Part the Second

By Michael Patrick O’Leary

Declinism

Last week, I wrote that for decades there had been a thriving literary genre consisting of works that portrayed Britain as the sick man of Europe (as the Ottoman Empire used to be known) and, indeed, in poor health globally. Much of this rhetoric came from the right but there were also voices on the left. Tom Nairn, who died on January 21 at the age of 90, was one of those voices. Nairn was a Scot who graduated in philosophy from the University of Edinburgh and , thanks to a British Council scholarship, spent a year at the Scuola Normale Superiore in Pisa, where he learned Italian, discovered Marxism and explored the writings of Antonio Gramsci.

Together with Perry Anderson at the New Left Review he developed a thesis to explain why Britain did not develop in a “normal” way. “The decline, mediocrity and archaism are also related to something else, less visible. As well as the socio-economic peculiarities of the United Kingdom, one should take into account its distinctive state. What seems to be happening in the new phase of British problems is that a long-standing illness of society is turning, rapidly and unmistakably, into a crisis of the state. For the first time outside the experience of war, ‘crisis’ has grown sufficiently acute to involve and threaten the form of state power.”

Diminishing Returns

Since 1948, spending power has increased in the UK, doubling every 30 years. It was about twice as high in 1978 as in 1948. It was close to doubling again by 2008, before the financial crisis intervened. Since then, stagnation.

The Resolution Foundation notes that average real earnings have fallen by 7% since a year ago and predicts that earnings will take four or five years to recover to the levels of January 2022. A quarter of the people the foundation surveyed said they couldn’t afford regular savings of £10 a month, or to spend small sums on a night out, or to replace electrical goods, or to turn on the heating when they were cold.

Had the pre-banking crisis trend continued, the typical Brit would by now be 40% better off than they are now. Instead, they are slipping ever backwards. What Britain has instead is a broken polity and people who cannot afford to heat their homes. Taxes are high but public services are appallingly bad. Voters have lost trust in the police (who are not investigating crimes but adding to them by raping and murdering) , the NHS, public utilities, ability to renew a passport or driving licence, the freedom to get from one place to another on time without paying a fortune and suffering extreme discomfort.

Causes of Decline

The current government doggedly attributes the sorry state of the country to the pandemic and the Ukraine war, which they claim have led to inflation throughout the world. Critics of the regime look elsewhere and put the blame on incompetent response to the 2008 financial crisis, the austerity policies of the Cameron government and Brexit. There is also the matter of ministers spending all their psychic energy on the problems of a hopelessly fragmented, fractious and fissiparous Tory party rather than attending to the needs of the nation.

Veteran political commentator Nick Cohen makes a good point in his blog Writing from London: “It’s not wholly the fault of a succession of failed prime ministers that Ireland, a nation the British once patronized as a rural backwater, has surpassed it.” Ireland was Britain’s first colony and now it is in better health than its former master. Being part of the EU has something to do with Ireland’s success. Astra Zeneca is planning to build a new state-of-the-art manufacturing plant in Blanchardstown in Ireland rather than in Macclesfield, citing Britain’s “discouraging” tax regime.

Those failed prime ministers (I have lost count) will not be able to convince voters that they are blameless for what has happened during the 13 years of their rule. The tendency is to blame someone else including a Labour Party that has had no control over events.

Brexit

I exhausted myself a couple of years ago writing about the dangers of Brexit. I was one of the doom mongers, the Remoaners. I used to write a column on Europe for two Sri Lankan business magazines. Looking back at those columns, I am not surprised to find that all of them were critical of the EU. I was not blind to the corruption, the undemocratic lack of accountability, the arrogance. However, it was clearly the height of folly for the UK to withdraw from a successful trading bloc without having a plan.

Liz Truss made a terrible hash of being prime minister but she is now back claiming that the current regime under Rishi Sunak is stifling growth by not cutting taxes. This ignores the obvious fact that growth has been retarded by willingly stepping out of the nearest (and powerful and influential and successful) trading bloc and failing to get better trade deals elsewhere. The trade deal that she negotiated with Australia did not go any way to replace the beneficial relationship with the EU. The minister, George Eustace, who negotiated it has recently said it was useless.

There were Leavers and Remainers, now we have Regretters. A poll by Savanta, found that. of people who voted to leave the bloc in 2016, 30% said they wanted the relationship with the EU to be closer. Of those surveyed, 29% believe Brexit is the primary reason for staff shortages in the UK, impacting a range of sectors like the National Health Service and agriculture. The proportion of respondents said Brexit was partly to blame for gaps in the labour market was 34%.

There are countless convincing reports that conclude that Brexit was a disaster for the UK economy. The OBR (Office for Budget Responsibility) has predicted that, over the 15 years from 2016, Brexit will reduce the UK’s GDP per capita by 4%. The Irish think tank the ESRI (Economic and Social Research Institute) released a report on 19 October 2022 showing reductions in trade from the UK to the EU reduced by 16% and trade from the EU to UK by 20%. Brexit has led to a significant decline in trade with the UK in almost all cases although by varying magnitudes. For most countries across the EU, the size of the impact is broadly similar for both export and imports. Ireland stands out as having had a particularly large reduction in imports from the UK relative to its other international trade patterns. Exports from Ireland to the UK, on the other hand, continue to perform in line with those of other markets with no notable impact to date of Brexit on the total levels traded.

Households across the UK are suffering the worst living standards since the 1950s.The think tank UK in a Changing Europe (UKICE) said trade barriers introduced after leaving the EU had led to a 6% increase in UK food prices between December 2019 and September 2021. Energy companies have been forcing their way into people’s homes to install pre-payment meters. The courts have declared this illegal. Energy companies have declared record-breaking, obscene profits but the government argues against them paying more tax while elderly and disabled people suffer from hypothermia because they cannot pay their extortionate bills. What would Dickens make of this?

The LSE ( London School of Economics) Centre for Economic Performance found that a “clear and robust impact of Brexit-induced trade frictions” had led to the increase in prices. It said Covid-19 could be ruled out as an influencing factor because there was a correlation between price increases and the share of EU imports for a particular product.

Figures from the accountancy firm UHY Hacker Young show that UK businesses and consumers paid £4.8bn in customs duties on imported goods last year, a new record, and up from £2.9bn a year earlier.

A recent meeting took place to discuss Brexit. The highly unusual cross-party nature of the gathering – and the seniority of those who agreed to attend – reflects a growing acceptance among politicians in the two main parties, Remainers and Leavers, as well as business leaders and civil servants, that Brexit in its current form is damaging the UK economy and reducing its strategic influence in the world.

I Deny that I Am in Denial

Jeremy Hunt, the Chancellor, declared that the UK’s new long-term economic plan is “necessitated, energized and made possible” by post-Brexit freedoms. We should face the future with bright eyes and confident smiles, because “declinism about Britain is just wrong“.

What planet is he living on? Adam Tooze summarized the argument against Hunt’s delusions: “For most of the last 60 years when critics have spoken of decline, they have tended to exaggerate the extent of the malaise. GDP and per capita income actually continued to increase. In the 1970s they did so quite buoyantly. By contrast, since 2009 there is nothing exaggerated about declinist talk. For a significant part of the British population real incomes actually fell. The shocking novelty lies in the fact that decline and stagnation are not figures of speech, but a literal reality.”

Private Affluence and Public Squalor

I am not an economist but I have seen this decline in the streets and in the shops – the pound shops, the charity shops, the food banks, the pawnbrokers. There were legions of homeless people sleeping in the street in freezing December because the government is too incompetent to provide enough affordable housing. Data collated by multi-agency database the Combined Homelessness And Information Network (Chain) and published by the Greater London Authority showed a 23% increase in the number of people permanently living on the streets in the third quarter of the 2020-21 financial year, compared to between July and September. There was also a 10% rise in the number of people who were seen occasionally sleeping rough but were not deemed to be a living on the streets.

I wrote in these pages how the elegant city of Bath Spa is so accustomed to homelessness that there is a statue of a homeless man and his dog. Food banks are struggling to meet record demand from people who are in work – including NHS staff and teachers. More than 80% of people running food banks reported supporting a significant number of people using them for the first time, while many said demand was growing among pensioners and families with babies.

Rishi Sunak helped out at a soup kitchen and asked a client if he was interest in a career in financial services. The man said he was interested in finding a home. Sunak’s wife has a pair of slippers designed by JW Anderson that cost £570.

People are dumping old clothes in the streets and I have seen with my own eyes seemingly respectable people picking through them. People are dumping old furniture and soiled mattresses on the street. Everybody looks drab, shabby and tired. Every second person you see is grotesquely obese and struggling to walk. Nearly two-thirds of adults in England are overweight, according to new data from a government public health agency. There are 19 district local authorities where more than 70% of adults are overweight or obese. Copeland, Cumbria, has the most overweight people in England – 75.9% of Copeland’s population are overweight or obese. Obesity is a disease of poverty not affluence. Many people in London look unhealthy and there are countless wheelchairs.

Today’s high taxes are not purchasing quality public services. It is a Kafkaesque nightmare embarking on a train journey. People are carrying Pringle cartons to pee into because the toilets are shut. People are dying while waiting hours for an ambulance to arrive. Those who are lucky enough to get to hospital wait for hours on a trolley in a corridor. In a declining country, even high taxes cannot provide sufficient funds to improve public services or reduce the national debt.

The water companies are giving out huge dividends to their foreign shareholders but cannot control the leaky system and the rivers and beaches are full of shit.JK Galbraith wrote of “private opulence and public squalor.” That is Britain today and successive Tory governments, Truss’s mayfly regime being the most egregious, have pursued policies which give to the already rich and take from, not just the poor, but the middle class. They will surely pay the price for rising public anger.