"Factual errors" and "slipshod research" - the Britannia Unchained Tories must try harder

Proper policy recommendations require hard graft, which is distinctly lacking in this book.

The authors of Britannia Unchained – five Conservative MPs including Elizabeth Truss and Dominic Raab – argue that Britons are “idlers . . . obsessed with the idea of the gentleman amateur”. Sadly, so far the reaction to the book has proved their point. They’ve had headlines in the Daily Mail and the Telegraph and the Guardian has marked them out as the young Tories to watch. Job done. Yet they’ve done it without doing any serious research, let alone thinking about what that research might mean. They have joined the political version of celebrity culture – the same culture that they argue, to some extent compellingly, makes Britons believe they can get on without doing any hard work.

You don’t need to plough through the book and itemise the factual errors or slipshod research to see just how lazy they’ve been. The first statistics in the book, on page two, point out: “The dependency culture has grown dramatically. By February 2012, 5.7 million people were claiming some kind of benefits. At over 13 per cent of the working population, this is one of the highest proportions in the OECD.”

What’s wrong with this? Where do I start? No footnote (in a book that contains several hundred, most to newspaper articles). What does “some kind of benefits” mean? Not pensions, child benefit or tax credits, I can deduce that, although the average reader won’t know. Does it include disability living allowance and housing benefit (both of which can be claimed by workers)? I think the former but not the latter. Grown since when? It certainly grew rapidly in the 1980s and early 1990s but the number of people claiming out-of-work benefits fell steadily from its peak in 1994 until the 2008 crisis and, despite the recession, is still well below the levels of the mid-1990s. So the drama is less than compelling. As for “one of the highest proportions in the OECD”, the last OECD study on this topic found nothing of the sort.

Most of the book follows this pattern: a randomly strung-together mixture of anecdote, assertion and rehashed articles from a wide variety of sources, ranging from the Mail to the Economist to that old staple, “A research study found . . .”

Hard graft

All this is a pity, because I found myself warming to much of the tone and content of the book. The authors’ basic message is one of hard-headed optimism; that is, the UK, despite our current problems, has plenty of inherent strengths and our destiny is under our control. They want us to learn from other countries but do not fall into the trap of arguing that we’d be fine if we just copied – insert one of the following according to ideological preference – China, Sweden, Germany, Singapore or the US.

Nor do they succumb to the easy pessimism that is currently prevalent among commentators (and, sadly, too many economists) that we are doomed to no or slow growth or that our children will be worse off than we are.

As a consequence, many of the broad implications of their arguments, at both macro and micro levels, are entirely sensible. Our children need to understand that they are unlikely to make it as pop singers or footballers but that if they study and work hard they have an excellent chance of succeeding. At a national level, policymakers need to be more ambitious, take more chances, encourage innovation and risk failure. Unfortunately, as a result of the sloppiness of both the research and the writing, the authors fail to translate this into concrete policy recommendations.

To take one example, it is a clear implication of many of the arguments they make – that we should be open to new ideas; promote competition and innovation; reduce unnecessary red tape, especially in the labour market – that the UK should be more open to immigration, especially skilled immigration. This would not be a panacea but it would certainly help. Now the government they support is moving in precisely the opposite direction, in a manner likely to do considerable economic damage – and yet immigration policy is not even mentioned. They are courageous enough to insult the work ethic of the British labour force, apparently, but not brave enough to confront the shibboleths of their party. That is a pity.

Doing evidence-based policy analysis and turning it into credible policy recommendations is neither quick nor easy. You need to be prepared to trawl through the data, work out what it means, translate that into something that policymakers can understand and help them think through the potential policy implications. On the basis of Britannia Unchained, we still lack politicians who are prepared to get down to this sort of “hard graft”.

Jonathan Portes is director of the National Institute of Economic and Social Research and a former chief economist at the Cabinet Office.

Read Simon Heffer’s review of “Britannia Unchained” in this week's New Statesman, on sale today

Lady Diana Cooper as Britannia at the Empire Ball in 1924. Photograph: Getty Images

Jonathan Portes is director of the National Institute of Economic and Social Research and former chief economist at the Cabinet Office.

Photo: Getty Images
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Autumn Statement 2015: George Osborne abandons his target

How will George Osborne close the deficit after his U-Turns? Answer: he won't, of course. 

“Good governments U-Turn, and U-Turn frequently.” That’s Andrew Adonis’ maxim, and George Osborne borrowed heavily from him today, delivering two big U-Turns, on tax credits and on police funding. There will be no cuts to tax credits or to the police.

The Office for Budget Responsibility estimates that, in total, the government gave away £6.2 billion next year, more than half of which is the reverse to tax credits.

Osborne claims that he will still deliver his planned £12bn reduction in welfare. But, as I’ve written before, without cutting tax credits, it’s difficult to see how you can get £12bn out of the welfare bill. Here’s the OBR’s chart of welfare spending:

The government has already promised to protect child benefit and pension spending – in fact, it actually increased pensioner spending today. So all that’s left is tax credits. If the government is not going to cut them, where’s the £12bn come from?

A bit of clever accounting today got Osborne out of his hole. The Universal Credit, once it comes in in full, will replace tax credits anyway, allowing him to describe his U-Turn as a delay, not a full retreat. But the reality – as the Treasury has admitted privately for some time – is that the Universal Credit will never be wholly implemented. The pilot schemes – one of which, in Hammersmith, I have visited myself – are little more than Potemkin set-ups. Iain Duncan Smith’s Universal Credit will never be rolled out in full. The savings from switching from tax credits to Universal Credit will never materialise.

The £12bn is smaller, too, than it was this time last week. Instead of cutting £12bn from the welfare budget by 2017-8, the government will instead cut £12bn by the end of the parliament – a much smaller task.

That’s not to say that the cuts to departmental spending and welfare will be painless – far from it. Employment Support Allowance – what used to be called incapacity benefit and severe disablement benefit – will be cut down to the level of Jobseekers’ Allowance, while the government will erect further hurdles to claimants. Cuts to departmental spending will mean a further reduction in the numbers of public sector workers.  But it will be some way short of the reductions in welfare spending required to hit Osborne’s deficit reduction timetable.

So, where’s the money coming from? The answer is nowhere. What we'll instead get is five more years of the same: increasing household debt, austerity largely concentrated on the poorest, and yet more borrowing. As the last five years proved, the Conservatives don’t need to close the deficit to be re-elected. In fact, it may be that having the need to “finish the job” as a stick to beat Labour with actually helped the Tories in May. They have neither an economic imperative nor a political one to close the deficit. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.