We Are All Critics Now

We have become used to the idea that budgets should be viewed through the lenses of market confidence and personal impact - what it means for the FTSE-100 or a couple in a civil partnership with a dog and a Range Rover. As a result, we now struggle to analyse the politics of the Chancellor's announcement in anything other than the most superificial terms: that the left has somehow won the argument on investment or that the Tories have parked their tanks on Labour's lawn. This obviously highlights the extent to which class has been marginalised in mainstream discourse since the 1980s, but it also points to the way that budgets, as set-pieces of political theatre, have become dramatic "works" whose critique is dominated by the fisking of the IFS (Paul Johnson now has the equivalent clout of Frank Rich, the 1980s New York Times critic dubbed the "Butcher of Broadway") and the hunt for plagiarism (the "already announced" numbers that pad out the new). A consequence of this is the expectation of novelty and surprise, which obscures the extent to which budgets, as progress reports of a ship of state that has very limited manoeuvrability, reflect continuity. This is most obvious in the claim that this week's budget marks the long-heralded "end to austerity".

If you were serious about making the case, you would start by defining austerity. Living within our means hardly qualifies, given the continuing if shrinking deficit since 2010 and the steady rise in the national debt over most of the last decade, while the idea that we were doing more with less is flatly contradicted by persistently poor productivity. The belief that austerity is merely a ruse to shrink the state is also not borne out by the data. Though the public sector share of GDP has declined since the artificial highs of 2009-10, the current figure of just under 40% merely takes us back to the levels seen in the 2005-08 period. Though the cuts to public services have been severe, this has been offset by increasing demographic demand and poor GDP growth. Even the claim that austerity is more of a moral stance is belied by the triviality of its cultural impact, from Keep Calm and Carry On to the vogue for home-baking. What did change over the last ten years was a steady shift in public resources away from the poorest and most vulnerable. We were not all in it together. In the final analysis, austerity has simply been an active policy of inequality and there is little evidence that the government intends to bring that to an end.

Aside from the targeted funds for the NHS and the police, and the now traditional protection of old-age pensions, the punishment of public services continues. Despite election campaign promises there is no "solution" to the growing care crisis and I wouldn't hold my breath for anything radical turning up in the autumn. In reality, much of the extra funding for the government's nebulous "levelling up" will find its way into council care services, though this will undoubtedly be insufficient to both patch the holes and meet growing demand. Sending Treasury officials to a business park off the M1 or M6 doesn't distract from the lack of any substantive move towards greater fiscal devolution or the continuing squeeze on local authority budgets. Much of the promised infrastructure investment follows the usual pattern of preferential help for motorists and rail commuters. There is to be no large-scale investment in housing - i.e. social infrastructure - and the environmental measures are nowhere near sufficient to address climate change.

The investment in R&D is positive, but this has not really been an area that the UK has been lacking in. The perennial problem has been translating research into viable businesses and jobs, which is ultimately about the willingness of private sector investors to prefer domestic over foreign opportunities. The scaling back of Entrepreneurs' Relief is an admission that subsidising "value-creators" hasn't worked to boost British industry, but has rather served to further advance rentier interests. The failure to scrap it altogether indicates a continued desire to indulge an already advantaged class fraction that is a major contributor to the low productivity that bedevils the economy. Like the Catapult innovation centres, which sought to bridge the "valley of death" between primary research and commercialisation, the thinking behind this relief was that the state's role is to cultivate a climate of exploitation and hope the market takes the hint, rather than to seek to direct capital. As such, there has been no Damascene conversion to the merits of the postwar national economy. There will be no National Enterprise Board, let alone a Department of Economic Affairs.

The Covid-19 measures are focused not so much on stabilising the wider economy or supporting precarious workers as protecting small businesses through the suspension of business rates and the subsidising of sick pay (if the expectation is that most people will be infected then a blanket award of cash - i.e. helicopter money - would arguably be a sensible strategy, solving the gig worker problem at a stroke, but this would simply offend too many conservative sensibilities). One consequence of this SME indulgence will be the continued depression of productivity, essentially because more underperforming firms are being offered an end-of-life extension. Along with the likelihood that high street lenders, encouraged by the Bank of England, will show forbearance on loans, this means that the zombie army will march on. One potential consequence of this temporary relief is that reversing it later will become politically unappealing, just as unfreezing the annual increase in fuel duty has, so either business rate relief may become semi-permanent or pressure will increase for a downward revaluation, or at least reform of the current transitional rules.

The response to the pandemic is driven not merely by scientific advice but by assumptions about public health and governance. The suggestion that the science is being influenced by behavioural psychology more than epidemiology points to the voguish influence of the marketised approach to social control, in which the self-interest of utility maximisation is held to be the most powerful force that operates on society, but underlying this is an older policy tradition of "let nature take its course" that reflects a de haut en bas pessimism about both the morality and effectiveness of state intervention. This has echoes of the response by the British government to the Irish famine of the mid-nineteenth century, which was equally informed by the enlightened view of scientific experts influenced by contemporary political economy. Where once the population could be dismissed as "feckless", now we are told that the interventions being adopted by other countries would be counter-productive because of our susceptibility to "fatigue", a politer way of saying the same thing.

Martin Kettle was typical of the centrist response to the budget in evoking the halcyon years of Butskellism. The "postwar consensus" is an historical given among press commentators, but it has long been contested by actual historians. The Tories certainly accommodated themselves to the welfare state after 1945, but they voted against the NHS and consistently sought to support private healthcare thereafter, which established a consistent pattern: resist the extension of public welfare, concede it under electoral duress, and then work to preserve a private sphere that could form the foundation of an eventual reversal. For example, they supported comprehensivisation after Butler's tripartite education model was shown to be inadequate to the needs of a modern society, but they insisted on maintaining the privileges of public schools. Today, they hold the latter up as exemplars for privatised academies. Likewise, their attitude towards organised labour and their willingness to make concessions in the face of its demands was always grudging and reluctant, even before Ted Heath tried to take the miners on.

Kettle revealingly interprets the budget as not only a break with the post-1979 past but as a repudiation of the Conservative party's critics: "It is now lazier than ever to dismiss the Tories as mere neoliberals, compulsive austerians or even as the same old, same old". Given that the budget does not diverge from neoliberal orthodoxy (those infrastructure funds will predominantly go to private contractors), maintains austerity for most of the public realm, and is wholly consistent with traditional Tory practice, this is a heroic determination to refuse to see what is at the end of your nose. The Guardian editorial - We are all Keynesians now (a phrase misattributed to Richard Nixon in 1971) - was more sceptical, correctly noting that this budget was not about to empower workers or advance redistribution, but it revealed its impeccable Oxbridge breeding by wheeling out the old essay trope about the Tories' ruthless pragmatism: "Conservatives, however, are prepared to give up their principles for power. It is what makes the party such a formidable political force."

All administrations trim and compromise, but the suggestion that the Tories are particularly prone to this is a myth based on assumptions about their innate skill and temperament as "the natural party of government", not to mention starry-eyed biographies of Peel, Disraeli and Churchill. The history of the Conservative party over the twentieth century is one of a reluctance to give up old principles, from empire and public schools to the under-taxation of property, combined with an irreconcilable dissatisfaction with the postwar dispensation. This was obvious both in their attitude to Europe, where a deliberate self-delusion about free trade and a refusal to acknowledge the logic of integration led inexorably to Brexit, and in their ambivalence over Keynesian demand management and the narrowing of inequality, which eventually led to the embrace of Thatcherite neoliberalism. Commentators who claim that the Tories have wisely adjusted to changed realities are invariably liberals projecting what they consider to be the wisdom of centrist governance, hence their tendency to wheel out the quote usually misattributed to Keynes: "When the facts change, I change my mind". The truth is that Rishi Sunak's first budget is business as usual, and that would be even more obvious were it not for Covid-19.