Support 100 years of independent journalism.

  1. Business
  2. Economics
6 September 2019updated 02 Sep 2021 5:44pm

I don’t think we appreciate how bad the next few years could be

Forget about Brexit for a moment: the potential for the British to have a really grim half-decade is underappreciated.

By Stephen Bush

One things that hasn’t happened at this Conservative Party conference is that no one – not Philip Hammond, not Sajid Javid, not Esther McVey, and not James Brokenshire – has used their speech to announce measures that might defuse any of the ticking time bombs underneath the government.

Forget Brexit for a minute. The United Kingdom has local authorities groaning under the combined impact of cuts to their direct grants and increasing adult social care responsibilities thanks to our ageing population. One, Northampton, has already gone bankrupt and it won’t be the last. There is a nationwide teacher shortage that is going to become more acute, particularly outside London, thanks to the continuing pressures on schools and the impact of the earnings threshold on the ability of heads to recruit extra teachers from Australasia.

The Universal Credit roll-out is gradually moving from the easiest cases – young claimants without dependents – to more complex ones. Two years after the scheme’s architect quit the government saying that the cuts to it were too savage for it to be done properly, the cuts remain in place and the roll-out continues. Some of the most painful cuts for people to bear will be those that were originally meant to be part of the cuts to tax credits – cuts that were, remember, sufficiently politically explosive for the government that even the prospect of them resulted in a prolonged crisis and knackered George Osborne’s prospects of becoming Conservative leader. (And given the closeness of the result and what the row did to David Cameron’s popularity, may well have been what tipped the scales as far as Brexit went as well.)

Now those cuts – which people were told had been shelved as the government was listening to them – are going to come back. They will be particularly acute in the small and mid-sized towns – the Swindons, Mansfields and Nuneatons – that stayed Conservative in last time.

Outside the areas that the government can control, we have had a decade of near-zero interest rates. Many mortgage-holders have never known anything like “normal” conditions and thanks to the United Kingdom’s superheated housing market many more have huge levels of mortgage debt. Add to that the large number of households with unsecured credit card debt and you have the potential for a real crisis. And while past performance is no guarantee of future returns, the British economy tends to go into recession every decade and it would be historically remarkable if the United Kingdom got to 2022 without one.

Sign up for The New Statesman’s newsletters Tick the boxes of the newsletters you would like to receive. Quick and essential guide to domestic and global politics from the New Statesman's politics team. A weekly newsletter helping you fit together the pieces of the global economic slowdown. The New Statesman’s global affairs newsletter, every Monday and Friday. The best of the New Statesman, delivered to your inbox every weekday morning. The New Statesman’s weekly environment email on the politics, business and culture of the climate and nature crises - in your inbox every Thursday. Our weekly culture newsletter – from books and art to pop culture and memes – sent every Friday. A weekly round-up of some of the best articles featured in the most recent issue of the New Statesman, sent each Saturday. A newsletter showcasing the finest writing from the ideas section and the NS archive, covering political ideas, philosophy, criticism and intellectual history - sent every Wednesday. Sign up to receive information regarding NS events, subscription offers & product updates.

All of which is to say: there is still a lot of conversation both at this conference and at Labour’s about the implausibility of a Jeremy Corbyn-led government ever taking office. It’s true to say that the perceived foregone conclusion did mean the third of Labour voters who were agnostic about a Corbyn premiership may have found it easier to vote Labour. It’s equally important to note that the Liberal Democrats always do better when the result of an election is believed to be clear, as people can risk a wasted vote, and without losses to the Liberal Democrats the Conservatives would still have a narrow majority.

But it’s also true to say that essentially very little bad had actually happened during the general election campaign itself other than Theresa May unveiling an unpopular policy and Jeremy Corbyn announcing some popular ones, and it still resulted in a significant increase in the Labour vote. The dementia tax had itself been abandoned by the time of the election. There’s no good reason not to suppose that any of the real and tangible crises that could hit the government won’t have an equally tangible and real impact on the deadlocked polls.  

Content from our partners
How to create a responsible form of “buy now, pay later”
“Unions are helping improve conditions for drivers like me”
Transport is the core of levelling up