Dissatisfaction with democracy is corrosive

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The British people are disillusioned. That is the conclusion to be drawn from recent polling on their trust in their government and politics. This is bad enough in itself. But low political trust risks creating a vicious downward spiral in which the distrust lowers the quality of politicians and reduces their ability to make bold, yet essential, policy choices. That then undermines performance even more.

According to an OECD opinion survey, just over 39 per cent of British people trusted their government in 2021. That is close to the US level of 31 per cent and ahead of Italy’s 35 per cent. But it was far behind Switzerland’s 84 per cent, Finland’s 77 per cent, Sweden’s 69 per cent and Germany’s 61 per cent. But distrust in the political system as a whole is even worse. According to The UK in the World Values Survey, from King’s College London, only 17 per cent of British people were “highly satisfied” with their political system, against 32 per cent dissatisfied. Canada, Germany and Australia are in rather better shape.

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Such dissatisfaction must be corrosive. After all, how many able people will devote their lives to a strenuous and poorly paid career whose practitioners are distrusted, if not despised? Yet democracy depends on having decent, competent and respected politicians.

Yet this dissatisfaction is not surprising. Over the past 16 years, the UK has suffered a huge financial crisis, fiscal austerity, a divisive Brexit referendum campaign, post-referendum chaos, a promise to “get Brexit done”, which did not happen, a pandemic, three prime ministers in one parliament, a fractious ruling party, a “cost of living crisis” and an opposition that had to recover from the leadership of a leftwing fanatic.

Worst of all, asEnding Stagnation”, from the Resolution Foundation and the Centre for Economic Performance, published last December, noted, “Labour productivity grew by just 0.4 per cent a year in the UK in the 12 years following the financial crisis, half the [average] rate of the 25 richest OECD countries . . . [R]eal wages grew by an average of 33 per cent a decade from 1970 to 2007, but this fell to below zero in the 2010s. In mid-2023 wages were back where they were during the financial crisis.” This is a dreadful economic performance.

What the country has been doing has not been working. That is unquestionable. It is crucial, then, that the next government breaks these dire trends, by ending stagnant productivity, reducing regional inequality and making housing more affordable and, in so doing, restoring trust in politics. If we look at the frenzied scheming and absence of any credible thinking in today’s ruling party, that government will not — and should not — be a Conservative one.

Yet, if the Conservatives do seem unlikely to win, they might succeed in ensuring that their successor fails by constraining its freedom of manoeuvre. One way to do this has been to offer tax cuts that depend on a politically highly implausible post-election spending squeeze. Labour seems likely to feel forced to promise to keep the tax cuts and associated curbs on spending. That could cripple their government. Alternatively, they could promise to reverse them. But then the Tories will accuse them of planning another period of incontinent “tax and spend”.

Nevertheless, as Nicholas Stern has noted in the FT, the UK needs higher public and private investment. It also needs to spend more on defence. That does not allow for tax cuts. Beyond this, the country needs a radical decentralisation of spending and taxation to subordinate levels of government, tax simplification and reform, pension reform, liberalisation of planning controls, active support for innovation and acceleration of the energy transition. Andy Haldane is right that this will also require a break up of the Treasury. The country, in sum, needs not a smaller state, but a more active and more focused one, along with substantial reforms often in contentious areas. Business as usual has just not worked. Radical change is now urgently needed.

The danger is that Labour feels it cannot get away with offering any of it. The party instead seems set on sticking as close as it can to government policy. That strategy might indeed increase its chance of winning the election. But it will deprive it of a mandate for much change. If it keeps to its cautious approach it risks presiding over another period of stagnation and failure. If it shifts to radicalism, it will be rightly accused of acting without a mandate. Either way, the cynicism of the public is likely to grow. At worst, posturing will go on substituting for radical policy, leading to prolonged stagnation and declining public confidence.

This is a path to failure. Sometimes, as now, politicians must dare to be bold.

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Source: https://www.ft.com/content/9a714114-03bf-4914-a5d2-8592fdb80248