This Time No Mistakes

Will Hutton's article in yesterday's Observer outlining his book on How to Remake Britain, which will be published in 10 days, exposes the catastrophic period of economic decline, austerity, growing inequality, and the cost of living crisis. He catalogues the mistakes made in post-war Britain with a relentless zeal. He also provides a chink of optimism for the future, this has always been an essential part of his character. 

"The level of our national debt has climbed alarmingly over the past quarter of a century, with no compensating increase in public assets..... Similarly, more than 20 years of imports of goods and services exceeding exports has meant our international debts have climbed by £1.5tn so that our balance sheet – positive for centuries as a result of empire and as a pioneer of the Industrial Revolution – is now dangerously negative. Fifty companies that could have been in the FTSE 100 were sold abroad between 1997 and 2017; we are running out of assets to sell. At the same time almost every metric on the economic and social dashboard – whether social mobility or the number of new companies launching on the London stock market – is flashing amber or red."

It is undoubtedly his most significant book since The State We're In, which was a precursor to the arrival of the Blair government in 1997. He has no compunction in pointing to Margaret Thatcher's government as the instigator of the collapse. Nor does he hold back from criticising the "rightwing nexus of libertarian tax-cutters and immigration-phobes, who put those aims above the rule of law and respect for human rights. They are unfit to govern."

"Rightwing ideological maxims, initiated by Margaret Thatcher in 1979 and continued by her imitators, have led to a sequence of policy disasters – monetarism, wholesale financial deregulation, austerity and then Brexit. Far from launching a renaissance, Thatcher was the author of a pernicious decline. The doctrine is that the private “I” is morally superior to anything public, that the state’s “coercive” proclivities must be reined in to promote a “free” market, that regulation and taxation stifle enterprise, that unless ferociously means-tested and minimalist, welfare creates a huge underclass of undeserving “shirkers”, and that good public services follow from a successful economy rather than being integral to it." 

"In the 1980s, monetarism did not contain inflation as billed, but rather prompted mass unemployment, hollowed out much of our productive economy – manufacturing employment nearly halved in a decade – and eviscerated public investment. The areas so scarred by the experience would, 30 years later, vote for Brexit. Financial deregulation led to the fastest rise in private indebtedness in our history, propelling illusory economic growth buoyed not by investment and innovation but by a flood of credit. It could only end in tears."

He does not flinch from castigating Blair and Brown as lukewarm followers of fashion. Even Blair has admitted he was far too cautious in investing in public services during his first period of office. After all, Gordon Brown was his ever-so-prudent Chancellor who determined that fiscal stability meant there was no room for renationalisation of the yet-to-be fully privatised railways.

"Britain’s liberal left cannot absolve itself of blame. If Conservatism has over-emphasised the “I”, the left has not yet found an electorally attractive way of making the case for “We” – or, better still, blending it with the “I” to create a political philosophy and attractive policies that flow from it, that would appeal to the majority. My proposition is that the “We” should be built on fusing an ethic of socialism grounded in profound human attachment to fellowship, mutuality and co-operation with the ethic of progressive liberalism....,. Essentially, individuals and society are in a constant iterative relationship. Individuals shape society, society shapes individuals, and each and everyone has an obligation to make the social whole as strong as possible."

He argues that Keynes' economic revolution and Beveridge's welfare state illustrate how progressive liberalism allied with socialism can be a powerful elixir for positive change. This is How to Remake Britain.

"Progressive liberalism and an ethic of socialism are not incompatible value systems: they are complementary. Progressive liberalism leans into the individualism that propels capitalism while accepting social obligations; an ethic of socialism leans into the foundation of a social contract and infrastructure of justice that underpins the sinews of a good society."

His starting point is to raise public investment decisively and so “crowd in” private investment radically to lift productivity and real wages. He focuses on three musts:

• closing the disgraceful gap in productivity, infrastructure and economic performance between London and the regions; 
• a commitment to achieve net zero by 2050 given the alarming rise in global temperatures; and 
• lifting research and development spending dramatically. 

He argues that it will require public borrowing for such investment to rise by at least 1% of GDP, or between £25bn– £30bn, with fiscal rules not determined solely by accounting, goals. He believes that the financial markets will be reassured if they know that the government investment is strategic and thought through. 

"Shibboleths about taxation need to be put to one side. Taxation represents the “we”, and as long as the demands on all sections of society are reasonable – involving at present a greater contribution by the wealthy, whose assets in relation to GDP have doubled since 1980 – there is no evidence that tax receipts at today’s level or even marginally higher will damage growth."

The missing link in Hutton's argument is the need for a comprehensive recasting of the British Constitution. He does argue for stronger accountability with the House of Lords democratised and an enforcement of ethical standards. What he fails to advocate is a root and branch reform of our constitution and he is silent on the importance of localism.

In the halcyon days of the UK being in the vanguard of the Enlightenment and Industrial Revolution, much of the need and motivation for radical change, innovation and delivery occurred at the local level. It was not a top-down series of Eureka moments from the government. It was tackling poverty, poor health, education and communications at the local level that nurtured the ideas, technology and collaboration between the municipalities, local entrepreneurs and inventive minds. This is what generated the revolutions in public health, transport, power supply, and manufacturing industries. There was a sharing of these inventions and ideas across and between localities. Government of the localities, by the localities, for the localities would ensure that 'This Time No Mistake' is not just another titular mantra destined for failure.

The evolution of new ideas seldom starts at the government level, they lack the detailed knowledge of problems or the experience to make things happen. It is the recognition and promotion of our regions, cities and councils' right to take back control of identifying needs and finding solutions that are the missing link in Hutton's analysis. If this is not recognised as we head towards the general election, even his optimism may lead to 'This Time More Mistakes' as the wannabe panjandrums and spads trade their WhatsApp messages with gay abandon.