Chancellor Of The Exchequer Jeremy Hunt poses with members of the Treasury staff as he leaves 11 Downing Street to deliver the Budget on March 6, 2024. Picture Credit: Peter Nicholls/Getty Images

Crisis, what crisis?

The Spring Budget was a shameless manifesto of complacency and managed decline

Artillery Row

Dame Eleanor Laing presided over a raucous chamber — which was perhaps unsurprising in a Spring budget consisting of shameless spin and electioneering soundbites from the Chancellor, Jeremy Hunt. Labour was given plenty to roar about, with constant jabs over tax cuts and spending, and some low blows about Labour Deputy Leader Angela Rayner’s sale of her council home. At one point the Deputy Speaker had to threaten to throw an MP out. The atmosphere can be summarised by one of her more memorable remarks: “Could you please shout more quietly?”

The Chancellor’s performance was more than merely complacent, it felt shamelessly disingenuous

But beneath the usual parliamentary Punch and Judy, and even the simmering pre-election tension, was real anger from the opposition benches, and not over a few cheap shots. There was no acknowledgement from Jeremy Hunt that the country was in trouble economically, or that people were struggling in unprecedented ways. Rather, airily cherry picked figures and technical wins papered over this grim picture with improbable claims to have reduced poverty and presided over higher growth than European competitors. These assertions were, as viewers who hung around for Keir Starmer’s response would shortly learn, at best an incredibly selective version of the truth, and at worst actively misleading distortions of it.

Starmer took to his feet, and for all that performative anger is the normal mode of opposition leaders down the ages, on this occasion his rage seemed rawer and unfeigned. One-liners were fired out shotgun style, with the hopes that they’d stick, but his strongest weapon was simply being in the right. As he correctly pointed out, despite tax cuts being loudly trumpeted by Hunt, British people will have “the highest tax burden in 70 years”. Claims that we had outperformed peers fall apart when you consider growth in per capita terms (as in, how much better off individuals are over time, not the growth of the economy over all.) 

The Chancellor’s performance was more than merely complacent, it felt shamelessly disingenuous. It would be one thing to sweep inconvenient facts under the rug, but Hunt explicitly called for higher per capita growth, for economic growth not based on migration, and for lower taxes, whilst boasting of a record that, as Starmer pointed out, included growth in fact driven by “record levels of migration”, which grew the economy overall whilst seeing the “longest period of stagnation Britain has seen since 1955” in per capita terms.

Besides the hypersonic levels of spin, almost as notable was what was not mentioned. Industrial policy, securing our supply chains, energy security and costs, infrastructure, the fiscal catastrophe in local government, and, most shockingly of all, housing, were nearly entirely missing from the budget. “Crisis, what crisis?” as Starmer put it. 

The problem for the government, apart from the demands of a looming election, is that the potential economic strategies available to them are seen as risky, discredited or impossible. Boris Johnson’s high spending, populist approach, with an emphasis on investment and correcting inequality, has been made far harder by economic conditions, especially for a party reluctant to be seen to raise taxes. Meanwhile an approach based on deregulation, stimulating growth and encouraging housebuilding has been abandoned after the catastrophe of Liz Truss. Hence why every other word out of Hunt’s mouth was either “OBR” (Office for Budgetary Responsibility) or “migration”. Having given up on strategy, the Tories are resorting to two familiar and battle-tested tactics — claims of relative economic competence and the culture war. They’ve pivoted back to focusing on attacking Labour as profligate, but this time with a side order of accusing them of being crazed open borders eco-fanatics. 

The threadbare flag-waving of the Tory right is a thin veil for a parliamentary party thoroughly wedded to individualism

You can see why this seems like the only move, potentially months out from an election, but it’s an approach that has stopped working. The government has simply been in power, and overseen mass migration and economic stagnation, for too long for fears of Labour to feel authentic compared to a known record of failure, decline and repeatedly broken promises.

It’s tempting to play the game of “what the Tories should do instead” but the problem is not one of messaging or gamesmanship, but ideology. Hunt’s one reference to the grim economy he has presided over as “economic headwinds” betrayed the flaw in the government’s philosophy — they are victims of an economic naturalistic fallacy, the idea that problems of inflation, productivity, wage stagnation, rising food and energy costs and housing shortages, are just things that happen, externalities that fall from the sky, gifts of the unknowable free market gods. Hunt presented the role of Chancellor as little more than a glorified accountant, whose job was to move modest packets of money around, and fine tune laws and processes to smooth the way for a magically boundless flood of foreign investment. 

You can make many criticisms of Labour, and its own very thin plans for governing the country, but at least the words “industrial strategy” have passed Keir Starmer’s lips. He seems to understand, at least in principle, that government has the ability and a duty to build economic resilience, shore up the material basis of the economy by securing energy and food, and create domestic supply chains capable of surviving global events and responding to crises. 

It would be impossible for an opposition leader to look bad in the face of such a flimsy and cynical budget, and Starmer did better than that. But whilst he recognises the scale of the problem, he is light on the specifics of his answer. It’s incredibly unclear how Labour can hope to revive the economy whilst it remains committed to Net Zero by 2030, or deal with the housing and cost of living crisis when it has no clear policy or target for reducing migration. 

The scale of the problems facing the country are tremendous, and now require solutions of proportionate boldness. Massive investment in Britain’s declining cities and regions was the promise of Levelling Up — instead they have seen table scraps. 19 councils have approached the government for exceptional financial assistance, Nottingham and Birmingham councils have declared themselves effectively bankrupt. 

We’re often told we’re experiencing labour shortages, and historically low unemployment (3.8 per cent), but in real terms over 20 per cent of the working age population is economically inactive. Much of that population is in receipt of benefits, such as the now six million people claiming disability, a rise of over two million over the past 20 years. And despite claims of Tory economic rigour and welfare reform, more than half of households in 2023 (54.2 per cent, comprising over 36 million people) — paid less tax than they received in benefits. 

The threadbare flag-waving of the Tory right is a thin veil for a parliamentary party thoroughly wedded to individualism. On this government’s watch, social trust has declined, the bonds of solidarity have dissolved, and free riders, from dubious benefits claimants to rentier capitalists living off of passive income, have relentlessly exploited the system. 

The task of rethinking and renewing the British state and economy is too important to be left to a single party

The challenge of reversing this situation is formidable, and is spiritual and social as much as economic and political. The start of restoring trust is reviving democracy, and bringing decisions closer to ordinary people. The collapse of local government is just the end of a long road of technocratic rule from Whitehall, and power, especially tax raising power, must be devolved to regions and cities evenly and consistently — not piecemeal and by treasury largesse. 

No less vital are forms of work that are dignified and stable. This means, necessarily, both a revival of manufacturing and industry, as well as the professionalisation of many trades and skilled work, as is typical in countries like Germany. Not only would this reknit the social fabric and provide much-needed certainty to families and workers, but it is crucial to unlocking a higher wage economy in which fewer families are net dependents on the state. 

Any hope of giving people dignified lives, and reviving social cohesion, is impossible so long as housing is scarce, expensive and cramped. It must be made easier to build homes, but they must also be larger, better quality, and attractive. Necessarily, more housing needs to be built in the areas people want to live and work in — namely London and the South East. But as well as regulating supply, demand must be managed by creating more jobs across the country, limiting migration numbers, and making it harder for overseas buyers to purchase housing. 

All of these necessary, urgent areas of policy require an approach that no major party has thus far countenanced. To be sold politically, and made to work in practice, requires a patriotic, confident political movement. Equally, it demands a rethinking of the role of the British state away from a managerial colossus, and into something both leaner and more interventionist, with much of the welfare state devolved locally, whilst large scale infrastructure projects, industrial strategy, security and energy policy take centre stage at the national level. 

Needless to say, it is far too late for Sunak’s government to take such an approach now. It is not too late, however, for a potential Labour government, or a future Tory opposition. The task of rethinking and renewing the British state and economy is too important to be left to a single party, or even Westminster and Whitehall as a whole. If Keir Starmer wishes to make his bold and truthful response to today’s budget a real governing project, it must be on a grander scale than any since Thatcher’s. 

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