So what would Cameron do?

Tony Blair once famously appealed for "eye-catching initiatives" with which he could be personally associated. David Cameron's decision to "embed" some of his shadow ministers with Rolls-Royce isn't so much eye-catching as eye-popping. The Conservatives spent a good deal of the 1980s telling us why manufacturing and the balance of payments didn't matter. Now Mr Cameron wants to learn from Rolls-Royce, a great British manufacturing success story and a major exporter. The Conservative leader said yesterday that "we want to understand in detail the factors that contribute to successful science, technology, engineering and manufacturing in the 21st century". They've taken another leaf out of the New Labour playbook; just as Blair and Brown before 1997 sought to build up a relationship with a sector of the economy that their party had been traditionally hostile to – the City of London – so too do the Cameroons now seek to make friends with the UK's unloved manufacturing base, concentrated in the North. Mr Cameron asked yesterday of his party – perhaps almost on his own behalf as much as that of the country – "how will you respond to the increased scrutiny you will now receive as the alternative government in waiting?" When it comes to business and the economy, some of the answer, surely, lies in how they have responded so far.

The Economy

The Shadow Chancellor, George Osborne, has a basic narrative: they will deliver what New Labour failed to – social justice with economic efficiency. Mr Osborne, like Mr Cameron yesterday, has identified "the terrible state of our public finances", falling international competitiveness on tax and the "narrow base" of economic growth – financial services and property – as fundamental problems. But the answers are essentially institutional: enhanced independence for the Bank of England; independent judgement of the fiscal rules; a "measurable commitment" to "share the proceeds of growth over an economic cycle": "Government will grow more slowly than the economy". There is, so far, no Thatcherite rhetoric about rolling back the frontiers of the state or the "ultra-low tax economy" (copyright Michael Portillo, long ago). The closest Mr Osborne gets to any of that is the woolly phrase "sustainably low taxes". Instead, Mr Osborne has promised to match Labour's spending plans for the first two years. But he has hinted he might want to move beyond pure inflation targeting and ask the Bank of England to "tame the credit cycle" through measures other than interest rates, such as varying the capital requirements of the banks. The aim would be to control the debts run up by households and companies in booms via so-called "counter-cyclical" regulation.

Green taxes such as air travel duty are still favoured, but they and the radical Green Tory Zac Goldsmith don't get such an airing these days. Maybe with oil at $120 a barrel, the Conservatives judge that they don't need them any more.

Tax

In terms of the overall burden, a "measurable commitment" to "share the proceeds of growth over an economic cycle" presumably means lower taxes than under Labour. Just as Brown waited until Labour's second term to raise taxes, so Osborne may postpone any more radical cuts until a second Cam-eron term, if that thought isn't a touch premature.

Osborne has made a few specific promises: he wants to cut the small companies tax rate from 22p to 20p in the £ and the main Corporation Tax rate from 28p to 25p. These moves would be paid for by dropping capital allowances, ironically hurting the capital-intensive manufacturing industries Mr Cameron wants to help. PricewaterhouseCoopers is advising Mr Osborne, who sees a "powerful case" for taking foreign earnings out of tax, which would stem the flow of companies leaving the country. Mr Osborne's other tax polices, such as their own £25,000 non-Dom fee, the abolition of stamp duty for most first-time buyers; the £1m inheritance tax threshold and capital gains being taxed at the same rates as income have been well advertised. The Tories decline to say if they would reinstate the 10p tax rate or CGT taper relief. Intriguingly, Mr Osborne has floated the possibility of downgrading the annual Budget palaver and leaving tax rates unchanged for longer. He wants to see technical tax changes published before the Budget and scrutinised by a committee of MPs.

Regulation

The author of the 1995 libertarian classic Saturn's Children: How the State Devours Liberty, Prosperity and Virtue, Alan Duncan, Shadow Secretary of State for Business, Enterprise and Regulatory Reform, these days contents himself with a plea for a little less red tape. He will "ensure that for any new regulation that is introduced, two or three will be removed".

Energy

The Tory policy is: "To enable nuclear capacity to be built, we need to sort out the planning system, put a price on carbon, ensure there is clarity on waste and decommissioning, and maintain a long-term climate for investment. Crucially, there must be a guarantee that there will be no government subsidies – nuclear should not be allowed to detract from an unrelenting effort to improve industrial and domestic energy efficiency, and encourage renewable technologies, microgeneration, decentralised energy and feed-in tariffs." But what if nuclear or renewable power aren't viable without those government subsidies?

Competition and Enterprise

Tory sources say they wouldn't allow the Competition Commission to be used, for example, to deflect blame for higher food prices on to the supermarkets. The European School of Management has been asked for ideas on enterprise; Doug Richard, of Dragons Den fame, will do the thinking on business support.

Transport

Boris Johnson was elected as London mayor in opposition to a third runway at Heathrow, although how much of a veto he would have over that isn't clear. The shadow Transport Secretary, Theresa Villiers, says there will be reform of the railways but without another "upheaval". She wants to see the rail regulator have more power and take civil servants out of micro-managing problems such as Sunday timetables. She is also keen on high-speed train systems and plans shortish (50 to 60km) pilot schemes to gauge their feasibility. National road pricing is out, but tolls for new road capacity, on the model of the M6 toll, are in, especially if they remove bottlenecks. If local authorities would like to introduce London-style congestion charge schemes, it's OK. Ms Villiers is content to allow Mr Johnson to scale back the London congestion charge scheme and press on with Ken Livingstone's polices to improve cycling, rail and Tube lines: the East London Line, Docklands Light Railway improvements and Crossrail. The notorious London "bendy bus" is to become a thing of the past. A "21st Century Routemaster" will instead become a surprising symbol of a modern Tory enthusiasm for public services. Maybe Mr Cameron and Mr Johnson will ensure it will be manufactured in Britain.