In Brief

Theresa May defends free market economy after Corbyn speech

PM calls capitalism the ‘greatest agent of collective human progress ever created’

The Prime Minister has championed free market economics, one day after Jeremy Corbyn attacked Britain’s “failed model of capitalism” and presented the Labour party as a government in waiting.

Theresa May’s comments, which The Daily Telegraph characterised as a “strong defence” of capitalism, were made in a speech to commemorate 20 years since the Bank of England was given the right to set interest rates.

May called capitalism the “greatest agent of collective human progress ever created” and said prosperity required a tough approach to ensure budgets are balanced.

“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, adding that “ultimately, that would mean less money for the public services we all rely on.”

The Prime Minister said it was free-market economics that “led societies out of darkness and stagnation and into the light of the modern age”.

Reuters noted that living standards have fallen since the Conservatives came to power in 2010, due to “years of meagre wage growth and bouts of high inflation - including a slowdown caused by last year’s vote to leave the European Union”. 

Ed Balls, former Labour shadow chancellor, said May's speech surprised him, as championing the free market felt like bad economics and bad politics.

On Wednesday, Labour leader Jeremy Corbyn attacked May’s economic policies, telling the Labour party conference in Brighton that it was “time we developed a new model to replace the failed dogmas of neo-liberalism”.

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