Extracts follow from an insightful and important article by Andrew Rawnsley, Chief Political Commentator of the Observer, published by the Grauniad – he considers, after years of Tory failure, whether Labour can get Britain growing again?
Quite apart from England’s stuttering, albeit successful, start in the Rugby 6 Nations championship and Ronnie Sullivan’s recent triumph on the green baize, this is an issue on the lips of bar-proppers up and down the land – especially when neither main party leader generates much excitement or hope with the electorate
The nation’s best do not choose politics as a career, not least because of the poor pay and battering they get from the unaccountable media, so we’re not only lumbered with unimpressive front benches on both sides but people who lack the experience and drive to bring about the big changes the nation needs for the long term – instead, it seems we’re forever fed a diet of short term manoeuvres to serve short term political gain, especially tax breaks just before elections and tax hikes soon after
He spoke as if getting more out of the economy was a novel idea that had never occurred to anyone before, but his is the 12th growth plan the Tories have fan-fared since 2010, which makes it one for almost every year they have been in power. If the Tories had been as prolific at generating growth as they have at producing plans, we’d have no need for another one because the world would be beating a path to our door to discover how the genius UK had become a land overflowing with milk and honey.
Osbornite austerity, sporadic interventionism during the May days, Johnsonian Brexit boosterism, the self-destructing experiment of Liz Truss, each of these was presented as the road to nirvana. Yet Britain still finds itself trudging through the dark valley of grim growth and high taxes while living standards have taken a horrible beating.
The Resolution Foundation calculates that the average household will be £1,900 poorer at the end of this parliament than they were at the time of the last election.
Do you feel better off for Tory government? That is the question that Labour wants to be front and centre of the election campaign. For most people, the answer will be a resounding no.
The OBR – Office for Budget Responsibility – slashed its expectations for growth over the next two years to anaemic levels and that is more optimistic than the Bank of England, which thinks the economy will be flat-lining throughout 2024. Stability is the claimed lodestar of the chancellor and the prime minister. It sounds better than admitting that they are heading towards an election year presiding over stagnation.
It is true that many of the advanced economies have been struggling to significantly improve their productivity since the financial crisis of more than a decade ago. In additional mitigation, the government can argue that the challenge has been made tougher by Russia’s invasion of Ukraine and the pandemic. Yet Britain has performed worse than most of its peers in critical respects.
Boosting prosperity on a sustainable basis requires long-term investment in skills, infrastructure, equipment, technology, innovation and the other drivers of growth. Business investment has been the lowest or second lowest in the G7 throughout the Tory years. Public investment, the money spent by national, regional and devolved governments, is well below the average for both the G7 and the OECD.
Bad decision-making explains some of this. So does the repellent way our politics has been conducted. Investors, both domestic and international, prefer a predictable environment to a chaotic one. This has been an era of Tory instability. Five prime ministers since 2010, seven chancellors and nine business secretaries.
They have been much too busy treating politics as a grotesque form of soap opera to manage and develop the economy properly. As for other departments relevant to education, skills, investment, infrastructure and technology, there have been seven transport secretaries, nine work and pensions secretaries, no fewer than 10 education secretaries and an astonishing 13 secretaries of state with responsibility for digital and media.
The revolving doors of Whitehall have been spun off their hinges. Policymaking has whipsawed in one direction and then its opposite. Industrial and economic strategies are here today, gone tomorrow.
Decent levels of growth allow government to offer satisfactory public services without having to impose heavy levels of taxation. Poor growth means that government ends up taking more in tax while delivering less in services. That is the highly unattractive combination we are living with today and one of the most important reasons why the Conservatives are so very unpopular.
Even with the two points off national insurance announced by Mr Hunt, the amount of tax taken as a proportion of national income is still heading remorselessly higher. The Institute for Fiscal Studies reckons that it will be higher even than during the years immediately after the Second World War. And what are taxpayers getting in return for the record sums they are sending to the exchequer? An NHS in perma-crisis, unsafe schools, prisons full to capacity and other public services in a state of decay.
The UK will remain stuck in this grim trap unless we can get stronger growth.