This article is taken from the March 2025 issue of The Critic. To get the full magazine why not subscribe? Right now we’re offering five issues for just £10.
Good opening sentences can disarm readers. Jon Moynihan starts his two-volume blockbuster, on Return to Growth: How to Fix the Economy, with a caveat. He tells us, “I am not an economist”, elaborating a little later in these terms, “On occasion, in both books, I slip into economists’ language, talking as though I am an economist. I am not.”
Whether, on balance, his volumes deserve the Nobel Prize for economics is moot. But Lord Moynihan certainly deserves a prize for something. For much of the twenty-first century the public debate on economic policy has sidelined growth at the expense of two sets of initials, DEI and ESG, and their associated agendas of wokery and greenery.
Moynihan has the chutzpah to remind his readers that “more stuff” (to use one of his phrases) makes people richer and is mostly beneficial.
The last two centuries were transformational. The growth of output per head was more or less continuous, despite the wars which disfigured the history of Britain and the world. A productivity gain of 2 per cent a year was typical. That may not sound much, but 2 per cent a year compounds, causing output and income per head to rise by seven times over 100 years and almost 50 times in two centuries.
But growth has come to a virtual halt. In the 15 years to 2023 whole-economy output per worker went up by 0.4 per cent a year, according to the Office for National Statistics. That is still progress of a sort, but in a century it adds only about a half to existing levels of output per worker.
Like Jon Moynihan, young workers have noticed they have “less stuff” than their parents
The UK’s total output continued to rise in the 15 years to 2023, with real GDP up in that period by almost 20 per cent. But, since the contribution from extra productivity was so small, the extra output was mostly attributable to substantial growth in employment, the bulk of it going to immigrants.
Nowadays foreign-born people constitute about a fifth of the working population, whereas in the first decade of the century the proportion was usually under 10 per cent. In this country today, migrant men are more likely to be employed than UK-born men.
Moynihan is far from being the first person to notice the UK’s recent miserable performance. One group which has noticed the productivity stagnation is, unsurprisingly, the UK-born working class. Not only do the low-paid have to compete with immigrants in the labour market, but the younger members of the working class are also very much aware that they have “less stuff” than their parents at comparable points in their careers.
It has become more difficult to climb onto the housing ladder than it was in the 1980s and 1990s, while car ownership is lower among people in their late teens and twenties than it was then. Significant material setbacks are the practical meaning of the official productivity data.
The political ramifications have been huge. The 2016 Brexit referendum result reflected, above all, the votes of working-class people who had not been to university. Middle-class graduates by a large majority wanted the UK to stay in the EU. The working-class leavers hoped that Brexit would enable the UK to control its own borders and to limit immigration.
The Red Wall constituencies, with their overwhelmingly working-class electorates, backed the Conservatives in the 2019 general election under the mistaken impression that Boris Johnson was on their side; they abandoned the Conservatives in the 2024 election, as they realised that many Conservative MPs were modernising, woke and green, and despised them.
The problem for Labour and the Conservatives today is that both have lost the “Red Wall” vote, which is perhaps 20 per cent of the electorate and constitutes the core support for Reform. In the latest opinion poll, for YouGov and The Times, Labour is on 27 per cent, Reform 23 per cent and the Conservatives 22 per cent. Can the two traditional main parties reduce Reform’s share? If so, how?
Politicians in all political parties can learn from Moynihan’s work.
No one can escape its central truth: much has gone wrong economically in the UK over the last 15 years. A standard line is that “productivity growth stopped after the Great Financial Crisis”, where the phrasing more than hints that capitalism and its financial system were at fault.
But an alternative rendering of the facts is possible. Productivity growth has stopped since the 2008 Climate Change Act, the 2010 Equality Act and the start of a major regulatory attack on the City of London.
The “E” in DEI might once have stood for greater equality of income, but the current dominant interpretation is greater equality of gender and ethnic outcomes. Red Wall voters are indifferent to that, and care hardly a fig for diversity and inclusiveness in the abstract, or for the environment, “society” and governance. They just want more stuff.
