The Conservative Party under David Cameron is certainly a slicker operation than they have been for many years.
In the wake of a rumoured loss of 1000 jobs at the Honda factory in Swindon, David Cameron has written an exclusive article for the Swindon Advertiser. Swindon currently has two Labour MPs, in marginal seats that the Conservatives must win if they wish to form the next government.
Firstly we have to say that some caution is required. The figure of 1000 jobs to go, about a quarter of the workforce, is based upon an estimate from the Unite union. Honda deny that they have any particular figure in mind, and are seeking to reduce the workforce by a range of measures, including six month sabbaticals on half pay: there will be no compulsory redundancies. But clearly the dramatic downturn in sales of new cars is hitting Honda hard, and the union’s estimate is probably reasonable.
David Cameron’s response is very clever, but utterly mendacious. It is full of crocodile tears about the fate of the unemployed, but also includes dog-whistle racism and strong indications that from the point of view of the labour movement, working people and pensioners, a Tory government would be much worse than Labour. Cameron says:
Labour failed to reform our benefits system and tackle the lack of skills training when employment was still rising. And it doesn’t help that two-thirds of the new jobs that Labour has boasted about creating have been in the public sector, and four-fifths have gone to migrant workers.
Let us examine this in more detail.
The Tories are criticising New Labour for not being ruthless enough in cutting benefits. The Tories say that Labour has not taken skills training seriously enough, but it is Conservative party policy to scrap the Union Learning Fund that provides training in essential skills. The Tories also want to cut public sector spending, which will inevitably impact on skills training. Cameron notes the failure of his beloved private sector to create new jobs, yet blames the government for creating public sector jobs! Surely the problem here lies squarely with those who haven’t created jobs, not with those who have. We should blame the investment decisions of Cameron’s friends, the private sector capitalists. Finally, Cameron blames migrant workers – but all serious economic analysis says that the impact of migrant workers has broadly helped the economy.
If we look at the Tories economic manifesto, it is coded to obscure their meaning from ordinary voters, but they blame the turndown in the economy on too much government spending:
A reckless experiment in big spending on the back of a debt-fuelled boom has ended in failure.
The fiscal rules have failed. We need a totally different approach that will entrench fiscal responsibility for good. We need a new fiscal framework so that in future all governments will have to fix the roof when the sun is shining
There is a sleight of hand here, because while it is certainly true that the unregulated growth of private sector debt has largely created the current financial and economic crisis, the problem has NOT been caused by “the fiscal rules”, that is government taxation, borrowing and spending. Indeed it has been part of the mantra of Gordon brown’s government to suppress government borrowing, and encourage private sector finance.
What the Tories are offering is a full scale return to Thatcherism, promising to:
Introduce a tough new forward-looking mandate for the public finances at the end of a forecast horizon: falling debt as a percentage of GDP and a balanced current budget, adjusted for the cycle
Balanced budgets, and tight money supply are designed to increase long term confidence in a country’s underlying financial stability, and thus boost private sector investment. This orthodoxy of the right wing grew in response to the crisis of Keynesian economics in the 1970s, when high government borrowing was perceived as a cause of inflation, which itself made private sector investment less attractive.
But it would be desperately dangerous now, when we have deflationary pressure, and a credit squeeze. Tory policies would accelerate the rate of company closures and job losses, which would further destabilise the financial markets as people defaulted on loans, and cause a slump in retail demand. What is more, the Tory demand that the government reduces its debt would effectively mean abandoning attempts by the government to intervene in the economy to generate demand though public infrastructure projects, or strategic nationalisations.
For all its faults the Labour government is showing a degree of pragmatism in response to the economic crisis that has meant that some of the steps it has taken are in the right direction for safeguarding the jobs and livelihoods of working people. They have abandoned many of the positions of economic neo-liberalism. This opens a space for the left, particularly via the affiliated unions, to argue for stronger and bolder measures to protect jobs and wages.
In contrast Cameron and Osborne are dangerous right wingers who are prepared to stick to an out-moded economic orthodoxy that will seek to deal with the recession by cutting government spending, and cutting benefits. Despite their protestations to the contrary this will lead to escalating unemployment.
The next general election one will be a potential turning point in British politics, and a Conservative victory would provide a much worse context for the labour movement.