The Inactivist State

The big story of the week has been the long-expected cancellation of phase 2 of HS2, the high-speed railway lines between Birmingham and Manchester and Birmingham and Leeds (the latter had already been scaled back in 2021). Rishi Sunak's talk of taking "tough decisions" after years of govermental dither and delay has failed to change the perception that his administration is weak and knackered, while Keir Starmer's refusal to commit to restoring HS2 to its former glory has been judged sober and responsible in the circumstances, though I doubt anyone seriously believes he will change in his mind in office as many still believe he will do over Brexit. The merits of the original plan were always highly questionable, both because the positive return on investment depended on the northern legs being delivered and because high-speed rail should be about covering very long distances (London to Leeds really was the minimum) rather than creating what is now effectively a fancier version of the Metropolitan line. 

The chief argument for cancellation, however, wasn't a flawed concept but spiralling costs. This has been attributed variously to incompetence, greedy bosses and inflation, but arguably the biggest issue was the gold-plating of the London to Birmingham line to satisfy voters in Conservative constituencies. Had the project started with the northern branches, the economics would look very different today and a decision to proceed with the final southern leg would have likely been positive (and if undertaken by a Labour government with no seats to protect in the Chilterns, might not have resulted in such indulgence). But this is all history and counterfactuals. What I really want to focus on is not HS2 but what this week's decision says about the capabilities and will of the state. At the 2019 general election, both the Conservatives and Labour offered a vision of state activism: the one focused on "getting Brexit done" and launching the ship of state on the ocean of free trade; the other on public investment to repair the damage wrought by austerity and a green transition to combat climate change. At the general election next year neither party will be offering a comparable vision of state activism.

The idea that a Boris Johnson-led government would be activist, leveling up the North and securing trade deals all over the globe, was always dubious, and not just because of the man's own laziness. Beyond cosplaying Churchill demanding "action this day", his record before enetering Number 10 was one of opportunistic rebranding (the London bike-hire scheme) and accepting the kudos for projects long planned before his arrival on the scene (the London Olympics and, arguably, Brexit). Insofar as he made things happen during his time as Mayor of London, it was largely by giving the green light to property developers, though the notorious garden bridge over the Thames proved (ahem) a bridge too far. Johnson has always been a conservative, albeit of an optimistic rather than pessimistic cast: in love with tradition and antiquity, substituting conviviality for social justice, and convinced that problems can be overcome by a positive attitude. Faced with the opportunity of heading an energetic state during the Covid-19 pandemic, he dithered over lockdown and oversaw a culture of indulgence and greed at the heart of government.

State activism is only an issue in a democracy when it might lead to an assault on property and power relations. For that reason, the restraint of democracy inevitably produces conservative governments whose chief feature is a reluctance to undertake anything novel coupled with energetic maintenance of the status quo. When they display activism, it tends to be in those areas that do not threaten to advance democracy, and often act as a bulwark against it, such as defence spending and the criminal justice system. New aircraft carriers and jails are no less activist than new railway lines and hospitals, but while the latter are seen as the response to a public demand, the former are not, even allowing for the media's determination to ventriloquise one. For all the differences in style and rhetoric, four of the last five Conservative Prime Ministers have shared a common characteristic in their aversion to state activism, while the one exception, Liz Truss, was unceremoniously booted out of office when she tried to actively manage the economy. 

Cameron and Osborne's (and let's not forget Clegg's) austerity was inactivism as a government-wide standing order. The purpose was not to shrink the state but to weaken it and allow it to degrade. The vision was that this would encourage people to reduce their reliance on public services and thus walk away from the state's "teat", a vision that also inspires Rishi Sunak, a man who doesn't appear to have ever used a public service in his life. While you will still hear many claim that Jeremy Corbyn lost the EU referendum, it was Cameron's insouciance that did it, though in this he was simply continuing a tradition from the 1980s by which governments deliberately failed to make the case for the European Union, preferring to employ it as an all-purpose whipping-boy. Theresa May's activism never extended beyond the Home Office's "hostile environment", while her attempts to grasp various bulls by the horns as Prime Minister (social care, the Brexit deal) invariably led to panicked retreat at the first sign of opposition.

There are exceptions to this rule of conservative inactivism, such as when the state must be employed by capital to violently revise social and economic relations, as in the 1980s. Breaking the NUM was as much an example of state activism as the creation of the London Docklands and the market-making deregulation of the City. That phase of activism pretty much came to an end with Margaret Thatcher's fall. Indeed, her departure was arguably triggered by British capital deciding that the time for change was over (the last great achievement being the EU Single Market), hence the elevation of a Prime Minister, John Major, whose administration was characterised by careful reversals (the Poll Tax), willing subordination to markets (the ERM), and policy triviality (the infamous cones hotline). His ultimate failure sprang from his inability to restrain those parts of his party ("the bastards") who wanted the careful reversal extended to the Maastricht Treaty.

1997 presented an obvious contrast in the way that New Labour embraced activism as a style, but as history would show, the substance of its programme of "reform" was either the maintenance of order under cover of progressive rhetoric or the further pursuit of capital-friendly reorganisation. It's also easily forgotten how much Blair and Brown's message, particularly in the early years, concerned assurances of what they wouldn't do, which makes the sight of Blairites today warning Starmer over his "caution" frankly hilarious. 2024 won't be a re-run of 1997, but the offer to the electorate will be essentially the same, both in its modesty and its assumption that a change of management is all that is required. At the fag-end of Tory administrations, Labour has a tendency to talk about "wasted years", as if they would have got more done, but in reality what they are criticising is neglect - a failure of stewardship - rather than missed opportunities.

Democratic state activism, in the sense of an increase in popular control and a consequent decline in inequality, ran out of puff in the early 1970s. The result of this has been a gradual degradation in the social fabric, inadequately offset by intermittent public investment that turns out to have been primarily opportunities for new private profits (PFI and its variants). The exception that proves the rule has been London, but the basis for that has not been a metropolitan bias by central government but the relative political power of the capital compared to other cities and regions and how that can impact on people's lives, for example Transport for London. But even in the capital there is a sense of drift after the heady years of activism under Ken Livingstone (and Boris Johnson floating on the vapours of his predecessor's work). Despite the hysterical Islamophobia of the right, Sadiq Khan's tenure has been one of cautious management and a reluctance to expand the scope of the mayoralty or the assembly.

The Tories have spent this conference week claiming that they will stop various bad things that were never going to happen anyway, such as a tax on meat and the need for 7 dustbins. Many of the government's critics have derided the triviality, but this misses that the focus on such mundane matters that would (if true) affect everyone is an attempt to celebrate inactivity and thus an appeal to genuine conservative values. It might seem bizarre that this has led to the Tories insisting that the country is near broken and that only they, the party of government for the last 13 years, can be trusted to remedy this, but again this is to underestimate how persuasive a promise to do nothing can be. It is also to ignore that Labour are pitching the same message, having matched the Tories on most commitments and equally on most refusals to commit. The implication is that if the country is broken it can be fixed by changing the management team but otherwise by hardly departing from Tory practice. There's a lot more inactivism to come.

Stuck in the Middle With You

The high-neoliberal period, from 1989 to 2008, was also the triumph of political centrism. This was theorised as the "third way", but as that name made clear, it was a theory that gained definition only in opposition to the other two: neither the sclerotic social democracy of the 1970s nor the antisocial free-market deregulation of the 1980s. As the alternatives on both the left and the right appeared to fall away under the weight of history (the fall of the Berlin Wall, the failure of monetarism), centrism became harder to define beyond banalities such as "what works" and an unthinking technophilia (which still motivates those who pine for that era, such as Tony Blair). Whereas "neither left nor right" appeared to have a clear if negative meaning in the 1970s, by the 1990s this provided less of a sharp contrast. There were no positive ideas to expound beyond the rhetoric of the "vital centre", which partly explained the turn to the headier air of international relations and the proselytisation of liberal democracy. In practice, centrism after 1979 did little beyond repackaging the foundations of the postwar consensus: the commitment to free markets, the (grudging) acceptance of the welfare state and a preference for technocratic governance.

Since the financial crash, there has been an intellectual revival on both the right and the left, though it can be argued that both actually started to recover some years earlier - the one in response to 9/11, the other in response to the Iraq War - but their theory (as opposed to their praxis) was largely ignored by a media still obsessed with the nominal centre and managerialist virtue. But a paradox is that this return to a greater definition on the flanks has not led to greater clarity in the centre in the manner of the 1970s and 80s. Nor has it produced a fresh flowering in centrist thought, let alone any vibrancy in its political practice. There are no thinkers of the calibre of Anthony Giddens to give a progressive gloss to the centre's renewed political hegemony (the "adults" are most definitely back in charge across the political landscape in the UK), while the likes of Jurgen Habermas and John Rawls would today be considered too far to the left in their concerns with democracy and equality. Once novel ideas such as the embrace of the service economy or the positive impact of workfare are now tired if not wholly discredited.

The marginalisation of thinkers such as Habermas and Rawls highlights the extent to which the spectrum of acceptable politics has shifted sharply to the right. That's not in the sense of the Overton Window - i.e. the policies that are now considered palatable for the electorate - but in the narrower sense of what the political cartel itself considers permissible. The UK offers a stark example of this, with the mild social democracy of Jeremy Corbyn anathematised and the xenophobic bigotry previously associated with UKIP now embedded in the Conservative Party and espoused even by ministers. This has happened at the same time that leftwing policies have become increasingly popular, from nationalisation and wealth taxes to state-led green investment, while previously popular rightwing positions, notably the need for austerity and leaving the EU, have lost much of their attraction. There is a sense of the political caste and the electorate moving in opposite directions, yet there is also a clear (and cynical) expectation that this simply means we will be obliged to elect the slightly less rightwing party as our new government next year.

In the Guardian (where else?), Steve Richards bemoans this lack of clarity on where the centre ground actually lies. Ignoring the boundaries that historically provided its definition, he seeks consistency and internal coherence within the centrist space but finds only contradiction. Thus "On economic policy, the former Conservative MP Rory Stewart was and is a supporter of the austerity policies introduced by David Cameron and George Osborne in 2010, the real-terms spending cuts that went deeper than any of Margaret Thatcher’s in the 1980s. In contrast, the Labour MPs who formed the short-lived centrist Change UK party were passionate opponents of Osborne’s economic policies – a problem as the Conservative backbenchers who defected to the same party were proud advocates of the cuts. On the most fundamental issue, a radical economic policy, “centrists” take opposite positions." Leaving aside the dubious claim that the Labour right were "passionately opposed" to austerity, there's an obviously simpler explanation for this apparent paradox, namely the priority given to stopping Corbyn, but that would mean accepting that centrism is, and always will be, defined negatively, not positively.

There is no great mystery in the differences of opinion among centrists over tax and spend or public service reform. These are tactical arguments, comparable to the issues that divided the New Labour administrations or the 2010-15 coalition government. The strategic objectives - to avoid deficit spending, to privilege wealth over income and to reduce the cost and extent of the public sector - remain unifying goals. The centre ground is fundamentally conservative (the third way was never equidistant) and this means there will be disagreements over the pace of "reform" and the precise balance between rewarding the deserving and punishing the undeserving. It also means that its social policy will be essentially opportunistic, which doesn't mean responding to public opinion but to the positioning on its flanks. Thus every step that the right takes further rightwards opens up new space into which centrism can move while preserving its relative position. An obvious example of this is the way that the right's increasingly overt transphobia has allowed the Labour Party to water-down its commitment to trans rights.

In contrast, every shift towards the centre that the left takes will be fiercely resisted, if necessary by inventing a strawman left of extreme views and malign intent. That shift is partly the Overton effect - the way that previously marginal left positions on public ownership and taxation have become popular with voters due to material circumstance - but it also reflects the secular trend by which the left has come to absorb the traditions of social democracy and even liberalism since the 1980s as centrism has shifted away from both in the right's wake. The centrist resistance to the left is not simply factional antipathy: it reflects the need to establish a clear boundary against which it can define itself. If the right were to move towards the centre ground, so jeopardising the incumbents, there would be a similar resistance, though perhaps not so hysterical (recall Labour's resistance to the advance of the BNP and particularly the tactical divisions in 2010 between "No pasaran!" in Barking and Dagenham and "Maybe we should be more racist" in Oldham East & Saddleworth).

Ultimately, as an essentially conservative disposition, centrism will always define itself more sharply against the left than the right. It is wedded to the preservation of social and economic hierarchies, even if it does demand greater "opening up" to merit. It is inclined to view demands for greater social justice with scepticism ("the timing isn't right") if not outright hostility ("that goes too far"). Its focus on prudent financial management and minimising government deficits is identical to that of the conservative right, the only difference being a self-congratulatory claim to superior virtue. Above all, it stoutly defends the rights and privileges of property. Insofar as it sees itself as a torch-bearer for the progressive tendencies within society, it is in the form of technocratic managerialism and the celebration of a capital-inflected image of science (the obsession with translating primary research into "world-beating" business opportunities is emblematic). In its emphasis on maturity, it treats it opponents to left and right as children and hysterics respectively.

Centrism saw its historic mission as the defence of liberal democracy against communism (and socialism) primarily, and fascism secondarily (though much has been made of national conservative parties facilitating the parliamentary rise of the far-right in the 1920s and 30s, it shouldn't be forgotten that this accommodation also included parties that saw themselves as centrist or liberal). Since 1989 it has longed for enemies of equivalent stature, first seeking them among the recalcitrant abroad (the "Axis of Evil" etc) and then the rebarbative at home (the crude and unmannered "populism" that was conveniently found on both the left and right flanks). These enemies have proved a disappointment, even the source of embarrassment (Canada's impeccably centrist political establishment applauding a former Waffen SS soldier is just the most recent mis-step). Russia is a broken reed and China too intermeshed with global capitalism to isolate. Despite the persistence of Trump, right-populism is politically marginal and the left excluded almost everywhere.

We are living at a time when centrism is not only dominant but hegemonic. While neoliberalism might appear diminished after 2008, the underlying assumptions about the role of capital and the state - those foundations of the postwar consensus - remain fundamentally unchallenged despite more recent reservations about the limits of globalisation and the need for greater governmental activism to address climate change. This hegemony can be seen in the lack of concern shown when displaying centrism's contradictions. Steve Richards is being disingenuous in imagining that these will alienate the electorate to the extent of jeopardising the system. If anything, there is a relish in the way that the operation of the cartel, and its trivial tactical squabbles, is now openly celebrated, from chummy podcasts to the court gossip of the BBC. It is also evident in the authoritarian turn of Keir Starmer's brutally dishonest leadership of the Labour Party: a muscular centrism directed exclusively at the left, smugly welcomed by the politico-media establishment. The problem is not the centre ground's lack of definition but its imperial ambition.

Policy Stability

From Conservative Party backbenchers and former ministers, to the Labour Party frontbench and media commentators, all are agreed that what business needs is policy stability. Specifically, that the planned ban on the sale of petrol and diesel vehicles from 2030 should be adhered to rather than having the target date pushed back to 2035 and that the separate schedule for the phasing out of gas boilers should also remain in place (though Labour have, typically, subsequently reneged on the latter). The suggestion that both would be relaxed was enough to prompt carmakers and energy companies to issue strongly-worded statements, ahead of Rishi Sunak's announcement, deploring what has been framed by the media as a watering down of the net zero by 2050 commitment and an attempt to create a divide (or "wedge issue") between the Conservatives and Labour ahead of next year's general election. At this point it would be wise to separate the base and superstructure. The political angle does not need much explanation and was widely anticipated after the Uxbridge and South Ruislip by-election in July.

What needs more investigation is why the automotive and energy sectors should be up in arms at this development. Behind the greenwashing, neither has a principled commitment to the environment, any more than the oil and gas industry does. There is also the apparent paradox of champions of free market capitalism demanding state planning. The key thing to understand is that "policy stability", or  synonyms like "predictability" and "consistency" in this context, are really just a subset of what Michal Kalecki termed more generally "business confidence". While this may be localised in questions of state subsidy, infrastructure support or trade guarantees in specific sectors, across the economy as a whole it boils down to the promise that government will avoid deficit spending, which would lead to full employment and so push up labour costs (and potentially necessitate increased taxes on capital). As you may have noticed, both main parties are in agreement on the need to avoid deficit spending, and to make the labour market less tight, so you can take it that capital is fundamentally happy. 

The idea that carmakers who commit to all-electric by 2030 will lose market share in the following five years, and so have particular cause for complaint now, assumes that electric vehicles (EVs) will continue to cost more than internal combustion engine vehicles (ICEs) beyond the next seven years. This suggests a lack of confidence on the part of manufacturers that the price of EVs can be brought down to the same level as ICEs by 2030. Why the lack of confidence? Is it a fear of hitting techological limits in manufacturing? That hardly seems justified given the pace of recent advances, notably in battery technology, and the fact that unit costs will inevitably fall as production facilities are fully converted. Is it a fear that geopolitical uncertainty will raise EV costs disproportionately? That's credible short-term, given the way the price of key battery components like nickel has fluctuated due to the impact of the war in Ukraine on supply chains, but you'd expect prices to return to normal a decade out (they've pretty much already done so as supply has adjusted).

A simpler explanation is the expectation of larger profit margins for the automotive cartel as the real cost of cars rises. That's something that has to happen anyway. While some people envisage a one-for-one replacement of petrol and diesel cars with electric models, and car manufacturers (like tobacco companies before them) see growth in emerging markets, the reality is that the rate of car ownership has to go into historical decline in the West first and elsewhere thereafter, with more use of public transport, if we are to not only reduce CO2 emissions but particulate pollution as well. That rising cost of cars may be initially offset for consumers through higher state subsidies (as in Norway currently), or by higher Pigouvian taxes on petrol and diesel ahead of an outright ban on sales. Naturally, car manufacturers aren't going to come out and demand an increase in road tax or fuel duty now, though that is the logic of their commercial position. Apart from the political ructions it would cause, this would highlight the extent to which the market is dependent on the state's active management, rather than being the product of competition. 

As the postwar history of the UK shows, when the government offers economic policy stability, such as in the area of prices and incomes, business has a tendency to carp about the constraints on competition and "management's right to manage" that this entails. The Thatcher revolution was essentially the capitalist class accepting instability (aka "creative destruction") through the effects of monetarism on industrial policy. This caused many businesses to fold, but class solidarity held because it opened up new routes to profit elsewhere, notably through privatisation. The demands for policy stability today reflect the extent to which capital since the 1980s has become dependent on the neoliberal state not only to create the legal conditions for a market to function but to actively manage changes in the parameters of that market and to intervene in favour of certain businesses (to "pick winners" in the derided parlance of the 1970s). The secular trend over the last 150 years has been for the state to take an increasingly active role in the management of industry. "Revolutionary" eras like the 1980s should really be seen as the government forcing a reconfiguration of the economy rather than liberating industry from state control.

An example of picking winners was the subsidies provided to foreign car manufacturers like Nissan to base their European operations in the UK, a policy that continues down to today with government funding and guarantees for BMW to continue manufacturing Minis at Oxford. There is also the active role the government is playing in moves to delay the imposition of import tariffs on EVs between the UK and EU, where it is clearly pushing sectoral interests rather than national ones. This tight coupling of the state and industry obviously isn't novel, and the UK is in not an outlier in the way that it crafts policy to suit particular companies, but what is perhaps more unusual is the way in which the state has in recent years actively sought to shield car manufacturers from the consequences of government policy, for example over Brexit. The point is not the implicit admission that Brexit is economically damaging, but the explicit acceptance that the car industry cannot be expected to deal with changes in the commercial environment. The current kick-back against the government is about the loss or devaluation of guarantees and the exposure this entails to the market.

This extension beyond market-making to market-maintenance was made brutally obvious in 2008 with the bailout of the banks. This was excused as an exceptional act for a systemically critical sector, but the hurry to return the banks to private ownership was not delayed by the thought that perhaps being systemically critical meant they should remain in the public sector under democratic control. It should be obvious now that both car-making and energy are systemically critical in the circumstances of the need to reach net zero, just as energy, water and other utilities are systemically critical full-stop. It was also the case that the banks were "too big to fail", which highlights that when specific firms make up a large share of a critical sector they will always be able to rely on the state as the investor of last resort, much as was the case in the 1970s, though then predominantly through public ownership. But again, this appreciation of scale does not prompt the thought that these firms should be nationalised, at least not in Westminster and the City.

This week's theatre can be viewed superficially as the opening skirmish in the general election campaign, but perhaps a better reading is that it was a reminder to the car industry that their future hopes depend on the state's willingness to continue to underwrite their operations and to adjust the market to guarantee profits. We habitually imagine that the state is weak and can easily be held to ransom by certain industries, like banking and car-making, but that is a fiction. It's popularity in political discourse is because it is agreeable to both the libertarian right, who see the state as inherently weak and ineffective, and those on the left who imagine that capital is wholly separate from the state, which holds out the prospect that a socialist government could use the levers of power to adopt a more antagonistic attitude towards capital. The reality is that the state is powerful but also deeply intermeshed with industry. It is less of a handmaiden to capital and more of a pilot of a ship that sails in the interest of its capitalist owners. The ultimate stability it offers is not a firm hand on the wheel but a refusal to allow the deckhands access to the wheelhouse.

The Triple Lock and the Trilemma

The media's framing of the possible suspension of the pensions "triple lock" has been varied, ranging from the Guardian's claim that its a penny-pinching initiative of the Treasury to the Telegraph's claim that it would be a "stealth tax raid", which isn't a phrase you often hear them use in connection with a benefit cut. The uncertainty over motive and timing suggests kite-flying, not so much for the intention to suspend or alter the triple lock ahead of the general election, but to see if they can get away with a refusal during next year's campaign to commit to it, and it looks like there is a cross-party consensus on that which has led to an informal agreement. As Chris Mason of the BBC rather artlessly put it: "Neither the Conservatives nor Labour have committed to keeping the triple lock come the next general election. ... I suspect that if the Conservatives keep it, Labour will too. If the Tories tweak it, Labour may well follow suit." (Clearly the BBC has learnt little from Laura Kuenssberg's catastrophic stint as a stenographer).

In the postwar era, the UK relied on widespread and generous occupational pension schemes, typically with defined benefits, to top-up the relatively ungenerous state pension, though this inevitably meant that pensioner poverty, among those who lacked such secondary pensions, was often acute. The late-70s marked an inflexion point as the basic state pension started a steady decline relative to average wages.  The introduction of the triple lock has helped arrest that decline, but the basic state pension (BSP) remains historically low (scoring poorly in international comparisons) and is unlikely to significantly better the position as a percentage of national income it reached in 1980 (just under 5%) despite the future growth in the pensioner population. This is because the instinct of the state, which has been there since the original Old Age Pensions Act of 1908, is to minimise the cost, either through means-testing, increased employee contributions (the original 1908 pension was a non-contributory scheme), pushing back the state pension age (SPA), or by failing to upgrade payments in line with wages. The result is a state pension system that is complex and subject to significant variations in outcome, which leads to the demand for further complex adjustments that introduce new problems.

This desire to penny-pinch has been countered by a political impetus towards fairness. This was particularly notable in the way that the BSP was introduced as the successor to the 1908 provisions in 1948. The proposal outlined in the Beveridge Report had been for a flat-rate pension, sufficient to lift people above absolute poverty, funded by lifetime contributions. The problem was the expectation that people who had suffered during the depression of the 1930s and then contributed to the war effort would also enjoy the pension, despite not having made contributions during their working lives. The consequence was that the BSP was not a funded system (i.e. where you take out what you put in, allowing for investment growth and actuarial evening across the population) but was in effect a "pay-as-you-go" system in which current employee contributions funded current pensions. The problem this stored up was that as the pensioner population grew as a percentage of the total population, either pensions would have to decline relative to wages or contributions by current workers would have to rise, neither of which was politically palatable. In part, pushing back the state pension age has been a compromise to avoid this choice.

The solution arrived at by the late-70s was to let the value of pensions decline through inflation, by removing the earnings link, but to offset this by encouraging greater private provision among better-off workers (as part of the wider move to financial deregulation), offering higher pensions through increased supplemental contributions (e.g. SERPS and later the State Second Pension, aka S2P), and introducing additional means-tested benefits for poorer pensioners (e.g. Income Support, Pension Credit, the Winter Fuel Payment). The repeated tweaks to the system reflects the state's reluctance to properly grasp the nettle, a failing that has been there since 1948. In this context, the triple lock was another attempt to kick the can down the road while implicitly acknowledging that the demise of occupational pensions for all but a minority meant that the state would have to shoulder more of the burden in future. It's clear the majority of working people aren't going to make adequate provision through personal pensions (it turns out that time preference - that current goods have greater utility than future ones - really is a thing), those in precarious work cannot afford to make supplemental contributions, and the perma-austerity of our political consensus means that benefits will inevitably fail to plug the gaps.

While many attribute the triple lock to a purely political calculation - i.e. securing the votes of the over-60s - and others have seen the shift from defined benefits to defined contributions as pushing risk onto employees following the pension fund scandals of the 1980s, another way of thinking about it is as the transfer of an overhead on capital (employer contributions) to a combination of the taxpayer-funded state and the individual. The reason why capital was prepared to fund generous occupational schemes in the postwar era was not an altruistic desire to make up for the modest BSP but an imperative to attract and retain workers in a tight labour market. There is a parallel here with the US, where employers have long had to offer generous health insurance to secure workers of the right calibre. The introduction of the Affordable Care Act in 2010 is an example of transferring that burden from capital onto the individual and the state. In effect, the pensions triple lock, which was also introduced in 2010, was the British Obamacare - just less contentious.

But while the welfare balance between the state and capital has shifted over time, it's clear that there has also been a change in the balance betwen the state and individual. This is due to a combination of poor private pension performance and growing inequality, placing an ever greater burden on the state. In practice that means a greater burden on today's workers, not only because of the pay-as-you-go nature of National Insurance but because the tax regime continues to favour wealth over income. This gets to the nub of the matter. If we think about it, the UK actually does have a national pension fund - i.e. a quantum of wealth, invested in assets that have historically delivered above-average growth returns, that many people anticipate will fund their retirement. It's just not in the intangible form of an electronic ledger. It's in the concrete form of bricks and mortar - in other words, property. Equity release is simply the modern equivalent of buying an annuity. The political problem is that pooling this fund for the benefit of all pensioners, including those who never owned their own home, would be inflammatory.

As many people point out whenever the issue of "pension generosity" arises, particularly in its current guise of the triple lock, the main beneficiaries are always going to be today's young, not today's old. This is because they can look forward to a full post-working life on a level of pensions that has grown relative to average wages over time. Of course there are some assumptions in this, notably that the state pension age is not pushed out even further while average lifespans remain static or even decline, and that other top-up benefits aren't reduced or even abolished. But the biggest caveat is that the current and future cost of state pensions must be paid by current and future workers. In other words, the fact that today's young can currently look forward to better pensions in the future not only ignores time preference, it assumes that the future labour force will be sufficent in size, and sufficiently well-paid relative to national income, to service a potentially much larger pensioner population. That seems optimistic, to say the least.

The obvious solution is equity release, in the form of increased taxation on property (and wealth more generally) to transfer funds to pensioners and thereby redistribute from rich to poor. This would also allow the burden on current and future workers to be reduced. Many people have long argued for National Insurance to be combined with Income Tax, but this is simply another way of saying that we should drop the pretence of a contributory welfare system and fund all benefits, from unemployment and disability to pensions, from general taxation. Limiting our ambition to having income tax do more of the heavy lifting misses that it already does a lot because we have failed to properly tax wealth, and in particular property. The classic poverty relief trilemma is that removing poverty without disincentives at low cost is impossible: you can have two but not all three. In the context of pensions: a flat-rate, generous BSP would be costly, while means-testing would disincentive supplemental private provision. The result is the acceptance that poverty for some is necessary. This is obviously an ideologically-coloured view: the persistence into retirement of the utility of the reserve army of labour.

Shifting the cost of pensions from workers to property has the advantage that it isn't going to disincentivise property ownership, in the same way that taxing land is reliable because landowners aren't going to abandon it (and obviously can't offshore it). The original sin of pensions in the UK was the idea enshrined in the Beveridge Report of the contributory principle, a regressive turn when you consider that the original 1908 pension, however ungenerous, was a non-contributory right. This principle turned out to be a carefully-cultivated myth that obscured that pensions were still dependent on general taxation. The subsequent sin was the turn after 1979 towards a tax regime that privileged wealth over income and increased regressive consumption taxes (e.g. VAT). The triple lock is likely to be tweaked at the very least after the next general election, by whoever happens to be in government. The cross-party consensus is not simply that it is unaffordable in the long run but that any changes to the pension regime must maintain the principle of pay-as-you-go, because to ask who should pay other than current workers would be to open a whole new can of worms.

The Manufacture of Dissent

Martin Kettle in the Guardian thinks that "Ulez reveals a systemic problem with how UK government works – or rather, doesn’t". As the lede summarises his argument, "Most people want cleaner air and a better NHS, but partisan politics gets in the way. To bridge the gap, we need citizens’ assemblies." The reason why centrists advocate citizens' assemblies is the expectation that they will inevitably deliver centrist outcomes, but it should be obvious that they only do this where there is first of all a political commitment to reform and enough of a cross-party consensus to ensure legitimacy for the outcome (e.g. in the case of Ireland's abortion reforms). The idea that partisan politics stands in the way of a better NHS has surely been disproved by history. On the contrary, the problem has been a cross-party consensus (for all but a few years) that the service must be reformed through marketisation and the greater involvement of private healthcare companies. What stands in the way is not partisanship but the cartel, and for that reason there will never be a citizens' assembly on the NHS.

On the specific issue of cleaner air for Londoners, Kettle claims that "In principle, people support action, provided the measures seem sensible, appropriate and fair, and that adequate preparation is made for the transition. It is clear this did not happen over the extension of Ulez. The upshot is that measures that would and could have secured sustained public backing, as well as being of public benefit, have become needlessly contested and at risk of being derailed. That failure is the result of our political system." This is misleading both on the scheme's introduction and the claim that it has become "needlessly contested". The original ULEZ scheme was announced by the then Mayor of London, Boris Johnson, in 2015 and was set to cover the same area as the congestion charge zone in 2020. In the event, it was introduced earlier by the new Mayor, Sadiq Khan, in 2019. In 2021, the ULEZ area was extended to the North and South Circular roads. It was estimated that this would impact 140,000 vehicles. The further expansion to all 32 boroughs this year is expected to impact a further 40,000 vehicles. The plans have been widely publicised and remain popular across London as a whole.

To suggest that anything is "needlessly contested" is patronising, implying that there is a predefined agenda for politics. This is the same sort of thinking that imagines a citizens' assembly would produce common-sense consensus and mutual respect, rather than antagonism. If you put an angry outer borough van driver in the same room as an inner borough parent with an asthmatic child, you're not necessarily going to get consensus. One feature of genuine political contest, as opposed to polite disagreement, is the willingness to defy the law and it was predictable that on the issue of ULEZ the Tories should have suddenly become defiant. The party of law and order has always been happy to indulge law-breaking and disorder, while the rightwing press has frequently campaigned explicitly for both. This should not surprise us in the least, any more than the Labour Party's consistent commitment to both upholding the law and rejecting activism as unhelpful. That the current party leader is a former chief prosecutor is incidental though emblematic. But why has ULEZ become such a contested issue?

Phil Burton-Cartledge sees the protests in the context of petit bourgeois politics, employing the frame outlined by Dan Evans's book, A Nation of Shopkeepers: The Unstoppable Rise of the Petite-Bourgeoisie. "Looking at mobilisations of the petit bourgeoisie in the 21st century, there is a certain commonality to them. Whether it was the petrol protests in 2000 or the Countryside Alliance demonstrations a year later, the Fathers 4 Justice stunts, and latterly the cocktail of Covid conspiracism, 15 minute cities, and now ULEZ what they all have in common is the perception the state, or rather a busybody and overly managerial section of the state is getting in the way, professing to know better than them, and is stopping them from doing as they please." His purpose in this is to highlight the dangers that such political ressentiment may present an authoritarian and managerial Labour government, despite Keir Starmer showing every sign that he instinctively sympathises with petit bourgeois politics as much as he respects the dignity of the state.

But there are a couple of problems in this analysis relating to scale and persistence. The Fathers for Justice stunts will never enjoy widespread support, but their specificity also means they will continue at the margins of society: there is an endless supply of divorced dads who imagine the state is a misandrist conspiracy. In contrast, the Countryside Alliance is a substantial organisation, though it's pretty obvious that the bulk of its support comes from field sport enthusiasts rather than smallholders and agricultural workers. It isn't a reactionary spasm by the petit bourgeosie that will burn itself out but an astroturf organisation for large landowners and second-homers that will likely persist long into the future. The same cannot be said for Covid conspiracism, which has already ceded priority among the far-right to anti-drag queen protests. Likewise, the 15-minute city demonstrations appear to have petered out already, while the anti-ULEZ protests haven't mustered more than a few score attendees so far (of course, this may change, particularly if the 15-minute crowd shifts attention). 

The question is, how do such isolated and marginal protests take on the appearance of mass movements, if only temporarily? The answer is media coverage. Consider this from the Telegraph: "Protesters descended on Whitehall on Tuesday to demand that the expansion of Sadiq Khan’s ultra-low emission zone (Ulez) be scrapped. Dozens of campaigners waved placards with messages such as “stop the toxic air lie”, and mocked-up car registration plates reading: “get Khan out”." (my emphasis). One reason why the Countryside Alliance has prospered over the years is that it has enjoyed disproportionate and sympathetic support from newspapers such as the Times and Telegraph. One reason why ULEZ has become a political issue is that those same papers have shifted from supporting what was originally a Conservative Party policy, encouraged by Grant Shapps as Secretary of State for Transport as recently as 2020, to outright opposition. 

The reason for that shift was the presumed political utility of ULEZ as a wedge issue in the Uxbridge and South Ruislip by-election in July. That Labour's vote increased and the Tories' fell, making a seat previously considered safe enough for a sitting Prime Minister into a tight marginal, was taken not as evidence that the electorate increasingly favours cleaner air but that Sadiq Khan had somehow managed to lose Labour a shoo-in. This was a framing shared both by the jubilant Tory press and by the Labour leadership, and it was notable that both promptly extended the critique beyond ULEZ to green policies more generally. While Labour remains officially committed to Net Zero and cleaning up the environment, it has made it clear that this will not trump its commitment to economic growth, and I suspect that it considers indulging sole traders with polluting vans to be a contribution to the latter.

The Tories can be accused of reckless opportunism in deciding that "green crap" is the dividing line on which to fight the next election, not least because they will inevitably be drawn towards starker opposition in order to accentuate the differences between themselves and Labour. They haven't got much else to offer. With Rishi Sunak's attempts to rebrand the party as competent managers of the economy going slowly nowhere, and with Labour having successfully closed off most avenues of attack by reneging on their promises and insisting that they would stick to Tory spending plans, it was always likely that the coming general election would focus on the cost-of-living when not distracted by penises and censorious students. The question of who should bear the cost of the Net Zero transition is actually quite a cunning one because Labour simply will not admit that the cost should be borne immediately by the state but funded over time by increased taxes on wealth.

Both Martin Kettle and Phil Burton-Cartledge see the anti-ULEZ protests as an organic product of popular dissent, the one the regrettable result of the failure of partisan politics to provide leadership, the other an expression of social anxiety by an innately hysterical class. But I think both are wrong. In the normal course of events, the expansion to the outer boroughs would have produced grumbling, limited compromise and a few upsets in local council ward elections. What has turned it into a cause célèbre is the salience decreed by the media, which predominantly means the Tory newspapers, and while that is partly about helpfully crafting a wedge for the Conservative Party, it is also about protecting what they consider to be their own interests, or more accurately the interests of their owners and their owners' class. It was always likely that capital would drag its heels even once the imperative of climate change became indisputable, and it was equally likely that this would eventually take the form of popular resistance to an overweening state. And if that resistance doesn't naturally arise, it will be cultivated.