Economists and other commentators have been warning that Britain is heading towards a 1970s-style debt crisis – that is, at some point soon, bond investors might stop lending to the government. Critics claim we could be looking at a situation similar to that which faced James Callaghan’s Labour government in 1976, when it had to resort to an International Monetary Fund (IMF) bailout. But in some ways, Britain finds itself in a much worse state, economically and politically, than it did in the 1970s.

Productivity growth is much weaker than in the 1970s. The decay in productivity growth over the past half-century underpins the incapacity of the state, and the degradation of public services and infrastructure. Indeed, it is the problem of productivity growth that has produced the government’s most pressing economic challenge: how to deal with the unprecedented peacetime expansion in public indebtedness.

If productivity decline is a result of economic constraints that have been built up over time, the grim state of the public finances is different – it is primarily a political problem. Since the 1980s, successive governments of all political stripes have side-stepped the reality of the productivity slowdown. Instead they have acted as if ‘money is no object’. This is a matter of bad political choices, not economic fate.

Whatever you think of the politics and policies of the Callaghan-Healey team in the late 1970s, their robust political leadership shows up the timidity and ineffectiveness of Starmer and Reeves. Unlike Labour in the 1970s, Starmer and Reeves have no plan or clue how to steer the UK from disaster.

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