Sunday, 27 July 2008

A New Thatcherite Nightmare Approaches

With the overturning of such a large majority in the Glasgow East by-election last week, Labour's 25th most safest seat there are a lot of ill-judged statements that Labour will be down to only 20 MPs following the next election in 2009/10. As I state before, that is a very faulty conclusion to draw from the evidence, as was information from the recent by-election in Henley which is ultra-conservative and where Labour did not stand a chance (the relative success of the BNP there has been mainly overlooked and should not have been, especially for the Conservatives). However, it does seem that the Brown government is under siege especially from the media and that there is now a high chance that he will be pushed out by his own party before any election occurs. However, I believe that people are unaware of the hazards that the UK faces if Labour loses the next election whether under Brown or someone else.

One of Brown's problems, is of course, that in 1997 the British electorate did not vote the Labour Party into power, they in fact voted for the Blarite Party, a Christian Democratic party with authoritarian overtones and an excellent control of the media. With Blair's departure the government has lost those characteristics. Blair knew this would be the case which is why he hung on so long. On his terms, his great failure was not to groom a Blairite successor who was strong enough and not corrupt to face down Brown and continue the Blaritie legacy. In addition Brown plays fair in a way that Blair never did. Brown believes people vote for policies, whereas, in fact, as Blair and especially his media sidekick, Alastair Campbell, knew, people vote the way they are told or are frightened to do by the media. Brown has let go that control of the media. I would hate him to be as manipulative as Blair was, but at least he needs to be better about getting his message and items of good news (like falling crime rates in many parts of the UK) across.

This failure is why David Cameron, leader of the Conservative Party, has managed to get away with having no policies, because everyone is focusing on Brown, and for the past few months, in seeking on his removal. As they are not being prompted by the media, no-one is looking around to see what the alternative actually offers. Cameron could slide into power more easily than any British leader before. Of course his lack of policies puts him in favour with the ultra-rich who effectively control the UK economy. With the economic crisis the world is facing, Cameron, most likely behave like Stanley Baldwin during the economic chaos of the 1920s and adopt a kind of 'Safety First' approach, i.e. one that means sacrifices from the ordinary populous in order that the wealthy are not upset a great deal. In fact this has been the Bush Jr. approach right throughout, so perhaps it should not be expected.

Of course in their rush to find more nails to put into the coffin of the Brown administration, many commentators seem to have been lazy in interpreting what went on in the Glasgow East election. Yes, it was a 22% swing in the poll, but to apply that across the UK and say it would lead to 20 Labour MPs after the next election, entirely misses which way the swing went. This, to some extent, shows up the differences between England and Scotland, especially its cities. The SNP (Scottish Nationalist Party) is in theory a party striving for Scottish independence, but that is not why most people vote for it. The SNP is to the left of Labour and certainly has been since the 1990s so it gains support from those people wanting a more Socialist approach to policies. In Scotland whereas late as 1980s 60% of the population rented social housing, and where education is still seen far more importantly than it is in England, this is the natural environment for left-wing policies. In 1997 the Conservatives lost all their seats in Scotland. I hardly envisaged that we have seen such a shift to the right that suddenly all of Scotland is going to love the Conservatives. Of course as in the 1980s and 1990s a Conservative government in London encourages many more Scots to think about breaking away so that they can have governments more to their taste, which for the majority are to the left of the current government.

The governments in power from 1997 have done far less than they should have done. Even if it had been Brown rather than Blair who had come to power in 1997 and only remained until 2001, then I believe more would have been achieved than we have witnessed with even a further 7 years of power. However, there are things that will cause real pain to ordinary people when the Conservatives come to power and neglect or scrap them. You might say that they are not going to overturn this legislation, but the one thing that has come out of Cameron is to say this:

"The Labour Party for a long time said it could deal with deep poverty because it understood about transferring money from rich to poor. I think we have reached the end of that road."

Thanks to Polly Toynbee in 'The Guardian' for highlighting this. She also noted how pleased right-wing commentators were about how 'brave' Cameron was to highlight that the 'experiment' of moving wealth from rich to poor should end. This is even worse than Margaret Thatcher. I loath her, but at least she believed there was a 'trickle down' effect in that if people at the top were prosperous then money would shake slowly down to the lower people in the economy. It never really worked that way, but being a daughter of a grocer and having gone to grammar school rather than the elite public schools that Cameron and the buffoon Boris Johnson attended, she at least saw people worse off than herself. She also emphasised hard work, rather than wealth coming to people as a 'right' in the way that Cameron and his ultra-rich supporters believe. Of course people made obscene profits under Thatcher and will again under Cameron, but there will not even be a gramme of moral censure on them for living that way.

One of the most effective coups of the Conservative of the 1980s was to portray the Labour Party as unable to deal with the economy. They achieved this by also effectively shutting themselves off from the legacy of the Conservative government of 1970-4. Though Thatcher did not name it so, effectively the Conservatives post-1975 were 'New Conservative' and so different economically from the Heath government. They condemned the economic policies of Labour as leading to unemployment under the 'Labour's Not Working' slogan, though of course once they were in power, unemployment rose from 1.6 million to 4 million. The Conservatives also oversaw the ever biggest crash in UK house prices 1990-3. Of course given how tied the British economy is to housing this had severe effects all over the economy and effectively shoved many middle class people, the very supporters of the Conservatives, down the social ladder. The Conservatives these days are no longer the party of the comfortably well-off or even the prosperous, like the Republicans in the USA, they have become the party of the extremely rich but use those well-off people lower down society as their base of support though actually not benefiting them. Conservative supporters are surprisingly masochistic and you still hear that terrible lie about Thatcher, 'she did things that had to be done, everyone agrees about that'. That statement which I have been hearing since the mid-1980s is still infuriating. Thatcher wiped out the lives of many middle class people, they know that and yet they feel they had to sacrifice their prosperity and the futures of their families because it was 'necessary'. Dictators love this kind of sacrifice and the average Conservative supporter is lining up to sacrifice themselves all over again in the 2010s. Meanwhile the rest of us are going to suffer in their race for martyrdom.

There are two policies which the Conservatives will scrap or let become moribund that will have a vast impact on social inequality. I can tell you for certain that by 2015 the UK will have far more people in poverty and will be a far more divided society than it is now. The first policy is the minimum wage. This was introduced in 1999, more than a hundred years after it had come to Australia and New Zealand. I have not seen much written on the social impact of the policy in the UK. Of course businesses said it would bankrupt them, but that in fact was not the case, and many still get away with flouting the law. However, I was living in East London at the time, one of the poorest areas of the UK. The minimum wage came in at £3.60 (€4.53; US$7.20) per hour for workers over the age of 21. At the time I knew workers in shops on £2.00 per hour (before tax of course). My father, working in Newcastle-under-Lyme met a woman working in a fish-and-chip shop where the cheapest meal was £1.90 and she was only earning £1.80 per hour. That indicates how low such people's purchasing power was as fish-and-chips are the cheapest takeaway food in the UK. This October, the rate for over 21s will rise to £5.73 per hour (€7.21; US$11.46) but given that 1 litre of petrol now costs £1.20, a loaf of bread costs around £1.30 (€1.63; US$2.60), and 1 pint (about 0.45 litres) of beer costs £3 (and is expected to rise to £4 this year) no-one is going to be wealthy on that income.

One reason why there has not been such an extreme slump in consumption in the UK that people expected is because of the minimum wage. The week it came into force you could see the shift in East London, the supermarkets, the buses, the underground trains, hairdressers, newsagents, the laundrettes, the pubs, the takeaways all suddenly had new customers or customers spending more. This in turn meant they could cover their increased wage bill and even employ more people. Everyone forgets that the poor are far more numerous than people in every other social category. Even the wealthiest person wants only one dinner however expensive it might be, a block of flats housing say 2000 people, need 2000 dinners and even if they are just fish and chips, this stimulates the economy at the grass roots far more than the single rich person. It becomes even greater when people in that block start all buying a fridge or a television.

Of course the minimum wage, the ultra-rich feel, must wither away as they feel it is making the population too cocky and unwilling to work in low wage jobs and also to stay compiant when in them. In fact given that so few people in the UK can save anything (and utility bills in particular are strongly cutting into the benefits of the minimum wage) they are actually as scared as they used to be. The harsher benefit regulations being introduced will add to that fear.

The other thing is the Working Tax Credits. Tax Credits were introduced in April 2003 and brought together tax credits that had covered families and disabled people before with a wider scope. The thing is that the people affected by them is now vast compared to what it was before, 82% of UK families with children now receive tax credits. It is a major source of income for single parent families. As the rate is related to the amount people are earning encourages people to find work. It does not cover the cost of child care which is the prime obstacle to parents of either gender working, but primarily women. Child care workers earn about £3 per hour per child and can make a reasonable income if they take in up to their maximum, which is about 4 pre-school children per adult. However, the cost of such care even at the lowest rates (and of course many charge even more) is £24 per day, £6000 per year for a parent working full-time, which you can compare to the average annual salary of £24,000 which 80% of the population earns less than. So I believe there is some way to go with Tax Credits, especially from a government which supports people having children (though Brown does this less than Blair whose Vichy-like Catholic influenced attitude was much more active in this). Taking away the hundreds of pounds per month that the large majority of families gain would actually increas unemployment almost immediately and would lead to a shooting up of child poverty.

What is fascinating is that Tax Credits prove that salaries are far too low in the UK. Though we are a country of many multi-millionaires, we have reached a state where the cost of living in the UK is so high that the government has to effectively subsidise more than 8 out of 10 families to be able to keep them out of poverty. The British have faced a year-on-year decline in how much their salaries can buy. If a teacher had the purchasing power that profession had in the mid-1950s they would be earning £80,000 now rather than the £25-30,000 that they do. When people complain about wage inflation they forget that a £1 million pound bonus for some utility company boss could pay the salaries of 33 teachers for a whole year. The cost of basics in the UK is cripping, with combined gas and electricity bills reaching £1000 per year for the average family, we are all effectively going to become dependent on the state to be able to pay for these things. Of course the British are big consumers of luxuries, but given our service-sector faced economy the inevitable fall away in consumption of these as is already happening, leads to unemployment.

So, with the UK already seeing a rise in unemployment and in inflation we are on track to have a government from a party which has no ability to manage unemployment and all it does is point the blame at those who lose their jobs and make them feel guilty for being discarded by businesses. Even Labour has had no ability to rein in the greed of utility companies and it will be worse when the party that gave those utility companies such freedom returns to power, especially as many of their friends are on the boards of these companies. Of course the UK like every country is buffeted by global economic challenges, but the way you weather them depends highly on the policies adopted by the domestic government. Just at the time when we need the economic strength of Brown when he was Chancellor, we are facing having an elitist party that does not care a damn about the bulk of population. We are rushing headlong towards a revival of 1983 and anyone who lived through that era must fear its return.

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