Suicide does not have to be swift. For every quick and tragic act of self-slaughter, there is the slow and inescapable self-immolation of the sixty-a-day smoker, junk food addict, or serial gambler.
Similarly, nations can die with a whisper, rather than a bang. Financial panics, budgetary crises, political soap opera: these are just the ephemeral surface froth that distracts from the deeper worrying trend toward future disaster.
Britain faces such a disaster today. Our current ills proceed to future decades of stagnation and decline, higher taxes, and waning prosperity. Any hope of remaining a player on the world stage will be a laughing stock for an economy increasingly resembling a health service with a country attached.
Our current failure to control inflation – and the attendant jitters that encourages in the money markets – follows a post-crash decade where growth has stagnated. Productivity grew at 2.2 per cent a year in the three decades leading up to the financial crisis, and at under 0.5 per cent since. The average person has been estimated to be £11,000 worse off than otherwise even before current price rises.
That unhappy trend has only been worsened by a series of outside shocks – the financial crisis, then Covid, and the war in Ukraine – which have left the public finances in an even unhealthier state. This was not helped by a post-Brexit Conservative party that has treated austerity – or fiscal honesty – as beyond the pale.
Going forwards, we confront the inexorable reality of an ever-smaller number of taxpayers supporting an ever-growing number of dependents. As Jeremy Hunt recently highlighted, the Office for Budget Responsibility puts our long-term growth rate at 1.6 per cent, but the rate of increase of public spending at 2 per cent. That excludes debt interest.
Without higher growth or spending cuts, that would mean public sector net debt of 217 per cent of GDP by 2071 and a necessary increase in annual tax revenues by £200 billion. The Chancellor suggested that would mean a doubling of the basic rate of income tax and the main rate of National Insurance.
This basic trend would be against a backdrop of a global economic decoupling and potential great power conflict. It assumes our public sector productivity does not become even more woeful over time, and factors in an economic model that remains wedded to cheap immigration and an absurd planning system.
Those of us in our twenties face the prospect of spending our adult lives watching Britain stagnate: a future of higher taxes, low growth, and perpetual misery. Britain’s position in the world and the health of our democracy can only be expected to buckle under the weight of our dysfunctional state. If we had any sense, we’d emigrate.
We Conservatives must confront that this depressing prospectus is all we have to offer voters after thirteen years in government. One does not have to think that Labour would do any better to understand why the electorate is unlikely to give us the benefit of the doubt.
It is as if the collective consciousness of the Right hasn’t noticed these trends. Recent months we have seen a spate of new projects designed to confront these realities. Our own ‘Reducing the demand for government’ series sits alongside Onward’s ‘Future of Conservatism’ initiative and similar campaigns in debating what must be done.
But with the Tories 20-odd points behind in the polls, all of this can look too much like planning for opposition. Margaret Thatcher provides an excellent example of the changes a party can make post-government if its leadership is willing to be honest about decline – and already has the ideas and policy agenda to hand to address it.
Yet this rather sketches over the awkward fact that before we Tories can get around to the serious business of tearing ourselves apart and stitching ourselves back together in opposition, we still have eighteen months or so left of governing to do. Can we not do something to try and address these fundamental challenges whilst we remain in power?
Of course, readers may remember that reversing our stagnation was exactly the raison d’etre behind Liz Truss’s leadership campaign and government. The ex-Prime Minister was clear that the “number one problem” confronting Britain was a lack of growth.
But if Truss was correct in her diagnosis of the country’s ills, her prescription left much to be desired. Kwasi Kwarteng and herself pledged the biggest act of fiscal expansion since the Barber Boom at a time of rising interest rates. They showed a fundamental lack of seriousness about the spending restraint that would be required or the legislative hurdles they faced, and managed to alienate all of those individuals and bodies on whom their project relied.
Hence why our government and party are now led by a man who said all of this last summer. But although Rishi Sunak may have ended up on the right side of history over the Trussonomics debacle, he still confronts the same depressing long-term economic picture.
But before he can even think of addressing those challenges, he has far more immediate hurdles to surmount. The strategy behind the five pledges he outlined in January was to set goals that could be reached with reasonable effort, restore some credibility with the electorate, and spend all of 2024 campaigning on a platform of proven delivery.
Unfortunately, as I highlighted two weeks ago, the stickiness of inflation against earlier predictions means the Prime Minister is increasingly unlikely to hit his goals of halving it, getting the economy growing, and bringing debt down. Increasingly, a Bank of England-induced recession, and the attendant hit to the public finances through higher welfare costs and shrinking tax revenues, seems the most likely course.
Sunak is not stupid. One suspects that his recent frustration in front of the Liaison Committee and reports of his privately bemoaning his bad luck in Number 10 stem not only because of a surfeit of by-elections (or because England are 2-1 down in the Ashes) but because he knows both that his plan is off course and that his country is in a mess.
If the five pledges are out of reach – and the current strategy for winning the next election junked – Sunak confronts a lack of purpose. His government faces the prospect of batting out time for the next year and a half.
But it doesn’t have to be like that. He has a choice. The Prime Minister can either passively accept the ship is sinking and be complicit in our national decline or use the next year to level with the country. First and foremost, he must tell MPs and voters about the hard choices that must be made.
There is no time for grand new supply-side legislative initiatives. Sunak will not be able to revive the housing or fracking proposals that scuppered his two predecessors. Nor should he expect a party so recently receptive to the siren calls of Trussonomics to welcome the prospect of fiscal restraint with open arms. Weary voters with shrinking incomes hardly want to hear more thin gruel is inbound.
But they and the country need to know why a return to some form of austerity will be necessary if we are to achieve any form of future sanity in regard to the public finances. Sunak and Hunt must point in that direction. They should use their remaining budgetary events to make a symbolic gesture of the restraint required: raising the pension age to 70, say, or finally scrapping the Triple Lock.
Voters may not want to take that medicine. But they might respect the Prime Minister more for his honesty than for another set of fudgeable pledges. Sunak’s role in history – and the purpose of his remaining premiership – could be as the man who told the British people what they needed to hear. That is the crucial first step in reversing our decline.