The year ends with the country in a worse state than the government’s severest critics expected. Yet worse is to come, as 2012 slides towards the second recession in three years. Virtually everything David Cameron’s government has done has made matters worse; most policy initiatives are creaking while others are mere words without substance. In my political lifetime there has been no more callous or inept crew in charge – nor a government more skilful at disguising its nature.
Archives from 1981 – a similar Conservative year of deep cuts and riots – remind us of a cabinet that put up a fight against some excesses. Margaret Thatcher herself knew the no-go areas – the NHS above all – until hubris overcame her on the poll tax.
Not so this government, as it puts the NHS out to tender, cuts benefits for disabled children, leaves Britain more isolated and rapidly accelerates inequality. The difference is that Cameron is the master dissembler, his words belying his deeds, while Thatcher revelled in an Iron Lady imagery tougher than her more pragmatic reality.
How she would relish the Meryl Streep version: her apotheosis as the Boudicca and Gloriana saviour in constant conflict with the men who sought to thwart her – her own party, the miners, poll tax rioters, Argies in the Falklands … all those bad men vanquished under her chariot wheels. The film is devoid of politics, a beautifully acted paean of praise with no backward glance at what she mangled in her wake. This myth-making will cheer Conservative spirits.
After the ratings bounce for his EU veto, Cameron is plainly tempted to climb aboard her chariot, his party relishing his new “Christian values“. His original rebranding painted him as unlike her as possible. Personable, colloquial, moderate in tone, his charming family imagery reserves his Flashman side for Prime Minister’s Questions. He has reassured voters that he is not as nasty as his party – still the most disliked of the three, according to Ipsos Mori. Yet he should remember that even in that moderate disguise, he still couldn’t quite win, not even against Gordon Brown. The more conceited his self-belief, the more he overestimates his opposition’s weakness, the less he resists that call of the wild from his party roots. He has dropped every single one of his disguises – going green, concern for the poor, socially progressive, hugging hoodies, relaxed about Europe – in one U-turn after another, though mainly without changing his political language. So far, his moderate manner prevents many from seeing the change. Besides, new governments get the benefit of the doubt, with leeway to blame everything on the old regime; but he will find 2012 less forgiving.
The failure of George Osborne’s economic policy has been faster and more embarrassingly transparent than many expected. Osborne’s vision of public spending as a thorny thicket choking off private sector growth has been exposed in textbook fashion, just as Keynes proved back in the 1930s. Public investment was the seedcorn not the briar, and “crowding out” joins the litter of failed economic theories. Labour’s warning of “too far, too fast” has proved right. As bank reform and financial regulation is now kicked into 2019, “rebalancing the economy” is all mouth and no trousers – a phrase, not a deed. The sinking construction industry points out that Osborne’s recent £5bn “boost” to infrastructure is a fraction of the 30% already cut from it, while 2011 saw even fewer houses built.
The cuts will bleed harder this year: each job loss is a family tragedy, full of bitter personal humiliation as well as hardship. Some 1,829 people a day are losing their jobs, not numbers but people – and the pace is accelerating. Incomes will fall yet again this year: a 7% drop, the sharpest in 35 years, says the Institute for Fiscal Studies. The real value of minimum wage incomes has fallen furthest, says the Resolution Foundation. The silent exodus from homes and schools has begun, as tomorrow’s housing benefit cuts already start to drive families out of privately rented homes: Barking reports 140 new families arriving last month, including 70 uprooted child protection cases, and with thousands more expected.
The NHS by next winter will make constant headlines: the £3bn cost of disruption and privatisation will seem exorbitant as services go bust and waiting times soar. Crime is already rising, especially robbery and burglary, as youth unemployment increases and youth services vanish. With Sure Start and child literacy programmes disappearing, future trouble brews. The OECD’s latest report on rising inequality finds the bottom 30% with just 3% of UK wealth, while the top third commands 75%. With money comes the power to sway governments to protect tax privileges and loopholes. The IFS predicts another 600,000 poor children in the next two years but shamelessly Cameron and Clegg still promise social mobility, knowing the IFS says it is already reversing. As Warren Buffet says of the class war: “My class has won.”
This is no time for a Labour loss of nerve. When even Tory MPs attack crony capitalism and FT leaders warn of a corrupted capitalism that is eating itself, Ed Miliband has hit the right theme. Keep hammering the distorting political power finance wields for its meagre 7.4% of the economy. Reclaim “the state”: it is not a threatening monolith but a motor for economic growth, with regulators to keep capitalism straight. “The state” is not a faceless threat: it is doctors, nurses, teachers, park keepers, police, tax collectors and apprentice trainers, all precious assets. Reclaim Blair’s best heritage, when Labour’s state improved life for most people, from lower crime to no waiting lists, better schools and public places, with better chances for more children. No apology needed.
This is a rich country: how that wealth should be generated, invested and shared is our choice, not iron fate. It took a war to rescue us from the 1930s depression with state investment in arms and soldiers: it needs a war footing now to use the positive power of the state to get us back on our feet. This is no time for the state to retreat.
Just when Labour is proving right on the economy and right on social policy is no time to panic or trim to Osborne’s levels of austerity: cutting the deficit half as fast is enough. Cameron may have won the argument so far, but the evidence will get ever clearer that he was wrong. Labour has to trust that facts on the ground will convince. As Cameron’s anti-statism kills off growth, 2012 should see public opinion follow those facts.
guardian.co.uk © Guardian News & Media Limited 2010