Post by Dan Dare on Jul 24, 2023 12:18:17 GMT
Daniel Hannan in the Telegraph:
"British politics ought to revolve around just one question. Why are we falling behind other advanced economies? That question should have dominated the recent by-elections. It should be the focus of every party manifesto. It should occupy our front pages and lead our news bulletins. Yet it is being almost wholly ignored as we quarrel about equality, obesity, trans rights and other ephemera.
Britain has some of the lowest productivity in the developed world, meaning that we generate less stuff per hour. Slovenes are overtaking us now, and Poles are on course to do so in the mid-2030s. South Koreans, who had a third of our income per head as recently as 1985, have already surpassed us. Yet we refuse to acknowledge, let alone address, the causes of our decline.
Consider the oceans of ink spilt over the question of Nigel Farage’s bank account. That row dominated our news cycle for a week, following the usual trajectory of a culture-war skirmish. Commentators started from whether or not they liked Farage, and then proclaimed their supposed general principles on that basis. When the facts emerged, Farage’s critics looked foolish. The other side piled in with gusto.
All harmless enough, you might say. Indignation can be invigorating. But it can also be a massive distraction. Have you seen any discussion of how much harder it has become to open and operate a bank account in general? Any debate about whether these difficulties are deterring investment, encouraging businesses to move to places where banking is easy, such as Singapore or the Gulf?
You can hardly have failed to notice that dealing with your own bank is more of a nuisance than it used to be, what with all this “know your customer” malarkey. The bureaucracy has ballooned since Brexit – in other words, at precisely the moment when we could be opting out of the needlessly intrusive bits of the EU’s Money Laundering Directive. But never mind all that. Much more fun to have a go at Jon Sopel, eh?
The problem is not just that we refuse to see our decline as a challenge. It is that we refuse to see it at all. We keep telling ourselves that we are a rich country. Right-wingers do it out of patriotic boosterism, Left-wingers as a pitch for more spending (“Why are benefits so stingy when we’re the fifth biggest economy in the world?”)
It is true that, in global terms, we are still wealthy. It is true, too, that the EU, which has made similar mistakes to ours, is also on the slide, so that we do well enough when we measure ourselves against France, Germany or Spain. But look at the other Anglosphere countries, and a very different picture emerges.
The average American is 39 per cent wealthier and 38 per cent more productive than the average Brit. Housing is also much cheaper in the US, as was energy even before the Ukraine war.
If Britain were a US state, it would languish at the bottom of the league. When my friend Douglas Carswell, the former Conservative and Ukip MP, emigrated in despair at our lockdown, he chose Mississippi, where he now runs a think tank. He picked that state because it ranked 50th out of 50, and he believed that, if school choice and tax cuts could be made to work in Mississippi, they would work anywhere. What he found, to his surprise, was a higher standard of living than he had left behind.
“A teacher or a registered nurse here starts on maybe £41,000”, he tells me. In Britain, outside London, a teacher gets around £30,000, a nurse £25,000.
“The superintendent of a typical school district in Mississippi takes home £130,000 a year, similar to a Cabinet minister,” says Carswell. “I know landscape gardeners who make more than the hedge-fund managers I knew in west London”.
All this, remember, in the poorest state in the Union, a state whose median income is less than two thirds of the American average. As the economist Sam Bowman puts it, “Americans could stop working each year on September 22 and still be richer than Britons working for the whole year.”
We don’t have to look far to find the causes of our relative poverty. Since March 2009, the Bank of England has increased the amount of money in circulation by about 50 per cent. The currency debasement accelerated during our needlessly harsh lockdown, leaving us all worse off. Government spending and borrowing shot up, and no party proposes to return to the levels of January 2020.
We refuse to build houses while admitting half a million people per year. House prices have increased by 450 per cent in real terms since I was born in 1971, a figure no other OECD country comes close to. Expensive property drives up the cost of everything else.
Meanwhile, the proportion of day-to-day government spending dedicated to the NHS has risen from 27 per cent in 2000 to 44 per cent and will, as Sajid Javid points out, soon exceed 50 per cent. The quip that Britain is a health bureaucracy with a government attached is becoming literally true. Not only does the NHS soak up resources; it also produces worse outcomes than rival systems, so keeping more Brits off work.
We argue about Brexit, wokery and Just Stop Oil as a kind of displacement activity. We would rather not recognise, let alone remedy, our longer-term problems. The only serious attempt to prioritise growth came from Liz Truss, and prompted outrage from civil servants, commentators and MPs, including many Tories.
It turned out that they did not want fracking, or cheaper child care, or oil and gas drilling, or lower stamp duty, or an end to the absurd IR35 rules than punish the self-employed. They did not want to attract top-rate taxpayers – that is, the people who pay most to the British state and claim least from it. Conservative MPs knew damn well that cutting top-rate tax would bring in more revenue, but they baulked at what they called the “optics”.
Who knows, maybe they were right. Maybe that’s why, in other Anglosphere countries, economic reforms have more often been initiated by Left-of-centre politicians: Paul Martin in Canada, Roger Douglas in New Zealand, Bill Clinton in the US. Leftist governments can reduce entitlements without being accused of murdering the poor.
Might something similar be true here? In theory, Sir Keir Starmer could get away with things that no Tory would touch. He could bring the NHS into line with European healthcare systems, where public and private providers coexist. He could end the triple lock on pensions, or even let the pension age rise with longevity. He could build more houses, lifting the nooses that asphyxiate our cities and that are misleadingly called green belts. He could slow the rise in benefits spending.
But nothing in Starmer’s history suggests constancy of character. His current flip-flopping over Ulez is depressingly typical. He has gone back and forth over nationalisation, rejoining the EU and immigration. He has gone from telling us all to vote for Jeremy Corbyn to kicking the well-meaning old boob out of Labour.
Starmer’s guiding principle is popularity. To the extent that he has committed himself to anything, he wants more borrowing, tougher green targets and easier strikes – all things that will worsen our problems.
No, I’m afraid that, as in the late 1970s, we are going to have to learn the hard way. No doubt we shall be bickering about diversity and inclusion right up to the moment when the final economic calamity overwhelms us.
Britain has some of the lowest productivity in the developed world, meaning that we generate less stuff per hour. Slovenes are overtaking us now, and Poles are on course to do so in the mid-2030s. South Koreans, who had a third of our income per head as recently as 1985, have already surpassed us. Yet we refuse to acknowledge, let alone address, the causes of our decline.
Consider the oceans of ink spilt over the question of Nigel Farage’s bank account. That row dominated our news cycle for a week, following the usual trajectory of a culture-war skirmish. Commentators started from whether or not they liked Farage, and then proclaimed their supposed general principles on that basis. When the facts emerged, Farage’s critics looked foolish. The other side piled in with gusto.
All harmless enough, you might say. Indignation can be invigorating. But it can also be a massive distraction. Have you seen any discussion of how much harder it has become to open and operate a bank account in general? Any debate about whether these difficulties are deterring investment, encouraging businesses to move to places where banking is easy, such as Singapore or the Gulf?
You can hardly have failed to notice that dealing with your own bank is more of a nuisance than it used to be, what with all this “know your customer” malarkey. The bureaucracy has ballooned since Brexit – in other words, at precisely the moment when we could be opting out of the needlessly intrusive bits of the EU’s Money Laundering Directive. But never mind all that. Much more fun to have a go at Jon Sopel, eh?
The problem is not just that we refuse to see our decline as a challenge. It is that we refuse to see it at all. We keep telling ourselves that we are a rich country. Right-wingers do it out of patriotic boosterism, Left-wingers as a pitch for more spending (“Why are benefits so stingy when we’re the fifth biggest economy in the world?”)
It is true that, in global terms, we are still wealthy. It is true, too, that the EU, which has made similar mistakes to ours, is also on the slide, so that we do well enough when we measure ourselves against France, Germany or Spain. But look at the other Anglosphere countries, and a very different picture emerges.
The average American is 39 per cent wealthier and 38 per cent more productive than the average Brit. Housing is also much cheaper in the US, as was energy even before the Ukraine war.
If Britain were a US state, it would languish at the bottom of the league. When my friend Douglas Carswell, the former Conservative and Ukip MP, emigrated in despair at our lockdown, he chose Mississippi, where he now runs a think tank. He picked that state because it ranked 50th out of 50, and he believed that, if school choice and tax cuts could be made to work in Mississippi, they would work anywhere. What he found, to his surprise, was a higher standard of living than he had left behind.
“A teacher or a registered nurse here starts on maybe £41,000”, he tells me. In Britain, outside London, a teacher gets around £30,000, a nurse £25,000.
“The superintendent of a typical school district in Mississippi takes home £130,000 a year, similar to a Cabinet minister,” says Carswell. “I know landscape gardeners who make more than the hedge-fund managers I knew in west London”.
All this, remember, in the poorest state in the Union, a state whose median income is less than two thirds of the American average. As the economist Sam Bowman puts it, “Americans could stop working each year on September 22 and still be richer than Britons working for the whole year.”
We don’t have to look far to find the causes of our relative poverty. Since March 2009, the Bank of England has increased the amount of money in circulation by about 50 per cent. The currency debasement accelerated during our needlessly harsh lockdown, leaving us all worse off. Government spending and borrowing shot up, and no party proposes to return to the levels of January 2020.
We refuse to build houses while admitting half a million people per year. House prices have increased by 450 per cent in real terms since I was born in 1971, a figure no other OECD country comes close to. Expensive property drives up the cost of everything else.
Meanwhile, the proportion of day-to-day government spending dedicated to the NHS has risen from 27 per cent in 2000 to 44 per cent and will, as Sajid Javid points out, soon exceed 50 per cent. The quip that Britain is a health bureaucracy with a government attached is becoming literally true. Not only does the NHS soak up resources; it also produces worse outcomes than rival systems, so keeping more Brits off work.
We argue about Brexit, wokery and Just Stop Oil as a kind of displacement activity. We would rather not recognise, let alone remedy, our longer-term problems. The only serious attempt to prioritise growth came from Liz Truss, and prompted outrage from civil servants, commentators and MPs, including many Tories.
It turned out that they did not want fracking, or cheaper child care, or oil and gas drilling, or lower stamp duty, or an end to the absurd IR35 rules than punish the self-employed. They did not want to attract top-rate taxpayers – that is, the people who pay most to the British state and claim least from it. Conservative MPs knew damn well that cutting top-rate tax would bring in more revenue, but they baulked at what they called the “optics”.
Who knows, maybe they were right. Maybe that’s why, in other Anglosphere countries, economic reforms have more often been initiated by Left-of-centre politicians: Paul Martin in Canada, Roger Douglas in New Zealand, Bill Clinton in the US. Leftist governments can reduce entitlements without being accused of murdering the poor.
Might something similar be true here? In theory, Sir Keir Starmer could get away with things that no Tory would touch. He could bring the NHS into line with European healthcare systems, where public and private providers coexist. He could end the triple lock on pensions, or even let the pension age rise with longevity. He could build more houses, lifting the nooses that asphyxiate our cities and that are misleadingly called green belts. He could slow the rise in benefits spending.
But nothing in Starmer’s history suggests constancy of character. His current flip-flopping over Ulez is depressingly typical. He has gone back and forth over nationalisation, rejoining the EU and immigration. He has gone from telling us all to vote for Jeremy Corbyn to kicking the well-meaning old boob out of Labour.
Starmer’s guiding principle is popularity. To the extent that he has committed himself to anything, he wants more borrowing, tougher green targets and easier strikes – all things that will worsen our problems.
No, I’m afraid that, as in the late 1970s, we are going to have to learn the hard way. No doubt we shall be bickering about diversity and inclusion right up to the moment when the final economic calamity overwhelms us.
