JHere are moments of transformation in politics where the opposition receives the political agenda. In the 1970s it was the power of unions and inflation that gave conservatives control of the narrative, just as after 2008 it was the aftermath of the financial crisis. Today, Covid and Brexit have combined to make the condition of people the number one political issue. The question of how to respond to this threatens to overwhelm a Conservative party split between its libertarian wing and its one-nation supporters and whose leader is clearly unfit for high office.
It is a new moment of transformation. The news last week that inflation in January hit a 30-year high of 5.5% to produce the biggest cut in the cost of living in 60 years is against the backdrop of a growing social crisis. The pressure translates into falling birth rates and stagnant or even falling life expectancies, hopelessly unfair life chances, disempowerment, justified post-Brexit economic pessimism and social neglect, all accompanied by a phenomenal private wealth. Labour, for the first time in 15 years, has the chance to dominate the agenda and do to their opponents what was once done to them.
“Leveling up” is the talismanic policy that brings it all together. Boris Johnson, for all his glaring shortcomings, had the wits to see this. It was not his alleged campaign genius or what deluded Europhobes believe to be the compelling case for Brexit that won the 2016 referendum and the 2019 general election. Rather, it was the massive disaffection of millions of voters from the working class vis-à-vis the status quo. There had to be change and the upgrade, the need for which is reinforced by the deadly injustice of Covid, represents his personal commitment to bringing change.
Except, as the recent white paper on the race to the top reveals in ways its drafters never imagined, this conservative party cannot deliver on its promises. The first two-thirds of this intellectually exciting but ultimately disappointing document are among the best government analyzes of Britain’s economic and social failures that I have read. It’s hard not to be impressed by the scrupulous gathering of devastating data, from slow commutes to work times to the catastrophically higher prevalence of obesity in Britain left behind – social science to their best. It recognizes that the many self-perpetuating causes of this cruel inequality require many self-perpetuating responses. If the basic framework it outlines is followed, it could result in, as the paper says, a £2.5billion generational increase in domestic output beyond any growth Britain could have expected otherwise. It’s a fabulous national prize – except the last third of the article shows how far off such a mobilization is and how thin the response planned by the government is.
Economic theory has for some time been moving away from the simplistic “market is magic” doctrines that have defined the last 40 years, but the opening chapter of the white paper marks the first decisive official break with this orthodoxy. The new consensus is to focus on how the state should mobilize and integrate the six capitals – human, financial, intangible, physical, institutional and social – which together constitute the “six-cylinder” model driving growth and, in particular, a catalyst for growth. serendipities available in densely populated cities. This is the “Medici effect”, so called because of the growth of the culturally and economically dynamic city-states of the Italian Renaissance. It is to combine these “agglomeration effects” with the right amounts of variable capital, brought together by autonomous and self-confident local leaders, which is the alchemy of self-amplified growth.
No great economy can be built on a weak society; no great society can be built with a weak economy – and both require inspired local leadership. None of this is rocket science, although it is a breakthrough for a Conservative government, but it does require system change.
Chapter two calls just that. He is scathing about the consequences of too much political centralization, the constant chopping and changing of Westminster-inspired policies – 40 policies between 1975 and 2015 to promote regional growth – and the bewildering plethora of at least 100 mini-funds. and subscale pots. the money for which local authorities have to bid, often with completely different criteria.
Instead, he argues that there must be consistency over time, massive rationalization of all variable funds, and national consensus on the interconnected “missions” behind which the country can rally.
It proposes 12, ranging from a more equitable distribution of the national research and development budget to objectives for improving life expectancy. Progress should be regularly and made public. Above all, by 2030, every citizen must have the opportunity to be led by a local mayor and empowered to carry out these missions.
So far so good, so you hit the politics chapter. Rishi Sunak’s stifling treasury veto is all too obvious. Imagination and verve disappear. Instead of rationalizing all these money-spinners, the white paper brags about it. Building UK investment and infrastructure banks to support local business? Forget it. A serious investment in transport so that journey times and frequencies match those of London? A joke. Search in vain for serious investments in social infrastructure. New or repurposed institutions that could be decentralized to support the growth model of six-cylinder capitals in all of our localities? are conspicuous by their absence. The goal of creating a globally competitive city in each of our regions is a noble one – but on Sunak’s corpse. Nor is it recognized that British capitalism itself badly needs a makeover if it is to play its part.
This is where Labor could pick up the thread. The country is ready to rally to a real race to the top.
Money? Issue 100-year or even perpetual bonds to fund vital capital expenditures. Create the institutions that will work with newly empowered mayors to revitalize our economy and society. Around the road to net zero, England from the Tyne to the Humber could reindustrialise around the manufacture of wind farms, turbines, electric cars and batteries.
Come back to the single market and export these green manufactured products to the EU. The economic outlook for the next few years is dire: shrinking labor force, shrinking trade, shrinking demand and stagnating investment, as well as the risk of falling property prices as interest rates rise. Against this backdrop, Britain cannot leave that potential £2.5bn of extra production begging. The narrative, fundamental setting and price are there for the taking. All it takes is the nerve and the vision to get there.