Lobster’s Robin Ramsey Explains Why Thatcherism Didn’t Work as Claimed and Why Truss Will Fail

In my last piece I said that Lobster’s editor, Robin Ramsey, has a background in economics and that he said in one of his pieces for the magazine that the Tories recognised long ago that trickled down economics didn’t work. They still wanted to cut spending and punish the poor for being poor while giving lots of more money to the rich. They just had to find a better pretext for it. So they started arguing for their wretched policies on grounds of morality. Now Truss has gone back to the old trickle down argument. In the recent issue of Lobster, 84, Ramsey has a piece in his ‘View from the Bridge’ column, ‘All Trussed Up’ explaining why Thatcher’s economics policies didn’t work in the way she thought they did, and even despite her best efforts, and why this means Truss’ policies will fail. He writes

‘On the day that Prime Minister Truss made her announcement about dealing with the energy crisis here, The Times (8 September) briefly mentioned (on p. 39) that the Chancellor of the Exchequer was off to the City to discuss ‘Big Bang 2’ – further deregulation of the financial services sector. Centrally, I would guess, will be a change to the rules introduced after the financial crisis of 2007-9 which increased the amount of capital the banks had to keep in reserve. In other words, financial gambling is going to be encouraged again. The central question with this new government is this: do they really believe that this warmed-over Thatcherism will work? My guess is that they do; that they have spent too long in a free marketeer intellectual ghetto to understand even the Thatcher years. They have failed to grasp that Thatcherism didn’t work on its own terms: it did not ‘cure’ inflation and did not produce more economic growth than its predecessors. Mrs Thatcher’s ‘reforms’ were possible because her government had North Sea oil revenues to pay for mass unemployment; could sell off chunks of the public sector; and, despite her best efforts to kill it, had a manufacturing base three times as big as it is now. The new government has little oil revenue; a much diminished manufacturing base; and not much of the public sector left to be sold. It will be interesting to see how long it takes them to grasp that the horse they are enthusiastically flogging is dead.’

For further information, go to https://www.lobster-magazine.co.uk/article/issue/84/the-view-from-the-bridge-47/

Private Eye from 2009 on Corporate Lobbying at the Tory Party Conference

Private Eye printed this piece about the corporate sponsorship of the Tory conference that year in their issue for the 4th – 17th September 2009.

Conference Countdown

David Cameron has warned lobbyists to keep their distance at the Conservatives’ forthcoming party conference in Manchester. With the keys to No. 10 within his grasp, the last thing Dave needs is another cash-for-access scandal. But corporations that want to get close to the PM-in-waiting can always go the think-tank route.

Policy Exchange is the most Cameroonian of these bodies, and its preliminary conference timetable shows how easy it is for business interests to pay for face time with shadow ministers.

Shadow energy minister Charles Hendry will be speaking about “energy security and decarbonisation” courtesy of Oil & Gas UK, the trade body for the North Sea oil firms, alongside the group’s chief executive. As the meeting is being paid for by the oil lobby, energy security will most likely trump global warming, and wind and wave power, like energy saving, will not get much of a look-in.

Shadow health minister Stephen O’Brien will be discussing whether funding for long-term care should be by “individual, state or partnership”. The answer may well be by “partnership” because the meeting is being paid for by Partnership Assurance which specialises in funding elderly care through equity release and insurance schemes and so has a direct interest in less government funding for elderly care.

Fellow shadow health minister Mark Simmonds meanwhile will discuss whether “We need more public health initiatives for the worried well?” The obvious answer would be ‘No we don’t”, but as the meeting is sponsored by Alliance Boots, which would love to be involved in government health initiatives to drum up more business, the answer may well be in the affirmative.

Shadow business minister Mark Prisk is addressing a meeting called “Britain won’t be great if we don’t make anything anymore”, paid for by the arms firm BAE Systems. He will speak alongside BAE’s spin doctor, Bob Keen. BAE’s contribution to Britain’s greatness includes taking huge amounts of the defence budget for military kit marred by cost overruns and late delivery – overpriced and late schemes like the Astute Class Submarine (£1bn over cost, four years late) about which the Tories have been making a fuss.

The British Airports Authority, so close to the current government, is taking no chances with a new administration and so is sponsoring a meeting on “infrastructure” with George Freeman, Cameron’s “A List” candidate for the safe Tory Mid Norfolk seat. BAA’s spin doctor, former spokesman for Tony Blair Tom Kelly, will also address Tory delegates at the meeting.

Shadow culture minister Ed Vaizey meanwhile will be talking about “the future of television ” on a platform funded by BT Vision, alongside the TV-on-the-internet firm’s chief executive. BT Vision of course currently lobbying the government to merge with Channel 4. So no hidden agenda there.

This shows how duplicitous Cameron has always been in trying to deny the corporatist agenda behind the Tory party. He wanted to hide the influence of the lobbyists at this party conference, just as his lobbying bill is supposed to make government more transparent by limiting them at Westminster. In fact, it’s aimed at charity and other political pressure groups and denying them access, and leave the corporate big boys untouched.

And it also shows the very deep connections between his Tories and the corporations seeking to profit from privatisation and government outsourcing.

Frankie Boyle Interviewed by Max Keiser On Scots Independence and British Politics

I found this interview with Frankie Boyle by Max Keiser over on Ian Bone’s site. Boyle talks about the Scots Independence, George Osborne as the type of landowner responsible for Highland Clearances, how the Act of Union was brought about through Scots colonial debt, the Tories, banks and debt, Thatcher’s squandering of North Sea oil revenue, the BBC and the restrictions on the type of comedy and suitable subjects on television, Donald Trump and the pathetic nature of the SNP, comedy and political rebellion, Right-wing institutional bias at the Beeb, Thatcher’s funeral and the IRA. He also compares the massive scandal surrounding Russell Brand’s and Jonathan Ross’ phone call to Andrew Sachs with the rather less outrage at Jimmy Savile’s and his long career at the Beeb.

Boyle is known for his edgy, offensive comedy. He makes some comments and observations here, which some will undoubtedly find offensive, such as his suggestion for the treatment of Maggie’s corpse. He is, however, also intelligent with very sharp, critical views, citing Noam Chomsky in one of his observations on the state of politics and the media. Definitely worth watching. But not if you’re Tory.

Britain Becomes South Africa: Primary Teachers Bring Food for Starving Pupils

Monica Caro, Campaigner against the government’s benefit cuts, outside the Royal Free Hospital in Camden

A few years ago I used to work with an academic, who was very involved in civil rights work to improve conditions for the Black community. He later moved with his family to the new, post-Apartheid South Africa. Talking to him later, I found that he was appalled at the poverty in his local area, and was trying to find donors, who would provide much-needed equipment for the local school. Apart from the poverty that still afflicts the vast majority of Black South Africans, there area suffered from unemployment. As a result, many of the schoolchildren were coming to school hungry. To combat this, the government had launched the ‘Nelson Mandela Feeding Programme’. This gave schoolchildren a meal when the came to school. My friend told me that it was only a peanut butter sandwich. It’s hardly enough, but it was something. It was often the only meal they would have all day.

South Africa was, of course, notorious for having an immensely wealthy White ruling class, which excluded from power and dignity the Black and ‘Coloured’, or mixed race, population. The townships into which the Black population had been segregated was notorious for poverty and the violence this engenders. It was hoped and expected that with the fall of Apartheid and the ascent of Mandela to the presidency, this would end and Black and White South Africans could finally march together in peace and create a land of prosperity and justice for all.

This has, however, not come about. The ANC has become massively corrupt, so that its members now have enriched themselves and joined the ruling White elite, while conditions for the vast majority of the Black population are as poor than they were previously. They are not, however, alone in their poverty. Since the 1990s there has appeared a class of White poor, similarly trapped in grinding poverty. This was recently shown on British television by a Black British DJ on his programme about South Africa. Ten Years ago this class of poor Whites was the subject of a photographic exhibition, Outlands, put on by a White South African photographer, intended to show an aspect of South Africa, that was unknown in Europe.

Starving Schoolchildren in Britain

Unfortunately, Britain seems to be joining South Africa in the emergence of a corrupt, obscenely wealthy elite, while the mass of its population are depressed into poverty and destitution, a poverty that includes children coming to school hungry.

Yesterday I posted a piece about Monday’s Panorama documentary on the massive expansion of food banks across the UK. One of the commenters to this blog, AmnesiaClinic, remarked that there had been reports in Britain of schoolteachers bringing in food to pupils from homes that had been hit by benefit sanctions. AM-FM has kindly provided the link to one report of this.

It’s an article from the newspaper, Ham&High, published on September 29 2013. Entitled ‘Camden primary teachers bring food into classes to feed hungry pupils hit by benefit cuts’, it reported the finding by Monica Caro, the vice-chair of the Camden Association of Street Properties, that schoolteacher in Camden were bring their own food from home into school to feed primary school pupils aged five to seven, whose parents had been hit by cuts to their benefit. Ms Caro, a volunteer and carer, was working with Petra Dando, a prominent campaigner in the borough against the government’s cuts. She was also shocked that the Royal Free Hospital had also opened a food bank. The hospital had opened a stall asking for residents to donate food.

Ms Caro said: “I thought, ‘Oh my god, if the Royal Free is now making a Comic Relief-style appeal for food then surely the government can hear that things are really desperate.’ I voted for the Conservatives and I wish I never had.

“It’s like living in Robin Hood times, they are taking from the poor to give to the rich.”

The article notes the effect of the government’s benefit cap, which means that no family can earn more than £500 in benefits, as well as the notorious bedroom tax. It stated that hit by the tax could lose between 14 and 25 per cent of their benefits.

The article quoted the comments of local lawyer, Rebekah Carrier, who was working on a number of challenges to the benefit changes in the High Court, who was particularly critical of the benefit cap. She said

“The people most badly affected by the benefit cap are families with three or more children. Often all of their benefits go on paying their rent and they have nothing with which to feed their children.”

Sally Gimson, a local councillor in Highgate, said she had been told by residents that they are skipping meals in order to make ends meet due to the bedroom tax.

It also reported that the Highgate Newtown Community Centre was going to open lunch clubs from the 4th October that year, where people in need could get a cooked meal for £1. The Centre’s director, Andrew Sanalitro, was pessimistic about the effect of the coming winters. He stated “There will be a spike in problems when winter comes because of heating bills. It’s just becoming a lot harder for people to cope.”

The article can be found at: http://www.hamhigh.co.uk/news/camden_primary_teachers_bring_food_into_classes_to_feed_hungry_pupils_hit_by_benefit_cuts_1_2691248.

This is disgusting and shameful. Britain, unlike South Africa, is an immensely wealthy country. I believe it is the seventh biggest economy in the world, but many of its people are facing the return of the grinding poverty our great-grandparents faced in the Great Depression of the 1930s. Malnutrition is also returning, along with diseases like rickets, that were common in the desperation and squalor of Victorian slums. It had been hoped such poverty had been banished through the welfare state, the expanding economy and the increased prosperity of the post-War years. ‘You’ve never had it so good!’, boasted the Conservative Prime Minister, Harold MacMillan. Well, the country as a whole is still immensely wealthy, even if Gideon, sorry, George Osborne has managed to stall the economy with his daft Neo-Liberal policies. Yet poverty is increasing. A quarter of all households have seen a decline in their income and standard of living through inflation and the Coalition’s imposition of wage restraint. And conditions for the very poorest are becoming increasingly desperate. So desperate, that they resemble South Africa, a country struggling to shake off the legacy of Apartheid and afflicted with massive corruption and the emergence of a non-racist, but still brutally exploitative ruling class. Which pretty much describes Britain under the Coalition, although racism still seems prevalent in the Tory party, despite Cameron’s attempts to root it out and protestations to the contrary. Witness the vans the Coalition circulated in Black and Asian areas to encourage illegal immigrants to go home.

Such poverty should have no place in 21st century Britain. It can only get worse, much worse, under the Coalition. If Scotland leaves the UK, taking its North Sea oil with it, then I believe we will see true conditions comparable to the Third World in what’s left of the UK.

The Coalition has to go, and Neo-Liberalism rejected and thrown into the dustbin of daft and exploitative economic policies.

Third World Thatcherite Britain and the Grab for North Sea Oil

Last week both David Cameron and Alex Salmond held separate meetings in Scotland with the petrochemical companies in order to discuss the vital question of the ownership and future of North Sea oil. This is a vital issue. The Scots Nationalists I’ve talked to in the past have all been of the belief that not only should an independent Scotland have a right to the oil reserves off its coast, but that this would support the newly independent nation’s economy. Although this wasn’t mentioned in the news reports, Britain faces the same question. If Britain does not retain revenues from the North Sea if Scotland leaves the UK, then the British economy will plummet. It’s a question of economic survival.

I was taught at school that Britain has a ‘third-world economy’. This meant that Britain was like the various nations of the Developing World in that its economy was heavily based on primary industry. In the Developing World these industries were either mining – the extraction and production of diamonds, for example, or copper in the African Copper Belt, or the various nations around the world specialising in a particular agricultural product – groundnuts, bananas, coffee and so on. In Britain in the primary industry that fundamentally supports the country’s prosperity was North Sea oil.

The authors of the book Socialist Enterprise: Reclaiming the Economy (Nottingham: Spokesman 1986), Diana Gilhespy, Ken Jones, Tony Manwaring, Henry Neuberger and Adam Sharples, make exactly the same point:

Third World Britain

Under the Thatcher experiment, Britain’s underlying economic decline has continued and gathered pace. Only North Sea revenues now disguise its true extent. Without them it would be impossible to sustain the living standards which the working population currently enjoys. Britain’s present levels of employment, industrial activity and public services are all being paid for on borrowed time. (p. 20).

They then survey the way the Thatcher government effectively devastated the UK economy, while Labour unfairly got the blame for economic mismanagement.

It is worth emphasising how disastrous Tory economic policies have been for Britain in purely economic terms. The Tory Party has never succeeded in cultivating an image of compassion or concern for social justice: but at least, so the convention goes, it can be relied on to promote ‘sound’ economic policies and generally do the things that are in the interests of business growth. The Labour Party, by contrast, seems to have a acquired a reputation for economic mismanagement. The really remarkable achievement of the Thatcher Governments has been to find a set of policies which, while designed to make ‘economic efficiency’ the overriding objective in almost every sphere or our lives, has actually had the effect of making our economy less efficient – as well as having all the more predictable results such as a huge increase in social deprivation, inequality, injustice and division. As a result we are now in a situation where socialist economic and industrial policies offer the only serious hope not only of healing deep social divisions but also of reconstructing a viable and efficient economy.

Employment levels in manufacturing, construction and the public services plummeted after 1979. The international climate worsened, it is true, following the oil price rises of that year. All the major Western countries have faced increased unemployment during this period. But in Britain’s case, government policies have played an almost uniquely important part in creating a fall in national output and an increase in unemployment. By pursuing exceptionally high interest rates as part of the attempt to reduce money supply growth and inflation, and then letting the market determine the level of the exchange rate, the Tory Government precipitated a massive crisis in the manufacturing sector in the period 1979-81 – especially among companies which were relatively dependent on export markets or which had recently expanded investment or stocks in anticipation of sales growth. Meanwhile attempts to reduce public spending and borrowing resulted in a further deflationary effect: there was a particularly severe impact on employment as capital projects and welfare services were sacrificed to pay for the escalating costs of increasing unemployment – not merely a vicious circle but an insane one.

If we look at another traditional measure of economic success or failure, the balance of payments, we see a similar story. Since 1982, a surplus on manufactured goods has been replaced by large annual deficits – the first such deficits since the Industrial Revolution. Imports and import penetration have risen sharply in virtually every sector of manufacturing. These imports have, of course, been paid for out of oil revenues. But declining oil revenues will no longer be able to offset the growing manufacturing trade deficit in the late 1980s and 1990s.

They then go on to consider some of the contributing causes to British industrial decline, such as the price of British goods, lack of investment in research and development, and the lack of an education workforce, some of which is now extremely dated.

Nevertheless, I think the main point is still valid. Thatcher destroyed the British industrial base, and it is still only North Sea oil revenues, which is propping the economy up, despite the Tory and New Labour attempt to promote the financial sector. If Britain loses these revenues, then the British economy will collapse. My guess is that we would still be in the Developed World, but go from one of the most prosperous to one of the least.

The result of this would a further massive collapse in living standards, accompanied by bitter discontent. In the Developing World, mass poverty traditionally gave rise to extremist political movements – Marxist revolutionary groups, and the various Fascist dictatorships like those of General Pinochet, Manuel Noriega et cetera ad nauseam used to contain and suppress them. The same is likely to arise in Britain. This would effectively discredit all of the main political parties, as all of them have been influenced to a greater or lesser extent by Thatcher’s legacy. But those most effected would be the Tories as Thatcher’s party.

No wonder Cameron was up in Scotland last week trying to keep hold of North Sea oil. If that goes, then so does a large part of British prosperity and the Conservatives/ Thatcher’s image as the party of British prosperity.