In the streets and parks of Britain everything seems to be as it always has been. This feels like a typical British summer with those totems of modern life passing us by: Glastonbury, Wimbledon and England crashing out of the World Cup after another catastrophic underperformance.
Yet behind these comforting cultural moments things are changing dramatically. The new Con-Lib Dem government is presenting the case for public spending cuts the like of which we have never seen in the history of the UK. Its call for a rebalancing of the economy now means taking on the ‘bloated public sector’, rather than as it originally did shifting from the over-dominance of the City of London and financial services.
Labour have yet to find their feet, understand the limitations of their record, or an appropriate voice, stuck between tactical and strategic considerations which will crystallise in the forthcoming AV referendum vote.
This is both a fast moving situation and a moment with significant openings and opportunities, but also one that is being used to forge a new powerful consensus and commonsense in the political elite and establishment opinion. This is namely, the utilisation of the current economic, social and political crisis to undertake a profound and far-reaching British revolution.
A fascinating and revealing gathering of these opinions took place last week under the auspices of The Times newspaper with their CEO Summit who then produced a sixteen page detailed supplement of its deliberations at the end of last week (1).
The summit brought together an impressive array of figures from business with The Times announcing that ‘the men and women there represented many of the most powerful companies in the country. Between them, their businesses employ more than five million people and they have a combined value of more than £1 trillion’. No need for block votes here; business knows it has power, legitimacy and respect in the corridors of government!
The event was addressed by David Cameron, George Osborne and Jean Chrétien, Canadian Liberal PM responsible for its 1990s programme of public spending cuts, and its aim was in the words of James Harding, editor of The Times ‘to help to shape an agenda for renewed prosperity in Britain’.
The Seven Themes of the CEO Summit
The day’s deliberations were split into seven task force groups: the deficit, business growth, political reform, public services, Britain’s security, education and skills, and climate change, with each coming up with a short-list of policy ideas and their top five priorities. Sir John Rose, CEO of Rolls Royce, commented that the key message of the entire day was there had been a ‘sea change’ in attitudes towards a ‘rebalancing’ of how money is raised and spent.
The priorities agreed in each discussion make for riveting reading and amount to a manifesto by major parts of British industry and commerce. The deficit group’s top policy ideas after its first one of sticking to the government target for deficit reduction, paints a weary picture. They are in order of importance:
- Shift a significant amount of government work to the private sector;
- Introduce a 5% pension levy for all public sector workers;
- Freeze benefit rates for two years;
- Cut all pensioner benefits and put one third into the Pension Credit.
All of these supposedly deficit reducing measures aid redistributing income, wealth and support away from those who are poorer and disadvantaged, and an implicit call for a recalibrated state which is even less ‘progressive’ than the current one in its priorities.
The business growth group decided their top aim was to ‘seek to put the UK at the top of the international tax competitive league’, and talked incessantly of the age old mantras of recent decades: ‘reducing regulation’, cutting ‘red tape for business’ and encouraging ‘labour market flexibility’.
The political reform strand was a shard of radical enlightenment compared to the rest of the day, co-chaired by that well-known reformer Vernon Bogdanor. Its list of reforms was a fascinating mix, first wanting to ‘change the voting system for the House of Commons’, second, ‘an appointed, and not elected House of Lords’ with the latter viewed as a ‘political gesture’, third, ‘a written constitution, with input from members of the public’.
The public services group decided their top priority was to ‘establish the things that ‘only government’ can do’ and to ‘take on the public sector unions (over pensions, pay and flexible working)’. One participant stated that we needed to ask ‘What does the State really need to do, and what does it not?’
The 'Britain’s security' discussion showed how far this could go by deciding that its most important policy should be how to ‘use the private sector to cut defence procurement and support’. The education and skills group's top aim was how to ‘give heads and governing bodies freedom over the hiring and pay of teachers’. One member of this discussion commented, ‘Heads should run schools as CEOs run companies – with freedom to hire and fire’. The climate change group was not surprisingly pro-nuclear, focused on profits and growth.
The Shock Doctrine of the British Crisis
The Times CEO Summit Agenda has been ‘delivered’ to Cameron and Osborne, along with Vince Cable and Michael Gove and other Cabinet ministers. It is an accurate statement of the emergence of a new consensus to address the multiple crises. After the bankers’ crash and the Keynesian moment, we are now ‘back to the future’ of the safety and comfort of the mantras of the Thatcher and Blair eras. This is the coming of another British revolution.
The crisis of sovereign debt in Greece and the Eurozone which emerged in the course of the 2010 UK general election has been used by the Conservatives and Lib Dems to shift profoundly rightwards and remake British politics. Nick Clegg rejects that he is being used as a ‘figleaf’ to engage in a fundamental transformation of British society, the state and the economy, making it more unequal, harsh and nasty for those who have the misfortune to be poor, or fail, or need temporary support (2). This is not because he is in denial about what is happening but because like a whole swathe of Lib Dems he is as economically liberal and neo-liberal as the most uber-Tory.
What is being posed is in effect a ‘shock therapy’ to the British economy, society and public spending the like of which has never been seen in a supposedly mature democracy. The only comparisons here are the brutal neo-liberal experiments of the Chilean and Argentinean military dictatorships in the 1970s, and the former Soviet bloc after the fall of Communism. Britain’s proposed cuts are twice as deep as Canada in the 1990s, and three times more tough than Sweden in the same period.
What isn’t widely realised is the power and hold this ideological dogma now has over parts of British society: elements of all Britain’s three main political parties, business, media and institutional opinion. The assumptions it draws on that the state, public spending and regulation are the problem, and a smaller state, public spending cuts and deregulation the solution are not based on any calm analysis, facts or evidence.
Instead, this neo-liberal calling has become a faith, a sect, a kind of calling which has a popular resonance because it is so simple and can be understood and articulated by a taxi driver or pub bore. The public sector has become ‘bloated’, ‘we have been spending more than we earn’, ‘the world does not owe us a living’; we have even seen the return of Margaret Thatcher’s ‘household economics’. Underneath it all the Con-Lib Dems want to see a return to the consumption driven, property fixated, asset bubble of the New Labour era as their own budget figures show!
What you won’t find in this worldview or any of The Times CEO Summit is an assessment of the shortcoming of British business, the City and finance. Nothing in the seven discussion groups' top priorities was about business changing its ways, the failures of banks and finances, and nothing at all was put forward about radically altering the structures and cultures of companies and industry. The long view story of this crisis, of the inadequacies of gentlemanly capitalism, the anti-industrial ethos in British society, the limitations of corporate governance and finance, and the addiction to short-termism and instability, didn’t get a mention.
The response to this has to recognise the dogma we are dealing with and its hold on the forces of power, wealth and status in our society. The second wave of neo-liberalism that is emerging will not be defeated by calmly pointing out the disastrous effects of their policies, and that thirty years after their palace revolution the UK is the fourth most unequal country in the advanced capitalist world.
We have to realise that facts and reality don’t matter to the true believers of this revolution. Therefore, the way to defeat them is to develop an alternative explanation of the current crises, which challenges the current constellation of forces which give legitimacy and voice to neo-liberalism, and which poses this with an understanding of the long view of the British crisis.
And we probably need to start thinking about a populist version of this as well: what would the taxi driver in central London say about the current crisis if they were trying to challenge the discussions of The Times summit last week? Do we have even the beginnings of an answer?
1. The Times CEO Summit: Setting Britain’s Summit: Business leaders present their policies to the coalition Government, The Times, July 1st 2010.
2. Channel Four News, July 5th 2010.