What did we learn today? Osborne will defend the banks. Again.

The Chancellor's Autumn Statement shows a commitment to backing the unregulated and reckless financi

Forget the bluster, the spin, the deflection of blame. Forget the bleat that "there is no money". Forget the "fake metrics". Forget "the plan to ensure we keep Britain safe from the sovereign debt crisis".

This Autumn Statement represents a welcome, if still inadequate, u-turn.

Underlying all the carrots and sticks is the Treasury's frank admission of error, the Bank of England's £75 billion (with a promise of more to come), and a frantic volte-face.

Of course, the Chancellor has had to disguise his about-turn by dressing it up as austerity, but he has dramatically relaxed fiscal consolidation -- even though public finances are, by his own admission, in far worse condition than they were just six months ago.

The Autumn Statement goes some way to acknowledging the cause of the rise in government debt and of turmoil in markets, noting that there was in the UK "the greatest expansion in debt of all the world's major economies over the last decade" and that "the full scale and persistence of that impact is slowly becoming clearer."

But while Treasury orthodoxy is finally "becoming clearer" about the scale of the crisis -- one deepened by synchronised austerity -- the Chancellor seems unable to learn the lessons and fully reverse course. While acknowledging that "the financial sector has acted as a drag on growth," the Chancellor today promised to ensure Britain "remains the home of global banks and that London is the world's pre-eminent financial centre".

In other words, the government is committed to subsidising, bailing out and rewarding the City of London -- at grave cost to public sector workers, pensioners and private firms. Their analysis, reactions and policies to this crisis remain profoundly inadequate.

For make no mistake, we stand at a pivotal moment in world history, and today our politicians and economic authorities are revealed to be disgracefully ill-prepared for it.

We remind them again: Britain is not facing a sovereign debt crisis. This is not a eurozone crisis. It is a private banking crisis: the catastrophic unravelling of the private, liberalised financial system. Governments, including our own, are not the cause of turmoil: they are victims of the turmoil in private financial markets -- in the City of London, "home to global banks".

The unregulated financial sector has lent recklessly and expensively for some thirty years to itself, to firms and to households. As a result, private indebtedness -- as both the Autumn Statement and the McKinsey Global Institute carefully document -- is at its highest as a share of income ever in history.

The unfolding and related crisis of sovereign debt is a consequence; the result of four years of futile attempts by western governments to maintain, compensate and support this bankrupt system. Osborne, in his statement today, persists in his backing of this failed order.

As rising unemployment, falling incomes and despair begins to crush western societies; as "indignants" in Britain, Europe and the US lead protests against more cuts in pay and pensions and are brutally assaulted by police for their pains, we are confronted by a frightening reality.

Our leaders and their advisers simply cannot absorb the lessons of the crisis. As a result they have abrogated any responsibility to lead. Instead, they struggle manfully to maintain and uphold the old, catastrophic financial system -- and are incapable of constructing a new, global order.

The resulting policy vacuum is frightening. No wonder the Polish foreign minister warns of "a crisis of apocalyptic proportions".

Ann Pettifor is executive director of Advocacy International and a fellow of the New Economics Foundation

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The NS leader: Cold Britannia

Twenty years after the election of New Labour, for the left, it seems, things can only get worse. 

Twenty years after the election of New Labour, for the left, it seems, things can only get worse. The polls suggest a series of grim election defeats across Britain: Labour is 10 points behind the Conservatives even in Wales, putting Theresa May’s party on course to win a majority of seats there for the first time in a century. Meanwhile, in Scotland, the psephologist John Curtice expects the resurgent Tories, under the “centrist” leadership of Ruth Davidson, to gain seats while Labour struggles to cling on to its single MP.

Where did it all go wrong? In this week’s cover essay, beginning on page 26, John Harris traces the roots of Labour’s present troubles back to the scene of one of its greatest triumphs, on 1 May 1997, when it returned 418 MPs to the Commons and ended 18 years of Conservative rule. “Most pop-culture waves turn out to have been the advance party for a new mutation of capitalism, and so it proved with this one,” Mr Harris, one of the contributors to our New Times series, writes. “If Cool Britannia boiled down to anything, it was the birth of a London that by the early Noughties was becoming stupidly expensive and far too full of itself.”

Jump forward two decades and London is indeed now far too dominant in the British economy, sucking in a disproportionate number of graduates and immigrants and then expecting them to pay £4 for a milky coffee and £636,777 for an average house. Tackling the resentment caused by London’s dominance must be an urgent project for the Labour Party. It is one that Mr Corbyn and his key allies, John McDonnell, Emily Thornberry and Diane Abbott, are not well placed to do (all four are ultra-liberals who represent
London constituencies).

Labour must also find a happy relationship with patriotism, which lies beneath many of the other gripes made against Mr Corbyn: his discomfort with the institutions of the British state, his peacenik tendencies, his dislike of Nato and military alliances, his natural inclination towards transnational or foreign liberation movements, rather than seeking to evolve a popular national politics.

New Labour certainly knew how to wave the flag, even if the results made many on the left uncomfortable: on page 33, we republish our Leader from 2 May 1997, which complained about the “bulldog imagery” of Labour’s election campaign. Yet those heady weeks that followed Labour’s landslide victory were a time of optimism and renewal, when it was possible for people on the left to feel proud of their country and to celebrate its achievements, rather than just apologise for its mistakes. Today, Labour has become too reliant on misty invocations of the NHS to demonstrate that it likes or even understands the country it seeks to govern. A new patriotism, distinct from nationalism, is vital to any Labour revival.

That Tony Blair and his government have many detractors hardly needs to be said. The mistakes were grave: the catastrophic invasion of Iraq, a lax attitude to regulating the financial sector, a too-eager embrace of free-market globalisation, and the failure to impose transitional controls on immigration when eastern European states joined the EU. All contributed to the anger and disillusionment that led to the election as Labour leader of first the hapless Ed Miliband and then Jeremy Corbyn, a long-time rebel backbencher.

However, 20 years after the victory of the New Labour government, we should also acknowledge its successes, not least the minimum wage, education reform, Sure Start, a huge fall in pensioner poverty and investment in public services. Things did get better. They can do so again.

The far right halted

For once, the polls were correct. On 23 April, the centrist Emmanuel Macron triumphed in the first round of the French election with 24 per cent of the vote. The Front National’s Marine Le Pen came second with 21.3 per cent in an election in which the two main parties were routed. The two candidates will now face off on 7 May, and with the mainstream candidates of both left and right falling in behind Mr Macron, he will surely be France’s next president.

“There’s a clear distinction to be made between a political adversary and an enemy of the republic,” said Benoît Hamon, the candidate of the governing Parti Socialiste, who had strongly criticised Mr Macron during the campaign. “This is deadly serious now.” He is correct. Mr Macron may be a centrist rather than of the left but he is a democratic politician. Ms Le Pen is a borderline fascist and a victory for her would herald a dark future not just for France but for all of Europe. It is to Donald Trump’s deep shame that he appeared to endorse her on the eve of the vote.

This article first appeared in the 27 April 2017 issue of the New Statesman, Cool Britannia 20 Years On

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