Building back better

Building back better

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As the country slowly moves out of the COVID crisis, the Government faces unique challenges. Now more than ever ‘building back better’ must become more than just a slogan.

            As we tentatively look towards a post-COVID Britain, there is an acute sense that it cannot be business as usual. The challenges are immense: thousands are dead, the economy is in tatters, millions suffer in ever-lengthening NHS waiting lists, political partisanship has divided families, and the climate emergency gets worse with every passing year. However, addressing these challenges requires significant investment from a government that has touted highly ambitious promises since it took office in 2019. So far, that investment has been lacking.

The government, which has ostensibly been running a wartime economy since early last year, has spent over £400 Billion in business support and furlough measures. National debt now stands at 106% of the UK’s GDP. This has apparently rattled the Chancellor Rishi Sunak, who now looks to tighten belts at precisely the wrong time. A cautionary tale Sunak would do well to heed is observable in the response to the financial crisis of 2008. When the Cameron government looked to tackle the ensuing recession in 2010, it did so by slashing public spending and imposing austerity measures, all in the service of that holy grail of Conservative economics: balancing the budget. The fruits of that endeavour lie scattered around us. Household debt has skyrocketed, average wages only reached levels comparable to pre-2008 last year, budgets for social care, policing, and welfare have still not recovered in real terms and a generation of young people are saddled with ballooning university debt. Austerity was meant to secure the public’s finances, what it did was hamstring vital public services and widen inequality across the board.

It is essential that the mistakes made in the wake of the Great Recession are not repeated as we reel from a second global catastrophe in as many decades. The pandemic has laid bare the gaping holes in the fabric of British society, and urgent remedial action is required now. Naysayers will point to the deficit, howling that the public purse must be snapped shut now that the immediate crisis is reaching a conclusion. They will argue that only deregulation and austerity – or ‘cutting red tape’ and ‘personal responsibility’ – will chart a path to prosperity. We’ve heard that one before. Meanwhile, governments around the world are waking up to the idea that to stimulate the economy, the state has to invest in the society that underpins it. Even the Americans, who have worshipped at the altar of Hayekian economics for the last half century, are advancing legislation that would see $3.5 Trillion in stimulus and infrastructure spending. It is essential that the government holds its nerve and invests ambitiously in the pandemic recovery, taking the opportunity to rebuild and augment the public sector hollowed out by austerity, and plot a path towards reshaping the economy towards a greener future.

The Chancellor’s inclinations towards fiscal frugality stand in sharp contrast to the ‘sunlit uplands’ pledged by the Prime Minister. Indeed, Boris Johnson has consistently promised that ‘building back better’ is at the heart of his government’s plan for revitalising the COVID-stricken economy. Whilst it is common knowledge that the Prime Minister has a penchant for bombastic language and a loose relationship with concrete policy proposals, he is surely aware that he has to produce something soon. However, he is also aware that the fiscal liberalism inferred from these pledges does not sit easy with many members of his party. Though there may be enthusiastic champions of a more interventionist government among the ranks of the newly minted Northern cohort of the Conservative party, the old guard in the South and Home Counties are not so enthused by this new-look Toryism. Delivering on his promises whilst keeping the jackals on the backbenches at bay will be a difficult task for Johnson, not least as he also has an early general election on his mind.

It will take a great deal of political courage to make the changes necessary to ensure that ‘building back better’ is not just a slogan. And yet Johnson has an opportunity few leaders are given: a chance to truly redraft the basic assumptions of the role of the state to meet the challenges of the day. The last time Britain was remade in this way came after the war; the creation of the welfare state was a statement of the new relationship between government and wider society. If Johnson’s government fails to deliver on its promises, possibly the last real chance to effect lasting change will have been squandered. Look towards the COP 26 conference in Glasgow this Autumn – if ever there was a platform for extraordinary change, it is there. Should policy give way to platitudes there, I fear the future may look very grim indeed.

 

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