NB: This blog post was written a while ago and not posted due to computer problems. The debate has changed since it was written, mainly because of Jeremy Corbyn, who will be the subject of the next blog post, but I felt it worth posting anyway. It was supposed to go up shortly after the budget was announced.
We were all surprised when the Tories won a majority in the general election earlier this year. Polls had showed Labour and the Tories neck and neck for weeks. No one expected what happened when the polling stations closed and the BBC announced its exit polls. The Tories were going to be the largest party in a hung parliament by quite a long way.
Paddy Ashdown's comments that he would "eat his hat" if the polls were right summed up the belief that this could not have happened. Over the next few hours, the results backed up the exit poll. The Tories would be the largest party and hold the balance of power. By the early hours of the next morning it was clear that even the exit poll was an under-estimate and that the Tories would form a majority government.
A taste of what the next five years would bring was immediately served in the form of July's emergency budget, the first purely Tory budget since Ken Clarke's 1996 budget 18 years before. The budget contained tax cuts for the rich in the forms of reductions in inheritance tax and corporation tax, the later to become lowest level in the G7 and joint lowest in the G20. The budget also contained £12bn worth of cuts to welfare, much of it for people in work but earning less than a living wage. The people who have insecure jobs, the people with low incomes, the people who have been suffering from years of stagnant wages, rising rents and high costs of living would bare the brunt of Tory austerity. We were told that it was essential to cut back aid to these hard working families in order to balance the books of the nation.
At the same time as those who work hard for a low wage were having money taken away from them, Chancellor George Osborne has announced the sale of the publicly-owned Royal Bank of Scotland at a cut down price. The net loss to the public purse of this sale is £13bn. The conflicting message is our society cannot afford to be generous to the poor but it is essential that we continue to be generous to the rich, if we do not then the entire mechanism of our society would ground to a hault. If we give the poor money they will not work, but if we stop giving the rich money they will not create wealth.
This cut to the poor and subsidy to the rich represents an enormous transfer of wealth from the poorest to the richest. The welfare state is being bled dry out of a sense of necessity, a necessity that does not extend to selling the government's RBS shares at market price. This shows what the Tories really believe in and what we will get for the next five years: help for big business and the rich, punishment the poor for being poor.
Osborne has pushed back his deficit reduction plans. The national debt will now be paid off in 2019, and it will take longer to repay the deficit under Osborne's plan than it would have under the plans laid out by Labour Chancellor Alastair Darling in 2010 and Labour Shadow Chancellor Ed Balls in 2015. Both of these alternatives, dismissed by the electorate, involved fewer cuts to public services. The Tory plan is not to rebalance the nation's finances but to rebalance society in favour of the “wealth creators”. This not a conspiracy organised by a public school elite, it is simply what the Tories believe will encourage economic growth that will eventually trickle down to everyone. The mass transfer of assets from the poor to the rich is supposed to benefit the poor at some later date. However, that day never arrives and we are becoming an increasingly unequal society.
Following their surprise defeat, Labour are searching for a new leader. This has not prevented interim leader Harriet Harman from endorsing the Tory welfare cuts. The electorate sent a clear signal that they did not trust Labour with the economy, that they completely accepted the Conservatives’ line on Labour overspending, and they wanted the deficit cut. Harman wants to regain some electoral credibility for Labour during her brief time in charge and her approach to this is to sign up to the Tories plan to hack away at the safety net the poor rely on.
By signing up to the Tories’ anti-welfare agenda, Labour have moved the middle ground of politics towards scaling back welfare. When Labour fails to offer an opposition to Tory cuts they become more acceptable to the electorate. This gives the Tories licence to cut welfare further than they initially planned.
It is not a coincidence that on the day that Labour agreed not to oppose the Tory welfare cuts, Work and Pensions Secretary Iain Duncan Smith has suggested that workers save for their own sickness and unemployment by paying into a private fund out of their wages. This is fundamental redrawing of the social contract and an attack on the basic premise that the state provides assistance to those who are unfortunate enough to be sick or unemployed.
This new assault on welfare is partly ideological: there are many Tories who would like to abolish welfare alltogether and move to system entirely based on self-reliance. That would be a system entirely based on how wealthy your family is, which suits the Tories perfectly. Another reason for this assault on welfare is the cut and thrust of politics. The Tories have a simple plan: to paint Labour as a party of the unemployed and themselves as a party of the hard workers, and this was one of the reasons why they won the election.
The Tories will keep hacking away at welfare until Labour stand up to them, at which point the Tories will accuse them of being on the side of the scroungers and against the strivers. If Labour try to avoid being accused of supporting scroungers by voting with the Tories, then the Tories will cut welfare further and further. While the two main parties play games of positioning over the issue of welfare, the people who rely on welfare are losing their livelihoods.
Labour, and other people on left, need to stand up to the mass transfer of wealth from the poor to the rich through welfare cuts and discount privatisation. However, the position faced by Labour after the surprise electoral defeat is a difficult one. They need to find a new way to present themselves, because the way that former leader Ed Miliband presented Labour completely failed to resonate with the electorate.
While Labour are going through this period of introspection, we should appreciate the size of the challenge. The electorate voted for the Tories and gave them a mandate, however slim, to cut further. The arguments of Miliband fell on deaf ears, the electorate is not interested in a Labour Party that offers a milder version of what the Tories are offering. The electorate would clearly just prefer the Tories.
If Labour and the left are going to start winning again, then we need a pursue new narrative about what has gone wrong in the past and what will go wrong in the future unless we change direction. This new narrative needs to be bold, radical, different from what the Tories argue, but it also needs to resonate with ordinary people and their experience of the world.
For my part, I intend to write articles looking into this question of a new left wing narrative and what shape it could take. Whatch this space for new ideas of how we change the political debate. The Tories are rolling out their vision for Britain for the next five years and it is a painful vision of welfare cuts for the poorest and the mass transfer of assets to the richest. The need for the left to express a narrative which could oppose the new Tory Britain has never been greater.