Britain sinks

The British economy is declining at an increasing pace. The chancellor’s spending review on Wednesday revealed the impossibility of mixing politics with economic reality

Allister Heath in an op-ed for the Daily Telegraph today described it best:

“Britain has grown lazy feckless and fat. We are addicted to bread and circuses, as long as others pay for them. We don't work hard enough, safe in the knowledge that “society” owes us a living. We crave free stuff paid for by taxing the rich…”

The truth is that Heath’s opening salvo describes a position which the chancellor has inherited. Britain was going to perdition anyway: the Labour government is merely accelerating the process. And what’s happening to the UK has lessons for the wider world, because in common with the UK all major advanced economies (perhaps excluding China and Russia) are going in the same direction.

It has been alarming to observe developments since Labour won its landslide last year. Its electoral success was borne out of disillusionment with the previous government. But there’s a more important point behind it: the addiction to bread and circuses and craving for more free stuff was what was promised by Labour. Voters are not interested in trivia, such as how it was all to be paid for.

The politics of it denies any attempt to reduce government spending. Even Farage’s Reform Party has started to promise more government spending, targeting Labour voters successfully and causing the chancellor to promise “investment” — in other words jobs in Labour constituencies.

Clearly, it is impossible for UK politicians to reduce government spending. The problem is widespread. Indeed, this is what Elon Musk has woken up to in America. Macron in France cannot do any cost-cutting without provoking outrage and riots. Even so-called right wing administrations cannot do it, with Merz in Germany promising to lift the cap on government debt. Spain has doubled down on socialism under Pedro Sanchez of the Socialist Workers’ Party.

The acceleration of Britain’s decline is despite the Treasury’s sensible insistence that budgets must be balanced. But its advice to the chancellor is that of bean counters. It is up to the chancellor to balance the books. She has tried to do this by increasing taxes to offset her socialist spending. The consequences are that revenue is now declining, even if this is yet to be reflected in the statistics.