A series of political scandals and unpopular decisions have undermined public trust in the British government. But improving economic performance requires more than just new faces: a new way of measuring prosperity and progress is both essential and overdue.
According to a recent survey, trust in government institutions is now below 50%. The current British government appears to have mismanaged a number of key political and economic challenges, the impact of which has undermined public trust in institutions and weakened economic progress. Spending cuts have stifled public services, including the NHS, and many critics argue the government has neglected its duties to boost long-term productivity or meet health and education targets.
The trials and tribulations of Brexit alone raised considerable doubts about the effectiveness of the state from 2016 onwards. Two thirds of the British population now believe that leaving the European Union has damaged the economy. For small and medium-sized enterprises, which alone account for more than half of all private sector revenues, the impact of the reintroduction of significant trade barriers is considered not to have been thoroughly considered. Long queues at ports such as Felixstowe and Dover were clear evidence that Brexit would not go smoothly as promised.
In 2019, as Boris Johnson's turbulent three years of leadership began, the new Prime Minister took office with great confidence, promising to “get Brexit done”, build 40 new hospitals and keep energy costs down. Many promises were broken during his time in office. There were long delays in Brexit negotiations, only six hospitals were renovated (but not rebuilt) and around 18 million households saw their bills rise to an average of £700 a year.
In 2020, the “Partygate scandal” as well as the then Health Minister’s breaches of Covid-19 social distancing rules left many people feeling that the incumbent government was out of touch with the devastating reality of the pandemic. After these episodes, IPSOS polls showed that the British public believed that the Labor Party had looked after people's interests and economic concerns more competently.
Public confidence deteriorated when Liz Truss took over as Prime Minister in 2022, remaining in office for just 49 days (a record low). Like her predecessor, Truss resigned following a vote of no confidence from her own party following the controversial “mini-budget” of September 2022. The departures of Johnson and Truss exacerbated public distrust as they suggested a lack of internal coherence within the governing party.
With trust most likely irreparably damaged, many voters believe the country needs change. Polls show that almost 90% of voters – including 65% of Conservative supporters – believe the UK needs new leadership. With Labor leading the polls for over a year now, it appears they are about to get what they want. However, this change will not be an immediate solution to the country's economic problems.
By failing to live up to expectations, the Conservative government has undermined public confidence in leadership. When promises made are not kept, companies and consumers begin to distrust future political commitments. And in times of uncertainty, people start saving more and reducing their daily and future expenses. Companies are also delaying investment and hiring processes. Both groups are then less likely to respond to incentives and policy initiatives, undermining the effectiveness of new government efforts.
Against the backdrop of the cost of living crisis, these impacts are multiplied as people try to cope with rising bills and expenses even though their money no longer stretches as far as it once did. And as the gap between the public and government widens, long-term employment rates, investment in innovation and productivity growth could also continue to fall.
Growth is typically measured by calculating the value of all goods and services produced in the economy. But with this framework, policymakers are limited to a purely results-oriented perspective. Many other key indicators of inequality, education and productivity are overlooked, which can give people a distorted sense of how well the country is doing (further eroding confidence).
As the economy has grown in 2023, strikes across multiple sectors and protests over the cost of living and the climate crisis suggest that social discontent is increasing. To address these issues, every new leader should move away from the tired idea that investing in public services and people is a “cost” and instead view it as a long-term investment in building trust and economic prosperity.
Comments are closed.