At one point in the summer Andy Haldane, the former chief economist at the Bank of England, was informally advising Andy Burnham. Haldane spent most of his career as an official at the Bank. He is not a party political figure. But at the Bank he was viewed as an independent thinker, he was brought up in the north of England and he is committed to regional growth (which is one reason why Michael Gove hired him as a levelling up adviser).

But any suggestions that Haldane is a Burnham supporter have now been quashed by an article Haldane has published in the Financial Times. In it, he says the Conservaties’ economic policies are “far more likely to succeed” than Labour’s.

He says:

In the decade since Brexit, both parties have swung simultaneously right on social policy and left on economic policy. The interventionist economic agendas of Conservative prime ministers Theresa May, Boris Johnson and Rishi Sunak would not have been out of place under New Labour. At the 2024 general election, only a vape wrapper separated the parties’ economic manifestos.

Today, those differences are stark. Andy Burnham’s conference speech was a homage to 1950s-style state socialism. Kemi Badenoch’s speech was also a throwback, but to the smaller state and lower taxes of the 1980s. Which offers the more likely path to growth?

In today’s straitened circumstances, the rightward fork is far more likely to succeed.

Haldane argues the Tories have not always been right. He says George Osborne’s austerity policies were a mistake.

At the time of austerity, UK government debt was not only far smaller than it is today, but the cost of servicing it was lower than at any time in human history. Remarkably, the country’s long-term borrowing costs were negative in inflation-adjusted terms for protracted periods. There will probably never have been a better time for public investment.

Yet funding was cut and a £2tn investment gap opened up relative to international competitors, stunting growth. Veering right was wrong.

But, in the current circumstances, Conservative policies would be best for growth, he says.

Today’s fiscal environment is fundamentally different. Long-term borrowing costs have risen 4-5 percentage points and now sit above estimates of the UK economy’s long-term nominal growth rate. That signals the need for primary fiscal surpluses, on a sustained basis, if the UK’s debt dynamics are to stabilise.

The Labour party’s plan for an expansive (and expensive) state sits uncomfortably with this precarious fiscal backdrop. It also sits oddly with the fact that public-sector productivity has failed to rise this century. Both state financial capacity and personnel capability are at present sources of economic weakness, not strength.

In this debt-laden environment, the pursuit of a larger state is more likely to crowd out than crowd in growth. It also runs the risk of a loss of confidence in bond markets that causes borrowing costs to ratchet — think “Liz Truss-plus” …

The Conservatives’ economic plans are better suited to that task: for example, through cuts to business and employment taxes and regulation to unleash animal spirits; and by slimming government spending to lower borrowing costs, as the IMF and Bank of England have recently highlighted.