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Strikes, sleaze and huge wealth gaps could hinder Tory neoliberal agenda

OPINION: Market fundamentalism survived the fall of Truss, but could a changing public mood bring about its demise?

Paul Rogers author pic
Paul Rogers
28 January 2023, 6.15am

Both the NHS and workers’ rights are targets of the Tory neoliberal agenda


Eleventh Hour Photography/Alamy Live News

Liz Truss’s accession to power was welcomed by elements of the Tory press, with Kwasi Kwarteng’s budget seen as a valued step-change towards full market fundamentalism. The optimism was short-lived, though, and within days the budget was ditched, as was the leadership soon afterwards, the stock markets having delivered their verdict.

It then became received wisdom within the Conservative Party that the Truss government had been an aberration of little long-term relevance and was best glossed over. But there was another view – that the Truss/Kwarteng error had simply been trying to do what was right but doing it much too fast.

It is well worth remembering that during the closing stages of the Truss vs Rishi Sunak leadership contest earlier in September, both candidates had fully embraced a neoliberal approach and each was every bit as determined as the other to emulate Thatcherism at its high point, 40 years earlier.

On that basis, the real test for the future of the ideology in the UK is still to come. So if the continuation of the neoliberal transformation is still the plan, how is it looking with a shaky Sunak administration clinging on to power in the midst of multiple crises of sleaze, strikes and discontent?

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What is clear is that even now, Sunak’s party is still fully committed to the transition. If the focus for Britain back in the Thatcher era centred on rapid privatisation, tax cuts for the wealthy, much tougher control of trade unions, financial deregulation and selling off social housing, then the work proceeded apace and continued into the 1990s. There was some slowdown under Labour through to 2010, and then 13 years of return to Thatcher-era policies right through to the present.

Even in the midst of the current problems, true believers see an opportunity for speeding up the transition in two areas – labour rights and the NHS – always provided the government can hold its nerve. With this in mind, we should note that while the 1980s transformations were largely successful as far as they went, there were two relative failures.

One was in the area of labour rights. While anti-union actions, especially against the miners and print workers, were certainly been effective in damaging trade unionism, the continuing influence of many of the public service unions, despite the legal constraints, is now a serious limitation in bringing organised labour under proper control. This approach simply will not work when it comes to unprecedented strikes by nurses, paramedics, ambulance drivers and tens of thousands of other health professionals. These union members simply cannot easily be dismissed as militants, even by the right-wing tabloids.

The second is that even towards the end of the Thatcher era, the NHS remained too popular in the public mind to be susceptible to across-the-board privatisation. There was certainly incremental progress in terms of creeping privatisation in the 1980s and 1990s, and it is worth remembering that Allyson Pollack’s seminal book ‘NHS plc’ was actually first published in 2005, analysing privatisation well into the Tony Blair era and pointing out the long-term public sector debt burden that would result from private finance initiatives.

Now, the creeping privatisation of the NHS is accelerating, with frequent talk of the need to pay your way, starting with GP appointments and A&E visits, as a precursor to transitioning to a privatised health insurance system. The government’s ever-closer links with the private health industry are much more out in the open, thanks partly to reporting by openDemocracy, with plenty of money also flowing into the pockets of MPs.

Closely related to this is the billions paid to the private sector during the Covid-19 pandemic. Much of this money was wasted, the latest example being a massive £15bn-worth of unused Covid tests, vaccines, and masks and gowns. Many of these supplies have been declared unusable and are being burned.

A few years ago, a sign reading ‘Keep calm and tax the rich’ might have been amusing, but now it strikes a serious chord

Despite this, given the huge rewards available to the private health sector, not least in the United States, if UK health privatisation does continue, it is right to assume that it will accelerate.

For the government, this is not just a matter of profits, welcome as they may be, but the wider success of the neoliberal approach. Overcome all the current strikes and worker unrest, and the control of labour rights in the public sector will be easier. Do so while continuing with health privatisation, and the sunny uplands of a neoliberal utopia will be there waiting for some, if not for all of us.

The trouble is that there are other annoying issues getting in the way. One concerns another consequence of neoliberalism: the problem of runaway wealth and its accumulation in so few hands. Years of campaigners pointing to the growth of near-obscene concentrations of wealth appeared to have little effect on public perception, but that is changing rapidly. Even just a couple of years ago, a sign reading ‘Keep calm and tax the rich’ would have been amusing and just a little pointed, but now it strikes a serious and thoroughly dissident chord.

Public disquiet is likely to grow. Super-rich individuals are now moving into the stately home business, not just buying up the old piles but even building brand new ones, like St John’s House, currently being developed in Oxfordshire. With more than 80 rooms, it’s expected to sell for around £100m. It might once have been met with wry amusement, but now the reaction is more likely to be anger and resentment.

If that is one problem for Sunak’s government, another, allied, issue is that the huge extent of maldistribution of wealth means that relatively easy changes to existing taxation patterns could yield tens of billions of pounds for the public purse, but that effectively means taxing the rich. This is not something his government will take on.

Reforms proposed recently by Tax Justice UK, for example, could raise over £37bn annually. They include equalising capital gains tax with income tax (£14bn), applying national insurance to unearned income (£8.6bn), a 1% wealth tax on assets over £10m (£10bn), cutting non-dom tax relief (£3.2bn), and tightening up on existing inheritance tax loopholes (£1.4bn).

When the Truss government took over in the autumn, some commentators, myself included, saw it as a clear test for policies approaching pure neoliberalism. If Truss succeeded, then all would be well for the belief system, but if it failed then the whole neoliberal approach could be seriously damaged. It did fail, but we were wrong to anticipate serious damage. The system has carried on much as before, with the Truss era quietly forgotten.

The outcome may not be the same the second time around, though. If most of the strikes fail and NHS privatisation continues, then the Sunak government will succeed, at least until the next election. But if the Sunak agenda fails, then the neoliberal transition really could be dealt a serious blow, given the changing public mood. The only problem is that if it does go that way, is there much chance of a thoroughly middle-of-the-road Labour Party making much difference once in power, or is that really being a touch optimistic?

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