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Fix faults of free market or risk return of failed ideologies, warns May

The PM said the free market economy remained the “greatest agent of collective human progress ever created”.

Theresa May has warned that the failings of the free market economy must be addressed if it is to continue to enjoy public support.

The Prime Minister said that abandoning the market and adopting “ideologically extreme” polices instead would simply hurt the poorest and most vulnerable in society.

Her comments, in a speech to mark 20 years of operational independence at the Bank of England, came the day after Labour leader Jeremy Corbyn warned that capitalism was facing a “crisis of legitimacy”.

Mrs May insisted that a free market economy, operating under the right rules and regulations, remained the “greatest agent of collective human progress ever created”.

She said: “Some argue that a free market economy is an end in itself and that drawing attention to the donwsides is somehow anti-business.

“Others would use the imbalances that are now apparent as a justification for the total rejection of the free market economy which has done so much to improve our lives.

“Instead, they advocate ideologically extreme policies which have long ago been shown to fail and which are failing people today in places like Venezuela.

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(John Stillwell/PA)

“My argument has always been that if you want to preserve and improve a system which has delivered unparalleled benefits you have to take seriously its faults and do all you can to address them.

“Not to do so would put everything we have achieved together as a country at risk.

“It would lead to a wider loss of faith in free markets and risk a return to the failed ideologies of the past.

“Far from somehow protecting the poorest and most vulnerable in society, that outcome would surely hurt them the most.”

Mrs May acknowledged that the global financial crash of 2008 had caused many to question the worth of the free market.

While she said that much had been done to repair economic the damage, it was important to recognise the impact it had on people’s lives.

“The British people, who played no part in causing the financial crisis, have had to make sacrifices in order to return the economy to health and ease the burden of debt on future generations,” she said.

“In truth, much work remains ahead of us, and, for all our progress, we should neither forget nor under-estimate the scale of the sacrifices which have been necessary to get us this far.”

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Bank of England governor Mark Carney with the Prime Minister (John Stillwell/PA)

The Prime Minister said raising the living standards and protecting the jobs of ordinary working people had to be the central aim of all economic policy.

“A free market economy, operating under the right rules and regulations, is the greatest agent of collective human progress ever created,” she said.

“It was the new combination which led societies out of darkness and stagnation and into the light of the modern age.”

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