As proposed national rallying cries go, perhaps this one lacks swagger. But its modesty is deliberate, as the economist and Observer columnist Torsten Bell’s surprisingly hopeful new guide to halting this country’s crumbling decline explains. Chest-beating political promises to put the Great back into Great Britain are, he writes, really just distracting from the real issue, which is that the British are exceptional all right – only not in a good way. We stand out from our pack of medium-sized, richer-than-average countries for our low productivity, chronic wage stagnation and American-style high inequality (but sadly without the higher growth of the US).
We have truly world-beating housing costs, higher than any other Organisation for Economic Co-operation and Development (OECD) country but Finland, but magically still deliver less living space per capita in return than famously cramped New York; we boast, if that’s the word, fewer hospital beds than all bar one other OECD nation.
Yet while Brits have somehow been conditioned over the past 14 years to accept creeping impoverishment as some kind of gloomily inevitable new norm, our neighbours show it needn’t be. A middle-income German household is now a startling 20% richer than their British counterpart and the equivalent French household 9% ahead. “Talk of being ‘world beating’ is a distraction from what we really need to be: more normal,” concludes Bell. Helpfully, the latter is actually within our grasp.
Bell has earned the right to have this argument taken seriously. A former adviser to the then chancellor Alistair Darling and then Labour leader Ed Miliband, he’s a creative thinker whose ideas are often ahead of his time and focus on those others overlook: low and middle-income earners, not the wealthier middle classes, and renters, not homeowners. As chief executive of the left-leaning Resolution Foundation thinktank, he deepened public understanding of insecure “squeezed middle” lives and helped design the Covid furlough scheme that saved countless jobs.
He is now standing for the safe Labour seat of Swansea West, though few expect him to spend long in backbench obscurity, which makes this book required reading for the new intake. But its real achievement is in creating what he calls some “hardheaded believable hope” of better days ahead, at a time when some – especially on the more disgruntled left – have virtually given up on Labour making a difference in government.
That hope matters, he argues. Chronic low growth and the shoddy public services it affords, over time, erode people’s faith in the state to do better, pushing them towards extreme political solutions. The risk is of a broken economy in turn breaking politics itself.
His analysis of how Britain came off the rails is even-handed, heaping scorn on George Osborne’s austerity era but noting that wage growth started faltering while New Labour was in office. While acknowledging the damage done by Brexit, he identifies the stubborn productivity gap between Britain and countries such as France or Germany as the biggest real drag on growth.
He’s no keener on dreamy leftwing utopianism than empty rightwing boosterism, taking issue with both the campaign for a universal basic income (UBI) and the anti-capitalist writer David Graeber’s popular “bullshit jobs” thesis, which argued that too many jobs in the modern economy are pointless, paper-shuffling make-work designed to keep the masses distracted. (UBI is too expensive if it’s generous enough to ensure nobody now on benefits loses out, he argues, but positively damaging otherwise; meanwhile, research shows a cheering number of Britons find their work meaningful or socially useful.)
But he’s also clear that simply offering more stability – shadow chancellor Rachel Reeves’s watchword – after years of chaos won’t be enough to unlock the investment businesses need to be more productive, and that there’s no avoiding the need for “wrestling with and rewiring parts of our capitalism”. Britain’s parlous state now, he argues, makes the case for things that seemed too radical in 1997.
There are original ideas here for everything from helping the low-paid build up emergency savings to making shiftwork less precarious, and perhaps most radically, for shifting the burden of tax from income to wealth. Raising income tax by 5p would cover the costs of scrapping the 8p national insurance rate entirely, Bell writes, leaving most workers instantly better off; the corresponding hit would be taken by landlords, richer pensioners and people earning money from dividends, all of whom draw income that attracts tax but not NI. Yet if the economics is persuasive, what the book lacks is arguably more politics.
Many of his big remedies are things that successive governments knew full well needed doing, such as building more houses or revaluing council tax, but have ducked for fear of a public backlash. While advocating what he calls “radical incrementalism”, or slow but steady progress towards big changes, Bell offers few answers to the question of how to get elected while promising, for example, wealth taxes likely to spook millions of older homeowners sitting on that wealth. (Presumably, his opponents are even now filleting the book for lines to use against him in Swansea West.)
But overall this is an incisive, upbeat vision of how a Labour government could turn things around even in difficult times. The one good thing about Britain digging itself into a hole, he notes, is that we could deliver a surprising amount of growth just by catching up to where we should be. Or in other words, the advantage of doing this badly is that things can – to misquote D:Ream – surprisingly swiftly get better.
• Great Britain? How We Get Our Future Back by Torsten Bell is published by Bodley Head (£20). To support the Guardian and Observer order your copy at guardianbookshop.com. Delivery charges may apply
