Going South: Why Britain will have a third world economy by 2014.
Larry Elliott and Dan Atkinson Palgrave Macmillan, £14.99
If you like annoying books, which get under your skin in irritating ways, this is your ideal beach reading. You should be warned that for Larry Elliott and Dan Atkinson the ideal beach would be in Cuba or North Korea - there is more than a hint of Marxism in their analysis - but if they are right there will be socialist beaches in the Vendee and in Dorset before too long.
I am old enough to be able to recall that every time the British economy slips into recession and unemployment rises above two million, there are those who ask how we will ever recover and speculate that joblessness is with us in perpetuity. Sometimes the culprit is technological change, sometimes it is the Yellow Peril, as super-competitive Asian countries eat our lunch. Elliott must remember these bouts of depression, too, as he has been the economics editor of the Guardian since Gordon Brown was in short pants. In the 1970s when the IMF marched in, and again in the early 1990s after our exit from the ERM, it was all up with us. 'Doomed,' the cry went up, 'we are all doomed.'
Elliott and Atkinson are fully paid up members of the Corporal Jones Tendency. For them, Clive Dunn's character was a Panglossian optimist. It is not that we are in a painful cyclical downturn, nor that our deleveraging hangover will take years to work off (a downbeat view I tend to share), nor even that we are slipping down the OECD league table of wealthy nations. Far from it. Their thesis is that the UK is not so much Queen's Park Rangers, struggling manfully to remain in the top flight, as Glasgow Rangers, with terminal tax problems and worth at best £1. We are a submerging, de-developing nation. We have done those things which we ought not to have done (borrowing too much money, mainly) and left undone those things which we ought to have done, and there is no health in us.
How so? Why are we in a worse position than other elderly European economies that seem to be wrestling with similar problems?
Exhibit A is our unhealthy balance of payments. We continue to run a chronic deficit in visible goods, even in tough times when the economy is growing well below trend. That is never a good sign, and our Corporal Joneses believe we have a structural flaw as successive waves of de-industrialisation have left our manufacturing industry hollowed out. (It represents about the same proportion of GDP as in the US and France, as a matter of fact, but let that pass.)
Exhibit B is our declining educational performance. We have been dropping down the OECD's PISA tables in the past decade and are now around the middle of the pack in secondary age attainment in maths and science, while Poland and other eastern European countries have been improving rapidly.
There are more gloomy statistics in Going South. I will spare you most of the alphabet, but Exhibit X is, well, The X Factor. The authors contrast 'the ferocious ambition that radiates out of the talent show contestants and the complacency of the national mood ... the talent show wannabes tell us that Modern Britain is failing large numbers of people desperate to better themselves and gain respect'.
So what do we do? Here the picture becomes less clear. Our heroes discuss two possible models for the UK: Swedish social democracy (always a temptation for Guardian man) and what they call 'Freeport Britain', which would involve turning the country into one enormous enterprise zone. Social market Britain would be a kind of Cleggite nirvana, with elements of the Big Society thrown in.
The Freeport version would be more bracing, involving an 'indefinite determination to live by the ebb and flow of a global market'. It's a choice between Stockholm (without the blondes on bicycles) and Singapore (without the Chinese). Both involve abandonment of the UK's global role and also 'a reconfigured relationship between the UK and the institutions of the European Union'. Unfortunately, Elliott and Atkinson are not convinced that either model would work for a population of 60 million, and I suspect they are right.
So there is something in Going South to annoy everyone. The Jubilee flag-wavers will be offended as much as the Europhiles. The free-market neo-Thatcherites will find as little to like as the Brownite free-spenders. But, there is no harm in spending a couple of hours facing up to the dark side of our economy, and scratching at a few sores. There are some telling points, and the authors present a persuasive taxonomy of British policy errors in the past few decades. Uplifting, though, they are not.
Howard Davies is a non-executive director of Morgan Stanley and was the founding chairman of the Financial Services Authority.