The Observer Economics The Tories have form when it comes to economic catastrophe Phillip Inman Hard Brexit is only the latest example where the British economy has taken second place to pride and party loyalty
A no-deal Brexit is just another cataclysmic event among many in Britain’s recent history. That’s why there is a good chance it’s going to happen.
The economy, unfortunately, has usually taken second place over the last 60 years to pride, party loyalty or – and this must be the most significant driving force – a trusting sense that no matter how bad things look everything will turn out OK.
It’s a phlegmatic approach to life that means Britain could just as easily fudge the outcome of Brexit, condemning the nation to years of hopeless anger from those who would rather our politicians had plotted a course based on rigorous research and open discussion.
Think of the much-delayed devaluation of the pound in 1967 and the decision, almost overnight, to join the European Economic Community (EEC). Next came the humiliating capitulation in 1976 to the demands of the International Monetary Fund following a long and desperate search for vital loans; the closure within a few of years of the UK’s coal and steel industries, putting more than one million people out of work; 1986’s Big Bang deregulation of the City; and the humiliating crash out of the European exchange rate mechanism (ERM) in 1992.
What planning was made for these epoch-defining moments and the effects they might have on the country and its people? Very little.
There is an obvious thread running through this list of events, and that is the mess, at every turn, the Tory party has gifted the nation from its time in office.
The ’67 devaluation followed reckless Tory mismanagement in the early part of the decade. Likewise, Britain was broke in 1976 following a Tory spending spree. Ted Heath, who oversaw that spending spree, also thought little about the consequences for poorer communities of joining the EEC, just as Margaret Thatcher lazily left the fate of steelworkers and coalminers to the vagaries of the job market. Deregulation of the City sucked more money into London at the expense of the regions. Lastly, the Tories delayed and delayed a decision on ERM membership until crashing out was inevitable.
Across the Channel, each of these developments was handled very differently. Which is not to say that France and Germany have all the answers. It’s just that the divergence with our neighbours over the need to plan is stark.
In the main, British politicians don’t like to plan for the future. It requires a tedious attention to detail. And while there is a sport in blaming political leaders for the current predicament over Brexit, they are not alone. Most British business executives are fixated on monthly production targets, and union representatives are cut from the same cloth. It’s an attractive, carefree approach in many ways, but it doesn’t solve knotty problems.
Offered the chance of tackling the country’s underlying economic issues in a tripartite group, politicians, employers and unions have spent most of the postwar period agreeing on one thing only – that hammering out compromises is too difficult or contrary to their short-term interests, no matter how nice the beer and sandwiches on offer.
Maybe, as many analysts have argued, the UK’s flexible constitution and overweening executive power allows political leaders to delay and delay until disaster strikes. Maybe it’s the obsession with the supposed benefits of a private education, even though the skills acquired by its graduates amount to an A-level in bluffing – as the Labour MP Jess Phillips passionately argued in parliament last week. More broadly, there’s a Cavalier strain that remains lodged in the British DNA despite the more rational, hardworking Roundhead ethic that battles with it for supremacy. As such, a good deal of our behaviour may date back to our emergence as a wealthy nation in the Tudor period and the wrestling matches between the those two attitudes that have raged ever since.
So just when, exactly, will the City press the no-deal panic button? | Nils Pratley
We want all the benefits of an overarching plan but enjoy the potential for drama that being cavalier offers. There are plenty of commentators on the liberal left who have urged their compatriots to be more German or Scandinavian, not just as a route to greater equality but also as a way to reach economic conclusions based on sensible compromises, following prolonged discussion between competing agencies.
Yet we prefer a system where one side dictates the terms – and that goes for battling employers and unions as much as Labour and Conservative. It’s an adversarial system that most people seem to enjoy, even if they pretend to despair at their MPs’ current antics.
Going back to those cataclysmic moments, all of them, at their root, were caused by the party credited by the British public with knowing most about money and the economy. They couldn’t be more wrong.
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