Going Round in Circles

Why the way we talk about money is throttling politics

A Tory party stunt in 2011 suggesting that Labour would “max out our credit card”. Since then debt as a percentage of GDP has increased from 80% to 100%.

Every election campaign from an incumbent is built around one question: “do you want to risk losing what you’ve got”? Ideally this involves both setting out your achievements and amplifying the negatives associated with your opposition. Blair’s two successful re-election campaigns pivoted around a simple triptych: lots done; lots more to do; lots to lose.

Rishi Sunak’s problem is his government doesn’t have any achievements, or at least none he wants to talk about. A Brexit deal was done but it is now exceptionally unpopular even with Leave voters. Vaccines were procured but, with the covid inquiry picking away at government failings and partygate stories still emerging, that’s not a topic they want to go near.

Sunak’s team had been hoping to secure some small symbolic gains on his pledges around growing the economy, cutting NHS waiting lists, and reducing small boat numbers. But all of these are currently off track. Stickier than expected inflation has increased the prospect of a recession in election year. Hospital waiting lists are still going up, with no prospect of strikes ending soon. Almost 3,000 asylum seekers have arrived on the south coast since the 10^th June alone, making Sunak’s claim a few weeks before that his policies were bearing fruit look extremely foolish. It’s dawning on Downing Street than Plan A isn’t working.

Plan B is to go all in on “lots to lose”. For younger voters this has no chance of working. Most people struggling with ever higher rent or mortgage repayments will feel that there is little left to lose. But they are not really the target. The majority of Tory voters from 2019 were older, socially conservative, and owned their home outright (or were close to paying off their mortgage). The more of these voters that can be convinced, for all the government’s troubles, Labour would be even worse, the more seats will be saved.

Which means the negative campaigning will be more relentless and more desperate than ever. Some of this will targeted on cultural fears like inappropriate sex education in schools or opposition to disruptive “Just Stop Oil” protestors. Small boats will persist as a theme despite the failure of government policy to reduce numbers. But the heaviest focus will fall on the economy. The mantra that Labour can’t be trusted with the nation’s finance will be repeated ad infinitum. Liam Byrne’s “there is no money” letter will be wheeled out over and over. We can’t be far off Tory Chairman Greg Hands getting it tattooed on his chest.

Unlike some of their other attack lines, in this one they will be assisted not just by their house media organs like the Mail and Telegraph but also more neutral outlets. An example: last month the “I” newspaper – which is generally good and non-partisan – ran an “analysis” showing that Labour had made £20 billion of “unfunded” spending pledges, “equivalent to a 3p increase in income tax”. As it happens the numbers in this story were wrong. The biggest supposed “unfunded pledge” related to childcare but they used a costing way higher than anything Labour have considered (I know because I wrote the report they took it from).

But even if the £20 billion number had been accurate the framing would still have been completely misleading. I’ll explain why in this post and why better conversations about spending are so critical to improving British politics. This is not because I think spending should be unconstrained - that is clearly not desirable, especially with interest rates so high. But because the current approach turns everything into a game with rules so daft that it becomes impossible to properly consider trade-offs. Years of playing this game, ever more rigidly, have left us with unusually high levels of debt, twenty years of wage stagnation and struggling public services. Regardless of whether you are a fiscal hawk or a Keynesian the current approach doesn’t work, and it’s throttling British politics.