Britain's Elites are Killing its Institutions

The BBC, Armed Forces, Whitehall and our economy are being run into the ground

Towering Columns

Mary Hartington at UnHerd says a liberal elite has undermined the concept of objective truth and is killing the BBC - but we will mourn its passing.

There is, in other words, nowhere to stand that isn’t someone else’s fake news. Pity the poor Beeb: when you can now search up 10 conspiratorial interpretations of every factual report, from every conceivable angle, in the time it takes to boil the kettle, how long is anyone going to go on believing in impartiality as such? You can be sure that any effort to “correct” the perceived existing Left-liberal BBC bias would simply elicit fresh accusations of “fake news” and “bias” from somewhere else. Under the circumstances, I don’t entirely blame Davie for throwing in the towel.

More than one thing can be true simultaneously. It is surely true that many will be delighted by the opportunity these events have afforded, to put the boot into the BBC. It’s surely also true that the institution’s well-documented middle-class staffing skew exposes its employees to the blind spots and groupthink of that social milieu, and that this is often visible in editorial decisions. But it’s also true that comparatively speaking, the BBC is fighting a heroic last stand for neutrality, against perhaps insuperable odds, and has arguably already held out longer than any of its commercial counterparts. It also held out longer than such utopian digital enterprises as Wikipedia.

As well as noting its lapses into bias, then, we might also acknowledge how very much worse this already is, almost everywhere else. But this is faint praise. “It’s not as woke as Wikipedia” may not be enough to save the BBC, as an institution, from the sucking void of Choose Your Own Reality. If it isn’t, then flawed and middle-class and sometimes irritatingly sanctimonious as it is, I suspect we will all come to regret its passing.

For The Times, Juliet Samuel highlights the damage being done to family businesses, which form the backbone of the British economy.

Britain’s anguished farmers may have grabbed the headlines, but the quiet damage wreaked upon far more economically significant family businesses has occurred mostly under the radar. The budget drew them into inheritance tax, subjecting any business assets worth more than £1 million to a charge of 20 per cent. The dividend payment needed to allow any heir to pay up will itself be taxed at 40 per cent, so the effective tax rate is more like 33 per cent. And most companies aren’t sitting on cash like that; they’ll either have to set aside money over five to ten years, take on debt or sell assets.

Naturally, the Treasury has little idea how many, who or where these businesses are. HMRC data from 2021 suggests about 500 estates a year were eligible to pay. Over a 30-year generation, this amounts to 15,000 firms, which, excluding “micro” companies, is probably about one in ten of all small and medium-sized companies. Only about one in ten survive more than 20 years, so this undoubtedly captures a very large portion of Britain’s longest-lasting, decent-sized businesses. And for their pains, the exchequer will bag less than £500 million a year, under 0.18 per cent of the annual welfare bill.

Some firms will be able to restructure to avoid the tax. But this involves expense, risk and complexity and many don’t yet have a chosen heir lined up to make it work. In the meantime, investment plans are on ice. The more an owner grows the business, after all, the bigger the liability he’s building up for his children. So what do you think all these businesses are doing? Sitting still and waiting to see what happens. Should it really be a surprise that this week’s data showed unemployment at a five-year high?

The country’s political elites have fallen for the lies of socialism, writes Miriam Cates in Conservative Home.

Britain is once again the sick man of Europe, because we have once again fallen for the lies of socialism. Since 1997, even conservatives have been seduced by socialist ideas about ‘fairness’ and equality. During the last parliament, the Conservative government repeatedly demonstrated its socialist sympathies, from boasts about how much money was being spent, to the nationalisation of childcare, the billions poured into the NHS, the freezing of tax thresholds so that many ordinary workers lose half their incomes, and the decision to borrow (or rob) £400bn from future generations during Covid. Boris Johnson even promised that the state would ‘wrap its arms around you.’ For the last two decades at least, socialism has been winning the battle of ideas.

More than anything, the attitude of the Conservative Party to the state pension shows how effectively socialist thinking has infiltrated the right of British politics. When the state pension was first introduced in 1908, it was ring fenced for the very poor, and only payable from the age of 70. Given that life expectancy was around 50 years old in Edwardian times, only a fraction of the population lived long enough to claim it. In contrast, the state pension in 2025 is UBI for the retired, paid for by current taxpayers and distributed to everyone of pensionable age regardless of their income, or the amount of tax contributions made during working life. Thanks to the triple lock, the state pension has risen 14 per cent more than average earnings since 2011, another blow to the conservative principle of fairness.

Socialising the costs of old age – while leaving the private family to bear all the costs of raising children – has undermined perhaps the most important of all human relationships between effort and reward. There is no longer any personal economic benefit at all for producing the next generation, so why not rely on the children of others to pay the costs of your retirement? Yet even conservatives continue to defend this model, claiming that people shouldn’t have children unless they ‘can afford it’, at the same time defending the high-tax socialist pension system that is making people too poor to reproduce the next generation of taxpayers.

In The Critic, Maurice Cousins says a delusional elite committed to net zero are destroying the country’s prosperity from within.

Two centuries ago, a Frenchman understood something that Britain appears to have forgotten. In 1824, the young engineer Sadi Carnot, the father of thermodynamics, wrote that the destruction of Britain’s navy would be less fatal than the loss of her steam engines, for to lose them would be to “dry up her sources of wealth, ruin all on which her prosperity depends, in short annihilate that colossal power.” Carnot grasped that Britain’s strength lay not in its fleets or armies but in its command of energy. France, still nursing the wounds of defeat, recognised that to destroy Britain’s engines would be to destroy Britain itself.

Today, no foreign power needs to lift a finger. We are doing the work ourselves, dismantling our energy system not through invasion but through the slow internal corrosion of reason, policy and will. Where Carnot imagined Britain’s enemies attacking her steam power from without, we have invited the same assault from within. The nation that once powered the world is unlearning the very logic of power. The consequence is not only economic decline but the erosion of national purpose.

A country that cannot power itself cannot govern itself. That logic still holds. As Rachel Reeves searches for a way to ease the cost-of-living crisis, revive productivity, restore growth and repair the public finances in the upcoming Budget, she must begin by bringing reason back to Britain’s energy policy. None of those objectives can be realised while energy remains costly and insecure. But to do that she will ultimately need to defeat the enemy within.

In The Times, Sebastian Payne argues that the Resolution Foundation think tank has warped and infiltrated Whitehall, discouraging economic dynamism and harming growth.

Before the last election it seemed the Tony Blair Institute may have the greatest sway over Labour government policy. Yet look at who is in government and it shows Queen Anne’s Gate is where power really lies. As well as Bell, Rachel Reeves recently appointed Emily Fry, an alumnus of the RF, to her council of economic advisors. Baroness Shafik, the prime minister’s chief economic advisor, chaired the foundation’s “Economy 2030” inquiry that proposed introducing road duty for electric vehicles, national insurance on rental income and scrapping agricultural property relief. If those ideas sound familiar it is because they’re all either being enacted or under consideration by the Treasury.

What is sorely needed is a counter to the RF to make the strident case for growth and innovation. Just as Thatcher argued at the dispatch box, the only way out of our economic morass is to accept that none of us will get better off unless the rich are allowed to lead the way. There was a populist fever after the financial crisis to bash the bankers and the wealthy, but continuing to do so means we will never regain any economic momentum.

The culmination of the RF worldview will be the budget, which Bell is playing a key role in shaping. Instead of curbing public spending to reduce the burden on taxpayers it will levy tax rises large and small. Take the foundation’s latest wheeze: raising income tax by 2p and cutting national insurance by the same amount. It’s a clever-clever idea to get the chancellor off the hook for breaking her promise to voters, but is another example of keeping us stagnated. As we may soon find out, the result of merely carving up the pie in a different way is just more decline.

Also in The Critic, Sebastian Milbank argues that our leaders have turned their back Britain’s maritime heritage because it does not fit into their narrow vision of the future.

Britain either spends excessively on extravagant grand projects or gives up on a thing entirely. HS2 was overengineered and overdesigned, with the result that we have taken twice as long to build something half the length it should be for many times what it should have cost. France and Spain built nationwide high speed rail networks in the time that it took Britain to build a single line. Like a manic depressive, after the heights of overspending, we immediately revert to the slump of underinvestment. The neglect of coastal communities and industries belongs strongly to the depressive phase. Anything that isn’t a glittering success, such as our ports and dwindling fishing industry, is deemed an irrelevant sideshow. When Keir Starmer sat down with EU negotiators in May and signed away our fishing rights for another 12 years, he was indulging in a familiar and fatal prejudice.

In this neo-Whigish worldview, industries like fishing belong to the past, doomed to be supplanted by coding or public relations. But as many jobs in services and technology are being automated by AI, and as hospitality, agriculture and tourism boom worldwide (but comparatively less so here), these assumptions look dangerously naive. In fact, the irreducible, unquantifiable and irreplaceable aspects of human life may turn out to be the most AI-proof, economically sustainable and important. What people will always desire and value will always make economic sense, and will always bring prosperity to the nation that can sustain and produce them.

Giving pride and purpose back to some of our poorest communities would restore more than a few jobs. It would recreate a lost identity, resurrect a dying culture and bring life back to the areas that most desperately need it. A visionary government would restore our hearts of oak, and steer Britain back to maritime glory.

Wonky Thinking

The OECD’s International Migration Outlook 2025 has found that global migration levels have remained high, over 15% higher than in 2019. Levels have remained elevated due to significant increases in humanitarian migration and asylum seeking. There are now 160m foreign-born people living in OECD countries, 11.5% of the population, up from 9.1% in 2014. The OECD found that immigrant workers are disproportionately employed in lower-paying firms and sectors, a gap that persists despite some immigrants moving into higher paid work.

New linked employer-employee panel data for 15 OECD countries between 2000 and 2019 show that immigrants at entry in the labour market earn 34% less than native‑born workers of the same age and sex. Two-thirds of this gap is due to immigrants working in lower-paying sectors and firms.

The immigrant earnings gap decreases by about one‑third in the first five years in the host country, and by about half in the first ten years. This is partly driven by immigrants moving to higher-paying sectors and firms.

Policies that target barriers to job mobility should feature more prominently in the integration policy toolkit. This includes providing information on job search, career counselling and the development of professional networks, but also improving local transportation and access to affordable housing, among others.

Think tanks from the Centre for Policy Studies to Labour Together have come together to argue for a series of pro-growth tax policies ahead of the Budget, from reforming property taxes to merging National Insurance and Income Tax.

While the signatories have different visions for a perfect tax system, we all agree that a tax system that moves in the direction of these reforms would be preferable to the one we have now. Each package could be implemented independently, and each would improve incentives and contribute to economic growth.

The reform packages are each presented as revenue neutral combinations. Collectively we take no view as to the appropriate size of the state, and the goal of these proposals is not to either increase or decrease total tax take. What these proposals do is highlight that for any total level of revenue, it is possible to make the system fairer, less distortive, and more supportive of growth.

Most importantly, we hope that these proposals illustrate that – whatever the precise detail – there is strong support among tax experts from across the political spectrum for a more rational and effective system of taxation, and strong agreement as to the nature of the necessary reforms.

In the British Economy Monitor, Andrew O’Brien shows that the UK’s trade imbalances are really holding back the economy as GDP growth slows to zero.

Governments need to stop focusing on quarter to quarter figures and start thinking longer term. It might actually help them politically given that sluggish growth appears likely for some time anyway. Why?

There is a slowdown in global service trade growth. From 2005 to 2014, global service exports were growing at 7.8% per year. In the years 2015 to 2024 this has slowed to 6.6%. This matters for us because our exports are heavily weighted towards services. The composition is also changing. Financial services are no longer the dominant global service export. The UK is still second in the world for financial service exports, however for telecommunications, computer and information services (digital) we are fifth. Germany and the Netherlands are also not that far behind us on digital exports, there is a scenario in which one or both take over us in the near future.

We are also fishing in a much smaller pond. The global trade in goods has grown by $14 trillion since 2005, nearly three times as much as the global trade in services which has grown by $4.7 trillion. If the UK had maintained its market share in global goods exports since 2005 (3.2% in 2005 v 2% today) it would be worth over $200bn in additional exports in 2024. In cash terms in 2024, the economy would be around £235bn bigger than it is today and the Chancellor would have around £80bn in additional tax revenues. This would be worth around £4,000 per person.

Podcast of the Week

Policy Exchange hosted philosopher John Gray to discuss the future of progressivism. Gray warned that the West will become more susceptible to “hyper-progressivism”, personified by figures such as New York Mayor-Elect Zohran Mamdani. This trend will be driven by a discontented graduate class that is economically trapped, having to seeking work in major cities that it cannot afford to live in. You can watch the event back online:

Quick Links

The UK economy contracted by 0.1% in September and grew at 0% in August.

Former heads of the British Army call for an end to lawfare on British soldiers.

The hacking of Jaguar Land Rover caused the fall in UK GDP.

UK unemployment has risen to its highest level in four years.

The UK energy intensive sector lost 8% of its workforce in 2024.

More than 1m people paid the highest rate of income tax last year.

Asylum seekers are to be offered £100 a week to leave hotels.

Net Zero targets mean that Britain is missing out on a crash in gas prices.