Thatcherism, austerity, Brexit, Liz Truss...
goodbye and good riddance to all that
Will Hutton
For 45 years, Britain has been blighted by
Conservative ideologies that promised a path to prosperity, but achieved
nothing of the sort
Sun 16 Jun
2024 10.00 CEST
The Tory
party in three weeks’ time promises to be in a more ruinous, even
life-threatening position than Labour was in the aftermath of the 2019 general
election. Labour at least had a route to recovery after an epic defeat – to
blend mainstream and centre-left opinion around a pragmatic programme for
government, to eliminate all traces of antisemitism and to marginalise its
toxic extremists. The question was whether its leadership, membership and trade
union backers would have the capacity and want power sufficiently to pull it
off. They have.
Today’s
Tories and their blindly ideological press – which has had such an important
role in reducing the party to the political carrion on which Nigel Farage’s
Reform now preys – has no such shared grasp of the task ahead. There is no
longer a strong centre right existing as a coherent formation that could anchor
such a recovery, or skilled politicians who might lead it. Instead, over this
parliament the party has disintegrated into a babble of rightwing cults ranging
from Trussite libertarians to “National Conservatives” stressing the
traditional virtues of family, faith and national community. The response to
the desperate condition in which millions now live and the wider crises of
stagnant productivity and investment, intensified by Brexit, is to blame
immigration, working-class fecklessness and high taxes – even if those are
moderate by European standards.
Farage’s
malevolent talent has been to aggregate this ragbag of prejudice and saloon bar
one-liners into a simulacrum of a political party, which last week in one poll
topped the Tories – the “crossover” point. How the party should react – to join
forces with Reform or take them on – will dominate the Tory conversation during
the campaign, as yet more candidates dissociate themselves from the Tory brand.
The chances of even holding on to 150 seats will shrink. The Tories could be
out of power for at least a decade – perhaps longer. Even the party’s survival
is not guaranteed.
The Tories could be out of power for at least a decade
– perhaps longer. Even the party’s survival is not guaranteed
Yet so
dominant are its rightwing factions that they crowd out any candid assessment
of how their party has come to be so despised and has fallen so low. In truth,
the root of their ills, if they thought hard enough, is the near religious
veneration of Margaret Thatcher – shared by Farage – lionised as the true
Conservative who put the country on the road to recovery on the principles of
small state, low taxes, self-organising market, suspicion of foreigners
(especially Europeans) and individualism. Those may have been her principles,
but what almost no one on the right dare ask themselves is that if she was the
author of such a majestic recovery, why is so little of it in evidence today?
The answer
is not bad faith or lapses into “socialism” – a crime that Rishi Sunak,
faithful Thatcherite, Brexiter and tax-cutter, is ludicrously said to have
committed. The unpalatable truth is that individualism in self-organising
markets and rollback of the state do not work as the path to prosperity even in
theory, and prove impossible in practice. Instead, successive attempts to
implement the doctrine since 1979 have been the direct cause of great
catastrophes culminating in the one that has passed into legend – the Truss
budget. It is Thatcherism that has laid the country low, and that the
electorate is now repudiating. The liberal Tory “wets” she so despised were
right; the postwar settlement needed reform not dismantling.
The first
catastrophe was the monetarist experiment of the 1980s – a means to roll back
the state so it would print less money – which achieved neither a smaller state
nor lower inflation. Other countries may have fallen for the same snake oil,
but none so emphatically as Britain. Our industrial base was needlessly
decimated, with manufacturing employment close to halving in a decade. Nor was
there any engagement with the stricken towns across the Midlands, north of
England and Wales that were simply left to rot. North Sea oil revenues, instead
of being harnessed in a Norway-style national wealth fund that today could have
been worth more than a trillion pounds, were spent instead on sky-rocketing
welfare benefits.
The second
catastrophe, with the same ideological roots, was the commitment to financial
deregulation in general and the big bang in particular – allowing the world’s
investment banks both to lend and speculate in financial securities backed by
the same capital. Again, Britain was the financial deregulation leader.
Building societies, emblematic of the failed culture of working-class
solidarity, were to be free to demutualise and banks to lend mortgages. Britain
then experienced a 20-year credit and property boom so that by 2007 every £1 of
capital supported an astonishing £50 of lending. Britain’s financial collapse
and consequent depression were the most spectacular in the west.
David
Cameron and George Osborne, Thatcher’s spawn, chose to describe the calamity as
a result of New Labour’s excessive public spending – perhaps the biggest
economic misdiagnosis in our island history. Enter catastrophe three –
austerity, another attempt to shrink the state to set the individual free. It
failed completely, but in the process hit people in areas still reeling from
the first catastrophe even harder. They voted in their millions for Brexit:
nothing, they reasoned– as wealth continued to concentrate in London and the
south-east and drain from the rest of the country – could be worse than the
status quo. It could. Brexit, again meant to release imagined individual
energies from the shackles of Brussels – became the fourth catastrophe. GDP and
tax revenues have shrunk below trend levels, costing at least an estimated
£120bn and £40bn respectively.
Then came
Liz Truss, determined to step up the one true faith several gears as she
unleashed catastrophe five. In focus groups, the legacy of her disastrous
budget still cuts through like no other. It is a proxy for 45 years of
ideological misgovernance, held partly at bay during the Blair years, but
returning with a vengeance thereafter.
Few on the
right – although both Osborne and William Hague have both got closest in their
condemnation of the homemade Brexit and Truss debacles – confront this
catalogue of catastrophe. It is why Sunak has no convincing story to tell in
this general election. Farage may win some disaffected voters, but he remains,
along with the discredited Boris Johnson, the author of the widely despised
Brexit: it is delusional to imagine a politician who thrives on poisonous
division could ever approach winning an election. The country wants change. It
is not a one-party socialist state that beckons, as the Mail, a prime author of
the right’s crisis, shrieked last week. Rather it is an alternative,
investment-driven partnership between government, business, finance, unions and
civil society to drive our economy and society forward. Goodbye to the
calamitous mistakes of the last two generations.
Will Hutton is an Observer columnist
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