March 25, 2013 5:55 pm

Strange death of a more liberal Britain

The country is gripped by a feeling that it became almost sinfully slack

If the UK really is sagging into a “lost decade” of economic stagnation, it is at least aware of its fate. Neither the elites nor the electorate expect a spectacular rebound any time soon, proving again that the British do grudging realism better than most.

But economic growth is not the only thing being lost as this decade lumbers on. The looseness and openness that has historically accounted for much of the UK’s success – and appeal to outsiders – is also in danger of being misplaced. At best, the country is nothing like as clear-eyed in spotting this. At worst, it is actively cheering it on.

Consider what is happening to three things that are fundamental to any nation: its media, its borders and its most important industry. Last week, parliament agreed what is essentially the first law pertaining to the press in three centuries. On Monday, David Cameron, the prime minister, gave a speech promising to toughen up the government’s already severe immigration policy. And almost month by month, whether from Westminster or Brussels, the City of London receives another wound, the most recent being a bonus cap and an increase in the government’s own bank levy.

These clampdowns tend to command a political consensus. The Conservatives, the Liberal Democrats and the Labour party achieved tripartisan unity on the press law (which may not be enough to stop it unravelling anyway). Mr Cameron’s criticism of the vast inflow of immigration in the past decade merely echoes similar speeches in recent weeks by Nick Clegg, his Lib Dem deputy, and Ed Miliband, the Labour leader. As for the squeeze on the financial sector, the most voluble discord between the parties is over which is the most punitive in its approach to bankers.

Of course, some reaction against excesses in all these areas was inevitable and necessary. Lives were ravaged by rogue newspapers, migrant numbers were hopelessly underestimated and taxpayers felt the cost of bailing out an overgrown financial sector. But the present backlash is taking place in an atmosphere of vindictiveness, not reason. As a result, there is little rigour in the analysis of what went wrong and where the fixes lie. With a few decades’ perspective, we might see more clearly that phone hacking and other tabloid depredations were specific criminal acts that required remorseless prosecution – and an end to the intimacy between press and police that indulged it. We might accept that the over-leveraging of the banking sector during the boom had causes other than light-touch regulation and sheer rampant greed, not least the loose monetary policy that has not only evaded the brunt of the blame but become even more deeply entrenched as British orthodoxy. We might recognise that the UK was actually shrewd to take in hordes of motivated eastern Europeans while much of the rest of the EU put up transitional controls.

Or the cold economic reality might dawn that the UK’s laxity, however chaotic and crude, is the way it earns its living. This is not a country able to trade on world-beating productivity or infrastructure. Its competitive advantage is the relative ease of doing things here, even if that means hiring foreign staff or trading financial instruments.

Instead, the country is gripped by quite the opposite epiphany, a feeling that it became almost sinfully slack in all sorts of ways and must now tighten things up. This mood has not played itself out; it is easy to imagine further restrictions being demanded in the coming years. Until now, the UK’s openness to foreign ownership of its companies and assets has been a non-negotiable badge of its liberalism. George Osborne, the chancellor, boasts of his country’s aversion to protectionism when he is abroad. But until now, the UK’s reverence for the rule of law was regarded as similarly sacrosanct, and yet the government is hounding companies for perfectly legal tax avoidance, even threatening to name and shame them. Politicians often indulge a popular mood on the assumption they can tame its excesses. More often, they become its vassals.

When the historian George Dangerfield chronicled The Strange Death of Liberal England in 1935, he meant the party, not the creed. Indeed, the idea of freedom did not merely survive in the UK but actually went on to flourish, inspiring Labour’s social reforms in the 1960s and the Conservatives’ economic revolution in the 1980s. By the end of the century, it was an astonishingly freewheeling country even by western standards, with London as a cacophonous, all-welcoming Babel.

Now, liberalism finds itself in the opposite predicament. The party that bears its name is in government for the first time since the second world war. Even aside from Mr Clegg, three of the most powerful Tories in the land – Mr Osborne, Michael Gove, the education secretary, and Boris Johnson, the London mayor – are metropolitan liberals by instinct. And yet the idea itself is in retreat. There is more to liberalism than permitting same-sex couples to marry or elder daughters to inherit the throne. It also involves tolerating real messiness in economic and public life. It is sad to see a country become squeamish about an idea it helped to invent.

janan.ganesh@ft.com

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