What next for Britain and its ailing economy?

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John Rapley is an author and academic who divides his time among London, Johannesburg and Ottawa. His books include Why Empires Fall (Yale University Press, 2023) and Twilight of the Money Gods (Simon and Schuster, 2017).

On Thursday, barring a failure in the polling industry on a scale not seen since the infamous 1948 “Dewey Defeats Truman” American election, Britain will install its first Labour government in 14 years. The country’s media have recently started referencing the 1993 Canadian election (that saw the Progressive Conservatives drop from 156 seats to just two) to infer that this week’s vote may become a similar “extinction event” for Britain’s Conservative Party. But even if it doesn’t, the country seems ripe for catharsis and desperately wants a fresh start.

The country is struggling, and not just at the Euros soccer tournament. Like Canada’s, Britain’s per-capita gross domestic product (GDP) is declining, though Britain’s is doing so even more sharply, with incomes lower than 15 years ago. Labour productivity is all but stagnant. The country was once a magnet for foreign investment, but since the 2016 Brexit referendum foreigners have been turning up their noses up at the U.K. And yet, despite all this stagnation, the country still has the worst inflation in the G7.

Strapped for cash by this malaise, the country’s public sector is collapsing. Schoolchildren go hungry, hospitals are crammed, the land’s rivers and beaches are swimming in raw sewage dumped by crumbling water utilities, the trains outside London often run late (if they come at all), and everyone has an anecdote of calling the police in an emergency only to be told they’re too under-resourced to show up.

Nevertheless, because the economy is squeezing the tax base, Britons are having to pay more in taxes, with the country’s burden now higher than it’s been since the 1950s, and on a path to go higher yet. Meanwhile, in much of the land, housing has become unaffordable to just about anyone who doesn’t have a bank of mum and dad on which to fall back. In short, Britons are paying more for everything, but getting less of it. Needless to say, they’re angry.

Yet while the public is hungering for a major change of direction, neither of the two major parties is offering it. The Conservative government is saying the country has turned a corner and brighter days lie ahead, while the Labour opposition is saying that they will restore growth with a bit of reform and some modest changes to the tax system.

Scarcely anyone believes this. The Institute for Fiscal Studies, Britain’s most respected independent arbiter of the government’s finances, was scathing in its assessment of the two parties’ manifestos. The next government, it said, would face a “stark choice”: raise taxes, cut spending or borrow more. Yet both parties are clinging to what the IFS calls “a conspiracy of silence,” showing an “unwillingness to face up to the real challenges” and promising lots of “essentially unfunded commitments.”

One gets the government’s cynicism. Since they are running on a record most everyone considers dreadful, they have no option but to pretend things will only get better. Besides, nobody expects them to have to keep any of their promises since it’s expected they’ll get walloped in the election.

But Labour’s silence is more puzzling. The party insists that with changes, such as planning reform, they can get the economy growing again and thereby generate the revenues needed to pay for their promises. But, while few doubt that the positive mood music around the end of Tory rule could unleash some pent-up investment, the kind of growth Labour is predicting will almost certainly prove elusive – not least because they’ve also ruled out the one measure which could most rapidly restore it, scrapping the failed Brexit deal that has knocked an estimated 4 per cent off the economy.

Once in office, therefore, Labour will almost certainly have to either break its promises and make more sweeping changes to its plans, or stick by its pledges and watch the economic funk settle deeper. Already, on the campaign trail, they’ve begun hinting that they’ll plump for Option 1, using the old line that once in office they may yet find that the government’s finances are in worse shape than they ever imagined, forcing them to scrap their manifesto pledges.

This time-worn tactic won’t cut much ice, though. Since the creation of the Office of Budget Responsibility by the David Cameron government in 2010, the government’s finances have been regularly updated for all to see. As there are few secrets now, trying this line on the British public will only worsen the low regard in which the public now holds politicians.

Labour may judge that making themselves as small a target as possible is the best way to win the election. It may be clever politics, but it’s no way to run a country. The British public has never forgiven Boris Johnson for his lies, including his assurances Brexit would make them rich. They’ll turn quickly against a Labour government that similarly takes them for fools.