Those of us of a certain age are able to remember when Britain really did seem broken. Indeed, we find it impossible to forget. Those not of the necessary vintage might usefully read Dominic Sandbrook\u2019s book on what he termed \u201cthe Battle for Britain 1974-1979\u201d. During the \u201cwinter of discontent\u201d, when the dead went unburied, Sandbrook records: \u201cThe port of Hull came to symbolise everything that was happening. Easy to picket because of its geographical position, it was \u2026 a battleground where the shop stewards\u2019 word was law. The TGWU set up a \u2018dispensation committee\u2019 where every morning local farmers and businessmen came cap in hand to beg the shop steward for supplies. A coffin-maker sat nervously before this \u2018tribunal\u2019 to ask for wood.\u201d<\/p>\n
Or, from inside the heart of government, there are the invaluable Downing Street diaries of Bernard Donoughue, principal policy adviser at No 10 to the prime minister, James Callaghan.<\/p>\n
In an entry from 1978, he records how two cars were commissioned for the PM, to be supplied by the state-owned car manufacturer British Leyland (which had endured no fewer than 523 strikes in a 30-month period). \u201cWhen they finally came they were found to have 34 mechanical faults and had to be sent back \u2026 when they returned the PM went for a trip in one. He decided to open the window for some fresh air and pressed the button which does this electronically. The result was that the window immediately fell in on his lap. The PM has now said that he does not wish to see the new cars again.\u201d<\/p>\n
As an anecdotal summary of the \u201cbroken Britain\u201d of the late 1970s, and the reasons for it, that could scarcely be bettered. Donoughue also revealed the toll the nation\u2019s woes had taken on the man who had been the top civil servant working for Edward Heath when that Conservative prime minister had presided over the \u201cthree-day week\u201d and power blackouts (we all had to make do with candlelight): Sir William Armstrong broke down completely, and was found lying on the carpet in No 10 chain-smoking furiously while raving about the world coming to an end. It must have seemed so to him.<\/p>\n
This was when the UK was labelled \u201cthe sick man of Europe\u201d, and foreign reporters here filed stories about \u201cthe end of Britain\u201d. We had been bailed out by the IMF, which in return demanded substantial public expenditure cuts, a humiliation that no developed economy had previously undergone.<\/p>\n
Now, our national balance sheet presents another looming horror \u2014 and one about which the international debt markets will be no more forgiving than the IMF of half a century ago. I wrote in May that \u201cwe are on the edge of a pecuniary precipice, about which our elected politicians don\u2019t see any advantage in telling the hard truth\u201d. The latest figures for public sector borrowing have come in at almost \u00a321 billion for June \u2014 well above the forecast made by the Office for Budget Responsibility \u2014 and no less than \u00a316.4 billion of this monthly figure represented debt interest payments. The mercury in the national fiscal thermometer is rising alarmingly.<\/p>\n
But on this occasion the IMF has not wagged its finger at the UK. Or at least, its estimates for economic growth released last week<\/a> put the UK ahead of the eurozone, with forecasts of 1.2 per cent GDP growth this year, followed by 1.4 per cent next year. For the eurozone, the IMF\u2019s forecast is for growth of 1 per cent this year and 1.2 per cent next year.<\/p>\n None of these figures are remotely impressive, but they do encapsulate a profound difference between now and the late 1970s. Then, we were heading towards recession while leading European economies were pointing in the opposite direction. And none of them experienced anything approaching the near 25 per cent inflation rate that ravaged British consumers and savers.<\/p>\n We tend to measure ourselves against France and Germany. France\u2019s debt and deficit, as a proportion of GDP, are worse than the UK\u2019s, and its prime minister last week delivered a lecture \u2014 as Agn\u00e8s Poirier wrote in The Times<\/a>, \u201cfrom a lectern on which was written Le moment de la verit\u00e9\u201d \u2014 warning that \u201cFrance is now the country with the highest public spending in the world. We must take responsibility; this is the last stop before the cliff.\u201d To judge from their reaction to Fran\u00e7ois Bayrou\u2019s speech, the French people have no intention of giving up any of their unaffordable privileges (such as a state retirement age of 60).<\/p>\n