speri.comment: the political economy blog

Is neoliberalism at last unravelling in Britain?

The crisis of the British political economy has now become an urgent crisis also for British politics

Professor Tony Payne, Director of SPERI

Tony PayneI just don’t understand why mainstream political commentators in Britain are not shouting about it in every column and appearance on radio and television.  But it can be said in no uncertain terms on the SPERI blog: the unfolding crisis of the British political economy has now become an urgent crisis also for British politics.  Indeed, it explains just about everything important that is happening in British politics at the moment.

Consider the following observations about where we are politically just seven months before the general election of 7 May 2015.  There are six, because – and this itself is a measure of how much has been thrown up in the air – no less than six political parties now matter in Britain.  (By the way, these snapshots are meant to be largely uncontentious.  The argument comes later.)

  • The Conservatives are stalled in the opinion polls, their uncosted tax bribe recently announced by David Cameron seemingly having had no impact.
  • Labour stays 1 or 2 percentage points ahead, but equally can’t get popular traction, appearing stuck at 32-33% in the polls regardless of whatever enticing future policy commitments it makes.
  • The Liberal Democrats are reduced to the desperate hope that the so-called ‘incumbency effect’ will prevent their representation being completely cut to shreds.
  • UKIP is bounding along, setting the agenda and tapping ever more successfully into significant reservoirs of discontent within lower-middle-class and former working-class communities in forgotten parts of England.
  • The SNP has experienced a huge surge in both membership and support since the Scottish referendum and looks forward to playing (for the first time) a decisive role in British, as opposed to Scottish, politics.
  • The Greens are lately also lifting up a bit in the polls, running at 7% support in the last few YouGov surveys.

All in all, it’s not neat and it’s uncharted.  Nobody knows what we will be looking at on the morning of 8 May next year.

So why is this happening?  What explains all the trends encapsulated in these brief state-of-play observations?  The answer is very clear: the British political economy is failing its people and party politics is now being decisively shaped by the various impacts this failure is having on different parts of the country and different groups in society.

Let’s work again through the six parties that matter and connect their current performances to important aspects of the crisis of the British political economy.

The Conservatives have eventually succeeded in reflating the old Anglo-liberal growth model (for maybe one final time?) on the basis of an asset bubble within the London housing market.  But economic growth, although back, is neither firm nor durable.  It hasn’t come close yet to making up for lost output since 2008 and it certainly hasn’t made the majority of the British people feel good.  By the same token, the sector of society it benefits and services – the rich and well-off in the private sector – is too small on its own to drive an electoral majority.

Labour definitely has a big enough constituency of people hurt by recession and austerity to which to appeal.  It has moved on from New Labour and has developed a veritable array of useful economic policies.  But it hasn’t succeeded in crafting a convincing story about the nature of a new British growth model grounded in the ‘responsible capitalism’ once articulated by Ed Miliband.  Its self-confidence has been damaged by its presence in office when the party stopped in 2008 and it has failed to explain to the British people that the crisis was a crisis of the market and that only emergency action by the last Labour government prevented a recession from being a depression.

The Lib Dems can be briefly discussed, because they now have nothing distinctive to say to the debate about the British political economy – a striking shift from the years 2003-9 when Vince Cable was warning presciently of the risks of the accelerating deregulation of finance.

UKIP is really interesting.  Although there is much that is nasty about the party and its programme for British exit from the EU would be catastrophic for many sectors of the economy, it is in fact the only political party in England speaking directly to the egregious levels of inequality that have come to characterise the Anglo-liberal growth model.  Many parts of England (and Scotland, Wales and Northern Ireland for that matter) were left out of the growth party generated by the Britain’s post-Thatcher embrace of globalisation – and they resent it.  UKIP muddles this with nostalgia for a 1950s England that has irredeemably gone, and is interested only in English manifestations of this discontent, but at least it touches it.  UKIP is conservative and radical at the same time.

The SNP’s near-victory in the Scottish referendum drew extensively on a strong measure of cultural nationalism, fuelled by longstanding differences in key institutions in Scotland from the rest of Britain.  Yet what was truly remarkable, and new, was the support that it won for independence in working-class Glasgow and other Labour heartlands.  This was not just a Scottish response to British misrule, but also perhaps even more a popular class response to the biased governance of a narrow ruling class – passionate evidence that the people of old industrial cities like Glasgow no longer had much of a role in the British political economy and felt angry about it.

Finally, the Greens for their part have been drawing on a growing sense amongst more and more people that economic growth, however delivered, can’t just be allowed to resume as normal business – that in effect a radically different political economy is needed in the context of escalating environmental threat and intensifying climate instability.  The Greens are as yet an inchoate political force, but their impact is unlikely to lessen.

What does all of this add up to?  It is obvious: a political economy that has failed its people and a politics that is lashing about wildly trying to develop a coherent response.  Politics is always fundamentally a politics of political economy – the play of agents responding to and seeking to manage structural changes in society and the economy.  This is the politics that we need now to be talking about in Britain.  Everything else is either fluff or derivative of this core crisis.

One final point, a point of conjecture still at this moment: do these various trends show that, at last, neoliberalism is unravelling in Britain, and unravelling, what is more, from below?  Many have noted that the anticipated anti-neoliberal moment did not occur after 2008-9; instead, the mainstream political elite turned to either the actual pursuit of neoliberal austerity (the Conservatives and Lib Dems) or its mimicry (Labour).  However, in politics change often begins at the bottom and forces its way to the political surface.  Possibly, just possibly, the British people in their apparently contradictory reactions to the crisis are now signalling that they have had enough of neoliberalism and want something that actually delivers to their aspirations and needs.

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Categories: Politics and policy, SPERI Comment | Tags: , , , , , , , , | 8 comments

Articles and comments posted on this blog reflect the views of the author(s) and not the position of SPERI or the University of Sheffield.

Comments (8)

  1. Although I agree with the conclusion of this article, I felt it was produced rather like a rabbit from a hat – I did not see it coming from what preceded it.
    Also, i was surprised to read that Ukip are “speaking to egregious levels of inequality”. I have not seen anything in their policies that addresses inequality. I see inequality as an underlying causal factor in many of our country’s ills. I was despairing that no party recognised that nor was tackling it. I was contacted by the Green Party, who explained that they do. As far as I can determine, they are the only party who address inequality as an economic problem. They are currently gaining about 1000 members per week. There are about 26 weeks until the election.

    • John Riley’s comment spot on. UKIP is exploiting the results of inequality but it’s agenda is ultimately neoliberalism by the back door. I joined the Green Party because I agree with him that equality is a core factor in global ills.

  2. Dear John. Thanks for your comment. I agree that UKIP’s proposed policies are unlikely to address inequality at all seriously. Indeed, the tax cuts they purport to want would worsen it. But they nevertheless find a way of talking plausibly to those who have missed out on the good times in Britain and in that sense they do speak to the politics of inequality. Tony

  3. @Deb Joffe

    Well said. A large part of the reason why I recently also joined the Green Party. Whilst the author makes some good points, he rather misses a fundamental aspect of the Green’s appeal. For me at least, although I would be astonished if I was alone on this, the appeal of the Green’s policies is based on the restoration of economic rather than environmental, equilibrium

  4. “[UKIP] is in fact the only political party in England speaking directly to the egregious levels of inequality”

    Uh? UKIP seems to be intent on creating inequality in more ways than one. It’s leadership are composed of ultra-right wing Conservative rejects, who would stop at nothing for a crack at power. In many ways they represent the archetypal problem with British politics. They are far more susceptible to corruption and are attracted to the economic neo-liberal model even more than the present government! The peoples party they are most definitely NOT!

  5. I feel immensely better informed about our tumultuous political scene than I did 10 minutes ago. Thank you.

  6. UKIP’s ‘inequality’ is between the UK and the EU (and possibly the rest of humanity). As you say they are living in the 50’s when Britain was still great and nobody was telling us what to do – in their dreams.

    The problem is that they have, to our shame, successfully transferred the blame from the neoliberals to johnny foreigner. I’ve been around a few doors in last while, and while nobody suggested that we bring bankers/financiers to account, not a few were unhappy about people who are not like us.

    So how about a Speri comment on why ordinary people are convinced that the people who are not like us come from another country, as opposed to the people who have been here for generations, not to mention those not here who are waiting for TTIP to allow them to buy their way in – the same people who, while well aware that money has no value of itself, like to tell the rest of us that everything should belong to whoever can offer the most money.

  7. I am writing as a Sheffield Labour councillor. I agree with those who are surprised by the comment that UKIP is speaking directly about the unacceptable level of inequality. It may be speaking indirecty but it has nothing to say about the need to tax the wealthy more or to stop tax avoidance by multi-national companies or to support the living wage. It blames Europe and immigrants for everything and is incoherent or silent on most social and economic issues..

    Also I don’t accept those comments that suggest that Labour has no view on inequality or an interest in political and economic change. I agree that it is still not bold enough and or convincing enough yet but it is edging towards a reformed political economy encompassing a more responsible capitalism, better paid jobs, an economic role for the state at central and local levels, devolution and publicly run public services.

    A final comment on the Greens. They have the luxury only having to appeal to a narrow group of middle class progressives to be doing well. There is talk of a surge which means they are on 6-7% of support. They do not have to win over a coalition of people from different backgorunds and views which is Labour’s task in order to be able to form a government.

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