Those increasingly surreal Tories

By Brian Barder / @BrianLB

This will be an old-fashioned, Old Labour tribal attack on the Conservative Party. (Hell, it’s election time.) If you can’t bear political tribalism, you don’t need to read any further. You may feel happier with ConservativeHome. Others can safely read on.

It’s becoming increasingly difficult to take the Tory election campaign seriously. A new arrival from Mars would get the impression that the principal choice facing the voters is between a party that wants to increase National Insurance contributions by 1% (1%!) and a party that doesn’t. The party that doesn’t, i.e. the Conservatives, claim that not increasing them is ‘a tax cut’, even though National Insurance contributions haven’t actually been increased and probably won’t be. I’m reminded of the whiskery joke about the communication cord in old-time railway carriages which you pulled in an emergency to stop the train. The sign above it said “Penalty for Improper Use: £5″, which was a lot of money in those days. So on arrival at Paddington Station (or wherever), we congratulated ourselves on having saved £5 by not pulling the cord, and eagerly debated how to spend it.

Labour returns serve by demanding to know how the Tories propose to fund this ‘tax cut’. Easy, say the Tories: more ‘efficiency savings’ in the public sector. The good plain anglo-saxon word ‘cut’ is now taboo. Everyone is going to make efficiency savings instead – and they are to amount to billions of pounds in a single year. This, it’s believed, will bring down the deficit and the national debt so that the rest of the world will go on lending us money at derisory rates of interest.

This is all pure Alice in Wonderland. If the Tories, once elected next month, performed the miracle of finding and making ‘efficiency savings’ in public services on the colossal scale threatened, it would necessarily and unarguably entail vast numbers of job losses. The private sector is struggling to get up off the floor after the collapse of bank credit and consumer demand, and will continue for some time to rely on the state to provide the stimulus required to keep going at all. Reducing government spending by billions of pounds in such circumstances would pull the rug from under the current indispensable fiscal stimulus, deflating demand just as it begins to recover. Without a revival in demand, firms are not going to resume investment spending, re-stock, start trading again, or hire labour. Worse still, mass redundancies in the public sector with no private sector job vacancies to soak them up can only mean a huge addition to the bill for unemployment benefit and the many other social service costs of large-scale unemployment; at the same time, government loses the revenues previously raised from taxes paid by those now thrown out of work – the ‘automatic stabilisers’ combine in a double whammy to increase unavoidable government spending and simultaneously reduce government revenue. Thus the budget deficit widens further; government borrowing necessarily increases. The UK’s creditworthiness is called into question in the international bond markets: interest rates are forced up, to persuade lenders to buy UK government bonds; credit for domestic investment, already hard to get, becomes more expensive. The recession worsens. Unemployment rises still further. Recovery and growth are choked off.

Keynes is generally (if wrongly) believed to have recommended that in a recession people should if necessary be paid to dig holes in the ground and fill them in again, so that the spending of their incomes from this meaningless employment helps to revive demand in the economy and thus trigger fresh economic activity, recovery, and growth. The Tories see public servants apparently digging holes and filling them in again, cry “Waste!”, and sack them. (In fact it almost certainly turns out that the holes had an invaluable purpose: laying fibre-optic cable to expand the availability of broadband, perhaps, or repairing and modernising the sewers; but in the desperate search for WASTE!, any old state activity will do for cutting to reduce the wage bill. It’s called efficiency savings.)

There’s even more of this topsy-turvy economics on the Conservative Party’s stall. For months they have been obsessing all over the airwaves, the public prints and the blogosphere about the absolute priority to be given to paying off the national debt – not waiting until recovery from the recession is firmly established, but starting the day after the election. Never mind the threat of still higher unemployment, ordinary blameless people’s jobs and self-respect and often health wrecked, homes repossessed, families humiliated: all that matters is paying down the debt. Every other objective, we were told, must be subordinated to this supreme national goal. To achieve it, the war leaders Cameron and Osborne had nothing to offer us but blood, toil, tears and the pain of savagely slashed public services. All – well, most – must suffer in this noble cause.

But wait! The captains of industry and business need have no fear after all. Did it look as if taxes would have to rise as well as public services being slashed if the debt was to be paid off? Not a bit of it! Taxes would actually be reduced under Chancellor Osborne: reductions in inheritance tax for the better-off, tax concessions to encourage people to get and stay married, no increase in National Insurance contributions (a ‘tax on jobs’!), strong hints that there’ll be no increase in VAT either, promises to abolish the new 50% top rate of income tax on the hyper-rich. At the same time spending on the National Health Service is to rise under the Tories year on year in real terms, front-line services in education are to be protected, parents given the ‘right’ to set up new state-funded schools outside local authority control whenever they wish, cancer patients to be given whatever drugs their specialists recommend, overseas development aid to go on rising. So that painful austerity decade that we heard so much about isn’t going to be so painful after all? But where’s the money coming from? All together, now: “Efficiency savings!” Efficiency savings will pay for all these rosy promises of delectable goodies handed out by Dave and George.

But what about the national debt? Will the famous efficiency savings be used to pay that off as well? Those five loaves and two small fishes will have to go an awfully long way.

Another small mystery: rich, successful businessmen are queueing up to endorse the Tories’ frenetic objections to that 1 per cent on National Insurance contributions – the single issue on which the whole election is apparently being fought. Cameron and Osborne, in their infinite wisdom, boast of this utterly predictable and shamelessly self-interested support by business as irrefutable evidence that they are right, and Labour is wrong. It’s a stealth tax! (Although rarely can stealth have been so public.) It’s a tax on jobs! (But all taxes paid by rich employers and financiers are taxes on jobs: it’s just that some are fairer, and bear less heavily on the poorest and most vulnerable, than others.) And if these business leaders are so concerned about jobs, why don’t they put on hold for a decade or two those colossal salaries, bonuses and share issues that they pay each other, and divert some of the money thus saved into job-creating new investment? Grotesque pay deals for the bosses are the most destructive possible tax on other people’s jobs. The mystery is that the media should report businessmen objecting to a minuscule tax increase as if it was news, and that Cameron and Osborne should think that it helps their case to exult about it, when in fact it simply confirms what we all already knew or suspected: nothing has changed. The Tories continue to represent the interests of the employers against the employed and the unemployed, the rich against the poor or less rich, the Institute of Directors against the trade unions, what’s left of them. What else is new? ‘Dog bites man’ is no story. Is the Pope a Roman Catholic?

Now we have Chris Grayling, the Tory shadow home secretary, defending discrimination against gays – the man who within a matter of weeks may well be the home secretary!; we have a Tory commitment to repeal the Human Rights Act; we have the surrender of the intelligent minority in the party to the Tory Europhobes with the desertion of the Conservatives in the European parliament from the mainstream centre-right grouping, defying the pleas of our principal partners in Europe; and now we have Cameron advocating – in an interview in the Catholic Herald! – a reduction in the period of pregnancy in which abortion is legal, a cowardly surrender to Roman Catholic and other obscurantism. And, worst of all, in the middle of the worst economic crisis the country has faced for generations, they don’t understand elementary economics. Cameron’s much vaunted claim to have changed the face of Toryism already lies in ruins, even before he has set foot insiode No. 10. At the first sign of pressure from the old familiar far-right interest groups who finance and control the Conservative Party, Dave caves in.

If these people do form the next government, as seems far more likely than not, it’s going to be a rough ride – for some of us. For most of us, actually. Say what you like about Labour…