Budget 2011: shock doctrine in the UK

George Osborne’s Budget will attempt a radical social re-engineering of the UK.

So will next Wednesday's Budget be "Shock and Awe: phase II" for the UK? The government's mantra of a "budget for growth" would have us believe otherwise. But even if we are spared any bombshells of the 20 per cent VAT variety, we can still anticipate what Pentagon planners call the "smart war" approach. Expect the Budget to be a more precision-guided follow-up to the original onslaught – and with the words "enemies of enterprise" chalked all over the warheads.

But, smart bombs or otherwise, the underlying coalition programme remains the same: a refashioning of the balance of power between social classes and public and private interests that George Monbiot lambasted last year (referring to the bestseller by Naomi Klein) as tantamount to the UK's very own "shock doctrine".

Klein's book of the same name shows how vested interests may capitalise on times of crisis to impose the sort of economic restructurings that folk would normally reject as sheer folly. It is becoming increasingly clear that, from cuts to tax breaks, the coalition is taking all the steps it can to refashion the country along pro-market, anti-equality lines.

Against such accusations, the government claims it is merely being level-headed: paying off all that burdensome debt and warding off the markets that prowl about our neighbours. But just as Margaret Thatcher proselytised the virtues of private ownership to cover her clawing away at public institutions, so today does David Cameron preach about devolved responsibility to hide the true intention behind making the cuts.

The Iron Lady's cold individualism may appear to have been shuttered out from this by talk of the "big society", but in truth Cameron has simply tacked up the garish swags of community empowerment in its place. Either way, we are left with little more than window-dressing for an ideological crusade.

Which is why we can expect further moves in this direction from the Budget.

Cue the anticipated setting aside of money for the sort of "enterprise zones" that Thatcher tried to introduce. These will be hoped-for pockets of success to be pointed to later, against the tide of the country's widening geographical inequalities.

And watch out for Osborne's preference for Pareto optimality as a policy tool: outlawing any policy intervention on behalf of the needy if it stands to impinge even marginally on the interests of the rich. These may well be interests he is now reliant upon to kick-start the economy.

But at times of cutbacks it is the least well-off who need most protection, and women among those most of all (one analysis of tax and benefit cuts after the June Budget shows that women bore 72 per cent of the cutbacks). Their basic needs are hardly the "enemy" of future growth.

Add to this the government's ongoing "war" on bureaucrats and the ratcheting up of a culture of aggression against "the forces of stagnation", the government's assault on local councils, the housing benefit cuts driving poorer people into cheaper rental "sinks", the cuts to and reshaping of the education system, and we are already well up to our necks in the sort of social re-engineering that Klein would be only too pleased to call a shock doctrine. A land that Thatcher would have been only too pleased to call home.

And with the Budget coming before the cuts agreed to last year start to make themselves properly felt, we have some chastening longer-term consequences to look forward to. As a recent study has shown, the combined effect of the ongoing and anticipated further precision targeting of welfare benefits and public expenditure will be to render the UK's public expenditure even less than that of the United States by 2014/2015. If fully implemented, this "unprecedented" development will equal, in the words of the study's authors, "a radical new departure in British policy directions".

Is this the brave new world that favours the boldness extolled by George Osborne at Davos in January this year? It may be for the decreasing few who can avail themselves of its pleasures. For the rest of us, it won't be a step towards the future at all. When Osborne's economic surgery is complete, it is more likely we will wake to find ourselves back in the night-time of Thatcher's Britain. Only now the lights will have gone out, too. And the trains still won't run on time.

Simon Reid-Henry is a lecturer at Queen Mary, University of London.

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Tom Watson rouses Labour's conference as he comes out fighting

The party's deputy leader exhilarated delegates with his paean to the Blair and Brown years. 

Tom Watson is down but not out. After Jeremy Corbyn's second landslide victory, and weeks of threats against his position, Labour's deputy leader could have played it safe. Instead, he came out fighting. 

With Corbyn seated directly behind him, he declared: "I don't know why we've been focusing on what was wrong with the Blair and Brown governments for the last six years. But trashing our record is not the way to enhance our brand. We won't win elections like that! And we need to win elections!" As Watson won a standing ovation from the hall and the platform, the Labour leader remained motionless. When a heckler interjected, Watson riposted: "Jeremy, I don't think she got the unity memo." Labour delegates, many of whom hail from the pre-Corbyn era, lapped it up.

Though he warned against another challenge to the leader ("we can't afford to keep doing this"), he offered a starkly different account of the party's past and its future. He reaffirmed Labour's commitment to Nato ("a socialist construct"), with Corbyn left isolated as the platform applauded. The only reference to the leader came when Watson recalled his recent PMQs victory over grammar schools. There were dissenting voices (Watson was heckled as he praised Sadiq Khan for winning an election: "Just like Jeremy Corbyn!"). But one would never have guessed that this was the party which had just re-elected Corbyn. 

There was much more to Watson's speech than this: a fine comic riff on "Saturday's result" (Ed Balls on Strictly), a spirited attack on Theresa May's "ducking and diving; humming and hahing" and a cerebral account of the automation revolution. But it was his paean to Labour history that roused the conference as no other speaker has. 

The party's deputy channelled the spirit of both Hugh Gaitskell ("fight, and fight, and fight again to save the party we love") and his mentor Gordon Brown (emulating his trademark rollcall of New Labour achivements). With his voice cracking, Watson recalled when "from the sunny uplands of increasing prosperity social democratic government started to feel normal to the people of Britain". For Labour, a party that has never been further from power in recent decades, that truly was another age. But for a brief moment, Watson's tubthumper allowed Corbyn's vanquished opponents to relive it. 

George Eaton is political editor of the New Statesman.