By Andy Silvester
This time next week, no doubt, your fingernails will be bitten to the quick in anticipation of Jeremy Hunt’s budget. Should you be able to wait no longer, we offer you our best informed prediction: don’t get too excited.
In some ways, a muted ‘fiscal event’ sums up Britain and Westminster at the moment. There is a lack of va va voom.
It seems to have infiltrated vast swathes of the public and private sector. Regulators dally on introducing Solvency II changes. The Treasury seems to have put even the mild reforms of the Austin, Hill and Kalifa reviews out to pasture, lest they rock the boat. Politicians fear spooking the bond markets, again, confusing the reaction to Liz Truss’ recklessness with what it would be to considered risk. Everybody from planners to local councillors manages to find ways to avoid building desperately needed houses. Investors, too, seem perturbed, undervaluing London-listed assets and preferring value-protection to value-protection. Chief executives are terrified of asking staff to come back to work more often, or challenge the orthodoxy of the ESG puritans.
It is as if the entire country has heard the words “returns may go down as well as up” and decided it’s not worth the faff.
This post-pandemic malaise cannot continue. A willingness to innovate, to invest, has been behind Britain’s post-1980s economic revival, but post-Brexit and post-pandemic it seems in shorter supply than ever. Government policymakers seem intent on managing Britain’s decline, incapable of taking on the knotty issues that are holding Britain back (exhibit a: our absurd health system and the demands it makes on all other public spending) and instead grandstand on how they’re going to stop the ‘small boats’ (spoiler: they won’t, unless your policy starts a lot further away from the English channel than currently planned).
Perhaps Jeremy Hunt will surprise us next week, but we would not bet the farm – perhaps we’ve lost our appetite for gambling, too. Risk and reward have been the engines of the City and the economy for years – it would be a desperate shame if we were to abandon it, and our seat at the global top table.
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