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UK finance minister: Capitalism is the only way

Monday, October 02, 2017 - 01:45

British finance minister Philip Hammond has defended capitalism as the only route to prosperity. As Ciara Lee reports, his speech was an attempt to counter the opposition Labour Party's increasingly popular vision for a more centrally-controlled economy.

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Britain's ruling Conservatives are grappling with deep divisions within the party,. But addressing the annual conference, Finance Minister Philip Hammond chose to focus on attacking the opposition. Defending capitalism, he insisted it's the only route to prosperity - warning against the Labour party's vision for a more centrally-controlled economy. (SOUNDBITE) (ENGLISH) BRITISH FINANCE MINISTER PHILIP HAMMOND, SAYING: "Their ambition to demolish our successful modern market economy, and replace it with a back to the future socialist fantasy, with hundreds of billions of extra debt for the next generation to pay off." The Conservatives have been rattled by labour's rising popularity. And Prime Minister Theresa May is facing questions over her leadership after June's snap election lost the party its majority in parliament. The prospect of a Labour government in the future though is already sounding alarm bells for investors. (SOUNDBITE) (English) SENIOR MARKET ANALYST AT ETX CAPITAL, NEIL WILSON, SAYING: "They lead in the polls at the moment, so it is a prospect that has to be considered. And clearly when we look at plans around nationalization of major industries, that is obviously a concern for investors." But businesses have more pressing issues. Companies, including pharmaceuticals giant AstraZeneca, want the government to agree a three-year transitional deal after Brexit in 2019. (SOUNDBITE) (ENGLISH) BRITISH FINANCE MINISTER PHILIP HAMMOND, SAYING: "The process of negotiating our exit from the EU has created uncertainty. So investment has slowed as business waits for clarity." But for now the reality is a slowing economy. With one major business group warning the all too obvious rifts within government are undermining confidence.