Showing posts with label Margaret Thatcher. Show all posts
Showing posts with label Margaret Thatcher. Show all posts

Thursday, 3 March 2011

The Decline of the BBC & the Deception of Modern Politics

Apart from last year’s expenses scandal, one of the things which most brings British politicians into disrepute, I believe, is their general refusal to answer a direct question, and to launch instead into clearly rehearsed collections of loosely bolted together phrases and slogans, which are virtually meaningless in their generality and ambiguity, and have already been used ad infinitum by most of their party colleagues. Not only do they consequently present themselves as evasive dissemblers, who would thus appear to have something to hide, it also makes them seem like mere mouthpieces for their party machines, without the wit to maintain a conversation on their own. As a result, it always takes me slightly by surprise when, once out of office, promoting their memoirs on late night culture shows, the same politicians suddenly start talking freely, candidly, and with a great deal of both intelligence and humour on a whole range of subjects about which I would never have imagined them to have been interested. Why, I always want to ask, if they were real human beings all along, didn’t they reveal this to us when, as a consequence, I might actually have voted for them?

The answer, of course, is that it is fairly hard to speak one’s mind or say anything even remotely original while staying ‘on-message’, and that while, in attempting to do so, a more naïve politician – if such a things exists – might have entertained us for a while, eventually, of course, he would have put his foot in it, not by saying anything inherently objectionable, but by voicing  a view sufficiently different from his party’s official policy for some predatory interviewer to have immediately pounced on the error, picking away at the exposed seam, until what was initially just a slip of the tongue had become a ‘Rift in the Party’, for which the errant individual would ultimately have been required to fall on his sword. Indeed, picking up on the careless phrase, and continually returning to it until the interviewee has either said something else he is going to regret, or has thoroughly tied himself up in knots trying to escape his entanglement, would now seem to be one of the most common tactics employed by TV journalists on most news and current affairs programmes. Moreover, the communications departments of all the main political parties are well aware of it, and make sure that all their spokesmen and women are well rehearsed before they appear in front of the cameras. In a very real sense, therefore, we get the politicians we allow our media to create for us. 

Nor is dogged adherence to the pre-prepared answer, regardless of the question, the only way in which the media and our politicians have colluded to render both politics and the media’s current affairs offerings progressively more empty. For not wanting to answer any real questions also means, of course, not wanting to get into any real debate. One can trade satirical jibes, point fingers at the government for going back on its promises, or accuse the opposition of having no answers of its own; but carefully reasoned arguments on the specifics of particular policies would not only bore the average viewer – or so the TV companies seem to believe – it would also require both the politicians and the TV presenters to have some grasp of the detail one suspects they now largely leave to their backroom staff. 

Even this wouldn’t be so bad if those backroom staff – or at least those working for the media – were occasionally allowed to produce and broadcast some in-depth analyses of their own. But this too seems to be a thing of the past. Even the BBC’s flagship current affairs programme, Newsnight, now clearly devotes more time to politicians talking at each other across a table than it does to the analysis presented beforehand by one of its own staff. 

This, I suspect, is largely due to the BBC’s twenty-four hour news coverage, which requires even some of the corporation’s most senior journalists to do their daily two-hour stint in front of the cameras, continuously reading from a looped autocue, when they could be far better employed properly preparing the evening’s broadcasts. More importantly, the need to fill these endless hours with something – usually by going across to the network’s correspondent at Heathrow airport, who is standing in front of an empty stretch of tarmac, still awaiting the arrival of some important person’s plane and hasn’t had anything interesting to say for the full three and a half hours he has already been there – has clearly been responsible for a steady erosion of even the most basic journalistic standards. Assembling a fifteen or thirty minute news bulletin requires clarity and concision, a disciplined approach which both hones a journalist’s analytical skills and forces him or her to focus on what is really important. Filling twenty-four hours with the same material requires only a flare for the inane and the kind of visceral terror of ‘dead air’ which can drive even seasoned broadcasters to ask people ‘what it’s like’ to be stranded at an airport terminal for four days due to snow, strikes or volcanic ash.
The worst of it is that most of the latest generation of news broadcasters actually seem to believe that being photogenic and maintaining continuity between items is not only all that the job requires of them, but that fulfilling this gruelling task is more than enough to merit their sizable salaries. As a result, the news just wafts past them, without it seeming to occur to them that, just for once, they might look below the surface or open up the story to further scrutiny. 

To take some recent examples, consider, for instance, the current regulations with regard to control orders for suspected terrorists, which, at the last election, both parties now in government promised to address, and which the Liberal Democrats promised to scrap altogether, introducing instead the use of intercept evidence in court, so that terror suspects could be charged and put on trial, instead of simply being detained under house arrest. It was to the dismay of many, therefore, that in January this year the government announced that although it was relaxing some of the rules, for reasons of security, control orders would certainly not be abolished in anything like the near future. 

Of course, the opposition were delighted. They immediately accused the Liberal Democrats, in particular, of abandoning their principles in favour of their ministerial positions, a jibe which, for a while at least, threatened to undermine the collation, and which naturally became the one part of the story which the news media therefore covered. No one asked whether control orders actually achieved anything other than tarnishing Britain’s reputation for upholding civil liberties. No one asked what the threat to national security might be in using intercept evidence in court, or how it was that other countries managed to do this without it undermining ongoing security operations. No one even hinted that it might be because the production of such evidence would alert people to how routinely MI5 listen to our telephone conversations and read our emails without even the pretence of justification. Indeed, were I a conspiracy theorist, I might regard this silence as suspicious. As it is, I merely think it symptomatic of a fourth estate which now regards itself more a part of the entertainment industry than a seeker of truth and guardian of our freedoms.  

Nor is this the only example of a political news story flashing across our television screens to be instantly forgotten without even the most basic questions being asked. In fact, I could cite almost any of the initiatives introduced by the present government since it came to power, and the same pattern would apply. To take just one more example, consider the recently announced reforms of the National Health Service, which centre on the abolition of Strategic Health Authorities and Primary Care Trusts, thus reducing NHS bureaucracy by 24,000 posts. Naturally, the opposition declared that such an upheaval would lead to chaos, cost more money, worsen the service, and result in people needlessly dying. The government then defended the measures by pointing out that expenditure on the NHS is one of the few areas that is not being cut in the general effort to reduce the budgetary deficit, and that the main aim of the reforms is to put more decision-making powers into the hands of GPs, to whom many of the responsibilities of the abolished bodies will now be effectively reallocated. And that was it. End of discussion. Not only did no one think it worthwhile rehearsing the reasons why reform of the NHS might be a good idea, or look again at the problems in order to consider whether the proposed measures stood any chance of being a success, they didn’t even bother to note that, superficially at least, something very like this was tried by Mrs. Thatcher in 1990, when she introduced the ‘internal market’ into the NHS by having GPs ‘purchase’ services on behalf of their patients, an initiative, which, if I remember correctly, failed quite miserably. Once again, therefore, the trivial political sniping was headlined, while the real issues of substance were completely ignored.

The problem, however, is not simply that in constantly trying to catch politicians out on the little things, while at the same time allowing them to get away with empty rhetoric on anything of substance, the media are failing to provide the kind of news and current affairs service a modern democracy needs. In reducing political debate to the trading of emotive sound bites, and in thus allowing politicians to appeal to the audience’s prejudices rather than its reason, they also encourage one of politics’ very worst aspects, its irrational tribalism. Anyone who has watched Prime Minister’s Questions, broadcast each Wednesday from the House of Commons, for instance, will be aware of what a gladiatorial circus it is, with each side of the house baying for their man. This is not about political debate; it is about the alpha males of two opposing clans going head to head and rousing their supporters in the process. Indeed, there is now a slot on the BBC’s programme which accompanies PMQs, in which viewers’ emails and text messages are read out giving their opinions as to which of the two party leaders, David Cameron or Ed Miliband, won that particular round.

Of course, it can be argued that it was ever thus. Since the Glorious Revolution of 1689, when parliament effectively became sovereign, the House of Commons has seen a good many robust and highly personal battles. But few, I suspect, were ever as hollow or as meaningless as today’s stage-managed confrontations. One of the reasons for this, I believe, is that, in a very important sense, politics in Britain – or, at least, politics as we knew it in the 20th century – actually came to an end in November 1990, when Margaret Thatcher finally resigned, exactly one year after the fall of the Berlin wall. Even the Iron Lady’s eleven years in office, however were more of a postscript to the political century than the main event, which probably occurred some time during the Attlee government of 1945 to 1951, when the Labour Party actually fulfilled its original purpose and, in doing so, effectively made itself obsolete.

The idea that a political party might only have one purpose, and that it could accomplish that purpose to such extent that it was no longer required, may, of course, sound slightly odd. But created to secure a fairer slice of the national cake for ordinary working men and women, it can be argued that with state pensions and universal suffrage having already been secured, in creating both the National Health Service and a universal social security system, and in providing a better system of state education and more affordable social housing, the Attlee government did all it needed to do in order to fulfil the Labour Party’s mission. It certainly seemed that way to many who witnessed the post-war transformation. I know because I, myself, was brought up on a local council estate in the 1950s. What it is important to realise, however, is that a 1950s council estate was nothing like the high-rise ghettos subsequent Labour governments built in the 1960s. Nor was it even remotely comparable to the ‘sink’ estates one now finds in most inner cities, where over two million people live on social security benefits without ever having a job. In the 1950s there was very little unemployment; Britain was actually recruiting workers from the Commonwealth; and the affordable homes which local authorities were building to house this workforce – or, at least, the indigenous part of it – consisted very largely of three-bedroom, semi-detached houses, which now retail at a price somewhere around the national average. A highly significant characteristic of the estate on which I grew up, for instance, was that the houses all came with what would now be regarded as enormous gardens, which were all, for the most part, lovingly and sometimes quite competitively maintained, with fruit trees, vegetable plots and immaculately mown lawns, fringed with flower beds. Being social housing, most of the occupants, of course, were married couples with two or three children. Most of the men had served in the war, and were then in their mid-thirties. They were hard-working, neighbourly and quietly aspirational. They had lived through the hard times, fought in North Africa, Italy, France and Burma, and were now enjoying the good life. Some families even owned cars. They still voted Labour, of course – the party that had made all this possible – but there was nothing ideological in their stance. If anything, they were apolitical and were generally suspicious of anyone who wasn’t. 

They were certainly different from the new wave of Labour MPs who entered parliament in 1945 and who went on to lead the Labour Party in the 1960s and 70s: men like Michael Foot and Tony Benn, who saw the end of the war as the beginning of a new international era of social justice, and who regarded the centrally planned economy, which had won Britain the war – or so Tony Benn often claimed – as an appropriate model for helping us ‘win the peace’. What followed in the Wilson and Callaghan governments of the 1960s and 70s was consequently far more of an ideologically inspired attempt to change the social and economic structure of Britain than it was a programme of measures directly intended to improve the lot of working people. Indeed, in the latter regard, it was a complete and utter failure. For as I pointed out in my essay, ‘Economic Misunderstanding: The Keynesian Legacy’, Labour’s economic and industrial policies during those two decades twice took the country to the brink of economic collapse, from which working people certainly didn’t benefit, and were probably the most to suffer. Its programme of nationalisation led to a steady decline in blue-collar jobs, for instance – particularly in manufacturing – while its increases in public expenditure, paid for out of borrowing and printing money, led to devaluation, spiralling inflation, and financial hardship for those with the least reserves to fall back on. It was only when the economy was in ruins and the working class couldn’t stand it any more, in fact, that the insanity of this country’s fifteen year experiment with state socialism was finally brought to an end. 

With this in mind, the claim that in returning the country to economic prosperity, and thus demonstrating that a free market economy was of greater benefit to working people, Margaret Thatcher also brought an end to politics as we had known it, should now, I hope, seem a little less fanciful. After all, it is clearly something which Tony Blair also recognised. In re-branding the Labour Party as New Labour, and changing the wording of Clause IV of the party’s constitution, so that future Labour governments would no longer be bound to a policy of ‘public ownership’ of ‘the means of production, distribution and exchange’, he clearly understood that the old fashioned socialism which had defined so much of the politics of the 20th century was now an anachronism which had no place in modern Britain. It also explains why Ed Miliband, in particular, should have so little of substance to add to the current debate. For with the Labour having fulfilled its original mission in the 1940s, experimented with state socialism in the 60s and 70s, and repackaged itself as a slightly more caring version of the Conservative Party in the 90s, the question its new leader now has to ask is where he takes the party from here. It is little wonder, therefore, that, while he ponders this, he should prefer to simply repeat such pithy observations as that the government is gambling with the country’s future, than that he should launch a whole raft of new policies without first establishing an overall direction.

What is far more significant, therefore, is the fact that he is not the only one who currently prefers rhetoric to substance. For, at present, the government seems equally determined to gloss over reality while it diverts our attention with political slapstick. Take, for instance, the main ongoing argument over the budgetary deficit, which the government wants us to believe it is tackling with a rigour necessitated by the previous administration’s fiscal indiscipline, and which the opposition naturally claims is rash, doctrinaire and potentially ruinous. With so much vehemence on both sides, the one thing one would imagine was certain, therefore, is that the cuts to public expenditure, which the government is currently implementing, have got to be fairly substantial. It may take some readers by surprise, therefore, to discover that according to the government’s own figures, published in its comprehensive spending review of 2010, public expenditure is actually budgeted to rise over the next five years, from £662 billion in 2010 to £740 billion in 2015, a total percentage increase of 11.95%, at an average annual growth rate of 2.39% as shown in Table 1.

 Table 1: Forecast Public Expenditure 2010 - 2015

How is this possible, you ask. After all, in September, we all listened in hushed expectation while George Osborne listed a whole raft of expenditure reductions to the House of Commons. The announced cuts, however, were not cuts to actual expenditure, but cuts to the planned or projected expenditure of the previous government, forecast at a time when it believed that the property boom which was then driving growth would go on forever. All the present government has done, therefore, is restore some sense of reality. Far from taking radical action to reverse the policies of the previous government, in fact, its 2015 target for public expenditure as a percentage of GDP – 40% – is exactly what it was in 2008, before the recession: a long way from the 33% rigorously maintained by Ken Clarke, Chancellor of the Exchequer during the last Conservative government. Indeed, given the sluggishness of current growth – nowhere near 2.39% per annum – it is unlikely that it will even achieve this very modest target.

What this means, therefore, is that both the government and the opposition have been claiming that current measures aimed at reducing public expenditure are far more radical than is actually the case. Why? Quite honestly, I don’t know. The opposition, of course, would have claimed that any cuts were too severe and potentially disastrous no matter how small they were. The government, on the other hand, needed to send a message to the credit rating agencies, and possibly thought it better to oversell the bad news at the beginning, when it was expected, so as to deliver better news later on, when things don’t actually turn out to be as painful as people are now fearing. Too cynical? Maybe. But it is typical of the smoke and mirrors which characterises  much of modern politics, and which results, in part, I believe, from career politicians having less of a personal – and more of a professional – relationship with the policies they espouse.

In this regard, they are a bit like lawyers who could, theoretically, argue either side of a case. They don’t need to believe that what they are saying is true; they are paid to convince others that it is, or, at the very least, to cast doubt on the case being presented by the other side. It is thus a professional skill in which most of our politicians are now trained from a fairly early age. Indeed, it is actually quite illuminating to compare the educational backgrounds and early careers of politicians on both sides of the house, which in many cases, are remarkably similar. Take for example the Prime Minister and the Chancellor of the Exchequer on the one hand, and the Leader of the Opposition and Shadow Chancellor on the other. David Cameron, as is well known, went to Eton, and then to Brasenose College Oxford, where he studied Philosophy, Politics and Economics or PPE, a course only offered by Oxford University and designed specifically for future politicians. George Osborne, the Chancellor of the Exchequer, also went to Eton, and then to Magdelen College Oxford, where he studied Modern History. Admittedly, Ed Miliband went to a far less famous and fairly unremarkable state school; but he also went to Oxford – Corpus Christi – where he also studied PPE. Finally, to round out the front bench pairings, there is Ed Balls, the Shadow Chancellor, who after attending a rather exclusive private school in Nottingham, went to Keble College Oxford, where he also studied – yes, you guessed it – PPE. What is even more significant is the fact that all four of them went fairly quickly from Oxford into party political jobs in or around Westminster: David Cameron and George Osborne at the Conservative Research Department, Ed Miliband and Ed Balls at the Treasury, under Gordon Brown. None of them, that is, had much of a career outside politics before joining the Westminster village. They are all simply career politicians, as, indeed, are nearly all the rest of the front bench teams on both sides of the house.

Having chosen to study PPE, in fact, many of them will have actually chosen a career in politics even before they left school. What this also means, therefore, is that unlike the men and women who entered the House of Commons in 1945, desperate to change the world, few of those going into politics today can realistically be said to do so out of any burning conviction. I do not say this to impugn anyone’s character. Indeed, it might have been better if some of the 1945 intake had had a little less conviction. But it is clear that, for many of today’s politicians, it is a career in politics, rather than the substance of politics, that is the main attraction. What’s more, the political establishment seems quite happy to embrace this, eagerly taking those with talent and ambition under its wing and preparing them for their later roles. The problem is that this easy graduation from Oxford to Westminster, without tasting much of real life on the way, seems almost to make the latter an extension of the former. It is why one sometimes gets the impression that both David Cameron and Ed Miliband are merely playing at politics, and why, too, I believe, David Cameron was never going to be as radical and unflinching as Margaret Thatcher in facing our current economic problems. For it not only takes considerable courage – or considerable foolhardiness – for a career politician to adopt a position well outside the margins of the prevailing consensus, it also requires a sense that this is about something more than just politics, a sense which I do not believe that either David Cameron or Ed Miliband have yet grasped.

My worry is that, in the case of David Cameron, having failed to face this greater reality from the outset of his government, reality may yet come back and bite not just him, but the rest of us as well. For with the current instability in North Africa and the Middle East forcing up commodity prices, and the effect this is likely to have on the world-wide economic recovery, there is a real chance, I believe, of another recession this year, not because, as Ed Miliband keeps telling us, the government is cutting public expenditure too much and too quickly, but because it is not cutting enough, and is not doing what Margaret Thatcher did when she came to power in a similar situation, which was to also cut taxation. For as I pointed out in ‘Economic Misunderstanding: The Keynesian Legacy’, there is an inverse correlation between public expenditure and taxation on the one hand, and private sector employment on the other. That is to say that by raising public expenditure, and raising taxation to pay for it, one effectively destroys jobs in industry. Equally, however, by cutting public expenditure, one can also stimulate jobs in the private sector. But only if one cuts taxes at the same time, thus reducing the public sector overhead on businesses and, in particular, the cost of employing people. Just as importantly, if one cuts income tax, one also takes the pressure off wage inflation. Indeed, had the government implemented the Liberal Democrat’s plan of raising the income tax threshold to £10,000, all lower paid workers would now be £600 per annum better off, which, for those on a salary of £15,000, would have been an effective pay rise of 4%, which is currently, more or less, the annual rate of inflation. This, therefore, would have allowed all employers to keep pay rises to a minimum, thus maintaining and even increasing employment in the private sector. As it is, instead of cutting taxes, the government has actually increased them by putting up VAT, effectively adding to inflation.  With domestic demand still flat and an export-led recovery still a far-off dream, if the Bank of England raises interest rates in the near future, as is expected, in order stop inflation getting out of hand, another recession is, therefore, a distinct possibility.

What will make it worse is the fact that, with Ed Miliband saying ‘I told you so,’ and no one there to contradict him, least of all the media, it is going to be very difficult for the government to do what it should have done in the first place by making real cuts to public expenditure and cutting taxation in order to boost growth. Margaret Thatcher would do so. But then she didn’t seem to mind the visceral hatred taking tough decisions earned her in some quarters. For her it was more important to do the right thing than be liked. I’m not so sure, however, that David Cameron feels the same way. Nor will the media help him. Indeed, they will love the circus created by another crisis. Nor, during the political slanging match that will ensue, will anyone attempt to analyse the real structural problems in our economy which have brought us to this point. Even less will they realise that we now have a political system, which, designed for a two dimensional clash of ideologies, left and right, is no longer fit for purpose, and is probably incapable of solving the problems. For with both sides playing to the crowd, and the media simply egging them on, no one will see past the ratings, or care that it is you an I that are going to have to pay the price.

Friday, 31 December 2010

Economic Misunderstanding: The Keynesian Legacy

One of the great difficulties in achieving clarity in the current economic and political debate over deficit reduction in the UK is the illusion, fostered in the second half of the twentieth century, that the economic laws that govern the wealth and wellbeing of nations are in some sense different from the economic laws that apply to individuals; that nations, in effect, can do things with money that you and I can’t. Nothing more exemplified this apparent difference than the efficacy with which Keynesian economic principles were brought to bear on the problems of mass unemployment in the 1930’s and post war reconstruction in the 40’s and 50’s. Through both FDR’s New Deal and the later Marshall Plan, the impression was created that, in some way, public expenditure, whether on new capital projects or on consumer support, actually created wealth. 

Throughout the 1960’s, as a result, left-wing parties were swept to power all around the world on programmes of increased public expenditure and improved social welfare, financed by a mixture of increased taxation and rising public debt. The view was that building schools and hospitals, and providing public services, not only created a healthier, wealthier, and more equitable society, but stimulated the economic growth that then paid for it. So strong was this prevailing orthodoxy, in fact, that by the late 70’s, when Margaret Thatcher came to power in Britain, and introduced a new policy of cutting the deficit and living within our means, many people regarded her as economically illiterate and an utter barbarian.

What they didn’t understand was that Keynesian economics only works in exceptional circumstances, when two key conditions apply. The first condition is that the economy to be stimulated should have large amounts of spare capacity, principally in labour: something that was clearly the case in the 1930’s and the again in the 1940’s as large numbers of soldiers returned home from World War II. Without this spare capacity, increases in public expenditure merely divert resources from wealth creating activities into wealth consuming ones. The second is that it must be possible to pay for the increased public expenditure out of borrowing rather than taxation. This is because increased taxation, no matter what form it takes, always reduces employment in the private sector. If one puts up income tax, for instance, employees effectively have to take a pay cut unless their employer increases their salaries to compensate for the additional deductions. If he does this, however, he then either has to cut staffing levels in order to reduce costs, or he has to put up his prices. If the latter, he then becomes less competitive. Sales fall and he either downsizes the company to bring costs in line with the reduced revenues, or he goes out of business. Either way, jobs are lost.

Borrowing money to pay for increased public spending also has its downside. Eventually one has to pay the money back. The last £45m instalment of Britain’s debt to the USA after World War II was only finally repaid in 2006. While the Attlee government of 1945 benefited from the loan, every government for the next sixty years therefore experienced it as a drain on the economy, often necessitating further borrowing to make up for these additional outgoings. It is for this reason, along with the fact that governments simply got used to living beyond their means, accepting the Keynesian approach as an economic fact if life, that, depending on what one includes under this heading, the UK now has a national debt of somewhere between £2.2 and £3.8 trillion, with annual interest payments now exceeding our entire expenditure on the National Health Service.

Failure to understand the dangers inherent in this mounting debt has also led to the development of a now very distinctive cycle in post-war British politics, in which every successive Labour government has dramatically increased both borrowing and public expenditure until, in each case, the inevitable financial crisis has brought in a Conservative administration and a period of retrenchment. Admittedly, this characterisation may seem slightly unfair in the case of the Attlee government, in that, due to wartime spending, Britain was already on the point of financial collapse when Labour was elected. On the other hand, it is certainly not an unfair description of the Wilson government of 1964 to 1970, whose growing debt and continuing need to borrow money led to a 14.3% devaluation of the pound in 1967. Although I was just thirteen at the time, I distinctly remember the Prime Minister going on radio and television to reassure a shocked and anxious nation that the pound in our pockets was worth just the same. By increasing the cost of imported raw materials, however, this one act of economic and political expediency contributed as much to the hyperinflation of the early 1970’s as did the almost annual hikes in oil prices imposed on a long-suffering public by OPEC during that period.

To counter both the inflation and the growing trade and fiscal deficits, the Heath government then tried to rein in public expenditure, particularly in the highly wasteful and strike-prone nationalised industries. The result, however, was a protracted miners’ strike, which, by cutting off supplies of coal to power stations, reduced Britain to a three-day working week, thus exacerbating our economic problems still further. In a snap election, called by the Prime Minister to decide the question as to ‘who ruled Britain’, the electorate then merely stated the obvious by replying, ‘Not you’. A Labour government was consequently returned to power, which, in order to get people back to work, immediately conceded to the unions everything they demanded, restoring former levels public expenditure and increasing both taxes and borrowing until, once again, the economy teetered on the brink of collapse.

This time the then Chancellor, Denis Healey, called in the IMF, which demanded £2.5bn cuts in government spending in return for a $3.9bn loan. In an attempt to explain this to the electorate, the Prime Minister, James Callaghan said: “We used to think that you could just spend your way out of a recession. I tell you, in all candour, that that option no longer exists.” But still the country refused to understand. Predictably, the public sector unions, whose members were going to be subject to a pay freeze, went out on strike. The dead went unburied; refuse remained uncollected for weeks; rubbish built up in the streets; and the newspapers called it ‘The Winter of Discontent.’

Ironically, it was this that led the electorate to reject a government which was simply doing what the IMF told it it had to do, and to elect, instead, a government which was going to do exactly the same thing – only more so, and of its own volition. For it was then that Margaret Thatcher embarked on bringing the economy back into balance: refusing to prop up failing nationalised industries; denationalising them whenever she could; cutting taxation, along with the bureaucracy and waste on which so much of it was spent; and rolling back the stultifying fingers of the state. To begin with, of course, it was extremely painful. Unemployment initially rose to over three million. There were strikes and riots; and in large parts of the country the Prime Minister was regarded with a visceral hatred that would have driven some to murder had they been able to get their hands on her. Yet within five years, the economy was soaring in a way it hadn’t done for most of the century. Unemployment fell rapidly and business thrived; and although there were some hiccups along the way – most notably those caused by our entry into the ERM – after 18 years of Tory government, the average person in Britain was wealthier than he or she had ever been. So much so that in 1997 they decided that they’d like to see more of the national wealth invested in public services and duly elected Tony Blair as Prime Minister.

Fortunately, during his first term in office, his new chancellor, Gordon Brown, stuck largely to the spending plans of his predecessor, Ken Clark, thus fostering his self-proclaimed reputation for prudence. Throughout the government’s second and third terms, however, public spending rose steadily. When the Conservatives left office in 1997, public expenditure represented just 32% of GDP. In 2008, before the banking crisis began, it had reached 40%. At the end of 2009/10, it was nudging 50%, with an annual fiscal deficit of £150b.

Of course, Labour politicians will say that this is due to the recession caused by the world-wide banking collapse, which had nothing to do with them. But even if Britain hadn’t had one of the largest banking sectors in the world – on which it was overly dependent – and even if our banking sector wasn’t regulated by a regimen which Gordon Brown, himself, had introduced, all the banking crisis really did was highlight a structural imbalance, which has meant that, while Germany has been able to come to the rescue of both Greece and Ireland – whose economies were also overly skewed towards the public sector, and were also running large deficits – the UK is now in a battle to save itself. 

One of the problems is that too few people realise how serious this is. Nor is it helped by the leader of the opposition telling them that there is some miraculous Keynesian alternative to public spending cuts: that by maintaining public expenditure at only a slightly reduced level, a Labour government would, instead, concentrate on stimulating economic recovery, from which the resultant increased tax revenues would, themselves, bring down the deficit, without the need for retrenchment and the hardship this necessarily causes. It is as if, indeed, the history of post-War Britain has taught us nothing, or that we never heard Jim Callaghan utter those fateful words that economic solutions which defy the laws of economics are ‘no longer an option’. The trouble is, of course, that for many of us this is actually true. Most younger people, for instance, would be hard pressed to say who Jim Callaghan was, let alone what, after a lifetime in Labour politics, he was eventually and traumatically brought to understand. And if you told them that, in 1976, the British government had to ask the IMF for a bailout in much the same way that the Irish government has recently had to do, most of them would be utterly shocked. 

It is this, however, which brings us to the most serious impediment to establishing the current debate on anything like a rational basis. For in knowing so little about our recent economic history, the opinions of most of us are informed not by the facts of this history, but by the myths. The most prevalent of these is that, in taking from the rich and redistributing to the poor, Keynesian social democratic parties, such as the British Labour Party, are like Robin Hood, whereas the Tories, who are simply out for themselves and their rich and aristocratic friends, are the wicked Sheriff of Nottingham. The evil Mrs. Thatcher, in particular, is seen as the symbol of this fundamental and primordial opposition, and it is her name that is now used to evoke collective folk memories of primeval battles on the picket lines and dolorous queues outside shabby unemployment offices, where the lost and defeated ultimately fade away to become dead statistics. 

We are only seven months into the new Tory led coalition, and already we have seen this atavistic conflict re-enacted in almost perfect detail in the student protests over increases in university tuition fees. It is almost as if the students of today are reliving the stories told to them by their parents who were students in the late 70’s, when Margaret Thatcher came to power, and when almost every student came out on to the streets in support of one striking group or another. That the current measures will have no immediate effect on student finances, of course, is irrelevant. The important thing is to take the fight to the Tory oppressors. For not only is it generally believed that these cuts are unnecessary – that, as Ed Milliband tells us, there is another way – but that they are politically motivated, and targeted in a very selective manner. Nor does it help that to some extent this is true. In the case of tuition fees, for instance, the size of the increase makes it fairly clear that the government is trying to affect a change in students’ perception of higher education, making them ask themselves whether they really want to go to university – whether it is actually the right thing for them – rather than simply going because there’s no real financial impediment to doing so, and because it’s what everyone does. Rather than opening up a debate on this issue, however, the government has engendered even greater cynicism as to their true motives by pretending that the increases are purely for financial reasons.

This is something, in fact, from which the government needs to learn a lesson. For, in the weeks and months to come, as more detailed cuts are announced and begin to bite, there are likely to be several more areas in which economic measures will naturally be accompanied by some element of social reengineering. And if the government doesn’t admit to this and argue its case openly, the more the myth of Tory mendacity and uncaring indifference will gain credibility. What’s more, it will allow both the opposition and the media to open up even more rifts between the Conservatives and the Liberal Democrats, just as the issue of tuition fees was seen to do. And if the LibDems continue to be vilified for supporting what the media will no doubt increasingly portray as a wanton and unprincipled crew of Etonian thugs, my fear is that the coalition will not be able to hold up under the pressure, that it will collapse much as Ted Heath’s government did in 1974, with the economy still unreconstructed, and the country firmly against it. Promising a restoration of public services, we will then see another Labour government following the same old Keynesian strategy, and history will repeat itself once again. For to paraphrase the combined words of Edmund Burke and George Santayana, for those who fail to learn from history – or, in this case, it seems, fail to learn any history at all – the travails of Sisyphus seemed destined to recur.