No new era, but the sound of an elite sharpening its axe

The Cameron and Clegg show won’t seem so cute once the cuts bite, but if Labour backs another Blair, it will fail to benefit.

We are at the threshold of a “new era”, David Cameron declared yesterday, in the rose-kissed dawn of a “historic and seismic shift” in British politics. It certainly looks like coalition politics could be here to stay, given the historic decline in support for the main parties. But any idea that the new Tory-Liberal Democrat government represents a challenge to Britain’s power structure, or even a break with some of the most shopworn politics of the past decade, was swept away as the ministerial carve-up was revealed.

With Liam Fox as defence secretary, William Hague at the Foreign Office, George Osborne as chancellor and Michael Gove in charge of schools, you have a quartet of throwback enthusiasts for US neoconservatism unmatched in today’s western world. For all the talk of the brilliance of the Tory modernisers’ coup, the prospect of the new home secretary Theresa May – who voted against abortion and gay adoption rights – heading up the government’s equalities agenda, or Iain Duncan Smith dragooning the sick and the jobless into privatised cheap labour schemes is a sobering measure of the new reality.

The administration unveiled yesterday is the product of an unalloyed elite “I’m all right Jack” Britain, supported by the most socially unrepresentative parliament since the 1930s. And welcome as it is that the Conservatives have had to put on ice a couple of their most egregious pet projects, such as slashing inheritance tax for the wealthy, the Liberal Democrats have secured none of the first-rank departments they might have expected for digging Cameron out of the hole of his own election failure.

All over Britain, the sound of scales can be heard falling from the eyes of Lib Dem voters who had hoped they were backing a progressive, even left-of-Labour, party. Instead, they’ve got a right-of-centre government, in which the Conservatives will unequivocally call the shots and the knives are already being sharpened for the deepest spending cuts since the second world war.

The new coalition can probably count on an early surge in popularity, at least while the novelty of party rivals working together lasts. Many non-Tory voters will be relieved at the thought of a Lib Dem counterweight to the Conservatives’ most divisive reflexes. But how long that will survive the impact of Nick Clegg’s “savage” retrenchment in public services is another question.

The austerity regime is due to kick off with the immediate £6bn round of cuts that Cameron promised during the campaign, but Clegg opposed – and which will now be implemented by the Lib Dems’ leading free marketeer, David Laws. That’s small beer compared with what’s coming.

If the Tories had ended up as a minority administration, they’d have held back from piling on the pain until after a second election. But now they’re planning on a five-year, fixed-term parliament, the imperative will be to bring forward cuts and tax increases in the hope that the worst will be over by the time the two parties expect to face the electorate again in 2015. The impact of that onslaught on the Lib Dems in particular is likely to be gruesome. Even if the coalition survives, expect Lib Dem defections and splits in the years ahead.

Was all this avoidable? The Lib-Lab option, representing a majority of voters who rejected Cameron’s Tories, was worth a shot. But the numbers were barely there and the dangers to Labour in particular – of a short-lived coalition followed by a runaway Tory election victory – not surprisingly provoked a backlash across the party.

But what has now become clear is that the decisive factor in the negotiation breakdown was the Lib Dems’ determination to go for a coalition with the Conservatives regardless. Clegg used the short-lived Labour talks as an effective bargaining chip.

Look back at the statements and actions of the man dubbed by his rival Chris Huhne as “Cameron’s stunt double” over the past couple of years and the warning signs that he was preparing for coalition with the Conservatives are obvious. The market liberalism he and his anti-unionOrange Book allies espouse anyway gells closely with the politics of the Cameron crowd.

For Labour, there are clear compensations in losing office at a time when, as the Bank of England governor Mervyn King reportedly argued, whoever holds it is likely to be out of power for a generation. As the main opposition party, it should also be able to benefit from the backlash against a government of what elsewhere in Europe would be called the bourgeois parties, reclaim the progressive mantle and reorientate itself after the self-inflicted wounds of the New Labour years.

It can only do so, however, if it faces up to the causes of those wounds. Last week, Gordon Brown helped prevent a Labour meltdown with a last-minute appeal to a core vote fearful of the return of the Tories. But Labour has lost five million votes since 1997, four million of them under Tony Blair. The largest share came from a working-class electorate New Labour insisted had nowhere else to go, with a significant chunk from a progressive middle-class constituency revolted by wars and attacks on civil liberties.

To win those voters back demands first of all a recognition that the neoliberal dogma of the New Labour years has been discredited by epic market failure and its disastrous impact on working-class communities. There’s room to build on the outgoing government’s recent tentative shift towards more social democratic solutions. But it also requires a clear break with the calamitous ideology that led Britain into five wars in succession, as it tailed behind the US imperial juggernaut.

That must be the starting point of the Labour leadership contest that has now begun. The attempt to build up a media and New Labour establishment bandwagon behind David Miliband – the heir to Blair who voted to invade Iraq, out-hawked the Bush administration during the 2008 Georgian crisis and has continued to hanker after the marketisation of public services – risks turning Labour inwards and backwards.

Whether the other candidates expected to stand against him, including Ed Balls and Ed Miliband, can move beyond New Labour and offer the kind of change which reconnects the party to its lost voters will determine the shape of politics in the coming years. It will be essential if the new Tory-led government is not to be the prelude to the era that Cameron is banking on.

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