How a pattern of decision-making that harms the economy and most ordinary voters is being sustained, even as the damage becomes clearer

Since the 1980s, the UK economy has been decreasingly robust, and its fruits have been shared less equitably, so that we now have a serious and protracted cost-of-living crisis and many public services are struggling. Rather than change course to a path of national renewal, many powerful voices are urging our politicians to take yet more so-called ‘tough decisions’ of the type that has caused the problem. And some of the most recent suggestions are likely to be even more damaging than those we have already seen.

Two charts graphically illustrate how UK economic growth rates have declined since the 1980s, and how the top 1% share of national wealth has increased over that same time frame.

Here is the growth picture.

And here is how wealth is shared.

These outcomes are not an accident: they are the result of a consistent pattern of policy-making which the population has become accustomed to and even persuaded to welcome. They are sold to us as ‘tough decisions’: regrettable but necessary. In reality they are extremely damaging, and more may follow:

• A continuing stream of vulture policies enriches a few at the expense of the rest of the population;
• Vulture policies are sold to us by incessant use of powerful rhetoric;
• Even today, voices we should be able to trust are using these techniques to push new vulture policies which would be extremely damaging to 99% of the UK population.

We have seen too many Vulture policies

Every Budget represents a portfolio of policies on both spending and taxation. And each individual policy is complex. But, as Chapter 15 of 99% describes in detail, and this article in outline, there are only four fundamental types of policy:

• Type I: captured growth policies – those which grow the economic pie, but allow a small group to capture almost all the benefits;
• Type II: shared growth policies – those which grow the economic pie, and ensure that the benefits are widely shared;
• Type III: vulture policies – those which do not grow the economic pie, but allow a small group to benefit by increasing their slice of the pie; and
• Type IV: balancing policies – which do not grow the economic pie, but allow a for a fairer distribution of the slices.

When we see a pattern of policy-making in which important vulture policies are enacted, eg enormous reductions in the top rates of tax since the end of the 1970s (from 98% down to 40%, and now slightly higher), and Brexit (which has done untold harm to the economy as a whole, but made a few people extremely rich), and at the same time vital public services are starved of funds (austerity), then the outcomes shown in the first two charts become inevitable.

Vulture policies are sold to us by the use of powerful rhetoric

Of course, vulture policies cannot be presented as vulture policies – not enough voters would support them. But skillful and constantly repeated rhetoric can ‘re-brand’ reality to make these policies sound attractive and even inevitable – they are ‘tough decisions’ which no responsible government would duck:

• The vultures can be rebranded as the saviours of society, whom it would be ungracious and uneconomic to expect to do any more to help sustain the rest of the nation, and the vulture policies can be presented as only apparently damaging – their knock-on effects will help us all;
• Ordinary people can be branded as parasites on the wealthy, who need to take more responsibility for their own lives;
• The very failure of vulture policies can be turned to advantage: the worse the economy performs, the more plausible it seems that the government can simply no longer afford to do what the nation needs. The vulture policies, we are asked to believe, are not really a choice at all: they are inevitable.

Euphemisms for vultures and their policies

Demonisation of those in need

The doctrine of implied inevitability

‘Tough decisions’ which are still to come

Unfortunately, this is not a problem of the past. Right now we hear powerful voices – voices we feel we should be able to trust – pushing this same rhetoric, and paving the way for even more destructive vulture policies: the OBR has become more shameless in its descriptions of the UK’s debt situation (which supports the idea that further austerity is inevitable), several voices are calling for a reduction in future state pensions, and the FT’s Associate Editor is joining the Tufton Street think tanks and Nigel Farage in calling for an end to the NHS as a universal, tax-funded service, free at the point of use.

The sales pitch for yet more vulture policies continues unabated.

The OBR claims that debt is at dangerous levels

The OBR wrote, in its recent report,

“Debt at 95 per cent of GDP is high by historical standards and so we also show the required tightening to return debt to a pre-financial crisis level of around 40 per cent of GDP.”

The clear implication is that our current level of debt to GDP is an historical anomaly, it is a dangerous level likely to lead to crisis, and 40% would be a much more ‘normal’ level to aim for.

A reader would be justified in hoping that, coming from the OBR, they could safely rely on that comment. The facts show an entirely different story.

Either the OBR is unaware of the facts or they are aware of them but nevertheless wrote the paragraph above – in a report focussing on debt, either explanation is unacceptable.

An honest summary of the data and their preferred scenario would instead say something like,

‘debt at 95 percent of GDP is marginally below our long-run historical average. In 300 years, debt at that level has not caused a crisis. Nevertheless, we felt it appropriate to consider the adjustment needed to make a dramatic reduction to around 40 percent, a level which has been reached only in 43 of the last 300 years.’

But that would not make a case that austerity is the only responsible course.

Calls to reduce UK state pensions

Armed with the OBR’s forecast that if we maintain the triple lock, state pension costs are set to rise to 7.7% of GDP by the early 2070s, several commentators have called for the abolition of the triple lock on pensions.

Astonishingly, the so-called Intergenerational Foundation is among them (supposedly their aim is to be fair to younger generations, in reality their work highlights relatively minor differences between generations to distract from the massive wealth inequality within generations). Their analysis shows that unlocking “would save around £19 billion per year by 2035–36, £28.5 billion by 2040–41, and £38 billion per year by 2045–46.”

That £38 billion ‘saving’ is of course £38 billion taken from the pensioners of 2045-6. And of course the savings would grow even further over time. The biggest losers by the 2070s would not be today’s pensioners, who would be long-dead, it is today’s younger generations many of whom would retire into poverty.

And the argument that this is a regrettable necessity is belied by the fact that the OBR’s own report shows that 7.7% of GDP is a proportion which many of our peer countries are already managing to afford perfectly well: Austria, Belgium, Denmark, Finland, France, Germany, Italy, Greece, Japan and Portugal all spend more than that already.

Calls to replace the fundamental model of the NHS

The far-right think tanks in Tufton Street have long called for the abolition of the NHS. And it has for years been an objective of Nigel Farage. But it is surprising, to say the least, that a senior journalist from the Financial Times is joining them.

Part of his premise is that the rich already pay more than their fair share of tax.

“But contrary to what many on the left think, the UK also really does tax the average person less. The “rich”, or the “broadest shoulders”, or whatever metaphor you want to use, really do pay more.”

Of course a billionaire pays more in absolute £/person than someone earning £50,000 a year, but many of the richest pay a lower percentage of their total economic income in taxes than almost all the rest of the UK population. You probably pay a higher rate than most billionaires.

He then breezily discounts the idea of continuing with a universal, tax-funded service, free at the point of use,

“You can try and win the argument that the current level of state provision, and the way we pay for it, is a good state of affairs. I don’t think this dog will hunt. Visibly, voters don’t like it, and I think the way our tax burden falls actively hurts growth, discourages higher earning and is bad for business.”

He goes on,

“Then there are three choices that I think are actually viable. You can win an argument for broad-based [i.e. not focussing on the wealthy] tax rises to restore abandoned state functions. You can shunt more of the cost of retirement and/or healthcare on to private individuals. Or you can do a bit of both. … I favour healthcare reform to make us more like our rich-world peers, where you have a combination of universal healthcare and some co-payment.”

He concludes,

“… I think wide-ranging reform of how we pay for and deliver universal healthcare to everyone is going to go from an election-losing heresy to a necessary conversation sooner or later.”

This is the doctrine of implied inevitability at its finest.

Abolishing the NHS would perhaps be the single worst vulture policy – worse even than Brexit and austerity. It would harm millions of ordinary voters, and it would do extraordinary damage to the economy as a whole, but it would enrich a few people massively.

Learned helplessness

The examples above show that vulture policies are not a problem of the past: if we do not act, we will see more of them – and the UK may start to look more like Argentina than Austria.

But if we do not tackle the rhetoric, we will continue down this path.

As we argued before, once one accepts three taboos (which as this article shows, we should not accept), then there is a remorseless ‘logic’ that underpins the helplessness of the government to do anything other than take yet more ‘tough decisions’ – decisions which harm both the UK population and the economy.

Observation of the policies which have, and have not, been implemented over the last 40 years or so shows what are in practice the tough decisions: vulture policies are not tough to implement; progressive policies have become almost impossible.

We must unlearn our helplessness and enact policies which reverse the course of the last 40 years.

It is time to redefine tough decisions, confront the taboos and serve the British population.

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