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Can Tories’ neoliberalism survive crisis-hit Britain’s darkening mood?

Growing anger over rising inequality makes the UK a testing ground for late-stage capitalist economic model

Paul Rogers author pic
Paul Rogers
27 August 2022, 12.00am
Nick Clegg and David Cameron’s coalition win in 2010 heralded the return of Thatcherite policies
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Creative Commons (CC BY-NC-ND 2.0)

When the British environmentalist and TV presenter, Chris Packham, tweeted a link to a striking video of sewage gushing out of a pipe onto a sandy beach in Sussex last week, it caused quite the stir. By mid-week, the video had surpassed five million views – the latest demonstration of a change in public attitudes to the privatised water companies.

The video’s impact has been heightened by three factors: the water companies are monopolies in the areas that they supply; most chief executives are on £1m-plus salaries; and shareholders are doing very nicely, thank you.

The anger directed towards the companies is part of a wider change in the national mood over the past six months, ranging from widespread support for striking transport workers, to the acceptance of the essential role of food banks in 21st century Britain. Worsening fuel poverty in the face of oil and gas corporations’ eye-watering profits adds to the anger, yet the lead contender for the Tory leadership, Liz Truss, is planning general tax cuts rather than prioritising the actual crisis at foot.

It is hardly surprising that the Labour opposition has moved into a poll lead even though its public presence is at best underwhelming. However, changes in party political support may be much less significant than this more basic shift in the national mood.

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In many countries across the world, not least in the Global South, people are fearful of the economic disarray predicted for the coming months. This also extends to poorer communities in otherwise wealthy countries across the Global North, especially those in which many millions are likely to be exposed to serious fuel poverty.

Thatcherite thinking’s return

In Britain, there is the added factor of a move to the political Right that even exceeds the radical neoliberal changes of the 1980s Margaret Thatcher era. This coincides with severe socio-economic challenges that simply do not fit in with that neoliberal agenda – meaning that the UK is heading for a crunch among wealthy states over the viability of an economic model that could have worldwide implications.

At the core of new economic thinking back in the 1970s was the idea of market fundamentalism, the primacy of the free market and its highly competitive philosophy. As it then came into political prominence in the 1980s, the main protagonist states were Ronald Reagan’s US and Thatcher’s UK, with the latter set for more fundamental policy shifts. Worldwide change was also evident, as the IMF and World Bank introduced “Washington consensus” policies of financial aid to poorer states being conditional on a neoliberal policy approach, especially when it came to privatising state assets.

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In global terms, though, it was the UK that embraced the new ideology most thoroughly – aided by the North Sea oil and gas bonanza, and in the 20 years after Thatcher there was little fundamental change, even if Labour carried out some modest reforms. Since the Tory-Lib Dem coalition took power in 2010, though, the UK has gone back to the Thatcherite thinking, and this has accelerated since the Tories’ overall parliamentary majority win in 2015.

Supported by the Tufton Street brigade of neoliberal freethinkers and their wider global community of hundreds more think tanks within the Atlas system, the government has worked hard to maintain the market fundamentalist view.

It hasn’t always been easy, as the COVID-19 pandemic required central economic management and government spending that would normally be anathema to any serious neoliberalist. Neither has the growing public awareness of global heating been very helpful.

On its own, the free market simply cannot respond quickly enough to the risk of climate breakdown. That has to come from determined governmental action, but neither of the two Tory leadership candidates is prioritising this – despite the wild weather now being experienced across the world.

Either Truss will stick to her policies – leading to political and economic crises – or the neoliberal approach will have to be abandoned

Whether Truss or Rishi Sunak wins the race, things are set for a new Tory government that is even more determined to pursue the Thatcherite dream, although such an approach will only make things worse. The increase in marginalisation now manifesting across Britain and the imperative need for immediate climate action both require effective and substantial central government action of a kind and extent that simply isn’t in the neoliberal playbook.

Because the UK government regards that playbook as sacrosanct and because the UK has gone unusually far down the neoliberal road, what is happening is essentially a test, not just for the Tory government but for this economic approach as a way of life. Either incoming prime minister Truss will stick with her declared policies – leading to a full-blooded economic and political crisis – or else the approach itself will have to be abandoned in a welter of U-turns.

Either way, neoliberalism will take a hit as the UK becomes an unhappy testing ground for what comes next in this era of late-stage capitalism.

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