This budget, however, wasn't supposed to be about Coronavirus. It was destined to be the frontispiece of the new government and set up what we mean by "Johnsonism", if anything. And judging by how centrist commentator after centrist commentator swooned as if discovering a new saviour in a shiny suit, then there was something here that obviously pleased them. On top of the emergency monies, more cash is to be brought forward for infrastructure projects and R&D. There was more for flood hit communities, £27bn for new roads, more money for the devolved administrations, billions for housing, hundreds of millions for a climate/nature fund, and plenty more. Repackaged and not as joined up as Labour's manifesto but, as predicted, the Tories have rummaged through the wreckage of Corbynism and watered down a few proposals enough to conform to their liking.
And so we have a recognition that, from the standpoint of economic management, the earlier austerity programme was a waste of time. This is a stimulus budget to upgrade an infrastructure left to rot by Johnson's predecessors. It will create jobs, it will support businesses facing the battering of disease, downturn, and Brexit uncertainty, and it might even address the rebalancing of the economy - though there is very little sign here of a green industrial strategy set to revitalise certain recently-captured constituencies. Underlining the break with Dave is the loading up of debt. Tax rises are nowhere to be seen (indeed, the much trailed cut to National Insurance contributions finally appears), and so the money for much of this comes from borrowing. Today's cut in interest rates by the Bank of England, ostensibly to keep the wheels on the wagon turning, is entirely coincidental. Helpful also is the occasional slippage of the bond markets into negative interest territory where, effectively, governments are paid to borrow money.
Then again, it is worth recalling Dave's austerity was not about mistaken economics. His programme was pure disaster capitalism, of using the seminal crisis of the 2008-9 crash and the sharp downturn to privatise more, cut back on the state, let the market rule more of the roost and, consequently, bedding down neoliberal realism even further. It's not for nothing we saw the tearing up of the NHS and its replacement by a market lubricated by taxpayers' cash, nor the completion of Tony Blair's move toward the full commodification of higher education, nor the doubling down of cruel social security reforms such as the advent of the bedroom tax and the retrenchment of the work capability assessment. Employment saw an explosion of involuntary part-time working and underemployment, the proliferation of zero hours contracts, and the stagnation in pay. The class politics of the coalition government years then was about driving home the right's political advantage, of applying the boot of capital to the neck of labour and pressing down. The beneficiaries were businesses, big and small, with enough scraps thrown out to the Tory coalition of rentiers, landlords, and pensioners.
Sunak's budget has dumped the fiscal targets of his immediate predecessor, and the self-styled fiscal hawks of Philip Hammond and George Osborne, but the class politics are unchanged. Without wanting to give them too much credit, the rabbit pulled from the red box bears something of a resemblance to what we've seen locally round these parts. Money has been found (borrowed) for infrastructure, (build-to-rent) housing, pet projects and chestnuts, but this was part-subsidised by cuts to services, such as drug and alcohol rehabilitation, homeless services, the provision of local centres, the "consolidation" of amenities and, if they'd had their way, cuts to council workers' pay. Sunak is spraying money at projects that will allow Johnson to traipse around building sites in a hard hat, but there is no money going into repairing the social infrastructure Dave and friends previously destroyed. Public services remain crumbly, with no new cash going in. Despite the announcement of support funds for local government to see councils through Coronavirus, there is no sign of the year-on-year butchering of funds from central government ending soon. We're not about to see money poured into amenities sacrificed to deficit reduction. This leaves the Tory voter coalition untouched, and expects the rest of us to get on with the even more unfavourable class settlement Dave imposed upon us. This Tory adventure into "socialism" might come clothed with the usual one nation nonsense, but it's a normalisation of two-nationism.
This isn't to say Sunak's budget is without political opportunity. The Tory relationship to principle is, how shall we say, flexible, but there will be some on the backbenchers who find this lurch into Keynesian territory discomfiting. Looking at the coalition of malcontents who rebelled against the government on Huawei on Tuesday, we find a curious mix of Brexit rebels looking for something to get awkward about with recent frontbenchers from the Theresa May and Dave eras. Publicly binning an economic strategy that was as decadent as it was Thatcherite gives the dissenters more scope for future dissent, and on this, whether socially conservative or (ostensibly) socially liberal, there is more common ground between these former foes for a persistent opposition. It also gives Labour an opening too. Sundry commentators like to sneer about Jeremy Corbyn's view that Labour "won the argument", but this budget proves the point of the Corbynist assault on austerity. Sunak and Johnson have decided crashing the economy is not a price worth paying for Brexit or anything else, for that matter. Labour can now make the case for other priorities - the job of pushing a people's bail out has just got that much easier now the previous common sense got twisted inside out.
Big-spending Toryism then, or old wine in new bottles. The centrists are going to coo about the new chancellor and his reasonable reasonableness, not just because they have a thing for nicely-spoken men in nice suits, but because they have no analysis, no class analysis, to make sense of this new direction. We do, and we must be clear about why the Tories are doing this and work to arm our party and our movement with this knowledge.
6 comments:
The Tory budget is a joke on many levels. Having spent a decade destroying the economy via austerity, and criticising Labour for wanting to find a magic money tree, they appear now to have found a forest of magic money trees. Most of the budget was about giving away taxpayers money to their friends amongst the 5 million small capitalists which make up their, and the brexit voter base, each of which are to be given a £3,000 cash bung, plus further cash bungs for these small capitalists, who are the worst exploiters of workers, via further tax reliefs, alongside the plans for Free Ports and so on. Its reminiscent of he way Greek conservatives gave away such bungs to the small capitalists and their associates they represented in the years leading up to the Greek debt crisis.
The announcement that anyone can now ring 111, and get a sick note sent to them without diagnosis, for a fortnight is an invitation for everyone to ring up and do so to get an extra two weeks paid holiday at the state's expense. The only constraint on that is the appallingly low level of SSP in Britain compared to other EU countries.
All in all the Tories are doing what they have continually attacked labour for proposing, except the Tories are doing it in a typically cack-handed manner, and doing it too late, in an effort to correct the damage they have already inflicted. It is doing what many of those working-class Tory voters in the so called red wall constituencies attacked Labour for proposing. The difference is the beneficiaries of the Tory largess will not be those working-class Tories or others in the working-class.
But, it does also show the crudity of all those on the left that have continually claimed that the Tories could only ever proceed on the basis of austerity. A look back at the economic policies of Mussolini, Hitler, and Moseley should have been enough to show why that is not the case.
"And so we have a recognition that, from the standpoint of economic management, the earlier austerity programme was a waste of time."
Not exactly. It depends on what you understand the purpose of the austerity to have been. If you believe the purpose of the austerity was to reduce the budget deficit, pay down debt, and thereby set the economy on a sound footing, then absolutely correct, it was a waste of time, and destructive. The experience in the US, and elsewhere, demonstrates the point. The US did not impose austerity, under Obama, except where Republicans had control, and consequently the US had a V shaped recovery. Higher economic growth and employment meant that tax revenues increased faster, and payments for welfare etc. fell correspondingly, thereby reducing the deficit.
In the UK, a similar V shaped recover was in place under Labour after 2008. Despite Tory lies, the yields on UK debt was also falling. In the last quarter that Labour was responsible for 2010 Q1, growth was 1%, equal to around 4% p.a., level the Tories have never been able to match in the following ten years. On the contrary, the Tory austerity cratered growth in 2010, and led to debt ballooning.
But, austerity was never intended to reduce the deficit, and so on, any more than the use of QE has been to provide economic stimulus. On the contrary, having stabilised things after 2008, by Keynesian intervention, the whole point of austerity was to SLOW down economic growth, because it was more rapid economic growth prior to 2008 that had led to rising wages (14% pay rise for tanker drivers etc) that presented the inevitability of rising interest rates. It was rising interest rates (that had gone to 6% in the US), which was the spark that led to the massively inflated asset price bubble in shares, bonds and property to burst. Its to avoid a repetition of that, the destruction of the paper wealth of the top 0.01%, now held almost exlusively in the form of this fictitious capital, rather than in the form of real capital, to which policies by the state have been focused, not economic growth. The policy of QE, which diverts money from the real economy into such property and financial speculation is simply a part of that agenda.
From that perspective, austerity combined with QE has been highly successful. It restrained economic growth, and thereby wage rises. It diverted money away from the real economy into speculation, propping up crashing property prices, and causing stock markets to rise by 300% compared to 2009. Too bad for them it couldn't last, and is now crashing around their ears.
Between Obama, Blair, Trudeau, Macron, now Sunak etc it really is bizzare to me how all these straight centrist men just seem to want a pretty & authoratige man in a suit to gush over. Something going on there.
"The announcement that anyone can now ring 111, and get a sick note sent to them without diagnosis, for a fortnight is an invitation for everyone to ring up and do so to get an extra two weeks paid holiday at the state's expense."
The advice dumb fuck is not to ring 111! Seriously can this self aggrandising dangerous idiot be somehow prevented from posting comments on the web?
I wouldn't normally respond to our inbred troll whether he uses the name Sentinel in his persona of a BNP supporter, or his plethora of other sock puppets such as DFTM, BCFG, CAAC and on and on ad infinitum, incluidng his latest Concerned Citizen plumage. However, trolls like him are spreading dangerous nonsense across the web, and as always preventing rational debate. So, here it is, a one off that quite simply refutes his latest lie, which anyone who actually watched the budget debate, or red the papers would know.
In a debate held yesterday in Parliament, Lord in waiting Lord Bethell said that patients who self-isolate will not have to see their GP to claim a fit note.
Instead, they can ask NHS 111 to issue them with an email confirming the diagnosis.
The advice is if you have mild symptoms, rest up for 7 days and if needed go to the NHS web page. Only if you have *serious* complications should you phone NHS direct.
Now to a dumb ass the difference between what dumb fuck says and what the actual advice is seems trivial (though even a dumb ass will see the difference to be honest) but in a global pandemic it is absolutely fucking crucial.
Ok dumb fuck!
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