Fending off a potential economic collapse really depends on those that ‘get it’ and those that don’t | Conservative Home

It’s been a year. Quite the year.

For Labour struggling in Government, the Tories languishing in opposition and far less important myself as Editor of this site.

It’s been better for Reform UK, but just as steep a learning curve I’d bet as it has been for me – a special mention in despatches for Henry, Tali, and William for all their help.

Labour have learned Government isn’t easy, especially if you hoodwinked the electorate that you had ‘a plan’.

The Tories have paid dearly for the failings of the last Government and with worrying poll numbers their leader is fighting uphill just to be heard.

Reform UK are trying everything, anything, to keep up the pace they set at the outset. They’ve managed despite the increasing scrutiny they richly deserve.

I’m just about hanging on in a world where politics has been moving at 100mph and has never been more unpredictable. However, one thing I’ve concluded at this inflection point in politics is that nobody should be allowed to brush aside the obvious economic challenges we face, and we have to question the capability of our politicians to address them. It’s still the economy, stupid

There’s just three types of politician right now; those that get it, those that don’t get it, and those that get it but are too stupid or scared to admit it.

Increasingly, from what she and her team are saying, Kemi Badenoch does get it. Senior Tories seem now to get it. Our columnist David Gauke definitely gets it judging from his column on Monday. Paul Johnson as he left the helm of the IFS gets it, although he’s not sure some Conservatives do. Andrew Neil gets it and said so this week on air.

Almost everyone in Labour doesn’t appear to get it. Morgan McSweeny probably does but I’m told is increasingly frustrated with those that don’t, perhaps including his weather-vane boss.

There might be some in the Cabinet who get it but are politically paralysed by the rest that don’t. The Lib Dems don’t, the Corbynites never have and on the evidence, Reform don’t care – either pretending they get it sometimes and on others proving they don’t.

So what is it?

I’ve not jumped on a band wagon, I wrote about it weeks ago, based on a simple premise: the public’s expectation for what government can and should provide them, long ago outstripped any government’s ability to provide it within taxation – and for too long we’ve all pretended that’s not a thing.

You’ve heard it before – you will hear it again: If we don’t act, we will become (pick any or all of the following) a welfare state/a health service/a pension pot with a state attached.

What’s changed is it’s no longer a choice. It’s not politics it’s economics and maths.

Welfare, health and social care, and debt repayment are the mighty trio of ballooning costs that dwarf any other expenditure. We literally can’t afford to go on like this, and hard though it is to sell people need to accept that they can’t have some of the things they’ve grown entitled to.

To even try to cover every thing expected you’d have to have even higher general taxation across everybody, including “working people” and a far better performing economy with a government truly committed to improving growth.

The Tories now seem to have found a wedge to drive between their party and the real ‘uniparty’ of big spenders, Reform, the Lib Dems and Labour. Kemi claims only the Conservative party understands this and can fix it. I really hope so because there’s still an army of people ready to point out, the Conservatives showed little sign they ‘got it’ in their last years in Government.

Yet, here is ground to show difference.

It’s a fact, as Kemi said in her CSJ speech on welfare, “the rider has become as big as the horse” and in this analogy it all gets worse if we don’t tackle it before the rider is carrying a horse. Or two horses. I’m not about to give that unenviable job to my children, or yours.

The Tories can apply the same prism to the NHS in terms of young and old – which in turn applies to national debt repayments. We are blithely saddling vast debt onto our children, and onto Brits as yet unborn. That’s not fair, or responsible, and too many people selfishly ignore that whilst virtue signalling all the way.

Andrew Neil put his finger on it on Times Radio when he said: “The British do have the view that they can have Scandinavian levels of welfare from cradle to grave but mid Atlantic tax rates”

Given we’ve never been taxed so highly and yet our proportion of tax to GDP is five percentage points lower than in the Scandinavian countries we’d struggle to deliver their levels of welfare, even if you could persuade the electorate they should such accept such tax rises. Besides, because of their much smaller populations, GDP per capita – the measurement that matters – is higher across all three.

And yet in a bid to try and to match public demands for that type of welfare, Rachel Reeves will come back for more taxes. She has to, because Labour MPs won’t let her accept reality and risk unpopularity.

When it comes to things you can’t afford, the risk of unpopularity is where Labour will put party before country.

The Tory position now is probably right. I’ll admit it’s the hard electoral road of the currently-nothing-to-lose, and it will require courage to do but a dose of cold honesty has to be right, because it’s not ideologically driven, it’s economically necessary.

It’s also important to be seen calling it out before the already watchful bond markets react in a ways that make the mini-budget shock look like a picnic. Or before we are left exposed to a big global financial shock – you know, like, a war – with Russia.

This is a real problem. Governments in the past, when America would take the strain, are used to eyeing defence as a source of extra cash, but now Labour have committed to increase defence spending, whilst also bailing out the Mauritian economy, this route, even though it wouldn’t fill the gap anyway, isn’t available. Indeed it’s a growing demand. If a government’s first duty is to keep it’s citizens safe, I’d prefer that to benefits for anxiety.

Reform’s took a different route this week. Lumping the Tories in with Miliband’s net zero spending – conveniently forgetting the Tories already distanced themselves from the 2050 target months ago – they claimed they’d look for the savings there and then listed circus trips, and takeaways given to asylum seekers.

Now, Milliband might accuse both parties of being ‘anti-science’ and ‘unpatriotic’ and his faith in the magic money tree for his cause is no more credible than an energy company that doesn’t produce energy, but even if Reform took all that money, they’re committed to £3.5billion in spending to remove the two child benefit cap.

Then there’s the cost of re-nationalising heavy industry in Wales, or burying electricity cables. Even removing every diversity officer who ever lived, or cancelling anything for asylum seekers (an admittedly popular move) won’t fill the gaps. Nor will, as the Bank of England has said, a Reform plan to scrap bank interest rates.

Their hunger to take on Labour is morphing them into Starmer’s game. ‘Say whatever you need to win, and work out the rest once we get there.’ It really might work. Reform supporters will point to their polling and just smile – but that still doesn’t answer the question.

Hard-nosed though it is reducing spending is the only real and difficult option. If, whatever your politics, you cannot see, or choose to ignore that then you shouldn’t be taken that seriously, however much you promise the moon on a stick.

We’ve all gone along pretending it was fine and kept kicking the increasingly obvious problem down the road.

That ‘we’ll-deal-with-it-when-we-get-to-it’ attitude isn’t going to work now. Plus, it’s dishonest.

You either get it or you don’t get it, and we shouldn’t give quarter to those that don’t, even in the face of unpopularity.

The cost to the whole country of pretending it’ll all be ok will be far far higher.