As people know, the General election led to a hung parliament, so the Tories did a confidence and supply agreement with the reactionary Democratic Unionist Party (DUP) to stay in power. Interestingly, while saying that there are no magic money trees during the election in reaction to the Labour Party manifesto, somehow came up with a cool £1 billion to give to North Ireland to get the DUP on board.
This proves what anyone who understands basic economics knows that the British government is not constrained in money creation as it has a sovereign currency – just in case it was not obvious when quantitative easing (QE) was used several times during George Osborne’s tenure as Chancellor of the Exchequer (really, as what is QE except for money creation?)
So there are magic money trees … governments and central banks, unlike you and me, can create money. They can spend beyond the revenue that they gain through taxes (creating a deficit) or print money (selling it as debt).
Why can money be created to prop up banks and the stock market but not to create jobs and social services? People are starting to see beyond the fog of neoliberal economic ideology that austerity is a political choice not a necessary economic policy because there is no other option. This contradiction was not one that the Tories wanted to become obvious, but their determination to stay in government overtook that .Now the the fog is lifting and people start saying huh?!
Who’s the leader? Who has the power?
This election result and the deal with the DUP has led to a series of interesting contradictions for the Tories. Theresa May just said she will be Prime Minister for at least one year; either she lacks ambition or knows the handwriting is on the wall. Indeed why does she think she will last another year? If things continue as they are, not even the Brexit negotiations will be enough of an excuse to not call a Tory leadership election. Prominent Tories are currently questioning whether she is capable of staying on for even one more year if she doesn’t shape up.
Many Tory leaders would certain prefer a leadership election, but who can lead the Tory party who is not completely loathed (e.g., Michael Gove, Jeremy Hunt, Iain Duncan Smith), living on another planet or in another century (ruling out such luminaries like Jacob Rees-Mogg, and probably Boris Johnson) or non-charismatic (Phillip Hammond)?
Will they go with Libertarian (a la those in the US, not real Libertarians) David Davis who is a social liberal? That may create problems with the DUP who are extremely reactionary on social issues. Obvious candidates for the post like Amber Rudd (Hastings, 346 majority) and Justine Greening (Putney, majority 1,554) are barely holding onto their seats. George Osborne has left Parliament to edit the Evening Standard which he uses to attack May whenever he has the opportunity Most of Cameron’s minions are still in the party and in Parliament and supported remaining in the EU.
The other group in Westminster that is propping up the Tory government is the Scottish Tories who ran on a separate manifesto as The Unionist Party. Mrs May need to keep them on board and they did not have the noxious policies that were in the Tory Party Manifesto. Ruth Davidson, leader of the Scottish Conservatives carries weight even though she is in Holyrood not Westminster and that could put the kibosh on some policies. But it didn’t stop them voting against Corbyn’s amendment to the Queen’s speech eliminating the 1% public sector pay freeze.
May’s weakness has created opportunities to challenge the hard Brexit advocated to bring UKIP members on board for the election.
More and more Tories are arguing for a soft Brexit rather than the hard one that May’s government has been pursuing; among these is Chancellor of the Exchequer, Phillip Hammond. May’s weakness has enabled business leaders, through the Confederation of British Industry (CBI) (which represents larger industrial capitalist interests along with British finance capital, which did not support Brexit) to push forward an agenda towards a softer Brexit which will not disentangle Britain from the EU in the manner that the hard Brexiteers want.
The CBI has insisted that Britain stays in both the Customs Union and the Single Market until Britain leaves the EU to create a “transition period” due to worries about domestic investment, transfers of businesses outside of Britain and a 9% fall in new job creation. This would mean that free movement of people would continue and Britain’s ability to negotiate new trade deals would be endangered until they leave. According to Stephen Swinford of The Telegraph, some CBI members insist that Britain stay in the Customs Union and Single Market indefinitely.
The Tories certainly hope to avoid another General Election in the near future. The Labour Party (LP) holds an 8 point lead in c opinion polls and some leading Tories are just holding onto their seats. If there is a General Election soon it is likely that Labour will win. If they can hold off for as long as possible, there is a possibility that public opinion may shift back in their favour. But all that is needed for them to lose the majority is a few deaths or resignations through serious illness or corruption and they may have no choice but to call an election.
Essentially, Theresa May is leader in name only, which has led them to backtrack on parts of the Tory manifesto. The Queen’s speech was rather threadbare; not due to her majesty wanting to watch her horses run at Royal Ascot) as noxious policies such as eliminating the triple lock on pensions, means testing the winter fuel allowance means tested, the Dementia Tax) have been jettisoned leaving only general statements at the end of the Manifesto.
There are a number of reasons for this:
1) Their partners the DUP are not a Conservative party (that is the Ulster Unionist party that lost all its seats) DUP members support Brexit but will not countenance an attack like this on its voters;
2) These policies may have cost a lot of voters in England and Wales amongst pensioners
3) The mood has changed and these specific policies may be the final nail in the coffin of deepening austerity as they simply cannot get parliamentary support (from MPs worried about their future prospects).
May’s weakness is evident. Her proclamation on June 13 that austerity is over was overturned within hours by Michael Gove whom she had to bring back into government as Environment secretary) who said the cuts are not over. Gove was not the only leading Tory to say the party is not over, thereby elevating austerity to a principle rather than an economic policy. Contradictions are wonderful things.
This paper-thin “majority” has led to other interesting changes. Health is a devolved matter in Northern Ireland and the 1967 Abortion Act does not apply so the only way most women in Northern Ireland can get an abortion is to travel to Britain and pay for it – at the cost of around £900 (plus travel)
An amendment to the Queen’s Speech was introduced by Stella Creasy (Labour, Walthamstow) which would have allowed women from Northern Ireland to for women in North Ireland on the NHS. This motion came in response to a Supreme Court decision rejecting NHS funding for Northern Irish women travelling to Britain to get abortions on June 14th 2017 on the basis of respecting the “democratic decisions of the people of Northern Ireland.
The DUP clearly supported the ban on NHS coverage for Northern Irish women that meant that they need to pay travel expenses along with the costs of the abortion. While May (the great Feminist) may have been willing to continue to deny the bodily autonomy of North Irish women, it seems that 40 Tories were unwilling to do so and were going to vote in favour of Creasey’s proposals
In this case, the 10 votes of the DUP become rather irrelevant and the Tory party changed its position and supported Creasy’s amendment which passed Parliament ensuring that Northern Irish women can now get abortions free at the point of demand on the NHS and as a result an important victory for which so many have been fighting for decades was secured on June 29 2017.
Hey Theresa May, how many people will you starve or kill today?
Given the shift in political opinion in the country evidenced by the vote at the General election, where rather than Brexit being the central focus of the discussion, the LP Manifesto shifted the debate to economic and social issues, and the Tory party hold on power was extremely weakened. The impact of their economic policies on the lives of the majority of people was brought to the fore and the shape of Britain’s future was central.. The fact that austerity is a political decision rather than a necessity and that large numbers of people in Britain suffer from these policies has become the lynchpin of the battle between the Tories and Labour.
What will happen to austerity? Do the Tories have the votes in Parliament to continue it or even deepen it? Probably not; we are beginning to see dents in the consensus around austerity among Tory MPs as they sense the change in public opinion. This change comes down to the success of Corbyn’s LP Manifesto demonstrating that austerity is an ideological political decision not a great universal truth that the vast majority of those living in capitalist economies must endure. This is the victory for which so many have been fighting!
Getting the Liberal Democrats on board to support the Tories in the absence of consensus around austerity would probably spell the end of the LibDems. Even though they are a pro-austerity party; they need to be very careful in doing this (they certainly would not support them on Brexit as they support Remain)) as their voters may well not forgive them crawling into bed again with such a right-wing Tory party.
And joining with the DUP presents problems besides the obvious of working with a homophobic and anti-choice political party aligned to terrorists to stay in power. The DUP is not a fan of all austerity policies even though it voted with the Tories to defeat Jeremy Corbyn’s amendment to the Queen’s speech to end the cuts in emergency services and the 1% public sector pay freeze with a majority of 14. They don’t support the elimination of the Triple Lock Pension scheme, means testing the Winter Fuel Allowance and the Dementia Tax, but they were left out of e Queen’s Speech so the DUP could fulfill its supply and confidence obligations.
The 1% public sector pay freeze was put in place in 2013 following a complete pay freeze from 2010) is becoming a problem for the Tories. Suddenly some of their MPs are saying it may need to go. They have not grown a conscience and have not suddenly noticed that austerity is destroying people’s lives (this has been evident for quite some time), but are being pushed by the shift in public mood that broke the consensus in mainstream British political parties that the only economic policy on offer is neoliberal and austerity based.
Inflation has been rising since the Brexit referendum and is at a 4 year high; impacting purchasing power. The Joseph Rowntree Foundation published a report highlighting the situation relating to pay levels, benefit cuts and rising prices due to inflation:
“Two important developments in 2017 have worsened the incomes of people receiving benefits, relative to what is needed to meet minimum needs:
- Inflation has returned, for the first time since the advent of the benefits freeze, meaning that the real value of benefits has started to decline.
- Cuts in Child Tax Credit (CTC) and the equivalent element of Universal Credit, announced in 2015, have started to come into effect. Families where the oldest child was born after April 2017 will no longer get the family element of CTC, worth £545 a year. The child element of CTC, worth £2,780 a year, will not be payable for children born after April 2017 who have at least two siblings.
As a result of these changes, a couple with two children can meet only 59% of a minimum budget, down from 61% a year ago. For a lone parent with a newly-born child, the proportion has fallen more dramatically from 56% to 50% of MIS in a single year. As shown in Table 1, this means such a family has only half what they need today compared to nearly two thirds in 2010. For a single person out of work, the ‘safety net’ is now providing barely a third of income needs. On the other hand, for pensioners, benefit levels have kept pace with inflation and remain at a level approximately sufficient to cover minimum income requirements (1).
Really, following the fantastic and correctly lauded job helping victims of terrorist attacks and those desperately trying to save victims of the Grenfell fire) by NHS workers, police, and firefighters , how do you justify this pay freeze?
“According to the study by Professor Alex Bryson at University College London and John Forth, a fellow at the National Institute of Economic and Social Research:
- School teachers saw a drop in median real earnings from £25 an hour in 2005 to £22 an hour in 2015.
- Police officers saw a median real earnings fall from £20 an hour to £18 an hour over the same period.
- Doctors experienced a drop from £38 an hour to £30 in median real earnings.
- Prison officers saw median real earnings fall from £16 an hour to £15 an hour.
- Nurses reported median real earnings of £16 an hour in 2005, rising to £17 an hour in 2010, before dropping back to just over £16 in 2015, showing a slight rise of 1.4% over the decade.
The hourly median wage figures were adjusted for inflation, based on 2015 prices and rounded to the nearest pound (2) .”As reported by The Guardian, according to the Report on Wage Growth undertaken by Alex Bryson (UCL) and John Forth (NIESR), there was a 3% drop in median hourly earnings between 2005-2015 for workers in 32 public sector occupations whose salaries are set by the government on the advice of independent pay review bodies. Median hourly pay fell even more – 6% – during that period, for workers across the board, as the recession of 2008 hit wages hardest in the private sector.
The confusion among Tory MPs as to their party’s policy on maintaining the 1% public sector pay freeze was fascinating; they went back and forth on whether or not they supported its elimination. You know that things are becoming interesting when Foreign Secretary, Boris Johnson calls for the public sector pay freeze to be eliminated. Other Tories like Grant Schapps, Environment Secretary Michael Gove (yes, he who said that austerity should continue, contradicted himself, quelle surprise), Defence Secretary Michael Fallon, Education Secretary Justine Greening, and Health Secretary Jeremy Hunt have called for an end to the 1% freeze in pay for public sector workers; one may have felt that they were in a parallel universe.
In a truly humorous and pathetic moment, David Cameron stated that Tories who are calling for the end of the public sector pay freeze and opposing continuing austerity are “selfish”; raising that old canard that government spending money today will undermine the future state of the economy. There are times that you wish that he had actually taken a few more courses in economics; introductory Macroeconomics would help his understanding of the economy significantly.
“They seek to paint the supporters of sound finances as selfish or uncaring. The exact reverse is true. Giving up on sound finances isn’t being generous, it’s being selfish: spending money today that you may need tomorrow (3).
But Dave, Dave, Dave, repeating mantras only works if people believe what you are saying …
Grenfell Tower Catastrophe
One of the most interesting General election results was the Labour Party gain in Kensington where Emma Dent Coad won by 20 votes. This is the area where the horrific Grenfell fire occurred which led to so many unnecessary deaths and which has become a symbol of the whole of Tory austerity policy, they probably are reluctant to even risk a vote here.
A refurbished council tower block, 23 stories high, burned to the ground so rapidly that it was been impossible for firefighters to rescue those on the highest floors. Fire safety regulations are so undermined that there was only 1 fire stairway and no sprinklers; moreover the cladding that was put on the outside to make it look prettier for the wealthy residents of Kensington was not fireproof; in fact the building burned from the outside in. Fireproofing the cladding would have cost only £293,000 more and adding sprinklers would have cost £200,000 pounds.
Tenants had been complaining about fire safety in the building to the private sector tower managers Kensington and Chelsea Tenants Management Organisation for years and their concerns were brushed aside and the tenants labelled troublemakers. As is the case in many places where the poor live, extended families share apartments, illegal subletting makes it difficult to know who is there, , those living in the building may not be in Britain legally, and it was Ramadan and people broke fast late in the British summer. The total numbers killed in the fire may never be known precisely.
Grenfell was a death trap for poor people living in social housing in Kensington; it is becoming the face of Tory austerity where regulations were undermined, where the bottom line set by the Tory controlled council in refurbishing the building was cost and cosmetics and not people’s lives and private sector managers ignored the needs and demands of tenants. If you want one thing that epitomises the lack of concern of the ruling classes in Britain for the needs of the working class, it is the Grenfell fire. Totally unnecessary deaths could have been prevented.
The differences between the two main parties’ leaders could not be starker. Jeremy Corbyn went down to talk to and comfort the survivors. Theresa May’s two visits to see the tower block did not include visiting the victims but only rescue workers. Even George Bush went to talk to the victims of Hurricane Katrina.
The Queen and Prince William then go down to talk to survivors of the catastrophe looking suitably emotionally moved. Only afterwards does Theresa May invite some survivors to Number 10 to talk to her. While some may see this as a good act of contrition, in reality what it is inviting people to her place of power; she cannot bring herself to go to the scene of the catastrophe and offer simple comfort to people suffering a horrible tragedy.
Her complete inability to empathise with victims appears almost sociopathic. It certainly does not help the Tory cause where they are insisting that they are not the nasty party. The Tory leaders of Kensington and Chelsea council resign in the wake of the fire, but they may (and should) be facing charges.
In the wake of the Grenfell tower block fire, cladding is being examined all over the country to check that it is fire-proof, fire safety regulations are being reviewed, the heights of building are being re-examined. But, it has taken a catastrophe in which men, women and children have died unnecessarily to do things which should always be central to building homes for all people. It is doubtful that these fire safety failings would have been done on luxury housing. Austerity, privatisation, cost-cutting, deregulation, all hallmarks of neoliberal economic policy are responsible for this catastrophe and Tory culpability cannot be eluded.
Almost every day, the impact of austerity makes the news. Social care for elderly people has been eroded due to privatisation, the cleaning and support staff at Bart’s Health (comprising 4 hospitals in London) have gone on strike for 30 pence an hour increase in wages and are demanding additional hiring due to overwork, the end of zero hour contracts (the poor women had to walk out to keep their 10 minute tea break; remember the workers here are mostly middle aged women) following the privatisation of their contracts now managed by Serco rather than being NHS public sector workers, the treatment of disabled people in the UK has been condemned by the UN as a violation of their human rights, incomes of British working class people have been undermined and it is quite obvious that wage squeezes to keep profits up do not lead to investment ensuring good jobs with decent wages and conditions of work.
While we await the threatened arrival of Donald Trump to Britain on a state visit, we can be amused by his comments at the G20 (I certainly wish I could have read Theresa May’s mind when this was announced; she needs Trump in Britain like she needs a bullet in her head):
“We have been working on a trade deal which will be a very, very big deal a very powerful deal, great for both countries and I think we will have that done very, very quickly.”
He added: Prime Minister May and I have developed a very special relationship and I think trade will be a very big factor between our two countries (4).
It seems someone forgot to tell him (or they told him and he didn’t understand or didn’t remember) that this cannot be done until Britain leaves the EU – those little details and all that – the thoughts of a big welcome for the orange Michelin man certainly brings a big smile to the faces of many on this island. I doubt that the Tory party leadership is as thrilled as the rest of us.
The people are not happy, the old lies are not working anymore, and it is only a matter of time that Prime Minister Mrs May will be history, it is questionable how long the Tories can maintain austerity.
We are living in very interesting times in Britain.
This is a slightly edited version of an article that first appeared on Anti-capitalist Meetup.