In its 13th year of Conservative economic stewardship, the UK has become, in the words of the Resolution Foundation thinktank, “stagnation nation”. But we should remember the conclusion of Edward Gibbon in his voluminous history of the decline and fall of the Roman empire: “All that is human must retrograde if it does not advance.”
Yes, if there is one thing on which Rishi Sunak and Keir Starmer are agreed, it is that the British economy needs growth. It must advance.
However, unfortunately Sunak and his chancellor, Jeremy Hunt, have an obsession with inflation. Their sado-monetarist approach involves urging the Bank of England to keep interest rates high in the counter-inflation cause, even if this leads to a recession.
The idea that the Bank should create a recession in order to get inflation down to its official target is not proclaimed openly, but it colours the thinking of a number of influential economists and advisers.
Of course, one obvious political benefit of the independence of the Bank in monetary policy is that it is a convenient scapegoat for news that may be bad for those who suffer from a recession, but good for the inflation hawks.
Call me old-fashioned, but encouraging, or risking, a recession strikes me as a pretty eccentric growth policy. However, there it is.
But what about Starmer and Labour, I hear you ask. They are certainly not in a sado-monetarist mood. No, their approach sounds more akin to a policy of fiscal flagellation.
Their pre-election policy is all about fiscal rectitude. Having consistently, and to considerable effect, castigated the Conservative governments of the past 13 years for an austerity programme that was based on false premises, and did considerable damage to many areas of the economy and society, Labour have now made an extraordinary decision. In order to win over the Conservative voters they seek in a general election, they have decided they must not commit themselves to reversing Conservative cuts to the public sector and social services.
For many people, including myself, the most crass and insensitive example of this has been their U-turn on the previous commitment to lift the cap on eligibility for child benefit.
Now, again, call me old-fashioned, but I had always thought that the duty of oppositions was to oppose – but to oppose the government on the opposite benches, not their own side or their own previously agreed policies.
Sympathetic commentators are attempting to justify Starmer’s approach on the grounds that history suggests he has to be cautious, and that once he wins – if he does, thanks supposedly to his caution – he can then indulge in the public spending he wishes to sanction.
But this depends on counteracting the huge hit to the nation’s finances which has been administered – and continues to be administered – by Brexit. In my opinion, the only hope Labour has of alleviating the problems they will inherit is to start now on a campaign to reverse the legacy of Brexit. As the New European asks in its current issue: “Why won’t Keir Starmer just tell the truth about Britain’s catastrophe?”
Let’s face it. Starmer was right about the damage that Brexit would cause, and the Brexiters were wrong about the imaginary benefits – hopelessly wrong. Why is Starmer so scared of the Daily Mail and the Sun, both of which backed the wrong horse in Brexit? The leader of the opposition should be hammering home daily the economic damage that has been caused. Recent polls indicate that the population is way ahead of the politicians in this respect. A majority of the nation knows it was a catastrophic error, and would like to re-enter.
Even as I write, holidaymakers are queueing for hours at Dover trying to cross the Channel, and businesses fear they’ve seen nothing yet, with the second batch of Brexit-related disruption to trade on its way at the end of the year.
Instead of being terrified of the tabloid press, a true leader for our time would take them on. And instead of trying to appease “red wall” former Labour voters who made the mistake of voting to leave, he should stand up and be counted, ramming home the mounting costs of Brexit.
Brexit was, and is, a scam on an international scale. Michel Barnier, the former EU negotiator, recently told a British visitor that the offer made some years ago by a senior EU figure – that “the door [for re-entry] is open” – has not been closed. But of course our former partners could not be expected to take this government seriously – and Sunak is a dyed-in-the-wool Brexiter.
If only Starmer could show some serious, historic statesmanship on this issue, both the Labour party and the nation at large would be the beneficiaries.
