In her party conference speech Theresa May promised to transform the Conservatives into the ‘party of the workers, the party of public servants, the party of the NHS’. She declared: ‘it’s time to remember the good that government can do’. Journalists on both right and left have been queuing up to announce a new era in British politics. Allister Heath has written in The Telegraph of May’s “repudiation of the Thatcher-Reagan economic world-view” and her apparent recognition that government is “the solution, not the problem”.
Meanwhile, John Gray in the New Statesman has claimed that May “has broken with the neoliberal model that has ruled British politics since the 1980s”. So where’s the evidence for all this? Gray finds it in May’s tax reform pledges, her plans for a national industrial strategy and her promise to reassert the role of the state as the final guarantor of social cohesion. Continue reading
Ken Clarke was pronouncing on Radio 4 several days ago that in the eighties people were calling for nationalisation to save British industry. He claimed the idea that the UK will collapse unless the government steps in has been heard before and is tired old nonsense. He seemed to think that history and the magic of free markets have proved the interventionists wrong.
So what really happened to the UK economy during the free market reign?
In 1979 as north sea oil and high interest rates inflated the value of sterling, foreign imports became cheaper. UK companies could buy coal from Poland and South Africa more cheaply. UK industries found they could import finished products from countries such as China for less than the cost of producing them here. So this must be good: cheap imports and low inflation courtesy of free markets. Continue reading
There is currently no small vogue among polemicists of right-wing bent to accuse lefties of something they call ‘virtue signalling‘. So please allow me to introduce a parallel neologism.
Many of the ugly responses from free market ideologues to the crisis now destroying the British steel industry are clear-cut examples of nasty signalling, designed to underline a given writer’s robustly Hayekian lack of sentimentality in economic matters. An exemplar here is surely Allister Heath’s recent Telegraph article, insisting that Port Talbot should be allowed to go to the wall.
‘It may be heartbreaking’, the publication’s deputy editor insists, as he plays Hearts and Flowers on the world’s smallest violin. But there must be no bail out for Welsh steelworkers, you see. ‘Government intervention tends to fail,’ we are told. ‘Throwing taxpayers’ cash at unviable, obsolete firms to postpone their demise ends up destroying far more jobs that it saves.’ Continue reading
What have they been putting in John McDonnell’s coffee? According to some, John’s embrace of fiscal responsibility, tight spending, and deficit reduction is a surrender to “the capitalist parasites“. And proving you cannot please some people no matter what you say, there have been criticisms from the right of the party arguing that his economics are the same kind that were rejected last year and in 2010.
I don’t know if the memory-loss associated with politics is a recent thing brought by social media churn, or is something deeply structural. But there wasn’t a great deal John said in his speech on Friday that hadn’t already been trailed previously. A good deal of this was mentioned in his first conference address as shadow chancellor. As the Tories have successfully managed to identify economic competency with the project of deficit reduction in the minds of a plurality of the electorate, John’s speech then – and now – signals his willingness to fight them on their own turf. In this he’s aided by the self-described “political genius” George Osborne’s inability to meet his own targets, and absurd, dogmatic desire to pull public spending out of the economy, which will only thwart his ambition in the long run. Continue reading
Rachel Reeves, a former Labour shadow secretary for work and pensions, has produced a short note for Progress which has been hailed in the right wing media, and by the Labour right, as ‘an alternative Budget’. The New Statesman was perhaps the most excitable, describing Reeves as the shadow chancellor in waiting. All of this is entirely incorrect as the article offers no alternative to the Osborne’s resumed austerity, which he is certain to recommence in the next Budget.
Reeves has declined to join the current shadow cabinet under Jeremy Corbyn and her intervention is clearly posed primarily as an alternative to the economic policy framework outlined by Jeremy Corbyn and John McDonnell, not to George Osborne. It confirms once more that the Labour right is disloyally more interested in attacking the Labour Party leadership than in attacking the Tories. Continue reading