In the wilderness: the failure of the economic growth narrative

30 Oct 2018

 

In the midst of Project Fear, nomenclature which has since come to be associated with David Cameron and George Osborne’s failed campaign to keep Britain in the EU, Michael Gove (a leading Brexiteer) proclaimed that Britons were sick of experts . This now notorious remark has drawn the ire and ridicule of myriad political commentators and opponents, but I think he was onto something. Something that the Remain campaign quite clearly didn’t grasp: the economic growth narrative has failed. 

 

While Cameron and Osborne wheeled out forecast after forecast predicting a recession should we vote to leave (a recession which would stamp out all the growth and progress we’ve made since 2008), they failed to confront the fact that for many of us this growth is intangible; whisked away into the pockets of big business and failing public services. While the economy has grown by between 1.5% and 3.1%  each year since 2010,  the reality for most is lower wages, suffocating housing and renting markets and building debt. 

 

According to the Institute for Fiscal Studies, men’s wages have fallen 7% and women’s by 2% since 2008. Since 2004 the amount of people living in rented accommodation has doubled and home ownership rates are at their lowest since 1985; even government ministers have admitted the UK housing market has failed. In the run up to the referendum in 2016, UK household debt was at £54,080 on average. This is an issue perfectly illustrated by the Daily Mash, a satirical newspaper, headline “If the economy’s so f**cking great, why am I skint? Says Britain”.

 

How could the Remain campaign be so foolish as to think that the British public, weighed down by debt and stagnant wages, would be persuaded to remain in the EU, and uphold the status quo, when their best argument was that the economy would shrink?  People don’t measure their finances by economic forecasts, they measure them by how much money they have in their pocket, by whether they own their own home and by the state of their public services; public services which have been ravaged by years of austerity.

 

Compare this to the Leave campaign; they promised at least an extra £100 million a week for the NHS, a crack down on immigration (which was considered to have driven down wages in many low skilled sectors) and a promise to take back control of our finances and laws. Instead of speaking in percentages and economic jargon the Leave campaign spoke in pound signs and power. They understood that campaigning on real issues that real people identify with would likely result in success. 

 

And compare the Remain campaign with Jeremy Corbyn’s Labour; Mr Corbyn doesn’t promise us growth, he promises us better public services, better housing and better wages. He promises us an interventionist, socialist government. In return business analysts, bankers and journalists promise will plunge us into recession (something which can be confirmed by googling ‘Corbyn recession') and yet, in spite of these dire warnings, Labour gained 28 Conservative seats in the 2017 election. Again, Corbyn speaks about real issues that affect real people instead of clinging to jargon and forecasts.

 

It is clear that the centrist politics that reigned powerful for the last 20 years is entering the wilderness. Time in the wilderness is best spent reforming and reimagining ideas – centrists must do this urgently. They need to appreciate the hardships that the electorate has experienced in the face of 9 years of growth; the stagnant wages, the rising food costs and the faltering services and then they must conjure up solutions which have long term viability. If they do not then the politics we see today, defined by dichotomy and conflict, will sit above us like the sword of Damocles for years to come.

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