Britain is in decline, but she can still be saved with some tough love
magazine, beloved of smug Left-wing sophisticates on both sides of the Atlantic, recently ran a piece about Britain in decline, a phenomenon it appeared rather to relish. Although the patriotic feelings of some Britons will find such a study offensive, we delude ourselves if we think the description untrue. Not only is Britain in decline economically and as a power in the world, but the reasons for it are clear and largely self-inflicted.
Decline can be absolute as well as comparative. Britain is certainly in the latter compared with America, a country creating wealth more quickly than we are and whose ability to project its power far exceeds ours. However, we are in danger of regressing to a state of absolute decline, our wealth not increasing at all but depleting, our standard of living falling, and our clout in the world shrinking. We are not so far from that condition as we like to pretend.
For example, City analysts complain about the decline of the London Stock Exchange, and highlight the desire of new businesses who seek shareholders to be listed in New York rather than in Britain – or, for that matter, in Frankfurt, for decline is a European disease as well. No one pretends America is a deregulated paradise for business, but the regulatory burden is less than in the EU, which is increasingly crippled by its desire to impose rules on entrepreneurs. In Britain, as has been widely noted, our Government has had a pitiful record at exploiting our own departure from the EU by freeing ourselves of damaging rules.
The constant refrain that our productivity is poor compared with that of many of our rivals stems partly from this failure of government to create conditions in which business can flourish, not the least of which is an absurdly high corporation tax rate. But there are other factors. Workers themselves are disincentivised by high marginal tax rates and by an increasingly suffocating welfare state (another problem Britain still shares with Europe): the latter has managed to create a society with millions of otherwise capable people of working age being deemed “economically unproductive” and living at the expense of the taxpayer.
One of the challenges for the next government – which we must assume would be a Labour one – would be to get such people off benefits and back to work: a tall order given how many people vote Labour because they believe it comes with the supposedly wonderful promise of enhanced welfarism. Sir Keir Starmer, should he become prime minister, would not have to settle for managing decline. He could ensure proper welfare provision for those who need it, but end the free ride for those who don’t.
This would entail a great dose of what David Owen once called “tough love”, and undoing some of the morally and economically lethal consequences of the pandemic. Many people will find work stressful: but that stress does not mean they have a mental illness that requires a doctor to sign them off working at the taxpayers’ expense. Those who became used to working from home during Covid need to accept that, in the interests of economic progress and better productivity, they might need to go back to an office now.
And those not prepared to accept a return to a “normal” working environment must realise, if their employer won’t tolerate such an attitude, that the state simply can’t, and won’t, pay them to do nothing instead.
Management is not without blame either. It must ask whether it could get better results for shareholders by tightening up working practices, and whether their particular corporate culture and strategy are effective, streamlined and ready to enhance competitiveness. If not, it is doing little except tread water as its business goes further behind in the international race.
A new government must, if it is to reverse decline, tackle other more fundamental problems. By the standards of many of our leading competitors we are poor when it comes to investment decisions that advance innovation and give a competitive edge; the firms that are good at it are carrying rather too many others that simply don’t operate effectively.
Our opportunities for training are comparatively poor; and
Just because you find work stressful, that doesn’t mean you have a mental illness
AI is making it imperative that we make as many people as productive as possible
counter-cultural though it may be, we must re-think whether it is better for Britain, and for so many of the young people concerned, to encourage them to go to poor universities where they study courses that badly lack rigour; and do nothing to commend graduates to potential employers who need either vocational skills or seriously-trained intellectuals who can solve problems, think
strategically, and actually manage.
For decades we have talked about such things, and for decades we have done nothing. The development of artificial intelligence, which (it was reported last week) might strip up to eight million jobs out of our economy, is the latest factor making it imperative that we make as many people as productive as possible, and equip them to deal with the opportunities of the next industrial revolution.
We have already left this shamefully late, and all deserve a share of the blame. As things stand we are unequal to the challenge, simply waiting for the steamroller to come along, and in the eyes of the world, quickly becoming a force that no longer requires to be reckoned with.