The detachment of the political class as a whole from the real issues and concerns of ordinary people throughout the country cannot be an accident, consistent as it is across Labour, Conservative, and Coalition governments.

It amounts to a reigning ‘Westminster Consensus’ in support of Britain’s failing economic model that must be dethroned before there can be any hope of substantive change and improved outcomes.

To have brought the British economy and society to this point of crisis and decline amounts to collective mismanagement by the political class as a whole, with the active collaboration of lobby journalists and legacy media.

In 1927, in a different period of malaise, the French writer Julian Benda published a controversial book called La Trahison des clercs – in English, The Treason of the Intellectuals.[7] The book laid out the collective failure of the intelligentsia to perform their critical social function of dispassionate reason and detached analysis as they instead fell into line as the craven servants of power and ideology.

Given the evidence below, we have reached the point of needing to similarly call time on our own treasonous elites, and their co-optation, capture, and complicity in Britain’s perpetual state of decline, which now stretches out over half a century.

To look at the composition of Parliament, the media, the think tanks and nonprofits, and the establishment political parties is to see a mirror image of the advent of the new corporate and financial business class that has emerged in the UK – a power elite that has itself been “denationalized,” according to business scholar Stephen Wilks, in that it “is no longer committed to the British national interest or even to continued location in Britain.”[8]

This amounts to a class apart, with its own sectional interests in career advancement and material reward that leads to the enactment and preservation of a very different policy agenda than that which would be supported by a popular majority, if only they were offered an honest choice.

To concretise this treason of the UK elites, simply think of the average person in Hartlepool in 1992, the year that Peter Mandelson was first elected as their Member of Parliament, and look at the economic fortunes of that median individual over the intervening years as evidenced by the data in this Index – comparing it to how the system has delivered for Mandelson himself, and for his cronies.

In whose interests has the system really operated over that period? Ordinary people, or the politicians supposedly engaged in public service to represent them?

With the partial exception of the economic programmes that are being developed by the Greens, by Plaid Cymru, and potentially by Your Party, there is nothing on the table in policy terms today that is remotely capable of bending the curve on Britain’s long-term systemic crisis and decline.

Any insurgent political party presenting itself as anti-establishment or as a genuine break from the status quo of the Westminster Consensus should be asked to demonstrate concretely the ways in which they would depart from the current economic model that has been continuously failing the majority of people in the UK for decades.

2)   Economic Growth Neither Likely nor Sufficient

Related to the treason of the elites and their misrepresentation of the people is the radical circumscription of the policy agenda and the misdirection of political and policy debates into areas that are irrelevant or largely beside the point.

The second story that leaps out from this Index is the extent to which our politics is organised around the pursuit of a chimera – the chimera of economic growth.

Almost the entirety of the economic policy agenda of the current Labour government under Starmer and Reeves is predicated on the elusive quest for growth – which has also been the stated goal of all the governments that preceded them in our period.

We are told that the state lacks sufficient resources to make the public investment that is obviously required, and that the government must therefore avoid frightening the horses with taxation or nationalisation and instead create the conditions business craves – deregulation, lower taxes, and fewer worker rights. This economic strategy, we are told, will encourage increased private sector investment and result in growth (“wealth creation”) that will benefit all.[9]

Everything about this approach is wrong – especially the backwards causal relationship between public investment and growth.

It would be difficult to discern from frontbench parliamentary discussions or the opinion and analysis pages of the national newspapers that growth in Britain – as our Index shows – has been consistently in decline, lower on average each decade than the decade before for the entirety of the period since the 1960s.

The only exception is the 2010s, which is explained by the recovery from the economic lows of the Great Financial Crisis in 2007-2009.[10]

But even in the 2010s, when considering GDP per capita, the average rate of growth was more than a full percentage point lower than that of the 1970s and 1980s (2.5% versus 1.3%).

There is absolutely nothing on the table in policy terms (and nothing external, in terms of global conditions) that suggests anything but a continuation of the dwindling of UK growth into the future.

Moreover, what feeble growth has occurred hardly suggests that additional growth would serve as a panacea.

When growth does occur in the present model, far from being broad based or trickling down it largely accrues to the top.

And some forms of growth, far from being beneficial, are actually its very opposite – the growth of the machinery of financial extraction and upwards redistribution.

3)   Growth of Finance is Growth in Extraction from the Rest of Us

The picture gets even worse with the third story evidenced by the data.

In a paper written for The Democracy Collaborative, the economists Dirk Bezemer, Michael Hudson, and Howard Reed have demonstrated that growth in the UK FIRE sector – “financialisation” – should be subtracted from rather than added to GDP, and growth in financialisation considered a growth in rent extraction.

Financialisation (to borrow their definition) is “the diversion of financial flows away from the real economy of production and consumption and towards asset markets in pursuit of capital gains.”[11]

Financialisation is a complex phenomenon, but has enormous explanatory power as to the causes of Britain’s highly unequal and dysfunctional economy of growing poverty in the midst of great plenty.

Far from boosting productivity and increasing efficiency in the non-financial economy, the growth of the financial sector functions as a subtraction from the real economy, as “financial flows are diverted to unproductive uses and… the resulting revenue flows benefit a minority. As financialisation gathers pace, rising wealth and debt detract from income for the majority.”

In such an economy, what is counted as growth matters a great deal. Every financial asset is at one and the same time someone else’s financial liability – and as the holdings of the financial sector have increased, so too has the debt held by households and businesses in the non-financial economy.

This process helps explain the squeeze-play of recent years, whereby nominal economic growth has in reality been experienced as reduced income through increased extraction and indebtedness.

The data for the UK economy show the powerful effects of financialisation.

In the quarter century between 1995 and 2020, nominal wages doubled, nominal UK GDP rose two and a half times, average house prices quintupled, but the valuation of financial assets rose four and a half times.

The benefits of this “capital gains economy” flow primarily to the already wealthy, while for the rest of us there are lower earnings from work, lower income growth in the non-financial sector, lower productivity, and less innovation – all alongside sizable increases in debt and in financial and real estate wealth.

The City of London sits atop one of the most highly financialised economies in the world. It has long focused on finding new ways to extract “rent” from the rest of the economy rather than on productive investment or social need.

Richard Roberts and David Kynaston, who have written extensively on the history and practices of the City, even suggest that we think of it as “a foreign country” – but one whose activities have inordinately “big implications for government and industry” in Britain.[12]

As Guardian economics commentator Aditya Chakrabortty has said, commenting on London’s role as the world’s biggest offshore tax haven, “Britain either shrinks the City of London, or the City of London will swallow Britain.”[13]

The financial sector, then, is extractive from the real economy.

And given that all income groups are paying ever more into the finance sector in fees and interest charges and for underlying assets while the payouts from the sector are even more concentrated than those of the economy as a whole, the finance sector has also become the locus of the production of increased inequality in the UK economy.

This, then, is the economic engine that the current government (like its predecessors) has installed at the heart of its economics – a machine that lowers not increases growth, and concentrates the returns amongst the wealthiest asset owners, driving inequality and indebtedness.

The stated plan is to deploy this machine for financial extraction increasingly in public services, including the NHS, and in energy markets and infrastructure to supposedly drive the green transition. It will be a veritable bonanza for finance capital – and a very costly exercise for the rest of us.

Astonishingly, the government has effectively doubled down on one of the principal causes of Britain’s poor, uneven, and unequal economic development and rebadged it as the solution.

4)   Regional Inequality Means a Disunited Kingdom

The UK’s yawning economic inequality is not just social but also spatial – Britain now has some of the deepest regional inequalities in the OECD.

The fourth story emerging from the data is therefore one regarding the regional worlds apart in which Britons increasingly live.

In the mid-nineteenth century, the Conservatives under Benjamin Disraeli fretted about the emergence of “Two Nations” in Britain – a wealthy upper class and an impoverished working class – and of the consequent implications for societal cohesion.

Today, the worry should be more along the lines of “Five or Six Nations.” Not only are Scotland, Wales, and Northern Ireland on very different trajectories to England, but England is itself made up of widely differing regions at increasingly disparate stages of development.

Regional GDP per capita offers a snapshot of this story. Looked at in constant 2020 prices and adjusted for purchasing power parity (PPP), the residents of different parts of the UK effectively live in the equivalents of vastly different countries at widely varying stages of economic development.

Somebody living in London, for example, is living in an economy the equivalent of Switzerland, whilst someone living in the South East of England is living in the equivalent of France.

Whereas people living at the other end of the regional scale are living in the equivalent of countries in Eastern Europe or the Baltic states: the closest comparison by Gross Value Added (GVA) for the North East of England is the Slovak Republic; for Yorkshire and the Humber, and the West Midlands, it’s Lithuania; while for the East Midlands it’s Poland, and for the South West it’s New Zealand.

Scotland, meanwhile, is closer to South Korea; Northern Ireland to Spain; and Wales to Hungary.

There is no longer a common story or unified direction for the countries and regions of the UK, many of which are now facing entirely different economic circumstances from those at the metropolitan core.

As a result, it no longer makes sense to talk in terms of a United Kingdom so much as a Disunited Kingdom, in which the state is no longer cohesive or coherent.

Economic policymaking in Westminster clearly serves the economic interests of London and the South East, but is far from addressing the needs of not only the Celtic nations – which are on varying but distinct trajectories away from the metropolitan core of the British state, and thus away from the Union – but also of the English regions.

Regional disparities alone, however, do not represent a cohesive alternative viewpoint, as there are also vast differences and inequalities within regions.

Greater London contains economic inequality gaps as big as those of the UK as a whole. Someone living in Camden, or the City of London, or Westminster, for example, lives in a borough with a level of development comparable to Luxembourg, while for Haringey or Islington it’s Switzerland.

In Kensington and Chelsea, and in Hammersmith and Fulham, it’s Ireland. For Lewisham and Southwark, and for Lambeth, the comparator would be Norway.

At the other end of the scale, residents of Enfield and Bromley live in the equivalent of Portugal; while those in Ealing live in Estonia; those in Croydon, in Slovenia; and residents of Barking and Dagenham, and Havering, live in an economy with a stage of development equivalent to Latvia.

In Redbridge and Waltham Forest, the comparator would be Chile.

5)   Britain is Extraordinarily Exposed to International Shocks and Lacks Resilience

It is clear from this Index that Britain is entering what will almost certainly be a period of great international instability and challenge in a condition of precarious fragility and extraordinary exposure to systemic shocks, both internal and external.

Decades of neoliberalism of different varieties has hollowed out and denuded the UK state of governing capacity and its people of resilience. 

The tremendous shock sent through global energy markets by the US-Israeli attack on Iran in early 2026 highlighted Britain’s extraordinary exposure to international events. More than most, the country was caught on the hop by the energy crisis stemming from the war, which quickly threatened to spread out from maritime and shipping to finance, commodities trading, insurance, transport, petrochemicals, fertilizer and food production, medicine, manufacturing, and more.

The overextended supply chains and just-in-time production models of peak neoliberal globalisation are ill-suited to today’s emerging new world order (or disorder), characterised by wars, pandemics, and trade and financial instability. “What appears at first as a maritime blockade,” as one observer put it, “is in fact the exposure of the entire global system as a hierarchy of brittle interdependencies.”[14]

As a highly internationalised economy with a longstanding trade deficit in goods and low buffer stocks of both energy and food, the UK is particularly exposed to global shifts and especially to sudden shocks like the Persian Gulf energy crisis. As a result, upon the outbreak of war the International Monetary Fund immediately downgraded UK growth forecasts, already low, more sharply than for any other G7 economy.[15]

The fact that Britain is so far from self-sufficient in food and energy, and has eroded so much domestic manufacturing capability, leaves the UK as a sitting duck in the face of the growing storms ahead. The current UK debate on national security quickly falls into typical ‘Westminster Consensus’ thinking about military expenditures and readiness for war. But predictable calls to boost military spending are entirely beside the point in a country that increasingly lacks the ability to produce for itself through a strong manufacturing base.

In most other advanced economies, the preservation of such basics as virgin steel production capacity would be considered an issue of vital national security, falling within the scope of measures such as the Defense Production Act in the United States or resulting in emergency nationalisation of a kind regularly employed by France (where even the ownership of a large yogurt company was considered a matter of strategic national importance).[16]

In fact, the lack of an industrial strategy worthy of the name is a far greater threat to UK national security than the supposed failure to meet artificial targets for increased ‘defence’ expenditure on American-made armaments that will themselves only add to risk and dependency.

One of the factors in the creation of the original early twentieth century government programmes that were precursors to the creation of the postwar welfare state – the Education (Provision of Meals) Act, the introduction of medical inspections in schools, the Old Age Pensions and National Insurance Acts – was the discovery of the dire overall condition of the nation in terms of public health, fitness, education and skills, “national efficiency,” and general lack of preparedness in the face of brewing international storms.

Economic and social lack of preparedness are likely to prove far more serious weaknesses than neglect of a costly but impractical military posture in an era of non-traditional threats and risk profiles and asymmetric warfare.

It’s easy to become alarmist about the fragility of globalisation and over-extended international supply chains and just-in-time production with no redundancy or elasticity, leaving us on current stocks and without resupply and with the potential onset of energy outages just mere days from food riots in major cities. Thankfully, such nightmare scenarios have not yet transpired.

But today we can say with high degree of certainty that the UK is in no condition to meet the emerging challenges of the dangerous future world that is shaping up, whether in terms of neo-mercantilism and competing regional blocs, the scramble for natural resources, or the many and pronounced downstream effects of climate and other shocks to interconnected global systems such as food, energy, trade and investment.

Beyond Policy to System Change

Broken Britain, as evidenced by the data in this Index, is not beyond repair. It is, however, beyond the reach of ameliorative reform or tweaks around the edges to the dominant economic model. What it requires is deep systemic change.[17]

One key overall lesson from this Index is the relative fragility and insufficiency of after-the-fact policy “fixes” – whether in terms of tax-and-spend redistribution, or regulatory interventions, or both – as any kind of substitute for deep structural interventions in the core institutions and relationships of the political economy.

We need a political conversation in Britain that goes beyond the limits of establishment policy positions and tinkering around the edges to the core issue of economic system change itself.

If we are not to find exactly the same pattern of results and outcomes another five years down the line, then there will need to be an altogether different and more ambitious set of interventions in the years ahead, commensurate with the scale of the challenge and capable of setting the United Kingdom on a very different trajectory from our present, downward one.

This will require nothing short of a transformation in the ownership and control of the British economy and whose interests it is designed to serve.