Cost of living crisis shows the folly of 'small state' politics – Joyce McMillan

Thursday morning, and another worrying news story arrives in my inbox. This time, it’s the Edinburgh Evening News, alerting me to a new appeal from Scottish stars Brian Cox and Alan Cumming to help save Edinburgh’s beautiful Edwardian King’s Theatre, which is set to close this autumn for a much-needed £25 million rebuilding and refurbishment project.

The problem is, though, that because of the current perfect storm of crises, the predicted cost of the work has shot upwards by as much as 30 per cent, since the fund-raising target was set and met; and now, the whole project is at risk, raising the possibility that the much-loved theatre may have to close for good.

Nor is this new threat to a much-loved Edinburgh institution an isolated incident; on the contrary, it is part of what is becoming a blizzard of dire predictions about the possible impact of this winter’s inflation crisis on the whole fabric of life in Britain.

The crisis in Britain’s high streets, of course, has been the stuff of headlines for years; and some commentators have also long been delivering grave warnings about the “hollowing out” of local community life, particularly in less affluent areas, caused by austerity, and diminished public spending on resources such as libraries, swimming pools and nurseries.

The current massive wave of inflation, though, is threatening to turn this process of decline into a full-blown collapse. So far, most public discussion of the issue has focussed on domestic power bills; but for businesses, charities and public institutions, though, there is no price cap, and many now fear that they will face bills on a scale that, combined with other inflationary pressures, will simply bankrupt them.

Last week, for example, the wonderful Lowry arts centre in Salford announced that it had received a power bill for more than £1million, three times its previous level, and more than its entire annual grant from the Arts Council of England.

When it comes to that great British institution the public house, the picture seems similar; on Tuesday, independent brewers wrote to the Chancellor highlighting research which suggests that 70 per cent of UK pubs now do not expect to survive the coming winter, with the majority experiencing a doubling or trebling of power bills on top of other cost pressures.

Many pubs do not expect to survive the coming winter as energy bills soar (Picture: Matt Cardy/Getty Images)

As for the public sector, many budget managers in hospitals, schools, nurseries and care homes must be baffled to imagine how they can possibly deal with energy price rises on that scale, given already strained resources. And all this is to say nothing of the possible impact on other small businesses and shops; the Federation of Small Businesses has now warned that the UK faces “a generation of lost businesses, jobs and potential”.

To say that all of this presents a dismal prospect is to understate the case; in truth, it sounds like a recipe for economic and societal meltdown, and for rapidly rising unemployment, poverty and desperation.

The present hiatus in UK Government is not helping, of course; yet the remedies put forward so far, by the two Tory leadership candidates and other Cabinet ministers, are so nonsensical that they seem almost certain to make matters worse, ranging from Liz Truss’s wasteful and ill-targeted tax cuts, to a ludicrous scheme for the government to borrow an eye-watering £100 billion, and use it to bail out, once again, their already failed system of private energy companies.

The current situation in the energy market, in other words, represents a microcosm of everything that has gone wrong with a model of capitalism determined to extract maximum short-term profit even from those basic systems that are essential to keep a complex, modern society running at all – and even when it becomes glaringly obvious that those services are failing.

It is now surely self-evident that the privatisation of energy, water and the railways – to name only three essential utilities – has achieved nothing for UK society in general, but has principally been a cash-cow for investors and a hyper-paid management class, robbing the public realm of resources desperately needed both for re-investment, and for service provision to 21st century standards, at affordable prices.

Yet our mainstream political discourse remains so trapped in the clapped out ideology of the 1980s that there is barely a leading politician of any party – Labour, SNP or other – who can bring him or herself to say without qualification that energy delivery companies should be permanently renationalised, and run in future for the benefit of ordinary citizens, and the grassroots, real economy of the nation.

What will become of us, if we cannot find an electable party willing to propose such a policy, is frankly frightening to consider; perhaps the sheer pressure of events will eventually make nationalisation inevitable, although probably on an expensive temporary basis.

The whole crisis, though, should come as a warning that the systems by which we currently live, in their present form, have come to the end of their usefulness, and are no longer able – in a resource crisis which can only worsen – to guarantee us secure and affordable access to the basics of food, clean water, energy and housing.

As during the pandemic, future governments will find themselves compelled by default to intervene regularly, on a grand scale, to protect their people from the worst impacts of the coming shocks, whether of war, climate change, or soaring global tensions.

And rather than clinging to the defunct “small state” rhetoric of the past, it’s therefore time for serious politicians and parties to start talking proactively about their plans for that crisis-resilient state of the future; its structures, its resources, and the values that should guide it, in a world where our societies either become more equal, and better at distributing and reinvesting wealth – or they die.