The writer is the shadow principal secretary of the treasury
Jeremy Hunt’s fall manifesto was an hour-long reckoning with his party’s 12 years in power. another package of tax increases and spending cuts; Another appeal to the public to tighten their belts. The Tories’ reputation for sound economic management had been destroyed, and they were killed by their own hands.
The chancellor has tried to blame both Covid-19 and President Vladimir Putin’s invasion of Ukraine. Despite the fact that these are challenges for all countries, only in the UK has the government responded by pushing the economy off a cliff in a disastrous ideological experiment. Only here we have emergency interventions from the Bank of England to support the pension system. And only in Britain was there such a collapse of international confidence that our prime minister had to put up with it at the G20.
The bill is now being sent to the public due to deviations in the September ‘mini’ budget. However, the made in Downing Street aspect of Hunt’s plan is not just about the past 12 weeks, it’s about the past 12 years. Low rates of economic growth have made the country less resilient to external shocks and left our citizens in an even worse situation.
The UK’s current problems can be placed firmly on the doorstep of 10 and 11 Downing Street and its many neo-conservative residents. But no political party can escape the responsibility of ensuring financial stability.
It is a responsibility that Labor understands and will live up to. We have seen what happens to public finances after the right’s rush towards drunkenness from irresponsibility. We will not respond backwards to that disaster. Where we have spending proposals we will explain how they will be funded.
For Labor today, financial stability should be the foundation but it is not an end in itself. Instead, it should serve as a platform for the UK to develop an appropriate long-term plan for growth.
If the UK had enjoyed even the average growth rate of OECD countries over the past decade, British households would be £10,000 better a year than they are now. This is the price of low growth. The UK is also the only G7 country that has not regained its pre-Covid position in terms of GDP.
The real impact of slow growth will be seen in people’s income. The Office for Budget Responsibility, silenced by Kwasi Quarting, Hunt’s predecessor and now tasked with describing the bleak terrain, reports that real disposable income for households will fall 7 per cent over the next two years. The question that Ronald Reagan originally asked – Are you and your family better off under this government? – It was officially answered and denied by the state economic watchdog.
Where does all this country leave? After the turmoil of recent months, no one should have any doubts about the ability of financial markets to punish a country. No wonder Bill Clinton’s strategist James Carville wanted to reincarnate as a bond market – this way, he pointed out, you can scare everyone.
Business needs certainty and stability after the endless chopping and change in recent years; The startup environment ensures that the UK is the best possible place to start and grow a business; A plan that will make the UK a world leader in the transition to cleaner energy and give the country the energy security it needs.
A proper growth plan also means fixing the holes in the Brexit deal and having a mature relationship with our European neighbours. And most importantly, the commitment that every part of the UK will enjoy the fruits of the growth we seek.
Last week we starkly saw where the past 12 years have taken us. Now is the time to combine financial stability with an appropriate long-term growth plan to give people hope for the future, to make the country more prosperous and its citizens better off.