Britain is a poor country determined to get even poorer

Sam Ashworth-Hayes

As the birthplace of the Industrial Revolution, Britain led the world into modernity. Today, it seems determined to do the opposite, its politicians happier mouthing platitudes about net zero than they are with getting on with growth. Nowhere has this been more clearly illustrated than in the response to Michael Gove’s housing speech, which dangled the prospect of a new Cambridge quarter filled with beautiful, dense housing and lab space; a fitting gift for one of the world’s finest cities.
And how was this vision met? With objections so short-sighted they were almost comical. Anthony Browne, a local Tory MP, swore he’d do “everything I can” to block it. Cambridge has “run out of water”, and new reservoirs will take 20 years to build. Speeding this up by waving through plans and buying extra buckets and spades is apparently beyond the ken of man.
These objections are a perfect example of why Britain is poor – and apparently wants to be poorer. The Hungarian sinologist Étienne Balazs once described imperial China as “a regime of paperwork and harassment, endless paperwork and endless harassment”. At times, this feels like the state that Britain has chosen to model itself on. Every attempt to build or innovate is choked off. As a result, we are slipping behind countries we once considered our peers. We invest far less of our GDP in machinery and buildings than other rich countries, and the effects are showing. Throughout the 1990s and early 2000s, the prosperity of Australia and the United Kingdom tracked one another. Today, Australians produce in real terms $8,000 more than their British counterparts.
Americans, meanwhile, might as well be living on a different planet; the gap in output per person between Britain and America is twice as large as the gap between Britain and Romania. And the rest are catching up. Poland, a country once ravaged by communism, is growing so quickly that, if you project pre-pandemic growth rates forward, it overtakes the UK’s GDP per capita in ten years’ time. It’s no mystery why. Cambridge should be a shining star in the economy of the South East, churning out biotech unicorns and building on its deep heritage of academic expertise to forge the industries of the future. Yet its expansion is choked off by regulation that seems actively hostile to economic growth.
Prosperity comes through people, in the right place and the right jobs. Our own history shows how much this matters. In 1700, Manchester was a market town of around 10,000 people. As cotton spinning took flight, the economy grew and by 1850 some 300,000 people called it home. The city was dubbed “Cottonopolis”, filled with warehouses described in Dickens’s Household Words as “fit for the Town Hall of any respectable municipality”. Would that growth be permitted today? Economists have estimated that loosening planning constraints in just three US cities would let people work in better jobs, boosting GDP by around 9 per cent. Lifting housing constraints in England’s South East could have a similar effect.
The Cambridge plan was put forward because past attempts to boost building have failed. But despite the economic case and the intent to build for beauty, people are still finding ways to object. At this point, if the UK is utterly determined to become the world leader in degrowth, we might as well pack it in and move to France – where they do at least build houses.