Tuesday, October 11, 2011

No cracks in the consensus ...yet



The recent party conferences by the Conservative, Liberal-Democrats and Labour parties underscore what unites rather than divides the major political parties. All have now subscribed to the austerity agenda in response to the global financial and economic crisis, although there is some disagreement on the pace of cuts. All the parties have also completely abandoned any aspiration towards a return to the free higher education most of our MPs once enjoyed. Ed Miliband effectively (and probably prematurely) conceded the principle of the debate over tuition fees to the coalition government by arguing in his conference speech that Labour would lower the cap of tuition fees from £9,000 to £6,000.

Perhaps more significantly there still appears to be no serious public discussion of the reduction in corporation tax proposed by George Osborne last year from 28% to 24% over four years, although Miliband did suggest he would claw this back from the banks and private equity firms which were the whipping boys for much of the speech. By 2014 corporation tax in the UK will have more than halved since its highpoint in the post-war era of 50% in 1949 when Britain really was in an economic crisis. The 24% corporation tax will put us well below the US (at 39%) or Germany (at 33%) and closer to the tax rates of Saudi Arabia and Russia (20%). This reduction is of course being paid for by students and others at the sharp end of the various austerity measures, yet the opposition has failed to campaign on this slashing of corporation tax and so the mainstream media have maintained a polite silence on the topic.

From across the Atlantic however, comes a potential source of trouble for the major parties. The Occupy Wall Street movement has spread to 25 cities in the US and has had an unusual degree of support and understanding from a broad coalition of disgruntled voters and even sympathy from Federal Reserve Chairman Ben Bernanke and mainstream political figures like Nancy Pelosi. Should the success of the movement continue, building on an awareness of record rates of inequality, there is a chance it could spread to Britain. The possibility of copy-cat demonstrations gaining mass support in London as winter approaches seems remote, but much depends on the public mood of those sections of the population most affected by the cuts, including the 100,000 public sector employees expected to lose their jobs by early in the new year.

The mass protests in Greece and riots in England over the summer are further reminders that civil unrest is a real possibility. Demonstrations of the type seen in the US or Athens may not take place, but if the planned occupation of the London Stock Exchange for the 15th October or similar future protests gained significant support it could put all three parties on the back foot. Each has been accused of ‘collusion’ in enacting a corporate-sponsored political agenda (be it Labour’s promotion of costly PFI projects including hospitals); deregulation of banks and financial services (Labour and Conservative); rolling back planning restrictions in the interests of property developers (LibDem/Conservative) and so on.

The extent to which the three major parties are seen to be ‘in the pocket’ of big business and pushing a discredited neo-liberal agenda may in the end do real damage to British democracy and could lead to even higher levels of voter disengagement.

Reconnecting with voters might be regarded by political observers as essential for all three parties. However, the perception that powerful lobbyists, private and corporate donors and multinational threats to relocate production (and accompanying beggar-thy-neighbour tax policies) are the real drivers of party policy may yet produce a coalition of citizens who are disillusioned with this politics as usual. Should this coalition find a sustained collective voice (either on the streets of Wall Street, Athens or London) and if a coherent set of demands emerges there may be the first cracks in the current political consensus. When 20,000 veterans of the First World War marched on Washington in the spring and summer of 1932 and set up a tent city opposite the Capitol - President Herbert Hoover (whose austerity measures were so unpopular) sent in four troops of cavalry and four companies of infantry to clear the encampment, which was torched. The failure of Hoover’s austerity measures led to the massive election victory of Roosevelt in November 1932 on the promise of a programme of employment through the New Deal. The lessons of history seem blindingly clear as the satirical magazine the Onion recently noted.

Should a similar movement of civil disobedience provoke public sympathy either here or in the US there is a chance for the kind of movement that could make real demands on a system that has appeared deaf to alternative strategies for dealing with the current economic crisis. At that point real political differences between the parties could make a comeback and our democracy would be all the healthier for that.

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