Many members of today’s cabinet are market fundamentalists who believe that ‘mass democracy’ amounts to nothing less than oppression of the ultra-wealthy.
In British politics, the Left is traditionally associated with ‘big state’ policies and Right with ‘small state’ policies.
Recently, several commentators have suggested that Prime Minister Johnson is pioneering a new kind of ‘big state, one nation Conservatism’ – and in effect stealing Labour’s clothes. For example, the FT, under the headline Johnson’s £12bn tax gamble: big-state Conservatism or expedient politics? wrote:
“The move leaves Britain on course to record the highest tax burden — 35.5 per cent of national income — since 1950, when the country’s most radical Labour government under Clement Attlee was nationalising swaths of the economy and grappling with the aftermath of the second world war.
Many Conservatives still think of themselves as small-state, low-tax politicians walking in the hallowed steps of former leader Margaret Thatcher. But the reality is that, after 11 years of Tory government, a graduate in Britain, repaying student loans and paying the lowest rate of income tax, faces the loss of 50 per cent of any increase in their salary above £27,288, paid by an employer.”
While Sky News said:
“The prime minister has broken two manifesto promises in an afternoon as he increases National Insurance to raise money for social care and pauses the triple lock on pensions.”
And The Guardian commented,
“Hence the decision to steal a few of Labour’s clothes: a higher minimum wage; extra money for the NHS; modest increases in infrastructure spending.”
Is this idea – that Johnson is stealing the centre ground from Labour – a plausible reading of the Johnson government, or is something else happening?
If we judge by policies enacted rather than by the associated rhetoric, we conclude that the Johnson government is indeed different from any previous government, but its policies bear no relation to those of any Labour Party past or present:
- the Johnson government is neither ‘big state’ nor ‘small state’ – it is plunder state;
- despite the rhetoric, it has no policies for levelling up; and
- unlike previous UK governments, it has no attachment to democracy.
From Big State/Small State to Plunder State
Traditionally, the Labour Party holds views which could be described as ‘big state.’ Most Labour MPs believe that there are important functions which can be performed better by the state than by the private sector, and that, therefore, they should be undertaken by the state. They also believe that taxation should be sufficient to enable these activities to be carried out properly and that it should be progressive taxation, in which the better-off pay higher rates of tax.
The Conservative party, by contrast has seen itself as the party of low taxation. Many Conservative MPs believe that state-run activities are inherently less efficient than private sector activities and, therefore, they should be minimised. They also believe that economic progress is driven by business rather than by the state and they see taxation as stifling business and therefore progress itself – and so they fall into the ‘small state’ camp.
But although the Johnson government has been reluctant to spend even relatively small amounts on some issues – such as school meals for the poorest children during holidays, pay rises for nurses, or benefits for the poorest – they did not hesitate to spend money in large quantities on a new ’Royal’ yacht which the Royal family does not want (£250 million), on PPE (well over £1 billion), on the so-called “NHS test and trace” (£37 billion ) – when this spending was directed into the corporate sector, via a special VIP lane which crowded out experienced suppliers in favour of donors and contacts of ministers. As a result, much of the money spent was (from the taxpayers’ perspective) wasted.
Indeed, the government’s attitude to NHS spending – or indeed to any spending which can in some loose way be linked to the NHS – seems to be:
“tax-funded spending is fine, as long as we can direct it to whom we want and as long as the tax burden does not fall on the wealthiest.”
The new Health and Care Bill, for example, will give ministers extraordinary powers to spend taxpayers’ money without oversight and to reshape the NHS at will. Calculations by our NHS project team suggest that the profit opportunity from moving the NHS towards the US system could be as high as $28 billion per annum.
Oversimplifying to make the point, the traditional Labour Party sees the NHS as an unalloyed benefit; the traditional Conservative party sees it as a large expense; and the Johnson government sees it as a gigantic profit opportunity. The same is true of schools and several other areas of public expenditure.
The beneficiaries of a plunder state would be a very small number of extremely rich people – rather like the Russian oligarchs. Most people would be seriously impoverished by such a change.
No Levelling Up
The government constantly talks about levelling up. To most people, it sounds as though they intend to close the gap between the rich and poor. But when you look at the policies, and in particular, when you follow the money, you get a very different impression.
The government has created a significant ‘levelling up’ fund of £4.8 billion, but the money has not been directed into areas of greatest deprivation. As the FT commented,
“Further FT research has found that 11 areas in England represented solely by MPs from the Conservative party that are in the lower half of national deprivation rankings have been put in the fund’s highest category. The areas, including some of chancellor Rishi Sunak’s Richmond constituency in rural North Yorkshire, have been classified as ‘priority one’ regions while some of the most deprived places in the country have been classed as ‘priority two.’ … Diane Coyle, Bennett Professor of Public Policy at Cambridge university, said the bias ‘is pretty blatant really.’”
When the government wanted to raise taxes – notionally to solve the Care crisis – it did not invest to collect unpaid tax from the very wealthy; it did not raise the top rates of income tax; it did not equalise income tax and capital gains tax. Instead, it increased National Insurance rates. While middle and lower earners would see an increased burden, the wealthiest would bear little or none of the cost.
Following the money leads to the conclusion that the Johnson government intends to spend lavishly into favoured parts of the corporate sector and in areas which vote Conservative, and to make sure that the wealthy do not bear the cost of this spending. It would take a miracle for this to lead to levelling up.
Dismantling Democracy
But perhaps the biggest difference between the Johnson government and previous UK governments is in its attitude to democracy. Most other governments have followed Winston Churchill’s line that “democracy is the worst form of government – except all those other forms that have been tried from time to time.”
Many members of today’s cabinet are market fundamentalists who believe that ‘mass democracy’ amounts to nothing less than oppression of the ultra-wealthy.
In fact, this government has been uncharacteristically systematic in its efforts to dismantle all democratic safeguards. In bills ranging from the Internal Market Bill, the Police, Crime, Sentencing and Courts Bill, the Elections Bill, the Judicial Review and Courts Bill and others, they have reduced or plan to reduce almost every check or balance in our democratic system:
- the ability of Parliament to scrutinise the executive;
- the safeguards on whistle-blowers who expose wrongdoing;
- the right to peaceful protest;
- the right to vote;
- the independence of regulators such as the electoral commission;
- the ability of the courts to review the legality of government actions.
If they succeed, the UK will become a ‘managed democracy’ retaining the façade of democratic institutions but with none of the substance.
Conclusion
It seems undeniable that the Johnson government is different from any previous UK government of left or right: it may be stealing Labour’s rhetoric, but it is not stealing its policies.
An undemocratic party set on building a plunder state is something so alien to the UK that it is hard for commentators and voters to accept that that may be what is happening. And therefore there is little commentary and little action to prevent it. If we wait until the Health and Care Bill is enacted and the Police, Crime, Sentencing and Courts Bill, the Elections Bill, Judicial Review and Courts Bill have passed into law, it will be too late to save either the NHS or British democracy.
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14 comments so far
Keep up the good work!
‘Tax-payer’ references throughout this article. The £37billion didn’t come from tax payers and neither will the extra spend. But you all know this… so why repeat it? It’s public money for sure – but nowt to do with tax-payers – loose lips cost ships.
Good question. I think the point that you are making, which is an important one, is that since we are not (and have not been for generations) on the gold standard, but instead in a fiat currency system, it is simply not true to say as Margaret Thatcher did that “there is no such things as government money; there is only taxpayers’ money.” It is also true that once it is taxed away, it no longer belongs to taxpayers, so perhaps a more accurate phrase would be “money received from taxpayers” — I think it would be a step too far, however, to say that there is no such thing as taxpayers’ money:
1. we all feel the existence of taxpayers’ money as we pay our taxes
2. government borrowing = government spending – money created – tax received = public sector deficit = private sector surplus (globally), so taxes are an important economic tool for governments.
Finally, I think it is largely because of point 1 that people (correctly) object to the misuse of public money.
I’m a rather disgruntled American who just survived four years of Donald Trump’s insipid, incompetent presidency.
I am shocked by what I read in this article. Can British pundits not see what is going on in the USA? If democracy is to survive anywhere, it starts with a flat tax rate, applicable to ALL. The rich deserve NO loopholes and no person is too poor to be required to contribute SOMETHING. One would then find a common %-age needed to fund what is truly in the national interest. Then it’s up to politicians and AN ACCOUNTABLE executive branch to assure that it happens.
Interesting point. A flat tax rate can only work in circumstances where, as you say, “no person is too poor to be required to contribute SOMETHING.” At the moment, in both the UK and the US, this is far from being the case. So a flat tax rate might follow a solution to the problem of mass impoverishment, but it cannot itself be the solution.
I strongly agree with your point about loopholes and the need for an accountable executive.
This is a brilliant analysis under a clever headline. It exposes the Johnson government’s rhetoric as insincere to say the least. It also shows how very far this government is moving away from traditional UK and EU norms
The flat rate overall tax system is the Russian tax model . 12% for all no more no less.
Many French citizens have relocated to the shores of the Black Sea to enjoy relief from the French Tax system.
The question with any tax change is “who benefits” — if you have a flat tax at a low level, the answer is clear: the rich.
To look after the entire population requires either progressive taxation or a universal basic income at a sufficient level that its recipients can both pay the flat tax and avoid poverty: that needs quite a high rate of flat tax. A flat tax at 12% in the UK would increase poverty dramatically.
I agree with every word Mark Thomas says, but would argue that he does not go far enough.
Legatum’s Shanker Singham made it only too clear where we are really heading. Take a look at their Charter City (ZEDE) in the Honduras, soon to arrive in the UK masquerading as “Freeports”.
Have to admit I dismissed it all as hype to begin with, but no longer.
The Tories are no “government”; they are a bunch of self-serving, venal opportunists.
Plain-speaking, spot-on. Sadly, HM’s loyal opposition seems incapable of anything like this, at present. Would it be too much to ask for the shadow cabinet to at least get on the 99% distribution list?
Accurate and worthy article.
I would add, that from an Irish historical perspective, the attitudes we saw during the Irish Famines, and the Partition of Ireland, remain a constant, no matter who assumes power in England.
The British State aka the Crown aka Empire 3.0 (the assets of Empire 1.0 that are still controlled by English oligarchy) dominates the politics and economy of the UK, and much of the global south, and is inherently extractive, a privateership institutionalised, a masked dictatorship of Accumulated Extracted Wealth.
SCL’s operations in 68 countries, interfering in 100 democratic elections is Empire 3.0 at work. They have not ceased operations, even as the companies were shut down.
Brexit: ‘taking back control’ is about that group reclaiming what they see as their entitlement, 1000 years old. Ownership and political dominion. Obviously, they dare not say so, in public, and so it had to be dressed in a costume.
They hated Corbyn, because he is persistent, and was a close friend of traitor Benn, and they feared the crowd that coalesced around his honesty.
They still fear that crowd, hence the intensity of culture wars, divisionary distraction, political grooming operations. They fear honesty, because they cannot counter it without violence of some sort.
Tout ce qui est dit est surprenant mais tout à fait la réalité ;nous ne devons pas être laxiste et laisser faire ; ce serait donner raison à tous ces politiques qui devraient nous défendre mais au lieu de cela oublient leurs promesses de campagne; ils nous manipulent dès qu’ils sont élus ; optent pour une politique de confort pour eux mêmes et sont trop souvent à l’opposé des revendications justifiées de la population ……
Some woukd say the present UK regime is verging on a kleptocracy.
@ corneilius thanks for your Irish perspective. What’s SCL?
BTW I heard a joke from an Irishman: “Now the English are getting a taste of what it’s like to be ruled by the English.”