Labour's blueprint for decline Tax tinkering won't save us

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.

The summer’s ethnic riots, like the Brexit Red Wall, provided Westminster with a vigorous display of Northern England’s post-industrial working-class anger at the current political settlement; yet, as with any failing regime, it is disaffected middle-class graduates who pose the greatest threat to its stability. As even The Times, cataloguing the emigration of Britain’s youth to Dubai, can observe: “How much British values actually count for when they are attached to a state that appears to be failing in slow motion, regardless of which party is in government, is a question few of us want to ask.” Significantly poorer than their equivalents in the United States, Australia or Canada, Britain’s middle-class young need only holiday in Europe to observe the significantly higher quality of life, functioning infrastructure and thriving cities of our closest neighbours. To be a young middle-class Briton is to be paid too little to justify current marginal tax rates, and taxed too much to justify the squalid and increasingly inhospitable public realm. The social housing discourse so prevalent on the younger Right offers few solutions beyond explicitly nativist redistribution: just as is shown by the importation of Third World care workers, Britain relies on low-paid migration to keep the welfare state alive, yet the expansion of the welfare state’s embrace beyond the national community threatens the survival of the entire structure through the withdrawal of popular consent. This dynamic will be one of the most turbulent political battlegrounds of the near future, yet Reeves’s Budget steered clear of addressing it, let alone resolving it.

A decade ago, millennial anger at Britain’s faltering social economy created the brief flowering of the Corbynite Left, which has since evaporated as a political force, leaving only a podcast and a handful of poor quality Labour MPs as testament to this forgotten era. As across Europe and the wider Western world, that anti-systemic energy is, among the zoomer generation, whose entire lifetimes have been marked by economic stagnation and slow societal disintegration, now coalescing on the political Right. Yet even here, Britain’s existing political Right offers no credible solutions to the country’s slow economic decline, with the insurgent Reform Party offering Northern England the same Thatcherism that destroyed its economy. Equally, the Conservative Party’s two leadership rivals will spend the Halloween vote competing to invoke the Iron Lady’s ghost, in an act of political necromancy targeted at a membership soon to join her in the Otherworld.

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: yet constrained by the Treasury, and fears of the political costs of both borrowing and taxation, there is little prospect of the promised new Green industrial revolution making it off the election manifesto and into reality. Instead, proceeding backwards, Labour’s climate policy looks set to weaken Britain’s energy resilience while boosting the industrial economies of other, even rival countries. 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.

Overburdened with unaffordable commitments, with a declining tax base, the British state lurches from crisis to crisis, getting weaker, poorer and less capable at each turn (this is, by the way, the very definition of societal collapse). The economic situation is so dire that tinkering with tax rates offers no meaningful solution: British politicians should instead think of the country in explicitly developmentalist terms, recreating the essential infrastructure — transport links, low-cost energy, the manufacture of basic goods like primary steel — necessary to permit a functioning first-world economy some decades to come. Labour’s promised £100 billion of capital spending through tweaking fiscal rules, if it actually manifests and is targeted sensibly, is a genuinely good policy and a necessary start: but even this huge sum may not be enough to catch up with comparable economies. In his excellent new book, the historical sociologist John A. Hall observes, using South Korea as an example, that “successful development seems to rest on a measure of linkage between state presence, shared national identity, and a benign geopolitical milieu”. Unfortunately for us, decades of failed governance have removed all three from the equation.

Instead, the British state is hurtling into an era of historic crisis for which it is manifestly unprepared; indeed the only sense of urgency shown by Westminster is in thrusting itself deeper and harder into the coming storm, as if unconsciously seeking its own death. The sole function of the British state is to maximise the security and prosperity of the British people; when it ceases to do so, it has lost its legitimacy. As the reactions to yesterday’s Southport revelations, even among the centre-right, highlight, the British state is rapidly losing that legitimacy: there is little in the Budget to restore it. “It falls to this Labour Party, this Labour government, to rebuild Britain once again,” Reeves declared, adding that opposing her Budget means “choosing more austerity, more chaos, more instability” — yet austerity, chaos and instability now seem baked into Britain’s near future. The time for rebuilding Britain will come soon enough, but it is doubtful that Labour will survive in power long enough to take the helm.

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Aris Roussinos is an UnHerd columnist and a former war reporter.

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