By William Schomberg, Sumantha Sen, and Kripa Jayaram
LONDON (Reuters) – The winners of Britain’s election on Thursday, which looks set to end 14 years in power for the Conservative Party, will face some of the biggest challenges faced by any new government since the end of World War Two.
The economy is struggling to grow, health and other services are under severe pressure, and there is little room in the public finances to fix them. The government is also falling behind on its immigration and housing targets.
Opinion polls indicate a significant lead for the opposition Labor Party led by Keir Starmer over the Conservative Party led by Prime Minister Rishi Sunak. The charts below highlight some of the key tasks that lie ahead for the next government.
A web version of the story is available here.
Economy
Britain, like many other rich countries, has managed very slow economic growth for much of the period following the global financial crisis of 2008 and 2009.
Growth in Britain since 2010 – when the Conservatives came to power – has been stronger than growth in Germany, France or Italy. But the difference is small.
Taking into account changing populations – which have risen sharply in Britain due to high rates of immigration – growth since 2010 has been weaker than in Germany and lags far behind the United States.
Living standards are expected to witness their first decline during a parliamentary term since the 1950s.
Sunak says economy is at a turning point after coronavirus and high energy prices. Starmer says Labour will deliver the strongest sustained growth in the G7.
Since the Covid pandemic, the UK economy has become the second weakest in the G7.
poverty
Poverty has continued to decline, but the pace of improvement has slowed since 2010.
The Institute for Fiscal Studies, a think tank, says extreme poverty – which measures the income of people with incomes below 60% of the median – fell five times faster in the 13 years to the 2009/10 financial year than it has since.
Other measures of hardship have worsened recently, showing the impact of high inflation on poor households more clearly.
In 2019/2020, 4% of working-age adults were unable to adequately heat their homes. Three years later, that share had risen to 11%, according to the IFS.
Immigration
Successive Conservative governments have failed to achieve their goals of reducing net migration, even after Brexit and the removal of free movement for workers from the bloc.
More workers from EU countries are now leaving Britain than coming in, but the number of people coming from other countries – particularly India and Nigeria – has risen sharply.
Net migration falls to 685,000 in 2023 from a record 764,000 in 2022, but is almost four times its level in 2019 when former Conservative leader Boris Johnson promised, before that year’s election, to bring it down.
Inactivity
One of the reasons why immigration rates have risen so high is the shortage of workers.
Employers have been struggling to fill vacancies since the pandemic began as the number of people classified as having long-term illnesses has reached record levels and the number of students has also risen.
Britain is the only G7 country where the inactivity rate – which measures people of working age who are neither working nor looking for work – is higher than it was before the coronavirus pandemic.
The Conservatives plan to tighten rules on long-term care benefits. Labour says it will tackle the problem by investing more in Britain’s health service.
health
The health service is suffering. The number of people waiting for non-urgent treatment, which had already been growing between 2010 and early 2020, rose after the emergence of the coronavirus and then reached nearly 8 million in late 2023 in England alone, almost double what it was four years ago. Years.
The backlog of patients has fallen slightly in recent months but the NHS is well behind its target of starting to treat almost all non-urgent patients within 18 weeks. It is also missing its target of treating emergency patients promptly.
Since 2010, inflation-adjusted health spending has grown more slowly than the average increases seen since the 1950s at a time when the population was growing and aging.
building a house
Another promise the Conservatives look set to miss is to increase new home construction after they ran into opposition to their plans to make building easier.
In the 12 months to the end of March 2023, just over 234,000 new homes were built in England, the figure remaining consistently below the target of 300,000 set for the mid-2020s.
Housing in Britain offers the worst value for money of any comparable economy, the Resolution Foundation think tank says.
Productivity and investment
Key to the next government’s chances of tackling many of Britain’s most pressing challenges will be its ability to accelerate economic growth that will put more money into households’ pockets and into public coffers.
To this end, it will be necessary to improve poor productivity. London and south-east England are the only regions in the UK where hourly output exceeds the national average, although the capital has seen its lead shrink after the pandemic, likely reflecting the impact of increased working from home.
More private sector investment is needed, but companies have been cautious about investing since 2016, the year of the Brexit referendum that sparked years of political instability.