The Conservative Party has paid the price for the dilapidated state of the UK and Keir Starmer's new Labour government will have its work cut out to fix it, says British author Will Hutton.
Labour Party leader Keir Starmer delivers a speech during a victory rally at the Tate Modern in London early on 5 July, 2024. Photo: AFP / Justin Tallis
Thirty years' ago, Hutton wrote The State We're In at the end of another long period of Conservative government rule. His new book is This Time No Mistakes: How to Remake Britain.
This time it feels different, he told RNZ's Sunday Morning.
"There was the same sense that the country had to turn a page, that the country had to move forward, and that Toryism had run out of steam. But there are important differences.
"The economy is undoubtedly in a more tricky situation now than it was then. There's social media and the all the accoutrements of 21st century communication in a way you did not have nearly 30 years ago. I think the divisions in British society are more acute and there's the ominous rise of the right."
But, he said, the country was moving in the right direction.
"The outlook feels darker. But the basic story is great, we're turning the page, a substantial majority and a stable government ahead of us for the next four to five years."
Revulsion at the Conservative Party has left them hollowed out as a political force, he said.
"It was a massive sense that we had to get rid of the Conservative Party, who now only have 121 seats in the House of Commons, that is the lowest since the 1834 Reform Act 190 years ago - so that was a big deal."
Britain, however, was in a dire state, Hutton said.
"What's happening towards the bottom of the income distribution is really dire. Four and a half million kids living in households where they're poor. We've developed the shortest five-year-olds in Europe of the last 40 years."
How broken is the UK and can it be fixed?
Malnutrition now plagues Britain as it did in the Edwardian era, he said.
"Life expectancy, which has risen every decade since the Napoleonic Wars, has actually gone back in parts of the country. Objectively, the social conditions in large parts of the country are really dire.
"Average incomes in some parts of the country are lower than Romania or Slovakia, lower than some of the poorest states in the United States like Mississippi."
Will Hutton Photo: Supplied
You cannot build a strong economy on a weak society, he argued.
"We've got one in six adults who are either functionally illiterate or functionally innumerate. It's terrible and we're rich country. And it's this promotion of inequality and indifference to the social consequences in the attempt to shrink the state and have tax cuts, why the Conservative Party only got 121 seats in the House of Commons. There was a mass revulsion to it, actually, and they've been held to account for it finally."
The UK needed to realise it was now a middle league nation, he said.
"Poland and the Czech Republic were a great deal poorer than Britain when they joined the European Union back in 2003. Poland will overtake us in 2030 and I think the Czech Republic may already be there.
"Middle income, developing countries, you might find them in parts of South America, parts of Africa. I mean, spend time in Cape Town or Johannesburg, large parts of those cities look better off frankly than large parts of Manchester or Birmingham."
Having described Britain's decline, what then was the fix? More government agency to unlock private capital and inventiveness, he said.
"Britain's does have enormous resource. And it could boost itself up if it chose to."
There is a desperate need for public and private investment, he said.
Government should guarantee loans for private investment in nation building projects.
"The state can offer guarantees to commercial banks who lend on identifiable and critical infrastructure projects."
Private investment then needed to be encouraged, the UK lagged its peers by some margin in this regard, he said.
"British companies invest, compared with their peers in other G7 countries, 100 billion pounds a year less. And you do that for 30-40 years, and you end up where we are kind of slipping down the league tables.
"You've got to reverse that. I want a major overhaul of our pension system, a major overhaul of our insurance system, I want to get equity and credit flowing into our companies on less onerous terms."
Nurturing young companies and keeping them in British ownership was also part of his vision for the country.
"There's a huge amounts of inventiveness and entrepreneurialism in Britain. And many of the companies that that get to a certain size or 10, 15 or 20 million pounds, get taken out and taken abroad.
"We need to keep them here and mature them here so they can populate our stock market. Britain could have a stock market as vigorous and dynamic as the American stock market actually full of high-tech companies, it's just they've all been taken out over the last 25 years by private equity companies in the States, and trade buyers in Europe and Japan."
Britain could not get away with the unchecked capitalist model of the US, he said.
"We've got to be much more proactive, in building ecosystems that support our enterprise and allow us to build some great companies."
The country was at a fork in the road, he said, and he hoped Keir Starmer, an admirer of Hutton's book, would make the right moves.
"We can't carry on as we have been doing and whether Starmer will follow through and do it … I mean he's cautious to the point of being overcautious, he likes to feel the ground under his feet before he makes a move.
"The sense of direction he wants to put the country is correct. His five missions are correct. It's just whether he's going to address these problems with a peashooter or mobilise resource on a scale that's needed and that's where, I think, the jury is out."