Britain’s narrative of hope

Anyone visiting from Mars over the Christmas break might have pondered on what a ghastly place Britain has become, and want to head straight back to the red planet.

The headlines have screamed of homelessness, people sleeping on the streets, the mendacity of blue passports and how NHS waiting rooms are crammed with lower-income Britons.

Certainly, there are great inequalities that shame our society. If Jeff Fairburn, the fat cat boss at housebuilder Persimmon who is set for a £130m pay cheque, and his colleagues were to donate their bonuses to housing charities there would be no excuse for anyone to sleep rough.

Similarly, it is deeply disturbing that it is the poorest in our society who, in an age of extraordinary low interest rates, end up paying usurious borrowing costs.

Meanwhile, the billionaire owners of Toys R Us and care home Four Seasons play havoc with the livelihoods and pensions of ordinary people.

These extremes of capitalism besmirch its reputation. But we shouldn’t forget free markets also have delivered enormous prosperity. Reading some of the accounts of 2017 one might think that as a result of the referendum Britain has dipped back into Dickensian poverty.

Indeed, as someone who has been an economic writer since the mid-1970s, I have never felt so disenchanted with the way in which data is often misinterpreted to fit a political agenda.

Suffice it to say these pages and this paper in general tends to accentuate the positive when it comes to the economy. It isn’t that difficult. Take the labour market figures for instance. At 4.3pc of the workforce the unemployment rate in Britain is at its lowest level since 1975. Indeed, in the last year alone, 375,000 new jobs have been created.

The familiar argument of critics is that many of these jobs are poorly paid and are in the ‘ gig economy.’ Drill down into the data and you find that as the labour market has tightened, people in part-time work or on zero-hour contracts have moved across into full-time jobs. The gig economy can be a stepping stone to better work.

yes, household incomes have been squeezed by the financial crisis and more recently by the devaluation of sterling which followed Brexit. But the big squeeze is not as ghastly as one might imagine from the reporting. In cash terms earnings rose at 2.5pc year on year according to the office for national Statistics.

Admittedly, prices also climbed by 3pc, largely as a result of Brexit squeezing some people’s incomes. But the distribution of impact is far from equal.

Home buyers, for instance, have received a huge benefit from low interest rates. Meanwhile, the grocers battling strong price competition from the likes of Lidl and Aldi have kept a lid on food prices, which are more important to the less well-off.

It is the buyers of electronic luxuries and drivers of oversized polluting cars who likely are the hardest hit.

Getting more people in work also has beneficial fiscal effects. The latest Government data shows that HMRC’s take from income taxes is running ahead of expectations.

This should not be a big surprise – the more people in work, the greater the income that is generated and the richer the exchequer becomes.

even corporate taxes, which have shown some softness as a result of cuts in the headline rate, have started to perk up again. This means that the country will borrow less this year than forecast.

MANY of the glass half-full developments are unreported or under-reported because of a determination by some to prove Brexit a disaster.

It is often noted, for instance, that after several years in which the UK was among the fastest-growing advanced economies in the world it has dropped towards the bottom of the league table.

That ignores the fact that while much of the eurozone struggled from 2010, UK output and jobs expanded and no one has managed to override the economic cycle.

The third- quarter output data demonstrated the rebalancing of the UK economy from household spending to manufacturing, business investment and trade is under way. Didn’t see many headlines or columns about that.

But why should anyone allow the facts to get in the way of a narrative of nasties?