The United Kingdom is enduring one of its most fraught periods since the Second World War. Living standards are declining at the fastest rate since the 1950s; NHS waiting lists are at a record high and the number of GPs has dropped by 40 per cent since 2010; councils are falling into bankruptcy; and the public realm is diminished.
Successive Conservative premierships have ended in failure. When Rishi Sunak entered 10 Downing Street in October 2022, he promised to bring order to chaos. In a narrow sense, he has succeeded. As Andrew Marr notes on page 20, “2023 was a year of recuperation at Westminster. We haven’t had a major election or referendum. We haven’t had a change of government.”
[See also: The immigration dilemma]
The UK economy has avoided recession and the market turmoil of the kind experienced during the brief Liz Truss era. But the challenges are formidable.
In his Conservative conference speech in October, Mr Sunak railed against a “30-year political status quo” and offered himself as a “change” candidate, even though his party has been in power for more than 13 years. This “rebrand” did not last long: he appointed David Cameron as Foreign Secretary a month later.
The Prime Minister was correct, however, to say that many of the UK’s defining problems – an unproductive economy, a dysfunctional housing model, an over-centralised political system, a fragile Union – have their roots in decisions taken decades ago. Successive governments have invested too little and relied for too long on consumption and cheap credit to boost GDP.
The economic divide between the UK and other Western democracies is increasingly undisguisable. As the Resolution Foundation’s recent Ending Stagnation report charts, low growth and entrenched inequality mean typical households in Britain are 9 per cent poorer than their French equivalents, while low-income families are 27 per cent poorer. The UK’s productivity gap with France, Germany and the US has doubled since 2008 to 18 per cent, costing £3,400 in lost output per person.
Yet, for most of the past decade, Britain has engaged in the politics of distraction. Any hope that Brexit would serve as a moment of national renewal has been dispelled. The UK has now been outside the European Union for almost four years, but even the most ardent Brexiteers struggle to say what has changed for the better: the UK is not even able to control its borders and net migration reached a record high in 2022.
Contrary to promises of lucrative trade deals with non-EU countries, the UK’s overall trade intensity remains at 1.7 per cent below its 2019 level, compared to an average increase of 1.9 per cent across other G7 economies, according to the Office for Budget Responsibility. And, far from “levelling up” regions outside the south-east of England, the government has presided over a widening north-south divide, having now frozen public investment (which will fall from 2.6 per cent of GDP to just 1.8 per cent).
In this parlous economic climate, few now doubt that Labour will win the next general election. After the party endured its worst defeat since 1935 four years ago, to be in this position is no small feat. Keir Starmer has so far defied those on the left and the right who believed his political project was destined for failure.
But the question of whether Labour has the capacity to change the country becomes more urgent. For electoral purposes, the party is swerving many of the policy challenges that it would be forced to confront in government. How will Labour rebuild the public realm when it has ruled out any new wealth taxes, for instance? Higher economic growth is necessary but not sufficient. Yet, to date, the party has only promised limited measures such as the abolition of non-domiciled status and the addition of VAT to private school fees.
Can the nation aspire to more than managed decline? After years in which ideological dogma and populism have trumped good policy, Britain needs a pragmatic, hard-headed focus on its economic and social maladies. But after a largely wasted decade, the opportunity for political transformation is upon us. A Labour victory would change the social atmosphere of the country for the better and offer the hope of a new start.
We wish all of our readers a happy Christmas and a peaceful New Year.
[See also: The Cameron delusion]
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This article appears in the 07 Dec 2023 issue of the New Statesman, Christmas Special