Tuesday, Dec 06, 2022

With UK plunged into cost of living crisis, government must recapture the narrative

Rishabh Bhandari writes: Tories should be bold in pressing forward with a reformist mindset and PM Boris Johnson needs to make the case for a global Britain that remains open for business.

Drivers wait to get gas at a Shell station in Slough, England (Mary Turner/The New York Times)

The recent annual gathering of the Conservative party in Manchester turned out to be a sombre affair. The initial hope was for a buoyant convention underpinned by a successful vaccination drive which ministers could proudly trumpet. But a growing cost of living crisis with fuel shortages, food-chain bottlenecks and rising energy prices changed the mood dramatically. While a winter of discontentment hasn’t arrived yet, an autumnal anxiety has taken hold with clouds of uncertainty hovering. It is clear that Boris Johnson needs to urgently reset his premiership and reconnect with the electorate.

To be fair, the task of fashioning a post-Covid economic recovery was always going to be challenging. Johnson was not unreasonable in pointing out that in a post-Brexit environment, the country was inevitably going to encounter a “period of adjustment”. That said, few would have predicted the chaotic scenes unfolding with fuel in scarce supply, wholesale energy prices spiking, supermarket shelves dwindling and inflationary pressures on the rise. When the army is called in to drive fuel tankers as an emergency measure, it is apparent that something has gone badly amiss. The timing could not have been worse. As the government’s furlough scheme (which benefitted a quarter of all in employment) also comes to an end, there is justifiable unease about what might lie ahead. Recalling Shakespeare, “when sorrows come, they come not single spies, but in battalions”.

That said, the government has played a leading role in this almighty fiasco. Its approach makes for a classic case study in what behavioural psychologists term as “confirmation bias”. In other words, a tendency to see what one wishes to see and to ignore inconvenient truths. Warning signs from the industry about labour deficiencies in key areas such as haulage and food-chain logistics were given short shrift. Alarm bells had been sounded. But a government intent on “taking back control” and reducing unskilled immigration was unbending. It was only when fuel pumps ran out that it rushed out a hasty temporary visa scheme for some workers. What this sorry saga underlines is that Britain needs a grown-up debate about immigration more than ever. It needs an official approach that is willing to appreciate the role that demand and supply can play as an immigration lever rather than arbitrary quotas.

Where are the Tories headed then? The answer seems to be muddled at the moment. A bid to continue to court the working-class Brexiteer voters has seen the Tory party support greater taxation and spending policies. But the truth is the increased borrowing cannot be sustained forever. Nor is increasing the taxation burden the answer. Incessant borrowing stands to pass debts on to the youth. And increasing taxation — even to support laudable concerns such as social care — risks choking off a recovery before it has truly begun. The irony is fiscal conservatism and making the case for lower taxes — especially for the low paid — has all but been forgotten by an ostensibly centre-right government.

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The government remains fortunate that the Labour party seems leaden footed and astonishingly insular. Labour has not yet articulated a credible alternative plan. Nonetheless, the Tories would be foolish to be complacent. What should be their key priorities then? First, simplifying the structures of an inefficient state should be their core aim. Second, championing economic freedom and promoting innovation should be at the heart of its agenda. A post-Brexit Britain needs to embrace free trade and eschew protectionism. It is only through growth that Johnson’s promise to “level-up” forgotten areas of the country — the so-called red wall — can be fulfilled. Allied to this would be a genuinely competitive tax regime to boost entrepreneurship. Alliances with like-minded democracies such as India need to be cemented too. This calls for strategic nous. As a case in point, the UK’s reluctance to recognise Covishield and thereby annoying Indian partners seems blinkered. Finally, the emphasis needs to shift to upskilling a population. Harnessing opportunities for all ages remains essential to avoid long-term structural unemployment.

The path ahead is unlikely to be straightforward for the Tory party. After a decade in office, there is a risk that the hunger for decisiveness could subside. But if they want to retain their status as a natural party of government, the Tories should be bold in pressing forward with a reformist mindset. More than ever, Johnson needs to make the case for a global Britain that remains open for business.

This column first appeared in the print edition on October 11, 2021 under the title ‘Autumn of anxiety’. The writer is a London-based lawyer and political commentator

First published on: 11-10-2021 at 03:20:28 am
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