Tuesday, 8 May 2012

The Coalition: Two years on

A marriage of convenience consummated on the Downing Street lawn in May 2010 gave birth to Britain’s coalition government. Arm in arm, two parties united in its commitment to wipe out the budget deficit within the term of a parliament.

Yet a vow to bring stability to the country has morphed into ideological zeal. Eradicating the deficit has become an obsession. Warnings that this would be damaging to an already fragile economy have fallen on deaf ears. A plan B has never been forthcoming. Plan A is not for turning. As a consequence, Britain faces its slowest economic recovery in history.
A pig-headed refusal to countenance a new strategy, points to a government wilfully discarding the evidence in favour of a commitment to shrinking the state and slashing benefits.

Ideological fervour aside, running through its core, this is a government beset by incompetence. From policy u-turns to a bungled Budget: the most dissected and regurgitated in years. Dodgy party treasurers give off a whiff of financial sleaze; ministers accused of colluding with media barons hints at corruption of the highest order.

Class has become the stick with which to beat the Tories once again.

Nadine Dorries, Tory backbencher, has delivered the most stinging rebuke, condemning the Prime Minister and Chancellor as:

“Two arrogant posh boys who don’t know the price of milk, and who show no remorse, no contrition, and no passion to want to understand the lives of others - and that is their real crime.”
After years of thinking that class doesn’t matter, that class won’t hurt them, it has taken one of their own to bring it to the forefront again in such clinical fashion.

At every stage, at every initiative, the Lib Dems have never been far behind: active instigators, rather than passive bystanders.
Whilst many thought that they would curb the worst Tory instincts, the opposite has been true. They have bolstered them, given them free reign to embark on a series of highly unpopular and destructive policies.

The NHS reform bill, now law, showed them at their most ruthless. An Act which points to creeping privatising, and opposed by huge sways of the medical profession as: ‘complex, incoherent, and not fit for purpose...and irreversibly damaging.’
All coming soon after the release of a report in the Journal of the Royal Society of Medicine which labelled the NHS as one of the most cost-effective systems in the developed world, saving more lives at a cheaper rate than any country except Ireland.

After analysing data since 1980, the report’s author, Professor Colin Pritchard, maintained that:
“The government proposals to change the NHS are largely based on the idea that the NHS is less efficient and effective than other countries, especially the US.

"The results question why we need a big set of health reform proposals ... The system works well. Look at the US and you can see where choice and competition gets you. Pretty dismal results."
The Lib Dems gambled on their raison d’être: voting reform. It never came, soundly beaten in last May’s referendum, off the back of a disingenuous ‘NO’ campaign, conducted by their Tory coalition partners. Whilst right in principle, any appetite for a change in the voting system fell far down most peoples’ list of concerns.

The trebling of university tuition fees gave succor to the view that the Liberals were prepared to sacrifice everything and anything in order for a seat at the top table. It also invariably damaged the standing of their once hailed leader, Nick Clegg.
But, it all comes back to the economy. A report out last week, by one of Britain’s leading economic think tanks, the National Institute of Economic and Social Research (NIESR), argued that the high levels of unemployment would do ‘permanent damage to the UK's productive capacity.’

The weakness in the economy was ‘unprecedented,’ with growth this year forecast at close to zero. They added that Britain being in a double-dip recession was nothing more than a technicality:
“Small quarter-to-quarter movements are largely irrelevant to the broader picture of an economy that remains very weak.

"Our monthly estimate of GDP suggests the level of economic activity in the economy in March 2012 was the same as in September 2010.

"This clearly does not constitute a sustained recovery.”

Four years after the start of the credit crunch and global downturn, the UK economy is still 4% below its pre-crisis peak.
Embarking on austerity at all costs has come at a price. Comparisons with the US make for sober reading. Official figures for last year showed that the US economy grew by 1.7%, compared to 0.8% in the UK.

For 2012, Britain has already got off to a rocky start, with the economy shrinking by 0.2% in the first quarter of the year, and the country sinking into its longest depression for 100 years. Meanwhile, the US’s continues to rise, growing by 2.2% for the same period:
While Obama chose to stimulate growth, Cameron chose to strangle it.”

Revered Noble-Prize winning economist, Paul Krugman, calls this ‘Cameron’s remarkable achievement:
“The defense I hear from Cameron apologists is that the austerity mostly hasn’t even hit yet. But that’s really not much of a defense. Remember, the austerity was supposed to work by inspiring confidence; where’s the confidence? Basically, the expansionary aspect should already have kicked in; it’s all contraction from here.

“[Instead], Britain will continue on a death spiral of self-defeating austerity.”
A victory for the basic, fundamental, laws of Keynesian economics.

The government can see the figures. It must look enviously over the pond, yet still refuses to change tack.
On taking office it repeated the flawed narrative that it had inherited record levels of government spending, stemmed from Labour’s mismanagement of the economy. Rather than the evidence, which showed it was the 2008 financial collapse which brought the economy to its knees.

Whilst this line convinced the electorate for a period, it has started to wear win. People want to see an alternative to cuts and anaemic growth.
Latest polls put the Tories at 29%, their lowest level of support since 2004; and it’s only taken them two years to achieve this feat. Labour are hovering around the 40% mark.

The Lib Dems face electoral oblivion unless they can distance themselves and find their own voice. Something I wouldn’t count on. Power-sharing has proven too enticing. Everything else can wait, including the next general election. Enjoy the ride whilst it lasts.
The coalition has had a shocking few weeks. One can’t help get the impression that the Conservatives are behaving like a party who were told they only had days to prepare for government, rather than the five years they’d actually had.

Incompetence pervades every level. The charge that they’re out of their depth is beginning to stick. That, and a stuttering recovery, makes the already onerous task of an outright Tory majority in 2015, that much less likely. Hopefully, Labour will be better prepared.

This article was first published by Shifting Grounds on Tuesday 8 May 2012

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