🔒 Bloomberg editorial: Tories’ troubles were a long time in the making

In the wake of UK Prime Minister Rishi Sunak’s call for a July 4 general election, the Conservative Party faces a reckoning after 14 years in power. Amidst declining household incomes and widening inequality, Britons are disillusioned, signalling a desire for change. Despite attempts to address issues like Brexit and housing, the Tories’ legacy is marred by economic stagnation and social crises. As the election looms, voters weigh the party’s promises against a backdrop of missed opportunities and enduring discontent.

Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.

By The Editors

Last week, when UK Prime Minister Rishi Sunak called a general election for July 4, he very likely put an end date on his party’s long stretch of governance. After 14 years in charge, what exactly have the Conservatives accomplished? ___STEADY_PAYWALL___

Clearly, according to consistent polls, many Britons are ready for a change. But ejecting perhaps the world’s most electorally successful political party suggests more than ennui is to blame. Conservatives’ predicament should serve as a warning to political parties that fail in that most important job: governing well.

Over the years, the Tories have given voters plenty of reasons to mistrust them — Brexit chief among them — along with any number of festering scandals. But one of their biggest failures was economic. Household income declined markedly over the course of this Parliament, with overall living standards rising at the slowest pace on record, according to analysis by Bloomberg Economics. One recent study found a rise in “material deprivation” across every age group, work status and region. The average UK household in 2007 was 8% poorer than its European peers; that gap had widened to 20% by 2022. Remove the rich outlier of London, and Britain would be as poor as Mississippi.

Despite the Conservatives’ oft-stated goal of “leveling up,” inequality has actually widened between the southeast of the country (including London) and the poorer north. Nor has the party had a convincing answer to the UK’s profound housing crisis, largely the result of regulatory constraints and local planning controls that have suppressed building. Instead of addressing the root causes, the Tories resorted to “help to buy” and other schemes that have predictably inflated property prices. One result is that housing insecurity and homelessness have spiraled. In one London school, a majority of students are homeless — an all-too-poignant metaphor.

Some of these disparities can be traced to the austerity introduced by David Cameron’s government in 2010. While successful in reducing budget deficits, that effort also imposed deep cuts to local governments and public services; health and social care have never quite recovered. A long squeeze on funding for the National Health Service (since reversed to some extent) has left lasting scars in the form of workforce shortages and lack of capital investment; mind-boggling backlogs have left many despairing of getting essential treatments. Defense spending and a string of procurement failures have left major gaps in Britain’s capabilities.

Yet for all that, and even with taxes near a 70-year high, the country’s debt-to-GDP ratio, nearing 100%, is still rising, signaling either further tax increases or spending cuts ahead, unless somehow growth can be put on a faster trajectory.  

Sunak himself bears only limited blame for these failures. He deserves credit for calming markets after his predecessor’s brief and destabilizing premiership, and for a much-needed trade deal with the European Union that put relations on better footing. He also brought order and purposefulness to policymaking after the scandal-prone chaos of Boris Johnson’s leadership. Likewise, Chancellor Jeremy Hunt’s efforts to encourage business investment and reduce the tax burden were on the right track.

Yet it all felt like too little, too late. Both parties will be laying out their plans over the next six weeks. After so many years and so many missed opportunities, voters already put a heavy discount on Tory promises.

Read also:

© 2024 Bloomberg L.P.