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15 October 2022

Britain is not an emerging market – it’s worse than that

Twelve wasted years, and all the Tories have to show for it is ruin.

By Jonn Elledge

“The UK,” the one-time US Treasury secretary Larry Summers said a few weeks ago, “is behaving a bit like an emerging market.”

If you squint, wish really hard, and don’t read the second half of the sentence (we’ll be coming to that), this might almost be seen as a good thing. “Emerging markets”, after all, are the sort of booming nations that power the global economy – it’s a term associated with rapid growth, high productivity, a growing middle class and other characteristics investors tend to like. China and India are emerging markets. So are South Korea, Brazil and Poland, which is emerging so fast its household income might soon overtake our own. All these are the sorts of places talked up as ones to watch in the pages of the Economist. Britain could do a lot worse than behaving like an emerging market right now.

These are not, alas, the emerging market traits that Summers was pointing to. Britain is untroubled by rapid growth, no matter how many times the Prime Minister intones the words like some kind of incantation. An economy dominated by the young and hungry is not in Britain’s future either, and as for rapid growth in infrastructure, there’s more chance of Kent dropping off and sinking into the sea.

No: the ways in which Britain is behaving like an emerging market are the bad ones. The instability and volatility. The vulnerability to sudden drops in the value of its currency or bursts of inflation – not to mention, in a desperate attempt to deal with those other phenomena, interest rate hikes. This is where the less well publicised bit of Summers’ sentence comes in. “It makes me very sorry to say,” he told Bloomberg Television, “but I think the UK is behaving a bit like an emerging market turning itself into a submerging market.”

Emerging is great – you emerge from shadows, or from a difficult period in your life. Good luck finding a positive way of submerging into something. Unless you count “a nice, relaxing bath after another hard day accidentally blowing up the country with your crackpot economic ideas”, I suppose.

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The proximate cause of all this – as with anything else anyone has written about British politics for getting on for a month now – is Kwasi Kwarteng’s mini-Budget, a brief statement which has been unnervingly maxi in effect. Asked on Thursday (13 October) if he had any plans to U-turn on some of his more hare-frightening measures, Kwarteng replied “let’s see”, which will look lovely next to “the lady’s not for turning” in the big book of Tory quotes. It’s like somebody bet him he couldn’t make things any worse.

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To be fair to the shortest-serving chancellor in British history not to have died in office, there have been signs that Britain is submerging for some time. One-party politics was something of a tell; so was the period in which that party was in the hands of a local strongman with no interest in policy or achievement, but abundant enthusiasm for doing up his palace. To go with that, we’ve got the increasingly crumbling infrastructure, the weak-to-non-existent wage growth, the politics in which one caste has to be coddled and assuaged at all costs even as the majority struggle.

Worse in some ways is the slow-motion complete collapse of public services, so that crimes are not just unsolved but uninvestigated; genuinely haunting stories of people being told an ambulance was on its way but the average wait was seven hours abound. All of these things feel like characteristics not of an advanced economy, but the sort of countries they patronise. Even “emerging market” feels optimistic.

I’ve been making jokes about all this, because it’s my job, but also because it’s a coping mechanism: they’re the kind of jokes you tell to break the tension at a wake. But it really isn’t funny. If Britain didn’t cut spending and bear down on the deficit, the Tories claimed in 2010, we’d be battered by the international markets. Spending was cut but the deficit remains, and now the markets punish us even though everything is already broken. We’re all going to suffer for it, but those with least will suffer most.

The only slight bright side I’ve been able to find is that the same people who once blamed Labour overspending for a meltdown in the financial markets are now desperately trying to persuade a furious public that this latest mess has nothing to do with the government. The polls show nobody’s buying this, which is pleasing.

But the collapse of the country is not a price worth paying for this tiny measure of schadenfreude. Twelve wasted years these clowns have inflicted on us, and all they have to show for it is ruin.

[See also: Liz Truss sacks Kwasi Kwarteng – will she be next to go?]

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