Another wasted crisis as government shows no appetite for growth

It has become fashionable to say in recent months that principles don’t seem to matter in British politics anymore. Most of that criticism is in the aftermath of a partygate scandal that, for all of its jaw-dropping detail, is not of grand importance in the scheme of things.

We will now lay that criticism at the Conservatives’ door for another reason. It is now abundantly clear that today’s Tory party has no desire to govern alongside the principles that Tory governments have governed with for decades: lower taxes, and economic growth.

It is fair to say that this particular iteration has been handed a tough assignment to navigate. The Covid-19 pandemic threw the public finances into chaos, and the inflationary pressures now buffeting the economy have created what is rightly called a cost of living crisis.

In the case of the former, only a ‘big’ state could answer the call. In the latter, that which we are living through now, focussing on a smaller state would have been a rather more prudent approach. Instead, taxes have gone up on national insurance, fiscal drag has pulled more workers into higher bands, and now energy companies which lost an absolute bucket-load of cash during the pandemic are set to have their investment decisions decided for them by the Chancellor’s hanging axe of a windfall tax – sorry, a temporary targeted energy profits levy.

Crises should be seen in politics as an opportunity. Yet at every turn, the government has bent to immediate political pressure rather than develop any kind of long-term strategy to boost Britain’s growth prospects.

Make no mistake: whilst this year is set to be a particularly grim one for the economy, it will not be the least. The UK’s trend growth is not nearly enough to sustain the size of the state that both major parties seem intent on building. Yet fixing that seems a lot lower down the priority list than short-term political manouevring. Singapore on Thames? More like Tokyo.