No one has actually used the phrase “abundance of caution” to describe the Heathrow Airport shutdown on Friday, but the chaos that it caused in international airline scheduling now seems to be down to a decision of extreme risk aversion. This episode is likely to become exhibit A in the debate about why the UK has economically lost its way.
The country has had something of a lost decade of low-to-nil productivity growth and higher taxes. This is a whole-of-society problem that, at the top of the funnel, resulted in the high-profile failure at the airport, a global transport node transiting hundreds of thousands of passengers every day.
Reporters honed in on Friday on the critical infrastructure risks of leaving the UK’s only hub airport reliant on a single substation for its electrical supply. Subsequent accounts revealed that it did have other sources of electricity but would have needed an out-of-hours reboot to bring these into its systems. Instead, authorities decided to close the airport for the day, causing major airline disruptions. It also emerged that the crucial decisions were taken while Heathrow’s chief executive slept, having turned the response over to his deputies after midnight.
There is a gamut of risks holding back the UK that exists in plain sight but few seem to be able to unwind or roll back. Take, for instance, the country’s energy conundrum.
The project to build a nuclear power station at Hinkley Point, in England’s south-west, is behind schedule and over budget. One reason for this is that the designers are having to comply with more than 9,000 technical assessments by the government, which commissioned the project. Hundreds of changes to the project have been ordered that engineers see as costly and unimportant.
The same design has already been built in Finland, a country that operates the highest safety standards and with a respected regulator regime, but none of that work can be used to credit the UK construction. It was originally due to cost £17 billion ($22 billion) and supply electricity by 2017. Then 2025. Now the best guess for generation is 2031 for what has become a £40 billion-plus-project.
At a smaller scale, the pettifogging rules seem to exist for the sake of rulemaking.
At a London Underground station that I use, there has been a small wooden bookcase on the back wall for years. In a tiny gesture to the community, people can leave books there for others to pick up and read. For commuters, it is a personal touch in an otherwise purely functional place. Not anymore. The bookshelf has been declared a fire hazard. There is now a laminated sign on the wall saying that the book exchange has been closed by the fire brigade.
Such are the hurdles placed in the way of businesses that many are grinding to a halt. A survey of family businesses on Monday found that more than half had put all new investment decisions on hold this year. The Confederation of British Industry issued a report on Monday that said “conserving funds” was the dominant theme for its members, with output slumping for all but three of its 17 sectors so far this year.
Foreign policy specialists often comment on the UK’s soft power advantages, including its cultural assets and institutions such as the royal family. Often what is really at work is that the visibility of the UK around the world is much higher than of other countries. Unfortunately, that also means that its flaws are magnified as well.
The current US administration, which likes to talk about European economic and social torpor, points to the UK as a poster child of this problem. US Vice President JD Vance was back on this hobby horse last week when, in a speech to the tech industry, he said that the UK had allowed its productivity to stagnate.
The former senator was speaking at a summit organised by the investment firm Andreessen Horowitz. After five years of rebasing talks with UK officials, the same firm set up a cryptocurrency and blockchain investment hub in London in 2023. In January, it pulled out to join the trend of American firms concentrating on the home market.
UK Chancellor of the Exchequer Rachel Reeves has made important statements to Parliament at a time when the economic bad news is mounting. The government has promised reforms, cutting back red tape and slashing bureaucracy. Attendees in a series of meetings with Ms Reeves have heard how the government will cherish foreign investment and work to set up a better regime to back new capital investments.
The trouble with the attempts by the governing Labour party, which has not yet been in power for a year, to set up a narrative of growth is that the drip, drip of bad news and poor performance is growing. All sides agree that the country does need to operate better at every level. It simply needs to get a grip on its critical national infrastructure, because restoring confidence in the country’s economic security is crucial.
Unfortunately, empty skies above west London are the latest indictment for the UK’s drifting ship.