by Peter Franklin
Monday, 10
May 2021
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Thatcherism died a long time ago — but Labour has only just realised

They are up against a very different kind of Conservative now
by Peter Franklin

Pennies are dropping all over Labour-land. They’ve finally realised that they’re not running against Thatcherism anymore, but a very different kind of Conservative Party.

Here’s Owen Jones making the point in a BBC interview over the weekend.

The interesting thing here is that he understands that the Tories aren’t just running on a platform of “national populism”, they’re also mixing it with “state intervention in a way that Cameron & Osborne didn’t do”.

Except that’s not quite right. The Conservative shift to intervention in the economy started well before the premierships of Boris Johnson and Theresa May.

As Chancellor, George Osborne pursued a policy of austerity, thus limiting the scope for the strategic investments of levelling-up agenda. However, spending more money isn’t the only way that a government can intervene in the economy. 

For instance, it was Osborne who introduced the National Living Wage — i.e. a long-term plan to raise the minimum wage to levels that few expected a Conservative government to ever support. Another example was the Apprenticeship Levy on employers to help pay for training — a key area of weakness in the British economy. 

A low wage, low skill economy is ultimately an unproductive one — doomed to fall behind countries where business invests in its workforce. Even a Davos-friendly neoliberal like Osborne understood that the state ends up subsidising cheap-and-nasty business models through the tax credits system and other means of supporting the working poor. 

I don’t say any of this to credit Cameron and Osborne as the true architects of the subsequent realignment of British politics. For a start, they were clueless as to the political potential of Brexit. Furthermore, the economic Darwinism of their “global race” rhetoric couldn’t be further removed from the post-Brexit positioning of the Conservative Party (“an economy that works for everyone” under May; “levelling-up” under Johnson).  

Nevertheless the Tory move away from free market fundamentalism is not a recent development. It’s been underway for a decade or more. Bit-by-bit the Conservatives have come to accept three basic facts. The first is that the modern state is simply too big not to have an impact on the market. The second is that business needs to be protected from its own worst instincts. 

The third is that one doesn’t have to choose between recognising the benefits of capitalism and seeing that market forces can be channelled to serve the common good. It took the Conservatives a while to become fully conscious of these realities.

Nevertheless, the signs of their dawning enlightenment were there to be read years ago. Labour, blinded by its Thatcher-hatred, ignored what was going on and has paid the price.

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Kremlington Swan
Kremlington Swan
1 year ago

‘..they are up against a very different kind of Conservative now.’

So are Conservatives.

Michael L
Michael L
1 year ago

Really weird to see Owen says it. Because of him and his ‘champion’ Corbyn, Labour became an ‘unelectable sewer’.

Galeti Tavas
Galeti Tavas
1 year ago
Reply to  Michael L

Own is just a Neo-Trot, and so is a lumbering dinosaur with nothing new to say as he wallows about in the swamp.

Andrew Fisher
Andrew Fisher
1 year ago
Reply to  Galeti Tavas

He wrote a good book, ‘Chavs’. I disagree with Owen Jones about most things, but what is the point of using this forum for simple childish abuse? Just a waste of space.

Jones is a young man and very much in tune with metropolitan youth opinion. You and I may deprecate it, but to call him a ‘dinosaur’ is way of the mark. You could, I suppose, call him that as a Marxist (19th century) but then free marketeers would be presumably be even older creatures from the Triassic, or earlier (Adam Smith, 18th century).

Last edited 1 year ago by Andrew Fisher
Mel Shaw
Mel Shaw
1 year ago
Reply to  Andrew Fisher

Owen Jones doesn’t know the difference between Chavs (the non-working underclass) and the working class (who, inconveniently for him, voted for brexit in large numbers).

Last Jacobin
Last Jacobin
1 year ago
Reply to  Michael L

I think that’s a bit unfair. His book Chavs, from 2011, was about as acute an assessment of what has happened to the English working class as you could get and not flattering of left or right.
Burchill, on the other hand, has never held a conviction or belief for longer than the time it takes her to write her next article.

Fraser Bailey
Fraser Bailey
1 year ago

‘Even a Davos-friendly neoliberal like Osborne understood that the state ends up subsidising cheap-and-nasty business models through the tax credits system and other means of supporting the working poor. ‘
The pernicious tax credits system having been introduced, or at least massively expanded, by the appalling New Labour govt around 15 years ago. There was one thing that wicked mob got right, from here to Kabul.

Jeremy Smith
Jeremy Smith
1 year ago
Reply to  Fraser Bailey

What are you going to do about low wage workers?

Neil Wilson
Neil Wilson
1 year ago
Reply to  Jeremy Smith

Give them an alternative job to go to at the living wage – by allowing people to sell their labour to the local council at a fixed rate. Which at a stroke solves the unemployment problem in Hartlepool and everywhere else in the nation.
Then there won’t be any low wage workers. The private sector will have to compete for labour and get better at using what it has by investing capital in better processes and machinery – which will solve the productivity issue.

Last edited 1 year ago by Neil Wilson
Chris Wheatley
Chris Wheatley
1 year ago
Reply to  Neil Wilson

This is already being done. About 10 years ago I watched a machine driving along the road sucking up sludge from the drains. There was one man driving it.
A couple of weeks ago I saw the same machine with two men in the cabin, two men holding stop/go posts walking with the machine, two men who were walking along moving traffic signs and two men sitting in a van watching. This is an 800% increase in labour for the same job.

Jeremy Smith
Jeremy Smith
1 year ago
Reply to  Neil Wilson

“..process and machinery”. The private sector that uses cheap labour can not automate the jobs?
A robot barista at Nero? A robot fruit picker?

Galeti Tavas
Galeti Tavas
1 year ago
Reply to  Neil Wilson

I can see the jobs advert: Wanted, hole diggers, and hole filler-ins. No experience needed. Job description, dig holes, fill them back in. Pay, minimum wage, must dig 10 yards, or 10,000 kg, of dirt a day. (naturally they will only dig 100 kg, but who cares, it really is just adult day-care)

Johnny Sutherland
Johnny Sutherland
1 year ago
Reply to  Neil Wilson

 by allowing people to sell their labour to the local council at a fixed rate.

To do what?

Andrew Fisher
Andrew Fisher
1 year ago
Reply to  Neil Wilson

I’m not sure I understand this, apart from being suspicious of problems being solved ‘at a stroke’.

Why, firstly, the local councils? They might well not have enough work to do, the unemployed may not have the right skills. The councils very well may well not have the budgets (it is local government that really did have its funding hugely reduced under Cameron and Osborne, far more than the central Civil Service.

Last edited 1 year ago by Andrew Fisher
Jeremy Smith
Jeremy Smith
1 year ago
Reply to  Jeremy Smith

Top up their wages.
Did I say that the economy doesn’t need low wage/costs/skill jobs?

Galeti Tavas
Galeti Tavas
1 year ago
Reply to  Jeremy Smith

Low Wage Work is a necessity. First it is for getting work skills – even simple ones like showing up, not showing an attitude, and focusing. Also low wage work is needed to act as a safty net for the not very employable. When those barely worth employing get bad attitudes the get fired, and can begin at the bottom of the ladder and learn to be better employees. Where all make good money the cra p employees stay bad and useless.

Brendan O'Leary
Brendan O'Leary
1 year ago
Reply to  Galeti Tavas

Low wage work was the entry level for unqualified yobs like me. I learned a lot and I did alright
Unfortunately, now the cynical class barriers of credentialism and hyper-regulation in everything are destroying the path to upward mobility.

Last edited 1 year ago by Brendan O'Leary
Johnny Sutherland
Johnny Sutherland
1 year ago

I’m not sure about it being a class barrier but credentialism is a real problem. I’m waiting for the first degree in toilet cleaning hygiene operations.

Brendan O'Leary
Brendan O'Leary
1 year ago

There are multiple levels, below degree or uni level, of credentials, certificates and licensing, requiring trainers and inspectors and associated bureaucrats usually outnumbering those doing any actual work.

Last Jacobin
Last Jacobin
1 year ago

Depends on how you define upward mobility. I think lollipop men or women who help kids and parents cross roads safely are more valuable to society than stockbrokers and their wages per hour should better reflect that.

Brendan O'Leary
Brendan O'Leary
1 year ago
Reply to  Last Jacobin

Here the lollipop/crossing wardens are mostly retired people who could have been anything in their previous working life. Even stockbrokers.

Last Jacobin
Last Jacobin
1 year ago

Fair enough. For lollipop/crossing wardens substitute street cleaners.

Brendan O'Leary
Brendan O'Leary
1 year ago
Reply to  Last Jacobin

Over the years I’ve had many colleagues who expressed a wish to retire from all the stress and get a simple job as a street cleaner. Those who did found out it wasn’t that simple and there was a long waiting list, (“dead man’s shoes” as we say) which mostly went to cronies already working for the council.

JR Stoker
JR Stoker
1 year ago

Thatcherism has not died; it is just sleeping, until such time as we are completely in the doo-doo and the eternal truths will be needed once more to sort the mess out

Jeremy Smith
Jeremy Smith
1 year ago

How are the Tories going to pay for all the “leveling up”?
Tax Tunbridge Wells to pay for Stoke?
Taxes on pensions? Housing?
It will require public spending as % of GDP to go up by another 5-10% of GDP.

Galeti Tavas
Galeti Tavas
1 year ago
Reply to  Jeremy Smith

MMT!!! Create the money out of thin air, give it to the lower earners. Use Tax to gather it back up later, this is called ‘Redistribution’ as only the well off pay income and capital gains tax, and is the cornerstone of MMT.

AND

Inflation! See, inflation is a tax on all money. It devalues every penny as soon as it pauses in motion. Inflation is the most regressive tax of all as poor have no Stock Market shares and Gov Bonds to beat inflation, so all their money suffers from ‘Inflation Tax’ so MMT is also ‘Regressive’.

MMT Is the current world’s Central Bank’s policy! It is cool, although will lead to a global depression, but who cares – it means free money by the trillion, to buy votes and make Lefties happy.

Dougie Undersub
Dougie Undersub
1 year ago
Reply to  Jeremy Smith

Since Tunbridge Wells has just gone Labour, that’s a very good idea.

Rob Mcneill-wilson
Rob Mcneill-wilson
1 year ago
Reply to  Jeremy Smith

How about reducing taxation to increase the tax take. 17% flat rate for all income tax and national insurance would do it.

Karen Jemmett
Karen Jemmett
1 year ago

I suspect even George will be a tad embarrassed at getting all the credit…. does this have anything to do with the fact he was a Remainer, per chance? Before you heap too much praise on ‘pension snatcher’ Osborne, you might all want to reserve judgment until we’re out of the mire….. that’s all I’m saying.

Dougie Undersub
Dougie Undersub
1 year ago

Osborne talked about austerity but didn’t actually deliver it. Government spending increased in real terms every year from 2010. That’s not austerity.
Many people might feel the money wasn’t spend in their preferred areas but that’s just an elected government implementing its manifesto, not austerity.

Emre Emre
Emre Emre
1 year ago

I can add two further relevant points here. Conservatives are no longer the party of “business”. They have given that up when they aligned with populism.
Secondly, the intellectual foundations of liberalism are collapsing. This means the right-wing of liberalism is under less obligation to focus on high minded ideas such as liberty and small government.

Last edited 1 year ago by Emre Emre
Charles Walker
Charles Walker
1 year ago

“Journalist Owen Jones says there has been “a compete vacuum left by the Labour Party when it comes to policy or vision””

And there he is!

Neil Wilson
Neil Wilson
1 year ago

 It took the Conservatives a while to become fully conscious of these realities.”
They still are not. Hence they made the mistake of proposing to raise Corporation Tax when they had no need to – because they were still pushing for ‘fiscal balance’. Even though that is impossible in an economy where people are net saving in Sterling. People choose to save and ‘force’ government to borrow those savings.
If you want to ‘balance the budget’ you have to confiscate the savings stock, not tap the financial flow.
Or finally become conscious that you don’t have to do either, nor reward people for doing so.

Jeremy Smith
Jeremy Smith
1 year ago
Reply to  Neil Wilson

Private sector debt is c. 230% of GDP. What are you talking about net savings?
Ever since 1974 (end of Bretton Wood system) the driving force of British economy has been an ever increasing pile of debt. From 1974-2007/8 it was driven by private sector debt (40% to 250% of GDP)
Since 2007/8-19 the growth has been driven by UK GOV debt (40% to 80% of GDP).
In total UK (as a nation) has to borrow more and more money. And the return on the debt has declined.

Last edited 1 year ago by Jeremy Smith
Galeti Tavas
Galeti Tavas
1 year ago
Reply to  Jeremy Smith

Inflation is the rat which gnaws away on debt – and so it will be made to rise. That inflation is merely a tax on all money not well invested it is a highly regressive tax, but it is a tax as surely as any, and will pay back debt. Just wait and see. The National Debts can NEVER be paid back by real tax, and so the stealth tax of inflation will do the job.

James Rowlands
James Rowlands
1 year ago
Reply to  Galeti Tavas

Weimar

Galeti Tavas
Galeti Tavas
1 year ago
Reply to  James Rowlands

I do not expect that, but maybe more like 1980 with 13% inflation and 15% interest. Wiemar was one of the world’s craziest times and places. The intellectuals, and the artists, psychology, Philosophy, Political, writers, thinkers, (Nazi, Marxist, Anarchist, Fascist, Freudian), military, all were incarnate at once in one spot is the swirl of greatest evil ever. Existential/Marxist Freudian/Nihilist/Utilitarian Frankfurt School arose in the Goethe institute and went on to USA Columbia University and is the source of all our crisis now) Satan was there then – it was an outburst of the most amazing creativity – but dark. Hitler, Antifa, and the Western Intellectual/Academic/Marxist all arose together. 100,000,000 deaths came from that time and place’s thinking.

Naturally France had much to do with it all, the Treaty of Versailles retributively forced on the Germans was their fault, and they reaped the whirlwind. But so do we all, still.

Galeti Tavas
Galeti Tavas
1 year ago
Reply to  Neil Wilson

Raising corporate tax is cool! It means the corporation has to raise the prices to cover it, keep wages down to cover it, and generally return much less to its shareholders, meaning they pay less tax. Everyone rich and poor pays that tax increase.
It is like making all food free, but taxing water and all drinks the same amount as you lose on food. It is NET ZERO, but looks good – who is not for free food?

Last Jacobin
Last Jacobin
1 year ago

For instance, it was Osborne who introduced the National Living Wage — i.e. a long-term plan to raise the minimum wage to levels that few expected a Conservative government to ever support.
The National Living Wage was a Tory re-branding of the minimum wage designed to take the political heat out of the campaign for a Real Living Wage.
Current Conservative Policies are New Labour with a side serving of English Nationalism/anti-foreigner sentiment. And I don’t even think they believe in the Nationalism bit, it’s just a useful point of difference for them to highlight between themselves and the other parties.

Karen Jemmett
Karen Jemmett
1 year ago

I suspect even George will be a tad embarrassed at getting all the credit… does this have anything to do with the fact he was a Remainer, per chance? Before you all heap too much praise on “pension snatcher” Osborne, you might all want to reserve judgment until we’re out of this mire.. that’s all I’m saying

Andrew Baldwin
Andrew Baldwin
1 year ago

Well, yes, the new Conservatives aren’t like the old Conservatives. The Chancellor of the Exchequer, Rishi Sunak, updated the Bank of England’s remit in March to include a trendy political commitment to “achieving strong, sustainable and balanced growth that is also environmentally sustainable and consistent with the transition to a net zero economy”. Long gone is the long-term goal of Chancellor of the Exchequer Norman Lamont, an inflation target range of 0% to 2%, i.e. consistent with a point target rate of 1% rather than 2%. Lamont’s long-term goal really could be called price stability. A 2% target rate is just a low-inflation goal. It’s a joke to call it a price stability goal. Does Peter see this as an advance? Not a rhetorical question. I would really like to know.

James Chater
James Chater
1 year ago

I

Last edited 1 year ago by James Chater