Labour’s conformism is crushing Britain

(with Karel Williams)

This is a government of conformists. The core doctrine remaining to Keir Starmer and his “Project” is cleaving senselessly to elite consensus and the vested interests of lobbyists. Instead of a politics of real change, we have a politics of issue management, of botch-jobs and technological panaceas, of the repression of alternatives. Last week’s Budget was a case in point.

Having prioritised fantasies about high growth, the government is now constrained by minimal levels of growth. It has produced a budget to maintain the status quo through a combination of small tweaks, and three significant changes: increasing the income tax take (without breaking the letter of the damaging manifesto commitment of 2024), taxing EVs as should have been done years ago, and ending the untenable two child benefit cap, which the government could have actually claimed credit for had it been done in the first days of the government.

Otherwise there were minor improvements to what were in effect tax breaks for investors, the pensions of the rich, and the owners of expensive houses.But the time when this government was an actor upon events, rather than their merely their slave, seems already behind us. Economic stagnation continues, the climate crisis swells, and Britain accepts the foreign policy of Donald Trump’s United States. How did the British political class become so timid and so conceited?

Risk avoidance and conservatism are no doubt the default position of most governments and their administrative machines. But things can be and were different. In the past British governments and the British elite have been more than capable of thinking originally and changing things radically. Without dissolving into nostalgia, there have been periods when the United Kingdom was genuinely fortunate in its leadership. In the postwar decades, British leaders changed their country in fundamental ways. Riding a long boom in economic growth, they delivered social advance for the majority, and a transformed infrastructure. They built and changed the welfare state and the NHS; they abandoned Empire and went into the Common Market. They reduced inequality.

Belying stereotypes of “gentlemen amateurs”, the intellectual and political class who imagined and delivered this – within and beyond the Labour party – were a mixture of Establishment thinkers and upstart administrators. Some were from big business; some had experience organising with trade unions and opposing the status quo. Beveridge, Bevin, Bevan and all their successors were committed to a project of national transformation and were open to the new thinking required. And below them was a cadre of reformers: capable administrators, political advisers, chairs of Royal Commissions. Among the social scientists, Richard Titmuss and Alec Cairncross; among the humanists, Lords Annan and Fulton; and among the scientists, Lords Zuckerman and Flowers. They took public service seriously partly because they shared Keynes’ assumption that policy decisions could be made in the public interest and affairs would be managed by discussion among a small group of wise and enlightened insiders. It was a world in which different insider groups competed, structured not just by party but by the ambition to do things differently from the past. This was a period when the state had decided to build, with public money dispensed on social housing, power stations, motorways, reservoirs and much more on a huge scale.

Continued in the New Statesman

The goverment's Annus Horribilis

A year ago a new government was elected with a small proportion of the vote and a massive majority. It calls itself a Labour government and says its programme is one of change and renewal. It is neither. Keir Starmer and his people did not like the revived Labour Party which arose from the ashes of New Labour. Instead, they built a new party which, like New Labour, was rigidly controlled from the centre, funded by the rich, disdainful of its members and voters and committed to minimal change. In the 2024 election it added a mere 1.6 percentage points to the 2019 Labour share of the vote.

Since then, the party’s polling has collapsed to an unprecedented degree. Though hard to believe today, once upon a time Labour governments used to essentially maintain, and sometimes increase, their vote share between winning and losing general elections. But the support for both Starmer’s party and New Labour has behaved very differently. New Labour’s vote share only fell between 1997 and 2010. Starmer’s party is shedding votes even faster. Polling today shows it would get an even lower share of the vote than in the even more disastrous 2010 and 2015 contests, and even worse than the post-war nadir of 1983.

The last Labour government ended in 1979. In three periods in office (though never truly in power) it changed the country. Never as radical as many hoped, it nevertheless offered an alternative and delivered change. It may not have created the welfare state, but it changed and extended it (not least in the 1970s); it may not have taken over the commanding heights of the economy, but each Labour government nationalised important industries and pursued distinctive industrial policies. The party had serious analyses, often competing ones, of what was wrong with the country and what might be done. It was a distinctly social democratic party and a nationalist party.

It is no secret that the leadership of successor parties have wanted to distinguish themselves from that historic one. Thus we have “New Labour” and Starmer constantly reminding us, with remarkable lack of appreciation of constitutional niceties, that he leads his government. Both are right. These governments are different. For example, neither has a distinctive analysis of the British condition, and no plan to make serious changes. “New Labour” was lucky it could pretend all was fine with the British economy, and it offered tiny pledges for change, and a change of mood. Starmer’s government has swaddled itself in the Tory rhetoric of fiscal rectitude, stability, deregulation, welfare cuts, higher defence spending.

Neither sees the virtue, or the usefulness, of telling the truth, once an essential feature of social democratic politics. Political discourse was deeply corrupted by “New Labour” and of course new depths were plumbed under Boris Johnson. Today, there is a little more honesty in government documents, but nowhere near enough. In the country at large, trust in government as well as dissent from its policies is widespread.

Some say that despite everything, Starmer’s government is social democratic because it raised taxes and spending to fund the NHS and instigated some state investment. But the idea that the Tories would have kept to their spending limits is for the birds. They would have had to do same if it wanted to keep the NHS going (which is what its aged voters wanted) and to get the level of state investment to the minimum necessary levels. In any case the real issue is not the level of spending, but the level of need and how it is addressed. And it is telling that Starmer’s government has chosen defence over foreign aid, welfare cuts over tax rises, prisons over school building, and the same investments supported by private lobbies as the Tories – carbon capture, nuclear, roads, airports. It celebrates minimalist, sometimes damaging trade deals just like the Tory Brexiters did. Fantasies about AI, proffered by interested lobbies, substitute for serious thinking about the NHS.

The recently released industrial strategy promises much the same as Tory industrial policies of the last 40 years – bring in foreign investment, deregulate, stimulate innovation and entrepreneurship. The government is going for growth on the basis of Tory models of the economy. It is telling that Starmer’s article in the Financial Times outlining the proposals contained nothing but the distilled banalities of Thatcherism and Blairism with a touch of Brexiteer fantasising. His and his government’s sad, shop-worn clichés say it all – turbocharging this, kickstarting that, being “laser focused” on something else, mainlining AI, supporting world-leading this and that, creating superpowers. It is not just passé talk, but passé policy too.

Backbenchers have rebelled in the name of “Labour values” to force the government to reverse most of its cuts to the pension (the winter fuel allowance is really part of the universal pension) and to abandon its radical cuts for support for the disabled. But the problem was not lack of Labour values. It was the actual values of the Starmer government. The conceit that because it is “Labour” the government does these things with regret should not wash anymore.

Even those who held out no hope for any economic transformation might have expected a government respectful of the law and of principles of decent government, and supportive of integration with the European Union, and indeed the national interest. But the government has drunk the Brexit Kool-Aid and accepted many of its underlying delusions. It crawled to Trump and played dumb when the sovereignty of Canada and Greenland was threatened. For all its talk about global responsibilities, it protects Israel from Iran and global condemnation but does not protect Palestinians from Israel.

This government has been far more concerned to support the self-image of a foreign country and its army than British rights of free speech or commitment to international law. At a more trivial but telling level it concocted a plot to deny Parliament a vote on Palestine, which the Speaker, to his shame, endorsed. In Parliament, it peddles feeble mendacities about humanitarian concern and its support for a two-state solution; it shows its true aims when it sells arms, provides diplomatic cover and proscribes Palestine Action (a move which most Labour MPs voted for). Raison d’état, they might call it – but it is the raison d’état of foreign countries.

One would have hoped, however naively, that Starmer’s government might have influenced the tone of politics. But far from shifting the centre of gravity of political discourse to the left, it has itself helped shift it to the right – not least by echoing Reform. Many government supporters have over the past year complained of a lack of vision, or even a story, and about Starmer in particular. They have yearned for it to be true to their vision of what they want it to be; that it ought to be a social democratic, centre-left government. But it does have a vision, which is what we see it enacting. It is what we see it doing, aping Tories and Reform, changing nothing important, dumping on the same people, at home and abroad, as the Tories did. It is true to itself; it is Starmer’s government.

But it is not just Starmer’s government. It is also the government of its MPs, its financial supporters and many of its members. Party members and MPs can no longer hide behind the idea that the leadership has betrayed the movement. In the days of the old Labour Party such an analysis was tenable. In the days of New Labour and Starmer’s government, it is delusional. If they are anything more than a cynical rallying cry of proxies for leadership candidates, “Labour values” now mean recreating the Labour Party as a party of working people, a party with a distinct and truthful analysis of the state we are in, and a party willing to change it.

New Statesman 5 July 2025

My Idea for Keir, from the New Statesman

Begin to appreciate that many of the problems the country faces are the product of implemented New Labour and Tory policies, not the lack of competence of the Tories. They got what they wanted done. Yet you have doubled down on their policies and practices – deregulation, welfare cuts, Brexit, encouraging corporate lobbyists, investing in carbon capture, sucking up to hard right-wing US governments, indulging genocide and aping their systematic mendacity. The result will be much the same, however much you talk about growth and fiscal rectitude. They did that too. It really is time for a change.

For the complete set see New Statesman 11 June 2025

Labour claims to be defending Britain from new threats, but its warfare state is steeped in old thinking

It is hard to take this Labour government seriously or literally. In presenting its much-heralded strategic defence review and calling for a new national resolve, it not only treated parliament with contempt – making big policy announcements outside the House of Commons – it gave the country ludicrously exaggerated claims for a “defence dividend”: the idea that increasing investment in the defence sector will boost growth and create high-quality jobs. It failed to explain why money for arms should be a better stimulus for the economy than, say, funding nurseries.

The government claims that the world has become so much more dangerous that a “root and branch” review of defence is needed. It claims that transformation and innovation are essential. Except there is very little that is innovative or transformative about the new approach. The programme it has come up with is a doubling down on the old – on the renovation of the “sovereign nuclear warhead” programme (to be mounted on very un-sovereign US-made and maintained missiles), on up to 12 new nuclear powered submarines, on cyber and drones, which have been staples in defence procurement discussion for well over a decade. The US remains, despite everything, Britain’s “first partner”, with whom ties should be strengthened. This is no great rupture with the past. And, as many have pointed out, there is a huge gap between the rhetoric and the spending, which will merely increase from 2.3% to 2.5% of GDP.

How are we to explain this? Labour has relished the opportunity to present itself as the party of rearmament, just as Tony Blair gleefully believed he was the first to make the Labour party a war party. Its unseemly enthusiasm is reflected in Keir Starmer’s childish talk of “a battle-ready, armour-clad nation” or of British “warriors”. The prime minister even claimed “we will innovate and accelerate innovation to a wartime pace” and become “the fastest innovator in Nato”. This is Labour wanting to become the Tory party of its imagination, to purge itself of the stain of social democracy, to indulge itself in nationalist nostalgia, not least for wartime. Continued in the Guardian 4th June 2025

Evidence on Defence Industrial Strategy and Related Matters

I was asked to give written evidence to the Select Committee on Business and Trade, focussing on defence industrial strategy and related matters. I did so as I was dismayed by the low level level of analysis (‘defence industrial superpower’) and the prevalence of very naive assumptions about industrial strategy and British innovation. Yet again arguments were made taking the UK case in isolation, misunderstanding its place in the world, and not recognising that things had changed, and in case, relying on dubious history.

Introduction

In this evidence I have presented some thoughts about defence industrial strategy, industrial policy, and innovation. Some of the discussion is historical. I make no apology for this. Much discussion of policy in this area is profoundly shaped by historical arguments. In my experience, many are wrong and need challenging if only to free up the policy imagination to analysis of the problems of the present, which are very different. I have appended the text of two talks on related topics which I hope the Committee will find of interest. The first was given to the Worshipful Company of Engineers, the second to a conference at the Ministère de l'Économie, des Finances et de la Souveraineté industrielle et numérique in Paris.

Problems in thinking about policy in the present and recent past

One of the most striking features of the debate on industrial and innovation in the British case is a failure to understand the UK’s place in the world, fatally combined with delusions about British strength. That said, in the real world of policy, as opposed to politics, a certain realism must appear, for example the recognition that manufacturing is a small sector of the economy, and services account for 50 percent of British exports, or that it is an open question whether a ‘sovereign’ virgin steel capacity is necessary. Nevertheless, policy discourse itself is deeply affected the idea of the UK being or becoming a science, innovation, or defence industrial superpower, and is contaminated by claims that UK prowess is world-leading or world-beating. This is not pardonable exaggeration, or simply a sad reflection of the level of political culture, or a left over from the past. These delusions are new and damaging to British progress. It would be a great help to policy making for the policy discourse to appreciate that the UK is a big Canada (about 50 percent bigger) with a lower per capita GDP. It is not a small United States, but a small Germany. It is not the world in microcosm, but a small interdependent part of it. It does not in a serious sense punch above its weight, and even if it did, bantam weights rarely come off well in bouts with heavyweights. Pretending to play premier league football while in the first division is a recipe for failure, not success. There is also a particular historical-political economic issue which affects understanding of industrial policy. There is a standard way of thinking about industrial policy, and that is that it is a good thing, but has been largely missing from the history of the UK. The history of industrial policy in recent years is thus taken to be the history of a few reversed initiatives. There are three fundamental dangers in this kind of thinking.

The first is that all governments have policies for industry, which typically differ by sector, whether they call them industrial policies or not. Nor should we forget the many selective tax reliefs and subsidies which are often more expensive than industrial policy as usually defined. There are also important general industrial policies. For the last forty years perhaps the most important have been 1) opening up the economy, to the EU and the world, 2) encouragement of foreign investment (foreign capital accounts for around 50 percent of manufacturing) 3) an innovation policy focussed on start-ups and entrepreneurs. In the recent past by far the most important industrial policy has been Brexit.

The second is believing that industrial policy is a good thing, better than having no industrial policy. However, some industrial policies are bad. Sectoral or other forms of narrow, discriminatory industrial policy are a recipe for capture, often leading to outcomes which are worse than no intervention. The National Wealth Fund’s singly largest investment programme in Carbon Capture and Storage may well be a particular case in point. Another crucial point is that one cannot think of industrial policy as a policy choice over not having one. Industrial policies are often imposed by circumstances, and can be a second best.

The third is believing that all countries should have the same policy. Thus, in the UK industrial policy is sometimes argued for on the grounds that the Biden administration did it, or China does it. But the USA and China (and the EU) have scope for developing industrial policies the UK simply does not have. It is worth recalling that even the massive United States is no longer self-sufficient in critical manufacturers, and that reshoring production, with no guarantee such policies would work, involves placing massive tariffs on overseas production. The UK is an a radically different position. The point is therefore not whether to have an industrial policy, but what kind of policy, recognising that bad policy is a very real possibility, and that the UK is in a particular position in the world economy. That said, there are important opportunities to improve the quality of work and life by integrating production and consumption at national level in fresh ways, avoiding the race to the bottom as wages are driven down and service quality declines. Most will be in the 80 percent of the economy we call services, but such considerations apply to industry also. But it needs to be recognised that such a programme requires understanding the profound changes in the British economy in the last forty years, the material aspects of particular industries, and having a complementary policy for trade.

Getting these things right is difficult, as the British Steel case illustrates. It should surprise no one that for decades the UK has imported steel. Policy has recently recognised the need to move to limited, all-electric steel making based on scrap. Policy has been to subsidise foreign companies to install electric furnaces instead of blast furnaces, and to look to DRI. Yet now two very old blast furnaces, with little life left, are to be saved, though presumably for a short period, at great expense, where the more modern ones at Port Talbot were closed down. There is no evidence that Scunthorpe blast furnace steel is needed for defence at present, and there will obviously not be around for long. Where there might be a case for intervention is in the rolling mills at British Steel, but these were not threatened with closure. In short, the British Steel case shows how industrial intervention should not be done. Continued here

On the need for evidence based research policy - a response.

Thanks to Ben Johnson and Pedro Serôdio  for commenting  (here) on my paper in Research Fortnight (see the post below).

Theirs’s isn’t in fact a response to my paper, but rather an illustrative example of the problems I was trying to get at. They don’t recognise the issue I was raising and seem to think that I am denying that R&D is important. This is not the case.  The  science base, R&D, innovation are all profoundly important at global level, but the relations to the national case are not straightforward, for reasons which should be obvious but are not.  What is true of the world economy, or of say the USA may not be true of the UK.  Not seeing this is a fundamental flaw in science policy, as I know.  Hence my reference to blasphemy.

That my key point is not appreciated is revealed by the fact that the evidence, and the papers cited, about spillovers and the like are not (with one exception) about the UK. The study of spillovers is for R&D done in industry in the United States.   Another uses OECD and French data and shows a very low defence  R&D effect on US growth. Another looks at Korea, another at the US.  One is a survey of theories and points which fail to address the obvious empirics of national R&D and growth I was trying to put on the agenda (yet more grist to my mill).   The only one on the UK shows that UK tax breaks increase R&D, and then makes assumptions about spillovers – there is no analysis of actual UK spillovers.  

I tried to pre-empt what seems to be their main point relating to the UK, which is about absorptive capacity, because I know it is a last-ditch defence of the conventional view that national innovation correlates positively with national growth (or should do). I noted: ‘The argument that R&D is needed to absorb overseas innovations is an untested assertion. It will doubtless be true in some cases, but not in others, probably most, given the importance of multinationals and straightforward transfers. It is not supported by national-level data.’   Ben and Pedro just reassert the point I was objecting to.   Sure, as I noted, there is doubtless something to it, but how important is it?  What is the evidence that this is significant, especially for the academic research base?  Are we supposed to believe we have electric cars because of British battery R&D?  Science policy needs a proper evidence base, not the reassertion of supposed truisms. It is too important for that.

Lastly, Ben and Pedro suggest that I think that because the economy has not grown it is because of a failure of research. Again, obviously not as I am pointing to importance of overseas research.  My point was about the failure of the model they are defending, which does indeed arise from not noting that other things are involved in growth, which they seem to think is my problem, not least overseas research. Ben and Pedro don’t seem to want to see  that what I am calling for is not the end of British R&D, but for a different policy for it, one which might work.   As I say, all grist to my mill.

Innovation and Growth - the need for evidence based policy

If British innovation could drive British growth, it would have already happened, says David Edgerton

First it was the budget, then it was the regulators. Now they have come for UK Research and Innovation. The government’s mission for UKRI’s next leader, Ian Chapman, is growth, growth, growth.

But UK research policy has been focused on growth for decades. The brilliant British science base would—it was and still is believed—bring forth innovations that, when taken up by entrepreneurs, transform the economy. 

Yet despite 40 years of growth-oriented public R&D spending, and lavish subsidies to private R&D, and generous support for spinouts and small and medium-sized enterprises (SMEs), and venture capital, the economy has grown more slowly than before, with productivity growth flatlining since the 2008 financial crisis. 

Put another way, where are the world-beating British enterprises and products born from government-funded research programmes and spinouts? Don’t say the chip designer Arm—it is not British-owned, and doesn’t owe its success to public research funding. The reality is that at best, one gets talk of unicorn valuations, not significant turnover or employment. 

This growth model has already failed. However, Labour’s answer is, as with economic policy more generally, to double down on past Tory policies, pretending they were never applied or were applied incompetently.  

Continued in Research Fortnight

Britain cries out for new economics. Labour has given it repackaged Tory ideas

Has Labour got a radical economic programme, on a par with 1945 or 1964? Has it stealthily snuck this past a hostile electorate? If you glanced at coverage of last week’s “historic” budget, you could be forgiven for thinking it had. At the election, the party promised minor increases in tax and spending, and now it is proposing major increases in borrowing, taxing and spending. But while this might seem like a screeching U-turn, it is nothing of the sort. Far from being radical, Labour’s programme shows deep continuities with failed Tory ideas and policies that do not meet the requirements of the hour, let alone offer any hope for the sort of transformation Labour once provided.

Continued in the Guardian 6 November 2024

Labour is telling Britain it is now a conservative party – and we should believe it

Let’s take Starmer at his word that it is the party of wealth creation and growth, not redistribution and equality. What will this mean for our politics?

We now live, despite appearances, in an age of consensus. We should perhaps call it Starnakism, a much more profound consensus than Blatcherism (the portmanteau of Blair and Thatcher) or the postwar Butskellism (Rab Butler and Hugh Gaitskell). Its most telling feature is that the Labour party’s fundamental criticism of the Tories is their lack of competence, rather than their policies.

Yet the idea that Labour remains a progressive social democratic party hiding in plain sight is still in the air. While it is granted this is not obvious from its programme, it is held that deep down it is the party of change, of welfare, of state intervention; the party of labour rather than of capital, the party of international law, not war. It is held that in power, either circumstances or opportunity will make it more radical. That hope animates many.

Yet Labour is telling the world otherwise, and we should believe it. While the Tories promise tax and welfare cuts, it offers minor increases in tax and spend, premised on cuts in other areas. Labour says it will not increase benefits, or remove the two-child cap; it will only make improvements to education and healthcare that are trivial in the context of the challenges faced, adding only marginal numbers of appointments and teachers.

It tells us it is now the party of wealth creation and growth, not redistribution or equality (that is, people at the bottom will only get more if the size of the cake increases, and they will keep the same share of the cake as before). It sees no Israeli war crimes in Palestine. It will marginally retilt capital-labour relations, which one hopes will reduce inequality somewhat, but it does not differentiate between good and bad types of business – all business is good. Brexit is accepted.

Continued in the Guardian 28 June 2024

Keir Starmer and Tory History

In December, in an article in the Sunday Telegraph, Keir Starmer made a supportive comment about Margaret Thatcher. It attracted derision from the left. His supporters responded that he was stating the obvious. But he was not. Keir Starmer made a general historical argument, here in its entirety:

‘Margaret Thatcher sought to drag Britain out of its stupor by setting loose our natural entrepreneurialism. Tony Blair reimagined a stale, outdated Labour Party into one that could seize the optimism of the late 1990s. A century ago, Clement Attlee wrote that Labour must be a party of duty and patriotism, not abstract theory. To build a “New Jerusalem” meant first casting off the mind-forged manacles.’ – The Sunday Telegraph, 2 December 2023

It is a remarkable and revealing passage. For it seems to be saying that only Thatcher and (partially) Attlee made a difference to the status quo. This runs counter to the traditional social democratic story – that Labour created something good, which Thatcher destroyed. To have this analysis from a Labour leader is astonishing (even if it was probably shared by Blair and Brown).

Continued in Red Pepper (29 February 2024)

The 'People's War'?

In 2021 I published a long article in the English Historical Review which looked at the origins of the ideas that ‘Britain was alone’ in 1940/41 and that it fought a ‘people’s war’ (‘The Nationalisation of British History: Historians, Nationalism and the Myths of 1940’). The article grew out of my 2011 book on the history of the British second world war (Britain’s War Machine) in which I had shown that if anything was said to be alone in 1940/41 it was the whole British Empire, not Britain, and that the term ‘people’s war’ had various differing meanings in the war itself, including one which claimed that Britain was not fighting such a war. In the article I traced wartime usages further and looked into when and in what senses historians came to use ‘Britain was alone’ and ‘people’s war’.

The English Historical Review, in the first of a new feature called Forum, have published three papers upholding the standard view that a particular form of understanding of ‘people’s war’ was the dominant ideology of wartime Britain (Lucy Noakes, ‘The ‘People’s War’ in Concrete and Stone: Death and the Negotiation of Collective Identity in Second World War Britain’ ; Sean Dettman and Richard Toye, ‘The Discourse of ‘The People’s War’ in Britain and the USA during World War II; and, Jessica Hammett and Henry Irving, ‘Renegotiating Citizenship through the Lens of the ‘People’s War’ in Second World War Britain’). The papers, and one in particular, that by Sean Dettman and Richard Toye, take issue with my claims about wartime usages. As part of the Forum I have responded to the multiple misunderstandings of what my paper argued and tried to make sense of this as well as pointing to the ways historians have already looked afresh at the history of the war (‘A Cliché to Be Avoided Like the Plague: The ‘People’s War’ in the History and Historiography of the British Second World War’).

Conservative hostility to net zero proves the party has turned its back on British capitalism

Of all Rishi Sunak’s blunders and policy decisions in 2023, perhaps the most consequential was his move to delay key milestones on the way to net zero. Sunak postponed the banning of sales of petrol and diesel cars and domestic boilers two months after the government authorised more carbon extraction from the North Sea. Cue outrage from the capitalists to the greens, from greens to even some Tories. What on earth was he doing?

Continued in the Guardian 22 January 2024

We need to reject the fantasy economics of the conservatives of both parties

Luca Calafati, Julie Froud, Colin Haslam, Sukhdev Johal and Karel Williams, When Nothing Works: From Cost of Living to Foundational Liveability (Manchester University Press, 2023)

 I had the very great pleasure, along with Grace Blakeley and Aditya Chakrabortty, to say some words about the above book at its launch at QMUL recently. I’ve written up my comments on this most book below.

This book represents one of the most hopeful and important developments in political economy for a long time. It points to new ways of thinking, new programmes and policies, ones with a chance of working in the new context in which we live.

It suggests a new way of knowing, of understanding the world, which means we see things differently, and we see things we did not see before.  It also suggests a new way of acting, a new politics, and one very different from that on offer from the two main parties, and from the think tanks.  Its critique is powerful and ambitious one. As the authors note:  ‘The UK system of economic knowledge production is centralised and hierarchical, so regional universities promote conformism and Celtic nationalists favour independence but so that they can more effectively deliver the consensus aims of Westminster economic policy.’ That is a stinging and powerful charge.

What they call techno-centrist and free market partisans both want more growth and higher wages (that is higher productivity). They differ in the nature of the supply-side drives they highlight – inventions and entrepreneurs, though both are typically closely linked.  To this programme are added measures to narrow geographical productivity differences, by, guess what, encouraging local invention and entrepreneurship.  This is the policy of both the Tories and Labour.  

These policies have been central for decades, yet have failed  to increase rates of growth over those of the long post-war boom and even more so the growth of incomes for the many.  Yet, not recognising this, advocates claim their ideas have not yet been tried, much like Brexiters explain the failure of Brexit to work. 

Underlying the critique is a sense that a lot of our economic ideas are left-overs from an era when industry dominated economies as well as imaginations, and where we did have high growth rates.  We are still focussed on good jobs in manufacturing, on industrial policy, on research and development when today the economy is 80 per cent services, and there are different dynamics around productivity and around imports and exports, and new problems which make the old industrially-driven growth rates not only unlikely but unsustainable.

Instead of this economics of fantasy they call for a political economy of improvement. Instead of wishful thinking about science and entrepreneurship they want to make things better based on systematic knowledge rather than the consensus of the think tanks.

So, what are the elements of this new approach?  First there is a renewal of focus on the household rather than the individual, on the distribution of household income and how it has changed over time. This leads to the realisation that broadly speaking today the single breadwinner household implies poverty for dependents, and that if we were to return to 1970s levels of equality, most households would be considerable richer.  The family wage has gone; the promises of trickle down have hidden the reality of forcing up of the share of capital of the national cake.

Second, there is focus on all sorts of incomes, and focus on essential expenditures.    What they call foundational empirics show the importance of bought essential services (from the internet to buses to food) and free services like health and education.   A startling revelation is the extent of the importance not so much of benefits (now vital to the working poor), but of free services to the poorest, which is worth more to many than either wages or benefits.  The upshot is clear – liveability depends not just on wages and benefits, but on the availability and quality of free services, as well as social infrastructures (from parks to pubs). In other words, we depend not just on money, but on infrastructures, material and human which cannot simply be bought.

So a proper economics has to be about much more than the income of individuals (even aggregated) but one of the structures people live in (households) and the multiple infrastructures which sustain life, including the foundational economy.  Improvement has to be about much more that providing more cash, it is also about the provision of services, free and paid for, and amenities of many kinds.

This kind of thinking is necessary because the effects of the market revolution, and its privatisations and drives for efficiency, have led to decrease in wages for the poorest, the fall in benefits, and reductions in the provision of foundational goods and services (free or paid).  There is thus a multiple crisis of liveability. 

But it is also necessary because of the challenges of decarbonisation.  This clearly requires action (which will be forced on the country) focussed on transforming infrastructures. It directly affects key costs and requires massive investment.  You cannot think it through as if it were a green industrial revolution, or as a programme for new R&D programmes and entrepreneurial start-ups.  It is a systemic issue which must be dealt with as such, and at the centre needs to be a multi-dimensional analysis of the households nearly all of us live in.  For the challenge is to change the housing and transport infrastructures of the many without imposing impossible costs on people.  Decarbonising electricity and making wind turbines is the easy bit.

One common and often powerful critique of radical policy proposals is that too often they in effect say: I wouldn’t start from here.  That is, they are cries of despair that we have the wrong politics and demands for a kind of politics we do not have.  Here too our authors innovate.  What shines through this book is the need to understand where we really are, and that includes not just the problem, but the possible solutions, that we really do need to start from where we really are.  And here that implies rejecting the fantasy economics of the conservatives of both parties.  That political economics of fantasy has become the British norm, spreading from Brexitism across the political spectrum, from wishing to be a science superpower, to dreaming of having the fastest rate of growth in the G7, to boasting of being a world leader in green technology.  We desperately need a more modest politics, a politics of improvement, rather than one of rhetorical excess and social misery.  And this book opens our eyes to this necessity.

Britain, here’s a plan: stop applying old fixes to new problems. And stop obsessing about growth

Crises in productivity and wealth inequality won’t be solved with ideas from the 80s. It’s not about a bigger pie – we need a different one

ccording to our politicians and most of the media, the central problem facing the British economy is a lack of growth. We need growth, we are told, to pay for this or that public service, or good wages, or housing. Just this week it was reported that the chancellor would need to plan further cuts in expenditure as a result of the Office for Budget Responsibility downgrading the UK’s growth prospects.

But we should beware framing the lack of growth as the main affliction. In any case, the solutions to the growth problem have been tried and largely failed, whether the austerity of the Cameron years, the tax cuts proposed by Liz Truss and Kwasi Kwarteng or the innovation promised by all governments since the 1990s. The problems of the present are genuinely novel, and require not so much growing the British economy as transforming it.

Continued in the Guardian (26 January 2023)

The woes of startup Britishvolt

Fake it till you make it has been the guiding maxim of British government policy for national renewal since Brexit. Don’t be a declinist remoaner, they say, instead enjoy the feeling of being a science superpower, an innovation hub, a global player, a new fount of regulation, and watch those entrepreneurs go, go, go. See them thrust into new markets as those great trade deals open up the world to British ingenuity.

In reality, the country has gone from hero to zero in a few months. The bankers are clamouring to slow the economy by pushing down wages and for cuts in public expenditure.

This is the context in which we should understand the sorry story of Britishvolt. The startup was formed in 2019 to build batteries for electric cars in the UK. It was first to be established (with promise of government subsidies) in south Wales, and then in Blyth in Northumberland, again with large subsidies promised. Three years later, it is considering going into administration amongst other options.

Continued in the Guardian 12 November 2022

Thoughts on the end of Truss and how Labour might react

The tendency to see British politics as an expression of a deeply entrenched, long-gone past has not helped us understand how much has changed in recent times. We have just witnessed the latest failed Conservative attempt to break with the Cameron-Osborne paradigm to which we have now returned. Labour, too, is tempted to return to the pre-2015 era. But there is no going back, and new realities need new politics. 

The transformation of the Tories into a May-Johnson-Truss Brexit Party was an extraordinary rejection of the New Labour/Cameronian consensus. But more than this, it triggered a whole new understanding of the state of the nation. On the one hand there was a radical revivalism, a depiction of Britain as an innovation superpower, ready to unshackle itself from Europe and assume its proper place in the world. It was implied that Margaret Thatcher had reversed the historic decline of the United Kingdom. 

On the other hand, there was a new understanding that much of the country had been left behind during these years and that a new national politics of “levelling up” was needed. Brexit contained all this and more. 

There was always a hard-right Thatcherite programme of privatisation, deregulation and free trade at the heart of the Brexit project. Both Theresa May, and to a lesser extent Boris Johnson, counterbalanced this with a more interventionist and nationalist approach. But Trussism represented this radical, free-market Brexit in its purest form.  

Continued in the New Statesman

Q&A The Queen’s Death and Competing Narratives of Empire

Does the U.K. focus too much on its imperial past, or not enough?

Nesrine Malik of the Guardian and I were taking different positions on the pertinence of empire to very recent British history. I was challenging the practice of merely asserting the significance of empire and suggested that this obscured many of the most important features of contemporary politics. We are in conversation with Isaac Chotiner, New Yorker 21 September 2022. See also my Guardian article on this theme posted below.

The Tories were once the party of the monarchy. Now they have other priorities

Following the death of Elizabeth II, power is performing its truths, transforming princes into kings and dukes and children into princes. But as the British state becomes less legitimate, these processes are losing their potency. The late Queen is revered across the world but the monarchy itself has lost its magic. Charles is King, but the monarchy will not be what it was.

Monarchy was never above politics. It rested on it and on the Conservative party in particular. This was the party of the monarchy, the union, the constitution, the established churches and the empire. In 1936, it disposed of a king emperor who offended its bourgeois sensibilities, thus redirecting the royal line of succession down to King Charles III. It was a Conservative government of the 1950s that redefined the monarchy as a national rather than imperial one. A then-imperialist Enoch Powell, in his tilting at the royal titles bill, was appalled, but to no effect. In time, he would become an ardent nationalist, dismissive of empire as a passing phase and the Commonwealth as a racial danger to the nation.

Today’s Conservative party is radically different from that of the 1950s. It has taken up Powellite free marketism and nationalism rather than imperialism. It now cares little for church or constitution. Of course it celebrates the person of the late Queen, but monarchy is a subtly different matter.

Continued in the Observer 11 September 2022

British diplomacy in the dock

In 1997, just ten days into office, Labour’s foreign secretary, Robin Cook, issued a new mission statement for the Foreign and Commonwealth Office. He invited its staff to work with the Blair government “in a joint project to make Britain once again a force for good in the world”. He had the grace and political wit to write “once again”. Since then, the phrase – stripped of that crucial qualifier – has been used repeatedly in official publications as if it represented past, present and future reality. In the 1998 Strategic Defence Review, for example, the defence secretary, George Robertson, noted that: “Our forces must also be able to back up our influence as a leading force for good in the world” (the phrase appeared another nine times throughout the document). It also appeared in the 2005 Defence Industrial Strategy. In 2019 Dominic Raab, then foreign secretary, claimed that “Global Britain is leading the world as a force for good”. The “Integrated Review” of 2021 claimed “a renewed commitment to the UK as a force for good in the world”. 

Arthur Snell, a British diplomat between the late 1990s and 2014, who served in countries such as Iraq, Afghanistan and Yemen, is contemptuous of the idea and the delusions behind it. “Put bluntly,” he writes, “a lot of the bad stuff happening right now is happening because of Britain.” From Kosovo to Brexit, Britain’s role in the world has been a force less for good than for the lamentable and abhorrent. It never stops to ask if it could actually “punch above its weight”, or even whether it should be trying to punch at all. Snell exaggerates the UK’s status in world affairs, but nonetheless offers a lucid rap sheet of egregious errors and self-delusions that have left destruction in their wake.

Continued in the New Statesman 24 August 2022

Yes, we’re in a bad way. But to wallow in myths of British ‘declinism’ won’t help us thrive

Decline is back. Commentators are noticing that the UK economy has not been doing well and is projected to stagnate. Other countries are doing better, in productivity, investment, research and skills. It really is deja vu all over again. But not quite. Only yesterday we were being told a different story – one of the fastest rates of growth in the OECD, of a new global, buccaneering Britain, a science superpower, an innovation hub, the fastest vaccine rollout… What is going on?

We have been living in an era of revivalism. At its core is an economic story which holds that Thatcherism had reversed the longstanding British economic decline, which had perhaps started in the 1870s, or perhaps in 1945. From being the sick man of Europe, the UK could stand proud again, and return to a global role. This view profoundly affected politics. New Labour, the party of post-decline cool Britannia, started to talk of British leadership, of global Britain, of a special internationalist destiny.

Continued in the Observer 12 June 2022