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The Tories are in denial about the existential crisis facing Britain


WHILE the Conservative Party indulges itself with a mammoth election bore lasting an extraordinary eight weeks – a process that any sane organisation could have arranged over perhaps three weeks in this digital age – Britain faces its greatest crisis, I would argue, since the Second World War. The crisis is not just energy and cost of living, self-inflicted as that is. It is far, far more.

The challenge is economic, cultural, institutional, societal and constitutional. In essence it is becoming existential and will be resolvable only with leadership showing philosophical compass, honesty, integrity and sheer determination.

Unfortunately, the Conservative Party and the apparatus around it seems in utter denial at the scale of the challenge ahead. It is as if all would be normal if it wasn’t for that beastly chap Putin. But that is completely to misunderstand the scale of the problem, for while the war in Ukraine has undoubtedly made matters worse, the root cause of our woes lies with our governing class.

This is no longer a case of a nudge here, a slight movement of the tiller there. If Britain is to survive in any recognisable form, a total and utter change of direction is required and urgently. So far I am not hearing that echo from the Bridge.  

Why is the challenge so great?

For the last thirty years or so the Conservative and Labour parties have morphed and become more concerned with power than ideas and strategic direction. The big philosophical questions are settled in their minds, the debate is at the margin. Decisions have largely been expedient, indulging pressure groups, NGOs and international bodies with policies designed to appear morally virtuous to the echo chamber, regardless of the consequences for the rest of us.

Debate has been suppressed with no meaningful discourse on most of the key issues of the day, from monetary extremism, the equality agenda and quotas, lockdown, the woke agenda, the climate emergency (or even if there is one at all), migration and the like. These are all highly contentious areas, with direct impact on lives, where in wider society there is active debate and indeed much disquiet. But not in Parliament, or on the BBC, where these matters are, in their minds, settled and kept well away from the barbarians.  

Sure, there is debate at the margin with Labour generally saying ‘not enough’ but the reality is, regardless of the views of the wider population, our Parliament has become little more than a rubber stamping body. With a few honourable exceptions there is almost no dissent.

Governments have adopted short-term fixes over strategic direction on the basis that if it blows up ‘at least it won’t be on my watch’. Power is everything, wrapped up in a moral language of equality and fairness when it is anything but.

Politics was probably always expedient but in times gone by when the state was small, the institutions broadly conservative and it did not concern itself in the personal sphere, the game did not matter so much. Now, as our leaders profess authority in every aspect of humanity, public and private, it does. 

Economically, both major political parties have found solace in Modern Monetary Theory (MMT) the wondrous and fantastical idea that HMG can print, print and print – to dish it out on furlough, bounce-back loans and the like without consequence. If it was so simple, Argentina would be rich. Indeed, Argentina was once rich. Before the war it might have even rivalled the US, but General Peron saw fit to corrupt that and now a nation abundant with raw materials staggers from one crisis to the next. Today Britain and much of the West lies philosophically at the very gates of the River Plate.

From an economic perspective the real breach with sane economic orthodoxy occurred with Gordon Brown’s decision, copied in much of the western world, to adopt unconventional monetary policies. Effectively crashing interest rates to zero and printing money provided a stop-gap to prop up a collapsed financial system which arguably had failed, in the US, as a result of Clinton’s desire to bend lending criteria to certain marginalised groups.

The decision to adopt MMT by Brown, subsequently ratified by Cameron, May and Johnson/Sunak, was the gateway drug for centralising socialist policy. Once the link between tax and spend was broken Governments believed they could solve any crisis by unorthodox monetary means.

Just print a bit and give it to this interest group or that. Easy, isn’t it – free money, looks nice with no consequence. Except that there is a big consequence, as it is the primary factor behind inflation. Brown’s response and the acquiescence of central bankers to adopt strongly negative rates and print to fund public deficits gave Sunak and the Treasury the wherewithal to print the country into lockdown.

Without Modern Monetary Theory there is no way the Treasury could have borrowed £500billion to fund the economy to do nothing for two years. Some of the people loved it – free money to stay at home. Now the chickens are coming home to roost as the desire amongst many to work is broken, inflation is causing serious damage and discontent is reaching fever pitch.

That great error was compounded by increasing regulatory interference, most notably in the energy field. In the dash to ‘meet our climate obligations’, HMG cancelled fossil fuel without having a clue what the economic implications might be. This despite the fact that the UK has close to zero impact globally (the UK’s carbon emissions are less than 1 per cent of the global total).

Britain could have been self-sufficient in power with North Sea and fracking assets. The irony is that this would not have jeopardised investment in new technology, which in time might become more efficient than carbon. Instead consumers will see utility bills in excess of £4,000 per annum as a direct result of HMG failure. They can blame Putin as much as they like but the truth is that the Government did not prepare for all eventualities, and instead put dogma and ideology ahead of our energy security.

Now with inflation at 10 per cent – and likely embedded in the middle teens in the medium term – the public sector appears about to call a General Strike. This is the public sector which was and still is partially posted missing in almost every respect, despite a 24 per cent increase in funding between 2019 and today.

If the new Prime Minster caves to union pressure not only will that be a reward for appalling service but it will unleash substantial wage inflation and in time unemployment. This will define the new PM. Is he or she Thatcher or Heath?

But the economic sphere is only one aspect of this existential challenge. Perhaps an even greater threat is the insidious creep of cultural Marxism in our institutions. It is everywhere. The impact is a collapse of the traditional family, the birth rate, social engineering in education and the workplace, a migration policy in total disarray to the extent that net migration topped one million last year in contradiction to every manifesto pledge, a police force increasingly influenced by woke attitudes, a hollowed out military who appear to prioritise diversity above defence and a state broadcaster that celebrates woke in its most extreme form.

The Government might say they do not wish to enter the field of culture, but would the heads of the armed forces behave as they are without political direction? I think not. 

Then there is the aftershock of lockdown and the relationship with state. A friend, born in East Germany now living in the UK, described our three lockdowns as far more uncompromising than anything Erich Honecker, the last president of East Germany, attempted. But the band plays on as if nothing is wrong. It’s all normal and they are in control.

In the long history of this nation there have been highs and lows. We have had regicide, civil war, disturbance and bitter argument, but we have broadly been a free people. Free from excessive state interference to order our lives as we see fit. We have broadly eschewed extreme ideology, for as the Book of Common Prayer pleads ’may we be quietly governed.’ But we are not governed quietly. There is not a nook or cranny of life into which the state does now not intrude.

We are well on the way to destroying the peace and tranquillity of what was a beacon of liberty and freedom. The erosion of our freedoms over two generations is unprecedented, aided by digital technology. In its place is a bullying state no longer content with economic mismanagement but now dictating on culture, morality and ethics.

A quiet and successful nation is built on personal liberty, family and community. A good society is built on creativity, hard work and perseverance. Freedom is a state that is 20-30 per cent of national output, providing a civilised safety net, not 50 per cent with a regulatory noose to boot. It is a marathon not a sprint. One would have thought the Conservative Party might have understood that; alas, it has been the primary agent inflicting economic, cultural and ethical woes upon us.

Can Truss fix it? I hope to be proved wrong.

This appeared in Brexit Watch on August 26, 2022, and is republished by kind permission.

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Ewen Stewart
Ewen Stewart
Ewen Stewart is a City economist who runs the consultancy Walbrook Economics. He is director of the think tank Global Britain and his work is widely published in economics and political journals.

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