One of the rare things that almost all political commentators agree on is that it is important that the government of the day does a good job of responsibly managing the economy. Which is exactly what every incarnation of this dreadful Conservative government has comprehensively failed to do.
The damage began with the Cameron coalition government. Austerity was the weapon of choice that was used to manage the economy and we were subjected to long and regular lectures on how there was really no alternative policy.
The government was, of course, entirely right that the country and the world had just gone through a huge crisis as a result of the 2008 financial crash. Unfortunately, they were quite wrong about the causes of that crash, the people who it chose to make suffer and the best ways to use the crisis to provide Britain with a more secure future.
The free market fails so the poor are forced to take the pain
The financial crash was the direct result of financial speculation and excessive risk-taking in lightly regulated markets. Lehman Brothers didn’t collapse because the free market was over-constrained. Free markets failed to function and gave rise to a boom in the price of opaque financial instruments that was eventually followed by an extreme bust. It required hugely expensive government interventions and a lot of international collaboration to avoid the system collapsing.
Any reasonable person would draw the conclusion that this means that extreme, unregulated free markets need to be more tightly controlled nationally and internationally and that those who had made excessive profits from the upswing in the markets should be made to help with the cost of managing the fallout. The Cameron government concluded that a lot of pain had to be inflicted on public sector workers and benefits for the working poor who had absolutely nothing to do with the crash. The bankers were helped to get back to risk-taking as quickly and as freely as possible.
Brexit: the blinkered lunacy of economic isolation
A different faction of the Conservative Party then took things even further. They decided that a crisis that resulted from having too little international management of a global economy could best be cured by dismantling one of the few international bodies that had the potential to control international money laundering and tax avoidance and of ensuring that some basic standards were adhered to across a large bloc of nations.
A bunch of extreme-right political theorists came up with the idea that Britain needed to experience greater deregulation and that it would be better off losing easy access to its main neighbouring market because that would somehow ensure that it would prosper economically. When business leaders tried to advise these fanatics that they were mistaken, the key leader of the Brexiters dismissed their concerns with the arrogant expletive “fuck business”.
In that, at least, he succeeded. The Boris Johnson experiment has resulted in lost business, increased costs, shortages of supplies, and lower investment in science and technology. When he left office his successor Liz Truss proceeded to double down on the errors of Brexit with such enthusiasm that even the financial markets lost confidence in what she was doing and she landed the country with the biggest surge in interest rates and thus housing costs for four decades. We are still reeling from the extra kick that gave to UK inflation.
A strange kind of responsibility
Now we have Rishi Sunak in charge, who likes to tell us all with great frequency about how responsible he is. On that he is right. He was an early and enthusiastic supporter of Brexit. So he is responsible for any damage it caused. He was the chancellor throughout the bulk of the Johnson era. So he is responsible for presiding over the longest period of stagnating living standards that Britain has experienced in close to a century.He was a hedge fund manager in the City of London and he worked for Goldman Sachs, one of the companies that helped trigger the 2008 crash and then needed bailouts. So he shares responsibility for the 2008-2009 financial crash.
Sunak has consistently either refused to support investment in green technology or done so slowly and reluctantly. Even when it is a cheap and easy-to-install alternative like onshore wind farms or better home insulation. So he carries responsibility for Britain falling behind China and the USA despite having a head start on the technology. He also made the conscious choice to pick a fight with public sector trade workers just as they were emerging from serving the nation well during Covid. So he is responsible for an exodus of talented young doctors and nurses who have had enough.
Scaling new heights of profligacy
Throughout their period in office the Conservatives have consistently failed to invest. Instead they have allowed core central services like water and power to become loaded with unmanageable levels of debt simply in order to prop up lightly taxed dividend payments. They have allowed stocks of publicly available housing to become so depleted and so poorly maintained that we have a national housing crisis. They have weakened Britain’s competitive advantage in high-quality research and technology by pulling out of schemes like Horizon and by making it much less attractive for highly skilled people to come here and work.
Everywhere you look now there is a shortage of money and a set of longstanding problems that are coming to a head. All that easy money which poured into the country whilst we were pumping out fossil fuels as if there was no tomorrow hasn’t been carefully invested. It has been frittered away on short-term profit taking encouraged by an orgy of well-funded lobbyists who have the ear of Conservative ministers.
When this government took office the chief secretary to the treasury received a note from the previous occupant wishing him luck, saying “I’m afraid there is no money”. Much was rightly made at the time of the utter irresponsibility of that comment.
Now after over 13 years of government we know that their legacy has been to leave even less money for their successors, even bigger debts, even smaller market opportunities and huge problems with inflation and with declining public services. If that is what comes from Conservative economic management then they should not be surprised if there is an appetite to try something rather different.
In my next piece for Yorkshire Bylines I intend to write about the prospects of Keir Starmer delivering a genuinely constructive alternative. Here’s a spoiler alert. Don’t get your hopes up too high!