Without bold action by the government, British citizens could find ourselves living in a formerly-developed nation
In the book 99%, which was published in 2019, I made what felt at the time like a bold prediction: if policy did not change significantly, neither the US nor the UK would see their civilisation remain intact to the year 2050.
What has happened since 2020 has reinforced that view – in fact, things have moved further and faster than I anticipated. Trump’s return to power in the US and aggressive implementation of his Project 2025 mean that it is already questionable whether the US remains a functioning democracy. And his ‘Big, Beautiful Bill’, which was much more than just a Budget, was described by economists as the largest upwards transfer of wealth in American history. American democracy seems very likely to be on a par with Hungary’s while its levels of inequality will rival those of a third-world country. As the Financial Times put it,
“It took years for Viktor Orbán to consolidate strongman rule in Hungary. Trump is trying to pull off an equivalent system-change within months.”
It may already be too late for the US. What are the prospects for the UK?
We have a choice:
- If we continue as we are going, there is a good chance of following America into the grip of the far-right; but
- With rapid and bold action, we can avoid that fate and put Britain back onto a path of economic and social progress.
The consequences of failure are more serious than the government is admitting, and the risks are higher. But so is the upside from bold action.
Following America to the Far-Right
Much can change before the next election (and it should), but on the hypothesis that we drift on as we have been going, it is very likely that we shall have a far-right government which will shred our post-war social contract and transfer yet more wealth to the wealthiest while accelerating mass impoverishment.
Electoral Calculus has estimated that if an election were held tomorrow, the results would be as follows:
If nothing changes between now and the next election, Reform will take around 30% of the votes and win a majority of 86 seats.
We could wake up to headlines like those below.
Is this really plausible? It is: many of the measures suggested in the fictious front pages above are taken from Farage’s own statements.
He has made no secret of his admiration for Putin and Trump. A new think tank, Centre for a Better Britain, which is supported by US donors, is helping to prepare Reform for government following the model of the Project 2025 planning done for Trump by think tanks including the Heritage Foundation.
Farage has said he will slash spending to make room for tax cuts, which always favour the wealthy at the expense of the rest. And he has expressed his admiration for the way DOGE operated in the US.
He has made clear his desire to deport 600,000 people from the UK – almost 1% of the British population.
He has made the (economically unjustified) argument that because we have an ageing population, we shall have to replace the NHS with a private insurance-based system. The harm that would do to British citizens is unthinkable – but it would enable higher profits for healthcare companies.
He wants to abandon action on climate change and support more use of fossil fuels.
He plans to fill his cabinet with hand-picked loyalists, rather than elected MPs, following Trump’s model.
And he has made clear that he has no time for ‘activist’ judges and lawyers who would seek to impose legal and constitutional checks and balances on his plans.
Based on Farage’s own statements, it is reasonable to suppose that he would closely follow the Trump model.
But this future is not inevitable.
Striking a bold progressive path
The book 99% contains a five-point plan, which seems more urgent than ever:
Let us take each step in turn.
Step 1: A democratic reset
The first step alone is not enough to solve all the nation’s problems, but it may be enough to prevent the worst outcomes.
There is a serious risk that the next election in the UK will not be fair. The experience with Brexit showed that a combination of dark money, disinformation and disregard for the electoral rules can induce the population to vote for something they did not want before the campaign started and do not want now. So the government should enact measures to prevent electoral abuse as far as possible.
Water-tight protection would unfortunately be difficult to achieve, and an easier and more certain step would be to introduce proportional representation (PR), which would make it far harder for a far-right government to push through the kinds of actions which Trump has taken in the US.
This is how the seats would fall under PR.
Reform would still be the largest party but would be far short of an overall majority. Even in coalition with the (greatly diminished) Conservatives, it would be slightly short. Policy might not be progressive, but the chances of such damaging initiatives as those listed above being forced through would be greatly reduced.
But that outcome is far short of what we want and deserve. Which brings us on to the remaining steps.
Step 2: Fact-based policy
A major reason for the failure of policy to tackle any of our problems since the Global Financial Crisis is that our governments have all accepted three fallacies, which lead to a sense of learned helplessness and an inability to act.
The resulting failure to address the problems of the British people is in large part why so many are now desperate enough to consider voting Reform.
The three fallacies are formalised into the Chancellor’s ‘iron-clad’ fiscal rules – it is past time to change these and adopt a much more dynamic and responsible approach to economic management.
A dynamic approach would enable the government to act as an agent of positive change, rather than passively waiting for ‘the markets’ to fix our problems.
Step 3: Policy for Solidarity and Abundance
Policy formulation is fiendishly complex, but there are only fundamentally four types of policy.
Each policy either grows the economic pie or it doesn’t; and it either shares the benefits of that growth fairly or it doesn’t. That gives us four types of policy:
- Type I: captured growth policies;
- Type II: shared growth policies;
- Type III: vulture policies; and
- Type IV: balancing policies.
We got into this mess because we have had far too many captured growth policies and vulture policies, and far too few shared growth policies and balancing policies.
And we can get out if we focus as much as possible on shared growth policies. and recognise that where we adopt captured growth policies, they need to be balanced.
First, the shared growth policies. Why not spend £100 billion over the next few years insulating every house in the country? Why not spend a few £ billion on R&D for battery technology or infrastructure for electric vehicles? Why not build a million eco-friendly social housing units? And why not fund the NHS properly? There is a complication here: many of our institutions are hard-wired for regress: to enable these growth-inducing initiatives to succeed, we will need to rewire for progress.
And for the balancing policies, why not pay a ‘green dividend’ to the poorest, funded by taxes on fossil fuels? How about immediately ensuring a true living wage? Why not stop the roll-out of universal credit and replace it with something fit-for-purpose, and why not have a taxation system that at least stops inequality growing?
Step 4: Invest wisely for the future
The fourth step is to invest wisely in the future. That is the Type II policies. We haven’t been wise, because widespread acceptance of the three fallacies has prevented all kinds of sensible investments.
The chart shows the case of flood defences. And of course environmental investments fall into this category, too. It is no more prudent for the Government to say that it cannot afford to tackle climate change than it would be for me to ‘save’ money by not fixing a leaking roof in my house.
Step 5: Ensure clean, competitive markets
The fifth step is to clean up capitalism. At the moment, the immensely powerful force that is the profit motive is too often fighting against solving the problems we are most concerned about. But it need not be.
In Appendix IX to the book 99% (you can download the Appendices free from the website), there is the story of a fictitious but quite realistic business, Alpha plc. The story goes like this:
In 1997, Robin Quickly was a young man with a dream. Working with two friends from rented premises in an out-of-town business park, using second-hand IT equipment funded by a loan from his parents and a small government grant, he founded a company which was destined to change the way Britons buy their clothes. In its first year of operation, the then unknown Alpha company had a turnover of just over £300,000 and made a small loss.
Today, Alpha plc is recognised as one of the UK’s most dynamic and successful companies. In little over 20 years, it has grown from nothing to a turnover of £1.5 billion and is still growing at over 10% per annum. Customers love Alpha. Because of its innovative business model, its costs are approximately 5% lower than those of bricks-and-mortar competitors – and it has passed this cost saving on to customers. Its service levels are consistently high. And Alpha was one of the pioneers in using algorithms to drive product selection. It has swept its competition aside.
And the reported profit of Alpha looks very healthy. But underneath the surface, the picture is very different. Alpha externalises many of its costs. It gets us to pay for its pollution, for its underpayment of staff and its failure to pay its taxes.
Because it externalises its costs, it can outcompete more ethical businesses. Because it externalises its costs, it becomes an engine for mass impoverishment. And because it externalises its costs, it gets rewarded for destroying the environment.
But if it could no longer externalise all these costs, it would cease to have an advantage over more ethical businesses. It would not have grown. It would not have contributed to mass impoverishment or environmental destruction.
In a world without externalisation, ethical businesses would outcompete unethical ones and the profit motive would become a force for good.
Conclusion
If we drift on, we are likely to end up like America.
But there is nothing to say that governments cannot be bold – and this one must surely begin to see that its timidity is heading it for catastrophic failure.
There is no question that the government faces a stiff challenge. But from a practical perspective, the challenge is nothing like that faced by Clement Attlee’s government. In 1946, debt:GDP stood at over 250%; in addition, the cost of servicing that debt was over 5% of GDP; more than half of national income had been diverted to the war effort and over 5 million people mobilised into the Armed Forces; some 5% of national wealth had been destroyed, and 1% of the population lost (and the equivalent figures were even worse in some other countries). Under such circumstances, a major increase in public spending would normally be considered unthinkable.
Attlee’s government rose to the challenge. It created the NHS and the Welfare State, at a time when it was told that doing so was unaffordable and would be economically irresponsible to try. And what was the economic cost? The UK enjoyed the most successful economic period in our history.
The consequences of failure are more serious than the government is admitting, and the risks are higher. But so is the upside from bold action.
Previous UK governments have shown what is possible, as have the governments of other countries. Ours should learn from their success.
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