Johnsonomics, state intervention and political expediency. New forms of state intervention in the economy have been quietly normalised throughout Boris Johnson’s premiership, partly in order to maintain the Conservatives 2019 electoral coalition and partly as a reaction to political events such as the Covid pandemic. As the Conservative Leadership Race continues, ConservativeHome’s Mark Wallace explains “what the Conservative Party wants from its next leader…fulfilling the 2019 promise to those first-time blue voters, to help people survive painful economic conditions”.  

Public ownership under Johnsonomics. Various forms of public ownership that have been employed under Boris Johnson’s premiership range from nationalisation of ‘defence-critical assets’, public equity stakes as a last resort for struggling businesses and mission-oriented innovation strategies.

Ambiguity towards the role of the state. Despite developing these significant policies and bills, the government adopted an ambiguous approach to public ownership, for instance Boris Johnson’s celebration of ‘greed’ and ‘capitalism’ in the development of the Covid-19 vaccine (despite the Industrial Strategy Council concluding “government played a key role in expediting every stage of the OX/AZ vaccine development process” in their paper outlining six lessons for future industrial policy in the UK), or perhaps best exemplified by the Cabinet  split on the issue of protecting a UK semiconductor manufacturer (Newport Wafer Fab) from a Chinese takeover.

Will the next cabinet adopt a more consistent approach? Commenting on the Conservative Leadership race and the state of the UK economy, Andrew Marr describes the outgoing PM as an “undeclared big stater”. Following Johnson’s departure Marr argues that  “we need a full economic programme for recovery, going far further than a tax-cut auction – itself based on an outdated notion of Thatcherism." But will the next leader rediscover the value of industrial strategy in addressing some of the country's most pressing economic issues, such as the rising cost of living? 

Weekly Updates

Climate change and environment

Conservative candidates back Net Zero. All remaining candidates in the Conservative leadership race have now committed to achieving net zero by 2050, with Kemi Badenoch making a surprising U-turn at the Conservative Environment Network (CEN) hustings. Penny Mourdaunt, Liz Truss and Rishi Sunak had all already said that they would commit to a 2050 Net Zero target if elected as leader, with Tom Tugendhat, who has now been knocked out of the race, saying he would delay the target (see Public First’s tracker for more on commitments to Net Zero and other policies). 

  • Public support for Net Zero. Scrapping the Net Zero target would be a vote loser, according to Public First’s polling for think tank Onward. As of April this year, 64% of voters support the UK’s plan to reach Net Zero by 2050 and 58% would still support the policy even if it was expensive. See here for Public First’s Daisy Powell-Chandler’s overview of public opinion on climate policies. 
  • Mounting pressure. Badenoch’s U-turn comes after mounting pressure from all sides, as businesses write to all candidates urging them to back Net Zero and CEN’s Cameron Smith argues that any candidate who fails to back the policy will “not get far”. 
  • Mordaunt pledges green jobs. Conservative leadership candidate Penny Mordaunt has vowed to create “millions of green jobs” if elected as leader, arguing that “environmentalism and conservatism go hand in hand”. 

The importance of carbon capture. Carbon capture, utilisation and storage (CCUS) can play a vital role alongside zero-carbon electricity, clean hydrogen and sustainable low-carbon bioresources in delivering net-zero, according to a new report by the Energy Transitions Commission (ETC). ETC’s Mike Hemsley explains what has and hasn’t worked in CCUS initiatives so far and how, by 2030, technology needs to be scaled up by 20 times

Reconciling twin struggles. The “twin struggles for climate justice and for economic justice, must be tackled together”, argues John Christensen of the Balanced Economy Project, as he confronts the “uncomfortable truth” of how the two often fail to complement each other. In the same piece, Balanced Economy’s Nicholas Shaxson interviews Professor Simon Holmes to explore how competition law could be the key to tackling monopoly power and climate change simultaneously. 

Value nature, says Ipbes. We must redefine what it means to have a “good quality of life” and factor in nature and sustainability, according to the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (Ipbes). In a new report, scientists argue that we must better consider the spiritual, cultural and emotional value that nature brings to humans and avoid the short termism of profit-centered valuations.


Conservative leadership tax promises. Though several candidates who were proposing significant tax cuts have now dropped out of the Conservative leadership race, proposals from those still in the running could cost “billions”, argues The New Statesman’s Will Dunn. For example, reversing the 1.25% National Insurance increase, as promised by Liz Truss would cost £13 billion a year, according to the IFS. TaxWatch explains why Kemi Badenoch’s promise to cancel the rise in corporation tax may have an adverse effect on growth. 

Windfall taxes should go further. The government should go further with windfall taxes in order to “redistribute the skewed allocation of resources in the economy”, argues Mariana Mazzucato. The recent increase in profits seen by oil and gas companies cannot be attributed to increased productivity but to exogenous factors, “meaning there is no reason that such a windfall tax will penalise investment”, she says. 

  • Spanish windfall tax for free travel. Short and medium distance journeys in Spain will be free for four months and funded by a windfall tax on banks and energy companies. The new taxes, which are expected to raise the equivalent of nearly £6 billion, will also be used to build 12,000 homes and enhance scholarships for a million young people. 

More than tax. Businesses don’t just want tax cuts, argues former Philip Hammond adviser Giles Winn. If Conservative candidates are to distance themselves from Boris Johnson’s ‘f**k business’ approach, they must understand that businesses are far more concerned about upfront costs, energy prices and labour shortages than their profits being taxed, he argues.

Industrial strategy

Stagnation nation. The Resolution Foundation has published the interim report of its Economy 2030 Inquiry: ‘Stagnation nation’. It finds that the current UK economy is characterised by low wage growth, high income inequality and an imbalance of “burden sharing” in which wealth taxes have “flatlined as a share of GDP” despite extreme wealth rising considerably. 

  • Inequality across the UK. The interim report finds that the UK is the most unequal advanced economy in Europe, with regional inequalities playing a huge part in income and productivity gaps.
  • European comparisons. Middle income earners in the UK are 9 per cent poorer than their French counterparts, while the poorest fifth of households in Britain are now over 20 per cent poorer than their French and German equivalents.
  • Sharing the burden. The report also found that while wealth has risen from three to eight times national income since the 1980s, the taxation of wealth as a proportion of GDP has remained flat, making a significant contribution to widening inequality.

Office for Economic Growth. Kemi Badenoch would break up the Treasury and establish a new Office for Economic Growth if she becomes Prime Minister, the Conservative leadership candidate has announced. Arguing that “we need to change the way the Treasury works”, Badenoch has said that she wants to inject "stronger democratic accountability into spending plans".

Fiscal policy

The death of Osbornomics. The real loser of the Conservative leadership contest will in fact be George Osborne, argues James Meadway, as the Osbornomics of the 2010s proves unpopular among candidates. The closest in the race to Osborne, he says, is Rishi Sunak: a “creature of the Treasury View” and an advocate for fiscal restraint. Meadway points out, however, that Sunak is “struggling to present his case for balancing the books against a crowd of opponents who have instead prioritised tax cuts, more investment or even breaking up the Treasury itself.” 

  • “Why the Tories don’t care about deficits anymore”. In a separate piece in the New Statesman, Meadway also outlines how reducing the deficit is no longer a fiscal priority for Conservatives. He argues that the trend in increased public spending on the right of politics can be partly explained by a “new politics” in which culture wars take “clear precedent over the fiscal probity conservatives once claimed.”
  • Mordaunt to ditch fiscal rules? Sunday’s leadership debate exposed deep divisions on the economy within the Conservative Party as candidates clashed with former Chancellor Rishi Sunak on tax cuts. A particularly heated discussion took place between Sunak and Penny Mordaunt, as the latter suggested she would ditch one of his fiscal rules: to only borrow for investment, not day-to-day spending, allowing the Treasury to spend more on tackling the cost of living. Sunak hit back at the proposal, saying that “literally Jeremy Corbyn didn’t think that was the right approach.”
  • Badenoch promises emergency budget. Conservative leadership hopeful Kemi Badenoch has said that if elected she will call an emergency budget to help with the cost of living crisis that could see an uplift in Universal Credit and pensions.


Finance For Our Future. Finance For Our Future, a broad coalition of leading UK civil society organisations, including the Finance Innovation Lab, is calling on the government to ensure that its proposed new rules for our financial sector prioritise creating a fairer economy for the long term. The coalition argues that the government’s current ‘Future Regulatory Framework’ proposals are “a hangover not only from before the cost of living crisis, but also the global financial crisis” and that the upcoming Financial Services and Markets Bill is a critical opportunity to “address the biggest challenges we face as a country today”.  

Crypto-asset inquiry. The Treasury Committee has launched an inquiry into crypto-assets which will explore the opportunities and risks they bring to consumers and businesses. For more information and to submit evidence, see here

Spanish activists occupy Blackstone hotels. Activists from the Spanish renters movement have apparently occupied two hotels in Madrid and Barcelona owned by Blackstone for deliberately inflating rental and real estate markets “through massive speculative buy-ups of properties in big cities”. In 2019, the UN’s housing advisor accused Blackstone Group of exploiting tenants, “wreaking havoc” in communities and helping to fuel a global housing crisis.