And thus we arrive at the most important (and inevitable) of all deflationary trends: demographic change. Retired people tend to consume less than their working age compatriots – thus putting downward pressure on demand as the population ages.
A remarkable amount has been achieved. Often against the odds and in the face of adversity. And certainly in circumstances far less benign than those faced by New Labour.
It has thrived through sector after sector demanding special treatment. Each claims a skills shortage and requires many more visas to be issued to foreign workers to come here.
Unhappy employees take nearly two additional working weeks of sickness absence per year on average compared to their happy counterparts, and nearly one in ten have had sickness absences totalling more than a month in duration.
Our nation was hailed by the Economist as the “top-performing economy of 2023” for the second year in a row. That isn’t a turnaround, that’s a miracle – a miracle delivered by common sense.
There is also a strong case for believing that it is risky if you have almost half of adults not paying income tax – the position we were approaching by the end of the Coalition.
As “world-beating” Britain became the first G20 country to mandate new rules, our competitors, including the United States, are having second thoughts about all these extra layers of regulation.
It has forgotten that rising prices are a disease of money, and has slid back to a world of “sticky” prices.
Many Irish policymakers make the reasonable point, if it’s a simple matter of tax rates, then why haven’t more countries simply adopted this approach? It has been in place for decades, there’s been plenty of time.
The key problem is stagnation. Margaret Thatcher’s reforms promoted mobility and opportunity. Now we are an economy which doesn’t change enough.
He will probably judge it better to keep a conservative spending message and dial down on the more radical green growth programme. Which would require her to make a painful U-turn.
Without understanding what parts of the status quo are propped up by the mass import of people, and how, and why, any move to cut headline numbers is going to run aground on the consequences of so doing.
Our chosen model is grossly unjust and will have many horrible consequences. But it already has, and yet it ticks along, because those consequences are not evenly spread.
Monday’s speech and today’s announcement show them choosing their ground for the next election. And since Hunt may find no money for further tax cuts next spring, the option of a May general election is opening up.
During my time at Horse Guards Road, every major u-turn was delivered by powerful case studies about the impact of policy on individuals. Yet time and again, industry leans on dry economic analysis to make its case.