The Selsdon Manifesto

The Selsdon Manifesto dates from the Group's founding in 1973. Nearly fifty years on progress has been made in some areas, particularly in the balance between the public and private sector. Some sections however remain relevant today

Government Spending and Industry

A policy for freedom requires a relatively low level of public expenditure. The smaller the government’s share of the national income thesmaller will be the total of resources allocated aspoliticians and civil servants see fit. At present the State takes unto itself over half the national product although private industry produces six sevenths of the nation’s wealth. The level of public expenditure has soared under this Government. As a result the State’s control over the decisions affecting our lives has increased, while in economic terms this growth of public expenditure has produced a huge net borrowing requirement which has been the root-cause of our present inflation. Drastic cuts in public spending are an essential requirement of a return to financial solvency and economic health. The private sector in industry must be expanded if resources are to be allocated rationally, i.e. by competition. Left to themselves, experience shows that politicians are only too likely to waste huge sums of public money subsidising inefficient industries and financing prestige projects which cannot justify themselves commercially and which often have damaging effects on the environment. High-minded talk of the “national interest” is in these cases just a smoke-screen disguising the fact that the public has previously demonstrated no support for these projects through the market. We oppose nationalisation because it increases the power of the central government, removes a large part of British industry from the competitive disciplines of the market, and in so doing, misdirects and wastes precious capital resources. Since the War our public sector has lost the taxpayer thousands of millions of pounds, while its return on capital has only been half that of private industry. The Government must begin dismantling the nationalised industries. Equity capital should gradually replace Exchequer loans as a method of financing these industries. So far the Government has failed to initiate any significant measure of denationalisation in spite of the pledges made by the Prime Minister at the time the steel industry was nationalised.