Hard truths from Lord Rose and Badenoch the thorn
Yesterday was a day for hard truths and straight talking.
It began with City veteran Lord Rose who said the UK is “at the edge of a crisis.” The former M&S chief and Asda chair said that after working for more than 50 years, and despite a predisposition to optimism, he looks at the state of the country today and shudders.
The problem, in a word, is growth. Or, in three words, lack of growth. “We have got no growth in the economy,” he said, adding that “if you have no growth in the economy, you’re not creating any wealth [and] if you haven’t got any wealth, you can’t put into the nation the services that voters want and voted for.” He has urged the government to change tack.
Lord Rose has articulated what many in the City feel, and can see. Shortly after Lord Rose departed the airwaves, analysts at Oxford Economics published a note warning that “the UK economy remains exceptionally fragile” and is characterised by subdued growth and high inflation, something they dub “stagflation-lite.”
They stressed that UK bond yields remain “particularly vulnerable to swings in market sentiment” and forecast a cool £30bn in tax hikes to come in the Budget.
Tory leader offers her diagnosis
Later in the day, Tory leader Kemi Badenoch popped up in the City to give her own diagnosis of the country’s problems. In a speech delivered to a room full of accountants she warned that Labour’s approach to the economy was storing up unspeakable horrors for the next generation as debt grows and taxes climb.
“Britain’s standard of living is not an entitlement, it is the sum of our collective efforts,” she said, adding that “there is no guarantee that we will enjoy a particular quality of life just because we are the United Kingdom.”
She talked about “unsustainable” levels of public spending and of the need to accept that “government cannot do everything.” While this honesty is undermined by her baffling insistence that the triple lock on pensions should remain, the broad territory of economic realism should be fertile ground for the Tories and while it may not have been one of Badenoch’s most uplifting speeches it was certainly one of the most important.
Our economic challenges are immediate and slow-burn; urgent yet complex, demanding responses both tactical and strategic.
The great worry is that Labour’s approach to the present makes it even harder to prepare for the future.