As British economic policy slides into an ideological abyss, can replacing Truss revive market confidence?

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Artwork: Chen Xia/GT

Political chaos in the UK has become commonplace since Brexit in 2016. Liz Truss, the new Prime Minister, has only been in office for a few weeks, and her government is on the verge of collapse as she has no not the confidence of his own party. It’s something that hasn’t happened in modern British politics for a century. The Conservative Party seems to have realized that the new Prime Minister, who has sworn to be the modern ‘Iron Lady’, is unable to take on the daunting task of reviving Britain’s economy. But the question is: can replacing Truss really restore market confidence?

It is a hasty judgment to blame the current economic problems in the UK simply on the unpopularity of Truss’ tax cut plan. Tax cuts have merit in stimulating economic growth. However, the real concern is this: is the market still interested in what constitutes effective economic growth policy? Among the many comments, the following two points of view were repeatedly mentioned by experts from different political camps: First, even if an effective economic development strategy is proposed now, its implementation will take time. Can the UK wait any longer? Second, what exactly is holding the UK economy back? The government has not thoroughly analyzed the kind of political and social environment necessary for social and economic growth.

Now the British government seems to be really thinking about the problem “seriously”. Nevertheless, not too long ago the global economic community predicted that the UK is currently “on the brink of recession” and that the UK economy has entered a “technical recession”. When the market and the public have lost patience and the economic downturn has become the ‘general expectation’ of British society, all policy will be for naught.

Ineffective social governance undermined the foundations of the British economy. “Small government, big society” was once the proud political label of British and American political culture. British parliamentary debates have also been touted as the norm of modern political life. However, post-Brexit, social and livelihood issues have not been effectively addressed, and the fate of home and foreign affairs has not really been answered. Politicians across the UK commute between meetings to discuss various proposals and stage political spectacles, which is now the norm in British political life.

Any capital would like to have a sustainable and stable investment environment, a healthy and promising political system, and an optimistic and positive social mentality. These extremely important elements of the investment environment are rare in the UK today.

The ideologization of the British economy has greatly exhausted the key elements of British development. Britain’s economy is fundamentally based on trade and free trade, which is the secret to its continued prosperity in recent history. However, the international community has seen the British government’s economic policy plunge into an ideological abyss in recent years.

In the Russian-Ukrainian conflict, the British government used extreme measures to manage Russian assets in the UK on the grounds of sanctions against Russia, which amounts to burying with its own hands the sacred rules and open principles of the market British. In its relations with China, the UK has repeatedly weaponized the concept of “national security” and created artificial barriers in the areas of 5G application, business investment and science and technology cooperation. How can a country that lacks basic trade credibility and economic policy continuity build an international business environment suited to the country’s economic development?

If the UK is to gain sustainable momentum for future economic growth, it must rebuild its strategic consciousness for the future world. We live in a world of turbulence and violent change. The essential features of this change are not only the transfer of the world economic center, but also the self-development and the transformation of the cultural destiny of all the countries of the world.

The United Kingdom is a pivotal country with global historical significance in modern times. It injected political ideology and concepts of economic development with considerable influence into the process of global modernization. However, the process of world history cannot always move mechanically in the direction indicated by some Western countries. Modern forward-looking human civilization needs new concepts and new thinking. Unfortunately, the current dominant ideology of British politics is based on the zero-sum game and the law of the jungle during the Cold War, a cultural mentality that is likely to lead to far more violent social unrest than economic recession.

The author is director of the Center for British Studies at Shanghai International Studies University. opinion@globaltimes.com.cn

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