Why the technocrats keep failing
Rishi Sunak and Jeremy Hunt’s ‘government of grown-ups’ has flunked almost every test it has set itself.
When UK prime minister Rishi Sunak was installed in Downing Street just over a year ago, the political and media elites gave a sigh of relief. After three years of Boris Johnson’s Brexit-boosting populism, and just one month of Liz Truss’s tax-cutting experiments, there was a sense that, finally, someone ‘sensible’ was back in charge. Sunak was a man, they said, who preferred technical solutions to voter-pleasing soundbites. Flanked by drab bank manager Jeremy Hunt as his chancellor, Sunak promised a return to economic orthodoxy, guided by the sage expert advice of the Treasury, the Office for Budget Responsibility (OBR) and the Bank of England. The ‘grown-ups’ were back in the room, apparently, and so Britain was back on track.
Those takes have aged like milk. Today, Hunt delivered his autumn statement. Although he put on a brave face and insisted that his ‘plan is working’, as surely everyone by now knows this government’s economic record is one of abject failure. In fact, even judging by the five staggeringly unambitious ‘priorities’ Sunak set out for himself at the start of 2023, this government has gone nowhere fast.
Take Sunak’s first priority – to halve inflation. This is the only pledge that has been unambiguously delivered. Inflation has fallen from just over 10 per cent in January to just under five per cent. However, this has little to do with Sunak or Hunt. As was widely pointed out at the time, inflation was expected to fall anyway, whatever action the government took, thanks to falling global energy prices and rising interest rates, which are set by the Bank of England. Sunak no doubt knew this at the time.
Priority No2 was to expand the size of the economy. Hunt claimed today that he has introduced ‘110 measures’ to kickstart the UK’s economic revival. But in the last quarter, from July to September, GDP growth came in at exactly zero per cent.
On the third pledge, to lower the UK’s debt, Hunt tried to claim a win today by suggesting it has fallen. But this is incredibly misleading. Yes, debt is slightly lower as a percentage of GDP than it was at the time of the spring budget, but this is due largely to a statistical quirk. This superficially more positive picture is thanks mainly to inflation, which has made the cash size of the economy appear larger. In truth, debt remains unchanged in absolute terms, and GDP hasn’t grown in real terms.
As for the fourth and fifth priorities, the results have been dismal here, too. NHS waiting lists are only getting longer and dinghies are still arriving in large numbers on the south coast. That Sunak felt moved earlier this week to issue a set of five new targets (rebranded as ‘long-term decisions’) suggests that even he has admitted defeat.
So where did it all go wrong? How did Sunak and Hunt, two ‘safe pairs of hands’, determined to heed the advice of experts, manage to so badly bungle every goal they set for themselves?
The problem for Sunak and Hunt is that the institutions and orthodoxies they have repeatedly deferred to are actually to blame for the UK’s economic crisis. It is the experts, the economists and the civil-service beancounters who got us into the economic mess we are in. It is foolish beyond belief to trust them to get us out of it.
Make no mistake: many of Britain’s woes in the 2020s are of the experts’ making. Recall how scientific experts at SAGE pushed for the country to be shut down for months on end in response to Covid, leading to the largest economic slump since the Great Frost of the 18th century. Or remember how the Bank of England agreed to slash interest rates to near zero and pump half a trillion pounds into the economy during the pandemic, while dismissing the inflation this was bound to cause as ‘temporary’. Or remember how our energy policies are shaped largely by the demands of Britain’s climate bureaucrats. Their insistence on replacing reliable fossil fuels with unreliable renewables has exacerbated the energy crisis, pushing up electricity prices for households and businesses alike.
Yet despite these failures, the technocratic state only seems to grow more powerful. In the aftermath of Liz Truss’s kamikaze mini-budget, the blame for the subsequent market turmoil was quickly pinned on her decision to bypass the OBR, which would usually have forecasted the impact of her policies. (Other contributing factors, like the long-term fragility of the economy and the Bank of England’s many failures, have been largely ignored.) And so to avoid a repeat of that meltdown, Sunak and Hunt have vested significant authority in the OBR. According to the Telegraph, every Tory policy ‘from welfare reform to immigration’ is now fed ‘into the OBR’s models to see if the computer says “yea” or “nay”’. Meanwhile, the Labour Party has promised to strengthen the OBR even further if it gets into government, with shadow chancellor Rachel Reeves pledging to enshrine the budget watchdog’s status in law.
Kowtowing to the OBR is not going to save us from our economic slump. Its economic forecasts are frequently wrong – sometimes catastrophically so. Yet they are still treated as gospel and used to determine key planks of UK economic policymaking. The OBR’s remit – for achieving fiscal stability – incentivises the Treasury to keep taxes high and spending in check, which warns off chancellors from making some of the investments that are vital to raising productivity and growth. Sanctifying the OBR has bound the government to the very economic orthodoxies that have led to our current economic stagnation.
During the Brexit referendum, Michael Gove caught the mood of the nation when he argued that Britons have ‘had enough of experts… saying that they know what is best and getting it consistently wrong’. These unaccountable bodies have been free to fail and fail, over and over again. Yet no matter how many times they falter, centrist politicians only seem to want to invest more power and authority in them. Meanwhile, the public and our elected representatives are increasingly shut out from economic decision-making. We are denied our right to have a say over the policies that determine our prosperity.
Surely, the lesson of the disastrous Sunak-Hunt double act is to beware experts bearing advice. If we are to ever escape the UK’s economic doom loop, then we will need to cut the technocrats down to size. And fast.
Picture by: Getty.
To enquire about republishing spiked’s content, a right to reply or to request a correction, please contact the managing editor, Viv Regan.