At the heart of Britain’s economic issues is the failure to invest. Business investment remains lower than its pre-2008 peak, and, improbably, the government plans to cut its own investment further. The result is an economy that relies on substituting cheap labour in the place of capital. As research by John van Reenan and others has shown, this has become pronounced since 2008.
OECD figures suggest that real hourly wages are down 10 per cent since 2008. This makes the UK the worst performer in this respect in the entire developed country OECD group, bar Greece. 80 per cent of those in work have seen either flat or falling pay since the crash. We are facing a “lost decade” for living standards. But with de-industrialisation over the last forty years, the relatively stable well-paid jobs that manufacturing has supported have become thinner on the ground. The labour market has hollowed out, with a few, very well-paid jobs at the top—and ranks of lower paid, increasingly insecure jobs for the rest. Worryingly, forecasts cited by Andy Haldane at the Bank of England suggest that 15 million jobs are open to being automated out of existence over the next decade.
Factor in the concerns raised by the discussion of “secular stagnation” in the developed world, with low or zero growth persisting, and the future for our economy can look bleak. Britain has compensated for its structural weaknesses with debt, both in its domestic, private sector borrowing, and internationally, with our record current account deficit necessitating huge borrowing from and assets sales to the rest of the world.
Under these circumstances, hoping to turn the clock back to 1945 or even 1997 is simply not an option. Our economy needs restructuring if it is continue to...
What makes a leader, and what is leadership? We are told every day that Jeremy Corbyn is not a leader, from Hilary Benn’s “He’s a good and decent man, but he’s not a leader” to the Daily Mail saying Corbyn “is the worst Labour leader in history”. But in spite of the relentless Corbyn-bashing, beyond the ability to win elections (Owen Smith: seriously?) there has been little discussion of what a leader, or leadership, means.
The adjective that sidles up most insistently to “leader” tends to be “strong”. For a strong leader is the thing to be. Margaret Thatcher was a strong leader. Tony Blair was a strong leader. David Cameron? He had pretensions in that direction. Theresa May’s performances at PMQs suggest she believes she too belongs in the strong leader club, and that condescension and archness are the way to achieve it, though her bid for membership took a turn for the worse this week when Corbyn challenged her on grammar schools.
Not all of us, however, are quite so in thrall to politicians who take voice coaching, visit bespoke tailors, employ image groomers, holiday with media moguls, or jettison past commitments (Blair’s unilateralism, for instance) when these things start to get in the way of a smooth ascent; and – to prove they are really strong, that they have the guts to take the really difficult decisions – bomb or invade some of the poorest countries on Earth.
On Wednesday a foreign affairs committee chaired by the Conservative MP Crispin Blunt delivered its excoriating verdict on Read more →
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