Andy Haldane, the former Chief Economist of the Bank of England, has issued a stark warning to the Labour government: deliver genuine, inclusive economic growth or risk creating fertile ground for far-right extremism to flourish in British politics.
In a significant intervention, Haldane argued that persistent economic stagnation and a deep sense of alienation felt by many communities outside London's affluent bubble are the primary drivers of political polarisation. He stressed that simply achieving macroeconomic growth is insufficient if its benefits are not felt equally across the country.
The Roots of Discontent
Haldane pinpointed decades of sluggish productivity and widening regional inequalities as the fundamental causes of public disillusionment. "When people feel left behind by the economic system, they become disengaged from the political process and susceptible to more extreme narratives," he explained. This economic frustration, he contends, provides the oxygen for populist movements.
A Challenge for Labour's Economic Plan
The warning serves as a direct challenge to Chancellor Rachel Reeves's growth agenda. Haldane, who previously led the government's Levelling Up taskforce, praised Labour's initial focus but emphasised that the proof will be in tangible outcomes for left-behind towns and cities. He called for a relentless focus on boosting skills, infrastructure, and local investment outside the Southeast.
Beyond Economics: Rebuilding Social Capital
Haldane's analysis goes beyond pure economics. He highlighted the erosion of social institutions—from local clubs to community centres—that traditionally provided cohesion and a sense of belonging. Rebuilding this "social capital" is presented as crucial alongside economic fixes to strengthen the nation's resilience against divisive politics.
The former economist's message is clear: the government's mission to secure economic stability must be married with a conscious effort to ensure prosperity is shared. Failure to do so could have profound consequences for the health of British democracy.
