CONSERVATIVE EFFECT ON WELFARE, EMPLOYMENT AND THE ECONOMY
MANAGEMENT OF THE ECONOMY
Austerity was always a political choice. Rejecting even mild Keynesian economic ideas of the state stimulating demand in times of recession, work experience chancellor and David Cameron’s school chum George Osborne decided that his Thatcherite state-slashing frenzy fantasy would be best accomplished under cover of ‘fiscal responsibility’. Strangely the Tories had never actually cared much about public debt before, as the facts (rather than myths) illustrate that they have historically borrowed more and paid back less public debt than any Labour government (https://www.taxresearch.org.uk/Blog/2016/03/13/the-conservatives-have-been-the-biggest-borrowers-over-the-last-70-years/), but the narrative was set, and Osborne presented himself (courtesy of his obsequious media army) as some reluctant pariah sacrificing his personal popularity solely to save the country from economic ruin. The problem was of course that despite this notion being utter bollocks, the Murdoch-Rothermere-Barclay axis eagerly pumped out this fallacious garbage relentlessly – ‘we’re only doing this because Labour messed up’. Like all good propaganda, it had one foot within a common sense narrative and was easily swallowed by low information voters. Incredibly, within a few years, they had the working classes not only accepting their crumbling living standards, but rejecting alternatives, while believing that the global financial crash was in fact solely caused by the Labour government.
At times, the mask slipped. When he wasn’t selling off state infrastructure projects to the Chinese, Osborne gushed about privatising more than Thatcher’s cohorts, including some outrageously inappropriate assets like the blood donation service. It takes a special kind of sociopath to see a public non-profit service that relies on altruism, and think “what an opportunity for my American friends!” It was originally sold off to Bain Capital, a US venture capital group involving ex-presidential candidate Mitt Romney, and later to the Chinese for a big profit, from people’s blood, which they donated out of the goodness (and contents) of their hearts. Talk about literally bleeding us dry. Another moronic privatisation was parts of the ambulance service, with predictable consequences of huge cost increases and less reliability: https://www.bbc.co.uk/news/uk-england-36381440.
Osborne treated the treasury like his own public school money box, knowing his malice and ineptitude would never be exposed by the press. He gleefully cut budgets from every department and told them to make do. Because of how centralised the UK is in terms of governance (I believe we are the most centralised nation in Western Europe), when the government cuts local government budgets, those councils have very few other methods of raising income from other sources, and so have to cut services to the bone to balance their budgets. We see the grim results of this everywhere, in the social care crisis, wrecked roads and extinct bus routes. Of course, Osborne would also ‘helpfully’ suggest that councils could sell off their assets to make up the shortfall, thus doing more for his fantasy by palming off more public assets to (most likely) Tory donors on the cheap. There were also some more outrageous privatisations that didn’t happen only because of huge public pressure: the coalition attempted to sell off swathes of public forests and the Land Registry, if you can believe that. Can you imagine the public body responsible for judging the value of land across the UK, in the hands of a profit-seeking company looking to make a quick buck? What in the world could go wrong?
Within two years of his austerity ‘solution’, Osborne was forced to ease off, as the national debt was mounting, and we narrowly averted a double-dip recession. Being booed at an Olympics ceremony was the least he deserved for his economic incompetence and asset-stripping on behalf of his cronies.
As I mentioned in an earlier blog, one of the biggest contradictory statements from the Tories that never seems to be scrutinised to its logical end is that public services are apparently crumbling because “we need a strong economy to fund them”, yet according to the same sources, only the Conservatives deliver a strong economy. So it is both strong (when electioneering) and not strong (when questioned on inadequate funding for public services): Schrodinger’s economy.
Because of the average punter’s general ignorance of economics, they rely on the press and personal experience to tell them if things are okay. If there isn’t a run on the banks and they’ve got a job, then the press tell them things are good, they’ll swallow it. But this ‘economic recovery’ doesn’t need an expert on macroeconomics to analyse when you consider that the Bank of England’s base rate of inflation has never been above one percent since the coalition came to power. This was supposed to be an emergency rate to stabilise the economy following the financial crash of 2008, but it now indicates an economy on life support for an entire lost decade. For context, the decade prior to the financial crash the average base rate of inflation was just over 5 percent (https://www.mortgagestrategy.co.uk/analysis/historical-interest-rates-uk/). An inflation base rate affects saver’s returns from banks, cost of goods in shops, and the increase in people’s mortgage payments, so it seems as if the Bank of England realises that too many people would go into negative equity or lose their houses should the base rate climb much, as well as basic goods becoming too pricey for those on the low end of the income scale. However, a reasonably climbing base rate is an indicator of a healthy economy, while a low one indicates an extremely fragile one.
Of course, the reason for all of this economic pain was ‘cutting the deficit’, which Osborne pledged to do by 2015 and failed miserably, then pledged to clear it by 2025 and basically hoped the general public were gullible idiots. The national debt has ballooned in the last ten years, and people who think they are being clever retort that “you’re mixing up debt and deficit, you can’t pay back debt until you’re earning more than you’re spending”, which is not true. The best way to shrink government debt is to invest and grow the economy, so that the debt-to-GDP ratio shrinks over time. This is how we recovered in the aftermath of the ruins of the Second World War, when debt-to-GDP was initially over 200%. Churchill, much like Osborne, proposed that the country couldn’t afford a welfare state or the NHS, but Attlee conquered him and built both, as well as nationalising swathes of bankrupt British industry. The national debt shrank massively over the next decade and beyond, then, with the odd stutter, incrementally until 2008, when it shot up and continues to climb. It doesn’t help when the Conservatives use infantile analogies for a sovereign currency issuing state like a household shopping budget or private debt repayment plans. Now, the current dishonest incumbent of Number 10 promises to spend loads but still shrink the deficit and debt, despite Brexit coming at a point when our economy has been in the gutter for a decade. The economic shock will be bad.
WELFARE AND EMPLOYMENT
It was pretty apparent early on that the Conservatives would play their favourite game of divide and rule, and that scapegoats among the working classes would make the austerity pill easier to swallow for the reactionary. While Theresa May spoke of ‘citizens of nowhere’, George Osborne made much of ‘skivers vs strivers’. Despite estimated benefit fraud accounting for a tiny amount of total welfare spending, the consistent amplification by the Dacre-Murdoch press means the public generally vastly overrate the scale of the problem: the emotional reaction is what counts here. People struggling while working full time are more likely to be resentful of people like them seen to be living easy, despite tax evasion by the super-rich draining much more money from the system (https://www.economicshelp.org/blog/6348/economics/cost-of-benefit-fraud-v-tax-evasion-in-uk/). Former worst Tory opposition leader in living memory Iain Duncan-Smith was put in charge of the Department of Work and Pensions, and, much like Michael Gove, quickly set about making a lot of people’s lives a misery at the altar of his dunderheaded ideology. Whether he genuinely believed that his maliciously authoritarian system of punitive measures and stigma would really miraculously make sick and disabled people take menial jobs and turn their lives around remains to be seen, because he is either a zealot who sees himself as some sort of political Christ figure healing the sick, or he is just a really fucking nasty hypocrite who lives high off the hog, rent-free in his wife’s family’s manor house, while lecturing desperate and frightened people living on the breadline about personal responsibility.
Like other prominent coalition ministers, his charge sheet of incompetence and cruelty is grotesque, and boils down to basic right-wing demagoguery. Using the previously mentioned polemic about ‘skivers’ as his shield going into battle, he spearheaded more and more imaginative ways to fleece the poor while slyly lining the pockets of rich corporations. He imported the American concept of ‘workfare’, where long-term Job Seeker’s Allowance claimants were ordered to work for their paltry seventy-odd pound a week. It’s yet another policy that plays on emotion but does not stand up to any logical scrutiny. I understand why some would not see an issue with the long-term unemployed being incentivised to get into a work routine. The concept is not entirely stupid, but if it is implemented, it needs to be in jobs with little training needed, short hours (because there is no pay), supervised and in the non-profit public sector, because spending more money on training for someone who won’t actually work that job permanently is counterproductive, and, most importantly, it should not replace a paid member of staff’s role. If you allow someone to work even part-time in a corporate role, as Iain Duncan-Smith did with some companies who should be ashamed (https://en.wikipedia.org/wiki/List_of_British_organisations_who_have_participated_in_workfare_programmes), you are 1) undermining the paid staff by having someone working for less than them 2) forcing someone to work for less than minimum hourly wage 3) giving a profitable company free no-strings labour, as there was no guaranteed placement at the end of the tenure. After numerous legal challenges, and the excellent activism of ‘Boycott Workfare’, this moronic scheme was scrapped, much to IDS’s chagrin, who simply gerrymandered the legal process by getting his unlawful scheme declared retrospectively lawful: mildly Orwellian. The heart rending stories of penury, desperation and suicide caused by the brutal regime instituted by IDS and his cronies will choke anyone with a heart. Food bank usage has increased from tens of thousands to millions (https://fullfact.org/economy/how-many-people-use-food-banks/). Who even referenced food banks in the public discourse in 2010? Widespread whistle blowing indicated that job centres were incentivised to sanction people, even seriously disabled or those with profound mental health issues. The Personal Independence payments and ATOS-led ‘fit for work’ interviews stripped disabled people of dignity and forced people in grave need off the benefits list to present a false case of ‘tackling benefits culture’. We had the despicable scenarios of terminally ill people being declared ‘fit for work’ to deny them any hope of self-sufficiency in their dying days. The Black Triangle Campaign has excellent records and stories of this cruel regime: http://blacktrianglecampaign.org/. It even got to the stage of the U.N. chastising the government’s callous treatment to its own citizens: https://www.theguardian.com/society/2017/aug/31/un-panel-criticises-uk-failure-to-uphold-disabled-peoples-rights. Amid all the bogus justification of ‘benefits culture’ and ‘the best route out of poverty is a job’, actual statistics confirmed that this was not true: most benefits claimants did in fact work, amongst other dispelled myths: https://www.poverty.ac.uk/editorial/exposing-benefit-%E2%80%98myths%E2%80%99. Universal credit has been an unmitigated disaster, the most obvious howling problem being the insistence that people surviving on next to nothing wait as long as four weeks for first payment.
The Conservatives immediately began making life harder for employees and easier for unscrupulous employers by doing things like extending the time a worker had to serve before they could request a work tribunal from 12 months to 2 years, while also cutting legal aid. A defining character of this government in fact is a comfortable environment for bad businesses: tax cuts, deregulation, reducing meagre worker protections and offering free labour via the ‘workfare’ programme.
The Conservatives have loved to throw around statistics that sound good with no context, like: “there are more people in work than ever before” – there are more people alive than ever before.
“Unemployment is at record lows under this government” – It’s long been accepted that unemployment figures are massaged in all kinds of ways and do not include the involuntary economically inactive or underemployed.
Underemployment is, like food banks, a new norm in this decade, as part of what has been termed ‘the gig economy’, where trendy new ‘flexible’ employers offer staff ‘autonomy’ as freelancers, but in some cases have the nerve to prevent them taking other jobs, meaning it is not freelancing but coerced employment without any of the benefits of secure employment. While the digital economy has defined the decade with tech giants opting out of tax liabilities, Uber, JustEat and the like are opting out of employment responsibilities. As if globalisation hadn’t assisted piratical capitalists enough, they began opting out of even the reduced expectations on them, making their activities seem a lot like borrowing someone’s van to sell ice cream, only to return it with no compensation, having made a fortune yourself and ran it into the ground. Imagine hanging around the house all day waiting for a phone call to tell you if you have any work tomorrow morning. That this is the reality for one person is bad enough, but evidence seems to suggest it is a growing issue for many of the contemporary precariat class.
“People on tax credits are draining the benefits system” – employers who pay their employees too little to survive on are draining the benefits system. The taxpayer is effectively subsidising their business.
The welfare state is supposed to provide a level beneath which nobody should be allowed to fall. The Conservatives agenda for this whole decade has been to spitefully dehumanise the weak and suffering as fraudsters; crushing them down through the cracks of the support system with malicious intent. After all, as George Osborne quipped about social housing: “Why do you want to build social housing when it just breeds Labour voters?”
If Johnson’s terrible Brexit agreement passes, the economy will look positively booming now in context, and unemployment will soar. These will seem like halcyon days, and the weakest, as always, will suffer the most.
