Osborne budget: the withering away of the welfare state
Posted on Wednesday 23 June, 2010
Filed Under Conservative Party, Economics
THERE are only so many ways that even the most creative reporter can spin the ‘10p on a pack of fags, 2p off the basic rate of income tax, average earner two hundred quid a year better off’ headlines that budget day typically generates.
So even though it is an entirely straightforward job, and the resultant copy is almost guaranteed the front page lead slot, this once-a-year task is not one I normally relish as a working journalist.
But yesterday’s speech from George Osborne struck me as qualitatively different; here we have a budget purposely designed to bring about the withering away of the welfare state.
The comparisons many commentators have made with Geoffrey Howe’s disastrous game of axeman in 1981 is clearly misplaced. In reality, the masterplan is far more profound than that.
Considered in the 1979 to 1990 round, public spending under Thatcherism actually rose a proportion of GDP. That statistic in and of itself says little about the hurt inflicted on many over those years; what is decisive is not the overall spending tally, but the things on which the money goes.
But in the eyes of sections of the ideological hard right – including many who venerated Maggie for other reasons – Thatcherism failed by its own lights. Despite its best endeavours, it somehow could not achieve its express desire to shrink the state.
True, to use another period buzzword, it did manage to ‘roll back the frontiers of the state’, largely through privatisation. But that is not quite the same thing. For the true believers, the whole experience constituted a classic case of close, but no cigar.
This time, Osborne intends to walk it like he talks it. With the exception of the National Health Service and foreign aid, he has proclaimed his intention to reduce the spending of every government department by 25% in real terms over the coming four years.
This is a move for which no obvious parallel in twentieth century British history comes to mind. Cuts of this magnitude can only have wideranging impact on the fabric of the life of this country.
They will mean a sharp contraction in state education at every level from the village junior school upwards, although that will make little difference to the Old Etonian class, of course.
Britain’s infrastructure – still a shame for a first world nation, despite the improvements brought about under Labour – will remain crumbling and decrepit.
The armed forces, too, will be scaled back to a level more appropriate for the UK’s real standing in the world. Empire nostalgia adventurism will henceforth be ruled out. That should not be a problem for many on the left. Indeed, prior to Blairism, it was Labour policy to reduce defence spending to the European average.
But the real prize in Osborne’s eyes will be the welfare state. It, too, comes under the ambit of the 25% rule, something that can mean only pain for millions of benefit recipients, including middle-class Tory voters who lose their jobs in the impending public sector employment carnage.
These are goals that even the most determined rightwing administration would find a challenge to implement. But the immense damage that even the attempt to bring this project to fruition could generate may mean that our lives are never the same again.
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22 Responses to “Osborne budget: the withering away of the welfare state”
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“Alistair Darling admitted tonight that Labour’s planned cuts in public spending will be “deeper and tougher” than Margaret Thatcher’s in the 1980s, as the country’s leading experts on tax and spending warned that Britain faces “two parliaments of pain”…
The Institute for Fiscal Studies said hefty tax rises and Whitehall spending cuts of 25% were in prospect during the six-year squeeze lasting until 2017 that would follow the chancellor’s “treading water” budget yesterday.” ~ Guardian March 2010.
“Change the name and the tale is of you” ~ Old Russian proverb.
I know. Bloody Marvelous isn’t it?
What will humanities graduates DO without jobs in 5-a-day outreach to go to?
Jeremy Kyle’s pets having to y’know, get a job.
How will we cope?
“No bankers were hurt in the making of this budget”
Couple of points.
The 25% cut only applies to ongoing expenditure – a high proportion of which goes to pay and benefits. The public sector capital budgets are, to a large extent, protected as most of that money goes directly to the private sector.
On the NHS, the Operating Framework document published on Monday makes it clear that while the NHS budget will not have such drastic cuts, it will be directed increasingly to the private sector. There is a commitment to an “any willing provider” model in primary care provision (i.e. privatisation). That’s before we look at the 50% cut in NHS management costs – secretaries, admin support, etc…
“But the real prize in Osborne’s eyes will be the welfare state. It, too, comes under the ambit of the 25% rule, something that can mean only pain for millions of benefit recipients, including middle-class Tory voters who lose their jobs in the impending public sector employment carnage.”
The problem with Labour governments is that they all run out of other people’s money to spend, as some wit once said. Allegedly.
Seriously, given the size of the gap between government income and expenditure, where is the money going to come from to keep things going at Brownian levels of pissing money up a wall?
Just keep borrowing and borrowing and borrowing, or what?
Gideon’s right to cut the bejesus out of everything, I’d have slaughtered the NHS as well. In years to come, the NHS is going to become increasingly powerful and influential because that idiot didn’t stick the boot in properly now.
Tories are bloody useless at fixing things, but at least they’re not wilfully trying to destroy the economy like Labour.
Clown:
“Tories are bloody useless at fixing things, but at least they’re not wilfully trying to destroy the economy like Labour.”
‘wilfully trying to destroy’?
Don’t be a prick, Clown.
The whole general idea of socialism is to destroy capitalism by any means. So if Brown was incompetant and fucked up the system socialist should be rejoicing and be preparing to take over. Then again socialist are so divided some even supporting fascists and living in cloud cuckoo land. Capitalists have nothing to fear from this lot.
@ Obnoxio The Clown
“The problem with Labour governments is that they all run out of other people’s money to spend”
Funny, I thought we arrived at this siuation by rich financiers in banks running out of other peoples money to spend and having to run squealing like stuck pigs to the state to bail them out.
As they say about the victims of capitalism, we don’t know how many there are because we wouldn’t know where to start counting and where to stop.
So we arrive at a situation caused by neo-liberalism to be solved by more neo-liberalism.
Marvellous.
And the poorest in society pay for a crisis caused by some of the richest.
Same old Tories, what do you expect from a pig but a squeak?
And ten billion quid a year is spent on middle-class benefits, it’s hardly been touched yet, I look forward to it being cut and you howling in agony when it is.
Dear Clown
Where is the money to come from?
– Scrapping Trident
– Collecting the Tax aviodance bill
– Increased tax revenue from people being in work and buying things
– which leads to maturation of the debt by 2020 anyway.
are some of the things which will not now happen.
Welcome to the Third World, dipstick.
“In years to come, the NHS is going to become increasingly powerful and influential”
Christ, you mean those nurses will soon be running the country just like the fk/g bankers? They’ll be demanding WE bail out their “carry-on” uniform derivitives? A ghost market in off-shore black tights? THEY ARE LIKE THE BLOODY TALIBAN, never satisfied! I blame Babs Windsor!
I’M voting “CLOWN” (and/or Nick Clegg) next time to cut these medico-fanatics down to size! Where is that Euston Manifesto group when you need ‘em? Iraq is so yesterday, it’s the Nurses now! Wake up and smell the Detol!
The whole issue of the ‘reform’ of the Welfare state, begun under Brown, and now continued by the Tories, has been lagrely ignored by the labour movement.That is despite a small campaign against it led by the TUC.
The present changes, such as the Flexible New Deal for the Unemployed, and the (before present Cabinet) pressure on those who receieve Incapacity and Disability benefits, are causing a huge amount of misery for people.
The Government is pledged to introduce some kind of Workfare. This will be expensive to run, needing as it does, overseers and private contractors even if the claimants only get their pitiful Dole for full-time work.
Because many people will be ‘sanctioned’ for not carrying out their labour correctly, or simply hate being forced to toil for a couple of a quid an hour, it will result in an increase in the already growing section of the workless who get no money. Out on the street, ready to rob, a minority will help fill up the gaols. Costing even more.
Last night David Freud – ex-Labour now Tory adviser – gave no details of the system. Despite the incredibly wealthy Paxman coming out with Daily Mail tales about the unemployed living it up he didn’t expand on how theya re going to proceed.
But this is one to watch.
People are very anxious.Our site, Ipswich Unemployed Action, has exploded: the number of comments on a post on the Budget, has reached over 80.
http://intensiveactivity.wordpress.com/
Andrew – if housing benefit is to be cut by 10% from those receiving JSA after just twelve months (not an unusual period?), then the unemployed are not just without work but also potentially homeless, whilst their core benefit is further degraded with the new price indexation. This is a “back to work” budget? How? By “transferring” them to the street selling the Big Issue? Caroline Flint first pointed in this direction. Labour leads…Tories follow. EVER thus.
Look the best way to look at it and I’ve been looking at it for some time, I’ve written to the new labour party many times i was even asked to go onto TV, radio and many time the phone rings to give a comment, but now I just put the phone down.
The BBC wanted me to go on angel or scrounger, they came down set up the camera’s and then left saying your obviously disabled and we are not looking for that.
I asked whom are you looking for and the reply was cheats, so I asked who are the angels then just a smile.
The sad fact is over the years I’ve applied for 780 jobs through the job centers help the cripples, I’ve had three replies to all those applications, I even once saw a job advert I thought I could do, going in my wheelchair I traveled two miles, I got to the gate to be told the job had gone, but the next day the adverts was still open so I phoned I was given an appointment for 10 am once they saw the wheelchair i was still waiting at 4.45 pm and the young girl said we are going home now sorry they will not see you.
Who are these nice people who are going to employ these people the retards the jerks who cannot read or have funny faces that people call freaks, you might say thats evil language to use, but it’s what people think is it not, Downs syndrome people either feel sorrow or laugh it’s one of the two, they miss the person that lives within that face.
The simple fact this is all about benefits cuts and why not come out and say so, I can live with that.
As for the Unions do not make me laugh, the TUC are more interested in what they can get out of the government what committees they can get on earn a bit extra as they sail into the house of lords.
I’m disabled what keeps me going is knowing in the end I can end it when I want, and nobody can stop me.
Robert. If you ‘end it’ hardly anyone will care and the Gov will save more money. Just be a pain in their arse and carry on.
The critique against rolling back the state seems to rely on conflating public services with public spending, as if getting your bins emptied really was reliant on overlapping quangos (last stats I saw on this said c.800 quangos exist), or your doctor’s surgery was brought to you in association with a series of talking shop projects on trendy PC issues, or if your local library will close if an overstaffed Whitehall department now employs 2 people to do the work of 2 people insted of 4 people to do the work of 2 people.
There are left wing ideological arguments for the managerialist state, creating stuff for people to do, even if it doesn’t need doing, and even if it is a redistribution of resoiurce from economically productive to unproductive (I believe the trendy euphemism is “socially useful”) but these arguments are not being openly put forward. There are also political explanations for why Labour would grow a client group in the state bureaucracy, whilst making hollow noises about reforming inefficiency, but these are not covered by the vague anti-analysis of how fat cat bankers did it all.
Yes, there was reckless activity in some parts of the financial sector on the back of the cheap credit sloshing around global economy, but is everything the fault of the fat cats? Did fat cat bankers made Brown break his own borrowing rules at the top of the boom? Did fat cat bankers cause the defict to go up years before the recession? Did fat cat bankers force people to spend on cheap credit and so keep the economy afloat? Are the fat cat bankers who needed bailing out (a bailout that’s so vague it can include all kinds of stuff to get to a big number) ungrateful because the people who hold government debt are nervous about ever growing requirements for borrowing, or does this only make sense if they really are all the same fat cats, and does a less ambiguous view change matters? It seems the fat cat banker has become the convenient scapegoat for every poor government policy and every individual’s own poor decisions for decades, its trendy, its populist, but it just doesn’t make sense, it leaves too many contradictions and holes in it’s wake.
“reckless activity in some (sic) parts of the financial sector”
CLASSIC.
Coming soon ~ “Hiroshima bombed – some injured”
Coatsey is right:
http://michael-hudson.com/2010/06/europe-sacrifices-labour-for-finance/
Robert – I don’t often agree with Jimmy but hang on in there – you are their enemy and every single day you stay alive and angry is a tiny little victory.
Coatesy – your Ipswich Unemployed Action site is brilliant.
Every city in the country needs a site like this.
Robert, all I can say is ‘Don’t let the buggers grind you down.’. Remember you only have one life, and you mustn’t let them take that away from you. If it doesn’t sound trivial, it reminds me of that old American song, ‘They can’t take that away from me’ about a person remembering an doomed lvoe affaire. Easy for someone selse to say though I know.
Don’t go gently, Robert, but I’m afraid they’ve got even worse in store for us ( I too have serious mobility problems ).
From 2013 (I think) ALL DSA claimants are going to have a probably untrained stranger come into their home with the power to arbitrarily take away their benefits and therefore their home. An indication of how this work is the experience so far with the ESA assessments introuduced by NuLab. Bet you that in 3 years the Tory scum will more or less have demolished CAB, so there will be little chance even of an appeal. Read on if you care.
From the SCAB report on the Employment Support Allowance assessments:
http://www.cas.org.uk/unfitforpurpose-scottishcabevidenceonesa.aspx
Citizens Advice Scotland’s latest research report, Unfit for Purpose, which looks at the significant impact that Employment and Support Allowance (ESA) has had on Scottish bureau clients. The main findings of the report include:
* Many clients with serious conditions are being found fit for work, including clients with Parkinson’s Disease, Multiple Sclerosis, terminal cancer, Bi-Polar disorder, heart failure, strokes, and agoraphobia.
* Over two thirds (68%) of claimants are being found fit for work compared to the original target of 50% of claimants.
* The Work Capability Assessment, which assesses whether a claimant is fit for work, is inflexible and fails to take into account a client’s full condition.
* Around 1 in 4 fit for work assessments reach a tribunal, with 39% of these appeals being won by the claimant. Where a bureau represents a client, 70% of appeals are won by claimants.
* Scottish bureaux have reported a massive workload helping clients with ESA appeals, which places increased pressure on already much stretched CAB resources.
The (English)CAB report on the ESA assessments:
http://www.citizensadvice.org.uk/not_working
Pardon me, Citizen’s Advice Scotland is of course CAS, not SCAB (Scottish CAB – just doesn’t have a good ring to it)