In the UK, for the first time in our recent history, we seem to be facing not just a constant threat of recession, but an entire crisis of economy. This isn’t just about Brexit – which, whilst a huge economic gamble, could have been economically useful – it’s much wider than that. For the best part of 9 years we have had a self-styled party of business in power, and yet in every important measure, public spending is dropping and we are feeling the effects.
Two areas show this problem particularly well. Between 2010 and 2019, police funding fell by 19% in real terms, and despite their being less police to actually record crime, it has led to an increase in violent crime. Stabbings, gun crime, burglary and robberies are all on the increase, which is no surprise given the funding used to combat, deter and catch criminals is falling dramatically.
In health, the figures are no less startling. The well-documented funding issues in the NHS – which have blighted every public conversation from general elections to Brexit – have not only led to problems recruiting GPs and carers, but have led to the UK being in a unique position of life-expectancy not only stalling, but falling in many areas of the UK. That’s truly remarkable for a developed, Western nation. If there’s one thing society seems to value, it’s not dying; indeed that’s sort of why society exists in the first place. With violent crime rising and life expectancy dropping – through an NHS inability to deal with health crises – we are spectacularly failing at this.
So what’s going on? Why is basic funding in health and law enforcement dropping, if we have a government who values economic growth above all else? Do we now simply have to accept that our society must function with less investment, or risk unassailable debt? Well, let’s start by looking at the facts.
The party of the economy
Firstly, I think it would be biased to suggest that the Conservatives are not traditionally better for the economy. It was Conservative governments who bought us into the EU to open up our trade, despite it being a decision which threatened their very existence and indirectly handed Labour power for almost a decade. More famously, the likes of Thatcher were famed for trying to move the UK economy forward at great cost to her own legacy. Closing mining industries and investing in financial markets, not to mention seeing the opportunities of lower taxes to attract rich domiciles, arguably helped the UK remain competitive with much bigger nations.
We can and should question the usefulness of these actions now, but at the time they represented the actions of a party striving to keep Britain at the forefront of economics. Clumsy and a little biased toward the wealthy, yes, but it’s hard to doubt their intentions economically.
But do they still show these signs of economic strength? Evidence to back this is almost impossible to find over the last 9 years of Conservative government.
Countries like Germany have invested in new industries, becoming world leaders in renewables and placing them at the forefront to exploit this emerging market and target strong economic growth. In contrast, over the last 9 years, the Conservatives have overseen a “dramatic and worrying” collapse in green investment. Alongside their falls in spending on health, law enforcement, welfare, and almost everything else, this has formed the backbone of their principle policy: austerity.
This point of principle has, unfortunately, shown the signs of a political party that has lost touch with economics. Their belief that high spending leads to high debt, and thus a weak economy, has led to – as explained earlier – one of the biggest slumps in societal values in British history. Yes, the UK is in debt, but national economics are not like credit card debts. Credit card debts get bigger the more you borrow, there’s no way around it. But if you invest smartly as a government, you can stimulate growth, decrease the value of that debt, increase the ability of people in society to spend money, export goods, etc, and do much more to eliminate debt than simply stopping spending. Indeed, the entirety of Keynesian economics – one of the most popular theories in economics, and the driving force behind numerous Nobel prizes – is focused on how investment does this.
Politics has changed
So why do conservatives stick to these principles? Firstly, politics has changed. Politics is no longer the place of noble decisions, made by honourable leaders who sometimes make mistakes, but rather it’s now solely a popularity contest of massaging egos, in which mistakes that hurt society can be politically motivated. Recent political history – at least of the last 15 years – has been one where party politics have entirely overcome the importance of the national interest. Whether it be Blair handing the reins to the unelected Brown, Cameron being more interested in his own party’s unity and backing a Brexit vote over economic security (then resigning rather than providing national stability), or May’s interest in her own popularity – which led to an election where she lost support – undermining the countries negotiating position during Brexit.
I stress, this is not about Brexit. Brexit is at best an economic gamble, but could lead to improved economic relations with big economic superpowers such as the US and China – but the way the Conservatives have treated it, to massage their own personalities and party, with no plans of actually making a success of it but rather to ‘win’ politically, speaks volumes about modern politicians.
The Conservatives have changed
More important than this is how the Conservative party has changed. For a long time, they have worried people as to how much they really cared about improving society, and how much they are really just looking out for the interests of the wealthy. But until the 80s they at least had the remnants of an economic theory which appeared to working and making Britain prosperous. However, that bias toward the wealthy has now largely consumed Tory policy.
There is no longer a strong economic theory, they instead stick to ‘trickle down economics’, which hasn’t been valid in economics circles for 20 years. And whilst they ignore the advantages of investing in emerging industries, or placing the UK at the forefront of future economics, their principle of austerity has completely forced the breaks on economic growth in current industries.
Lack of investment in health and welfare necessarily means fewer people are able to work, more days are lost to sickness, and fewer people are employed in the NHS – the country’s biggest employer – which in turn creates a never-ending circle of stress, burn out, recruitment issues, and a hopeless pit where the prime minister now throws money occasionally in lip service.
The same goes for crime – less security and higher rates of things like robberies and burglaries decrease productivity as people are less likely to start or grow companies if they feel their work is going to be wasted or stolen from them. These are not abstract connections. If you decrease spending on societal basics, you decrease its ability to function.
So why do they still win the support of big business? Not because of their record on economics, but because of their rules which allow for profits to escape into tax havens – which in turn creates the supposed lack of funds for government to invest – and which favour existing big companies and company owners. If you are Amazon or Starbucks, and you support the Conservative government, you are making a sound business decision as you’ll pay such low levels of tax and massively increase your personal income. If you’re an emerging business without such clout, there’s almost nothing to support you: you’ll have no influence to pay less tax, suffer from increasingly few schemes to help new businesses, and take the toll of citizens suffering from low healthcare spending and high crime rates. That’s a lose-lose, economically: it doesn’t help economic growth, it just helps the wealthy.
This balance whereby the Conservatives have abandoned economic growth in favour of wealth-protection is matched by direct influences in the government itself. Theresa May’s husband has been linked to the Paradise Papers tax havens scandal, various government ministers have personal interests in low taxation rates on high earning companies, and most come from families where wealth is passed down, and thus have no interest in ‘new wealth’ being created so much as ‘old wealth’ being protected. You can argue that these personal interests have no effect on policy, but the odd decisions they have taken to weaken the economy – by a party who used to be almost obsessed with it – must be somewhat telling.
Is this how things have to be?
The simple answer is we don’t know. Until government policy changes, or a new government is elected, we will not know how much the economy can be stimulated. And, indeed, if you can ignore the noises of the tabloids – the owners of which are so often the benefactors of Conservative ‘wealth protection’ – the willingness of the Labour party to listen to new economic theories is very encouraging.
But there is evidence that the UK is lagging behind, not leading, due to government policy. Life expectancy is increasing in other countries. Crime is falling, or at least not rising, in many others. And despite Brexit wobbling Europe, even the lead economy there, Germany, is managing to invest in new industry and avoiding economic deceleration. What’s more, whilst the Conservatives argue that we need lower taxes on wealth to encourage wealthy people to live and spend here, we actually have some of the lowest tax rates in the developed world, yet are one of the few still advocating austerity (even if this is no longer vocalised, due to its political unpopularity).
What we can say, with some certainty, is there are lots of compelling reasons to raise an eyebrow if you are told that the Conservatives are the party of a ‘strong and stable’ economy.