October 20, 2010
Thatcher’s Children
Most people remember where they were on 9/11. Epoch-changing events have that effect, especially when they are so spectacular and obviously far-reaching in their ramifications. But not all epoch-changing events are spectacular, and they don’t always advertise themselves so obviously.
With that in mind, remember where you were today. The 2010 Comprehensive Spending Review may become a date historians return to.
Much of Britain’s post-war history can be summarised – simplistically, but with some accuracy – as follows. After the devastation of global war, and the realisation that unchecked economic and social strife leads to the violent recourse of desperate extremist politics, west European nation states erected new social settlements both to rebuild shattered economies and polities, and to serve as prophylactics against the politics of extremism.
During the 1970s the social settlement in Britain underwent extreme strain for complex reasons, but in particular due to economic difficulties of both domestic and international origin. In 1979 Margaret Thatcher was elected Prime Minister, and the first phase of a radical re-settlement began. The position of organised labour within Britain was crushed, and the role of private enterprise was drastically increased. Deregulation of finance and industry expanded the scope of market provision, and contracted the role of the provider-state. However the core of the post-war social settlement – what we loosely call “the Welfare State” – was left essentially intact, although modifications were made to the way it provided services, reflecting moves towards a general market-default.
From 1997-2010 Tony Blair and Gordon Brown’s New Labour put the Thatcher project on hold, but did not reverse it. If anything the role of private enterprise in particular was expanded. Although core components of the welfare state – in particular education and healthcare – saw enormous increases in spending from 2001 onwards, this was undertaken within the framework of accepting the Thatcherite re-settlement on the economy as a whole. Although laudable efforts to reduce poverty were undertaken – with some considerable successes – socio-economic inequality increased, as the marketisation of everything continued apace.
From May 2010 onwards, what can be described as the second phase of the Thatcherite resettlement began. Under the banner of massive fiscal retrenchment – justified (rightly or wrongly) as a necessary response to the devastation of the 2008 financial crisis – the Conservative-LibDem Coalition has proceeded to instigate massive spending cuts which are fundamentally over-turning the post-war “Welfare State” and attendant social settlement.
Indeed, it is worth noting what has already been pushed through since spring 2010.
Whilst Michael Gove’s highly ideological free schools programme, and parallel withdrawal of ordinary state school funds, has attracted much attention it has simultaneously distracted from the massive reconstitution of the NHS being conducted by Andrew Lansley (arguably without democratic mandate). Universal child benefits have already been withdrawn. The affordability of higher education for all may be finished as the LibDems U-turn on one of their oldest electoral promises. The system of state benefits has come under severe attack from Chancellor George Osborne, as dramatic welfare caps are introduced. And reports ahead of the CSR going official indicate that the Government already expects at least half a million new unemployed from public sector redundancies alone.
And this is only the beginning, the warm-up; the light shavings of the razor before the axe falls proper.
As John Gray has explained so well Cameron, Osborne and Clegg are Thatcher’s ideological children. They see this as the only way, for they have known no other way. And thus, it may very well come to pass that 20th October 2010 will be noted by future historians as the day the British social settlement completed the change of direction begun in 1979, entering new – and as yet, uncharted – waters.
So remember where you were. Your grandchildren may want to know.
NemesisTheWarlock said,
October 20, 2010 at 8:13 am
It truly is a moment of great pride – at last, a cure for the British cancer of socialism. To quote Hansard’s report of the words of Hartley Shawcross, Attorney-General in the degenerate Attlee Government, “We are the masters at the moment … and for a very long time to come. “
Tim Worstall said,
October 20, 2010 at 8:23 am
“west European nation states”
Yes, but to then elide to the specific and particular ways in which the UK did is rather to sell the pass.
Because the other west European states constructed said social settlements in very different ways. For example, Holland has always had a school voucher system: Swedish and Danish health care systems are not free at the point of consumption (there are low fees to be paid for visiting the doctor for example) and are run by the counties, not as a national monolith.
Sweden and Denmark again have much more private involvement in the provision of what are usually considered public services: much of Denmark’s fire and ambulance services for example are provided by a private company (now part of Group 4S) and have been for most of the last century. The French system of health insurance is a real health insurance system, the “national” system only paying 80% of the treatment cost for most diseases, the balance usually being made up by private insurance. Both the German and French systems have myriads of different providers, charity, not for profit and profit making, the insurance, both State and private covering them all.
On labour protections, the Nordics are fire at will, with high unemployment and retraining protections, the Latins make it very difficult indeed to fire with low unemployment and retraining protections.
One can indeed make the argument that the UK has done these things in one particular manner and that this is now being changed. But almost all of the changes are the adoption of ways in which other West European countries have organised their social settlements in this post war period.
Arguing about whether they’re adopting the good methods out there or not is another matter: but there’s pretty much nothing which is being proposed which hasn’t been in use in some other comparable society, some of them much more “social democrat” than our own, for decades.
A change in the UK’s post war settlement, yes. But out of the ordinary for the general European post war settlemnt? No, not really.
Indeed, the financial aim seems to be to return the State to about 40% of GDP….around and about the post war average actually. Just with different and, as I say, already used elsewhere, delivery mechanisms.
Paul Sagar said,
October 20, 2010 at 8:34 am
Tim, that’s a fine elaboration – but i dont see it as in tension with anything I’ve written here. The OP does try to be descriptive rather than evaluative; whatever the specific nature of the changes being wrought my point is only that the changes are big.
Nick said,
October 21, 2010 at 9:23 pm
Although the Attlee government did introduce the last great austerity push… maybe Clegg should investigate how they squeezed spending next time he prattles on about fairness…