General Election 2015: Can Britain learn to love its richest citizens?

The mood music of the election has changed, at least as far as economic policy is concerned. We are going from a dry debate about numbers to a more nebulous one about the way we would like to live and work.

Up to now, the three main parties have been seeking to make a distinction over their fiscal objectives. The Conservatives are the party of responsibility, the only party actually aiming for a surplus. Labour is anti-austerity, cutting the deficit but not at the cost of undermining public services. The Liberals are predictably somewhere in between: austerity with a human face.

But that debate has ground to a halt. That is partly because we have to take so much on trust. As the Institute for Fiscal Studies pointed out yesterday, there is not enough information to see how the three major parties might reach their objectives. The IFS thinks that this deliberate vagueness is disgraceful, and it is right. But if you step back and look at the fiscal plans in general, they don’t feel that far apart. All parties need to get the deficit down, though they don’t want to say how. But we are adults and know that policy will adapt to changing economic events here and abroad. What we do want is reasonable competence, something that Nick Clegg acknowledged yesterday with his call for a post-election stability budget.

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Now we seem to be going from a specific if unanswered question – how quickly do we pay down our debt – to something much less focused. It is more: what kind of economic society do we want to be, and which party is better able to nudge us in that direction.

It is hard to get a handle on this but we can catch a feel in a number of ways. There are the various controls Labour wants to place on economic activity: the energy companies, private landlords, house-builders, the banks of course, the railways, and more generally pay and conditions. In seeking a more regulated economy, Labour is responding to the way a lot of people feel: that we have become split into winners and losers, the winners being large companies and people in well-paid occupations, mostly in London and the Home Counties, the losers being just about everyone else.

You can also see this in the ambivalence that the parties show to business. All are notionally in favour of wealth-creation, but while many forms of wealth-creation are seen as welcome, others are not. If Labour, at least by the standards of the Blair/Brown years, is anti-business in prospect, the Coalition has been quite anti-business in office. The oil companies have been milked for North Sea revenues, a policy which is now reversed but has already seen curbed investment. Small businesses are praised by all, but have been loaded with more complex regulation. As for the banks, if HSBC does indeed relocate its headquarters, it will be because of the Coalition’s approach to tax and regulation.

Behind this ambivalence are huge structural changes. The most visible of these are geographical: the shift of economic activity towards the South-east. Thus Oxford has been rated the least affordable place to live in the UK because house prices are highest relative to wages. But people follow jobs: claimant count unemployment in south Oxfordshire is down to 0.8 per cent.

Less visible, but felt by everyone, is the changing structure of work, with the end of supposedly secure jobs and the rise of self-employment. The UK has become a huge job machine, creating jobs at a rate of nearly a million a year, but as we all know, the flip side of this is insecurity and generally low wage growth.

The problem for politicians is how to explain that these are trade-offs: the more you protect people already in work, the more you exclude those who don’t have work. We have managed to avoid creating the insider/outsider society so evident in France, but in doing so have seemed to ignore the plight of people who are on the wrong side of changing employment patterns. Ironically the left, in wanting to increase employment protection, actually help the “haves” or at least the “have jobs”, whereas the more free-wheeling right is better at creating space for outsiders. But it is hard to explain this, all the more so if those outsiders are recent immigrants.

It is also hard for politicians to explain the London phenomenon: how the capital and its commuter region have become such a magnet for talent and wealth from the rest of the world. I think the whole debate about non-doms, tax avoiders and evaders, and so on reflects a discomfort with what the outside world sees as a stunning success story.

A key driver of the London economy has been providing services for the global rich. The global rich, as anyone who went through the Sunday Times Rich List last weekend will be aware, are much richer than we are. It is not just that most of our top 20 are people who have moved here. There are no home-grown Brits in the top 50 in the world, none.

Nevertheless providing services to those pretty-jolly-rich who are here has generated a very good income for Britons as well as generating huge tax revenue for Her Majesty’s Government. In London the income trickles down, attracting waves of young Europeans to the job market, but it does not so visibly trickle out to the country. You don’t see the tax revenue, though the fact that 1 per cent of the population pays 30 per cent of income tax has been widely reported.

Maybe the best way to see this is to say that the next government will face two challenges. One will be to balance the books. We all know that. But the other more subtle challenge will be to help us become more comfortable with our role in the global economy: cherish what we are good at, be honest about what we are not.