No one cares, and no one’s listening.
Such is the attitude of the country to what was either the last or second-to-last fiscal event of this parliament. Nobody expected fireworks, but at the same time, nobody expected much at all.
It’s not that the public does not appreciate the need for fiscal tightness. The Truss incident and its consequences clearly demonstrated the danger of fiscal irresponsibility, and thousands felt serious financial pain as a direct result of her announcements. It’s a need understood by Labour, who have made clear that they will be adhering to the same rules binding Hunt’s hands.
But people may still find themselves wondering how a government that has been in charge for 14 years (come May)can be so helpless. This is but one more indicator of the recurring pattern of a government that has no control – over the economy, over immigration, over crime, and over the direction of the country as a whole.
This is not going to be any other election year. The Conservatives are aboard a speeding train with no breaks, headed towards a cliff called electoral decimation. Recent polling suggests they will be lucky to scrape together 120 seats.
Announcements such as the 2% cut to National Insurance would, maybe, cut through – but for the fact that workers on less than £30k will be worse off overall, due to frozen tax thresholds.
A 1% real-terms increase in public spending would, maybe, cut through – if it were not likely that the money will likely be raided to fix short-term spending shortfalls, as has happened before, and wasn’t being paid for by further cuts to public services on their last legs (to temporarily prop up others on their second-to-last legs).
The overall message of turning a corner, would, maybe cut through – GDP per capita hadn’t been declining for the last three years, and we didn’t live under the highest tax burden in 75 years, and living standards weren’t expected to remain below their 2019 level for the next five years.
Admittedly, there is not a lot Hunt could have done. His options are limited by the consequences of a sorry period of economic mismanagement that has let an ever-growing pile of structural problems fester and now rot away at the UK’s economy. We can’t build infrastructure, the housing crisis is accelerating, energy costs are only headed upwards, and investment as a proportion of GDP has been the lowest in the G7 for decades.
Is it any wonder productivity growth has never returned to its pre-2008 trend?
None of these specific issues are likely to sit front and centre in the electorate’s mind, but the outcomes they determine certainly are. A strong economy means rising wages and living standards and more funding available for public services. A weak one, as we have seen, is more at the mercy of economic shocks such as Covid and the Ukraine War, and, ultimately, undermines the social contract.
The budget is, therefore, a fiscal event that will barely register in the story of the Conservatives’ time in power. Things are carrying on unchanged. What GDP growth there is will largely be a function of the country’s unprecedented level of immigration. For ordinary people, it’s still squeeze, squeeze, squeeze from all angles. Contradictions abound and multiply, such as the pairing of the highest tax burden since WWII with public sector austerity, or a shortage of teachers alongside the highest-ever number of people going to university.
Tackling these will require a great deal of willpower and hard-thinking from any future government, but it must be done. Failing to do so will prove catastrophic.
Featured image: Wikimedia Commons
