Well, thank goodness that’s over. Elections are rarely edifying spectacles, and this one was worse than most. The Conservatives kicked things off with some appalling policy announcements, and then mostly went negative, accusing Labour of ‘failing to rule out’ various made-up taxes ad nauseam. Labour spent most of the time in safe mode, saying as little as possible in the hopes of winning a large majority by default.

And that, of course, is just about how it turned out. So why did things go so wrong for the Conservatives? And what hopes and fears should we have for a Labour government? Here are ten initial reflections from a classically liberal, free market perspective.

1. For the Conservatives, there has been a fundamental failure of political strategy. Again and again, they have embraced right-wing rhetoric – alienating centrists – and then completely failed to deliver, infuriating the Right. They ended up losing voters in every direction at once.


2. Even those of us who favour open labour markets and want to treat everyone as an individual, regardless of their nationality, must admit that immigration has become a defining political issue. Unreformed public services and a broken housing market may be as much to blame as overall numbers, but nevertheless an effective (but enlightened) approach to border control is essential.


3. I often think of Dominic Cummings’ ‘golden rule’ – that ‘the government doesn’t control the government and has no interest in doing so’. Having worked in Westminster for many years, it rings true to me. Our bureaucratic state runs on autopilot, and most ministers barely scratch the surface – preferring (often rationally) to play a political game for the media instead. But this is a dangerous equilibrium: a state that doesn’t respond to democratic impulses, and a political class mired in superficiality, will invariably inspire calls for a populist ‘strong man’ to get things done.


4. The Conservatives have consistently failed to maintain a distinctive and coherent governing agenda that their MPs and supporters can unite around. This has led to repeated cycles of drift followed by panic over how little is being achieved in government, as well as many people left with nothing to do except plot for one faction against another. Vacuous government – by opinion poll, focus group, and media grid – has proved to be an unstable and chaotic thing.


5. There is a lot of economics lurking in the background of this election. Governments across the world who presided over post-Covid inflation have paid for it at the ballot box. Britain’s Conservatives have proved to be no exception. But this is more than just bad luck – it reflects a longstanding inability to address supply side restrictions (for example on housing) that raise the cost of living, as well as a failure to understand (and respond to) the monetary roots of our recent inflation. Politicians who want to avoid a similar fate need to learn the right lessons.


6. Fiscal policy has been a problem too. So-called ‘austerity’ was necessary after the financial crisis. But it should only have been a first step. Cutting wages and benefits, and salami-slicing departmental budgets, buys you time – but then you need to move on to structural reforms that change what the state does and how it does it. That never happened, and as a result many public services have been run down, even as the state continued to live beyond its means.


7. There was a notable fiscal failure in the other direction too. The adverse market reaction to the September 2022 mini-budget undermined the Conservatives’ reputation for economic competence and set back the cause of pro-growth reform. The key takeaway should be that you cannot decouple tax cuts from hard decisions on spending and retain the faith of the bond markets (and, by extension, the electorate) – especially when inflation is high and interest rates are rising. If you want to cut taxes, you need fleshed-out ideas on how to reduce spending pressures and shrink the state.


8. We are yet to have a government really take growth seriously. Plenty of politicians say the words, but their actions speak louder. We haven’t liberalised land use. We have deliberately made our energy supply more expensive and unreliable. We have regulated the life out of financial services and taken a heavy-handed approach to the tech industry. We haven’t meaningfully reformed the tax system. Most damningly, having opted for a disruptive form of Brexit, we have largely rejected the ‘competitive divergence’ that such an approach made possible. When governments promise growth and fail to deliver it, their days are numbered.


9. That is a challenge Labour will face too. They deserve huge credit for sidelining the socialist hard-left, and for placing such emphasis on economic growth (coupled with fiscal responsibility). The greatest hope here must be that they succeed in their efforts to face down nimbyism and get Britain building. A large majority will help, but they wouldn’t be the first government to try and fail to break free of the shackles of the Town and Country Planning Act. They may come to realise that densifying London, and allowing urban extensions in other high-growth areas, is a surer route to success than the quixotic dream of New Towns.


10. There is some version of a successful centre-left that fuses supply-side liberalisation, public service reform, and fiscal responsibility with more traditional social justice concerns. But it is a very narrow path to tread. I worry about Labour’s plans for employment regulation, their approach to equalities legislation, and their general instinct towards the ‘quango-ification’ of the British state. In each case, they may only accelerate trends already present under the Conservatives – but that is little consolation.

I will write soon about the future of the British right – and the necessary (but admittedly not sufficient) role that economic liberalism must play within that if it is to have any chance of renewed success.

Yet just as Hayek dedicated ‘The Road to Serfdom’ to the ‘socialists of all parties’, the IEA has always addressed its work to liberals in all parties – and in none. Our mission is to advance understanding of economics and the institutions of a free society, and that is something that transcends partisan politics. Governments and elections come and go. But whatever happens in Westminster, our commitment to ideas and education will remain undimmed, and we will always do whatever we can to keep the flame of economic freedom burning brightly.