Hunt is not a flamboyant man, nor any kind of visionary; and as he stood as the dispatch box, carefully rearranging the UK’s finances in ways that might reassure the markets while not completely crashing our faltering domestic economy, the words “deckchairs” and “Titanic” sprang irresistibly to mind. He talked of stability, growth, and compassion; but what he was delivering was essentially a steady-as-she-goes budget, for utterly miserable times.
Earlier in the day, for example, the government’s own Office for Budget Responsibility made it clear that the UK can look forward, over the next two years, to a record fall in living standards, and probably to the longest recession since the 1930s. A nation already struggling with a grim cost-of-living crisis driven by food and energy prices – and robbed of resilience by more than a decade of austerity and wage stagnation – is set to be clobbered further by soaring interest rates, and now, it seems, by increased taxes for all but the very poorest.
Yet against this backdrop, all Jeremy Hunt really had to offer was a little sticking plaster. The budget does make some half-hearted attempts to raise funds from those who have benefited most from the last 12 years of Tory rule, shunting a larger proportion of high earners into the 45 per cent tax band, and extending the windfall tax on energy-producing companies. He also promised to raise pensions and benefits in line with inflation, to extend some help with power bills beyond next April, and to allow for small increases – although not enough to match inflation – in spending on health and education.
As the markets are beginning to realise, though – with an initially calm response now giving way to a more sombre mood – what was seriously absent from this statement was any organised large-scale vision of how to begin to repair the UK economy, in such difficult times. “You can’t borrow your way to growth,” Hunt told the Labour benches, as they derided his spending plans. The truth, though, is that the economic outcomes of public borrowing depend crucially on how and where the money is used; and that borrowing or printing money to invest in the nation, its people, its services and infrastructure, is now beginning to look like the only viable way forward for a country suffering economic recession bordering on depression, and facing what for some is a truly shocking poverty crisis.
It’s clear, of course, that given current international conditions, the kind of Rooseveltian New Deal the British economy now needs would require a level of vision, boldness, and willingness to tackle the international context that is in short supply among our politicians. Every problem the country currently faces, for example, has been worsened by the gross political and economic error that was Brexit; yet even the Liberal Democrats, never mind Labour, hardly dare mention the B-word as a factor in the UK’s recent decline, far less propose a rapid return to the European single market.
On the matter of public spending, the UK now needs to face the fact that our battered public sector cannot tolerate any more austerity, and that for the sake of our rising generation, and of the health of the nation including its capacity to work, we now need massive reinvestment across our public sector, boosting wages and local economies, enabling recruitment, and reopening vital local authority services that have been run into the ground or abandoned altogether. We need politicians who are bold enough to work up that kind of investment programme into a credible ten-year plan for a revitalised UK economy, well researched and credible enough to win the confidence of voters and the markets.
And above all, we need – together with international partners – to become deadly serious about the massive investment needed to shift our economy towards a low-carbon future; a future in which the very idea of economic growth is both challenged and redefined, for a new age. Hunt’s statement was not quite the budget that climate change forgot; but his main plan for dealing with it – despite the UK’s immense potential renewables wealth, far cheaper and quicker to exploit – was “above all”, to go ahead with the construction of Sizewell C, a vastly expensive and unwieldy nuclear project unlikely to produce any power for at least 15 years.
In truth, though, the trumpeting of that foolish decision is the final giveaway that Hunt and his fellow Tories simply do not understand the extent of the change we need to see, over the next decade, if the UK is to have any viable future. The challenge of climate change offers huge opportunities as well as costs, scope for investment that can generate jobs and positive economic activity on a huge scale, shift power back towards communities if handled well, offer the prospect of warm homes and affordable energy to every citizen, and – most importantly of all – create some hope of a liveable future for our children and grandchildren; and government and the private sector now need to co-operate as never before, in order to deliver that change.
Yet here we remain, trapped by a dysfunctional financial system and a failed Tory government in a system which increasingly has little to offer, to ordinary citizens, but further depression and decline, against a backdrop of environmental despair. At the next UK general election, the Labour party will have once chance, with its Green New Deal, to make it clear that it understands – as the Tories do not – the scale and radicalism of the change that is now necessary; and if it fails, the good ship UK may start not only to founder, but to break up, on the rocks of 21st century reality.