There’s a scene in the Godfather, after Sonny Corleone is killed that Don Vito turns to Tom Hagen and says “Consigliere of mine, I think you should tell your Don what everyone seems to know”, this morning we are Don Vito and the OBR is Tom Hagen, although that is flattering to the OBR. News in the Times (and wherever else you get your news) this morning “UK economy contracts 0.1% in October” and the sub-heading is even more revealing (or maddening, or both) “GDP shrank unexpectedly” – hands up who here is surprised? Is that one hand at the back I see? No, OK, thought not. Everyone knows that the economy is in a total mess, it’s obvious everywhere you look, yet when the figures arrive, the media presents them as a surprise, as if we’ve not been living with this reality for months.
If there was any doubt left that this system is not working for ordinary people then that should be gone now. You don’t need OBR forecasts or Newsnight to know what life I like for you and your family. Contrary to the news from SW1, the economy doesn’t live in a spreadsheet, it’s a real thing that affects everyone. The complete chasme between reality and institutional narrative has become impossible to ignore.
We have already discussed, at great length why GDP is not a good measure of the strength of an economy (for normal people living in it). It measures how much activity is taking place but doesn’t tell us whether this is productive or improving peoples lives. It reduces everything to a single digit which we’re expected to applaud when it moves in a positive direction, even when the underlying reality is falling confidence, non existent growth and stagnant wages.
So, the question we have to ask is: what is the point in these forecasts? What is the point in the OBR producing projections that do not reflect the real world? What is the point in the media reporting them as though they are actually news? We can see something completely different, which raises a more pertinent question: what exactly is the purpose of this governments economic policy (we could go on to ask what is the point of this government, but maybe that’s for another day). The policy at the moment seems incapable of understanding the lived conditions of regular Brits.
The previous budget increased employer NI, which did look good on the treasury’s spreadsheet, but almost immediately weakened the jobs market, this budget raised taxes on working people (the fiscal rules are another alternative reality in SW1). GDP per capita has been flat or falling for years (the exact numbers can be debated, but we can see the direction of travel) Living standards are plausibly the worst in decade. The basic duty of a government is to make the best of a difficult sitautuon for its citizens and this government (and the blue one before it) has completely failed.
As I’ve said, none of this should be surprising coming from a system that treats human beings as a fiscal lever to make a spreadsheet go green. ‘Growth’ (GDP) has been pursued by increasing the number of workers to make more consumers. Anybody who thinks that people are just an input variable should be a long way from being able to make that a reality. The appeasement of the OBR and the bond markets is socially corrosive.
All this plays out in a theatre; Question Time and Newsnight, The Politics Hub and Peston, X and even TikTok. Politicians point to one another’s failures or quietly rewrite their own records praying that the next election is kind to them. The performative nature of modern society does not lend itself well to serious politics and when politics becomes performance, everything else suffers.
The deeper issue is structural. The problem is not that all politicans have the same background, they don’t. This government has many working-class MPs on its benches, but the problem is that they almost all came through the same narrow pipeling, the same courses at the same universities, the same NGOs and think-tanks resulting in the same economic and political assumptions. Different accents, same ideas. When all of the decision makers think the same way, we’re going to get the same decisions over and over again.
We need more diversity. Diversity of opinion, of thought, of experience. There are so many thoughtful, switched on, knowledgeable people. Critical thinkers, business men and women, philosophers and thinkers in Britain who could radically alter the shape and prosperity of Britain, but they remain outside the structure. The problem is not a lack of talent or ideas, it’s getting them to a position where they can help grow this country. If we want different results we are going to have to change the system.
Disclaimer:
The views expressed in this essay are entirely my own. They do not represent the opinions or positions of any organisation or project I’m associated with.
This piece reflects personal interpretation and commentary based on publicly available data and reporting from sources such as the ONS, IMF, and the House of Commons Library. While every effort has been made to ensure accuracy at the time of writing, this should not be taken as financial or investment advice.