The one critical issue that was continually ignored throughout election campaign was the economy
CALL it what you will – the elephant in the room, the dog that didn’t bark, whatever; there was one really rather crucial issue which didn’t much figure in the election debate – the economy.
Instead, the campaign focused almost entirely on quality of leadership (which on all sides seemed depressingly lacking), security, public services, social care and who might be best to manage Brexit.
Even on exiting the EU, there was little instructive discussion of where the process might end, and what its impact on jobs and business might be.
If seriously contemplating “no deal” as a negotiating tool for securing a decent one, you do at least need a credible plan for such an outcome. If there is such a plan, we heard nothing about it in the campaign.
Meanwhile, the still deplorable state of the public finances, how to get them back on track, and the myriad challenges facing the country on competitiveness, productivity, trade and rapid technological change hardly got a look in.
In the end the economy is everything, the bedrock on which all else is built. An unstable economy that fails to deliver the rising living standards citizens expect will ultimately floor even the strongest of political and social constructs.
Yet for the last month or more, it has been the issue that dares not speak its name – like the mad aunt locked in the attic, a presence occasionally heard but politely ignored.
In a nation grown weary of austerity and desperate for answers, the nitty gritty of what lies ahead was barely discussed in any meaningful or illuminating sense.
Discuss it, unfortunately, we must. Start with the immediate challenges. The government has become used to boasting of the strongest-growing economy in the G7, yet in the first quarter of this year, Britain was joint bottom of the pack.
Rising inflation is squeezing real wage growth, threatening a marked slowdown in consumer spending; the savings rate is down to virtually zero; the housing market seems to be grinding to a halt, not just in central London, but increasingly further afield too; and anecdotal evidence is of Brexit uncertainty finally beginning to hit home in lower business investment.
What’s more, there seems to be worryingly little positive impact from the weaker pound on net trade. Imports leapt by 2.7pc in the first quarter, while exports fell by 1.6pc.
In terms of the economic boost normally provided by devaluation, the post-referendum hit to sterling seems to have been one of the least successful in British history.
Meanwhile, the rest of Europe seems to be rebounding strongly, which should provide some degree of support. It would be virtually unprecedented for the UK to fall into recession while all around are growing.
Even so, it would be most unwise to count on the European crutch for long. The European economy is enjoying something of a sweet spot – a confluence of profligate European Central Bank money printing, fiscal easing, credit expansion and an advantageous euro/dollar exchange rate.
But it’s unlikely to last. ECB tightening later this year, under pressure from a plainly overheating German economy, threatens to bring the still unaddressed deficiencies at the heart of European Monetary Union crashing back centre stage, potentially plunging the region into renewed crisis.
Things scarcely look much better further afield. The fiscal stimulus promised by US President Donald Trump seems to be fast running into the sand, stymied by Congressional opposition and an increasingly dysfunctional White House.
Lead indicators from the financial markets – commodity prices and bond yields – are beginning to signal a pronounced US slowdown. China’s monumental credit bubble is an accident waiting to happen.
To these immediate threats we must add the enormous structural challenges, from ageing populations, to the disruptive technologies of the internet, and automation and artificial intelligence.
According to analysis by the Bank of England, some 15 million jobs, or almost half of those employed in the UK, are at risk from the “second machine age”.
Yet in an election defined by almost obsessive analysis of the latest polling data, virtually no reference was made to the profound changes happening under our very noses.
No vision was offered, still less a credible plan for confronting them, or exploiting the tremendous economic opportunities that with the right, pro-business, policies they might offer.
The Conservative Party manifesto did admittedly tangentially tiptoe into the ageing issue with proposals for dealing with the rising costs of social care, but only to beat a hasty retreat at the first sign of grapeshot.
Are all these things just too difficult to confront?
Or are we led by second-raters with little in the way of plausible solutions?
We are about to find out. (© Daily Telegraph, London)