{"id":35137,"date":"2026-05-13T06:35:10","date_gmt":"2026-05-13T06:35:10","guid":{"rendered":"https:\/\/www.europesays.com\/britain\/35137\/"},"modified":"2026-05-13T06:35:10","modified_gmt":"2026-05-13T06:35:10","slug":"ending-britains-cycle-of-decline","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/britain\/35137\/","title":{"rendered":"‘Ending Britain\u2019s cycle of decline’"},"content":{"rendered":"

Can Labour recover from this historic collapse? Before the 2024 election the warning signs were all too clear. The most common public descriptions<\/a> of the state of the nation were \u2018broken\u2019, \u2018struggling\u2019 and \u2018divided\u2019. Britain, it seems, has lost the capacity to deliver progress for all.<\/p>\n

Labour\u2019s failure to overturn the deep-seated cycle of decline that it inherited lies in large part in an inadequate diagnosis. Its roots lie in the outsourcing of economic power from democratic government to private global capital. It is this transfer that has crowded out high social priority activity and delivered economic slowdown.<\/p>\n

Yet Labour lacks a theory of modern capitalism and thus a route map for recovery. The new plutocratic masters of capital have created vast, anti-competitive corporations that are increasingly run for personal enrichment. The top 50 global companies<\/a> \u2013 names such as Nvidia, Saudi Aramco and JP Morgan Chase \u2013 hold a 27% share of world GDP. This is up from 5% in 1980.\u00a0<\/p>\n

READ MORE:\u2018Labour must help families build towards their dreams\u2019<\/a><\/p>\n

Google controls over 80% of Europe\u2019s search market. Bayer-Monsanto, PepsiCo, and Nestl\u00e9 dominate food markets. A few financial giants exercise immense leverage over investment, innovation, and the pattern of production. The UK\u2019s financial sector holds assets of \u00a327 trillion<\/a>, ten times annual economic output, way above the country\u2019s economic needs. In 1970, this ratio stood at a quarter of the economy.\u00a0<\/p>\n

Keir Starmer rightly talks of the need for \u2018wealth creation\u2019, but draws no distinction between activity that serves the common good, and growth-sapping \u2018appropriation\u2019<\/a> aimed at diverting the gains from economic activity. It is the revival of \u2018extraction\u2019 that powers today\u2019s towering personal fortunes through economic activity increasingly detached from economic and social advance.\u00a0<\/p>\n

Examples<\/a> include the rigging of markets, the manipulation of corporate balance sheets, and mass tax avoidance. A rising share of corporate profits go in dividends to institutional shareholders at the expense of wage growth and private investment<\/a>. Appropriation is endemic to the boom in the private equity takeover of public companies, an industry dubbed a \u2018blood sport\u2019 by critics. Such companies \u2013 from Boots, Pearson, the AA, Morrisons, John Laing and a range of privatised utility companies \u2013 now employ around a tenth of the UK workforce.\u00a0<\/p>\n

The private companies that have swallowed up great swathes of key UK public services from residential social care to educational support, stand accused of widespread profiteering by the Competition and Markets Authority.<\/a> The quick and easy profits from these predatory business tactics come from aggressive financial engineering, opaque accounting, and the selling of key assets. Thames Water<\/a> is bankrupt because its owner for 11 years, the Australian investment company Macquarie, dubbed \u2018the vampire kangaroo\u2019 by critics, took \u00a32.7bn in dividends, increased the company\u2019s pension deficit from \u00a318mn to \u00a3380mn, and its debt from $3.4 to $10.8 billion. \u00a0\u00a0<\/p>\n

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With fragile public finances, and lacking the instruments to launch a public-led revival, Labour has turned to the world\u2019s giant American asset management and tech companies, from BlackRock to Palantir, to restart a growthless economy. In and out of Downing Street their chief executives have struck lucrative investment deals in areas from artificial intelligence to data mining. Apparently forgetting the public costs of New Labour\u2019s private finance initiative<\/a> to build hospitals and schools, these deals come with both generous public subsidies and high return guarantees, while adding to the extensive reach of global capital into the British economy.<\/p>\n

High inequality, heavily-marketised, and low publicly owned economies like the UK, will always steer resources<\/a> to the demands of boardrooms, mega financial institutions and a swollen billionaire class. It is this that explains the deterioration of essential social infrastructure, and the lack of provision of key everyday goods and services \u2013 from local transport to adequate child and adult care \u2013 on which thriving communities depend.<\/p>\n

Wealth concentrations power demand for extreme positional goods \u2013 from the private jet to the luxury yacht \u2013 that are only available to the super-rich. Scarce land and construction resources that could have been used to tackle a growing housing crisis are steered to luxury property development that serve minimal social goals. Britain hosts vast and lucrative industries, from tax avoidance to lobbying and public relations, whose sole purpose is to protect personal fortunes and buy economic power. To reverse decline, Labour needs a strategy that harnesses the country\u2019s resources for higher social value activity. As the American President, Franklin D Roosevelt,<\/a> declared in 1936, \u2018The test of our progress is not whether we add more to the abundance of those who have much, it is whether we provide enough for those who have too little\u2019.\u00a0<\/p>\n

It draws on a background paper at the for the Compass\/Progressive Economy Forum conference on 30 May ; Change:NOW! Mobilising the Progressive Majority \u2013 Compass<\/a><\/p>\n

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