Can Britain be mended?

“Change? Why change? Aren’t things bad enough already?” Historians differ over whether Robert Cecil, Marquess of Salisbury, a late-19th century Conservative prime minister, really said this. But it sums up well the fin de régime despair that grips not only the great Lord Salisbury’s party but also much of Britain. Change is sorely needed, yet the fiscal room to finance it is limited and the public appetite for more disruption following the pointless excitement of Brexit must also be in doubt.

Nonetheless, the change that voters have opted for guarantees that some economic and social reforms will follow, whether for good or ill. Fortunately, those new political winds are also bringing a pile of books offering diagnoses of what has gone wrong and prescriptions for putting it right, some written by people in or close to the Labour party. Britain’s new cabinet will not be short of summer reading.

A common motif is that Britain is “broken” or “failing” in myriad ways and proffered reforms are often said to represent new forms of patriotism. Such phrases are standard tools for opposition parties trying to win elections, but that doesn’t necessarily make them wrong. Indeed, the then-newish Tory leader, David Cameron, fought the 2010 election under the slogan of “Broken Britain” and, as Torsten Bell writes in Great Britain?, he was on to something in his analysis, though not, alas, in his subsequent solutions.

Bell is a former Treasury civil servant who became head of policy for Ed Miliband during his ill-fated time as leader of the Labour party between 2010 and 2015. He then became chief executive of the Resolution Foundation, a think-tank chiefly focused on inequality. After finishing his book, Bell was selected as Labour candidate for Swansea West, and doubtless will have been hoping to put some of his ideas into practice as a minister or adviser.

One important contribution Bell’s book makes, beyond the richly detailed data for which the Resolution Foundation is noted, is to force us to look at the long-term origins of Britain’s malaise. This has the added benefit of putting the UK’s departure from the EU into its proper perspective.

His most crucial statistic, one that is a consequence of all the other ailments gripping Britain, is that average wages in 2023 were still below 2008 levels after adjusting for inflation. The young have fared especially badly: incomes of Americans in their early thirties, he says, were 21 per cent higher in 2021 than in 2007, while in the UK they were down 1 per cent.

The slowdown in incomes began in 2005, but economists and officials such as Bell paid it little attention because the headline gross domestic product figures remained strong — until they weren’t, thanks to the 2007-08 global financial crisis.

That crisis, led by America but fuelled by credit excesses in Britain too, is what gave Cameron his “Broken Britain” slogan. But then he and his chancellor of the exchequer, George Osborne, misdiagnosed the disease as being one of public financial excess, rather than the private sort, and prescribed deep cuts in public spending as the cure.

This “austerity” strategy was as effective as medieval doctors’ use of bloodletting. It left the country with drastically underfunded public services and, crucially, with low levels of public investment at a time when borrowing was at its cheapest for centuries.

Brexit sucked so much oxygen out of normal policymaking that there was scant room to think about more fundamental economic and social issues

It was against that background of economic and social stress that Cameron’s fateful decision before the 2015 election to promise a referendum on UK membership of the EU was made, in a bid to beat back a threat to the Tories from the Europhobic right, and then his even more fateful decision to hold the vote in 2016. Brexit was a consequence, not a cause, of Britain’s economic failures.

Brexit sucked so much oxygen out of normal policymaking and caused such a psychological breakdown in the governing party that there was scant room to think about, let alone deal with, more fundamental economic and social issues. For too long, policy and politics became ideological — are you a Brexit loyalist or a Remoaner? — rather than practical.

The rapid turnover of prime ministers and their cabinets caused by Brexit made it hard for businesses, whether domestic or foreign, to place long-term bets on what regulatory or economic environment they were likely to be facing.

This explains why neither Bell nor the other books under review devote much time or space to Brexit, seminal event though historians will consider it — and why neither Labour nor the other main political parties dwelt much on it during the general election campaign. Leaving the EU has proved to be an act of self-harm, but rejoining is not a high priority for either voters or policymakers.

Bell offers an array of policy ideas, but they come down to one overarching goal: to make “the next era of Britain’s long history a high investment one”. He documents how among rich countries over the past quarter century only Germany comes close to the UK’s consistently low levels of public investment, and that on private investment the UK’s performance has been the worst in the G7.

He describes his approach to changing this as “radical incrementalism”, by which he seems to mean that while there are no magic bullets, the important aim must be to be persistent and ambitious across a wide variety of fronts over many years: boosting housebuilding, investing in education, reforming planning rules and raising pension savings chief among them.

One thing we can hope is that, in government, Bell persuades his bosses to drop the Tory obsession with being photographed in hard hats and hi-viz jackets as if only manufacturing matters. As he points out, Britain’s present and future will depend far more on a wide range of services, including creative industries, science, finance, law and education, than on factories.

Sam Freedman, who also has a background as a civil servant and policy adviser, chiefly in education, takes a different approach in Failed State. Freedman focuses more on the system of government in the UK than on the policies it may or may not adopt. For, to use the titles of the three sections of his engagingly historical book, he sees government as being “Overloaded”, “Overpowered” and trapped in a self-destructive “Overdrive”.

If Bell’s overarching goal is investment, Freedman’s is decentralisation. This is not because he fetishises local decision-making or devolution as being somehow super-wise or more democratic, but because he sees the over-centralisation of decision-making in England, in particular, as having made government, especially strategic thinking, nigh on impossible.

Between 2010 and 2020, he says, local authorities’ “spending power” fell by 24 per cent as central grants were cut by 40 per cent and local taxes could not be raised enough to compensate. While local councils have to make competitive bids to secure government grants, central government “guidance” has reached absurd levels of detail, such as on weekly refuse collection or, in what Freedman says is the most ridiculous case he has found, for a “Chewing Gum Task Force” fund.

Some deeper study of the strengths and weaknesses of devolved government in Scotland, Wales and Northern Ireland could have strengthened this argument, but Freedman’s point is that as England makes up 84 per cent of the UK’s population and 87 per cent of its GDP, it is the centralisation of power in England that matters most.

He argues that in a process begun by Margaret Thatcher, central government has taken on too many powers for its own good. As a result, it has sought to dodge proper scrutiny of how it uses them, and has worsened matters by becoming in thrall to a modern 24-hour media cycle for which “random” announcements take far higher priority than intended.

Freedman argues that in a process begun by Margaret Thatcher, central government has taken on too many powers for its own good

Freedman is especially scathing about how UK prime ministers “have more responsibility than an American president but with a team smaller than a German city mayor” and get involved in “policy minutiae that should sit far below their level”, with the Treasury then having too much say over individual projects.

But, like other writers, Freedman also laments how the relationship between ministers and civil servants has broken down. This process has been much worsened by Brexit, leaving “a disempowered civil service, increasingly fearful of genuine impartiality or offering their own policy solutions”.

Dame Sue Gray, chief of staff to Labour leader Sir Keir Starmer, is likely to have her work cut out — although, as a highly experienced former civil servant, she should at least know where the problems lie. A big question will be whether what might be called the Thatcher tendency, when a would-be radical reformer decides she needs to centralise power further in order to deploy it, can be put into reverse for England under Starmer.

Tom Baldwin is another writer who has been close to the Labour party, in his case as director of communications under Miliband and, more recently, as author of a well-regarded biography of Starmer. His book, with Marc Stears, an academic at University College London who was Miliband’s speechwriter, also focuses on England. Their belief is that a series of “overinflated myths” about the country have changed it, in a bad way, and need to be set straight.

The book is cast as a travelogue, from Runnymede in Surrey, site of the signing of Magna Carta and from where the idea that the English invented liberty is examined, to the seafaring buccaneers of Plymouth, working-class Blackpool and supposedly anti-immigrant Wolverhampton, to the cosy establishment elite of Oxford. It is an enjoyable, sometimes compelling read.

The funny thing is that it already feels a bit outdated, going over the nostalgia-ridden arguments of the Brexit years, rather than what ails Britain now. Such a judgment may admittedly be to overrate the power of the political winds currently blowing: neither nostalgia nor the culture wars are over.

Bell’s hope is that Britain can become “normal” again, by which he partly means catching up with others on productivity, but also by making labour contracts more secure, equalising taxes on incomes and capital gains, taxing property wealth more equitably, and, above all, regaining seriousness. Paul Wallace, a journalist who wrote for the Independent and then The Economist (during my time as editor), expresses a similar hope in Tanked, which is due out later this summer.

Wallace’s “ten-point plan to save the economy” echoes Freedman’s calls for decentralisation and reducing the power of the Treasury, and Bell’s desire for a coherent business strategy directing public investment, rather than an industrial one, reflecting the importance of services. Most of all, though, Wallace’s plea is for what could be called common sense through stability: ending the churn of ever-changing ministers and half-baked policies, and bringing in some longer-term strategy. Let us hope.

Great Britain? How We Get Our Future Back by Torsten Bell The Bodley Head, £20, 304 pages

Failed State: Why Nothing Works and How We Fix It by Sam Freedman Pan Macmillan, £20, 368 pages

England: Seven Myths That Changed a Country — and How to Set Them Straight by Tom Baldwin and Marc Stears Bloomsbury, £22, 368 pages

Tanked: Why the British Economy is Failing and How to Fix It by Paul Wallace The Bridge Street Press, £25, 272 pages

Bill Emmott is a former editor of The Economist; his new book ‘Deterrence, Diplomacy and the Risk of Conflict over Taiwan’ will be published by IISS/Routledge on July 15

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