Reviving Britain will require our version of the chainsaw act

Reform in the style of Argentina’s Javier Milei is what is needed to set the UK on the right track — Nigel Farage’s ideas would return us to the 1970s

That scraping sound you hear is Rachel Reeves moving the deckchairs around on the Titanic. On Wednesday the chancellor announced the reinstatement of winter fuel payments, which she had axed for most pensioners last year. She intends to claw back the money from better-off pensioners through higher tax bills and a higher means test for future payments. How she will pay the additional cost of £700 million will not be revealed until the autumn budget.

Reeves also promised £15.6 billion for improved transport links in the north of England and the Midlands, though I am sure any resemblance to the plans announced by Rishi Sunak in 2023 is purely coincidental.

Scrape, scrape. What’s that big white thing we’re sailing towards? The answer is a debt crisis. While the press dutifully pore over the size and location of the chancellor’s deckchairs, the unpleasant fiscal arithmetic is of an unsustainably high national debt. Growth is weak, stuck below 2 per cent according to the latest Office for Budget Responsibility (OBR) projections. But the debt is mounting up.

On the eve of the financial crisis in 2007-08 the gross national debt was 42 per cent of gross domestic product. Twenty years on, according to the OBR, it will have more than doubled to 105 per cent. The worst part is the rising cost of interest payments on the debt: adjusted for inflation, rates are likely to exceed growth in the next five years.

Ferguson’s Law is inexorable: when a country is spending more on interest payments than on defence — as Britain has since 2021 — it can say goodbye to being a serious military power. The other chairs being moved around this week were on the decks of our two aircraft carriers.

On Monday, Sir Keir Starmer pledged to “move to war-fighting readiness” by 2034 as he laid out the findings of the strategic defence review. But all that will happen between now and April 2027 is a minute increase in defence spending from 2.3 per cent of GDP to 2.5 per cent. As Max Hastings has pointed out, at this rate the UK will soon lag behind all European Nato countries except Spain. With a fifth of the defence budget being consumed by our new nuclear deterrent, the Royal Navy has shrunk to a size last seen at the time of the Armada.

What ails the UK? The Conservative MP Neil O’Brien calls it “the confluence”. Simultaneously, Britain is dealing with a demographic crisis (longer life, falling fertility) which mass migration was supposed to solve but didn’t; a breakdown of the mid-20th-century welfare system, which weighs down on incentives to work; rising taxes, which discourage entrepreneurship and investment; and a crisis of confidence fuelled by “woke” denigration of our history in our schools, museums and national broadcaster.

“Weak growth compounds welfarism and erodes the public realm,” O’Brien writes, “from potholed roads to urban streets that are covered in stickers and graffiti and smell of wee or weed. In a struggling economy the dynamics of a newly hyperdiverse society become more dangerous.”

Reading O’Brien’s essay I found myself wondering: was Enoch Powell right after all? Consider these facts: around one in 60 people in the UK arrived in the country in the last year, and around one in 25 in the last four years. There is now more than one asylum seeker per 200 residents in multiple cities, including my native Glasgow. It would be strange indeed if the indigenous population did not connect low growth and failing public services with the biggest influx of foreigners to these isles since the Norman conquest.

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