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If Tory MPs want to end austerity, they need to get serious on Brexit and tax

Without a softer Brexit and tax rises, the government won't be able to afford higher public spending. 

In 2017, the Conservatives lost their parliamentary majority. But it was two years earlier, in 2015, that they lost their majority for austerity. Ever since the end of the coalition (and the Lib Dem votes it provided), the Tories have struggled to pass new spending cuts and tax rises. This, as Stephen noted in his column this week, reflects the rise of the "austerity nimbys": Conservative MPs who favour cuts in theory but rarely in practice. 

George Osborne's last Budget (which forced a U-turn on disability benefit cuts) and Philip Hammond's first one (which proposed a doomed rise in National Insurance) were both thwarted by this tendency (prompting last week's £25bn giveaway). Austerity has been politically discredited by the election result and economically discredited by the UK's parlous performance (Britain is the slowest-growing major EU economy, average wages are not due to regain their 2008 peak until 2025, and the deficit is not forecast to be eliminated until 2031 - 16 years late). Unsurprisingly, then, an ever great number of Tories are demanding a shift from cuts to investment. 

Sajid Javid, once renowned as a dry Randian, called for Philip Hammond to announce £50bn of housing spending (the Budget provided just £3bn more). Tom Tugendhat, the foreign affairs select committee chair, has urged Theresa May to "invest in our economy even more than she is already, and perhaps take the chance to build more homes". Another Conservative backbencher, Ben Bradley, has called for the government to "start to invest again" and warned that "austerity is grating on people". Others have demanded an end to defence cuts (long a pet concern of Tories) and even an increase in military spending from 2 per cent of GDP to 3 per cent. 

But though there is political and economic merit in ending austerity, too many Tories are avoiding hard choices. Brexit, the Office for Budget Responsibility has forecast, will deliver a net fiscal hit to the UK of nearly £300m a week. Yet though the majority of Conservative MPs backed Remain, most are still committed to withdrawal from the single market and the customs union (one could call it "have your cake and eat it conservatism"). 

Labour's 2017 manifesto proposed £49bn of tax rises to match a £49bn increase in public spending. Economists debate whether the party's assumptions are reasonable (the IFS warned that higher taxes on the well-off would cost more by depressing economic activity) but Tory MPs, by contrast, propose few if any tax rises at all (and, indeed, demand further tax cuts).

Abysmal productivity, an ageing population and rising public expectations are already imposing severe pressure on spending. Unless Tory MPs acknowledge the need for tax rises and a softer Brexit, the end of austerity will remain a dream, rather than a reality. 

George Eaton is political editor of the New Statesman.

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South Africa’s new dawn: How Jacob Zuma’s misrule was ended

“We are going to look back at the past ten years and think of it as a lost decade.”

On the afternoon of 13 February, as South Africa’s President Jacob Zuma was recalled by his party, the African National Congress (ANC), a popular Johannesburg radio station began receiving calls about a peculiar incident.

A truck had lost its load along the M2 highway and people were scurrying to pick up what they believed to be tiny nuggets of unprocessed gold. The highway became congested as motorists pulled over to join the search. Even for a city that rose from the dust of a gold rush, this was a bizarre scene.

The first radio caller was giddy with excitement, as was the second. The third did what South Africans do best: he made light of an otherwise confusing and anxious day in the young nation’s history. “It’s manna from heaven,” the caller said. “Zuma’s just been recalled and already the roads are paved in gold.” Nine years into the president’s disastrous rule, South Africans had not lost their sense of humour – and were awaiting a new dawn. The police cleared the scene along the M2, no one proclaimed a worthy find and the nation returned to waiting for Zuma’s next move.

Technically, the president did not have to resign as head of state, despite the opposition of the ANC, the proud liberation movement turned ruling party that Zuma led for a decade until December 2017. Realistically, he had no options left.

With an overwhelming majority in parliament, the ANC was ready to table a motion of no confidence the next day. Defiant to the end, these final hours on the eve of Valentine’s Day were Zuma’s last stand.

They called him the “unstoppable tsunami” and with good reason. Zuma damaged South Africa and the ANC in ways only history will fully capture. He wrecked a country struggling to rebuild itself under the shadow of apartheid. Under his rule, the economy stagnated, unemployment rose, poverty grew, violent crime spiked and corruption became endemic.

“South Africa was headed in the wrong direction,” says Mmusi Maimane, leader of the Democratic Alliance, the official opposition, which governs in cities including Johannesburg and Cape Town. “We are going to look back at the past ten years and think of it as a lost decade,” the political analyst Stephen Grootes concludes.

Zuma lurched from one scandal to the next. He was acquitted of rape, avoided almost 800 corruption charges for over a decade and nearly crashed the economy by recklessly firing a respected finance minister. Taxpayers were misled over exorbitant upgrades to his private mansion (a swimming pool was defended as a fire-fighting feature) and his friendship with the controversial Gupta family placed him at the heart of what became known as “state capture”: the looting of state coffers through the corruption of senior government officials.

“State and independent institutions were repurposed for the enrichment and protection of Jacob Zuma,” says political commentator Justice Malala. “He went through the guts of the framework, pulled out the institutions he needed and systematically broke them down or took away their independence.”

The institutions ranged from the tax revenue service to the public broadcaster, from the police to the prosecuting authority, and from the intelligence services to crucial industries such as mining.

Although constitutionally barred from governing beyond 2019, Zuma was widely believed to have engineered a plan to hold on to power (and avoid prosecution) through his ex-wife, Nkosazana Dlamini-Zuma, who was campaigning to take over from him. By December, when the ANC met to pick its next leader, who would go on to become the country’s president in 2019, a mood of despair and hopelessness had set in.

The race was close. In the end, 179 votes out of nearly 5,000 cast separated Dlamini-Zuma from her challenger, Cyril Ramaphosa, a former union leader and businessman who had campaigned on an anti-corruption and pro-growth platform.

Ramaphosa’s victory in mid-December was a turning point. It removed the prospect of Zuma’s continued rule, began an instant shift in political power and sparked a moment of renewed hope. Ramaphosa had his own controversies, but was viewed as largely incorruptible. He had risen through the trade unions, served the ANC and built his wealth in the private sector. 

Following Ramaphosa’s election, the extent of state capture emerged through superb investigative journalism.

Politically driven prosecutions fell away, a hugely unpopular nuclear energy deal with Russia was frozen and, as Zuma was being recalled, police cars arrived outside the home of the Gupta family.

And yet, the president refused to leave the Union Buildings quietly, prompting comparisons with Margaret Thatcher. “He was the worst possible combination of ignorance, selfishness and incompetence that could have been inflicted upon the long-suffering people of South Africa,” read an editorial in the Daily Maverick on 13 February. “Now, stripped to the bare essence of being Zuma, the final image emerges, one of the selfish man who cared only for himself.”

Journalist Richard Poplak concluded: “What is born in chaos dies in chaos.”

 Zuma’s departure allows for the rebuilding to begin. The role played by the media, civil society – which found its voice during the Zuma years – and the judiciary (particularly the constitutional court) is being recognised. New president Ramaphosa delivered an inspiring state of the nation address the day after being sworn in.

“You can survive bad leadership, but what you won’t survive is bad institutions,” Mmusi Maimane told me.

There are no delusions over the epic challenges ahead. Unemployment is at 27 per cent (and is much higher for young, black South Africans) and GDP growth is stranded at 1 per cent. However, there is optimism, too: the “lost decade” is over and the Rainbow Nation’s renewal has finally begun. 

This article first appeared in the 22 February 2018 issue of the New Statesman, Sunni vs Shia