SNP and Labour risk being outflanked on the left by Boris Johnson's big-spending Conservatives – Joyce McMillan

It was three months ago, in late November 2020, that a group of 24 senior economists wrote to the new BBC Director-General asking that the corporation rethink its use of “inappropriate” language in reporting on the UK economy.

The Tories' defining ideology now appears to be cultural rather than economic in the shape of Union Jack nationalism, says Joyce McMillan (Picture: Dominic Lipinski/WPA pool/Getty Images)

The group – which included Glasgow University Principal Anton Muscatelli – were particularly incensed by a phrase used that week by BBC political editor Laura Kuenssberg, who said that the UK had “maxed out its credit card” in meeting the costs of the pandemic.

Household budget analogies, they said, exert a great influence on the public’s understanding of economics, even though they simply do not represent the economic reality facing governments which can put new money into circulation at will, and which currently – if they wish to borrow – face some of the lowest interest rates in history; and they asked that the BBC stop framing economic reports in these terms.

It was an interesting row, in that it threw a rare spotlight on the role of ideology in public debate – in this case, the simplistic, monetarist ideology promoted by Margaret Thatcher in the 1980s, and never explicitly challenged since by a mainstream British party. At a rhetorical level, Britain’s treasury ministers are still wielding the household analogy with a vengeance, and already seem to have convinced much of the public that we will soon have to ‘pay the price’ of our big Covid overspend, in much higher taxes.

In practice, though, the messages they are sending are much more mixed; and Rishi Sunak’s budget statement delivered on Wednesday – with its continuation of hugely expensive Covid relief programmes until September, contrasting with its memorable meanness towards public sector workers and those at the lower end of the income tax system – offered a vivid case in point.

If the Tories were still interested in presenting a coherent economic ideology to the nation, they might even now be in the middle of a bitter party struggle between small-state proponents of continuing austerity, big spenders on “grand projects” in the Johnsonian style, and those liberal types – still not entirely absent from Tory ranks – who think that if governments are going to throw money about, they might as well do it in well-targeted ways that actually relieve poverty, support local economies, and enhance the life chances of ordinary Britons.

The fact that the Tories are not engaged in such a struggle, though, signals with great clarity that their defining ideology is now not an economic but a cultural one, in the shape of a pervasive Union Jack nationalism; and it also indicates that the political weather has changed for all of us in the UK, in that the economic policies of the dominant British right are becoming ever less predictable, particularly under the pressures of a Covid epidemic that has ushered in the return of big government, possibly for the foreseeable future.

All of which raises serious issues for Britain’s opposition parties, most of which seem anything but fleet of foot in registering the scale of the change. Keir Starmer’s Labour front bench looked in serious danger of being outflanked on the left by Rishi Sunak this week, as they fought shy of the kind of corporation tax increase the Chancellor has scheduled for 2023, and – in the face of some of the most inadequate benefit rates in western Europe – failed to argue that he should make the £20 uplift in Universal Credit a permanent feature of the system.

Given the political fate of John McDonnell’s budget proposals in Labour’s 2019 manifesto – a well-targeted programme of large-scale public investment dismissed as ridiculous at the time, although now dwarfed by Covid spending – it is perhaps understandable that Labour feels it still has to dance to the old tune of austerity, even when it has been exposed as nonsense.

Yet given massive recent shifts in public opinion on issues like UK benefit levels, and on pay for groups like NHS workers – that is, given the social priorities revealed by the pandemic, and so poorly reflected by the economic orthodoxy under which we have been living for the past generation – there seems a real and present danger that opposition parties which take too cautious a line on the role of government in the post-Covid economy may find themselves completely outflanked by a new Toryism that is no longer playing by traditional rules, on the economy or anywhere else.

And if that warning applies to the Labour Party, it should also be heeded by the SNP an economically cautious and small-c conservative party which could find itself seriously wrong-footed, in preparing a manifesto for any future independence referendum, by a British government which is now more prepared to splash the cash than at any time in the last 40 years.

In that sense, the SNP’s memorably cautious Growth Commission Report – published in 2018, and intended to provide a basis for an orderly transition to independence – looks like a document now overtaken by events, and in need of major revision.

And although the current turmoil in Scottish politics leaves little time for debate around key issues such as currency, public investment, and the well-managed and creative transition to a low-carbon economy for which Scotland has so much potential, independence campaigners who fail to notice the changing political weather on these islands, and to update their vision for Scotland’s future accordingly, risk missing a key opportunity to think more boldly about the options available, beyond the limits of “household budgeting”, and also risk being swept aside by the marching bands of Johnson unionism, fuelled by loads of cash both printed and borrowed, and confident that in economics as in so many other areas, they will never truly be held to account, or made to pay the price.

A message from the Editor:

Thank you for reading this article. We're more reliant on your support than ever as the shift in consumer habits brought about by coronavirus impacts our advertisers.

If you haven't already, please consider supporting our trusted, fact-checked journalism by taking out a digital subscription.