“I’M AFRAID THERE IS NO MONEY.”

John Boydell - Friday, 8 September 2023

As always, I’m not on anybody’s “side” politically, just trying to champion common sense.

‘It’s how you tell ‘em’ that matters, even if it is the truth. Liam Byrne, chief secretary to the Treasury under Gordon Brown was the author of that infamous note that was left for the incoming Tory administration. It was a gift, politically, and became like one of those annoying tunes that you can’t get out of your head, constantly reinforcing the impression that Labour could not be trusted on the economy. There were, then, some shortcomings in competence but there were also circumstances outside the then government’s control, to a large extent. We were post Lehman Brothers, with economic turmoil around the world. Tax receipts in the UK fell substantially and borrowing had to increase significantly. It’s hard to envisage that even a government so practised at putting its foot in its mouth time after time, like the current one, will repeat such a disastrous piece of messaging, even though there is, demonstrably, no money left.

As the brickbats rise in the approach to the next election, it’s possible that references to the note will reappear but care would be needed with that one. Back in 2010, it was a spectacular Labour own-goal but passing time has made the damage fade, while it has produced repeated episodes of Tory incompetence, including as to the economy. As for the last Labour administration, there have been some circumstances outside the government’s control: Ukraine and Covid. There have been other economically damaging episodes that were within its control e.g. Brexit and the Truss/Kwarteng mini-budget. There have also been thirteen years to improve citizens’ lives, long enough to properly compare A [then] with B [now]. Stock markets can fall as well as rise; your fund may be worth less than last year but if over thirteen years your fund was not worth significantly more than when you’d started, you’d be wondering about the competence of your financial adviser. The government [and all governments to a greater or lesser degree] use headlines to try to gather votes, relying on many voters to not apply much [or any] scrutiny to the substance behind such headlines. Regrettably for ruling politicians, adverse headlines can also hit home and not receive the scrutiny that might otherwise balance out the position. ‘We’re broke!’; ‘Nothing works any more!’; ‘Party chaos!’; ‘School buildings scandal!’; ‘Record tax burden!’; ‘Record homelessness!’; ‘Record NHS waiting lists!’; ‘Brexit border delays!’; ‘Sewage in our rivers!’; and ‘Prices through the roof!’ are examples. There are many more – and they are politically damaging. Are they deserved or are they the product of poor messaging and explanation? Frankly, it doesn’t matter in the chase for votes [it does matter, in terms of governance]: it’s what members of the public perceive.

Let’s take one area to compare for then and now: poverty. The UK used to be the fifth most prosperous country in the world, and now it has dropped to sixth. It’s not an unfair proposition to expect a government, in power for thirteen years, to have a plan and execute it to lower levels of poverty. The Poverty Strategy Commission, with cross-party former-minister members, has recently observed that poverty levels are too high and that deep poverty is growing. The social contract between the government and citizens is not, it appears, being performed. It is concerned for six million families living in poverty and highlights the increase in the number of people living in “deep poverty”. “In recent years, we’ve made little progress in tackling the causes of poverty: low wages, an inadequate social security system and sky-rocketing housing costs”. Is this the result of bad policy, badly implemented by the government of the sixth-richest country in the world or is it lazy lead-swinging citizens [and immigrants] as regularly reported by certain right-wing news outlets? Then with now comparisons are harder to cover with helpful media headlines, after thirteen years to form a view.

While there won’t be a note at the Treasury saying there’s no money, it won’t matter, for most of the country feels poorer. They will, when the election nears, be asking themselves why they are worse off than they used to be. What’s my government been doing with the last [then] fourteen years? It’s a fair question, that looks like hanging around. The latest British Chambers of Commerce (BCC) warning is that the economy is “on course to avoid a technical recession, but growth?is likely to remain so feeble that it will be hard to spot the difference”. The Resolution Foundation observes that typical working-age household incomes are going to be [in real terms] 4% lower in 2024-25 than they were in 2019-20. It added, “Never in living memory have families got so much poorer over the course of a parliament.” Voters feel poorer and are poorer. They will ask ‘Why after fourteen years am I poorer?’. It’s a fair question that will not be deflected, any more, by scapegoating headlines about lead-swingers, foreigners, woke-left and Putin.

I’ve written a number of times that messaging can be crucial and powerful. But, I’ve also opined that if there’s no substance behind the messaging it will run out of road. Too often, there’s been no policy or poor policy with bad implementation, often derived from dogma, instead of simple facts, reality and common sense. Whoever forms the next government has an almighty task on its hands: there will be “no money” and some serious, deep-lying issues