27.10.2010

No united front here

Unfortunately for Clegg, Osborne has not managed to get away with it, argues James Turley

The government’s programme of cuts has been sold to the population at large on the basis of its supposed necessity. We are running an unsustainable national debt, goes the mantra - unless we balance the books, all manner of economic chaos will result. Plagues of boils and rivers of blood, one presumes, will not be far behind.

Of course, if you do make this pitch successfully, it is pretty unassailable - if there is no choice, then there is no choice. Yet it remains a tough sell - because it is abundantly and obviously not true, as a cursory glance at the history of the national debt will demonstrate. A substantial national debt is as old as capitalism itself - and in times of full-scale war, it has dwarfed the present, somewhat piddling borrowing levels as a percentage of GDP.

The government, however, is left with little choice - because no other arguments are available to it. This is clearly demonstrated by the fact that it is increasingly difficult to find a defender for George Osborne’s spending review who does not have a whole list of strongly worded caveats. Certainly disquiet is being expressed over the cap on housing benefit, and not only from the ranks of the Liberal Democrats. London Tory MPs fear public outrage will be ignited at the sight of people being forced to move home.

Most remarkably, perhaps, this disquiet has penetrated into the heart of the Tory press. Peter Oborne, chief political commentator at The Daily Telegraph, lambasted Cameron and Osborne for their ‘insensitivity’ in announcing the cuts to rounds of whooping and cheering. The Mail, meanwhile, is fully on the warpath - cuts in child benefit have been interpreted by the nation’s foremost bastion of reaction as an attack on the family.

Even worse from its point of view is the enormous increase in funding to be enjoyed by the department for international development, to the tune of 37%. If there is one thing worse than public money going to the needy in Britain - or ‘scroungers’, in Mail jargon - it is public money going to needy foreigners. No less an authority is quoted than a very angry Sam Bowman of the Adam Smith Institute: “Overseas aid is a waste of taxpayers’ money that props up dictatorships in sub-Saharan Africa and funds fast-growing countries like India, whose economy has grown by nearly 8.8% in 2010 and which has its own space and nuclear weapons programmes ... Why the chancellor thinks that the taxpayer should fund the Indian space programme is unclear” (October 21).

The bulk of this ‘aid’, however - despite crowd-pleasing talk from the cabinet about pregnant mothers and malaria - has a rather dubious purpose. It is to be focused on shoring up ‘unstable’ states, in the interests of ‘conflict prevention’. In practice, this means funnelling money into Afghanistan and Pakistan, under the guidance of the newly created national security council.

It initially appeared that the Tories’ public ring-fencing of ‘international aid’ was simply a way to prop up its flagging ‘progressive’ PR job. That the budget is swelling so markedly leaves little doubt - in a period when the military budget is being cut, pumping money into aid makes up the shortfall. It also leaves the door open for greater use of ‘soft power’ as part of a shift in imperialist tactics - both in existing conflict zones, such as the Afghanistan/Pakistan mess, and in the service of future projects, such as regime change in Iran (on top of that, in the light of the recent Stuxnet affair, it should be noted that £650 million is being pumped into a new department concerned with cyber-security threats).

On one level, this discontent from the rightwing press does not represent any particularly virulent animus against the cuts per se. The Mail and the Telegraph are historically linked to the right of the Tory Party. Though they have officially supported the far-right Monday Club or its successors and accessories, the homology between the meat-headed racist garbage of the latter and the frothing denunciations of migrants and minorities common to the former (especially the Mail) is clear enough.

In that respect, discontent towards Osborne’s cuts is a particular form of their dismay at the general political outlook of a Tory Party headed by David Cameron, the world’s least convincing nice guy, in coalition with the Liberal Democrats. The latter are particularly useful to Cameron, as they allow him to face both ways more successfully. Any concession to modern liberal sensibilities can be milked in order to even out the wrinkles in his ‘progressive’ facade, at the same time as they can be blamed on the Lib Dems to appease discontent from the right of his own party.

In this context, there are no end of incentives for the supposedly disenfranchised Tory right to cause ructions in the coalition. If it swallows Cameron’s excuses, then it is to blame for all those woes. If it does not (and this is far more likely), then pressure on the coalition has a tendency to undermine those excuses, and thus induce Cameron to lean further to the right. The cuts, then, are a convenient stick with which to strike Cameron and his allies - in other contexts, there would be other complaints.

That said, the fact remains that the cuts are a suitable weapon - even for so bloodthirsty a creature as the Mail. It should not be ignored that, of all the issues on which to come out fighting, it has chosen a cut in benefits, which are not noted for receiving strenuous defence in the pages of the rightwing press. The autocannibalistic tendencies of the government’s austerity programme have made a truly motley band of enemies - ranging from the RMT to Associated Newspapers.

Of course, by the same token, simply destroying the public sector was not good enough for the Tories, because it was not good enough for Nick Clegg. The utmost care had to be taken to pitch the cuts as ‘fair’ - in other words, in a manner which balanced attacks on the poor with the removal of privileges from the ‘affluent’, in a sort of grotesque parody of that other contemporary snake-oil operation, carbon offsetting.

Unfortunately for Clegg, Osborne has not managed to get away with it. One need not turn to the pages of Socialist Worker to discover this - no less an authority than the Institute for Fiscal Studies think-tank has rather bluntly declared ‘fair cuts’ to be an illusion; the poorest are to be hardest hit, in particular the Mail’s precious ‘families with children’. The thoroughly bourgeois IFS, which was formed out of four finance capitalists’ disgust at the introduction of corporate and capital gains tax in 1965, also found time to ridicule suggestions that Labour’s proposed cuts would have been more severe, and that ‘front-line’ school spending would be preserved.

Clegg has rather predictably reacted angrily to the accusations. After all, he has the most to lose. The truth is, though, that the IFS has found some absurdly complicated ways to prove what is obvious to any eight-year-old of average intelligence - that you have to hit the rich very, very hard before they begin to feel pain comparable to that suffered by the unemployed upon quite minor changes in the benefits system. For the latter the difference between £45 and £50 a week is enormous - compared to the difference between £150,000 and £200,000 a year.

On an even more basic level, there are simply more of us than them - the fairest of ‘fair cuts’ will cause a lot more dislocation to the millions of workers in the country than the thousands of capitalists. Given all that, it is generally safe to assume that the simple act of taking money out of public services - especially sums of the order of £80 billion - means punishing the working class on an enormous scale.

Behind all this furore lies a fact acutely embarrassing to all advocates of large-scale austerity programmes in the contemporary capitalist world - on their own terms, they simply fail. It is impossible to restore economic stability by impoverishing millions. It is barely even possible to cut a budget deficit in that manner - after all, sacked public sector workers will then have to go on benefits; families already reduced to eating cut-price baked beans out of the tin will see their health deteriorate, which will then spike the NHS budget; none of these people will be able to spend much in the way of money, which will take a huge chunk out of VAT takings, and so forth.

And so it has already come to pass. The most recent figures show economic growth - not exactly soaring in the last days of Labour government - has dropped from 1.25% to 0.8% since Osborne’s ‘emergency budget’ of May. And with consumer spending stalled, the effects of the swinging cuts in public spending lying ahead and a rise in VAT set for January, it will take a miracle - or, at least, a great deal of highly imaginative book-cooking by the treasury - to avoid the dreaded ‘double dip’ recession if these plans are fulfilled. Such is already the fate of Ireland, whose austerity programmes resulted in an economic lurch south, which the government (and all major opposition parties) propose to fix with ... another raft of cuts.

Britain is not Ireland, of course - but it is not recession-proof either. With such an instructive example across the Irish Sea, it is no wonder the ruling class is having immense difficulties uniting behind Osborne’s cuts.