Even though ‘Victorian values’ have become bywords for reactionary social policy, the 1866 budget shows that today’s Conservative Party fares badly by comparison
Throughout the current parliament the UK Coalition Government has been beset by accusations that its welfare reforms echo the Victorian treatment of some of society’s most vulnerable citizens. Perhaps I should reveal my hand straightaway by saying ‘well-founded accusations’, because I certainly count amongst the people who have not been shy to use the analogy. It is the scapegoating of people in need on top of the withdrawal of money from front-line servicing of that need which makes the equation resonate quite so clearly.
I was left to ponder another dimension of the Victorian analogy last week in the aftermath of George Osborne’s pre-election budget. This aspect of the budget might appear to be only for historical anoraks like me, rather than for those who want to shout loudly in protest at the accelerating destruction of the welfare state. But bear with me, because it will prove to be merely another route to the same destination.
Osborne has consistently tried to disarm his critics’ use of a discourse of fairness to challenge their assertion that he has forced the burden of fiscal consolidation to fall disproportionately on the poor. He has responded with a fairness discourse of his own, this one set within the framework of claims about inter-generational justice. ‘Let’s be clear’, Osborne has said, ‘there is nothing fair about running huge budget deficits, and burdening future generations with the debts we ourselves are not prepared to pay’. The failure to ‘fix the [fiscal] roof when the sun is shining’ has been presented as a ‘dereliction of our duty to future generations’. David Cameron has invoked exactly the same theme when arguing that the ‘security of your family depends on the stability of our public finances. To every mother, father, grandparent, uncle, aunt I would ask this question. When you look at the children you love, do you want to land them with a legacy of huge debts? Do you want … to make life more difficult for their generation because we refuse to do the right thing in our generation?’
Now, at this point let me take you back to the 1866 budget brought before the House of Commons by William Gladstone and championed in Parliament by John Stuart Mill. Its centre-piece was an earlier plan to pay down the national debt, and the politics of the budget debate revolved around the opportunity cost of debt reduction as measured in terms of foregone alternative spending commitments.
In 1865, a young William Stanley Jevons published his book, The Coal Question. Jevons linked Britain’s place as the pre-eminent commercial power to the cost advantage it possessed in the production of iron for use in manufacturing industry. But this, in turn, relied on low-cost coal extraction, which he believed would soon come to an end when mining activities had to concentrate on increasingly deeper coal seams. Jevons’s policy recommendation was really rather straightforward. He argued that ‘those now living’ had a duty to ‘compensate posterity’ for the benefits that they had seized for themselves by exploiting low-cost sources of coal almost to the point of exhaustion. Here we again find arguments in favour of inter-generational justice, and once more the inter-generational bargain takes the form of creating surpluses in the present which might then be used to pay down the debt burden for the future. In short, viewed from today’s perspective, so far, so familiar.
Yet there is a distinct twist in the tale. Gladstone presented a budget that focused on reducing the overhang of the national debt, citing Jevons’s Coal Question at length when doing so. Mill spoke persuasively in the House of Commons on the same topic, again citing Jevons extensively, and this time making direct reference to the duties owed to future generations. However, historical research that places the debate back in its full context suggests that this was nothing but a convenient smokescreen. After all, neither Gladstone (in his parliamentary speeches) nor Mill (in his Principles of Political Economy) had previously used claims relating to inter-generational justice as a rationale for debt reduction. In fact, they had explicitly denied the plausibility of such a rationale. The only reason for taking action to pay down the national debt, they said, was to establish a new distributional settlement within society. It was a mechanism, pure and simple, for taking money from one group of people and giving it to another.
The details of the 1866 budget warn us, therefore, to be suspicious when confronted by Osborne and Cameron attempting to make a moral case for acting decisively on the national debt. What could be more alluring than noble-sounding words about accepting sacrifices ourselves today so as to avoid enforcing sacrifices on other people tomorrow? But are these not in fact weasel words designed solely to soften us up for further attacks on welfare rights? It is not intuitively easy to imagine taking a stand against an argument that is couched in terms of inter-generational justice. Yet, for anyone wishing to object to continued austerity, this might be the only course of action remaining.
I say this because there is also a second twist in the historical tale. Gladstone and Mill erected their smokescreen as a means of outmanoeuvring landowners agitating for self-serving tax advantages at the expense of manual labourers. Money that was being used to pay down the national debt could not, of course, also be simultaneously used to lower the landowners’ tax burden. Jevons also seems to have been in on the plan. ‘The Coal Panic’, he wrote in a letter of that time, ‘gets on very well … Mill, followed by Gladstone, really frightened the Opposition, composed of old landed fogies who thought their rents would go on rising for centuries to come.’
Today’s Conservative Party, by contrast, has constructed its inter-generational justice smokescreen for altogether different purposes. Whereas Victorian liberals used their diversionary tactic to defend the poor against exaggerated rentier claims, Osborne and Cameron have used theirs to assert the rights of rentiers over the rights of the poor. As a consequence, there are times when I wish that today’s Conservative ministers really were the Victorian liberals that they so often like to depict themselves as being.