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Jeremy's Blog 21st June: Election Thoughts

This article by Jeremy Moody first appeared in the CAAV e-Briefing of 20th June 2024

A governing party’s manifesto is taken more seriously than many might suppose. The civil service will be poring over it to establish the new policy directions, No 10 conventionally checks off the pledges as progress is made and the House of Lords defers to Bills for manifesto commitments.

The political debate of an election campaign then dramatises points, advancing or avoiding proposals and being challenged. In 2019, Boris Johnson’s environmental interests saw a competition to promise increasingly improbable numbers of trees. 2024 witnesses a competition to limit freedom of manoeuvre over taxation – possibly only the Pre-Owned Assets Tax remains to be mentioned. However, the public may believe little of this. Tight public finances await a future with uncertainties that the parties appear to overlook.

The coming Parliament will see an aging population, further climate change, the US election and perhaps China squeeze Taiwan, Russia disrupt more widely, an American debt crisis and other shocks. Whoever wins, debt seems likely to rise – we have to hope that will be to fund productive infrastructure.

Three central challenges for the UK are the economy, increased global political risk and climate change. All three directly concern agriculture on which Labour’s manifesto pledges little in the bare 4½” allotted from 130 two column pages – little more on the environment. The Conservatives and Liberal Democrats would add £1bn to the present budget; Reform’s £3bn budget might just be for England – but a good agricultural policy is about much more than payments. The Conservatives would continue to ease planning restrictions on farm infrastructure. All invoke food security but that, needing us to produce more from less, requires improved farming productivity.

As Labour’s new language about wealth creation recognises, improving productivity is key to the growth that will make all other problems more manageable. However, Keir Starmer’s talk last autumn of “bulldozing” the planning system looks more incremental in the manifesto, relying on local plans. A Labour government could miss its moment to achieve the change it says it wants, before finding its backbenchers unreliable – as did the last government. Again, we wait to see how infrastructure might be accelerated when the trick is to make it easy, not invent new state organisations. It could still be years before new housing and infrastructure really materialise, and construction capacity is limited.

The increased capital allowances for investment in plant and machinery would be kept but what would really revive a spirit of enterprise, an appetite for risk and a willingness to work? If this were easy, it would have been done, here and in western Europe. Growth will not come just because we wish it. Observation suggests that reassuring with security gets taken as comfort, rather than a basis from which to accept risk. That is part of the debate about Labour’s employment rights package. The issues of economically inactive adults and immigration seem set to endure.

Russia’s invasion of Ukraine (itself in part a war to control commodities) is just the clearest expression of greater global risk with aggressive authoritarian regimes and more failed states. Having run defence spending down to fund welfare and health, both major parties look to increase it, again needing economic growth if the money is not to come from other services while rising debt interest and welfare bills add to the pressure. National security lies in economic growth, a work of years.

With the costs of not tackling advancing climate change much larger than those of doing so, the major parties compete on deadlines for climate change measures, sometimes confusing a lack of realism for ambition, but both urging the move to renewables and nuclear with supporting infrastructure. Again, the task for government will be the practical achievement of major change while keeping public consent. It will also have to deal with the increasing risks and damage from climate change.

Labour, Liberal Democrats and others seek a closer relationship with the EU but:

  • the continuing domestically-focused perspectives of the UK’s EU debate overlook it taking two to negotiate, assuming there would be a ready attention and low price for such an approach when the EU will have its own interests (such as French demands to fish in UK marine protection areas)
  • the EU’s Single Market has not unlocked the growth in western Europe that seemed reasonably expected when it was launched but seems rather to have narrowed supply chains; western Europe has the same stagnant economies as the UK
  • some areas where we are pursuing innovation, as with gene editing, might not be accepted as the EU would generally expect its rules to be adopted.

Whatever the relationships, we need to focus on our own issues.

A new government and ministers will be learning the realities of the business of government on the job, coming to understand its constraints with the complexities of the world, the competing commitments, trade-offs and the time progress takes. If government is to be more than the administration, preferably competent, of relative decline and an increasingly unhappy country, it will make most progress by focusing on key issues before facing a fickle electorate. If we do not tackle productivity and growth, in farming and the wider economy, we may simply have to admire the future richer countries of the world, having lived off past wealth, not current income. Are we yet facing our realities? This campaign has not yet sought public consent for the answers and the change they will involve.

Meanwhile, the French are now having an even more precipitate and challenging election in half the time.

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