The political climate may not have changed

The surprise election result has led many to hope that there has been a change in the political climate.  Those who hope for a more equitable society, a reduction in the huge disparities of wealth, and fairer treatment for those who work in the public sector for example, may have taken heart by the events of the past couple of weeks.  The terrible disaster of Grenfell Tower also brought calls for tighter regulation and rows broke out about the privatisation of the management arrangements and refurbishment allegedly done on the cheap.

In this piece I argue for caution since I believe fundamental beliefs by the public have not changed.

The Conservative government looks weak at present although there will no appetite for a leadership election anytime soon.  Contenders are denying they are out on manoeuvres.  A deal has yet to be concluded with the DUP.   Austerity – the policy which the government has pursued for around 7 years – is now only a flickering ember and it is said the word is no longer in the lexicon of Conservative MPs.  The policy is a disaster, yet, the ability of the government to change tack is severely limited with the prospect of higher interest rates, the pound under further pressure, the effects of Brexit on the horizon, the dire state of our productivity, the poor state of our balance of payments : well … on and on it goes.

So the grim nature of where we are and the huge support which the Labour party achieved at the election – against nearly all predictions – has led some commentators to assume that ‘things are achangin’’.  Whilst it is undoubtedly true that the Conservatives will pinch some of Labour’s clothes in the coming months (although a cap on energy companies for example – which the Conservatives called ‘Marxist’ when Labour proposed it – was not in the Queen’s speech) the idea that the ideology they have pursued since the days of Margaret Thatcher is not dead.

Briefly, this is the neoliberal ideology of small government, low taxes, limited regulation, privatisation and free trade.  It has led to zero hours contracts, reduced inspection regimes and ‘red tape’, and huge disparities between the richest and poorest in our society.  It contributed to the banking crash because they were weakly regulated.  Low taxes have not delivered greater prosperity for the majority of the population and have led to private wealth and public squalor.  Privatisation has not led to greater efficiency and the scale of the corruption by some private companies has been immense.

Surely some have argued, there will be a sea change in government attitudes?  I am not so sure that much will change.  The main reason is that the core beliefs of the neoliberals are widely popular at least in principle.  What Mrs Thatcher achieved was to unify the prosperous with the poorest to believe in the same things.  This created an extremely powerful force.  Take for example the belief in deregulation and a reduction in bureaucracy and red tape.  This is hugely popular in the City and among many corporate leaders.  It enables them to employ thousands on zero hours contracts knowing that there are too few inspectors to catch them out.  It is also popular with ordinary people who cheer loudly on programmes like Question Time if a politician says he or she is dedicated to reducing ‘petty fogging regulations’ or some similar phrase.  One effect of reduced regulation is the continuing high use of sugar in food and drinks which result in thousands of children needing hospital treatment to remove their teeth.

Austerity was widely accepted as a necessary policy.  The Conservatives brilliantly blamed the Labour government for overspending and successfully deflected attention from the real cause which was a massive failure of the banking system which took place because of deregulation.  It bore down hardest on the poorest and is now seen to be both an economic failure as well as causing untold hardship.

They also successfully blamed the ‘scroungers and skivers’ for fleecing the benefit system while saying nothing about corporate welfare which, by some estimates, amounts to around £180bn a year.  It is truly staggering that scarcely a week goes by without hearing from the corporate sector about the negative effect on growth caused by our tax system, with veiled threats that they will move to a low tax regime like Ireland or Luxembourg if something is done to increase them, while all the time they and their firms are the biggest beneficiaries of the tax system.

Every so often there is a disaster – such as Grenfell Tower last week – and the cry goes up about why it was allowed to happen and that ‘they’ should have done something about it. That ‘something’ is the Building Regulations and they were not updated, allegedly because of a belief in deregulation as a means to stimulate the economy.  A cull of staff in local authorities has reduced their ability to carry out checks and enforcements across a range of issues although in the case of Kensington and Chelsea, they were not short of funds.  The problem there was indifference by the authority not shortage of money.

The other principles of the Neoliberals are similarly popular.  Small government: since many believe governments are incompetent and our politicians venal, corrupt or useless then it follows that the fewer of them the better.  That the private sector is more efficient than the public is accepted without question by many.  While private sector directors rake in multi-million salaries, bonuses and share options – sometimes while their companies are producing poor results or even failing – any local authority chief executive earning more than say, £150,000 is lampooned and castigated.  Yet often those companies are doing no more than was being done by a public body.

The idea that we are all better off with low taxes is almost unchallenged and universally believed.

Less regulation will stimulate entrepreneurs is another basic belief.  Cut the regulations and all sorts of businesses will pop up to capitalise on the new freedoms.  Entrepreneurs will appear like mushrooms on an autumn morning bursting to create jobs in a deregulated market.  That regulations actually create compliance work seems to be forgotten.

So the idea that the government will change tack and explain that we need more tax if we are to have better health, new roads and improved education is not going to happen. The idea that they accept we need more regulation of the corporate sector is also unlikely.  Better pay for politicians so that we get better quality people and prohibit practices such as the ‘revolving door’ is also never going to get off the ground.

For real change to happen then some of the basic beliefs that the population as a whole cling to will have to change.  The neoliberal ideas are deep rooted and widely popular.  A more mature philosophy is needed and until that emerges then the current ideology will continue to reign supreme. 

Peter Curbishley