Cameron’s coalition: a government with ominous intent

David Cameron is halfway through his term as prime minister and despite the ‘omnishambles’ of his austerity cuts his steely ideological core will not allow him to change course now

Polly Toynbee and David Walker
The Guardian, Wednesday 19 September 2012 17.00 BST

Geographically, socially, financially, educationally and electorally, Cameron has favoured his own people. Photograph: Murdo MacLeod for the Guardian
How should we separate dogma from disarray, in this half-time report on David Cameron’s occupation of No 10? Dogma is the strength of Cameron’s determination to dismantle the state, while disarray is his confusion and incompetence in carrying it out. People assume political leaders know what they are doing, when in fact they are often deeply confused. Cameron, like all modern politicians, gets swept up by one day’s headlines. He is also in thrall to Tory beliefs that are often confused and contradictory. He has been a navigator without maps, usually oblivious and indifferent to the unintended consequences of his policies. In health, criminal justice and welfare the Cameron era has to be characterised by the 2012 catchphrase “omnishambles”. Yet if his programme has been less grand design than instinct, the urge to cut back the state was strong and has given the Tories identity and impetus. This has been and remains a government with ominous intent.

By half-time, though, spectators round the Westminster stadium expected the worst to be over. The announced tactic was to frontload spending cuts, get past the necessary pain of tax increases and give Team Tory a run-in to the next election, with time for a few electoral Mobots. Growth would be well established and George Osborne would scatter feelgood tax give-aways ahead of the polls.

That’s not going to happen. The timetable has slipped badly, so that the structural deficit in the public finances cannot be eliminated until 2016–17, and that’s optimistic. Tax handouts now can only be purchased by yet more searing cuts to public services and welfare spending.

Blaming Europe for failure came naturally, but was triply unconvincing. First of all, as a matter of fact, UK exports to the EU had been growing, at least until early 2012. Secondly, the deepening Eurozone crisis was in large measure a result of the same austerity policies Osborne and Cameron insisted were the remedy for the UK. And thirdly, if the Eurozone crisis was as bad for Britain as Osborne claimed, wasn’t that the best reason to temper austerity and revive demand?

But thinking again is for pragmatists. Cameron’s stiff-necked insistence on sticking with his cuts shows that despite the haplessness and chaos, his inner ideological core is steely. State shrinkage was and remains his government’s guiding light. Cameron’s cuts will permanently damage and diminish government and collective endeavour, and in that sense he may still leave the field a winner.

He still has fully to deliver. The Institute for Fiscal Studies reckoned that, at April 2012, four-fifths of planned reductions in spending remained to be realised. Departments and public bodies had lopped the easiest to reach branches, cancelling investment, freezing pay. The body count must now rise. In 2011, 270,000 public sector staff were sacked, cutting the payroll by 7%. By March 2012, according to Unison estimates, 625 public employees were losing their jobs every day, and decimation must go on indefinitely. Osborne’s targets depend on chopping cash support for the disabled, further cuts in tax credits – which will make low paid work even less attractive – and paying less housing benefit, which forces population movements that make no economic or social sense.

Can Cameron stay the course? There is evidence to hand, for his second-act script was written into the little-read business plans Whitehall departments were required to publish in June 2012, even if within weeks, ambitions were being abandoned. Take the Treasury’s aim of greater variation in public sector pay, so those who work for councils, the Department of Work and Pensions or the NHS in poorer parts of the country would see their salaries cut, as a means of allowing private sector employers to cut their pay too. Tory MPs grew alarmed at the disruption and loss of local income; the business people supposed to benefit disputed the Treasury’s understanding of labour markets. Cameron backtracked: in the civil service reform white paper regional pay variation was nowhere to be found. It hangs in the air uncertainly, with a fraught attempt in the South West NHS.

No wonder Osborne rounded on business for failing to speak out in favour of tax cuts. The unwillingness of the private sector to be as Thatcherite as the government would like is proving a problem, as well as an ideological paradox. Companies have even been reluctant to strip employees of rights, which may make it hard to implement the Cameron-backed plan to allow managers to fire at will. The introduction of universal credit depends on bringing vast IT systems on line. Iain Duncan Smith struggled to keep his job at DWP, so may stay there long enough finally to learn a lesson that has been staring him in the face for months: in trying to help poor households into work there’s a permanent trade-off between simplicity and fairness. His work programme will look even more perilous if contractors demand to be paid despite failing to find clients jobs that aren’t there.

A union protest against the cuts … the IFS estimates four-fifths of the coalition’s spending reductions remain to be realised. Photograph: Ben Stansall/AFP/Getty Images
And so on, round the departments. Despite the Tories’ pre-election pledge of a bigger army, 25,000 are to be cut from the services together with 29,000 civilian staff as the Ministry of Defence budget is to shrink by 7.5% by 2015. But that is not matched by any slimming in UK pretension. If the state must be urgently reduced, why go on spending twice as large a proportion of GDP on defence as Germany, a higher proportion than the Chinese (officially) spend, clinging to the top table, the UK’s permanent seat on the UN security council seat and a role as rear gunner in any passing war?

The government, according to the MoD business plan, will “succeed in Afghanistan” (whatever that means); “continue to fulfil its standing commitments” (tautology); promote defence exports (while cutting its own purchases); “succeed in other operations it is required to undertake” (obeying prime ministerial whim). The MoD started buying elements of the renewed Trident system, for which the lowest total estimate is £20bn, an unexplained, luxury survivor in these years of austerity.

From the Department for Communities and Local Government business plan springs the extraordinary interventionist proposal to identify 120,000 troubled families – a suspiciously specific figure – and sort them out. Evidence for the existence of a permanent core of disadvantaged households is shaky; ministers talk about families in trouble, families causing trouble and troubled families, though the categories and numbers are all different. Whitehall wants councils to seek them out and earn £4,000 if they get mothers and fathers into jobs and sons and daughters into school, stop them offending, or causing neighbours trouble – all this while benefits are cut and in-work rewards falling for those who are in work.

The government hopes to bask in an Olympic afterglow, but Jeremy Hunt’s successor Maria Miller faces the unappetising task of selling a policy for culture and sports that critically depends on government while cutting playing fields and arts support. Despite Hunt’s departure, the DCMS business plans still ominously promise to make room for Murdoch and his surrogates by deregulating broadcasting and communications and to keep up pressure on the BBC to “ensure it is more accountable”.

In education, Michael Gove makes no secret of his aim to bring more private money into schools through sponsorship. The business plan for the Department for Education confirms Gove’s stated intention to fracture the “1944 settlement” beyond repair. A vision of educational anarchy beckons as he compels more primaries to become academies, free schools expand and revamped versions of the old city technology colleges are established, moving further and further away from the possibilities of comprehensive secondary schooling, as the OECD reports the UK as one of the most class-segregated systems in the developed world.

In justice, the departure of Ken Clarke makes no difference to a plan to bring more private contractors into prisons, probation and community sentences. Private companies will not, of course, have an incentive to stop the growth in prison numbers that, on the face of things, would bring them extra income.

The Department for Environment business plan is to try to cope with the negative consequences of privatisation under a previous Tory government, but not to admit the lack of a national water grid, excessive leakage and inadequate sewerage in London. The government also needs to reform energy: a dearth of bidders to build new nuclear power and nimby Tory MPs blocking wind farms combine to show the limits of a privatised market.

Read the Cameron business plans and nothing is joined up. Transport Department plans for charging heavy goods vehicles to use the roads would make sense if they were married to a programme of shifting freight to rail and radically cutting the number of journeys made by delivery companies. Yet the point of the privatisations of rail and buses under previous Tory governments was to break them up. The plan’s stated aim of “making public transport more attractive” is unlikely to be implemented when fares are rising faster than inflation.

In health the Tories face daunting political risks, entirely of Cameron’s creation, not one of them mitigated by the ejection of Andrew Lansley. Voters may not absorb the administrative detail of a “reform” the chief executive of the NHS said was visible from Mars, but one thing they know: Cameron promised during the 2010 election not to cut or privatise the NHS. Those will be principal – and perilous – themes into the next election.

At the 2010 Tory party conference, Francis Maude said the government was relaxed about creating a postcode lottery for healthcare and other services, and that is precisely what results from the “reforms” now in place: as the state is rolled back, there can be no national standards. The public always strongly resents any suggestion they can get a drug or treatment in one place, but not another. New evidence emerges of the centrality of mental health, and how switching resources to psychological services could save large sums from physical healthcare budgets. But that would mean a central initiative, with the capacity to steer and reallocate. In opposition Cameron derided Labour’s targets but has sought to reimpose the same 18-week maximum wait for surgery – demonstrating how often he finds centralism essential when faced with the consequences of the anarchy that characterises his competition policy.

When you have provoked thousands of police constables to give up off-duty time to march through Whitehall in vocal opposition to your plans for their pay and pensions, as the government did in May 2012, you might take care not to rile them further. They are, after all, the people you are going to depend on to police the other demos, to put down riots and reassure the public on crime. But no, the Cameron recipe for policing is in turmoil. He is simultaneously cutting police numbers, overhauling recruitment and promotion, appointing a detested hatchetman as chief inspector of constabulary, reorganising the national detective agencies and, to crown it all, creating elected commissioners who will have a built-in incentive to slug it out with chief constables, interfere with police operations – and harry the government for more crime-fighting resources and, as ever, “bobbies on the beat”.

Police officers oppose changes to their pay and pensions … Cameron’s recipe for policing is in turmoil. Photograph: Dan Kitwood/Getty Images
But again, don’t let the disarray obscure the dogma. The three-word badge for Cameron’s first half is “any qualified provider”. A key document is the Open Public Services white paper published in July 2011: however cack-handed its delivery, this paper proves Cameron’s radicalism. Even the paper’s publication showed bravado. It was to have been published in February that year but a scandal at Winterbourne View, a long-term private residential hospital, provoked alarm at private profiteering. Undeterred, Oliver Letwin and Francis Maude, Cameron’s ideological commissars, went ahead and published the masterplan a few months later.

It’s there to read for anyone who doubts Cameron’s purpose, and anyone who thinks the Liberal Democrats have watered down Tory ideology. The default position for all public services is private provision, and not even the military or policing is exempt. The abject failure of G4S at the Olympics has not blunted the intention. Most departments, agencies and local authorities are obliged to drum up at least three rivals, preferably commercial, to bid to provide services. As Cameron wrote in the Daily Telegraph, this creates “a new presumption against the dead hand of the state”. Woe betide any civil servant obstructing it: “If I have to pull those people into my office and get them off the backs of business, then believe me I’ll do it.”

It’s working. “The UK’s austerity programme is entering a fruitful phrase for outsourcing,” said an analyst in June 2012, noting £4bn worth of government work out to tender in the first six months of the year alone. The Tories intend irreversible change, believing that once they excavate the foundations, this edifice can’t be rebuilt.

Of course there are countervailing tendencies. Philosophically, Conservatism was and remains all over the place. Shrink-the-state zeal conflicts with a Tory desire to keep Britain great, leading to over-the-odds defence spending. Love of the little platoons of localism vies with the constant urge to command, witness Gove and communities secretary Eric Pickles. Market freedom is at odds with social order exemplified in Cameron’s half-baked National Citizens Service for the young. Ministers rubbish professionalism, abuse the civil service, slander GPs and teachers, then bemoan loss of respect and authority. Even a shrunken state needs disinterested, enthusiastic public servants.

In the second half, governing will get harder. Lib Dems facing electoral annihilation will have to consider early exit from the coalition. Peevish and disappointed at the loss of both electoral and House of Lords reform, they must surely now veto the Tories’ bid to shrink the House of Commons by cutting constituencies in their favour.

Another question presses. Osborne dared not repeat his line about all being in this together when he cut tax for the rich in his 2012 budget. As benefit cuts bite and real incomes fall, the unjust distribution of pain gets plainer for all to see. For all his speeches on social justice and social mobility, the thrust of Cameron policy is to make the country more unequal at an accelerating pace. By 2015, the IFS estimates, at least 500,000 more children will fall below the official poverty threshold: this compares badly with Labour who took a million out of poverty. Duncan Smith’s thinktank is working overtime on trying to show poverty is only a socialist construct, and that official measures based on income are worthless. They won’t succeed, as the accumulating data show the young, women and the poorest households have taken a disproportionate share of the cuts.

Geographically, socially, financially, educationally and electorally, Cameron has favoured his own people. For example, the National Commissioning Board for health is no longer obliged to share out money according to the indices of deprivation; resources are being “equalised”, which means redirecting funds from poorer areas in the north of England to richer southern districts.

In the end, electors will judge on the economy. Eurocataclysm may precipitate a wider collapse and Osborne will try hard to blame it for the added economic damage caused by his austerity. Economists warn of a decade or even two of depression, stagnation and socially unsustainable unemployment. Cameron could still change course, responding to unfolding events with imagination and humility. But that would mean abandoning the project that his Tory generation picked up from Thatcher, their vendetta against government and their unshakeable trust in markets, despite all the evidence of failure and all the perverse consequences. Such a volte-face is unlikely, so Cameron’s second half looks set to offer more of the same dogma and disarray.

• Dogma and Disarray: Cameron at half-time by Polly Toynbee and David Walker

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