At first it happened slowly, but now it is sudden and harsh: the Age of Unreality in which we have lived in comfort and security is coming to an end.
For years, the global trading system gave us cheap manufactured goods. Asian economies helped to keep our inflation low and credit cheap. The warning signs were there – stagnant wages despite high employment, shuttered factories and low productivity to name but a few – but life was comfortable enough, for the political classes at least.
Quite evidently it would not last, but the Complacent Generation carried on regardless. Shallow leaders who preferred the ephemeral and peripheral to the serious and complex failed to fix our structural weaknesses – like the planning system, skills, investment in innovation, and our economy geography – and continued to expose us to risks, like stretched global supply chains and the dependence of our economy and key institutions on investment from hostile foreign states.
This dependence has undermined our security as well as economic resilience. When the Cold War ended, the West reigned supreme. But the generation of leaders that had faced down the Soviet Union handed over to the Complacent Generation, who made mistake after mistake. Defence capabilities were whittled down. Military defeats in Afghanistan and Iraq were spun and explained away. Communist China, intent on restoring its global power, was invited to fund and run critical national infrastructure, from energy plants to parts of the telecommunications network.
Despite an unprecedented threat from Islamist terrorism – mostly home-grown and incited by preachers and ideologues from Britain and overseas – too little was done to prevent segregation within our cities, the adoption of extreme beliefs and practices, and the open organisation by agitators, plotters and extremists who want to destroy our way of life.
Across Europe, including Britain, preening politicians took security for granted. Even as they cut defence spending, they stuck two fingers up to the United States, the ally upon whom European security depends. The European Union, which contributed to peace by integrating the economies of Western Europe, came to believe it had secured peace beyond France and Germany. It expanded its borders toward Russia, even opening talks with Ukraine, but lacks the hard power to defend its members and friends. Observing Russian aggression, Finland, an EU member state, now urgently seeks fast-tracked NATO membership and American protection.
Everywhere we look the foolishness and naivety of the Complacent Generation is beginning to reveal itself. The examples are many, but the energy crisis especially is a case study in stupidity.
Britain should have approved new nuclear power stations twenty years ago. Yet Blair and Brown dithered, and the Coalition ruled out nuclear subsidies. Theresa May began her premiership promising “an energy policy that emphasises the reliability of supply and lower costs for users”. This should have meant new nuclear and a dash for gas, but instead we got a net zero target with no idea of how to achieve it or what it would cost. Now the Johnson government, even more religious about net zero, opposes fracking and chooses not to exploit North Sea gas fields. Confronting an energy crisis, ministers protest there is little they can do.
The crisis may be international, but responsibility for Britain’s lack of preparedness lies at home. Energy prices have been rising here for years, thanks to ministers loading green surcharges onto household and industrial energy costs. Now, with rising Chinese demand for gas, Russia exploiting Europe’s dependence on its gas supplies, the post-pandemic resumption of the global economy, and Britain’s depleted gas storage capacity and refusal to exploit its own reserves, wholesale gas costs have more than quadrupled since before the pandemic.
British households, and our energy-intensive industries, will pay the price, just as they will pay for rising inflation and, however necessary they might eventually be, tax rises. The whole structure of our economy – too reliant on financial services, too geographically unequal, too exposed to stretched supply chains, poorly connected, with low productivity and too little investment – is as it is because of the decisions and indecision of the Complacent Generation. No politician of any party has yet provided the coherent plan for growth we need.
Neither is there a credible plan to project and defend Western interests as economic, diplomatic and military power shift eastward. Geopolitical change has been hastened by Western errors, like Middle Eastern wars, naivety, such as through world trade policies, and the virus, which disrupted democratic societies more than autocratic states. But Britain and our allies have also been blind – perhaps wilfully so – to the actions of our competitors and enemies.
China has bought its way into our critical national infrastructure, our universities and even, as we learned recently, our democratic institutions. It has corrupted international institutions, from the World Health Organisation to Interpol. It has created rival organisations – such as the Asia Infrastructure Investment Bank – with the connivance of the British government. It has stolen industrial secrets and increased its economic and military reach around Asia and Africa.
Russia, with troops massed on the Ukrainian border, has already won in its face-off with the West whether it invades or not. It has shown Europe to be hypocritical, weak and, in some cases, corrupt. It has proved German energy needs trump the international order. It has successfully established that Ukraine, occupied or not, will remain in its sphere of influence. It will go on facilitating international organised crime, launching cyber attacks, developing hybrid offensive capabilities, laundering dirty money through financial centres like London, and undermining Western interests.
Russia, like China, can do these things because the Complacent Generation of Western leaders has made it possible. And now, from a position of unnecessary weakness, we face great challenges – revolutionary new technologies, mass migration, competition for energy sources, security threats, the decline of international institutions, the need for economic growth and doubts about how we protect our way of life and project power – but our eclipse and defeat is not inevitable. Now the Age of Unreality is indisputably over, the truth is before us. We need a new generation of leaders to return us to reason and strength.
