The Rise of a New Socialism

Resurgent left pushes prices controls, handouts, ideology and social division

Towering Columns

For The Spectator, David Shipley argues that the murder of Henry Nowak was caused by the police putting ideology before public safety.

Robert France, temporary deputy chief constable for Hampshire and the Isle of Wight has said he is ‘sorry’ that Henry was ‘handcuffed and arrested as he lost consciousness’, and told the BBC that the force has referred itself to the Independent Office for Police Conduct (IOPC). He added that the court pathologist said Henry could not have been saved by earlier medical intervention.

Much attention has been on the issue of Sikhs carrying knives. It is bizarre and stupid that we allow one particular ethno-religious group to carry lethal weapons which are illegal for any other resident or citizen of the country, especially when British women aren’t even allowed to carry pepper spray for self-defence. This exemption must now end.

But in many ways the behaviour of the police in this situation is far worse. There are plenty of dangerous, violent thugs in the country. Some have families who will try to conceal their crimes. But the police are supposed to treat us all equally under the law. Or rather, they were, until the wicked, lethal doctrine of anti-racism captured them.

The police chose to ignore the evidence in front of them in order to believe the Sikh family shouting about ‘racism’. The police ignored the appeals of the 18-year-old white boy bleeding out in front of them. Decades of training on ‘anti-racism’, fear of being labelled ‘racist’, fear of not listening to minority groups. All of these no doubt played a part. This pernicious doctrine of anti-racism has captured the police since the Macpherson report labelled them ‘institutionally racist’. Whatever they were in the 1990s, it seems that our police are now institutionally anti-white.

In The Times, Paul Johnson criticises those that say the government has not raised taxes or intervened enough on the economy.

Meanwhile, the pretenders to the throne appear as unprepared for office as the current prime minister was two years ago.

I’m delighted that both Andy Burnham and Wes Streeting are talking about reforming our capital taxes. Capital gains tax is in need of reform. But look at its scale. It raises about £20 billion of £1,100 billion of total revenue. Wise reforms would struggle to increase that by more than a small number of billions. Burnham’s call for a land tax I also agree with. But our problem here is not that we tax land and property too little. By international standards we tax it rather a lot. The problem is our current system is catastrophically damaging. Yes, please reform it. No, don’t pretend that is a way to repair the public finances. And please don’t claim that a wealth tax is the answer to all our ills.

As for Burnham’s general schtick that the current government hasn’t been left wing or interventionist enough. One does wonder whether he has been paying attention. This is, after all, a government that has increased taxes by something like £60 billion and public spending by a lot more than that, has substantially raised the minimum wage, is bringing rail and steel into public ownership, has scrapped the two-child limit and abandoned any effort at welfare reform, is stopping exploration in the North Sea and going hell-for-leather for net zero, and is implementing transformational additional regulation of employment and of rental housing. This is no Blairite tribute act.

The overall impression is that both those occupying the highest office and those vying for it have lost the capacity to focus on underlying problems while continually chasing the next day’s headlines. Any organisation which spends all its time firefighting, while neglecting to focus on its underlying problems and on its strategy will inevitably fail. So it is with governments.

In The Spectator, Michael Gove laments a political class addicted to policy gimmicks and unable to debate the big issues defining our age.

Only last week Rachel Reeves made an emergency fiscal statement to the house, responding to the consequences of war in the Middle East. The most significant headline measure was a VAT cut on fairs, zoos and theme parks. A titanic battle has been raging between a theocratic state sponsoring terror networks bent on acquiring nuclear capability and the world’s pre-eminent military and economic power. That war has choked off the world’s oil supplies, undermined the principle of global freedom of navigation and undermined food security. And our finance minister’s response is to shave a few quid off a day out at Alton Towers.

At least when Ed Davey careered down multiple waterslides during the election he acknowledged it was a gimmick. Reeves appears to think it’s up there with the Marshall Plan as a wartime reconstruction programme. We may be picnicking on the edge of a volcano, but the meal deal itself has never been better value. If the Chancellor’s response to a war raging now is so pettily inconsequential, how on earth do we think she will prepare us for the shocks about to hit us which are even more profound and long-lasting?

AI’s ability to perform almost all basic clerical research and analytical tasks at a speed which no human can match and with a level of sophistication few could outdo is likely to render most entry-level professional jobs redundant. The basic work of accountants, lawyers, management consultants and bankers could be done better, faster and much, much cheaper by machines – all with the barest of human supervision. That change is not a generation away. It is coming within months and years and will hit a generation already alienated from capitalism and democracy by the weight of student loans, the cost of housing and the comfort in which elderly elites now live…

This moment in our national life is, above all, a time for seriousness. Yet our government fiddles with bus fares and funfair prices. And Reform, the opposition party which currently leads in the polls, offers ludicrously unworkable tax cuts – and social media spats between its leaders – for our entertainment. This is candy-floss economics and coconut-shy politics while the world is transformed at a pace and in a manner unseen for centuries.

In Conservative Home, Laurence Fredricks warns that Burnham’s myopic focus on social housing will see fewer homes being built.

Development is too often treated as a public service, something that can be ordered into action by politicians, burdened with social obligations, and still deliver with little regard for the costs. Development is a business. Business runs on profit, to survive, crucially, but also to grow and deliver more homes. This is true at every scale, from SME housebuilders to the major developers. Without a profit incentive, homes do not get built.

Burnham’s “housing first” platform centres on social housing as an alternative to the housing market: “We really haven’t had that approach in this country since the post-war years.” But post-war Britain was not a world without markets or private development. The difference was that homes could still be built at scale. What changed later was the emergence of an increasingly restrictive planning system that chokes supply. That, far more than the commodification of housing, is what created today’s crisis.

The direction of travel being set by the PM-in-waiting should be a grave concern. Instead of recognising the planning system and the mounting burdens placed on developers as the real barriers to housebuilding, Britain risks drifting toward a state led housing model where the delivery of housing comes at any cost – with the taxpayer ultimately footing the bill. The answer is not to berate the commodification of housing, or treat housing as a public service to be commanded into existence. It is to fix the planning system, restore viability, and give the market the conditions it needs to deliver.

For The Times, Robert Colvile highlights the hypocrisy of the left allowing foreign oil and gas imports whilst shutting down the North Sea.

It’s true that Britain, like many other countries, is cutting petrol taxes to help consumers (or rather postponing a planned increase). And if you squint very hard, you can see Rachel Reeves’s gimmicky tax breaks for summer holidays as a backhanded way of saving on jet fuel, on the principle that 15 per cent off a trip to Thorpe Park might make people slightly less inclined to fly to Disney World.

Yet the King’s Speech pledged to make it actively illegal to grant new oil and gas licences in the North Sea. Leading to the absurd spectacle — highlighted by Kemi Badenoch and her energy spokeswoman, Claire Coutinho — of Labour MPs voting through the ban even as the government was relaxing restrictions on the import of Russian oil refined in third countries, to shore up supplies of that precious aviation fuel.

But that’s not the end of the hypocrisy. Miliband can talk all he wants about all the wind turbines he is building. But even if we completely decarbonise the electricity grid in the next few years, we will still be using fossil fuels for a load of other things for the foreseeable future: heating our homes, fuelling our cars, powering factories, smelters and data centres. In fact, in 2024 we imported energy equivalent to 138.9 million tonnes of oil. Netted off against our exports, that translates to 44 per cent of our overall energy needs coming from abroad — the highest proportion in a decade.

And what kind of energy were we importing? The vast bulk — more than 90 per cent — was made up of oil and gas. And our largest supplier was Norway. In short, as I’ve pointed out before, we are paying the Norwegians billions of pounds to send us oil and gas from exactly the same North Sea basin we refuse to properly exploit ourselves — because of a ludicrous piece of climate arithmetic which counts the emissions from the stuff we drill but not the stuff we buy.

In The Spectator, Stephen Pollard says we are giving anti-Semites a cultural veto after a talk on Jewish culture was postponed due to concerns about security.

Interviewed earlier this month at the Cannes film festival, Hungarian filmmaker László Nemes spoke of the ‘shameless orgy of anti-Semitism overtaking the West.’ The director of Son of Saul was stating something both profound and obvious, and here in the UK we see examples every week – and it sometimes feels like every day. On Tuesday, the British Museum informed ticket holders to a talk scheduled for today as part of Jewish Culture Month that, ‘Due to security concerns, the Ancient Israel and Judah in the British Museum talk… has been postponed.’

It was the matter-of-fact blandness of the statement that hit hardest. ‘We apologise for any inconvenience. With best wishes, The British Museum Ticketing team.’ Oh well, just a bit of Jew hunting, sorry if it’s a bother, best wishes and all that…Increasingly, events involving or attracting Jews are being cancelled – and that’s when they have managed to find a venue willing to host them in the first place…

Whatever the actual motivations behind such decisions, they all have the same effect – handing anti-Semites a veto over the staging of events with or for Jews. Let’s accept that the British Museum has acted in good faith, as it says in its statement. So what? The outcome is the same as when the West Midlands police caved in to the Jew hating mob and banned Israeli fans – Jews – from attending Aston Villa’s match against Maccabi last year. Their reasoning might be different, but their decisions have had a similar consequence. The British Museum has allowed Jew hate to determine its programme. By postponing a talk on Ancient Israel and Judah.

Let’s reserve judgement on whether this is actually a postponement or, as I suspect it will end up, a cancellation. One of our leading cultural intuitions has sent out a terrible message. Do you worst, it is saying to the anti-Semites, and we will cave. For shame.

Wonky Thinking

A new report by Boston Consulting Group has found that our financial services sector is underperforming due to a lack of capital, stalling productivity and declining employment. The sector that once drove UK productivity growth now actively drags it down. Had the sector continued to grow at its pre-crash trajectory, it would be 40% larger than it is today. This equates to an additional £66 billion in output and £100 billion added to the wider economy. The research has found:

• Business lending has seized: Total lending to private non-financial corporations has returned to levels last seen in 1998, standing at 59% of GDP in Q3 2025, with both bank lending and other forms of credit having fallen as a share of GDP. SME loans have almost halved as a share of GDP since 2011.

• Productivity growth has stalled: The sector’s contribution to aggregate productivity growth has flipped from +3.5% pre-2008 to -1% in 2019–2024, meaning it is now actively dragging down UK productivity growth. A more sector-specific productivity metric – annualised change in assets per employee (inflation-adjusted with CPI) – has been zero for the past five years in the UK compared with 1% in the US.¹

• Shareholders have lost out: If £100 was invested in UK financial services stock in April 2011, its total value would be worth £185 less by the end of 2025 than if invested in US financials and £108 less than if invested into UK industrials.

• Employment has declined: Jobs in UK financial services have fallen 1% since 2011, while the equivalent employment has grown 17% in the US and 16% in France. Assets per employee, however, have remained static in the UK.

• Capital is not flowing where it is needed. 53% of total pension fund allocation was invested in UK equities in 1997 compared to 4% in 2022 and 82% of US pension funds allocated to equities. UK households have the lowest share of personal wealth held in equities and mutual funds in the G7, at 8%.

The report also identified three policy choices that the UK government has made that have constrained growth.

Regulation was recalibrated for resilience but not updated for growth
New regulation after the GFC strengthened the sector’s resilience but institutionalised a bias towards removing all risk over growth. The system-wide UK LCR stands at 152% in 2025, far above the 100% Basel minimum and the 120–140% seen in US and EU peers. The UK’s CET1 ratio is 15.4%, two percentage points above the US (13.4%). If UK banks reduced capital buffers to US levels – still within requirements – this could release up to £440 billion in capital, which could be channelled towards lending. Meanwhile, consumer regulation has resulted in 23 million consumers going without financial advice. Compliance and quality-assurance headcount rose 503% from 2009–2021, before settling at 208% of 2009 levels.¹⁹ This compares to just 78% growth in the US.

Business credit has become structurally harder to access
UK businesses are caught in a self-reinforcing credit trap. Businesses seek credit less readily because they expect rejection; lenders pull back because they see insufficient demand. Both sides have rational reasons to behave as they do – but together, this has resulted in total lending to SMEs falling from 12% of GDP in mid-2011 to 6.5% in 2026. It has also become even more concentrated, with the share of lending to SMEs in the real estate sector rising from 39% in 2016 to 51% in 2026 – despite only 3% of total SMEs operating in the real estate sector. The reasons for this appear two-fold. First, it is expensive and time-consuming for banks to find, vet and onboard smaller borrowers. Second, regulatory constraints require banks to hold more capital against loans to these businesses because they are harder to assess – many lack the physical assets that banks traditionally use as security.

Technology underinvestment leaves UK firms exposed to the AI era
In the early 2000s, because of its relatively advanced integration of technology, the UK financial services sector had the highest level of capital stock in software and databases of any advanced economy. However, the capital stock of computer software in UK financial services has grown at a rate of just 2.5% a year since 2010. This compares with 6.7% in the US – meaning total US stock has almost doubled in a decade, while the UK equivalent grew by just 30%. The UK now lags the US, Japan and Spain in terms of capital stock of software and databases as a share of total assets. The divergence since 2010 is a direct consequence of the active choices described above. This gap means UK firms are entering the AI era further behind than many peers.

Why has this happened? High costs and legacy tech stacks are common across the sector in different countries. But UK banks tend to have higher cost income ratios than most, regularly over 60% of income. Furthermore, the UK lacks the scale of the US market or the rapid growth of some smaller economies, both of which make developing economies of scale challenging.

On his Substack, David Goodhart has published an essay on the emerging post-liberal consensus amongst the British public which has rebelled against the neoliberalism that has dominated the political debate for the past forty years. He proposes a manifesto for ‘left-conservatism’ which combines cultural conservatism whilst encouraging a system of national preference on the economy and business.

My own version, that I would categorise as belonging to the Left-conservative school of post-liberalism—a synthesis of moderate social democracy and moderate cultural conservatism—has three main elements.

1. Small-c conservative common-sense.

• Acceptance of the moral equality of all humans but rejection of the moral universalism and post-nationalism of the liberal Left, (promoted in some aspects of international law).

• Restoring authority to elected politicians.

• An immigration pause, plus the understanding that a society with a shrinking ethnic core needs an attractive, broad-based national identity more than ever.

• A belief in personal responsibility and reciprocity, entailing a shift to a more contributory welfare state.

• Money alone is not the answer to poverty and social dysfunction, family structure/upbringing matter.

• More support for stable families, marriage and higher fertility by minimising the motherhood penalty but also by making it easier for one parent to remain at home when children are pre-school.

2. Market-friendly, national social democracy.

• A national business preference in public procurement.

• Tougher paternalistic regulation of industries with power to poison bodies (food) and minds (tech).

• Less market in some key public utilities but more market in areas where competition is weak.

• Transition to Dutch-style social insurance model for health and social care.

• An end to this version of net-zero, and lowest possible energy costs for businesses and households.

• Limited use of subsidies and tariffs to prioritise national industry, reshoring and innovation, and national control over critical infrastructure/utilities.

• Incentivisation of a more patriotic business elite, and clearer distinction in the tax system between the productive and unproductive rich (a land tax?).

• Reduction in the tax/regulatory burden on small business.· Promoting higher levels of home ownership and entrepreneurship, especially among young people.

3. A regional settlement to tackle the crisis of demoralisation in Somewhere Britain.

• Tackle extreme regional divides by promoting not just public investment and growth companies in left-behind places but investing in grass-roots institutions: sports clubs, youth clubs, pubs.

• We need our elite universities but must reverse the over-production of people with generalist academic qualifications and under-production of skilled workers and technicians.

• Create more outlets for public spiritedness. In a more dangerous world, with more erratic climate, we need an expanded military reserve plus a civic and environmental taskforce. We also need an easy-to-use online national volunteering platform.

This is not a radical manifesto but it cuts across still powerful liberal assumptions in key areas: the reluctance to accept discomfort at rapid ethnic change as legitimate; the economism of so much social policy that focuses almost exclusively on higher welfare payments; the persistent belief that more graduates is good for the economy and society; reluctance to re-think rights legislation or international conventions even when they thwart democratic common sense. There are policies here borrowed from Right and Left traditions but the Right bloc in British politics would be most comfortable with it.

Podcasts of the Week

In The Spectator’s Coffee House Shots podcast this week, Tim Shipman and James Heale interview Joshi Herrmann, founder and editor of Mill Media, who has been closely following Andy Burnham’s career in Greater Manchester. They discuss whether Burnham’s emotional style of politics will be successful in the much tougher world of Westminster politics.

Quick Links

A majority (65%) of Britons believe that we should stop prioritising clean energy over cheaper energy.

Household energy prices will rise by 13% in July, an average of £221 per household.

The number of young people not seeking work is the highest since records began.

Same review finds we are spending twenty five times more on welfare for young people than helping them to find work.

Energy intensive manufacturing production has fallen by 40% since 2015.

Charity led by Green Party’s Makerfield by-election candidate calls for farming to be ‘decolonised’.

Live births per year by mothers born in the UK have fallen by over 100,000 in the past decade.