Perhaps the word “enjoy” here is doing a little too much work. This was a period of ideological ferment and not just between Left and Right, but within the Conservative Party itself, pitting the self-styled libertarian Thatcherites on one side against their “Wet” opponents on the other. Yet to have an ideological dispute, you need clashing ideologies, which in that period were in abundance.
Back then, ideas and intellect certainly seemed to matter. The other day I came across an entry from Thatcher’s engagement diary in October 1982 regarding a dinner organised by her think tank, the CPS.
Among those who attended were V.S. Pritchett, Anthony Quinton, Isaiah Berlin, V.S. Naipaul, Tom Stoppard and Phillip Larkin. A briefing note sent to Thatcher contains descriptions of each of the guests. “Anthon Quinton: President of Trinity Oxford. Conservative philosopher. You liked his ‘Politics of Imperfection’ and quoted it in the Airey Neave lecture”. “VS Naipaul: Very successful, sharp, angular novelist. Trinidad origin. Passionately opposed to the Left and of course ‘Liberation movements’.” “Tom Stoppard: Brilliantly successful and entertaining, rather Shavian, playwright. Czech origin. I expect you will have seen several of his plays e.g. Professional Foul, Night & Day.”
It is hard to imagine today’s political class ever receiving such a briefing with that degree of assumed knowledge — or any of the leading figures taking an evening off to enjoy their equivalent company. And Jenrick’s stunt only served to remind us of that. Starmer, despite declaring that he does not have a favourite book or poem, is not an uneducated man — far from it. In his speech to Labour conference he spoke of the value of the arts and his own love of classical music. Yet, we all know, implicitly, that this is an age not of great ideas, but of Zoom calls, spreadsheets and box sets.
As a result there is a shallowness to today’s politics. Starmerism is clearly not the product of an ideological movement years in the making boasting a cadre of political ground troops ready to go into battle for its principles. This government is, rather, a reaction to two distinct failures: the Labour Party under Jeremy Corbyn and the Conservative Party under five different prime ministers. Beyond that, its roots are so shallow it risks being blown away at the first storm that comes along.
Which brings us to that final, inescapable, economic reality. Money. While there has been much focus on the French fiscal crisis and the growing spread between its bond yields and those of the Germany, it has been less remarked upon that British borrowing costs are now higher than both countries — and rising as investors begin to price in the likelihood that Rachel Reeves will increase borrowing in her statement on 30 October.
For much of Labour’s first 100 days, it has argued that its first priority is to put the Government’s books in order following an apparently reckless Tory splurge under Rishi Sunak and Liz Truss. “Never again” has been Starmer’s motto, a reference to the crisis which followed the Truss mini-budget of 2022. And yet, without much fanfare, the yield on 10 year gilts is now almost back to where it was in 2022 at over 4% — a whole percentage point higher than in France.
The reality for Britain, then, is that its economic challenges have not gone away because it replaced Truss with Sunak and then Sunak with Starmer. The fundamentals remain difficult and clearly no one in Government has a clue how we might escape this trap. And it is a brutal trap: how can we, as an ageing, indebted and energy-poor country that is dependent on inward investment, possibly find a way to prosper in an increasingly protectionist world dominated by Chinese exports, American technology and a booming Middle East? Right now, no one seems to have a clue.
At Starmer’s investment conference in London, the boss of the US pharmaceutical giant Eli Lilly, David Ricks, set out the challenge as he sees it. “I think the difference in the UK is, separate from Europe, it’s a relatively small market for most multinationals and certainly for Americans, so something needs to be quite different to make it interesting.” For many Remainers, it was a gotcha moment: had we stayed in the EU, we would not have to be so different, and so would not be chasing businessmen like him. But the reality is that Britain has been desperately searching for inward investment for decades — and has even succeeded at it: last year the UK actually saw its its foreign investment grow, as Europe’s fell. The reason we are dependent on foreign finance is not because we left the EU, but because we run such a large trade deficit. As David Edgerton put it in The Rise and Fall of the British Nation, the dream of Thatcherism was to resurrect British capitalism, but what we really did was to open Britain up to the world’s capital.
I’m not sure Britain does need to make itself “interesting” in the way Ricks and his friends describe. But we clearly need to do something different. And in the meantime, we are prostrating ourselves before rogue operators who know how desperate we are.
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Subscribe“Something needs to be different to make it interesting.”
That something needs to be a little more than the Royal Family, incorruptible courts and fluency in English. These are hard-headed businessmen and women, so they look for dependable profits.
Cheap, imported labour is one way.
An educated, hardworking workforce, a comprehensible tax system, modern infrastructure and inexpensive energy costs is another.
I wonder which Starmer will go for?
Who knows? Starmer certainly doesn’t. He is yet another one who wanted to be PM but has no idea what to do when he has actually got there.
His view that “lockdowns” should have been longer and harder, presumably supported by even more printing of money, doesn’t exactly demonstrate a grasp of economic realities.
https://www.bbc.co.uk/news/articles/cjd54zd0ezjo
Why are you suggesting people go to this link ?
It is a weighty article….
Cheap, unskilled labour will vote Labour and help to transform Britain (demographically.) It’s a twofer.
‘Incorruptible courts’.
Seriously? For a generation the legal profession has been prosecuting and convicting postmasters for crimes that didn’t even happen. Will any judge or lawyer be held accountable for their role in ‘the most widespread miscarriage of justice in British legal history’?
Will they even be named?
Should the public trust any judgement from this cohort of judges?
The Post Office Horizon scandal is finally in the news, yet it is now widely reported that the legal profession is dragging it’s feet in settling the compensation – the slower the case, the fatter the fees.
Shameful.
‘Incorruptible courts’
https://www.bbc.co.uk/programmes/w3ct793n
Broadcast just yesterday on Radio 4, an example of the effective deployment of legal pressure and Non-Disclosure Agreements.
Starmer will increase the taxes on small businesses and use the proceeds to artificially inflate house prices. Just like his predecessors. A majority of families are now homeowners so it’s a surefire way to win elections. The country will continue to decline.
If he genuinely wanted to make Britain great again he would tax the £multi-million houses in Chiswick and Highgate and use the proceeds to provide loan guarantees for growing businesses in the provinces.
There are multiple responses to make to this sad, dirge of an article, a fugue in both the musical and psychiatric sense. We can rant at the Tories, or at Starmer, or preferably both (and my instincts, hackles rising even as I write this, are to do precisely that). Or we can lament with the author: ‘For God’s sake let us sit upon the ground, And tell sad stories about the death of kings’. But one thing I know: Britain has absolutely everything it needs, to not just stay afloat, but thrive in the 21st century. But to do that, Britain first has to decide who they are, and then use what they have got. That is of course a hackneyed cliche, but I have thought that for literally decades, and it looks to me as true today as it ever did. I will also say one more thing: the fear within the UK ruling circles, regardless of party, regardless of the timeline, of a protectionist world, has been a perrienial throughout my five+ decades in the UK, to the point where every single government has overcompensated in their zeal to set an open-trade example – and this article is no exception. But Britain has been chasing a mirage. You don’t need to be dependent on the US, or China, or the EU or anyone. Thinking that you are, is a choice.
Are you saying the UK can run a fortress/autarchic economy?
What I’m saying is difficult to summarise succinctly, but yes, close to that, although with caveats. Ultimate globalisation is inevitable, but we don’t have to buy into blind globalisation, we can put our thumb on the scales right here right now so we have control how to proceed as we see fit, as other nations are going to do. I’m sure what I’m claiming will sound unhinged. I could go on and on with arena after arena, but restricting myself to a single ‘for example’, the UK can access it’s own cheap energy, because a mile underfoot each of us is an absolute treasure trove that can keep the UK going for a century – all that’s required is the will get away from the ideological crap and to dig baby dig – and of course high end engineering and technology. Given that Britain pretty much invented engineering and technology, and still has stunning levels of intellectual firepower at it’s disposal, this shouldn’t be beyond our governing elites to manage.
Absolutely right. The GENUINE diversity that these islands has embraced for centuries has fired invention & imagination – Ancient Greece was empowered by its trading with foreigners, assimilating new ideas & producing the most astonishing advances in thought as a result – & the remarkable (contingent) history that developed here led to our leading the world in material invention.
Courage mes braves! Nil desperandum carborundum !
Material Invention requires STEM knowledge and experience and, coupled with Business Experience and an understanding of what a Customer is, can help the country back to prosperity. There are plenty of people capable of contributing towards this goal.
However, the Left don’t understand Business or what a Customer is, and Whitehall haven’t a clue about anything. Or, they act as though the haven’t a clue about any of the above.
They are in the process of demotivating entrepreneurs, with their budget hints, and their NET Zero Delusions show how little they know, understand, or even care about the Laws of Physics, Chemistry or Science in general.
Heck, they don’t even have a clue how Science and Engineering should be conducted, even though many studied Philosophy, so should have come across the Philosophy of Science.
There are many successful professionals, in their 50’s, realising that the extra income, ravaged by the expected tax increases, coupled with and even greater Woke, and the continuing destruction of the British Wealth Creating Industries by NET Zero policies, just isn’t worth the candle.
Yes, we’ll need candles, when the wind isn’t blowing.
Nothing unhinged about it at all !
You’re quite correct. The fundamentals are all in place.
Disagree with your final sentence though – the problem is that the governing elites think they can and should manage this. Just keep them out of it as much as possible. They weren’t needed for the first industrial revolution. They aren’t now.
Absolutely right. Keep governing (political) elites as far away as possible, they do nothing but fiddle and obfuscate.
Mr B. It is unhinged. FREE TRADE. MISES. HAYEK.
And your point is ?
Where have we rejected free trade, Mises or Hayek ? As far as I can see we didn’t even monetion them. Nor said anything that particularly contradicted those views.
‘But Britain has been chasing a mirage. You don’t need to be dependent on the US, or China, or the EU or anyone. Thinking that you are, is a choice.’
Surely this, contradicts the entire notion of free trade. It is not a choice to think we depend on those countries for trade. We do depend on those countries for trade.
A comment below asks:
Are you saying the UK can run a fortress/autarchic economy?
To which the reply is:
‘What I’m saying is difficult to summarise succinctly, but yes, close to that, although with caveats. Ultimate globalisation is inevitable, but we don’t have to buy into blind globalisation, we can put our thumb on the scales right here right now so we have control how to proceed as we see fit, as other nations are going to do’
This also contradicts the entire notion of an open, free market economy. It contradicts the idea of low government intervention in the economy. Government thumbs on scales does not sound like a very good idea or like something mises or Hayek would have advocated.
Further down:
‘“are you proposing we extract our own energy over importing it?”, the answer is yes, because we have our own energy, or another example’
That is not a free market argument, it is an isolationist argument.
‘so buying cheaper for now from your potential enemies doesn’t really help in the long run when your enemies decide to turn the taps off, does it?’
Free market arguments frequently include the idea that free trade promotes peace and prosperity. Britain does not have that many potential enemies unless it decides to go to war with Russia and China, in which case it is really a US proxy war we would be fighting and to be honest I think are arguments in favour of maintaining trade with these countries rather cutting it off and following us policy. Mises favoured anti imperialism, seeing trading partners as enemies is again really not in keeping with libertarian principles:
https://mises.org/mises-daily/anti-imperialism-mises
,’ but for my perspective libertarianism is ultimately destructive of the notion of the nation state, but sadly I’m still locked into my buy-in of the nation state’
Doesn’t sound like free market economics to me. Sounds like isolationism.
This:
.’ But Britain has been chasing a mirage. You don’t need to be dependent on the US, or China, or the EU or anyone. Thinking that you are, is a choice.’
Is nonsense.
Thinking that we don’t depend on imports is contradicted by the facts:
‘Imports to the United Kingdom were nearly unchanged at £74.63 billion in August 2024, rising slightly from £74.60 billion in July’
https://tradingeconomics.com/united-kingdom/imports
United Kingdom Imports By Category Value Year
Machinery, nuclear reactors, boilers $97.26B 2023
Mineral fuels, oils, distillation products $92.44B 2023
Vehicles other than railway, tramway $90.37B 2023
Electrical, electronic equipment $74.00B 2023
Pearls, precious stones, metals, coins $63.17B 2023
Pharmaceutical products $27.35B 2023
Commodities not specified according to kind $26.48B 2023
Optical, photo, technical, medical apparatus $23.55B 2023
Plastics $19.65B 2023
The list goes on and on, can be found here:
https://tradingeconomics.com/united-kingdom/imports-by-category
That’s an enormous amount of trade to replace across a wide variety of industries. How do you propose we choose not to rely on imports from those places.
Thinking that a small country like Britain has ‘everything it needs’ right here, in my mind, is very illogical.
Securing our own energy from what we can access can’t be a bad idea, but those resources are finite and energy extracted here, especially coal, would be more expensive than imports from places like China, where labour is cheaper and environmental legislation is far less stringent.
The sanctions on Russian oil have cost the British economy dearly, any further restrictions on energy imports should be resisted in my opinion, are you proposing we extract our own energy over importing it?
Also this:
‘we can put our thumb on the scales right here right now so we have control how to proceed as we see fit, as other nations are going to do’
How do we do that without government interference in the economy. What scales and where do you hang the balance. Which other nations. In my opinion, we need less government intervention in the economy, not more. They should keep their thumbs out and away from the scales in my opinion. Their latest interventions in our economy have been a disaster.
I can go around answering all the specific points you raise, for example “are you proposing we extract our own energy over importing it?”, the answer is yes, because we have our own energy, or another example, saying: “resources are finite” gets us nowhere because they are finite everywhere so buying cheaper for now from your potential enemies doesn’t really help in the long run when your enemies decide to turn the taps off, does it? So instead we have to agree to disagree. I get the sense your instincts are libertarian, and I sympathise to a degree, but for my perspective libertarianism is ultimately destructive of the notion of the nation state, but sadly I’m still locked into my buy-in of the nation state.
‘libertarianism is ultimately destructive of the notion of the nation state, but sadly I’m still locked into my buy-in of the nation state’
‘Given that Britain pretty much invented engineering and technology, and still has stunning levels of intellectual firepower at it’s disposal, this shouldn’t be beyond our governing elites to manage’
Our nation state is built off the back of the British empire and global trade. You are not defending the British nation state by proposing isolationism, Britain hasn’t been isolationist, for at least a couple of hundred years if not longer.
Our industrial revolution was only a success because of our ability to import and export. Britain thrived off the back of free global trade. So libertarianism has surely never destroyed the British nation state, and in fact made it what it is today.
Although I prefer the libertarian view point, to be honest my views are based mostly on what is practical, it is not practical to say we can just stop imports and drop our reliance on global trade. It is not even in keeping with the history of Britain’s nation state and we have relied on global trade for over a hundred years now.
What part of the British nation state is it you believe you are protecting by cutting off our imports and energy?
What you would achieve is a massive recession, shortage of resources and energy and probably hyper inflation.
You have not addressed how you would replace hundreds of billions of pounds in trade.
You have not addressed the fact that energy extracted here, would be more expensive and even having made that investment, it would not be a long term reliable solution.
If you wanted to on shore a significant portion of industry, you would need cheap energy and quite a lot of it to even make that feasible, by extracting energy here at increased cost, you are also increasing manufacturing costs. How do you propose we make British industry competitive in that scenario?
I am not suggesting isolationism in the absolute or crude sense at all. Nor am I suggesting not buying and selling to and from everyone as necessary. My objection is to the kind of blind commitment to open trade that for example Lord Heseltine pursued all the time he wielded executive authority. He pretty much never prevented foreign companies from buying out British companies in critical industries, technology not least, and then those companies were allowed to be eventually picked apart or die as seen fit by their new owners, leaving entire industries hollowed out. Note also that this commitment to open trade was blind because the countries those companies came from didn’t reciprocate in kind – most of them prevented their own companies from being asset stripped in the same way by different means, many not directly visible but framework driven. The proof is for example, successive UK companies failing in the US and then dying, examples being defence engineering and technology companies like Ferranti and Plessy. Or another example, there is no significant presence of UK owned companies in for example Japan, whereas every man and his dog from across the world are allowed to own UK companies, including vultures from across Arabia. That insane Heseltine mentality has been visible across executives in government after government in the UK, including people like Blair, Johnson etc. I don’t know if you recall the story around Rover for example. Rover was acquired by BMW, then chopped up, with them keeping the profitable bits like MG, but the core business was sold off to a Chinese company under Stephen Byers’ direction, who then let the business die almost immediately. That Chinese company was probably only interested in getting their hands on BMW engine technology and patents in the Rover cars and had no intention of running an operating business in the UK. They might even have been shadow backed by the Chinese government for all we know. I am suggesting: don’t let our companies die to the point we are denuded of entire industries. Don’t allow critical companies to be bought out – this is the reason there are no tech giants originating from the UK. Don’t extend carte blanche to countries who don’t play fair with the UK. For example Aus does but the US doesn’t. Prioritise the critical stuff from our own companies and only buy from overseas when necessary, with a plan to replace locally when it becomes possible. By critical stuff I mean energy, core manufacturing, technology and IT especially, also to a lesser extent, core food, as in agri at home. I could go on but enough already, you get the picture.
‘Lord Heseltine pursued all the time he wielded executive authority. He pretty much never prevented foreign companies from buying out British companies in critical industries, technology not least, and then those companies were allowed to be eventually picked apart or die as seen fit by their new owners, leaving entire industries hollowed out’
On this point, that perhaps foreign companies shouldn’t be allowed to buy out British companies – I’m afraid I don’t agree. That means saying to people that have built and grown a business in the UK, that they cannot sell it on to who they like. In a global economy that is now more connected than ever, this seems like an unnecessary removal of peoples freedom.
Limiting British businesses by not allowing foreign investment/ ownership when Britain is already quite a small country with limited resources and has a limited pool from which investment could be drawn, would stifle innovation, remove incentives to grow and sell a business and depress the value of those companies potentially.
You also make the point that companies have at times been allowed to ‘die’ or have been ‘hollowed out’ – if a business dies it is normally for a good reason, businesses that are failing should be allowed to do so, what alternative do you propose? If British investment can’t be found, do you think the British state should subsidise British industry just to keep it from foreign ownership/ investment? Where does that start and end?
Your point about rover:
Rover was acquired by BMW, then chopped up, with them keeping the profitable bits like MG, but the core business was sold off to a Chinese company under Stephen Byers’ direction, who then let the business die almost immediately. That Chinese company was probably only interested in getting their hands on BMW engine technology and patents in the Rover cars and had no intention of running an operating business in the UK.
I would say that well, the Chinese owners paid for the business, what they decided to do with it from that point onwards was up to them. I believe, though I could be wrong, that rover was already in trouble before it was purchased. It would not be unusual I don’t think for a buyer of a business like that to chop out the parts/ designs that are going to be profitable, and discard the parts that are failing, regardless of where they came from. It’s just good practice. There’s no point flogging a dead horse.
.’ Don’t allow critical companies to be bought out – this is the reason there are no tech giants originating from the UK.’
The UK tech industry isn’t actually doing too badly at the moment, it also relies on access to global markets, especially for investment, components and raw materials:
‘ ‘Our research is testament to the resilience of the UK’s tech sector despite global challenges. The rise in tech incorporations shows there is cause for optimism in this key industry. Whilst it’s impossible to ignore AI as a driving force behind UK tech incorporations, especially for businesses working in data, there will be other factors to consider. London projects itself as a leading global authority in tech.’
https://www.rsmuk.com/news/number-of-tech-company-start-ups-jump-by-record-22-percent#:~:text=The data shows a total,data businesses and IT consultancies.
‘ Prioritise the critical stuff from our own companies and only buy from overseas when necessary, with a plan to replace locally when it becomes possible’
Britain isn’t big enough to sustain this type of economy, I take your point about the us, but they have access to their own oil, raw materials and investment pools. Once the government starts telling people who can make what and where, where and who they should purchase from, they are again curtailing freedom and ability to innovate as well as placing an (in my opinion) unnecessary regulatory burden on businesses. If businesses in the UK have to prioritise buying local instead of over seas, you are potentially increasing costs and therefore making them less competitive before they have even started trading.
Businesses in the UK are already subjected to very stringent legislation and regulations, our tax system is convoluted, our taxes, especially corporation tax, are pretty high, our employment laws are also convoluted and hard to navigate. Businesses in the UK need more freedom from government regulations, not government telling them who they can take investment from, where they should buy from and preventing them from participating in the global economy.
That 86 people think Britain could be isolationist, and minus nine people have down voted a perfectly legitimate and very important question is one of the most worrying things I’ve come across on here.
A fortress economy in Britain would be an absolute disaster.
I have responded to you but they have sin binned my post.
Thank you for trying. Serious discussions on economics are not allowed. People might start having interesting and informative conversations. They may even find common ground and solutions. Sin bin for you.
Catastrophic level of debt and immigration have to be brought down to manageable levels – and fast. To do this will not be easy or painless and requires a massive improvement in the intelligence, competence and honesty of our political leaders . It does indeed require a Thatcher type figure of our times.
Go Kemi!!!
Except that Thatcher didn’t really solve debt problems. One could even argue on the contrary. The reduction in national debt was in reality only moderate while private- and household debt exploded. Moreover, Thatcher 2.0 won’t have any state assets left to sell and there are not that many productive industries where tax breaks will actually lead to growth.
Tax breaks!
What’s not to like about Thatcher? She smashed the Unions, flamed the Argentinians, tormented the EU (or the EEC, as it then was) and turned a bunch of council house dwellers into home owners! Oh, and she helped Reagan win the Cold War!
Well, yes, and then we all got to watch them flip their homes by selling at market rates and raking in a fortune on the taxpayer’s back. And now young families can’t afford decent accommodation as there is no public housing left. At least the landlord class are thriving…
That second part is a separate problem. I lived in the UK (on a gap year) in 1980, which was the first full year of Thatcher’s Premiership. I found it depressing that most working class English people (including my relatives) were happy to live in Council houses their whole lives, and seemed to have no desire for home ownership. Thatcher changed that.
There was nothing wrong with living in a Council house. The estate I grew up on in the 60s and 70s was safe and clean. People kept the front gardens tidy and there were no drugs (we would have known).
It was an anathema to someone who grew up in Australia. After the gap year, I went to University, got a job, and as soon as was humanly possible (age 23), bought a house.
….At least the landlord class are thriving! you must be absolutely joking, you can’t be living in the U.K.
It can hardly be denied that the private rental sector in the UK has been very profitable on average over the last few decades, and many have made a good bundle out of it. Including the banks and letting agents.
Of course it’s always a _risky_ investment. It can’t be all upside. Some got bad tenants, some got caught out by mortgage rate increases, tax changes, etc. There may indeed be plenty of landlords who are struggling. And there are still lots who are doing well out of it.
The problem is not so much selling houses to the working class but turning housing – like everything else – into financial assets backed by ever more credit. That way wealth trickles up while the market becomes a Ponzi. So within one or two generations you find your family without assets as well as affordable rent or any housing at all.
I can see your point, but on a personal level, the fact that I am comfortable in late middle age is at least in part due to my becoming a property owner at age 23. In the interests of full disclosure, I do live in Australia.
“The reason we are dependent on foreign finance is … because we run such a large trade deficit.” Yes, and a lot of that “investment” is just selling off national assets to anyone, so long as they are foreign. It is interesting that the specific investment projects will, in the long term, make that trade deficit worse. The container port project makes it cheaper to import and the Stansted project makes it more convenient to make trips abroad. Both very nice, but neither addressing the root cause.
What would be wrong with a “Pret a Manger ferry” ? And what would induce someone to sneer at it like that ? I’d say that’s almost certainly an advance on the food quality over the golden era of 1970s and 80s ferries the author seems to long for.
And the comment ignores the obvious facts that the Channel Tunnel and low cost flights fundamentally changed the economics of ferry travel. We now get more for less cost – and yet some people still aren’t happy.
There is nothing about the supposed “economic predicament” that isn’t fixable. Nor are the solutions unknown. We’ve been here before. The challenges we face today are not all fundamentally different from those faced by Mrs. Thatcher in 1979. Many are similar.
If the author’s so concerned about the trade defecit, perhaps mining our own oil, gas and coal rather than importing them are a place to start.
If bond yields – and UK government interest costs – are rising, it’s because investors know that the Labour government’s about to make things worse. You can report what Starmer and Reeves say and all their platitudinous good intentions, but it’s what they actually do that counts.
Follow sensible policies and investment will take care of itself.
Bond yields increasing internationally. Same trend for US Treasury bonds. Markets largely expecting slower reduction interest rates due to fuel cost inflation risk re: middle east etc. What Reeves does on the Budget less a factor, although she needs to tread v carefully too.
The position is v difficult. A symptom of last 16 years. One can argue some recent pay settlements added to challenge, but continuance of strikes wasn’t helping either. And certainly 7m on a waiting list for treatment not aiding workforce challenges.
Fundamentally both main parties made electoral promises v difficult to then navigate, short term at least. Debatable if public ready for more honesty at that time. We’ll see how that evolves.
Interesting to see you now date the problems from T-16 rather than your usual T-14 years. But starting from 2008 makes some sense. But the thing is, something must have gone wrong earlier for 2008 to happen in the first place !
It’s also quite interesting how many echoes there are today of Gordon Brown’s policies in the many leaked announcements on fiscal and tax policy. The talk of “borowing to invest” and “investment in public services” is back again, as is raising national insurance (income tax to those with an above room temperature IQ).
But Brown never understood the difference between spending money and actual investment. He just spent all his time measuring inputs (spending).
Can’t help feeling that history is about to repeat.
On the strikes: many of us hardly noticed them. Some of those people could (indeed should) strike permanently as far as I’m concerned.
I can’t think why this post has had five downticks. Bad grammar? Not that I can see. Crazy assumptions or conclusion? Nope. The only explanation that comes to mind is “shooting the messenger”! It’s a shame a downvoter isn’t prompted to add a note explaining why they downvoted.
From a down voter:
‘Markets largely expecting slower reduction interest rates due to fuel cost inflation risk re: middle east etc’
This point is wrong.
‘Following ten heated days of geopolitical speculation, the risk of seeing the Israel-Iran standoff degenerate into an oil price rally is evaporating, as Prime Minister Netanyahu vowed to strike military targets and not oil ones. This has brought macroeconomics back into the limelight with OPEC cutting its 2025 forecast again and China continuing to report weak import numbers. All of that saw ICE Brent slump back to $74 per barrel and WTI fall to within touching distance of the $70 mark.’
https://oilprice.com/Energy/Energy-General/Oil-Prices-Tumble-as-Demand-Concerns-Take-Center-Stage.html
US inflation has been coming in lower than expected since September I believe, they were talking about cutting rates back then, sooner than expected I believe, not slower, uk inflation has also come in lower than expected.
‘Fundamentally both main parties made electoral promises v difficult to then navigate, short term at least. Debatable if public ready for more honesty at that time. We’ll see how that evolves’
Not sure what that is supposed to mean apart from it sounds like the poster doesn’t think the electorate can cope with honesty. And should be lied to until the situation has ‘evolved’. Rather a concerning position really.
The proof of the pudding is in the budget. We both know what they should do. If, instead, they load more taxes onto SMEs I hope you won’t be on here defending them.
A symptom of last 16 years.
Nope. This rot started in 2004.
Not sure the Pret a Manger ferry is a good analogy if the writer is complaining about lack of human interaction. At least in Pret you get to hand over your money to a (usually) smiling cashier.
Pret, yeah, fantastic economic growth, incredible productivity. You’ll easily pay your mortgage on what they pay…. and the tax you pay will wipe the national debt at a stroke. Pret, Costa, Macs, Cote, Starfucks, B&Q, Wickes, KFC, that’s why the country’s so broke and still so fat….the basis of the great U.K. industrial come back.
More for less. Yep, that’s all that matters. P&O under DP Ports are despicable and that the governments allow them to treat people like serfs and disposable assets is why no one feels they belong, why the spirit of the country is hang dog low. So, go on keeping on racing to the bottom, subjugating and oppressing, selling off the last vestiges of our heredity to Qataris, Dubai , China and the US but as the saying goes; you or your children will be next…more for less, what a mathematical genius.
We run such a large trade deficit because Thatcher destroyed much of industry in the early 80s and subsequent governments have shown no interest in reviving it. The point not made is that being dependent on foreign investment is fine for a while as it tends to lead to prestige projects such as London skyscrapers. After a while though the foreign investment starts to buy out what people depend on for their daily lives: farmland, water, their own homes. The UK is becoming a colony owned and run by a cartel of imperial interests.
The industry that “Thatcher destroyed” was only kept afloat on the back of fiscal deficits, so the point you’re making here fails at the first step.
The Unions had destroyed most of it before Thatcher got anywhere near it.
….at least we had coal and not windmills…..until in her class war she destroyed that too….
Deep mined coal was too expensive. Very few mines were viable and made less so by the likes of Scargill.
And it was Scargill who declared class war…”we will bring down this Tory government”…no the electorate do that…and they didn’t.
Yep and now the green loons think that wind and solar will save us, they are fools. Coal was limitless but instead Thatcher drowned the mines, destroyed the mining communities : society, what society? Sure paying EDF and China £Bn for nukes sometime never is more viable than coal every time. As for Drax, which moron allows subsidies for burning forests from America to be defined as carbon neutral? Carbon capture ? Sure have £20Bn ! More ponzis than you can dream of, no wonder we’re broke.
With the very recent closure of Britain’s last coal-fired power station, Britain’s link with her once great industrial past was finally severed. A black day in many respects.
Stopping the use of children down the coal mines also severed a link with Britain’s great past.
Class war, is it? Oh dear. People like you are just perennially confused.
‘People like you’…….
Labour closed more mines than the Tories.
Producing a ton of coal at £120 while it could be bought for £90 on the open market wasn’t sustainable.
In fact, before WWII, the private owners of the coal mines were willing to improve productivity with new investment, but it obviously needed a reduction in manning levels demanded by the unions.The post-war Labour Government avoided confrontation and subsidised the investment.
And the mirage of success continued, until it didn’t. There’s hundreds of years of coal left, but who would risk all that investment. Once bitten, twice shy, though much could be automated.
And the Green Windmills are the invention of the Miliband brothers.
It wasn’t only the post war Labour government which avoided confrontation…otherwise known as reality. So did the Tories, particularly Churchill’s and Macmillan’s.
Of course, Castle tried to improve industrial relations with her “In place of Strife” proposals…torpedoed by Callaghan. And Healey eventually had to accept reality…but too late.
The solutions are all staring our ninth rate clerical class neo Pooteresque draylon clad political ( lower middle) class in their now often bearded and bovine faces. Look to Switzerland for tax, immigration and low crime, France for road building information and example, Luxembourg for investment management? and others who do certain things bettter than The Dystopian Pipls Republic of Nu Britain- Draconia.
The last days of the exhausted Thatcher/Major regime were marked by an electorate contemptuous of the Tories and keen to get shot of them. They were also marked by something else that grabbed a lot less attention: UK public debt falling to it’s lowest point from highs after the war half a century prior – to the point where markets who were reliant on buying that debt for stable long term returns were worried that not enough debt was being sold. Debt in fact hit a low in the early nineties during the Major/Lamont recession, then rose a bit, then fell again, until the Tories were out. People often think it started rising again after the 2008 crash, but that’s not true. It started rising ever since the start of Blair/Brown, spiralled steeply upwards after the great banking crash, dipped a bit during the 2015 Tory government, and then started going absolutely stratospheric when the pandemic hit.
My J’accuse:
I related all the above to set the backdrop for a look back in anger, and jabbing the finger at specific governments and personnel since 1997.
Fact 1: Blair/Brown blew away an absolutely golden inheritance. Own it, Labour, you useless bunch of numpties. But cheer up guys and gals, we did get, um, ‘Surestart’, and even some, errrm, ‘youth clubs’ in exchange, so that’s all alright then.
Fact 2: Despite his reputation for hard headed austerity, public debt absolutely ballooned under Cameron/Osborne 2010-2015. Take a bow you useless Tories, you bag of numpties. You had a duty of care to fix the mess after the banking crash and you did absolutely none that, you just left the problem to fester and grow huge.
Fact 3: Absolutely none of the consequences of the blowout spending during the pandemic were not obvious, a nobody on the internet like me could see what was coming down the track, the inflation surge, the higher interest rates, and the truncation of fiscal and monetary options when this happened. And yet, Johnson/Sunak went right ahead with the splurge anyway. Oh why did you do it, why, you bloody old towser-faced boot-faced totem-poles on a crap reservation?
I will make one final point. I went to America in the nineties and again in the noughties (a little before before the crash), and the buying power afforded to the average Brit was absolutely great – everything seemed cheap, food, fuel, accommodation. In Canada, you could buy a mansion in a prosperous suburb in Toronto for the price of a semi in London. Now, everything looks expensive everywhere in America. And that seeming expensiveness is straight down to the fact that we are now a third poorer than we should be – average earnings should be 30-40 percent higher than they are ,had they kept pace. We can’t afford anything because we are now poor. Thanks a bunch, Messrs Brown, Darling, Osborne, Hammond, Javid, Sunak, Zahawi, Kwateng and Hunt. Oh, and of course Reeves, in anticipation.
Not difficult is it? Print money…get inflation! Apparently not an idea which politicians are familiar with…
I would add that the Major recession was entirely due to his actions as Chancellor…and yet he now makes proclamations as if he were a respected elder statesman.
The problem here is obvious.
The sheer size of the state, with umpteen barely employed civil servants picking up wages and pensions out of all proportion to their actual worth, a giant, and wildly misused welfare budget.
A huge Quangocarcy which infects the whole of life here from ordering a breakfast to building a power station and everything in between, (more huge salaries and pensions on the state) and a political class reduced to ten second sound bites while unelected people run the country into the ground.
The writer grievously under estimates the effect of Thatcherism. She took control when the economy was dying after years of state interference and heading into an abyss. More of the same needed doing, but she couldn’t go on forever and the left wing Tories who has always despised her took over. Their type have ran the country since, hence most of the problems .
Two Tier of course understands nothing of this. He is even frightened of a painting of Thatcher.
Part of the problem is that which is deemed acceptable by those in positions of responsibility in Politics and Government.
The Covid Enquiry, for example. Is it really justified that we will spend in excess of £200 million on this exercise? Surely a budget of a couple of million would be adequate?
The costs of planning applications has spiralled into lunacy. The beneficiaries increasingly appear to be middle-class university educated professional legal and regulatory specialists who have exploded to meet a demand created by their own kind.
When doing my MBA one of the tasks was a Worked Assessment of Case. The Case was issued on Friday at 14.00 and had to be returned by 21.00 on Saturday researched, analysed and written up. The report was limited to 1500 words and needed to provide a clear understanding the analysis and conclusions.
It is time for Government to implement the KISS principle and concentrate on the essentials.
I supported Remain but if there is to be a Brexit benefit then we should allow any minimal restrictions on the use of artificial intelligence and robotics unlike Europe which is drafting restrictive regulations. Automation should be encouraged to a maximum by retaining the capital allowances already available and discouraging low wage employment by increasing employers national insurance contributions
Natives made unemployed should be offered the jobs of illegal immigrants forcibly removed. This clearly requires leaving the ECHR and a punitive sanctions regime for those employing illegal immigrants.
It was Arthur Seldon, not his son Anthony, who was prominent in 50s and 60’s as a founder-member of the IES. As for Starmer’s cultural hinterland, he doesn’t seem to have one being unable to name a favourite novel or piece of music (even Taylor Swift) and of course he doesn’t dream, but seems happiest playing and watching football (from a freebie hospitality suite)
Good catch. I thought that sounded a little unlikely (Anthony Seldon at the IEA). Learnt something too – Anthony Seldon is Arthur Seldon’s son.
Once again, errors like this do make me wonder if UnHerd employs any editors.
Probably not the editors’ responsibility really. Maybe they need to create “Unherd Verify”. But there again we probably encounter intellectual property rights.
‘Which brings us to that final, inescapable, economic reality. Money.’
A reality nobody in charge of anything understands very well right now.
Fundamentally the west is in an awful lot of debt, we don’t make much to export, we have allowed America to weaponise things like the dollar and the SWIFT payment system, there are sanctions upon sanctions upon sanctions and increasing tensions with the east, to the point we have nearly isolated ourselves economically, shot ourselves in the feet and will be f*cked quite quickly if we don’t stop to think about what we are doing with all that.
‘Back then, ideas and intellect certainly seemed to matter.’
In a country with apparently some of the best universities in the world – ideas and intellect do not matter anymore.
What matters is puking the establishment line (normally set out by America) with complete compliance – you must be sure to smear, attack and ostracise anybody that questions government policy or media narratives, they are guilty of thinking and using their own intellect, that is absolutely not permitted – you could catch ideas or misinformation disease.
‘, possibly find a way to prosper in an increasingly protectionist world dominated by Chinese exports, American technology and a booming Middle East? Right now, no one seems to have a clue.’
Right now what we are doing is talking about having a war with two of those places. America has sucked the UK and Europe dry with the Ukraine war, it’s sanctions regimes and it’s inflation reduction act – like a massive vampire. America is nearly done with that now, they are going to up the draw bridge on ukraine soon, leave everyone in a mess, then they want to p*ss china off, which will cause everyone quite a lot of disruption again. The American leadership seems uncertain as to what will happen with Israel and Iran, given their track record, don’t expect anything to go too well, but hope for the best. You can’t expect too much at all until we’ve sorted that all out really.
It’s going to make quite a difference to what can be done.
Free trade, no sanctions, no wars could all be good for Britain, all of those things are not polite to talk about at the moment though, so instead you will end up in an isolationist, sanctioned, possibly missile attacked dystopia until/ unless sensible people start talking about sensible things again.
The guiding spirit of the USA is TONYA HARDING
The whole point of Brexit was to re establish DIFFERENCE. As Draghi has confirmed EU autocratic dysfunction and its hyper regulatory regime has suffocated innovation and dynamism. They fear AI. They fear competition. So they stagnate. When this inept scummy student Leftist clique depart there will be an opportunity to prosper again. Vive la difference.
Goodness, this piece meanders with very little to say about contemporary protectionist currents, what the EU now wants from Britain to save this Labour government, and how the Tories might put together a platform which challenges the UK’s well-worn economic orthodoxy.
Perhaps the key point is that no politician who achieved anything of worth would have been so crass as to elevate ‘Growth’ to the totemic status it is now afforded.
They would have recognised that other things mattered more in shaping lives and the country.
You want the welfare state? Then you want your govt to pursue high growth strategies. Even to the point of mortgaging what ever else might matter.
Our productive economy has been abandoned, destroyed or outsourced. Mass immigration is drowning our public services.
Our education system is politicised and totally ineffective at producing the skills we need.
Our political class veers from zealots to financialisation to abasing itself to better run foreign regimes. Not a man or woman among them, serves the nation. Not a single one possess any wealth creating skills.
The banking system gorges itself on the chaos while producing nothing.
With a British State and a British society that is highly dependent on debt based and migration based growth, then we need at least 1% growth to cover our liabilities.
The required growth then needs to factor in inflation otherwise everything seems to be becoming more expensive with less ability to cover our debt liabilities.
With low growth, pensions and debt based securities hang in the balance with yields on gilts steadily increasing with the resultant effect that we are servicing State borrowing to the tune of £100bn a year which is 8.9% of government spending.
In other words we are in a period of managed decline but with government narratives trying to gaslight the public that £68bn of investment will reverse our long term fortunes.
The problem is the inability of our politicians to speak the truth lest they scare off capital investors and make bond vigilantees jittery. Thus modern British governance is about keeping the asset bubble inflated so that capital gains tax revenue is ensured and digital investments are kept afloat.
In other words, modern governments are now largely financial economy orientated rather than material economy orientated which has now largely been outsourced abroad.
In this respect, there is no solutions other than an asset bubble crash so that the financial economy is realigned again with the material economy.
https://surplusenergyeconomics.wordpress.com/2024/10/15/291-the-coming-shock/
Those capital investors and bond vigilantes must be fully aware of how unsound the underlying economy is, but presumably they are content to continue propping it up while the returns keep coming. But now taxes are at a 70 year high, and increasing yet further, it can’t be long before this giant Ponzi scheme comes crashing down. How taut can you tune a violin by turning the screws ever tighter until the whole thing implodes in a cloud of splinters and sawdust?
I’ve seen British ferries run by British staff (dirty, grubby, and poorly serviced) and British ferries run by Filipino staff (spotless, with courteous, impeccable service). As a Briton, I know which I prefer.
Ironically, despite everything, Britain actually is a great nation, but it needs to stop borrowing and start paying back the debt. Meanwhile, its people need to stop expecting the state to do everything for them, and the state needs to get out of the way of business.
Thatcher, our greatest post-war leader, understood this, and we need a Thatcher now.
Please tell me what Thatcher’s briefing said about Philip Larkin – presumably expurgated?
I thought the way to stay afloat was to cut the working week, pay people more by reducing profits, borrow as much again as the financial hole you had previously and conveniently ignored, blame the rich and drive them away unless they give you lovely gifts and pretend that spending more than you earn will be fine because something will eventually turn up.
Britain must become a tax haven
How does Britain survive in a protectionist world? Cheap energy.
The Industrial Revolution happened before the EU, let alone Brexit, both of which are irrelevant to Britain’s problems today, as set out in this very interesting piece.