tories | ukwatch.net

What can Cameron do?

JamieSW — Tue, 21 Oct 2008 18:57:34 +0000

In 1931, as the European banking system seemed to be collapsing, the Austrian economist Joseph Schumpeter observed that people felt the ground giving way beneath them, and not merely those with bank accounts. Many in Britain and America must be experiencing similar tremors now. Yet, in Britain at least, there are huge differences between 1931 and today. The 1931 crisis had profound political consequences – it almost wrecked the Labour Party and established the extraordinary hegemony of Stanley Baldwin, Neville Chamberlain and the Conservative Party – but it was a balance-of-payments crisis that was resolved the moment Britain went off the gold standard and devalued the pound. Almost uniquely among major economies, Britain didn’t experience a run on the banks or a threat to people’s savings. No high street bank collapsed or was likely to. In so far as there was a nervous shifting of money it was from the banks to the building societies, whose golden age it introduced.

The stability of 1931 was based on large, conservative institutions – the Midland Bank (now HSBC) was the biggest bank in the world. Unlike so many of the American banks which collapsed, British banks were not dependent on the savings of rural and small-town communities (whose incomes had begun to fall even before Wall Street ‘crashed’). Nor, unlike the great German banks, were they large investors in perilously unprofitable industries. They were cautious organisations run by cautious men. The building societies were exactly that, societies for building: building houses in local communities to which many were tied. Nearly all were ‘mutual’: ‘owned’ by their depositors, they were products, like the co-operative societies, of the 19th-century tradition of financial mutuality. They were not investment or commercial banks; and did not want to be.

Again, the London Stock Exchange, unlike Wall Street, wasn’t a site of crazy speculation. There was less loose money sloshing around with no other profitable outlet; a stiff tax was levied on all Stock Exchange transactions; and the culture was different. The members of the predominantly Conservative governments of the 1930s were not wholehearted admirers of the City. They imposed exchange controls on capital exports and they believed in a ‘managed’ currency. This reduced the authority of the City banks that had been so influential in the 1920s and before the First World War. Free trade was abandoned: Britain became a protected and cartelised economy. These governments were often suspicious of the state and believed in balanced budgets, but even so they nationalised mining royalties, brought the national grid under public control and established Imperial Airways (the distant precursor of BA) as a state monopoly. They believed in capitalism as a system of private ownership, a system of social and economic virtue, but not in the piratical capitalism of the United States. The Conservative Party of the 1940s was not seriously hostile to the nationalisation of the mines and railways, or of the Bank of England.

How things have changed. That kind of Conservatism is (or was) one with Nineveh and Tyre. We are faced with the possibility of a Conservative government in less than two years’ time led by men who have hitherto represented the purest form of freebooter capitalism. Despite a couple of brazen attempts by George Osborne to pretend that the banking crisis has nothing to do with them, all its ingredients, to the extent that they are home-grown, were cooked up by the Tory Party – mostly under Thatcher. The first was the abolition of exchange controls, which had the effect of strengthening the City and its institutions at the expense of other sections of the economy, as well as permitting the uninhibited export of capital regardless of what it did to British economic and financial systems. The second was to allow the value of the pound to rise considerably, rendering much of British manufacturing uncompetitive. This led not only to the elimination of hundreds of thousands of jobs but to a ‘rebalancing’ of the economy in favour of the financial and service sectors – which the country’s elites convinced themselves was the way of the future. It also had long-term consequences for the current account that were hardly less damaging. The third was the ‘Big Bang’ and the process by which the City and the banking system were effectively deregulated.

If you wanted a ‘competitive’ and risk-happy City, as the Conservative government did, then getting rid of all the understandings and conventions that regulated the old City was entirely proper. The Big Bang undoubtedly reinforced the City’s international standing; but it encouraged ecstatic risk-taking everywhere – often via financial devices themselves intended to spread risk. It also encouraged, as in 1920s America, huge inflows of loose money that were hard to control and were usually seeking speculative returns. The Big Bang initiated the process by which the old merchant banks, still largely home-owned, passed into foreign ownership or simply disappeared. The result, whatever the intention, has been to make the British largely (and almost uniquely) indifferent both to who owns the country’s assets and to the purpose for which they are owned. (Since these assets had to be sold to cover ever widening current account deficits this is probably a mere quibble.) The inevitable accompaniment to the Big Bang was the deregulatory legislation of the 1990s which, among other things, allowed the mutual building societies to ‘demutualise’ and become banks.

Finally, and most important, the Conservative governments began the politicisation of British housing and its manipulation for electoral reasons. The desirability of owning one’s house has a long history in all English-speaking countries and there are good social arguments for private ownership. But there is a thin line between social desirability and political calculation, and Thatcher crossed it with complete insouciance. The mandatory sale of council housing was pushed through not for social reasons (though many defended it on those grounds) but as a way of re-engineering the electorate. When Conservatives spoke, as they often did, of a ‘property-owning democracy’, what they had in mind was an owner-occupying, Tory-voting democracy. Thus the councils whose houses were compulsorily sold were not allowed to spend the proceeds on new social housing, since that would create more Labour voters. New housing was almost always privately built – i.e. rationed. Since demand could never be met, owner-occupiers achieved an effortless rise in asset-wealth and privately built housing was increasingly used as security for consumption on credit. Again, that was its purpose. Although the rhetoric of Thatcherism was ‘productionist’ – thrift, hard work and so on – what it actually stood for was private consumption.

The housing boom of the late 1980s, ending, as it was bound to do, in the recession of 1990-91, eventually did for the Conservative government. In their criticisms of Labour’s ‘credit bubble’, Cameron and Osborne are right only to the extent that Labour further refined the politicisation of housing and carried it to its logical electoral conclusion. But there is no evidence that the Tories would have acted differently. Labour didn’t invent the credit bubble.

The banking crisis has understandably caught the Conservatives on the hop, and Cameron’s responses have been pretty incoherent. Much of what he recommended with confidence even a few weeks ago now sounds dated – as he knows. Fundamentally, he is trying to adjust Thatcherism to inappropriate political and economic circumstances. Thus he wants light regulation; he is opposed to forced nationalisation of financial institutions; he wishes somehow or other to cut taxes; he still believes in the overriding efficacy of the market as against the state; he is a man whose sympathies lie wholly with finance and financial institutions – probably inevitable in someone whose experience of life outside Parliament was a brief stint in a PR firm. He has, however, committed the Conservative Party to Labour’s current spending plans; he has reluctantly admitted that nationalisation of banks could be defensible (the sight of savers struggling to open accounts in Northern Rock must have shaken the faith of every committed free-marketeer); he has conceded that taxes might have to rise given the ‘mess’ his party will certainly inherit. In other words, he is all at sea. The banking crisis has undermined the whole edifice of Tory policy, which was founded on high levels of public expenditure plus a deregulated economy – i.e. exactly the same assumptions as New Labour’s, but tweaked in an even more free-marketish way.

The events of the last few days, however, have driven him far from free-market triumphalism. In fact, he has had little option but to support the public recapitalisation of the banks. The banks themselves want it and nothing else seems likely to restore the money markets or the mental balance of increasingly irrational stock traders. He has done this with reasonable aplomb; even trying to snatch some moral credit by appearing as the scourge of the money-lenders; something the City probably won’t forget. But we don’t know whether this is merely a tactical switch – to be abandoned when the good times return – or an expression of genuine doubt about his political inheritance.

In either case Cameron needs to accept that Thatcherite Conservatism is not the only form of Conservatism, and doesn’t have a unique political legitimacy. What is the function of the Conservative Party? It is to defend inequality: to make acceptable the social and economic unfairness inherent in a predominantly capitalist economy; to preserve the interests and privileges of social elites. But historically it has not been committed to a particular strategy to fulfil these aims. Thatcher appears to have thought that she was the first ‘proper’ Tory prime minister since Chamberlain. But Chamberlain was not a proto-Thatcherite, and the predominant Conservatism of the last thirty years has been unlike any other in the history of the party. As its behaviour in the 1930s suggests, the party has always been prepared to allow an active role to the state if circumstances required. It has not always given primacy to the unfettered market: indeed, it has hardly ever done so. And it hasn’t always been the party of banking and finance – and to the extent that it has been, it was in its role as the party of property rather than of finance. In the past, powerful forces within the party have aimed to divorce it from finance. Joseph Chamberlain’s campaign for protection before the First World War had precisely this intention; by 1914 the protectionists had won control of the party – and they kept it in the interwar years. Baldwin and Neville Chamberlain were products of that campaign. In Chamberlain’s case it simply ran in the family.

The Tories have had recourse to many specious slogans in the defence of inequality. One was ‘fairness’. Believing that Conservatism actually stood for fairness was doubtless naive on the electorate’s part, but it wasn’t wholly absurd. Until recently the party was reluctant to be seen sanctioning displays of conspicuous unearned wealth, but the difficulty with the economics it has espoused in the last thirty years is that unfairness and the display of conspicuous unearned wealth are intrinsic to it. That is its point. And this is what landed the party in so much trouble in the 1990s. There are no doubt many explanations for the debacle of 1997, but the deliberate abandonment of ‘fairness’ and the open cultivation of unearned wealth was one. For a time Cameron could get away with being in a muddle. That he is not Labour is his strong suit, just as not being Conservative was Blair’s in 1997. But as he gets closer to the election and, even more, if he wins it, muddle will become increasingly disabling. The policies to which he is naturally drawn will almost certainly be discredited and in any case won’t work. If, on the other hand, he comes to see that the party has other traditions, less heretical than neo-Thatcherism, he is unlikely to lose support among the electorate or his own party membership. If he doesn’t, he risks either losing the next election or leading a government even more unsuccessful than the present one.

Events of the last year or so – certainly since the run on Northern Rock – have imposed several almost inescapable obligations on any responsible government. The first is the restoration of the regulatory systems that were set up in most Western countries just before or just after the Second World War. Everything suggests that light regulation or self-regulation of financial institutions never works. In the General Theory, Keynes said he expected the state increasingly to determine the patterns of investment because the state, unlike everyone else, can take the long view. Keynes went further than we would want to go, but it is surely correct that among economic actors the state is best placed to arbitrate between differing and often antithetical economic interests and best able to regulate financial systems dominated by short-term decisions. What has happened in Britain and America is that the state has abdicated its responsibilities to such agents as the Financial Services Authority, whose regulatory touch has indeed been light. The question is how much of the regulatory regime can be re-established. Demutualised mortgage lenders can be remutualised only with difficulty, but they should at least be subject to adequate regulation, whether by the Bank of England or the FSA. Even if it is unlikely that the present political class will entirely restore the credit discipline of the 1950s, when governments controlled access to credit by fiat, something like it seems unavoidable.

The second inescapable obligation is the return of housing to its proper function: as providing places to live in rather than to speculate on. The relationship of housing to politics in both Britain and the United States is not fully understood even by those who transformed it. They don’t understand it because that would require confronting awkward facts about Anglo-American democracy. Fundamentally, private housing has become a compensation for the increasingly gross maldistribution of income. Inadequate incomes mean that large numbers of people don’t have access to the style of life that has always been the ultimate justification of neoliberalism and to which, reasonably enough, they now believe they have a right. What does give them access to it (in the short term) is credit. But credit has to be secured, and that’s what housing does. However, it works only if house prices keep rising and people have enough income to repay debt. When prices stop going up and people can no longer repay what they owe, the financial system begins to disintegrate. This is what has happened; and it has happened because we have replaced something like social democracy with credit democracy, or universal access to credit, and credit is a thoroughly inadequate substitute because sooner or later it has to be repaid. Which means that people’s incomes have to be sufficient to repay it, and in many cases they aren’t. What we have put in place is a dynamically destructive cycle. The number of houses is rationed in order to force up prices; people buy houses in order to secure credit on the strength of those prices; this encourages a heady belief in perpetual profit and thus both risky lending and risky borrowing; this renders the banking system unstable; and lending both to individuals and among banks then collapses. Such a cycle involves a paradox. Since these credit democracies still hold elections, governments are forced to underwrite savers at the expense of creditors and stockholders. And if savers are also small shareholders, as many are, the price they pay for protecting their deposits is the devaluation of their shares. This is absolutely not what was originally intended. The rationing of house building has one other consequence: it means that many cannot acquire somewhere adequate to live.

As a way out of this, stricter regulation, though necessary, is not enough. Governments must restore house building to something like postwar levels. When Richard Crossman was housing minister in the 1960s, some 400,000 houses were built every year, most of them council houses. In the last few years the number has scarcely exceeded 150,000. This year it is unlikely to reach half that level, and little of it will be social housing. Increased house-building programmes would both stop the development of credit bubbles based on artificially inflated house values and would have a ‘public works’ effect as an expansionary mechanism should the economy go into serious recession. The housing market obviously has to be restored – some want to sell and others want to buy – but not on the pattern of the last thiry years.

Governments must also reduce the demand for private credit. Since it is unlikely that people will lower their lifestyle expectations very much, and since falling house prices diminish their value as security, the only way demand for credit can be reduced is by increasing the income of those who want it. That is something any British government would hate to do because it involves redistribution, which in turn involves the taxation of high incomes. But if there isn’t to be some form of income redistribution, we will be back on the same old treadmill.

British governments, of whatever party, should also think carefully about our relationship with the United States. It is largely one-sided, has been very damaging and has left the political class in a world of illusions, a world where above-weight-punching is thought indispensable. Gordon Brown has been careful to emphasise that the banking crisis had its origins in the US. In one sense that is self-evident: almost any crisis in American banking is going to be a crisis in Europe. But it is an error to assume that the lending and borrowing practices of the demutualised societies in Britain, or Brown’s role in encouraging those practices, were immaterial. The run on Northern Rock was, after all, the first and so far the only serious run on any bank anywhere. Equally immaterial, Brown would like us to think, is his own profound admiration for the economic and financial system of the United States. Although our own bankers hardly needed it as a model, it has been New Labour’s model, whether Brown admits it or not, as it has been the Conservatives’. If the crisis induces the government to increase its distance from the United States and display greater scepticism as to its financial and economic virtues, that is only to the good. But it will be difficult for New Labour, since the ideological superiority of the US over ‘Europe’ has been central to its formation. And it will be even more difficult for the Conservatives. If anything, their illusions are stronger, heightened by the party’s infantile and dangerous Europhobia. It has been under Cameron (who must surely know better) that the Conservatives have threatened to withdraw from the Christian Democratic grouping in the European Parliament and join the ratbags of the extreme right. Cameron might still be the favourite to win the next election, but the last few weeks, to the extent that they have forced disagreeable choices and unpalatable facts on him, have tested him more than anyone else.

Ross McKibbin is a fellow of St John’s College, Oxford, and the author of Classes and Cultures: England 1918-51. His edition of Marie Stopes’s Married Love is published by Oxford.

Tories in queer hypocrisy shocker!

Ellie Keen — Sun, 05 Oct 2008 20:29:54 +0000

So now the Tories are courting the pink vote. Big surprise. But the notion, promoted even by the BBC, that gays might have a ‘duty’ to vote Conservative is baffling.

They’ve wheeled out Margot James, PPC for Stourbridge and noted deep-blue dyke, to tell us all why we need to vote Tory. This is the same Margot James who did not stand as a gay candidate at the last election, and who has been heard saying that she hoped her partner’s name, Jay, would be mistaken for that of a man by reporters. Ms James’ parroting of the party-line at the Stonewall event yesterday goes something like this:

“Gay people are net contributors to public services through their taxes, because very few of them have children.

“I think gay people have got more angst on this issue than anybody else because gay people are paying in, through their taxes and actually using far less of the NHS because they tend not to have families, less of the education system for the same reason and all the more reason to be angry with this government for the waste of their taxes.”

Translation: “Everyone knows you faggots hate kids! So vote for us – we hate kids, too!’

The suggestion that homosexuals do not have ‘families’ is both degrading and manifestly false. I happen to live in a massive multi-sexual household of six. None of us are related by blood, but we consider ourselves family. All of us, furthermore, have mothers, fathers, brothers and sisters and all of us feel that – despite our sexuality – we are just as invested in other humans as anybody else. Me and my big queer family are appalled by this throwaway rhetoric, at a Stonewall event, no less.

The logic of the tory tax argument also falls down when the ageing society is brought into play. Sure, homosexuals may, on average, raise fewer sproglets than their het friends, but this makes it all the more important for us that we live in a society that invests properly in healthcare, elderly care and the pensions system. Without the dubious surity of grown-up kids to wipe our octogenarian posteriors, we are going to need a government that invests in our care – a government that values the contribution we make as members of society enough to make public spending a priority.

The main tory line, however, remains that you and I should vote Conservative because, well, there are quite a lot of gay conservatives. Newsflash: there have always been gay tories; there have been gay tories before the word was even invented. What there have never been are tories promoting a gay agenda. In recent years, tory MPs have, for the most part, had an appalling voting record on queer issues in parliament – vital issues like civil partnerships and the age of consent. The tories are quite happy for us to carry on shuffling in the dark. If they’re gay, too, they certainly haven’t traditionally wanted the world to know about it. The tory closet door remains firmly shut. And no wonder, this being the party that introduced and tried desperately to save Section 28 of the Local Government Act, 1988.

Just a reminder: the amendment stated that a local authority “shall not intentionally promote homosexuality or publish material with the intention of promoting homosexuality” or “promote the teaching in any maintained school of the acceptability of homosexuality as a pretended family relationship”. Ian Duncan Smith and a great deal of the tory party faithful spent 2003 trying to save this disgustingly homophobic piece of legislation. Nobody has apologised for that, and the silence of top conservatives over their shocking record at the Stonewall event stunk of hypocrisy.

I am not suggesting that just because you like a bit of same-sex action you absolutely must be a political radical. Not at all. Not one jot. In fact, I’m grudgingly of the opinion that one thing the 1990s were good for was freeing gay men and women of the grinding obligation not to also be bigoted fuckwits if they so chose. But bigotry and a forward-thinking queer agenda have never gone hand in hand, and if one is queer – not just gay, which is a statement of fact, but politically queer – you do have a duty to vote for anyone else apart from the tory party and far right.

Queer politics involve more than a private penchant for cock and a public rhetoric of tax breaks for straight, married couples. Queer politics are politics which make it easier for the millions of men and women who choose to live and love outside of the heteronormative box to do so without cultural, practical or financial discrimination. Queer politics are inherently radical, and not everyone working towards them is gay, and not everyone gay has queer politics. Let’s not mistake gay – which is what the Conservative party has always secretly been – for queer, which it never will be.

2014: A Tory dystopia

JamieSW — Fri, 26 Sep 2008 10:14:39 +0000

The year is 2014. The Tories, led by David Cameron, are preparing to go to the polls, seeking a second term in government. Back in 2010 they crushed Labour in the general election, and promised to bring about a social transformation to match the economic reforms of the late Margaret Thatcher. And it’s true that four years of Cameron government have certainly brought many changes – they’re just not the ones the voters expected.

Cameron’s first term has been marked by two main themes: painful restrictions in public spending, primarily focused on the welfare budget, and a dramatic acceleration of privatisation in the public services. Many health services are now routinely provided by the private sector, and most new schools have been ‘new academies’, set up by private benefactors. But privatisation has been given far wider scope: the task of getting people into work has been privatised, prisons make a profit, and media deregulation and budget restrictions have sent the BBC into a spiral of decline.

This has not gone unnoticed by the public. Services that used to be taken for granted are no longer available. Others are harder to access. The quality of service has declined, and there is frustration that companies cannot be held to account for their mistakes. And there has been a series of scandals as corporate contract negotiators have ripped off the taxpayer for millions of pounds.

While privatisation has proved controversial, the big headlines have been reserved for the severe restrictions Cameron has put on public spending. The Tories found themselves in a bind after the election. They had promised to ‘share the proceeds of growth’ by reducing public spending as a proportion of GDP, but the global economic slowdown that began in 2008 was far more intractable and lengthy than they had expected.

Cameron’s chancellor, George Osborne, seemed to have little room for manoeuvre – the Conservatives had promised to match Labour’s spending on the NHS, and education was one of their flagship policy areas. So Osborne turned his sights on the welfare budget, the largest component of public spending, where cuts could be made without much political risk. The government launched a propaganda campaign deriding benefit scroungers, incapacity cheats and immigrants on state handouts.

This rhetoric proved popular, encouraging the re-emergence of the nasty streak in the party. But gradually news seeped through of the losers – those who had fallen through the now-threadbare safety net into destitution; vulnerable people, unable to speak up. The public noticed an increase in homelessness. Poverty, including child poverty, rose dramatically, regardless of the new Conservative rhetoric about helping the poorest. Crime ballooned, as it had under Thatcher, despite harsher penal policies. The Daily Mail carried screaming headlines about the ‘feral underclass’ and their lives of crime, drugs and prostitution. It was all a far cry from David Cameron’s promise to fix the ‘broken society’.

Workfare

The Conservative government’s earliest reforms were designed to make the benefits system more difficult to access and far more judgemental of the citizen, in order to reduce the welfare budget. Benefit claimants who don’t participate in back-to-work programs now lose their benefits. The penalty for not accepting a job offer is the denial of a month’s jobseekers’ allowance. Three months’ benefit is docked for refusing a second offer, and if a third offer is turned down then the allowance is stopped for three years. Furthermore, anyone who has received jobseekers’ allowance for two out of three years is required to do community service.

The policy has achieved its objective – it has saved money – but it has proved far harder to actually get people into jobs. Instead, large numbers have simply disappeared from the system and descended into a black-market world of poverty and hopelessness, causing further social breakdown.

Those that have taken work have found that unscrupulous employers are well aware of their situation. Afraid of being left without jobseekers’ allowance, the new pool of unqualified labour is in no position to question illegal practices and poor conditions. They simply have to grin and bear it, clinging onto jobs with zero prospects for money that is never a penny over the minimum wage (which has risen far slower than inflation).

The problem has been exacerbated by the continuing long-term decline of manufacturing. The proportion of skilled employment has fallen, and the economy is now dependent on unskilled jobs. Eastern Europeans previously occupied many of these, but there has been a trend for migrant workers to return to their home countries – the workfare labour army has taken their place.

The Tories believed that the real treasure chest in the welfare budget was the money being spent on incapacity benefit. They thought that they could save more than £3 billion a year by 2014 – like New Labour before them, the Tories had a preconceived notion that many, if not most, of the two and a half million people claiming incapacity benefit were well enough to work. So the first step was a massive programme of ‘work capability assessments’, not just for new claimants (New Labour had already instituted much tighter criteria here), but for all existing incapacity claimants too.

This was a vast and hugely costly exercise, but the results were not what the Tories wanted. It has proved extremely difficult to significantly reduce the numbers on incapacity benefit. Those found partially capable of work by the assessments have been placed in jobs that are often inappropriate and stultifying.

It is the mentally ill who have suffered the most – because of the nature of their illnesses, their attendance at work is impossible to guarantee and confidence easily dashed, especially when the resources are not there for the kind of one-to-one support needed. For some, the harshness of the new regime has exacerbated their condition. So, despite making life very unpleasant for people on incapacity benefit, the Conservatives have not managed to make big spending reductions.

Poverty, tax credits and marriage

The Conservatives intended to use the savings from benefit cuts for other social ends, such as making marriage more fiscally rewarding and tackling poverty. But even if this had been possible, the problem of poverty has had its own impetus.

In opposition, the Tories were critical of Labour’s tax credits system, and so it has been no surprise that the value of tax credits has diminished. Child poverty is a hot issue. The Conservatives never committed to Labour’s target of ending child poverty by 2020, and this has served them well, as there is no way of achieving the target without massive investment. New Labour had believed the solution was to increase dramatically the number of parents in work, and to this end they ended income support for lone parents with children over the age of seven just before the election. But even before this change, low pay meant that two million children were living below the poverty line in working households.

Under the Tories, little has been done to combat bad employers. People have simply been moved from workless poverty to in-work poverty, and their inflexible, poorly paid jobs have undermined family life – the very thing that Conservatives said was essential to fix the ‘broken society’.

Cameron and Osborne championed marriage as one of their distinctive themes in the 2010 election. They promised to eliminate what they called the ‘couple penalty’ in the tax credit system. But the marriage issue came back to bite them when several cabinet ministers later went through messy divorces – to the delight of the tabloid press.

Housing

Some families have stuck together, but more out of necessity than desire. The ever-rising waiting list for dilapidated social housing has led to overcrowding in bad, privately-rented accommodation that has drawn parallels with Victorian times. But the most significant change has been to abandon the idea of mixed communities.

Particularly in London, under Ken Livingstone, it was accepted that the relationship between social housing and poverty, ill health and poor-quality education should be tackled by planning for mixed housing provision – having rich and poor living side by side, doing away with so-called ‘sink estates’. A clue to the different direction the Tories would take came immediately after Boris Johnson was elected as London mayor in May 2008: one of his first acts was to allow Conservative-led Hammersmith and Fulham council to cut all planned social housing from a new development in White City.

Under the banner of ‘decentralisation’, the Conservatives have reformed the housing revenue account – the mechanism Labour used to redistribute housing money from rich areas to poor, causing Conservative councils to claim that they were being ‘robbed by Whitehall’. Already-struggling estates have been left to deteriorate, while the more affluent Tory-controlled areas have built up surpluses. For inner cities, this has meant a return to the very worst kinds of neglect seen in the 1980s and 1990s, with huge backlogs of repairs. ‘Shameless estates,’ as they have become known (the Shameless TV show is now in its 17th series), are areas where unemployment is rife, prospects poor, and health bad.

Crime

With so many disappearing from the benefits system and living in poverty, often on abandoned estates, it came as no surprise that crime rocketed – except, that is, to the right-wing press and the Conservatives. They had thought that a tough penal system would deter people from breaking the law. Certainly, the small armies of mainly young people doing community sentences, dressed in their distinctive overalls designed to shame, are a visible symbol of punishment. But they also draw attention to an uncomfortable question: why are there so many criminals?

The prison population, already sky high under Labour, has grown exponentially. The Tory government has changed the sentencing rules so that judges set a minimum and a maximum sentence, ending automatic release. They had anticipated that this would lead to a 10 per cent increase in the average length of determinate sentences, but they thought this would be compensated for by a much-vaunted ‘rehabilitation revolution’, to be brought about by the involvement of private companies. It wasn’t: the effect of the Conservatives’ other social measures contributed to the sharp increase in crime, and that, in turn, kept prisons overcrowded, despite a prison-building scheme. This made rehabilitation work much more difficult.

Pensions and social care

For the elderly, times are hard. The pensions system has not yet reached complete crisis – that will be for the next generation – but the state pension has fallen further behind earnings, and pensioner poverty is rife. The Cameron project’s political strategy has been aimed at younger people from the start, as can be seen in George Osborne’s call for ‘fairness between the generations’ back in 2008, which suggested that the young were bearing the burden of an older nation. The elderly were never at the top of the priority list.

The most severe consequences have been in social care. The Tories have not cut spending on social care, but neither have they raised it to meet the enormous extra need. Since Derek Wanless’s social care report for the King’s Fund in 2006, it has been known that costs would rise from £10.1 billion in 2002 to £24 billion in 2026 just because of the ageing population. But under both Labour and the Conservatives the English government (unlike its Scottish counterpart) has been unwilling to take responsibility. The question has therefore been whether the state should ensure that the poorest in need of care get as much help as possible, or simply protect the assets of those who have property wealth.

The loudest voices in the debate have been the middle classes, understandably worried that they will have to sell their houses to fund care. So the Conservatives have looked for market-based solutions that protect property. For those without any assets, the quality of social care is in decline. It is the worst-case scenario – people have to get very poor or very ill before they can receive care that is patchy and poor quality.

The situation has attracted much political flak – and not just from the left. Tory councils, still in charge in most of the country and quite a force, have been under pressure to meet everyone’s needs with inadequate resources. Their rebellion has placed the issue in the spotlight, and it is looming large in the 2014 election.

Environment

The gravest consequence of the dearth of public investment has been the lack of progress on climate change. The ‘vote blue, go green’ slogan was a key part of the Tories’ rebranding exercise in opposition, but in 2011 the PR strategy backfired when journalists noticed that Cameron’s personal wind turbine kept on turning even when there was no wind. It transpired that it was powered by mains electricity, and was just for show.

Even so, Cameron has continued to make worthy speeches on climate change and has pushed for more international action. Unfortunately, the measures needed to avert climate catastrophe are ultimately incompatible with Conservative market philosophy.

The key area has been energy policy. The Tories went into the 2010 election with an ambitious plan for the micro-generation of energy, with German-style feed-in tariffs allowing individuals to sell sustainably-generated power to the national grid. In some pockets of the country, this has worked very well. However, coverage has not been national, and it has allowed the Conservatives to pose as a green party without bringing about a fundamental transformation of the energy sector.

Such a transformation would require a major role for the state, with massive investment in renewables, carbon-capture technology and energy efficiency. Britain’s private energy companies are simply not up to the job. There has been huge under-investment in energy infrastructure ever since the Conservatives privatised the sector in the 1980s and 1990s, and we are now starting to see the results.

Today, policy is adrift. Frequent climatic disasters keep the issue close to the top of the agenda, but all of the major parties still see the world strictly through the prism of the market. The political impetus to tackle climate change is lacking.

Privatisation

That same prism has refracted the state into a privatised entity. The second main theme of Cameron’s term in office, after the spending restrictions, has been the sweeping privatisation of public services. In many ways, it was laid out on a plate for him: New Labour fatally undermined the idea of public provision and changed the funding structures in areas such as the NHS, ready for an influx of private companies. It was as if New Labour had arranged all the dominoes in line, inviting the Tories to knock them down in one go.

Nowhere was this truer than in the English health service. By the time Tony Blair resigned, the English NHS was run on a payment-by-results basis, putting hospitals in competition with each other. Huge corporations such as Virgin and United Health were running GP surgeries, with a select few contracted for the crucial commissioning function, giving them control of billions of pounds of public money. (Blair, incidentally, has just taken up a £450,000-a-year part-time job as president of the Washington-based Institute for Christian-Muslim Relations, following his successful stint with the Exxon-sponsored Iraqi Freedom Foundation.)

It was difficult to see how the Tories could do more damage. In fact, they have managed to go even further down the market route. They have instituted what they call a ‘true payment-by-results system’ whereby hospitals are paid according to health outcomes rather than activity. This has been a disaster. Hospitals have no idea how much money to expect, leaving them with no ability to plan. The bureaucracy required is immense. League tables are produced for every conceivable treatment, with unintended consequences – private companies misreport their performance, as their profits depend on it, while NHS facilities are routinely pilloried in the tabloid press for supposedly poor (but in reality more honest) results.

All NHS hospitals are now foundation trusts, and, freed from Gordon Brown’s rather weak restrictions, they can now borrow like private hospitals. (Since resigning as an MP, Brown has focused on his writing, but his publisher has cancelled the release of his latest book, Vision, the follow up to 2007’s Courage.) Unprofitable treatments are no longer available. Again, this process began under New Labour with the denial of hernia operations in Oxfordshire, but it has greatly accelerated.

Conversely, the market leads hospitals and corporate-employed GPs to find ways to treat lucrative cases while shunting others aside. Also common is the levying of fees for extra services – some hospitals have even attempted to charge ‘bed rent’.

The public has perceived a degradation in service, but there has been no commensurate reduction in the cost of the NHS – indeed, the enormous performance bureaucracy created by the Tories, combined with the billing, contracting and accounting necessary in a market, means that costs are rising. Curiously, the public places the blame for this not only on the Conservatives but also on the NHS itself, feeding the frenzied calls of right-wing commentators for the complete handover of the service to the private sector.

Education

The same privatised vision informs the Conservatives’ education policy. In England the key Tory idea has been the establishment of ‘new academies’ (although they aren’t really much different from the old academies). They can be set up and run by companies, charities, trusts, voluntary groups, philanthropists or co-operatives, and all the same fears attached to New Labour’s academies still apply, especially in regard to sponsorship and the capitalist – and sometimes religious – ethos of the schools.

New academies are outside the national curriculum and independent of the local authority – in fact, they compete with local authority schools, as their funding depends on the number of children who attend. They can be established even in areas where there is a surplus of school places. This is justified on the grounds that it ‘drives up standards’.

While the Conservatives have drawn on the Swedish example of diverse schools, studies have shown that Finland’s fully-comprehensive system is more successful. Although new academies are supposed to be non-selective, the schools are outside local authority control and deal with their own admissions, which has inevitably led to a more socially-segregated education system.

The policy’s only saving grace has been that there were not many people who wanted to establish a new academy. They are still not allowed to make a profit, so business wasn’t interested, and the Tories were surprised to find that parents were largely indifferent to the idea of opening and running their own schools.

Wider education policy has been marked by inconsistency and contradiction. Despite the rhetoric about ending central control, the Conservative government has insisted that schools must have a formal uniform, place children in sets, and use synthetic phonics. It has also required the teaching of a skewed version of British history that amounts to propaganda, designed to stir national sentiment.

Public dissatisfaction in England has been exacerbated by the contrast with the rest of Britain. Even under New Labour, the Scottish Parliament and Welsh Assembly set themselves against privatisation in health and education, and with the Tories in power the disparity has become even more pronounced. It is now a common theme of news coverage and pub conversation that the Scottish and Welsh are getting a better deal.

Welfare privatisation

As well as squeezing the benefits system, the Conservatives have privatised its job placement function. Jobcentres now grade potential benefit claimants according to their capability for different kinds of work and refer them to a private company to find a job. This fundamental reshaping of the welfare system built on New Labour’s reforms – Tory ministers defend their policies by saying they are only continuing James Purnell’s work.

The ‘payment-by-results’ system, under which companies’ funding depends on getting people into jobs and keeping them there, is meant to provide the state with the levers it needs to control the process. But it doesn’t work like that. The Tory plans were largely based on the Australian system introduced by the Howard government, but in that country the profit motive produced perverse outcomes and fraudulent behaviour. There was no real market, because the ‘customers’ (unemployed people) didn’t pay for the service and couldn’t choose to switch between companies. Although private providers were paid by results in Australia as in the Tory scheme, there was minimal competition once a few companies became dominant. To compensate for the failure of the market, the Australian government was forced to tighten regulation and central control – undermining the original aim of cutting bureaucracy and costs.

The Conservatives chose to ignore this evidence, and promptly repeated the Australian experience. They also faced an outcry from the voluntary sector, which had been promised a key role delivering job placement services but didn’t have the capital necessary to win many contracts. The sector belatedly realised that its involvement had been used as PR cover for privatisation.

Prison privatisation

Conservative rhetoric on prison reform also emphasised the voluntary sector, but the reality has been the privatisation of prisons. To use the jargon, there is now an ‘offender management marketplace’. All public prisons have been made into Prison and Rehabilitation Trusts, along the lines of Foundation Trust hospitals, with financial independence. The government has encouraged the private sector to build more prisons, which then compete for the same funding as the public prisons through a tariff system. Prisons are paid a set amount for each convict, and get a premium if a former prisoner doesn’t re-offend for two years. Newly-released prisoners are handed over to the private workfare companies to be put into work.

But if the market fails in welfare because the jobseeker is not a real consumer, then it can hardly work for prisoners, whose defining characteristic is a lack of choice over their destiny. Re-offending rates have proved stubborn. Ex-prisoners don’t seem too bothered that their activities might cost their former institution its premium tariff.

The media

The erosion of the public sphere has even spread into the broadcasting industry. The Tories have never been fans of the BBC, and the snappily dubbed ‘multi-channel, multi-platform era’ has provided the perfect excuse for Cameron (a former director of corporate affairs at Carlton Communications) to undermine it.

The Conservatives argued that it was unfair to expect commercial channels to carry current affairs or children’s programmes without a subsidy. Thus, the licence fee has been ‘top-sliced’: a proportion of the money is now distributed to commercial channels, leaving the BBC with less revenue and forced to close down channels.

Impartiality requirements on non-publicly funded broadcasters have been relaxed, meaning TV news on commercial channels can now wear its biases on its sleeve. While the BBC’s news still has to be impartial, all the editorial pressure now comes from the more boisterous and slanted end of the market, pulling even the publicly-funded newscasters rightwards. Newspapers have opened stations that follow their editorial line – and worse, Rupert Murdoch is in the process of launching a UK Fox News. The BBC has seen itself relegated to the role of making up for market failure, as it gradually loses out against its competitors. This has eroded faith in public broadcasting. People no longer expect to be treated as citizens by the broadcast media – merely as consumers.

The labour movement

The hurricane of privatisation has been opposed tooth and nail by the trade unions, and for good reason – union power is overwhelmingly centred in the public sector. Foundation hospitals, prison trusts and new academy schools have opted out of national pay bargaining agreements. The new, hostile employers make it difficult for unions to recruit members working for the private organisations that now deliver so many services, such as the health corporations or job placement companies.

Most of Margaret Thatcher’s anti-union legislation remained in place after 13 years of Labour government – it was nice of them to save the Tories the job of reintroducing it – but that hasn’t prevented further attempts to undermine the unions. In the first year of Cameron’s premiership, Boris Johnson, who had been kept on a tight leash before the 2010 election, was given free rein to take on the RMT transport union. He believed this would be popular with commuters. A drawn out battle ensued as the RMT surprised the Tories with its doggedness, and the dispute marred Cameron’s early period in office, casting an image of social strife.

Since then the Conservatives have been more subtle. Behind the scenes, the government has encouraged public sector employers, particularly in the NHS, to derecognise unions in areas where branch membership is not what it might be. After disputes in the health service and the fire brigades (where the Fire Brigades Union is fighting another wave of ‘rationalisation’ by cash-strapped local authorities), there is talk of strike bans in essential services.

A more fundamental change has been the end of direct union funding of the Labour party. Labour had the chance to settle the party funding issue before they left office, but lacked the political energy. So, under the guise of cleaning up politics, the new Conservative government outlawed donations of more than £50,000 from individuals, companies, organisations and trade unions, rejecting desperate pleas to allow individual union members to pay an optional affiliation fee as part of their annual membership. This was a financial disaster for Labour, as 90 per cent of the party’s money came from the unions in 2010.

Former Labour affiliates were left with a sudden surplus of cash that they could use for political ends, but only as third-party campaigning organisations. So, as the 2014 election looms, the big unions are agitating for a rise in the minimum wage and supporting candidates who back it, without directly mentioning the Labour Party. In many ways, this has made the unions higher-profile, more vibrant campaigning organisations.

For Labour, the change has made the party reliant on its members – and wealthy donors. This has pulled it in two different directions, causing tensions that have not been resolved as we go into the general election. The party has to compete for members in a political marketplace (an analogy the Conservatives are delighted with), and has found it easier to attract supporters by sounding social democratic and mildly left wing, keeping quiet about Blair and Brown. But the big £50,000 individual donations, which have started to pick up after four years of Tory government, generally come from unreconstructed Blairites who still want Labour to be like the US Democratic Party.

One of the great problems for Labour in opposition has been its inability to make political capital from unpopular Tory reforms. Whether it’s NHS privatisation or the brutal tightening of welfare, Labour has no credibility, thanks to its record in government. The Conservatives’ most effective defence has been to say ‘we’re only finishing what you started’. Without this handicap, Labour would be far more likely to win in 2014.

Tory England

Even if Labour can scrape back to power, though, its long-term future in England is threatened by developments north of the border. The SNP narrowly lost the first referendum on Scottish independence in 2010, throwing Alex Salmond’s party into temporary disarray. But seeing a Conservative government in London soon revived the nationalist cause, and opinion polls now suggest that the Scottish public will vote for independence if given another chance – a referendum is expected imminently. Welsh nationalism is also on the rise. (See ‘Break up of Britain’, p33.)

The secession of Scotland would leave a very Conservative England – a Tory dystopia of a neoliberal, privatised state, dominated by a political consensus that stifles any hope of challenging the market. It would be a truly broken society.

Yet there are rays of hope. It was not public clamour for right-wing policies that brought the Tories to power in 2010, but recession and an apparently bereft Labour party. Cameron’s programme in office has been blunted – sometimes by lack of public interest, sometimes by obstruction – and where policies have been put into action, they have rarely worked as expected. The results are already generating opposition, and how this opposition will be expressed is the key question for the future.

Alex Nunns is a Grammy award-winning rock star. His band’s fourth album, Singing the Blues in Red, was the biggest-selling record of 2013

With thanks to the Fire Brigades Union for their support

Stripping the Tories

Ellie Keen — Thu, 18 Sep 2008 23:24:23 +0000

Luckily enough for the Tory party, quite a few international markets went boom on the day that this story broke. Strip club vouchers offering discounts for Tory delegates, in with the brochure for the upcoming Conservative Party Conference in Birmingham.

Let’s not wallow around in anyone’s gloopy moral residue. Sex work isn’t nice work, but it isn’t immoral, and a visit to a strip club is simply a statement that you are happy to cash in on the privileges of your wealth and gender in the most sickly self-indulgent of ways, and that you are comfortable enough in that privilege that you don’t mind buying other people’s bodies for your personal sexual gratification in a room full of your colleagues. Hey, there’s a big market for that sort of thing, and markets, as we’ve all been reminded this week, are amoral, not necessarily immoral. Markets merely allow the flow of wealth and power to seep a little more smoothly towards the top. And hey, since it’s the annual Tory piss-up and we’re all very pleased with ourselves, why not flaunt that philosophy, especially if, in the words of Ian Taylor of Marketing Birmingham, the vouchers were ‘produced to help maximise the economic impact for local businesses’.

What angers me about this sordid little story isn’t the fact that Tory MPs might enjoy visiting strip clubs. Statistics suggest that well-paid, powerful white men will number most patrons of these newly-licensed ‘entertainment establishments‘ (A legal loophole means that since the introduction of the Licensing Act 2003 lap dancing clubs currently only require a Premises Licence for the sale of alcohol to operate, despite being part of the commercial sex industry. The number of lap dancing clubs across the UK is estimated to have doubled since 2004). There is always, always going to be a market for the more culturally and fiscally powerful to buy sex. What adds insult to time-worn injury, however, is the fact that it’s a buyer’s market. This was not an advertisement, but a voucher: a voucher offering conservative delegates a 66% reduction in entry price to Birmingham’s Rocket Club.

Now, these are bloody hard-working girls. The women who staff strip-clubs and brothels don’t do it for kicks, whatever the makers of Secret Diary of A Call Girl may say. They do it for the money, and they earn every penny of that money by laying the most intimate parts of their personhood on the line and risking their physical and mental health every day within a profession that earns them ostracization from friends and family. These women deserve better than to be offered up as discounted goods. These women deserve to be treated with respect.

In the vast majority of cases, women don’t become sex workers – prostitutes, lap-dancers, streetwalkers, strippers or porn stars – for the kicks. No, they do it for the money. They do it because there is simply no other way to earn that scale of living wage as a woman under 30 in the current UK job-market. In the Guardian today, most commenters seemed to miss the point of a heart-rending article by a prostitute and single mother. Her point was that she became a prostitute because her former job as an office PA was not paying her enough to support herself and her two children and was, at the same time, taking up so much time and energy that she barely got to see them. Her decision to go into full-time sex work was, as it is for many women in her situation, entirely an economic one.

We need to start respecting women’s work, whether or not they have made the difficult decision to enter the gloomy world of sex-work. If Tory MPs such as Anne Widdecombe really feel that the inclusion of the voucher in the brochure represents the party ‘throwing every value out of the window,’ if they don’t want to face the escalating realities of sex work for women of every class and background in the economic real world of contemporary Britain, then maybe they should start to analyse why women make these choices.

Eighty three per-cent of sex workers, according to recent studies by Object and Fawcett, want to leave the profession; but thousands of women every year make that career choice, and they make it because the country in which we live is currently fostering a gruelling long-hours culture in which women make up the bulk of lower-paid, exploited workers. Women are still paid 17% less than men in full time work and 33% less in part-time work, and when they get home they are still expected to perform the bulk of domestic chores, especially if they are single parents, as many sex workers are.

But the Tory delegates who have been so warmly invited to enjoy the bodies of the low-paid women of Birmingham at a discount price do not think this is a priority. In fact, a key part of current Tory policy proposes an end to equal pay audits, insisting that ‘only those firms which lose sex discrimination cases will be subject’ to them. Until the Tories get serious about offering low-paid workers decent living wages, then any paltry statement blaming the City of Birmingham for putting entirely appropriate adverts in the back of their brochures will be crass hypocrisy. Until that day, they may as well schedule complementary sessions with hookers into the official programme and stuff a few fivers into Lady Thatcher’s pearly g-string whilst they’re at it. Any less is pure hypocrisy.

Welfare Reform: what's the deal now?

Ellie Keen — Mon, 18 Aug 2008 00:00:00 +0000

Ooh, James Purnell. Those kindly eyes, that roguish smile, that cheeky little pro-war voting record. He can call me any time, but meanwhile, guys and gals, let’s satisfy our post-adolescent political lust by calling the Secretary on welfare reform.

The national drive towards reform of the benefits system has been gathering momentum over the past 18 months, with the pace stepping up from January when the Conservative party released ‘Work for Welfare’, a short proposal for some pretty draconian reforms to the current welfare state where all ‘able bodied’ men and women would be expected to work (the fact that one in four claimants of incapacity benefit are severely mentally ill clearly does not register with tory stiff-upper-lippers). Hot on the heels of this report came Purnell’s green paper, the rather more progressively titled ‘No One Written Off: Reforming Welfare to Reward Responsibility.’ Cue a tiresome little inter-party squabble with a lot of bitchy back-handing to the BBC over just whose idea it was to bring the British welfare system into the 21st century.

On first reading, both reports advocate a greater emphasis on individuals taking responsibility for and ‘earning’ their own benefits; both want to encourage more people into work and provide better checks to do so; both want a clearer distinction between the genuinely needy and those relatively able to work, those whom a medieval government might have called ‘sturdy beggars’. The net effect of the reforms is that in October 2008 a new Employment and Support Allowance will be introduced for new claimants of Incapacity Benefit and other benefits before being rolled out to all recipients.

There, the similarity between the proposals ends. It must be made absolutely clear that Purnell’s green paper treads an extremely fine line between positive reforms that empower people to work and victimisation and further isolation of already poor and vulnerable sections of society. For now, in the months pre-instigation, the proposals come through relatively successfully, with welcome additions such as a long-overdue simplification of the benefits claiming system, making it easier for genuinely needy claimants to access vital support. Until you’ve sat up with a severely physically and emotionally disable friend and watched them crying in frustration as they try to fill out the forms, you may not understand quite how vital this particular change is. The old system was designed to be complex in order to discourage fraudsters from bothering; the new system will build in more proactive checks. And about bloody time too.

The tory proposals, on the other hand, are replete with the rhetoric of disdain for the poor and needy. In the conservative worldview, people need to be stopped at all costs from ‘playing the system’; the government has a ‘moral right’ to ‘protect families’, the practical upshot of which is tax benefits for married couples, as if a silver ring ever solved anything. Quite apart from the fact that Labour’s report is massively longer and more in-depth, quite apart from the fact that it answers the conservative challenge with the diligence of a progressive government purposefully handling the difficulties of practical power, we cannot – simply cannot – have tory hardliners like Chris Grayling in charge of this delicate transitional period in the benefits system.

This welfare reform package is one that can only be successfully implemented by a socially aware, self-policing socialist party of the type that, at its best, Labour tries to be. Conservatives such as Grayling have claimed that Purnell’s proposals are a ‘straight lift’ from tory plans; they are not. If anything, the latest proposals represent a visionary re-working of a policy which, under the Tories, would further criminalise the working classes and drive hundreds of thousands into poverty, debt, addiction and despair.

Because the tories have far less idea even than the incumbent government of what real poverty really means. You can’t say ‘credit crunch’ with out baring your teeth into a snarl, and it’s going for the throat of benefit recipients trying to live on £40 per week. MPs demonstrating ‘belt-tightening’ by not demanding increases on their sixty grand salaries live in an entirely different world from people on JSA and Incapacity Benefit. The welfare state was never designed, as the tories claim, to allow ‘a young man to grow up’ knowing that ‘the state will support him’ whatever choices he makes: if you live on benefits, you are poor. Very poor, and you’ll stay poor unless your circumstances change. A life lived on benefits is a life on the breadline, a life replete with stress and starved of reward and acheivement, a life in many respects half-lived. The vast majority of people on state benefits are keen to return to work – the problem, is that many face tremendous obstacles in obtaining and retaining employment.

The conservatives’ mantra of small government, of decreasing state support in every arena in favour of ‘the family,’ will be massively detrimental to the real good that has been done in moving millions of people off benefits and over the poverty line in the past decade. David Cameron believes that:

‘The primary institution in our lives is the family. It looks after the sick, cares for children and the elderly, supports working people and the unemployed’ –

Woah there. Reading between the lines, doesn’t that mean that families should be doing the work of the state, just like they did in the pre-industrial era? Well, presumably they’re planning to reward domestic work financially, then, aren’t they, and take massive social steps to encourage social cohesiveness within all family structures, and provide equal benefits for civilly-partnered homosexual couples and married straight couples alike? No? Or, just for instance here, could it be another strategy to shove vital care structures such as ‘caring for children and the elderly, supporting working people and the unemployed’ out into the streets in order to save money? We’ve heard this one before. It was called ‘Care in the Community.’

Oh, yes. And tucked away in the pages of ‘Work for Welfare’ are some really juicy howlers, such as:

‘Equal pay audits will apply only to those firms which lose pay discrimination cases’.

Which is a logical and VITAL part of making the welfare state work for everyone, clearly. Only a progressive socialist government has the tenacity and social responsibility to make welfare reform work: we must work now to avoid handing a fledgling system based on ‘rights and responsibilities’ over to the tories, who will never understand in our lifetimes what it really means to be poor, sick and desperate.

Why David Cameron Blames the Poor

tim — Sun, 03 Aug 2008 21:47:00 +0000

David Cameron’s ‘blaming the poor’ speech in Glasgow may be more than just an attempt to placate the unreconstructed right of the Conservative party. It is not often recognised how far British public opinion has shifted towards a liberal individualist stance on social issues in recent years. In some ways we are more Thatcherite under New Labour than we ever were under the Conservatives.

Evidence from a range of attitude surveys points in the same direction. Sympathy for the poor, growing steadily stronger through the 1980s and early 1990s, has collapsed. By 2006 the situation was almost exactly reversed. The public is roughly twice as likely to attribute poverty to laziness or lack of will power now compared with a decade ago. The numbers thinking the government should spend more on the poor has steadily declined.

People are also much readier to accept the inequalities of the market. In 1997, slightly more people thought it unfair that those on high incomes could buy better health care or education than the rest of the population than took the opposite view. Now nearly twice as many think buying better health care or schooling is perfectly acceptable as don’t.

Various factors contribute to explaining the shift to the right in social attitudes. Our recent qualitative work examined how people discuss fairness and government services. A strong theme across our interviews was the acceptance of inequalities. While the better off should be expected to contribute in the same way as everyone else does (and tax avoidance by the super-rich was seen as just as outrageous as benefit cheating by the poor), there was little support for redistributive taxation. Such attitudes are buttressed by a strong and widespread belief that opportunities to succeed, while not entirely equal, are open to those prepared to make the effort across society. Why fleece the better off when they pay in just as much as anyone else, and anyway we all stand a reasonable chance of getting there if only we try hard enough?

Opportunity for all and tolerance of income inequalities are strong themes in political discussions and in public opinion. Turning that round, sharply progressive tax and direct interventions to help the most vulnerable become unacceptable. When it pursues such policies, the government is careful to do so by stealth. Perhaps the success of those ideas is reflected in the lurch to the right of public opinion. Cameron’s claim that ‘social problems are often the consequences of the choices people make’ is the logical extension of this view.

Out-thought by the Tories

Ellie Keen — Sat, 10 May 2008 21:12:41 +0000

We could be at a turning point in the political life of the country. The electoral alliance that brought New Labour to power is disintegrating. Popular indifference towards the government is hardening into outright dislike.

While the government pretends nothing is wrong, David Cameron’s new Conservatives are staking out ground that once belonged to the left, talking about a social recession, taking the ideological initiative, hungry to win. Look at some of the rightwing thinktanks and you discover a profound shift in Tory thinking. It seeks a break from Thatcher and Hayek. The project is significant: to build a basic emotional connection with the people. Last week’s results suggest it is beginning to work.

This new pro-social, compassionate Conservatism is intellectually backed up by a focus on fraternity. The left, they argue, is wrong to think fraternity is another word for equality. And the Thatcherites are wrong to think that liberty will take care of fraternity. Fraternity is about society, wellbeing, and relationships. The Labour government, it argues, has failed because it has abandoned the fraternity of ethical socialism in favour of state management.

The government’s response has been woefully inadequate: it argues that the Tories have no policies, or they’re old Etonians with a financial black hole in their plans. They’re copying us. We’ll scrutinise their policies, expose their elitism. We’re for the many, they’re for the few. But these arguments miss the point. James Purnell has come out fighting: “We have a vision of the good society that the Conservatives cannot match.” Yet this is precisely what the Labour government lacks.

Rather than dismiss Cameron and Boris as Eton toffs, we should ask why is it that they are connecting with people. This government has lost the language of ethical politics – relationships, values, even social justice. It does not discuss fraternity or a culture of care and empathy. It doesn’t know how to speak to people’s insecurities. Its silence over the super-rich is matched by the harsh language deployed against migrants or welfare recipients. It has no vision of a more democratic way of governing. The joys, pleasures and frustrations of everyday life pass it by. Faced with a crisis it triangulates rightward. Initiative after initiative blurs into a white noise. It offers to listen. The danger is it hears only the echo of its own jargon.

And yet Cameron’s Conservatism is built on a major contradiction. It believes in social justice but thinks the state is the problem. Markets are the solution to social recession, economic development and the ecological crisis. But as the credit crunch leads us towards recession, markets won’t deliver security, let alone social justice. Yet the government can’t exploit this contradiction, owing to its own blind faith in markets.

Its time to take on the new Conservatism. We have to expose its own tensions and weaknesses. We must also spell out our own version of the good society. First, we need to reclaim fraternity – it’s not about brothers, it’s about togetherness in adversity and in joy. It goes to the heart of the question of what being human means. Fraternity is about living with and for others, building unity out of people’s differences.

Labour must re-establish its belief in equality. Equality is the moral standard of fraternity. It is the ethical core of social justice. It holds that each person is irreplaceable and of equal worth. As the dust settles on these elections, Labour needs to rediscover its soul.

Jon Cruddas is Labour MP for Dagenham. Jonathan Rutherford is editor of Soundings journal and professor of cultural studies at Middlesex University

cruddasj@parliament.uk

Tories and New Labour go after the disabled.

JamieSW — Tue, 08 Jan 2008 18:47:01 +0000

The Tories claim they could get 200,000 people off incapacity benefits by requiring recipients to prove they can’t work and reducing entitlements. In light of New Labour’s goal of getting a million people off incapacity benefits by 2015, this seems small pickings. No wonder Labour accuses them of stealing their ideas (in reality, Labour has simply taken over old Tory policy nostrums). But, setting aside the rank authoritarianism and vindictiveness of such crackdowns, how achievable are such aims? The November edition of the Cambridge Journal of Economics, which is focused exclusively on New Labour’s economic management, deals with this question. Since the claim is that this number of people can be moved into work, the obvious answer would appear to be ‘no’. That New Labour has reduced the claimant count is without doubt, and while some of it is due to macroeconomic trends, it seems likely that much of it is due to reduction in access to benefits (‘welfare reform’) given the massive gap between the official unemployment rate and that registered by the ILO.

Cuts, interrogations, ‘support’

In this context, incapacity benefits refers to a wide range of receipts. Incapacity Benefits proper are received by 1.4m people; national insurance credits for incapacity by 1m; and Severe Disablement allowance by 0.3m. There are a further 0.3m on Disability Living Allowance who are not included in the overall count. The IB claimant counts are highest in the older industrialised areas of the north, and two areas in Wales have IB claimant counts higher than their working age population. This is associated historically with mass redundancies in the former mammoth industries of coal and steel. Claimants tend to be older, and male – perhaps in part because women receive pension at 60, while men don’t receive it until the age of 65. There has already been a reduction in claimants registered in 2004, for the first time in a generation, and if this were to hold, then the reduction by 2015 would amount to 200,000. On the other hand, population dynamics could see trends in the opposite direction – if IB claimants over fifty increase by the same rate as the over-fifty population, then the overall count will have 115,000 added to it. Overall, regardless of policy, the current flows extrapolated to 2015 would add 67,000 to the count. And, since women will have their pension age revised upward to 65 by 2020, the claimant count would be increased further.

In theory, there are enough ‘hidden unemployed’ in the IB claimant figures to reduce them by one million. The government’s proposed measures for dealing with this include precisely those recommended by the Tories – introduce compulsory work-focused interviews with the intention of sorting out those who can work from those who cannot. The benefit will be phased out for all but the most sick or incapacitated and replaced by Employment and Support Allowance, with a strong element of conditionality – recipients must accept forms of training and education designed to get them into work, for face financial penalties. And until they receive their Personal Capability Assessment, claimants will receive exactly what they would on the Job Seekers Allowance (presently £59.15 per week for a single person over 25), thus removing a financial incentive to claim incapacity benefit (£61.35 for short-term incapacitated; £72.55 from weeks 29 to 52; £81.35 for long-term incapacitated) – actually, as you can see here, the financial incentive is initially tiny. Only those expecting to be on IB for a long time would expect a financial benefit from it. That is why one of the government’s other proposed measures is to remove the escalation after six and twelve months. They also intend to ‘support’ GPs in ‘helping’ people return to work – I suspect this will amount to target-based pressure to force people into accepting work. The journal’s research suggests that even these stern measures will not reach the government’s target – at best, they might remove half a million from the count by 2015, which means that they would have to find a way to double the impact of their existing measures. Most of the reduction would have to be in those areas mentioned earlier – old industrialised parts of the north with high unemployment.

Neoliberal justification

The dogma underlying the government’s approach, which justifies it in its conviction that it is assisting the poor, is the view that “supply creates its own demand” – an extra labour supply will produce higher employment. The market will, on this view, bring demand and supply into balance through wage adjustments (reductions). For this to work, there needs to be maximum flexibility in the labour market (hence, diminished bargaining power for labour, the curtailment of rules protecting job security and so on). As the authors of the journal article point out, it is just not the case that markets automatically balance supply and demand. The effect of these policies will be to increase the official rate of unemployment – only in regions where there is close to full employment already and labour shortages in specific segments to boot will there be the effect the government imagines. That is, in precisely those areas where the IB claimant count is lowest. Given the emerging economic difficulties, the period of sustained employment growth looks like it is coming to an end, and even after recovery it may be difficult to repeat. Further, while the government claims to target those who are not severely disabled and can theoretically do some forms of work, those with enduring health problems are not well-placed to thrive in even a tight labour market.

The policies proposed by both parties are in effect detrimental not only to those claiming IB benefits, but also to the working population as a whole, who are expected to accept reduced wages and security in the government’s model. By no means likely to increase employment and tending to reduce the dignity and conditions of those currently on disability benefits, the government’s policies will – if they are permitted to get away with it – be able to reduce the size of the welfare state. And that, of course, is what it is all about. The global roll-back of the rights and protections secured by past generations of working people is not passing without resistance. The government’s policies on welfare, including cutbacks of pensions, are deeply unpopular. Privatisation of provision is hated. And the congruent process of effective wage cuts and diminishing conditions and entitlements is producing industrial resistance. The barrier such resistance repeatedly hits, as Mark Serwotka recently pointed out, is the commitment of union leaders to the Labour Party. That loyalty is coextensive with profound resignation in the face of the neoliberal assault, a willingness to negotiate away even the most basic forms of protection, and an unwillingness to risk sustained confrontation with the government. Even if the Tories get in and implement the same policies more aggressively (that may be hard to imagine, but they almost certainly would), the union leaders will say “we can’t afford to embarrass our party, we must ensure they get elected next time round”. The only way out of this is for union members to: a) build up rank and file organisation to resist union leaders when they call for acquiescence, as in the recent postal strike; and b) make a sharp break with New Labour, forcing through an independent political fund as the basis for political realignment.

A divided Britain

JamieSW — Tue, 01 Jan 2008 15:06:49 +0000

Gordon Brown has, apparently, learned no lessons from the downward trend of Labour over recent years or, more specifically, the slump in his own government’s fortunes over the past six months.

Alternatively, if he has learned lessons, they are the wrong lessons that will simply smooth the way for David Cameron to enter 10 Downing Street.

Simply declaiming a goal of “One Britain of security and opportunity for all the British people” is meaningless if even the dogs in the street can see that this does not mesh with reality.

There is no single united Britain of security and opportunity.

Britain is increasingly divided, economically and socially, and government policies have played their part in exacerbating division.

Working people’s pay is held down, as is the state pension, while the smart clubs of London’s City and West End are still replete with punters hooked on conspicuous consumption, spending more on a single round – in some cases, a single cocktail – than many low-paid workers earn in a year.

When factories close, workers go down the road with statutory redundancy pay, while, on the other hand, incompetent and self-seeking directors can walk away from financial disasters of their own making with seven-figure settlements.

Working people were used to being treated like this under the Tories. They expected something better with Labour – to no avail.

When Mr Brown talks of maintaining stability and low inflation and building on “our economic success,” most workers don’t know what he’s talking about.

“Low inflation” is the government code used to justify cuts in purchasing power and the fruits of economic success are concentrated on a small section of society, which wastes no time in exporting its profits overseas in search of even bigger profits.

The Prime Minister is not short of advice from close allies of Tony Blair, whose message is summed up by former minister Steven Byers.

According to Mr Byers, it won’t be enough to motivate Labour’s core electoral support.

“We also have to appeal to the promiscuous voter by demonstrating that we can be the party of aspiration and ambition as well as social justice and fairness,” he suggests.

What desert island have these people been living on?

Aspiring to be the “party of aspiration and ambition” is Blairite shorthand for looking after the better off and continuing to abandon Labour’s grass roots.

That approach has led to the party’s loss of up to 5 million votes since 1997.

Instead of sucking up to Mr Byers’s promiscuous voters, Labour would be better advised seeking to reconnect with its base, which has been scorned, treated as voting fodder and been told that it has nowhere else to go.

That means listening to trade unionists instead of to greedy, self-satisfied and undertaxed businessmen.

The Tories have launched yet another campaign against the trade unions’ political levy, but this means of political funding is transparent and democratic, not like the reliance on donations and loans from rich people, which has generated one scandal after another.

Unless Labour takes a decisive change of direction, it will not only continue to let down Britain’s working people but will throw away its grip on government.