Britain balancing its books part 3

The moral case — betraying our values?

Zoso Davies, a credit strategist and Hartej Singh, a Credit Investor write a four-part series arguing that balancing the books should be the UK government’s number one priority. With living standards, immigration, climate change, and choppier geopolitical waters dominating national discourse, this may seem blinkered. We firmly disagree. In our view, the very ability to live well, invest in our future, and defend ourselves depends on the credibility of UK PLC. As stewards of long-term savings, we feel a personal responsibility to make this case.

These are our personal views and not the views of any institutions we are affiliated with.

The flow of our 4-part series

1. Why it matters now: Sound public finances underpin living standards

2. What’s broken: More promises than productivity

3. The moral case: Betraying our values?

4. How to fix it: Efficiency, transparency, growth and credibility.

In our first two articles we laid out why we, along with a growing chorus, believe that the UK is playing fast and loose with its fiscal stability. We made the point that a fiscal crisis is not an academic talking point, it would result in real hardship and be highly regressive for our country in every meaning of the word. And we have shown that the root cause of this malaise is that successive UK governments made promises that our economy is unable to deliver on. While promising the world to the elderly and the infirm may seem like kindness, when that results in an unbearable burden on the rest of society stop being moral.

In this article, we change pace and ask a deeper question. Does the deterioration of public finances reflect a deeper erosion of our social fabric and shared moral frameworks. And if so, can we get back to the values that once made Britain great? Alastair Campbell famously said “We don’t do God”, but we must be allowed to talk about morals. The UK is not short of plans: we are short of courage. Britain’s habit of overspending is not a technical failure, but a cultural one.

We shine a light on four primary British values: 1) fairness, 2) duty, 3) resilience and 4) freedom. We argue that they are not being lived up to. Unless we restore those cultural guardrails, no laws and no spending plans will hold for long. The question is, can we summon our bravest selves?

The stark reality

You don’t know Alfie, in fact you can’t even see him, but you will care about him: he is a child born tomorrow in the UK. He will be joining the workforce in 20 or so years.

What country do you want Alfie to inherit? More specifically, in light of the concerns we have for the UK’s fiscal position, how much debt should Alfie be born with in order that we, today can shy away from making hard decisions? What’s the right number? What would Alfie vote for?

How would you explain this chart to Alfie?

Our ideals, not our politics

The moral case for fixing government finances is not party-political, nor specific to one creed. It’s about how we behave as a society and what we stand for. Over the course of a thousand years, Britain has been forged by its unique position geographically (as an island), morally (separation from Rome), and politically (Magna Carta and the primacy of parliament over the crown). By Christian ethics, by the British and Scottish Enlightenment, by the Industrial Revolution, and by the classical inheritance we claim for Britain as the home of parliamentary democracy. Britain’s proud history includes being the nation that broke the back of slavery, a scourge that shaped human societies for at least 5000 years. It stood at great cost against both Nazism and Soviet Communism.

And what are those fundamental, British values? To us they at least encompass the ideas that we stand before the law equally (fairness), that we think not just of ourselves but of what is morally right (duty), that we persevere through hardship (resilience), and that we maintain liberty for all (freedom).

1) Fairness

Edmund Burke captured our instinct here: “Society is indeed a contract… a partnership not only between those who are living, but between those who are living, those who are dead, and those who are to be born.” Are we frittering away the legacy of those who came before? If the unborn have standing in our moral imagination, then chronic deficits are a democratic failure. Children, recently born or yet to come, do not vote yet we burden them with spending decisions made today. This is taxation without representation.

Turning to our moral framework, the failings are clear. We are shackling our children with debt, in pursuit of what is easiest for ourselves, while creating promises and obligations that favour one generation over another. This includes promises like the pensions triple lock that are so obviously unsustainable that it is only a matter of time before they will be broken. We are failing in our duty, and in doing so we are enslaving our children who will have to endure that hardships that we do not.

That fairness that we aspire to dictates that we spend what we produce and demands that we make all the necessary cuts to spending and taxation today. This small fiscal step would have huge cultural ripples. Allowing us to align with our want to be fair stewards of the country and to hand it over to future generations in ship-shape.

“A man has made at least a start on discovering the meaning of human life when he plants shade trees under which he knows full well he will never sit.” The Life We Prize

2) Duty

Duty, too, sits at the heart of our national story. Nelson’s signal at Trafalgar - “England expects that every man will do his duty”—was a command to serve a higher order, not merely us. Are we still answering that call, or have we recast duty as a one-way claim on other people’s money?

In moral terms, rights are inseparable from responsibilities. The services we prize are paid for by neighbours who work and pay tax and—when we overspend—by lenders who extend trust. When politicians scatter unfunded promises, they sever that bond: they confer the “right” while sending the bill to others, especially the young. Labour politician Andy

Burnham is quoted saying that the UK government should not be “in hock” to the bond markets and we agree – but the only way to do that is to borrow less, thereby reducing the leverage that bond vigilantes have over the Chancellor.

Reigniting our culture of duty would do the opposite: match every benefit with a payment and every pledge with a plan. Duty asks us to accept restraint today—on spending and on tax giveaways—so that commitments made are commitments kept. Our word should be our bond. Fiscal honesty would lead to more civic honesty, restoring the link between service and reward and allowing us to hand over the country in good order.

“The price of greatness is responsibility.” — Winston Churchill

3) Resilience

Resilience, in the British sense, is to be able to prepare for and face hardship. It’s the strength behind the “Keep calm and carry on” tea towels. Overpromising wears down the padding that lets the nation absorb a shock. It gradually blurs the line between temporary and habitual help, leading many to believe that someone else - the state (but more honestly the taxpayer or markets) - will always stump up more money. A country that prizes resilience should be wary of policies that nudge people toward its antithesis - reliance.

Whilst the state should provide insurance in lean times, its generosity should restore footing, not create dependence. A safety net, not a feather bed. Any permanent benefits must be properly funded today, not rolled forward onto our children through debt and interest tomorrow. If people are made the false promise of permanent sustenance, what incentive would they have to make any provision themselves? And there are other costs, for example the waste of skills and talent that occurs by having the pension age too low. A low retirement age signals that someone’s experience, wisdom and cultural capital is past its sell-by date. We disagree with that idea.

What does resilience look like in practice? Investment before luxury; contingencies before giveaways; rules that bite; commitments matched with pay-fors; and a tilt toward productivity over promises.

“We have always found, where a government has mortgaged all its revenues, that it necessarily sinks into a state of languor, inactivity, and impotence.” — David Hume, Of Public Credit.

4) Freedom

Every pound of debt speaks of a deferred choice that should have been taken. These deferred choices are not theoretical, they are the first domino falling en route to a weaker pound when confidence fades, and to a higher risk premium on gilts. We will have already constrained our fiscal room when the next crisis inevitably arrives. Stoics would have called that a loss of agency; Epictetus put it simply: “Wealth consists not in having great possessions, but in having few wants.” That applies to both nations and individuals. A culture that normalises overpromising necessarily curtails real freedom.

The ancients also saw that carrying yesterday’s indulgence on the backs of tomorrow’s citizens corrodes the republic. Solon’s seisachtheia—the “shaking off of burdens”—cancelled debt bondage and barred using a person as collateral. The reasoning was simple: it is morally wrong to bind the future for the present’s sake. We have not chained our children physically, but we have pledged the fruits of their labour indefinitely.

“Debt is the slavery of the free” (Publilius Syrus).

Hope, not fear. Leadership, not fecklessness

The moral case is not a sermon. Who are we to deliver that?

We view these comments as an intervention. A chance to realise that we have lost our way, and to actively decide, if we are willing, to return to our core principles:

1. Fairness extends across generations: We must not vote ourselves benefits and send the bill to those who cannot vote. When policy shifts costs to the future, require an explicit “Burke test”: would we sign this deal if Alfie had a vote?

2. To dutifully think not just of ourselves, but of what is right: And not what is easy. Yes, it is morally right to support the old and the frail, but it is immoral to break the backs of the worker or to steal their freedoms to do so. Duty means protecting the few outlays that raise long-run capacity - education quality, planning reform, basic research, critical infrastructure.

3. Resilience is built before the storm: Keep calm and carry buffers. Safety nets should be springboards—targeted and time-limited—while good years fill rainy-day reserves and favour investment over giveaways. Favour dignity over dependence.

4. Freedom requires fiscal space: Debt narrows our choices, weakens confidence, and lifts the risk premium. Fewer promises, more productivity; do not mortgage our children’s earnings for today’s comforts.

Let us summon that Dunkirk spirit and do hard things for a common good, however old-fashioned that might sound. Rebuilding belief that we are part of a larger set of ideals, with the expectation and hope that the future will be better for our children, our friends, and our neighbours.

We will need to reconsider the foundational Christian message of self-sacrifice. We will need to embrace the enlightenment thinkers and reconnect with the knowledge they passed down to us. This is not a spiritual calling, but a journey of harvesting the wisdom that served our forebears so well. These core values have survived hundreds or even thousands of years and we can reshape them for the 21^st century without abandoning them completely.

Culture, Credibility, Currency

You don’t need a Bloomberg screen to know that the country feels wobbly. Households and businesses sense the storm clouds. What they do not see is sustained action to meet it. Roger Scruton captured the stakes: “Good things are easily destroyed but not easily created.” Sound money, credible budgets, and stable institutions are exactly those “good things” we should want to protect.

Through realigning our culture with our British values of fairness, duty, resilience and freedom, we can make the hard choices needed to enhance our credibility. That will lead us on the path to protect our economy and hand assets not liabilities over to Alfie.

We can make the hard choices today that will bring prosperity tomorrow, if we are brave enough.

In case you missed part 1: Britain balancing its books part 1

In case you missed part 2: Britain balancing its books part 2