An end to Britain’s uncertainty and drift

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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

For too long, the UK has felt like a country adrift. Politics has been stalled by the fact that its government has seemed to be living on borrowed time. Investment decisions are not being made; difficult decisions are being ducked. It is puzzling for a prime minister to call an election sooner than he has to, when his party is lagging so far behind in the opinion polls. Yet — even if this were not the main motivation behind Rishi Sunak’s move — it is in the country’s best interests that the uncertainty and drag are ended, and voters are given a choice at the ballot box.

The auguries for the outgoing government are dreadful. The Conservatives lag behind the opposition Labour party by almost 21 points in polling. They lost hundreds of council seats, and one of their only two metro mayors — despite his personal popularity — in local elections three weeks ago. Ministers hope a fall in inflation to 2.3 per cent, expectations of interest rate cuts, and incipient signs of growth picking up will support a narrative that a corner has been turned and the sunlit uplands can be glimpsed. But with prices more than 20 per cent higher than in 2021 — one of the largest rises among rich countries — many voters are still squeezed. They feel little sense of an upturn.

The vague promise that things might be a little better tomorrow is, moreover, remarkably thin gruel from a party in power for 14 years. Given the paucity of their record, the Conservatives will have to persuade the electorate they have answers to the key challenges facing the country — despite the scant evidence they have provided through much of the most recent parliament. The election will be decided on which party voters feel has the more convincing plan to get the country moving, and rekindle the growth that is vital to raising living standards and funding severely stretched public services.

Four main questions need to be addressed. Parties must set out how they aim to resolve the strains on the NHS and social care, schools and universities, police and the courts, local authorities, as well as defence — especially given the spending cuts implied by current fiscal projections. The IMF warned this week that spending would inevitably be higher, with a near £30bn gap in public finances looming.

The second question, then, is how parties plan to raise the necessary revenues — and overhaul an overly complicated tax system that in some cases inhibits growth and receipts. Devolving more revenue-raising powers to regional authorities is important to support localised growth initiatives.

Third come strategies to level up left-behind areas and revive productivity growth in a listless economy, notably by supporting the green transition through joint investment, targets and incentives.

Finally, parties need to set out how to improve Britain’s competitiveness, leverage existing advantages such as the City of London and financial services, and tap into new growth sectors. Eight years after the Brexit vote, Britain has yet to set out its global ambitions.

Manifestos must outline a vision for Britain’s relationship with Europe and the wider world, in security and trade. How would they, in government, balance national security against the UK’s strengths as an open, free trading economy? Given companies’ keenness to strengthen ties with the EU after the UK’s threadbare exit deal, it is regrettable that both parties seem disinclined to make this a central issue.

Voters will welcome the prospect of restoring a stability and predictability that has long been lacking. But this is not enough. The electorate is looking for delivery — on issues ranging from new nuclear power stations to new homes. There is a widespread acceptance that Britain has not been working as it should. This election must provide an opportunity to start putting it right.