From the climate to water and energy, our country is facing multiple crises that are a product of total political failure
Illustration: R Fresson/The Guardian
“Almost nothing seems to be working in Britain,” says the Economist. The Financial Times reckons the country is “creaking”; one Daily Telegraph columnist, with characteristic restraint, foretells “the coming collapse of basketcase Britain”.
Whatever conclusions follow, the basic observation is much the same: what with skyrocketing bills, crisis-plagued railways, a drought worsened by our decaying water infrastructure and an NHS once again on the brink of collapse, the United Kingdom is being confronted with huge problems it can no longer wish away. Up to now, it has been easy to pin the blame for our malaise on whatever crisis was then afflicting us. But there suddenly seems to be a dawning understanding that the era of Covid-19, Brexit, the war in Ukraine and the overarching climate emergency have exposed fundamental failures that have been festering for decades.
Mounting predictions of a national meltdown only highlight a story that ought to be very familiar by now: the deep and enduring problem of British underinvestment, and a national mindset innately averse to thinking about the future. From time to time, some or other grand project – London’s new Elizabeth line is a good example – suggests that the right people can just about get their act together. But for the most part, we have an economic model that excels at ephemeral stuff, but fails when it comes to the things that everyday life – let alone a healthy, future-proofed economy – actually depend on.
In that sense, the quintessential modern British experience is that of being stranded in the kind of mainline railway station where the consumerist wonderment extends into the distance – able to buy the latest in coffee, sushi and so-called Cornish pasties – but being faced with points failures, shortages of train staff, and that grimly British incantation about “any inconvenience caused”.
In 2018, a report by the TUC revealed that private and public investment as a proportion of national income put us 34th in a ranking of 36, trailed only by Portugal and Greece. In the 40 years to 2019, fixed investment in the UK averaged 19% of GDP, the lowest in the G7. Now, business investment in the UK remains more than 9% below its pre-pandemic level. Crucial parts of our national infrastructure have been failed twice over: first when they were state-owned and let down by the stinginess of the man from the ministry – and then when they became privatised victims of modern capitalism’s increasing fondness for stripping out, squeezing down, and chasing dividends.
The fate of England’s water is a particularly vivid example. Pipes, reservoirs and treatment works were once owned and run by local councils, but are now in the possession of a mind-boggling mess of interests that includes a Malaysian conglomerate called the YTL corporation, Norway’s state-owned bank and JP Morgan Asset Management. The consequences have been as mad as that suggests: between 1991 and 2019, such shareholders were paid £57bn in dividends – nearly half what the water companies spent on maintaining and improving their infrastructure.
Late last week, there were reports of ministers threatening electricity generators with an extended windfall tax, unless they used hugely increased profits to invest in green energy rather than pay shareholder dividends – a story that once again highlighted the tensions between instant payouts and longer-term considerations. Given that the average company share is now held for about six months, the former usually wins.
Executive bonuses based on annual results are part of the same problem. In the consumer economy, the results are bad enough (think of the hours most of us spend on poorly staffed customer helplines). But once that logic dictates decisions that affect our most basic infrastructure, you get a mixture of tragedy and disaster: national resilience coming a distant second to the kind of greed that finds a home in offshore tax havens.
Our systems of politics and power hardly help. With elections seemingly arriving every couple of years, and with our fourth prime minister since 2016 imminent, it is hardly surprising that planning – and spending – for the future so rarely intrude on the national conversation. The problem is made worse by the stupidities of a two-party system built on the idea that consensus is for wimps, and by post-Thatcher Conservatism – funded by bond traders and hedge fund managers, and deeply averse to any suggestion that the state should spend significant amounts of money.
Perhaps the biggest issue of all is that the British state is so centralised: overloaded Whitehall departments cannot possibly deal with demands for investment from wildly different parts of the country, and are usually beholden to the penny-pinching mindset of the Treasury.
What may or may not happen once Boris Johnson’s successor takes over is a very interesting question. Current levels of public sector investment have just about moved us away from the chronic self-harm of the austerity years, but they still fall short of the emergencies we will carry on facing – and besides, the Tories’ evident post-Johnson lurch to the right makes such small gains feel fragile. Most big investment ideas remain for the birds: all our big cities should have modern transit systems, but given that such things get nowhere without permission from the centre, most of them look set to remain stuck in the past. The climate crisis demands an energy revolution and home insulation programme that shows no convincing signs of materialising.
Meanwhile, the term Theresa May and Boris Johnson used to describe renewed investment in parts of the country that had been denied it has literally become a joke: at a recent leadership hustings in Darlington, when Rishi Sunak was asked what “levelling up” actually means, he simply laughed. As the last few weeks have proved, neither public nor private investment really capture the Tory imagination: its members – and financial backers – want the sugar-rush economics of tax cuts instead.
On the other side of the House of Commons, the opposition has better ideas – witness Labour’s £28bn-a-year climate investment pledge. But Keir Starmer’s party hardly feels like it has the confidence or ideas to push us out of our current short-termism and future-denial (when the frontbencher Steve Reed was recently asked about taking energy companies back into public ownership, he ruled it out on the basis that “nationalising companies costs an awful lot of money”).
Those of us who make the case for a progressive politics that would run well beyond Labour – and embrace coalition and consensus instead of rejecting them – don’t do so because it would be nice if everyone got along better. The case for a more pluralistic way of doing things is all about the realisation that long-term thinking and lasting change require a different political mentality. Unless it arrives, the crises over housing, water, energy and all the rest will grind on, and the kind of corporate governance that might help push us somewhere different will always be deferred until tomorrow.
Whatever the alarm about a country that no longer works, this is exactly the impasse in which we find ourselves: well aware of the danger, but as the David Bowie song put it, always crashing in the same car.
- John Harris is a Guardian columnist