In such uncertain economic times, it is perhaps little wonder that last week’s local elections left a messy set of results. They certainly don’t act as an endorsement of the government, with the Conservatives losing almost 500 seats including the vast majority of councils in London. But neither do the results represent a decisive victory for Labour, which, despite putting a brave face on things, enjoyed mixed results, particularly in the West Midlands and the north. Post-Brexit, post-pandemic and in the midst of a cost-of-living crisis, the UK’s inequalities have been exposed as never before, yet our politicians seem content to play it safe.
There has been a lot of talk recently about British politics being “out of ideas”. Eyebrows were certainly raised at the paucity of inspiration in this week’s Queen’s Speech. However, we should not confuse policy inertia with a lack of ideas. Every day brings yet another piece of research or analysis about the state that we’re in. There are plenty of ideas on how to make things better – what is lacking is an appetite in Whitehall to challenge the economic model and deliver change.
It comes as no surprise, then, that the Queen’s Speech failed to rise to the challenge of the cost-of-living-crisis. Fundamentally, the government doesn’t believe that’s its job. The pandemic was an exception, forced upon them. This time round, Johnson’s cabinet is happy to sit this one out, betting that there are more votes in doing nothing than there are in helping those who are struggling to make ends meet.
But we also have another problem: cultural inertia. Even if you have all the ideas, interrogating the economic model that got us into this mess in the first place and making real impact requires imagination. And there is precious little to be found.
Part of this inertia comes from the fact that people are, simply, exhausted after two years of weathering a pandemic. For people working at the front line in councils, hospitals and the community, the pandemic has further exacerbated what were already difficult working conditions. The legacy of austerity has been an expectation that people do more with ever-decreasing levels of funding. This is not an atmosphere conducive to taking time out for reflection, learning and coming up with new ideas.
This inertia is also borne out of the ways in which we see the world, however. The mental models we use to make decisions and the way in which these models are shared and replicated means that challenge or disruption becomes difficult and actively discouraged.
In our work at the Centre for Local Economic Strategies (CLES), we see this all the time. Our collective understanding of economics and economic development has become stuck on particular tropes and long-held views that stop us from being able to imagine an alternative future. The Queen’s Speech was chock-full of these.
The persistent notion, for example, that regulation and complexity are inherently bad for us – and that, by removing them, we can deliver better outcomes for business – has no basis in reality. Good business relies upon good bureaucracy – for example, having a decent legal system is one of the reasons why London has historically been a preferred location for tech start-ups. Property developers prefer the certainty of a local plan to help inform their long-term investment strategy. The list goes on.
Similarly, the idea that positive outcomes such as living standards and public service delivery are dependent upon our ability to “drive” economic growth. In fact, the reverse is true. Good health, education and living standards are foundational for an effective and inclusive economy.
The Queen’s Speech also perpetuated what is – arguably – the biggest myth of all: that by driving an overall increase in local and national growth we can ensure that everyone benefits from the United Kingdom’s success. That by just making the pie bigger, more people will benefit.
Just growing the pie isn’t nearly enough. There is no direct correlation between rising levels of growth and improvements in living standards. If there were, then, after decades of growth, levels of poverty and inequality would surely be lower, instead of continuing to rise as they have. Why is this happening? Because the pie is getting gobbled up by those who are most able to serve themselves. While people struggle to heat their homes, for example, companies like BP and Shell report profits of £9.5bn and £14bn, respectively.
Despite the fact that economists have been making these arguments for decades, and regardless of the severity of the threat facing the millions now struggling to eat, heat their homes and give their children a roof over their heads, these notions persist. They are backed up by the wealthy interests that they serve and replicated through our centralised system of governance, leaving many local organisations, including the sceptics, feeling as if they have little choice but to play along.
But it is possible – not only possible but essential – to disrupt the inertia, challenge the model and give people a sense that they do have choices, that a different type of economy is possible. Around the UK, new ideas are beginning to emerge from local economies where partners in the public sector and in civil society are making different choices and actively exploring ways to disrupt, challenge and cut through.
This is because they are asking different questions about who is really benefitting from the growth that is generated and why. They are asking questions that examine where the wealth is going and how we can rewire our economies to make sure more of the wealth in a given area benefits those who need it most.
And not only that, but they are acting upon the answers to start to build a different type of future for their residents. Why? Because the enemy of inertia is anger – and that’s the one thing our places don’t lack. Now we just need our policymakers to act.