By Mark Buckley
The media campaign to paint the new Tory leadership in a more favourable light is pure myth-making. The Sunak and Hunt combination is more cautious, especially compared to Truss and Kwarteng, but is no less committed to the central project of the British ruling class, the Americanisation of the British economy and society.
Ever since Boris Johnson’s seizure of the leadership, Tory ideologues and successive leaders have adopted as their central policy the Americanisation project. This entails tax cuts for big business and the rich, consequently much lower public spending, deregulation, privatisation and the removal of all environmental and product standards that stand in the way of profitability. That was the Tory plan for Brexit all along.
They also calculated that the population would mount some resistance, whether strikes, protests, demonstrations or civil disobedience in opposition to the effects of this project. In fact, all of these, to one extent or another have already taken place. So, there is already a raft of authoritarian legislation reducing the rights to protest, assemble or vote. Cops and soldiers have been placed above the law and the government will now try to push through further anti-union legislation.
In general, only a fraction of the Labour left has opposed any of these measures. It is widely understood by supporters of Americanisation that draconian laws and policies may be needed to railroad it through.
This is a shared project, agreed by the last three Tory sets of leaders including Johnson. However, fierce tactical disagreements have broken out about the timing and scope of each component of their plan. But there is a shared aim.
It is also agreed by the bank of England which is aggressively raising interest rates even while arguing that the recession has already begun and that it ‘could be the longest ever’. Crucially, it is now forecasting a surge in the unemployment rate to 6.5%. This is a conscious policy in order to drive pay down and keep it there.
Although Truss and Kwarteng shared this project, they were ousted because they went too far, too fast. They caused financial markets to crash, deepening economic woes without any political gain. In turn, those markets took fight because the package of tax cuts for big business and the rich was so outlandishly large, it was not seen as either deliverable or credible.
Essentially, the judgement in ruling circles was that the working class and the poor have not been so beaten down by successive years of defeats that meekly accepting such huge attacks would be a foregone conclusion. Considering the current strike waves, solidarity protests and campaigns around the environment that judgement was almost certainly correct.
It is estimated that the Truss/Kwarteng package would have increased the budget deficit by £70 billion. This is equivalent to the entire education budget, or almost one-tenth of the entire government budget for services in the previous year. The scale of cuts required was likely to provoke significant resistance, and bondholders (many of them overseas) feared they would be called on to fill the gap. This explains the fall in the pound on the currency markets and the large falls in the price of government bonds (known as gilts).
Crucially Truss and Kwarteng had no detailed announcement about the cuts they would make. By contrast Sunak and Hunt are now billed as a ‘safe pair of hands’ because they reversed the element of reckless tax giveaways requiring further government borrowing and will detail their tax rises and/or cuts. It is these deep cuts to living standards that have’ reassured the markets.’
Now they have gone even further, suggesting that they will aim for a budget surplus of £10 billion, requiring additional cuts bringing the total to £50 billion. As this is not much different to the original £70 billion proposed by Truss and Kwarteng, it is easy to see how powerful the promise is of reducing the living standards of workers and the poor.
Yet it also shows the precariousness of the overall position. It is certainly not a foregone conclusion that they will be able to mount the attacks on living standards that they are threatening. First, even some mainstream economists tend to believe that attempting to run a budget surplus in a downturn is itself reckless. In an economic downturn, each ‘saving’ made causes negative economy consequences, which push down government revenues and push up expenditure elsewhere.
More important, the population is no longer shell-shocked as when Cameron and Osborne began austerity 12 years ago. Now resistance to Tory plans is already under way. Other unions are being drawn into struggle, and sporadic victories have been registered. Solidarity has broadened, the economic crisis is not going away, so the radicalisation will continue even if there are setbacks too along the way.
A genuine counter-offensive against austerity has begun. The task is to the ensure the Americanisation project is ditched, taking its supporters with it.
Images: Rishi Sunak By Simon Walker / HM Treasury, OGL 3, https://commons.wikimedia.org/w/index.php?curid=124686916; and Jeremy Hunt By Richard Townshend, CC BY 3.0 <https://creativecommons.org/licenses/by/3.0>, via Wikimedia Commons