British prime minister David Cameron set out a vision of a “socially responsible and genuinely popular capitalism” on Thursday. In a London speech, he argued that Britain wouldn’t build a better economy by turning its back on the free market. “We’ll do it by making sure that the market is fair as well as free,” he said.

Cameron’s address came mere days after opposition leader Ed Miliband advocated more aggressive consumer protection in an interview with The Daily Telegraph. He said, “People’s living standards are squeezed as never before” as a result of the government’s austerity policies.

Miliband’s Labour Party has somewhat distanced itself from the Third Way centrism of former prime minister Tony Blair but argues that it still champions the interests of the middle class.

In a policy speech last year, Miliband lambasted “predatory” business practices and “wealth strippers” which he claimed were ripping ordinary people off. They were “squeezed by runaway rewards at the top,” he lamented, while British society was “too often rewarding not the right people with the right values but the wrong people with the wrong values.”

The statements were generally interpreted as a return to past Labour strategy when it was in opposition to the “nasty” Tory Party of Margaret Thatcher and her adherents who believed in smaller government and free enterprise.

Cameron on Thursday argued that the government was implementing “less but better regulation” and said “of course there is a role for government, for regulation and intervention” but “the real solution” to Britain’s economic woes “is more enterprise, competition and innovation.”

We are the party that understands how to make capitalism work; the party that has constantly defended our open economy against the economics of socialism.

David Cameron’s case for capitalism is less convincing than Thatcher’s and is informed more by pragmatism than ideology. He argues that the government has to cut because it faces a debt crisis. Labour points out that the spending policies haven’t contributed to higher growth.

Indeed they haven’t. The British chancellor announced last November that growth in 2012 will be weaker than the government previously anticipated. Whereas 2.5 percent expansion was projected in March 2011, the figure will probably come in under 1 percent this year.

Borrowing, therefore, will be higher — more than £120 billion this fiscal year and next which is nearly 5 percent of gross domestic product. Public spending, despite the “heartless” cuts Labour so condemns, has only increased under the coalition government.

Britain’s debt is roughly 62 percent of GDP or nearly £1 trillion but that doesn’t include the state’s huge pension liabilities. When factored in, according to the Treasury, the actual debt equals 173 percent of GDP

Last year, accountants at PricewaterhouseCoopers estimated that “Britain would have to make across the board budget cuts of 5 percent a year to come close to cutting the deficit in half by 2014.” They even assumed a slight economic upturn that’s unlikely to materialize due to Britain’s high energy costs and the spiraling debt crisis in Europe.

Cameron, for all his praise of the free market, isn’t making tremendous progressing in getting the government out of the way of job creators. The state still consumes more than half of economic output in Britain while the “cuts” (which aren’t real cuts but decreases in spending projections) barely meet the requirements set by private sector accountants to achieve a balanced budget.