It’s taken a leadership race for the Tories to fess up: they’ve wrecked the economy | Owen Jones

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The Guardian

After years of division, the unexpected sudden arrival of unity should be cause for celebration. It has long been accepted by the government’s opponents that 12 years of Tory rule have been a disastrous combination of stagnation and decline, so it is to be welcomed that pretenders to the Conservative crown have now embraced these facts.

That Liz Truss has savaged the economic policies of the government she has served in since 2019 is notable enough, damning Rishi Sunak for plunging the country into a coming recession. But Truss’s critique is far more sweeping than that, damning “business-as-usual economic management, which has delivered low growth for decades”. Whether Truss is aware of this or not – she did, after all, get lost leaving the room during her campaign launch – this is a timeframe that includes the last three Conservative prime ministers. And she is on point: the average economic growth of the 2010s was only marginally better than the 2000s, itself the worst decade for growth since the war.

This is an important concession, because when he was steward of the British economy, George Osborne defended his slash-and-burn austerity on the grounds that “truly sustainable growth … depends on sound public finances.” But these cuts delivered only stagnation, because they suppressed tax receipts. The vandalism went further: a lack of investment in infrastructure and skills left a legacy of lower potential growth even after Osborne’s political downfall.

But Truss’s critique goes further. We would expect her to assail New Labour’s time in office, but by “decades” she surely goes beyond 1997, and she would be correct. After all, the average economic growth under Thatcherism in the 80s was 2.6%, the same as the much-maligned 70s, when western economies were convulsed by a massive oil price shock and the collapse of the Bretton Woods system.

The key difference between those two decades, of course, was that the proceeds of growth were more equitably distributed in the 70s. It turns out that Truss is a comrade: she is apparently savaging the neoliberal economic settlement of weak trade unions, privatisation and low tax on the rich. And she would be right: after all, in the period when unions were strong, big businesses were expected to contribute more and state intervention in the economy was widespread – the 50s and 60s – growth was much higher.

In the 1950s, for example, growth averaged 3.2%: for those ascribing that to rebuilding a nation reduced to rubble by the Luftwaffe, our industrial production had recovered to prewar levels by 1947, and growth was even higher in the 1960s. It may not be her intent, but Truss’s disavowal of decades of stagnation represents a repudiation of the Thatcherite religion.

For doomed candidate Tom Tugendhat, alarm at the potential consequences of damning Tory economics began to creep in: “It’s very difficult to understand who’s disowning and who’s defending the record of the last few years that they’ve been in government,” he cries. But Tugendhat is not one to shy away from the ruinous consequences of Tory policies, either. “We need to build more new homes,” he says sagely. “That’s the solution to the housing crisis.” Quite so, Tugendhat – as the House Builders Federation told MPs recently: “In the years following the financial crisis, net additions to the housing stock fell to 124,000 new homes per annum, the lowest peacetime figure ever recorded.”

At the sharpest end of this wholly artificially manufactured crisis, one in 206 citizens of a supposedly wealthy society, England, are homeless, while one in five children live in a house that is either overcrowded, unaffordable or unsuitable, or a combination of these ills. The housing crisis spurs on many evil spin-offs: it damages mental and physical health, increasing the risk of respiratory illnesses such as asthma, and damages the educational attainment of children. With English private renters coughing up nearly a quarter of their income on rents – in London it’s closer to half – here is a cost of living crisis convulsing households long before Tories were forced to wring their hands about it. And again, Tugendhat might rightly protest that New Labour’s housebuilding record was miserable, too: and he’d be right that a dogma that satisfying this basic human need must be left to the market has taken hold of both political parties.

It may seem like an eccentric act of self-harm for Tories to capitulate to the fiery critiques long made of their time in office, but there is perhaps a logic to it. Boris Johnson, after all, was allowed to get away with the deceit that he represented a change, a rupture, from what came before him, despite repeatedly voting for policies that inflicted so much harm on the economic and social fabric of the nation. But in these febrile times, the Tories’ opponents should finally rejoice. A consensus has finally been established that Conservative rule has been a travesty, a miserable tale of squashed potential and stolen dreams. Don’t take my word for it: there is finally cross-party unity, and we have the Tory truth tellers to thank for it.

July 18, 2022 at 11:13PM

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