch to business.

She has watered down proposals to put employees on company boards, delegated action on energy prices to the independent regulator and switched to a more business-friendly approach on Brexit.

That includes using a key speech in Italy last week to state a desire for a transitional period to smooth the UK's departure from the European Union.

"They have dramatically improved their business engagement since the election," Josh Hardie, deputy director-general of the CBI business lobby, said in an interview.

Companies have been "listened to because a lot of what was in the Florence speech was as a result of conversations with business."

Last year, Mrs May blamed central banks and their ultra-loose monetary policy for widening inequality.

BLOOMBERG