The trust deficit grows with every broken promise

Examples of politically ruinous pledges abound. George H Bush destroyed his own Presidency by promising “read my lips; no new taxes”. Britain’s Conservative government made a reckless promise to reduce net immigration to under 100,000 p.a. Having discovered that the target could only be met by economically damaging cuts in numbers of skilled workers and overseas students, the Conservatives inexplicably doubled down on the pledge and then failed to deliver it by an even bigger margin. My party, the Liberal Democrats, has just returned from a decade in the political desert having pledged not to increase tuition fees and then finding, in office, that the pledge was undeliverable.

After promising that she would make Britain grow faster by cutting taxes, Liz Truss provided a spectacular lesson in the folly of over-promising. Lessons were clearly not learnt. Her successor asked to be judged by 5 pledges. Three economic pledges were modest but largely beyond his government’s control; a promise to stop all boat crossings by asylum seekers was almost designed to fail; and did. A pledge to cut NHS waiting lists was another hostage to fortune, needlessly sacrificed.

The Labour government had this rich history of failure to draw upon. It also had, with the 1997 Blair 5-point pledge card, a model of how to make promises that were modest enough to deliver but concrete and relevant enough to excite the voters. Blair was also fortunate to inherit a growing economy in an era of global stability.

Whoever cooked up the 1997 pledge card had disappeared or lost their knack by 2024. The latest pledge card included two new underwhelming administrative structures (a ‘border security command’ and Great British Energy), an economic commitment of extreme vagueness (‘economic stability’) and an NHS commitment encompassing 14 targets. Even political anoraks struggle to remember them.

What most people do remember is an over-riding promise to raise Britain’s rate of economic growth to provide more resources to finance spending on public services without the need for higher taxes on ‘working people’. This promise is already hanging like a millstone around the government’s neck.

Short of a sudden spurt of economic growth and tax revenues, Rachel Reeves has had to raise taxes to finance urgent spending priorities. A pledge not to raise rates of income tax, employees’ national insurance and VAT has effectively ring-fenced three quarters of revenue. As a result, there has been a raid on other taxes not specifically covered by the pledge: employers’ national insurance and farmers’ inheritances. Together with a fierce squeeze on unprotected public spending and pensioners’ Winter Fuel Payment to demonstrate toughness. Outrage. Shock and horror. Some of the outrage may be synthetic, but the widening trust deficit is not.

In deciding what to do next, the Prime Minister has followed the example of his hapless Tory predecessor: make more and more detailed and specific promises in the form of targets which, short of a miracle, are undeliverable (like the promise of 1,5 million new houses in England over five years) or are achievable only by sacrificing other medical priorities (the promise to cut NHS waiting times after GP referral).

And nothing is closer to pure Sunakism than the pledges on economic growth: to make Britain the fastest growing country in the G7 and to raise ‘real household disposable incomes’ in every region of the UK. Economic history does not however encourage the idea that governments can radically change the underlying productivity growth of the economy. Labour remedies from George to Gordon Brown and Tory disruptive therapy from Margaret Thatcher to Dominic Cummings have failed to move the dial much if at all.

There are two big new ideas that seek to inject hope into the promises. The first is public investment to supplement the private investment which was weakened, long term, by the financial crash of 2008. I applaud the intention and wish we had more in the Coalition. But the borrowing to finance it depends precariously on the ‘kindness of strangers’: bond market vigilantes who owe Britain nothing.

The second is planning reform. I was party to the planning reforms of the Coalition which permitted change of use from commercial and industrial to residential and made house extensions easier. There was a boom in rather shoddy conversions. But the reforms did little to boost house building whose problems have less to do with the planning system and protections for bats and toads than less tractable problems like the dearth of building skills, builders’ credit and council funding.

I genuinely wish that my scepticism is unfounded. I want the government to succeed. Hope is surely better than cynicism. But in a slow-growth world of chronic uncertainty, closing borders, conflict and resource constraints hope cannot become dependent on magical economic solutions. I worry that a widening trust deficit between unrealistic promise and inadequate delivery is feeding the ugly beast of modern populism. Delivery: of course. But serious democratic and progressive politicians must learn how to build a sense of fairness and social cohesion without relying on the growth fairy.