Newsletter
Enter your email address here to receive updates from the team.
Jobs
Policy | Charity & Fundraising | Research | Education | Executive | Media | Social Care | Communications
User login
RSSBudget 2011: shock doctrine in the UK
George Osborne’s Budget will attempt a radical social re-engineering of the UK.
By Simon Reid-Henry Published 18 March 2011 12:16
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.
Tags: Shock doctrine in the UK Budget 2011
Related articles
-
22 May -
22 May -
22 May -
22 May
From the magazine
-
Ian Mulheirn -
Robert Skidelsky -
Felix Martin -
New Statesman -
Rafael Behr -
Ryan Gilbey -
Laurie Penny -
Alice O'Keeffe -
T S Eliot
Elsewhere on the Blogosphere
- FT Westminster
- ConservativeHome
John Baron and Peter Bone table a cunning EU referendum amendment
- Labour List
Harrow Labour Group splits, as several councillors form “Independent Labour Group”
- Liberal Conspiracy
- Left Foot Forward
Benefit fraud accounts for just 0.7 per cent of welfare budget
Blogroll
- Alastair Campbell
- Benedict Brogan
- Coffee House
- Comment Central
- Conservative Home
- Dave's Part
- Gary Gibbon
- Guardian Politics
- Hopi Sen
- Iain Dale
- Labour List
- Labour Uncut
- Left Foot Forward
- Liberal Conspiracy
- Liberal Democrat Voice
- Luke Akehurst
- Neil Clark
- Next Left
- Our Kingdom
- Paul Waugh
- Penny Red
- Pickled Politics
- Political Betting
- Political Scrapbook
- Simon Fletcher
- The Bleeding Heart Show
- Think Politics
- UK Polling Report
Latest tweets
More from New Statesman
- Online writers:
- Steven Baxter
- Rowenna Davis
- David Allen Green
- Mehdi Hasan
- Nelson Jones
- Gavin Kelly
- Helen Lewis
- Laurie Penny
- The V Spot
- Alex Hern
- Martha Gill
- Alan White
- Samira Shackle
- Alex Andreou
- Nicky Woolf in America
- Bim Adewunmi
- Glosswitch
- Kate Mossman on pop
- Ryan Gilbey on Film
- Martin Robbins
- Rafael Behr
- Eleanor Margolis
- Tools and services:
- Polls
- Predictions
- Archive
- Magazine
- PDF edition
- RSS feeds
- Advertising
- Subscribe
- Special supplements
- Stockists
37 comments
fOX!! The coalition last year increased the income tax threshold from £6,475 to £7,475, the coalition is commitment to moving towards the £10,000 level promised in the Liberal Democrat manifesto. Is this not a good idea.
PhilDuval 'I agree that immigration has also helped drive down wages - but who wants to regulate immigration if it is good for businesses? We never hear the CBI arguing against immigration do we'?
The CBI doesn't care what the colour or nationality is, has long as it's cheap. The trade unions should have opposed mass-immigration of low-cost Labour, but didn't. One Trade Union leader on bosses wages went as far as calling striking refinery workers racist for demanding British jobs for British workers.
Luddite, it would have been a good idea if VAT hadn't been raised. Are you aware the VAT increase wasn't in either party's manifesto?
Don't forget we have a NI increase on the way, child benefit scrapped for many family, 500,000 taxpayers being added to the higher tax rate.
Also the working tax credit for childcare is being reduced from 70% to 60%
Don't forget, we have inflation of 4%, which is eroding people's income.
Would you like me to continue Luddite?
Hi Stu, how does taking money away from the state equate to taking it out of the economy?
Poor Luddite, Osborne killed the recovery and with unemployment at a 17 year high, Cameron and Clegg are killing jobs.
I think the point that gets missed again and again is that first the majority of the people who make up this country, who tend to be of average wage and heavly reliant on loans/credit, whether labour, tory or liberal see very little forward movement in the overall development of our society. yes labour invests in public welfare however does nothing to address the social inadequacies in the long term such as the rich/poor gap were as the conservatives seemed to be trapped in the same idealogical place it has been since Churchill. the belief of wealth organically running down to the poor which is obviously rubbish. Until we move away from a capitalist amoral ideology to ethical and morally based democracy nothing will change. Second until a broader spread of society is reintroduced into politics representative of a broader view things will only get worse. Maybe the house of lords can be democratically selected and called 'the house of commoners'.
Gordon Brown's tax credits simply trapped the poor into the benefits culture.
Gordon Brown’s flagship policy of using tax credits to tackle poverty traps families in a poverty. Even a political knob-head like you Fox should understand that.
I am hoping and expecting Corp Tax to be significantly lowered not just in Northern Ireland, but across the UK. This would be a major statement of intent both by the government and by the country.
The rest of the EU will be p*ssed.
I am also expecting a couple of big sell-offs and help with consumer energy bills.
Remember that the first couple of years in the first term is always when a government is at its most radical.
We've spent far too long looking at wealth distribution and not enough at wealth generation. We have become lazy. We have lost our edge and our way. We have become distracted and reactionary rather than driving forward.
Britain, like most of the west needs a radical change of direction now.
Essentially, and despite its infinitely better ethics, rampant Socialism over the last few decades has been financially disastrous for our economies. We now desperately need to get back to wealth generation and then worry about distributing that wealth when we have it. The clock is ticking on the west and its time to step up to the plate and keep our dominant position.
Its time we moved away from the failed neo-socialist controlled economy model favoured by European nations and the failing Obama WH and moved towards a libertarian meritocracy.
The game has changed and in order to compete we must change or face the same decline as seen towards the end of the Roman Empire.
'libertarian meritocracy'
Wow, that's just too stupid for words, have you not noticed that any country which adopts 'libertarian' values also adopts massive wealth inequality and social problems. If you have very rich people and weak government the rich [i]become[/i] the government. I mean just look at the USA with their rampant anti-statism: corparations literally (yes literally) draft bills to be submitted to Congress, in many states nearly all public services are funded by local income taxes rather than national income tax so rich people never have to subsidise the poors' education and if you happen to live in a poor inner city area your public services will be so underfunded and understaffed you may as well hand yourself into a prison for how inevitable a life of poverty and crime is.
You are right though in stating the mixed economy approach has failed. But rather than return to the free market which has always failed us before I think we need to reconise society will never advance when a minority of excessively wealthy people can exercise a wholly unjust amount power over the rest of us. Of course this will never happen as nearly every media outlet is controlled by one of said parties and does a damned good job of scaring people out of any political/economic system which isn't run by and for an elite of rich white dudes.
'Rampant socialism' of the last few decades!? Which country have you been living in? The UK hasn't had anything resembling socialism since the late Forties. Most of what followed but most particularly over the last thirty years, has been rampant free market capitalism! Because the welfare state has been undermined by successive right-wing governments, it has never even approached a truly redistributive mechanism since capitalism has always pushed its rates way below the average wage; thus all that has been redistributed and prolonged is relative poverty while the rich have got richer - hardly socialism! Just capitalism largely paying lip service to the goal of social equality, something the UK is now further from than since the end of the Seventies when it was among the most socially equal in Europe. Post-Thatcher, we're now among the lowest in Europe in terms of social equality. And that ain't down to any obscure form of socialism, it's down to Thatcherite capitalism. But I'm assuming you've been living in a parallel universe all this time.
A Morrison
Emergency Verse - Poetry in Defence of the Welfare State www.therecusant.org.uk
^^^^
Sounds like trickle down, Thatcher, Reagan economics to me. Which has not worked. The principle is not sound because we don't know if the rich are taxed to little or to much.
You can not tell which side of the laffer curve you are on. You can however look at the concentration of wealth and tax rates historically.
A govt driven by ideology is not preferable to pragmatism. Everyone NOT just Balls warned the extent of the cuts would hamper our recovery the only people not agreeing were Osborne and a few right wing think tanks.
How can taking money out of the economy, creating unemployment when even the CBI are saying the predictions the Tories expect for private sector investment are cloud bloody cuckoo land going to create economic growth?
Does Osborne honestly believe he can piss in our pockets and tell us its raining?
"Rampant Socialism"!
Libby, you're a fool.
"Libertarian meritocracy"
An oxymoron if ever I heard one. Assuming every is afforded an equal opportunity to put to use their merit, how do we distinguish and reward someones "merit"? By a sliding scale of wages? Those of with the "least merit" earn the least? So how does that sit with our current society, where TV reality stars, pop stars, pop magnates, professional footballers, and investment bankers are the highest earners and earn far more than teachers, nurses, firemen, doctors and policemen/women yet have far less skills, and far less "societal" benefit. Ahh - hold on it's coming to me - because they generate wealth. So gamblers, good looking chancers and those with some genetic ability deserve more than those who are intelligent and work hard? Why do they get that at present? That's because what the market will pay them. So if you leave the market to it's own devices, you end up with no meritocracy, but a lottery.
Libby is no fool. She's not even a real person. Like half of the commentors on the NS website she's actually a right-wing astroturfer.
Her comment is so close to the official party line of Tory propaganda circa the 2010 election that it might as well be lifted directly from their pamphlets.
I know we're in a recession, but can't the UK afford a new red box for the chancellor? That one needs a little renovation!
Given that the neocon economic model recently failed catastrophically, and brought the world's financial system to the brink collapse, it seems utterly absurd that anybody should now seriously advocate more of the same. It would be nice to believe that 'Libby Smith's contribution was actually a nostalgic spoof; unfortunately, Condem economic policy suggests not. Still the freemarket fundamentalists Cameron, Osborne and Clegg blindly pursue their market nirvana, in the face of all the evidence of its utter failure, like millenarian cultists after the millenium. Why do people continue to fall for this dogma-driven lies?
God knows where some people have been living . The last thirty years have seen the country ruled by governments who have acceptrd the right wing libertarian Washington Consensus. Social Democracy has been confined the the margins. All surveys show that the countries who have stuck to social democracy have the worlds highest living standards. We should be copying what they do. High taxation,universal benefits,low war spending are all the things we should be copying.
i was hoping for some serious analysis but this is just wordy thoughts.
No doubt Osborne's budget will create a fiscal and economic landscape for many in this country with a bleakness that surpasses even that of the Thatcher era.
A continuance of an ideological mission which hopefully will be the undoing of the Tory led Government supported by (the wolves in sheeps' clothing) Lib-Dem leadership. The tragedy is that it will also be the undoing of many innocent hard working citizens as well
Osborne will try to mask the tax raises, but if Petrol Prices are over 135p a litre, he will be facing a increasing hostile right wing press.
^^^^
Labours got a credibility problem.
Labour squandered billions, who in their right-mind would allow Labour. 'Ed Balls' anywhere near that little red box. Millions wouldn't even let that man run a tuck shop!!
Sorry... failed to understand your last rant matthew...
Super Sorry The Luddite, really don't understand the last comment, should I ?
Thanks for the comment Luddite, I take it as a term of affection.
Its all about re-learning history through experience..it's unfortunate but the 10 bob millionaires dont act until they have it taken from them..
fred you enjoying your knighthood ;-)
I think Libertarian Libby irritated some of the more Marxist elements here, proclaiming that the nose between the eyes isn't really there is an interesting deflective ploy though...........Loved it!!
If nothing else this government demonstrates that the class war is alive and kicking.
The coalition confirmed today there will be a large boost in apprenticeships and also said that they would expand university technical colleges to provide vocational skills. Now fox, what actually did New Labour do for manufacturing apart from import millions of cheap foreign workers to drive down wages.
Has the Coalition confirmed that Consumer Confidence is at a record low, unemployment at a 17 year high, record fuel prices, inflation twice the rate of earnings, 500,000 people added to the higher rate of tax?
Has Mike555 persuaded you to stop swearing or has he changed his mind again?
I'm kind of confused by the description of the coalition's policies as ideological-or rather, by the outrage that seems to cause. Of course they are: every government operates according to a particular ideology. The alternative is a government driven by common sense, which is the most meaningless phrase imaginable.
Suburbanmonk, rich people having more money to spend does result in poor people getting more money too-outside a feudal society, that's an absolute inevitability. You can justifiably argue about the rate at which the money flows down, but the principle is sound. And for what are people genuinely reliant on loans or credit? If that's the case, then all of us-rich or poor-need to be a bit more critical about what we actually need and what's just nice to have.
Matthew, what's your problem with higher taxes? Either the state needs the money or it doesn't. Personally I think it could get by without it, but I'd be surprised to find you and I on the same page when it comes to taxation and it's corollary, the size of the state.
Gordon Brown admitted he failed to regulate the banks and increased taxes on the poor. This is the Labour parties economic legacy, folks never forget getting screwed.
His next huge mistake would be his jobs tax that will kill the recovery.
"We've had 13 years of his economic mistakes. Britain can't afford five years more."
Poor Luddite seems to think it's March 2010 not March 2011.
Luddite
'Gordon Brown admitted he failed to regulate the banks'. I agree with you but if you are also in agreement with Osbourne - who wants little or no business regulation - aren't you in a contradictory position?
I agree that immigration has also helped drive down wages - but who wants to regulate immigration if it is good for businesses? We never hear the CBI arguing against immigration do we?
Neoliberalism is a refashioning of the values which dominated the 19th century. Namely that the powerful and the rich should stay that way.
ach - looking at the drumming at the gates in Sheffield last week, he is a cun I get you another one, Cleggs home constituency,
http://www.youtube.com/watch?v=d23oHekZPQQ
The fuck dutch canoe - feck off to spai9n with your bullfighting misses Clegg. Tosser in Britain immigrant perfectly described. How the hell did he become an MP in Sheffield - it baffles me.
Notice Thatchers Army has been brought out again. Serve the people??? MY fecking ARSE!!!
Cops forse was bought in 1979 by good pensions and increased pay by Thatcher. A disgrace - it is like a Latin country here.
Path of Least Resistance, a modern day ballad from 1978 Sheffield,
http://www.youtube.com/watch?v=pE7RbNhaT0c
The Thatcher government reduced us to living on The City money, and now Cameron and Clegg is trying to get us to live on that again, when they failed.
MADNESS!
http://www.youtube.com/watch?v=OzWx_1nh6e8