The Post-Thatcher Consensus: A Critique

On the face of it British politics has never been more interesting. The government is currently run by an increasingly awkward coalition between the Conservatives and the Liberal Democrats. There remains a considerable amount of unease within the Labour Party towards Ed Miliband’s style of leadership. In Scotland, we are only months away from a decisive referendum on whether Scotland should leave the United Kingdom. And to top it off across Europe, we are seeing the rise of the populist right embodied in Britain by Nigel Farage and UKIP.

Surely there hasn't been a more interesting time to be observing British politics. That is until you asked the question where is the argument for genuine change coming from? The only answers seem to be being provided by an unholy mixture of separatists and right-wing nationalists. The rise of nationalism whether in the guise of separatism or populism is concerning enough; but this misses the bigger picture of widening inequalities.
 

What of the main three parties, where are their arguments for change? With the exception of the Lib Dem commitment to political reform; genuine change seems thin on the ground. All three of Britain's main government parties subscribe to the political and economic consensus that began during the government of Margaret Thatcher. This is the consensus of Thatcherism and its offshoots; a group of philosophies which many academics refer to as neoliberalism. Thatcherite watchwords like the free market, privatisation, deregulation, austerity, competitiveness, welfare reform and fiscal discipline have now become commonplace. In a nutshell, this consensus boils down to the preference of private over public, the corporate over the community, self concern over social concern and the ability of the free market over the ability of the state.


This is the consensus to which all three of Britain's main political parties now subscribe to. Obviously, it was the Conservative Party in the late 1970s that first adopted a free-market approach under Margaret Thatcher. It wasn't until the mid-1990s that the Labour Party adopted the post-Thatcher consensus. Tony Blair under a programme called "the third way" sought to mix the competing economic views of Thatcherism and social democracy. As for the Lib Dems, they have consistently supported social liberalism since 1906; however in 2004 "The Orange Book" was published, which sought to fuse the social liberalism of the left with the economic liberalism of the right. Orange book liberalism has been in the ascendancy within the Lib Dems since the resignation of Charles Kennedy in 2006. The offshoots of Thatcherism can also be found in aspects of the SNP; whereas UKIP is an overtly Thatcherite party.


So what have been the consequences of 35 years of Thatcherism? Firstly there has been a widening gap between the rich and poor. In Britain this is epitomised by the fact that almost 1,000,000 people have had to use a food bank in order to feed themselves in the last year. Furthermore there is a widening regional gap between the former industrial North and the business orientated London and the South East. At the same time property price bubbles have been allowed to develop due to reckless bank lending. In 2008, this led to a global financial crisis, which came against a backdrop of under-regulation in the banking system and as a result a bailout of the banking industry was required.


While regulations were being curved for the rich, they were only increasing for the poor. Welfare-to-work programmes have been on the rise, whereby welfare claimants for jobseeker’s allowance (JSA) will have to work to continue getting their benefits after nine months. There have also been stricter rules, tougher penalties and closer scrutiny placed on the welfare claimed by the poorest especially in relation to unemployment. Welfare reforms such as the “bedroom tax” have led to the housing benefit for those in social housing being reduced if they have one or more spare rooms. Such welfare reforms have been a major cause in rising inequality and the rise of food poverty in Britain. This has been accompanied by a vile political discourse, which vilifies people who claim benefits. This is being conveyed through the media who target the poor, the unemployed and the disabled with sensationalist headlines and television programmes like “Benefits Street.”


Youth unemployment is a serious problem in today's Britain. The country still has almost 1,000,000 young people unemployed this is the equivalent of almost one in five young people being without a job. Young people feel alienated from politics and from society due to a whole raft of broken promises and welfare cuts that have impacted on them. Even the Labour Party intends to cut JSA for the under 22s who do not get training or qualifications. No politician of any political party seems to be willing to defend the rights of young people let alone tackle youth unemployment. From 1945 until the late 1970s, governments had a profound role in tackling unemployment. Such Keynesian policies like full employment have become a thing of the past under Thatcherism. It is this neglect of social policy that has undermined almost 1,000,000 young people and is denying them of having a more secure future.


Before Margaret Thatcher came into office it is true that income tax levels were incredibly high and that in some respects the trade unions were too powerful. However, the situation has gone from one extreme to the other. Today, the wealthiest are taxed less than 50% and there are no measures to tax the property assets of the wealthy. As for the trade unions, from being too powerful few decades ago they are too weak today. Any democracy needs a functioning trade union movement; however wage levels for a decade have remained relatively stagnant, partly due to the absence of an effective trade union movement.


The reach of the free market seems to be never ending. A whole range of industries were privatised in the 1980s and 1990s, from telecommunications, to utilities, to the railways. The free market has also had an increasing influence in public service provision. In the NHS, private companies are increasingly being relied on to provide health care services and competitiveness has been placed at the heart of the NHS. It is worth remembering that the first concern of a private company is to create profit. The profit motive is the primary motive and any other motive whether it is caring for patients, educating school pupils or delivering local services will only ever be secondary.


Perhaps the most concerning aspect of the post-Thatcher consensus has been the political disengagement of many people with the political process. Too many people, especially from traditional working class communities, no longer feel represented by the views of the mainstream parties and are in danger of falling foul of the siren voices on the populist right. Why is no one making the case that people are facing such economic difficulties not because of immigration, but because of entrenched inequalities, or the under-regulated banking industry, or the lack of a Keynesian solution from government, or through the lack of an effective trade union movement.


Where is the progressive challenge to the current status quo going to come from? There is a whole wealth of centre-left social liberal and social democratic groups and intellectuals, who are laying the foundations for a potential progressive alternative to the post-Thatcher consensus. Internal party groups such as the Social Liberal Forum and Compass are becoming factories for new progressive ideas in order to challenge the worn out status quo. There are also a wealth of academics on the moderate left from which progressive inspiration could be drawn from, such as, John Rawls, Thomas Piketty, Will Hutton, Paul Krugman, Ha-Joon Chang and Roberto Unger.


The post-Thatcher consensus has left Britain more economically unequal, more politically disengaged and more socially insecure than when it began. It has centralised political and economic power in Westminster and the City of London. The great democratic deficit between working people and the company management needs to be bridged through a mixture of co-operatives, worker representation on company boards, worker share ownership and renewed trade union engagement. There also needs to be a serious attempt to redistribute wealth and to reduce the scope of the free market in social policy. Finally, there needs to be a Keynesian solution focusing on tackling unemployment, the looming housing crisis and the ever present threat of climate change.


In some respects Thatcherism and the post-Thatcher consensus has tested the fabric of our society, our economy and our democracy almost to breaking point. It represents a tired and worn out consensus, that doesn't benefit millions of people in Britain. Furthermore it has neutralised the ideological competition that makes democracy a viable concept. The three main political parties must break away from representing fifty shades of Thatcherism. Britain needs a new consensus; the freedoms, rights and opportunities of the most disadvantaged in society depend upon it.

What is Liberalism For?

What is liberalism for? This was a question that the Liberal Party began to ask itself at the end of the 19th century. Following the defeat of the Liberal Party in the 1895 general election, it became clear that the Liberals had to examine their guiding philosophy. Liberalism, the radical ideology that had sought at the start of the 19th century to provide everyone with liberty and rights had ended the 19th century looking out of touch and unable to address the problems which people faced. The one time philosophy of radical reform looked uneasy and unable to acknowledge the vast inequalities that had emerged within industrial society. The defeat of 1895 helped the Liberals move away from the stale status quo of Gladstonian classical liberalism and towards the philosophy of new liberalism, what today would be called social liberalism (“The New Liberalism” The Liberal Democrat History Group http://www.liberalhistory.org.uk/item_single.php?item_id=85&item=history). The transition to social liberalism enabled the Liberal Party in the early 1900s to become the champions of social reform; by laying the foundations of the welfare state, securing workers rights, and by redistributing wealth through taxation.

Today in 2014, it has become necessary for British Liberals to ask themselves once again, what is liberalism for? For almost 100 years social liberalism had been the dominant political discourse within the Liberal Democrats. In 2004 however a new brand of liberalism emerged in the Orange Book. Orange Book liberalism embodied a fusion between the social liberalism of the left and the old Gladstonian classical liberalism of the right. The answer according to the Liberal Democrat Orange Bookers was to promote a brand of liberalism that was directly in the centre of the political spectrum. The Orange Book narrative was that of a pragmatic party of the radical centre, hence the Liberal Democrats would be a party of power with the opportunity to form coalitions with either the Conservatives or Labour. A situation not too dissimilar to the German Free Democrats (FDP), who had up until recently assumed the de-facto status of being an almost permanent party of coalition government. While social liberalism seeks to foster social justice in order to enable the individual freedom of the disadvantaged, Orange Book liberalism seems to defend the status quo at best and at worst promote policies that undermine fairness and social justice.

The liberalism that is currently on offer to the British electorate is bland and seems to lack any radical and progressive perspectives for social change. Phrases such as social justice, tackling inequality, community politics, public services and redistribution have almost become dirty words or perhaps even more concerning, they have become in the minds of some "anti-liberal” words. Radical centrist liberalism far from being radical has become a defender of the status quo. Far from removing the Liberal Democrats from the traditional left-right axis, radical centrism has placed the party right in the middle of it. The Liberal Democrats should be a party of change willing to tear down the status quo, not propping it up through endless coalitions and bland politics. Currently British liberalism is in danger of being a valueless no-man’s land which is neither able to attract voters from the left or the right. This fact has been shown through the disastrous results for the Liberal Democrats in the 2014 Local and European Elections.
 

Whatever happened to the philosophy that guaranteed people's freedoms and wanted to hold the powerful to account through political reform? Whatever happened to the philosophy that created the welfare state? Whatever happened to the philosophy that sought to put power in the hands of ordinary people, while ensuring that the environment was protected for the next generation? Where is the Liberal mission in 2014? The reality is all of these aspects encompass the modern need for liberalism. The liberalism that actively enhances people's lives today while protecting their future for tomorrow. Liberalism (especially social liberalism) is needed to combat Labour authoritarianism, Conservative free market policies and the rising tide of right wing populism.

Liberalism must exist to address the concerns of 21st-century Britain. There are massive wealth and power inequalities in British society. The burden of austerity has fallen too heavily on the poorest, the most vulnerable and those who depend on vital public services. Unemployment is still a massive issue facing Britain, especially amongst young people. There are massive regional inequalities throughout the country with London and the South East seemingly benefiting from a recovery, while the rest of the country lags behind. This recovery is one that is being fuelled by a dangerous housing bubble at the same time when Britain needs hundreds of thousands of additional new homes every year. Many people continue to work in a situation of job insecurity ,where wages are low, future prospects are uncertain, and trade union activity and collective redress is limited at best and non-existent at worst. This is all set against the backdrop of the increasing encroachment of the free market economy into the NHS and the education system. Finally, looming over the world like a shadow is the imminent threat of global climate change. The Liberal Democrats must develop policies to combat these hardships facing many people in Britain today.

What is liberalism for? Liberalism is for freedom, social justice, local empowerment and the future. The status quo is failing millions of people across Britain and the Liberal Democrats need to challenge it. Those Liberal Democrat politicians who are not driven by this sense of mission, by the drive for change, those who forget the history and values of liberalism will surely face the wrath of a disillusioned electorate. Liberalism exists to help the people not to cling onto power; fellow Liberal Democrats we forget this fact at our own peril.