The Conservatives have long prided themselves on their reputation as “the party of the economy”. A Labour government, they warn, would threaten the UK’s hard-won prosperity.
Yet two days before the general election, there is no economic growth of which to speak. The latest monthly report from the Office for National Statistics shows that GDP was flat (0 per cent) in the three months to October 2019. On an annual basis, the economy has only grown by 0.8 per cent over the last year – its weakest performance since March 2012. Production output and construction output have both fallen (the latter by 2.3 per cent in October alone).
The Tories, however, will seek to turn such figures to their advantage. A stagnant economy merely confirms the need to “get Brexit done” and “unleash Britain’s potential”, in the words of the party’s manifesto.
The uncertainty over the UK’s EU membership has undoubtedly depressed growth and investment. But Boris Johnson offers only the illusion of certainty. If the Conservatives are returned to government, the UK will likely leave the EU by the end of next month, defying those who predicted a no-deal Brexit. But a new cliff-edge will immediately appear.
Johnson has promised that the UK will negotiate a comprehensive new EU trade agreement in time for the end of the transitional period in December 2020 – a pledge that is undeliverable. Either the UK will be forced to seek an extension (the average trade negotiation lasts four years) or it will risk exiting with no deal at all. Either way, January 2020 would not be the end of Brexit uncertainty, but merely the beginning.
Yet the UK’s economic woes cannot be attributed to Brexit alone. Long before the Leave vote in 2016, Britain was enduring its slowest recovery on record. A fragile economy – too unbalanced, too unproductive and too unequal – was further imperilled by austerity. Though employment remains at a near-record high, average earnings are not expected to return to their pre-crash peak until 2025: workers are still £13 a week worse off than in 2007.
By embracing higher public spending and signalling their willingness to borrow for investment, the Conservatives have at least disowned George Osborne’s austerity economics. As they have tacitly conceded, cutting spending in pursuit of a totemic budget surplus made neither political nor economic sense. Now, just as Osborne’s Keynesian opponents once did, Chancellor Sajid Javid argues that ultra-low borrowing costs – below 1 per cent – mean the state can afford to expand and invest.
But the Conservatives are no closer to offering a vision of an alternative economic model that ends the UK’s overdependence on consumer debt and high finance. Should Johnson win the majority he craves, it will not be because of his party’s economic record but in spite of it.