It’s been a long time since there has been a tangible sense of economic hopefulness in Britain. During my lifetime, rare memorable moments of national optimism include Tony Blair’s landslide victory in 1997, the London Olympics in 2012 and — for hardened Brexiteers — the morning of June 24th 2016. But with the exception of these transient glimpses of positivity, the national mood has been one of increasing gloom. Polling conducted in a number of European countries by YouGov in June revealed that Brits are most likely to think badly of their country, with 80 per cent of us saying that the UK is in a “bad way” or “very bad way”. The majority of Britons, across all social classes, believe “Britain is broken.”

In 1997 the new Labour Government was elected on a tide of optimism, with the promise that “things can only get better.” A generation later our current Labour administration is governing on the premise that things will only get worse. Last week’s tax-raising, growth-shrinking budget deepened the sense of decay and decline, with financial forecasters predicting a decade of stagnation.

At July’s general election, British voters blamed the outgoing Conservative administration for the woeful state of the nation and, as night follows day, they will blame this Labour Government for failing to turn it around. At the next election, the Conservative Party, alongside Reform UK and the Liberal Democrats, will each run on a platform of ‘reversing the decline, ’restoring stability’ and ‘returning to growth.’

The causes of the problems are not primarily political or managerial but structural

But can any political party really turn things around? Britain’s problems are far more deep-seated than many people — and politicians — believe. Broken Britain cannot be fixed with a  fiscal tweak here or a productivity drive there, or indeed by any of the policies proffered by our major political parties this century.

Take just two of the major economic challenges facing the UK; the NHS and our national debt.

The parlous state of the National Health Service is one of the issues that is always near the top of voters’ concerns. Waiting lists are long and it is difficult to book a timely GP appointment. Despite its apparent poor performance, the NHS costs us more than ever, with an annual budget approaching £200bn. This figure will continue to grow as healthcare increasingly cannibalises other crucial areas of public investment such as defence, infrastructure and education.

Politicians rush to ‘solutions’ without properly identifying the cause of the problem. The Left blames “nasty Tory” cuts and offers more money. The right blames inefficiency (and then offers more money). But these are both superficial diagnoses that ignore the elephant in the room. The NHS is a victim of its own success. At its inception in the 1940s, life expectancy was 65. Just four per cent of the population was over the age of 85, a figure that has now tripled. In the 1940s, the NHS offered low-tech medical care for a small range of routine and emergency conditions; there were very few treatments available for cancers or for chronic illnesses such as diabetes, obesity and dementia. Now thanks to medical advances, thousands more diseases can be treated, sometimes over the course of decades and at a cost of hundreds of thousands of pounds per patient. These facts alone explain why health spending has become unaffordable and why the causes of the problems are not primarily political or managerial but structural. ‘Solutions’ such as more funding, better management, more outsourcing are just window dressing.

Or consider the “cost of living”, another issue that always polls highly on the list of public concerns. The “cost of living crisis” is a euphemism for high inflation, the phenomenon of constantly rising prices that puts pressure on household budgets and makes people feel that they are always becoming poorer. Since the 1970s, the UK has experienced historically unparalleled levels of inflation. A basket of goods that would have cost my grandmother £10 in 1973 cost me ten times more — £104 — in 2023, thanks to an average yearly inflation rate of 4.8 per cent over the last half century. By comparison, goods worth £10 in 1873 rose to a value of just £17.98 by 1923, an average annual inflation rate of just 1.2 per cent.

As history shows, high inflation is not an inevitability; it has been caused primarily by modern monetary policy, or quantitative easing (QE), where Governments borrow money from the future to pay for the present. Since 2008 alone, the Bank of England has flooded the economy with around £900bn of QE, reducing the value of money (raising inflation) and adding to the mountain of public debt, which is now so large that it costs taxpayers £100bn a year — £3700 per household — just to pay the interest. Unless we dramatically reduce the national debt — by growing the economy and spending less — inflation and interest payments will impoverish our children. Inflation is a serious issue, yet the ‘solutions’ proposed by mainstream politicians to control it – subsidizing energy costs, imposing price controls – will always fail because they do not address the true cause of the problem. If unaddressed, our debt to GDP ratio is forecast to double by 2060; goodness only knows what that will mean for inflation.

The United Kingdom has many other ‘sticky’ economic  problems, festering wounds that will not be healed by the sticking plaster approach of contemporary politics. From Britain’s birth rate crisis to our balance of trade deficit to the gaping hole of unfunded public sector pensions, nothing short of radical reform can rescue our economy from the abyss. 

All of these problems have potential solutions. We could reform health and social care funding to include an element of private insurance. We could reduce spending and shrink our national debt. We could thin the forest of regulation that all but prevents private sector investment in infrastructure. And we could reform our welfare system to support child rearing rather than worklessness.  None of these remedies would be easy to swallow, but they are the only antidote to inevitable decline. 

Yet there seems to be no British political party in 2024 that is willing both to face up to Britain’s prognosis and offer honest treatment.  In recent years, our political elites have had their heads in the sand, refusing to discuss topics such as immigration, family breakdown or the costs of net zero. Populists on the other hand have shown courage in acknowledging the concerns of ordinary people, but have taken the easy option, telling people what they want to hear. In its 2024 manifesto, Nigel Farage’s Reform Party promised to eradicate NHS waiting lists in two years, a commitment as unachievable as it is laughable. 

So why do our political leaders have their heads in the sand? There is certainly an element of ignorance; few in Parliament or the media understand the economic implications of a collapsing birth rate. But the main reason politicians avoid proposing unpopular policies is self-evident. In a democracy, popularity is the only show in town.

If our democracy is to survive, it must show itself capable of reversing Britain’s serious economic and demographic decline

Yet I’m not convinced that the great British public is as resistant to difficult choices as politicians tend to believe. During Covid, millions of people willingly isolated themselves before it became necessary to do so, in order to limit the spread of the pandemic. Brits voluntarily opened their homes to over 200 000 Ukrainian refugees despite the enormous personal and financial costs. The electorate will support difficult decisions if — and only if — they believe it’s necessary. 

Conversely, when the problem is widely misunderstood, voters will not back the right solution. This was perfectly illustrated during the 2017 general election campaign, when the negative public reaction to Theresa May’s manifesto pledge to fund social care costs through the value of an individual’s property ended her hopes of winning a majority. May put forward the most sensible proposal for funding social care in recent years yet it was dead on arrival because, by and large, the electorate wrongly believed social care was already free and that the Conservatives were pledging to introduce a charge. Keir Starmer clearly learned from this debacle and simply didn’t tell the public what he intended to do in government. When the voters don’t understand the challenge, no politician can sell the solution. 

And here lies the problem. For a long time now, politicians and the media have had very low expectations of what the public can understand. Government through soundbites and an over reliance on short social media posts to explain new policies have led to gaps in voters’ knowledge. Judging by my own experience of knocking on doors and corresponding with voters over the last five years, most people do not know that the state pension is paid for by current tax payers. Most people think that a low birth rate is a good thing. Many people think that the government should borrow more money. Most people thought Covid was many many times more deadly than it actually was. When the electorate doesn’t understand the problem, they will not vote for the right solution. No householder with a patch of damp will fork out for a new roof unless they’re convinced that there’s no other option to save their home. 

It’s time for a new type of political class to emerge. One that is neither squeamishly elitist, refusing to discuss the concerns of ordinary people, nor shamelessly populist, offering sugar-coated solutions that sound attractive but won’t work. Instead we need courageous political realists who will — like Churchill and Thatcher — tell the people how it is, explain the problems that we face and begin to roll the pitch for the tough but necessary measures that a future government must take. 

If our democracy is to survive, it must show itself capable of reversing Britain’s serious economic and demographic decline. Our only hope is for the electorate to be properly informed about the cause and scale of the problem. But who will rise to the challenge?