Main Edition
US
FR
(Credit: Chris J. Ratcliffe/Bloomberg via Getty)
If Britain’s cultural production leads the world in anything, it is in the imagining of grim dystopias which are only elaborated versions of contemporary British life: the line from 1984 to Children of Men is drawn through a particular, grudgingly passive relationship to a smothering Westminster state, in which declining living standards are wearily accepted, and the state’s authoritarianism is veiled by a neurotic, emptily patriotic boosterism.
From 1948 until now: entire British lifetimes could be spent experiencing only decline. That the national mood leading up to this Budget was one of trepidation is not solely the product of the Starmer government’s tin ear for political communications; it simply reflects the reality that Britain’s low-wage, low-productivity economy is the product of decades of political failure, and that there is little immediate prospect of the already wildly unpopular Labour government pulling Britain out of its tailspin. As Tom Hazeldine’s excellent recent survey in the New Left Review of Britain’s political economy underlines, by winning the support of only 20% of British voters at the election, Starmer entered office with “the lowest vote-share that a majority Westminster government has received since the introduction of universal suffrage”. Yet the Prime Minister must already look back on this slender mandate with fond nostalgia: the Budget, squeezing an extra £40 billion of taxes out of Britain’s low-paid workforce to extract — perhaps — 1% GDP growth is not likely to improve it.
The Labour government cannot restore the conditions of post-war social democracy because the underlying basis of that economy, a strong domestic manufacturing base, no longer exists. As Hazeldine’s 2021 book on Northern England, Britain’s economic powerhouse turned welfare sink, observes, the region “has tumbled from a unique pedestal, that of the world’s first industrial region, and fallen further than the world-economic conjuncture demanded. The contribution of manufacturing to national output in the UK has flatlined at just 10 per cent since 2007, barely a third of the figure for Germany and a smaller proportion also than for other comparable economies.” The result is a bizarre anomaly, the nation’s equivalent of possessing a Netherlands or Rhineland and choosing not just to leave it underdeveloped, but to actively un-develop it. The de-industrialisation of the North was a conscious choice made by successive Westminster governments, betting Britain’s future prosperity on a combination of London-centric financialisation and enmeshment in a globalised world economy. Yet the risks of financialisation were shown by the 2008 crash, from which Britain has never recovered; the full price of globalisation, in a now rapidly deglobalising world slipping into conflict between the great industrial land empires, is only now coming into view.
The Trentes Glorieuses, which enabled the expansive welfare state Britain can no longer afford, were a time-limited product of the Second World War, rescuing the British economy, if only temporarily, from the great slump of the Thirties. The great national gamble on financialised globalisation initiated by Thatcher and accelerated by succeeding governments of both parties was itself an attempt to kickstart the faltering economy with which Britain was left, once decades of post-war rebuilding had run their one-time course. It was a drastic form of experimental surgery which the patient is unlikely to survive. Instead of investing in industrial modernisation, Thatcher and her successors squandered natural bounties, such as North Sea oil, on subsidising the selling off the British economy’s essential components to international capital. Scottish nationalists, convinced that they would have invested North Sea oil wealth more wisely than Westminster, are hard to refute: the brief burst of prosperity created was analogous to that of boomers releasing equity from their homes to fund a world cruise, and showed equivalent disdain for their descendants’ chances. The result, as Hazeldine correctly observes, is that Britain is “the worst placed among OECD countries to weather” the coming storms, having “entered a period of marked economic decline compared to other G7 and OECD countries”, a relative decline made tangible to British voters with every foreign holiday.
The results of this decline are now palpable in every aspect of British life: in ballooning healthcare costs somehow leading to declining services, and the attendant national ritual of early morning calls to dismissive receptionists to compete for a narrow window of medical attention — and its corollary, the day-long trip to A&E, a desperate hack of the NHS system which must itself weigh heavily on national productivity.
Britain’s cloud of misery assumes concrete form in provincial high streets of unmitigated gloom, whose shuttered shops are punctuated by vape outlets, phone repairers and cash-only barbers, whose dubious legality are left unexamined by a state desperate for whatever revenue it can take; indeed even Oxford Street is now just another dismal provincial High Street. Our ruling class’s economic model is one so committed to low-wage employment over investment that the Conservative government imported almost 4% of the country’s population in the past two years just to man checkout tills and deliver food on bicycles, juicing gross GDP figures from what has aptly been termed “human quantitative easing”, even as the resulting exactions on housing, infrastructure and societal stability fray what is left of Britain’s social contract.
Indeed, in this grim landscape of tangible decline, where The Telegraph advises the young to emigrate with coldly unarguable rationality, the British social contract is literally a joke. Over the past year or so, friends of otherwise impeccably liberal opinions have forwarded me the “British social contract” meme, the archetypal cultural product of Britain’s younger online Right-wing, in which a hardworking graduate is crushed by taxes to support pensioners in ease and comfort and migrants in social housing. Similarly, friends working in policy report a sudden shift in attitudes in hitherto liberal wonkish colleagues, with their ire focussing particularly on London’s disbursement of social housing to an economically inactive dependent class. Anecdotal though they are, these observations mirror wider social trends. Britain is simply a poor country: 43% of the population earn too little to pay income tax at all. As Britain’s economy withers, the tax burden falls increasingly on a smaller and smaller professional class, its younger members already crushed by student loans and rising housing costs, whose growing sense of despair at diminishing expectations is rapidly curdling into rage against the British state.
Join the discussion
Join like minded readers that support our journalism by becoming a paid subscriber
To join the discussion in the comments, become a paid subscriber.
Join like minded readers that support our journalism, read unlimited articles and enjoy other subscriber-only benefits.
SubscribeTest
Struggling too so doing my test!
I wouldn’t trust Starmer & Co to build a Lego set. A nation is most definitely beyond their talent level.
There can be no rebuild while adhering to net zero targets. Everyone knows it. It’s a huge green elephant in the room. The very idea of outsourcing the production of our industrial needs to China/India etc and then criticising them for their pollution is beyond hypocritical. It’s frankly disgusting.
I’m already tired of this government. Joyless. Hypocritical. Talentless. I could go on. But why bother.
Great, if depressing article, but would like to make a few points related to the green transition mentioned in the piece. The first is that some proportion of a hundred billion through this parliament for green infrastructure is small change – something like five times as much would be needed over five years, or ten times as much over a decade. I imagine the government is expecting to kick-start things and then expects the private sector to step in with investment. But Reeves didn’t talk about any of that – no talk of PPP/PFI for example (and with good reason because those are now perceived as a discredited models). And if the government expects industry investment, they would need to incentivise it heavily with tax breaks and capital spending write-offs and the like, otherwise I don’t see why private industry would invest on that scale, but Reeves didn’t announce any of that. And that leads to my second point – private investment won’t come in because investors would need to know there is a return on investment – and they know that’s not possible without selling the resulting energy expensively for something like a decade – which regulators would of course prevent. And that also leads to my third point, which is that replacing hydrocarbon energy generation infrastructure built up over multiple decades with green infrastructure cannot possibly generate jobs, or efficiency, or productivity, or growth – because all you are doing is a one-for-one replacement, ie the end users of the energy, be they private consumers or industry, are not going to notice a difference which would cause them to change their behaviour. The activity of switching in and of itself, cannot possibly result in growth – it’s just a very very large cost. It’s not like someone who now gets their electricity in their 3-bed semi from wind turbines is going to say, “ohh this new electricity is a zinger, let me go out and buy a Tesla!”. And another example, if they now get some of their energy from solar panels, they will look at the cost of installing those, only to realise that it will be a decade before they see a profit on what they have forked out. So, huge up-front energy infrastructure spend which does not result in additional productivity has to *mechanically* result in higher energy prices for many many years.
Also, something else. No one ever discusses this, but the cost of running two different infrastructures in tandem for years is going to be enormous (and just to be clear it cannot be otherwise, you cannot retire the old stuff for a minimum of three decades). That cost would then manifest in even higher energy prices and lower efficiency. And I thought the whole point was to generate growth via cheaper energy.
The author mentioned “squandered natural bounties”, so I make this final, and I know totally futile, point: it *is* possible for us to generate cheap energy, the technology to do it is known and mature (many countries already do it) and not that expensive, and the energy generated would fit in with our existing energy infrastructure, and it would generate growth, and we would be much less dependent on other countries. The answer is to frack baby frack. But asking for that in the UK right now would be like asking the whole population of Saudi Arabia to convert to Christianity – not gonna happen. Because people who have bought into the green stuff have bought into it like a religion, whether they admit it or no.
Three hours, and I’m the first uptick.
That is depressing!
The lesson may be that any comment this long – however good – is unlikely to be read by that many people
Prashant’s posts are usually worth the read, however long
I agree completely.
Prashant for Pm and the rest of you above in the cabinet.
Thank you for the kind words, guys!
Not sure if this contradicts your observation, and apologies if so, but based on tick rate, it appears to me that blog articles have an extremely short shelf life, sometimes measured in mere minutes! At first, ticks (up or down) come thick and fast, but rapidly tail off. If that is so then adding a considered comment to an article more than a day or so old is largely a waste of time, so few readers by then will see it!
Having read this excellent, yet hugely sad and depressing, essay twice I can only sit at my desk and reflect on what it is that my home, a once proud and industrious country, has become.
Nothing more than a shadow which is itself inexorably fading as the sunshine of economic growth and development is eclipsed by the looming bulk of ideological dogma until all that will remain is a repository of memories – of squandered opportunity and unfulfilled promise – held in the grey-matter of a generation who will themselves soon be gone.
As the writer so presciently, and with razor-sharp prose, exposes to us, the readers: Britain is done for. The game is up. Britain has been weighed in the balance and found wanting.
How can it be though that the very people who should recognise the fact of our country’s demise, politicians of the recent past and the here and now, seem not to understand the desperate nature of the situation at all?
Perhaps it is just simply the case that this current crop of politicians do not possess the leadership qualities which, if allied to raw intellect and underpinned by meaningful life experience, might make it possible to halt, or even reverse, this country’s precipitate decline.
Or, and this has to be the worst of all possible scenarios, and one which many will dismiss as a wild conspiracy theory, perhaps everyone that matters does understand what is happening to Britain and, more widely, to The West but that they are happy for the process to take its course.
The increasing allegiance of many political leaders and multinational corporations to the doctrines of the World Economic Forum certainly gives me pause for thought. One of the W.E.F.’s oft repeated mantras requires that we all need to “Build Back Better”. Well it must surely be the case that no-one can build back anything at all until what existed before has been thoroughly and completely dismantled.
“In lieu of other ideas, Labour is committed to recapturing the post-war boom with climate change adopting Hitler’s role as the spur to national regeneration.”
In 1939 the UK was a manufacturing powerhouse and we had an empire
Is this working?
No; just like the labour government . . .
My proper comment has managed to disappear in half an hour, but at least I can post at all. I couldn’t yesterday.
Testing, testing…
Isn’t it just?
How does Rachel Reeves know that this is the first Budget to be delivered by a woman? How dare she presume to know the gender identity of Denis Healey, Nigel Lawson, Gordon Brown or Philip Hammond? But George Osborne’s has always been anyone’s guess.
If a pound on your bus to work and another pound on your bus back “won’t make any difference”, then why will a penny off a pint of beer? How many pubs will even pass it on? For a commuter on minimum wage, the 50 per cent increase in bus fares will be the equivalent of a four per cent increase in income tax. The minimum wage will go up in April, but the bus fares will go up in January, and everything else is going up now, not least energy prices as we head into winter. The huge rise in employer’s National Insurance contributions will preclude any pay rises in the face of this galloping inflation, any official fall in which is only prices going up by less than the last time that the Government checked. They are still going up.
Keeping the present income tax and employee’s National Insurance thresholds until 2028 will be a huge increase in taxation, with those thresholds only then rising in line with inflation in time for the General Election, as if we were all stupid. Being practically impossible, sickness and disability benefit fraud is as good as non-existent, so the only way to deliver these cuts is by requiring the failure of a quota of claims regardless of medical circumstances, even if that meant that the claimants died, as some of them will.
Like Keir Starmer, Reeves promised that there would be no return to austerity, so it cannot be austerity that the budgets of five Departments are to be cut, including a 3.2 per cent cut to the Home Office that was now “dispersing” the residents of the Bibby Stockholm. We have been paying £400 million per year to rent that 48-year-old engineless barge, which cannot be worth more than a few million pounds. Political kickbacks? What do you think? And to only one party? What do you think? Like HS2 and the Rwanda Scheme, that should be subject to someone like the Covid Corruption Commissioner. Except that we have yet to see who was going to be the Covid Corruption Commissioner.
This is all for what? The uniparty’s precious Office for Budget Responsibility predicts that the economy will grow by 1.1 per cent this year, and two per cent in 2025. But from 2026, growth is predicted to be weaker than previously forecast, at least by the OBR, slowing to 1.5 per cent by 2028. Yet we are to pay Ukraine three billion pounds per year “for as long as it takes”. For as long as it takes until what? The unconditional surrender of the Russian Federation? And that is before we have even mentioned the recent BRICS Summit in Kazan.
Look, this Budget is not all bad. None of them ever quite is. The justice for the Mineworkers’ Pension Scheme is especially welcome here in the North East. Yet overall here, the dualling of the A1 has been cancelled, there is to be no Leamside Line investment, and even the Crown Works money had already been announced in March by Jeremy Hunt. Andy Burnham and Tracy Brabin have promised to keep the two pound cap on bus fares, while Kim McGuinness has said nothing. But Brabin and even Burnham do at least have some ties to the Left. McGuinness is purely a creature of the Labour Right, whose hatred of buses is visceral.
My Labour MP is disabled. North Durham is full of communities that, mostly but not exclusively since the pits closed, depend on the buses to get people to and from work that is rarely well-paid. He holds no Government position. On recent polling, he was projected to lose his seat. When this matter came to the vote, then we shall be watching.
As they will be watching in numerous constituencies that Labour won back this year, or won for the first time in a long time, or won for the first time ever, but which now faced the removal of agricultural property relief, meaning that on a family farm valued at over one million pounds, a family inheriting it will have to pay tax at 20 per cent. The average farm is worth eight million pounds, meaning a tax bill of £1.4 million, in practice payable only by selling the farm either to a property developer, thereby removing the land from food production altogether, or to some corporate agribaron, quite possibly putting control of the food supply in foreign hands, or in tax-avoiding offshore ones that amounted to the same thing. Goodbye to family farms. Goodbye to agricultural communities, which also depend heavily on buses where they are lucky enough to have them, just as the former Red Wall does. This Government either does not understand any of the places that have made it the Government, or it simply does not care.
This Government either does not understand any of the places that have made it the Government, or it simply does not care.
What the government understands is that the UK media is controlled by the London elites – who simply will not allow them to take the obvious course of action: tax the trillions in unearned property wealth of London and the Home Counties, wealth that, for the most part, came from the state in the first place, and use the proceeds to revive the economy of the North.
You’ve hit a nerve there, Hugh!
Perhaps they see farmers as Kulaks, to be driven off the land and cooperatives set up and the surplus serfs relocated to what industry that’s left
I’d prefer them to follow Mao’s or Pol Pot’s example and send all the academics to the countryside to pick vegetables.
Serfs who didn’t want to be serfs could become Cossacks. They lived in camps and went about being swashbuckling and militarily useful. I feel that there could be space for that in the northern rocky hilly places of our country. Then one day in the future , a fearsome band of border Reiver/ Cossack hybrids will ride south and deal with our stupid , venal and corrupt government.
Tax tinkering is perhaps a bit of an understatement. The budget was a disaster; a wrecking ball that will consign what little remains of economic growth in the UK to the dustbin of decline.
There is no point in picking over all of its failings here, but if you wish to encourage growth then saddling business with huge tax rises, ludicrous employment regulations and some of the highest energy costs in the world is probably not the right recipe.
The issue with both Reeves and Starmer is that they are Marxist civil servants, who then became politicians, who then got into power. Neither of them really has a clue how business works, how the market works, how wealth is created, what capital really means. All these things are utterly alien to them. What they do believe is that the state is preeminent and the solution to everything. Sadly, for the country, they are about to discover how wrong and ignorant they are.
Well said
The basis for any sort of recovery has to be focused on cheap and reliable energy. We seem to be going into the direction of zealotry to be shown to be virtuous whilst increasing the cost of energy. Without cheap energy there is zero chance of any increase in manufacturing but Labour seem tin eared to reality.
The arguments in this article clearly demonstrate the depths to which we have sunk with a general air of despondency. There seems little belief that the sums being borrowed for investment will be spent wisely.
And the real kicker in the IFS debrief this morning was that the big capital winner is Net Zero. Transport infrastructure is declining in real terms. As Paul Johnson said: NZ may be clean but it’s not growth. Anyone would think Labour was working for a foreign entity …..
The global commitment to net zero is the most devastating example of this consuming insanity. War has been declared on carbon dioxide the gas that is responsible for greening the planet, essential to the growth of all plant life and for producing the oxygen we all breathe via photosynthesis. CO2 makes up a mere 0.04% of the atmosphere yet it is now decided that it must be trapped and pumped away under ground. Furthermore CO2 makes up only 4% of the greenhouse gases supposedly contributing to global warming. Most of the rest is water vapour about which we can do nothing. Greenhouse gases carry warmth and prevent us from freezing to death as the earth rotates from day into night. Dr John Allen-Piper
I’ve read this before about water vapour being the worst greenhouse gas. What percentage is it and where does it come from? I must say find it difficult to think of water as being a threat to life.
We know that most of it goes to government institutions such as the civil service, NHS and any nationalised industry that are not wealth producing. They will spend billions on these groups and just tax the wealth producing corporations and their workers to fund it. You would appear to be right in that respect but if they are Marxists as you say it makes sense. God help our nation.
So long as Reeves and Starmer keep the metropolitan professional class on side with house price increases, higher public sector salaries and ever more generous unfunded pensions whilst making moves to rejoin the EU, it won’t matter if the rest of the country crumbles.
Anecdotally, the private sector part of that metropolitan elite class equation is becoming restive. HMRC investigations into partnerships affecting top 5 and law firms, 62% marginal tax cliffs, sense of increased violence in metroland, school VAT raid, declining fortunes of London thanks to FCA are taking their toll. One of my political concerns is Labour creating an apartheid between public and private sectors. That won’t end well and starting to see right wing media making the case against public sector pensions given above inflation salary increases. Employer NIC more fuel on that bonfire. A different form of class war?
We don’t need a crystal ball to see this; its already happening in Scotland. The real (and terminal) problem comes when the majority of the workforce are working for the state, and there’s no incentive for them to vote for anyone else other than the tax and spend party.
It certainly looks like this but it still makes no sense. If the country goes down economically, as seems more and more likely, even the privileged educated class will eventually feel the pinch because investors would steer clear of the UK. The prevailing attitude sounds like a severe case of psychological denial which afflicts some people and countries.
One of the reasons current MPs don’t know how business works is that practically all prominent Labour MPs have never run a business, or even worked in one, they’re all basically lawyers like Starmer and the Blairs, ex-employees of the state or, worst of all, people who did PPE at Oxford and went straight into politics. And the only person with an engineering degree in Parliament I can think of is…..Kemi Badenoch!
To see an example of high street ghastly grim, visit Croydon.
Approaching by train, this town – dubbed by a German newspaper in the Thatcher era as a DSS gulag – boasts the skyline of Manhattan. When you arrive, despite the apartment towers that continue to grow from vacant plots, it presents like Manhattan without the money. Or with a local economy that probably doesn’t exceed that of Haiti by very much.
The half-empty shopping centre has been vacated by some of the leading high street names. A large premises elsewhere has been abandoned by a supermarket chain, presumably because there are not enough middle class customers who are said to frequent this business.
Despite this, there are notices displayed at the railway station announcing that the town is a centre of culture. There are traces of culture and prosperity. They can be found in the facades of the buildings of yesteryear. In the former department store building that still has stained glass windows in the upper floor, advertising children’s clothes of the period; and in the former bank building on a corner which still has a magnificent art deco clock.
I gave you an up-tick. But what can be done about it now? This reminds me of all of those South American civilisations which were supposed to be very clever, great builders, predictors of star movements, superb irrigation systems – and then they just collapsed leaving a pile of rubble.
So true. While it is an extreme example sadly it is not alone for the vast majority of our cities and towns are showing advanced signs of neglect, decay and uglification. When you think of the vision the Victorians demonstrated it is truly shaming.
I wouldn’t trust Starmer & Co to build a Lego set. A nation is most definitely beyond their talent level.
There can be no rebuild while adhering to net zero targets. Everyone knows it. It’s a huge green elephant in the room. The very idea of outsourcing the production of our industrial needs to China/India etc and then criticising them for their pollution is beyond hypocritical. It’s frankly disgusting.
I’m already tired of this government. Joyless. Hypocritical. Talentless. I could go on. But why bother.
Yes. But the problem is how to get a media discussion about it. We get pages and pages about Starmer’s suits, a winter payment of £250, VAT on private schools, etc, but everybody is avoiding discussion of NetZero. Did either of the Conservative candidates mention expensive energy? The whole subject is taboo.
In detail, what about the ridiculous wind farms in the sea, which are rusting away and are still not connected to anything? Who in the media is talking about this disaster. We also pay a Norwegian company to maintain them. We pay that company per kW generated (through our bills) and a fixed rate per hour when they are not working – like now.
Why is nobody willing to discuss these things?
To demonstrate the stupidity of Parliament the debate on net zero lasted for 30 minutes before an almost unanimous vote in favour, without any sort of plan. Virtuous and clueless
It’s the same Virtuous and clueless MP’s that keep pushing the now clearly known dangers of the mRNA Gene (plus DNA, plus DNA plasmids) vaccines.
Too busy making other plans to avoid the worst excesses? I know several SMEs who now in full scenario planning mode, which is exhausting. The normal concern that a biz owner has about a labour government has been transformed into fear. The many extractive measures floated in the run-up to the budget have not been discounted. The attitude is more “if not this time then next” rather than “the worst is over, let’s regroup and move forward”.
Alt energy is the new religion, it is heresy to deny it’s Wonders!
Most people believe the BBC.
The “Daily Sceptic” frequently discusses these things; Chris Morrison’s posts there are a beacon of common sense. But who reads them? Only the climate change “deniers” (not that we deny that there is change, just that carbon emissions are but a fraction of the cause, as the rest is down to natural phenomena outside our control).
Net Zero is insanity. We are replacing cheap energy with heavily subsidised so-called green energy, but proponents forget the enormous costs of building it (do they realise that the infrastructure is either unaffordable or untried – think carbon capture for the latter); electric cars require vastly more energy than the UK will ever produce, and forget the cost of making the lithium batteries, or the gross ecological damage done by mining the stuff. Actually I suspect the have realised the cost of the infrastructure, as they plan to pump £100bn into the green economy. For what? And from where? Our taxes, of course, so we end up paying over the odds yet again.
It’s time for Net Zero to be abandoned. China isn’t doing it; instead they are exporting all their no-Net Zero-made things to us. India isn’t doing it. The USA isn’t either. Us doing it is pointless virtue-signalling, as even if we were to succeed, at whatever cost, it won’t make any major difference globally.
Could it be because the corporations that made and are making vast sums out of these “clean energy” investments also cunningly invested heavily into MSM publications and broadcasting media in order to keep certain things away from any meaningful scrutiny?
Yes, akin to placing us in fuel jeopardy because they cannot bring themselves to consider nuclear whilst buying huge amounts of nuclear generated energy from France.
I wouldn’t trust Starmer and Co. to organise a farting contest at a beanfest.
It’s especially galling as there’s a reservoir of cheap energy under morecambe bay.
The failure of an island nation to run any shipping companies, maintain a proper ship building industry or even produce virgin steel is also utterly bananas.
Besides lacking an industrial base, a major difference between the postwar period and the current economy is also inequality. Both wealth and income inequality. That is not just because labor is squeezed but also because the welfare state shifted focus to finance and the asset economy. Just trace where all QE money and cheap credit went after 2008 and 2020 to figure out how the neoliberal nanny state really works. If one wants to reestablish a productive base, a lot of that wealth needs to be redirected from rent seekers to the real economy. And those who own it won’t like that.
True what you say, but one of the problems with this country is insufficient inequality.
When somebody in work little or no better off than someone on benefits or the minimum wage what incentive is there?
The wealth creation that Britain needs requires STEM knowledge and experience, something that the political bubble find alien to their very existence.
It creates jobs, wealth, status, and hope for young families, yet our politicians are stuck with Arts and Humanities degrees.
Amen.
IMO, most people aren’t intelligent enough to do meaningful STEM work.
This is a typical problem in other Western countries as well. The idea was of course that the market would offer a higher standard of living to the middle class and that welfare would only still be necessary to prevent absolute poverty at the bottom of society. However, this failed. A big reason for this is that those who didn’t own asset were impoverished over time, relativity speaking. They missed the fiscal stimulus. One can simply not buy a house anymore with a normal salary, but this defined the middle class.
So yes, that is not very motivating. But I think lowering asset prices is a better method than abolishing the welfare state further.
Show me the society that has taxed its way to prosperity. Not a single of the grand revenue generating schemes trotted out by the professional political class spends a minute looking at how to spend less. In the US, simply slowing the rate of growth is tantamount to “wanting to cut vital programs, endangering lives.”
The following is worth reading again: it simply reflects the reality that Britain’s low-wage, low-productivity economy is the product of decades of political failure —— The serial failure is how figures like Trump or Milei or some other outsider becomes possible. Labeling that person as extreme or right-wing purposely misses the point. In a healthy, normally-functioning system, there would be neither place nor need for such figures.
We should ask Milei if he can please invade Britain and cut down our bloated public sector. We will give him the Falklands as a bonus.
Good idea. But let’s not give him the Falklands – we need the oil and gas.
Outsourcing hasn’t worked when control is lost.
Yes, 318 new public sector jobs created every day. We know how it all ends…. with a visit by the IMF. In two years I reckon.
Taxing your way to prosperity is a little like drinking your way to sobriety.
The problems for which Britain has become the poster-boy are endemic to western countries. My own belief is that government in the modern world now requires skills that are beyond the abilities of any individual or political group.
My suggestion is outlined in a substack series with an intermediate review at https://panocracy.substack.com/p/panocracy-67
Comments welcome!
“Britain relies on low-paid migration to keep the welfare state alive”
Good piece. But this sentence sounds like nonsense to me. It was recently shown that low-paid migrants *cost* the UK huge sums of money. They’re certainly not contributing to the welfare state.
I read this as meaning the large number of staff employed on low pay to maintain the Welfare State
You’re probably right. It’s a rather ambiguous phrase. Thanks.
You confuse snapshot with (longer term) trend. If you care to look it up, the EU went on the record around 2010/12-ish if I recall correctly stating something to the effect that – and I paraphrase heavily here: “social democracy (read welfare/pension state) cannot survive without mass immigration”. You see, whether “they” make a difference in today’s budget or not is proximate. Whether an influx could, at a future date, help shore up the base of the terminally financialized economy is ultimate. “Democracy” and all the things that started or support it left the room ages ago.
Ride the lightning
Low paid migration. There you have the wasps nest. Until writers like this one have the courage to name it, what will change?
It’s a downward spiral.
Immigration pushes down wages. The native population lose interest in working because it ceases to be possible to sustain a home or family on the low wages offered. Five million people wind up on benefits. The government tells us that more immigrants are needed because natives don’t want to do the work.
Rinse and repeat.
Head, nail, hit!
Depressing and true. If I was 20 years younger I’d be emigrating, probably to the States.
I think anyone who is even just half awake is fully aware of the terrible situation the UK economy is in.
I’m starting to get bored of Unherd relentlessly going on about it when another possibility exists – Unherd could play host to smart and creative thinkers who have good ideas for how to get out of the self-reinforcing spiral of economic deterioration we find ourselves inside, rather than endlessly telling us how hopeless it all is!
Regurgitating old news, often with a Left Wing slant, doesn’t appeal.
I can see my subscription lapsing, in mid-November .
To be fair, we do see some articles offering prospective approaches, but too few. UnHerd, like most media, is infected with left-wing ideology without even realising it.
That’s odd, I gave you an uptick which turned into four and a down tick at the same time?
The ticks are stored on the server. When you click one of the thumbs, it fetches the current total back.
Yes I’ve noticed this as well. You’re the first to mention?
Maybe that’s because my comment was SO contentious, ha, ha!
Couldn’t agree more.
Philip one of my side gigs is as a lecturer. There is not enough original thinking going on in academia and a dearth of serious thinkers in political parties. In academia the reasons are clear: lack of heterodox.and (worst case) self-censorship, survival based on publication/ citation numbers resuling in hyper-segmentation of subjects to trivialities rather than tackling “big issues” with a dark underside of plagiarism, p-hacking and publication in minor journals (every one counts) with lower standards of peer review, together with grant funding that requires DIE statements rendering many topics unfundable. I am less sure about politics but I would put money on: opportunity cost of salary, opportunity cost of safety (David Ames, activists turning up at your front door impacting self and family), the 24 media cycle distracting attention, and constitutional assaults rendering parliament impotent and the quango decision makers unaccountable. It’s a mess which has been 30+ years in the making. I believe when thwle financial reset comes (whoever leads it), the political system will change as well.
UK needs a crisis. Perhaps that what you are mistaking for unconsciously walking into one. All the far left theory needs to be shown up for what it is: destuction of norms, of a nation, of religion, of all older values. This is the only positive today. A crisis will force everyone to acknowledge what they have failed to stand up for. Country, work, honesty, free speech, debate, the country’s history, religion, culture and people.
“Turning and turning in the widening gyre The falcon cannot hear the falconer..”
These strange times seem to mirror earlier eras in British History when it was the place of the soothsayer and prophet to play midwife to a future which yet groaned in travail. And by God does it groan.
“There was an old prophecy found in a bog
The country’d be ruled by an ass and a dog”
Mr Roussinous needn’t hold back. If he feels, with Richard II’s Bishop of Carlisle, called to play the Sibyl –
“Disorder, horror, fear and mutiny
Shall here inhabit, and this land be call’d
The field of Golgotha and dead men’s skulls.”
As a teacher of children in the North, I and a few of my colleagues are convinced we are teaching a group of children that will eventually become cannon fodder. I have felt this way for a number of years. I just hope the bright ones get out before it is too late.
Taken from an 2021 Unherd article, ‘Is Boris Taking Us Back to the Seventies?’, by Dominic Sandbrook…
“Wilson’s Foreign Secretary, James Callaghan, told his colleagues he often thought that, if he were a younger man, he would emigrate. And more embarrassingly, they knew it abroad. “Britain is a tragedy,’ the US Secretary of State, Henry Kissinger, told President Gerald Ford in a conversation captured by White House transcribers. “It has sunk to begging, borrowing, stealing until North Sea oil comes in … That Britain has become such a scrounger is a disgrace.”
Why are you removing comments? How can things improve if debate is stifled? If Unherd takes that path what is the consequence? Ignorance, no debate, Ignorance, no debate…. endlessly cycling.
The only people who gain from censorship are those in power who are afraid to lose it.
Get a grip Unherd.
There is no right wing party in UK. There are no right wing values heard. Not even here. Is there a single instance in history of a successful far left country? No.
The practical problem for UK is how to remove all the supporters of the left in the institutions? How can the March through the Institutions be reversed?
Too late…
My advice to my grandchildren will be to leave the country, there is no future in the UK. Sad to say.
That kind of defeatism and cowardice is precisely what got us in this mess in the first place.
Where would they go? The whole Anglosphere has the same instincts…ditto the EU.
Starmer, that emotionally void, robot voiced. excuse of a leader, has to stay on for five years. The right have to stay fractured. The slow motion train crash, that is the UK has to be speeded up. Perhaps then you will all wake up, and work out what is important.
Why are UK leaders so ineffective when the solutions are so obvious?
Because any party offering the solutions you refer to would be committing electoral suicide. All the commentators aiming their fire at the politicians are missing their target. We the people are to blame.
Sad but true.
A ponzi scheme supported by overvalued and unsustainable housing prices , endless government deficits and money printing, and overfinancialization of the economy is bound to fail eventually. And it’s not only the UK, it’s most of Europe, the US, Japan. The entire edifice of the G7 is supported by out of control and rising debt, they will try to keep this going as long as they can. The US is also headed for a 50 trillion dollar debt around 2030. The stock markets are also supported by the excess cash generated by endless debt, resulting in huge overvaluations in many stocks worldwide. When the debt crisis comes it will be global, stock markets will collapse, recession and unemployment will crash housing prices, and banks will be in trouble and need more bailouts. Impossible to predict when this will begin, but when the system begins to unravel, it will make current problems seem like a picnic. It just takes one country to begin a bond route.
I heard a middle aged working class couple on the train here in South London talking about what is happening – topics ranged from the NHS to Southport to nepotism -‘there’s no one out there on our side’ was one comment that summed it up quite well. ‘We need a revolution’ said the man. Of course its not going to happen, but the mood out there is very sour. If an issue turns up that motivates and unites people it could get ugly.
Having read this excellent, yet hugely sad and depressing, essay twice I can only sit at my desk and reflect on what it is that my home, a once proud and industrious country, has become.
In truth it is nothing more than a shadow which is itself inexorably fading as the sunshine of economic growth and development is eclipsed by the looming bulk of ideological dogma until all that will remain is a repository of memories – of squandered opportunity and unfulfilled promise – held in the grey-matter of a generation who will themselves soon be gone.
As the writer so presciently, and with razor-sharp prose, exposes to us, the readers: Britain is done for. The game is up. Britain has been weighed in the balance and found wanting.
How can it be though that the very people who should recognise the fact of our country’s demise, politicians of the recent past and the here and now, seem not to understand the desperate nature of the situation at all?
Perhaps it is just simply the case that this current crop of politicians do not possess the leadership qualities which, if allied to raw intellect and underpinned by meaningful life experience, might make it possible to halt, or even reverse, this country’s precipitate decline.
Or, and this has to be the worst of all possible scenarios, and one which many will dismiss as a wild conspiracy theory, perhaps everyone that matters does understand what is happening to Britain and, more widely, to The West but that they are happy for the process to take its course.
The increasing allegiance of many political leaders and multinational corporations to the doctrines of the World Economic Forum certainly gives me pause for thought. One of the W.E.F.’s oft repeated mantras requires that we all need to “Build Back Better”. Well it must surely be the case that no-one can build back anything at all until what existed before has been thoroughly and completely dismantled.
“Scottish nationalists, convinced that they would have invested North Sea oil wealth more wisely than Westminster, are hard to refute”. Not at all difficult to refute – one merely has to look at the experience of the SNP-in-government in Holyrood to see that nationalists are just as capable as unionists of unwise and unproductive spending.
The deindustrialisation of Britain is at the core of this. I don’t think you can lay all the blame for that at Thatchers door. UK deep seam mining had become a hopelessly uncompetitive industry and North Sea oil and gas soon more than replaced it and gave great riches to the State. . The trouble was successive political incompetents just squandered it in their pet plans to buy political power and as a result the size of the State just ballooned .
Net Zero and U.K. Government led energy transition are both deeply delusional “policies”. Britain desperately needs an indigenous and plentiful supply of affordable, secure and high intensity energy to fuel any industrial renaissance. Wind and Solar fail on every count. SMRs seem to offer some promise and we should not forget we have a massive natural gas reserve under our feet. However ignorant politicians seem to have closed their minds on nuclear and U.K.onshore gas . For a starters those closed minds need to be opened.
.
!
So what’s the answer? More deregulation? There’s been a Conservative government for 14 years whose instinct was to tax less, but all we’ve ended up with is crumbling public services, low growth, low pay and mass immigration to fulfill the need for cheap labour. Attempting to invest more is a laudable aim, but it needs to be done intelligently. Efficiency gains and productivity growth is essential, but no clues in this budget as to how it’s going to be achieved.
Wow! People think the Tories taxed less! :0 Well done to our corporate media!
One of the best writers on this site & pretty much lays it all out here.
Could have done with more on the dire lack of investment (retail / corporate / sovereign) substituted by reliance on an increasingly dysfunctional and fragile housing market.
The ponzi migration policy (suppress wages / support property / boost GDP / hammer per capita GDP) is pure desperation
“Make Britain a world leader in being left behind” is the most apt comment I have ever read about this former Green and pleasant land. The truly sad aspect of our country is that very very few politicians would understand what that phrase meant. Our politicians only goal is to avoid responsibility and ensure everything bad is because of their opponents. It’s student politics at the very time the country requires grown ups in charge.
It’s a pleasure to see Osborne stood on his head as he caused so much trouble. We can’t blame him for the situation in 2010, but his unbalanced approach deepened our difficulties. I’m not just talking about the extent to which he took austerity and how he tried to slide from that into small-statism. I’m talking about the wage lowering, benefit slashing approach to reducing unemployment instituted a low productivity economy in which growth came to depend overwhelmingly on employing more cheap workers, even if it meant importing them. And the ridiculous notions which followed like considering that offering jobs was a public benefit which entitled employers to raid the national till.
Sadly, when people started to revolt against a low wage, low productivity, low public service spiral, they were fobbed off with the idea that the source of this problem was in Brussels, not right at home, as the sad decline of Brexit hopes revealed.
Now, finally, we have a government committed to raising productivity, wages and the standard of public services. Those who employ more than 40 or 50 are now definitely incentivised to organise and invest to reduce employment in relation to what’s produced, restoring an original dynamic of capitalism, and freeing up people to carry forward the new investments we need without ramping up immigration.
As many have observed, realising such an upward growth spiral will depend on many things, but at least the government has taken the responsibility to point employers, private and public, in the right direction.
Nice idea, shame about reality.
The real problem in the UK is the financial illiteracy enforced by our educational institutions and the fidelity to the leftist narrative.
Doesn’t “austerity” referred to reduced government spending? And yet every year, the budget has gone up — so how much austerity has their actually been?
Shared national identity is top of the list. So unfortunate that this article captures the country’s state with such clarity. The key is not cheap energy, industrial base or infrastructure, absolutely essential as these are, three other fundamental qualities are necessary first;
1. Order – share social behaviours, values, respect for life and law. Only then can law work.
2. Support for Families – financial recognition of investment in the future prosperity
3. National interest – sum of the first two demonstrating state support for public investment in our common good.
Atomised , relativistic, multicultural, self obsession and grievance all immersed in rapacious capitalism is a destructive corrosive mix. All as obvious as the ever lengthening confection of lies and desperate policies pedalled by our failed rulers. Failed leadership, failed morality, failed spirit, failed vision of weak, gumptionless elites, who serve only WEF globalisation and reduction of all to status of serfs.
So much power has been outsourced to unelected quangos and forces preventing change have been hard baked into the system by legislation…..it will be a long road to recovery
Aris is right. The UK has been wrecked by generations of politicians, among others. Rather than build on the damaged but still substantial economic structure after WW2, successive governments flushed most of it down the toilet. No country has declined so far, so quickly, as has the UK since WW2.
They think we deserve it!
‘Reeves’s commitment to a “green transition” that studiously avoids nuclear power, reversing the direction of travel of other major economies, will make Britain a world leader in being left behind.’
In an excoriating, depressing, bleak but utterly recognisable tableau there was at least one chuckle. Thanks.
They hate the country and our financial decline brings this bunch real joy and an opportunity for globalists to buy us up cheap.
I’ll miss them terribly, but as soon as my children complete their education I’m going to advise them to seek a life in another country.
Hopefully I’ll be able to visit them regularly…
I get weary of the British commentariat’s ignorance about its economic history. This is the third time in a few weeks that I’ve come across an article grossly mischaracterising the timing of Britain’s decline as a manufacturing “powerhouse”. It didn’t start in 1980 or any of the other politically partisan dates that get trotted out to bad mouth this or that recent government. The British economy in fact began its long slide (relatively speaking) in the late 19th century (largely as a result of its bougeoisie’s almost unique disdain for its technologist and engineering caste). As a consequence its performance as a manufacturing nation was relatively lacklustre for the entire 20th century.
And Britain today would almost certainly have been a better place now, had ignorant media-class ‘workshop of the world’ sentimentality not prevented it from facing up the the fact all those decades ago.
I guess part of the problem with discussions about redistribution, prosperity (and inequality) is that they are largely based on paper values which are rooted in the financial economy rather than the material economy which in turn are soft wired in fiscal policy and especially debt accumulation.
https://surplusenergyeconomics.wordpress.com/2024/11/02/292-fake-it-till-you-break-it/
However debt accumulation and the investment it affords is a net negative multiplier due to debt servicing payments and the losses incurred through transactional costs alongside the relentless increase in the cost of materials due to the increasing energy costs of energy production and the increasing material costs of producing goods and services.
This means, in the long term, debt liabilities cannot be honoured which will eventually cause dramatic asset devaluations, not just for the rich but the poor too in terms of housing assets.
Thus the number one problem regarding smoothing out inequalities is the debt liability problem with wealth taxes simply diminishing the ability to service debt leading to insolvency and bankruptcy.
Consequently, any strategy to smooth inequalities must be done with care and focus primarily on the material economy rather than the financial economy. One possibility is to institute a tiered pricing system for essential goods and services in terms of ability to pay. This is being experimented with in terms of “social tariffs” but could be extended to all essential goods and services provided by government (national and local) and corporate institutions with the rich paying above the median price and the poor paying below the median price.
This could be extended to essential-discretionary goods and services if it can be shown that a particular good or service is demanded by the rich and poor alike such as festival tickets, vehicles, smartphones, etc.
Overall, I think we have to look at more bottom up holistic solutions rather than top down partial solutions and ones which focus predominantly on the material economy rather than the financial economy.
This type of strategy I think means building up a grand cultural narrative that is able to firstly be truthful about the post growth predicament we find ourselves in, especially in the UK, and secondly, one that can build up a sense of national solidarity between the rich and the poor. This means the end of polarising narratives whether based on wealth, class, race, gender, etc which means a paradigm shift for the Left.
Excellent piece. Britain is heading for real trouble. That is of no benefit to us (and I don’t wish it on Britain anyway) but my immediate concern is that Britain will pull out of N.IRL before we are ready to absorb it although we probably could now if we had to.