Camerons five-year legacy: has he finished what Thatcher started?

On 12 May 2010, in the sunlit rose garden of No 10, David Cameron and Nick

Clegg announced the creation of Britains new coalition government. In a flawlessly stage-managed performance, Cameron proclaimed the birth of a

new politics. His coalition government would, he said, be underpinned by the principles of freedom, fairness and responsibility.

This cosy launch, it turned out, was a bluff. Under Camerons leadership the country has become harder and meaner, more divided by class and region.

Readers of thinktank reports and those acute enough to hear the behind-the-

hand remarks, knew what to expect. But Cameron is dextrous, emotionally

intelligent, like Tony Blair. In the runup to the 2010 election, he sprinkled

speeches and photo-opportunities with new flavourings green trees, social enterprise, the big society, free schools, hug-a-hoodie, vote-blue-go-green, the-NHS-is-safe-with-me. Such posturing irritated Conservative backbenchers,

some of whom disliked his metrosexual manner and support for gay marriage.

But Camerons style was no handicap: that easy, upper-class air dispelled any suggestion he was driven by zealotry.

The coalition agreement that was hashed out in the days before the rose

garden show was a strange magna carta. It promised a national tree-planting

campaign, honesty in food labelling and a pledge to encourage live music.

These turned out to be distractions only the thundering final clause

mattered: Deficit reduction takes precedence over any of the other measures

in this agreement. From then on, the Liberal Democrats were a sideshow,

passively approving the most brutish cuts and offering negligible contributions

of their own.

Cameron seized the 2010 crisis to realise his ideological ends. By

exaggerating the parlous state of national finances, he was able to pursue his

longstanding ambition to diminish the public realm. Margaret Thatcher

privatised state-run industries; Camerons ambition was no less than to

abolish the postwar welfare state itself. The Office of Budget

Responsibility recently announced Camerons victory by 2018, it

forecast, we would have a state the size it was in the 1930s.

This was a coup, though Cameron, unlike Thatcher, would never triumphantly

produce from his pocket a crumpled copy of a pamphlet by the rightwing

economist Friedrich Hayek; the swivel-eyed stuff was left to backroom guru

Oliver Letwin, former special adviser to Keith Joseph, the man who said

Conservatives should no longer conserve but instead demolish all that stopped

the flowering of individualism. Cameron was guided by the groupthink of his

generation of young Tories, inspired by the Thatcher posters on their college

walls. From Tory central office, where he worked for two years before his

heroines fall in 1990, he breathed in the accepted wisdom that the state is an

impediment, the market solves all ills and individualism trumps collective

endeavour. Frankly, I dont like any taxes, Cameron told the Federation of

Small Business a year ago.

Despite failing to win the election, the Tories proceeded to savage welfare,

destabilise the NHS, decouple schools from collective control and replace

public service provision with markets and contracts. These developments were

foreseeable, but even Camerons fiercest critics might not have expected that

during its five years in office, the government would go on to jeopardise the

unity of the UK itself and threaten Britains standing in the world.

Juvenile irresponsibility

In his book Capital, Thomas Piketty observed that in advanced economies

wealth has become so concentrated among the few that most people are

virtually unaware of its existence. Great wealth is secret, and its hold on power

even more so. Who knows what goes on over country suppers in the Cotswolds,

where the prime ministers neighbours include Rebekah Wade and Rupert

Murdochs daughter Elisabeth, with Mark Carneys sister-in-law and lobbying

magnate Lord Chadlington next door? Yet people have inklings. Cameron

provokes nothing like the visceral response that Thatcher did, but he has not

erased peoples resentment of privilege. Todays opinion polls reflect a

scratchy sense of unfairness. George Osbornes mantra, first chanted at the

2012 party conference, all in it together raises a hollow laugh.

The story of the Cameron era had unexpected twists. Members of the

Bullingdon Club are bred to rule, so it was surprising they turned out to be so

inept in the basic arts of government. Time and time again they stumbled into

self-made disarray, from the attempt to sell publicly-owned woodland to the

proposal, later scrapped, to increase the speed limit to 80mph.

Cameron shares more than Eton with Boris Johnson; they have both exhibited

a kind of juvenile irresponsibility in power. Cameron appointed as

environment secretary Owen Patterson, a climate-change sceptic, the man

who blamed the badgers for moving the goal posts when too few of them

submitted to being shot by Tory farmers. Despite the desperate need for new

homes, his first housing minister, Grant Shapps, tried to block plans for a

housing estate on the airfield where he kept his Piper Saratoga plane.

Cameron has been equally frivolous about the EU, casually offering an in-out

referendum, although he knows his own conditions for reform could never

be met.

Perhaps its naive to call Camerons set irresponsible with power; they acted

with premeditated intent. The administrative disarray the Tories caused in

one department after another had a purpose. In our vocabulary chaotic is a

good thing, Nick Boles, who went on to become planning minister, told the

Institute for Government in 2010. What we are doing to the public sector is

creative destruction, said Cabinet Office minister Francis Maude. Too large a

public sector crowded out enterprise, said Osborne. Over the four years from

May 2010, public sector employment fell from 21.6% of the UK workforce to

17.6% to less than one job in every five, a lower figure than for the past four

decades.

Good fortune aided the Tories. In 2008 GDP contracted; by May 2010 growth

had returned, but Osbornes passion for deficit reduction held back recovery.

The argument in 2010 was not about the principle of getting public finances in

order: it was about the timetable and at whose expense. A cabal of bankers,

economic commentators and corporate influencers demanded that net public

debt as a proportion of GDP be lowered to 30%, the lowest ratio for 300 years.

The figure was plucked out of US neoliberal texts. Empirical evidence does not

suggest that there is a set point at which national debt has a detrimental

impact on growth; economies with higher average debt-to-GDP ratios have

not lost out on long-term growth.

However baseless Camerons economic assumptions, nothing seemed to dent

the assertiveness of the deficit hawks. Austerity, they argued, was unavoidable.

Unsurprisingly, the poor suffered the most. In opposition, Cameron had said

inequality mattered and there was no trickle down to the poor from the rich.

In office, the Institute for Fiscal Studies confirms that money has been sucked

upwards out of the pockets of the poor to cushion middle and upper-middle

earners.

Child poverty has started to rise, ending the downward trend established

before 2010. This was inevitable once Osborne decreed that four-fifths of

deficit reduction would come from spending and welfare cuts but only one

fifth from tax increases. The government, like its predecessor, turned a blind

eye to billions owed in tax. Unpaid debts for tax and fines in March 2013 were

22bn. The Treasury estimates that the tax gap the difference between

what companies and individuals pay in tax and what they actually owe is

35bn per year. The National Audit Office (NAO) adds in another 50bn for

criminal and fraudulent transactions a total loss to the exchequer of nearly

100bn a year. What was done about it? Revenue and customs staff were cut.

Farewell welfare

In his bid to rip apart the social security safety net that has been in place since

1945, Cameron found the ideal lieutenant in Iain Duncan Smith.

Administratively incompetent, vainly overambitious, barely comprehending

his own departments numbers, Duncan Smith was kept in place as secretary

of state for work and pensions because he could say without blenching that the

poor were skivers and scroungers who were overbreeding.

Remedies came in the form of the intrusive medical tests, the Work

Programme, abolition of the emergency social fund and frozen benefits. We

met a junior jobcentre manager, who wished to remain anonymous, in a

railway hotel in a Midlands town. Sanctions are applied for anything at all,

just to hit the targets. Officially the government denied having targets to

reduce claimant numbers. Many dont know whats happened until their

benefit suddenly stops. Many can hardly read. Its very easy to hand someone

two sheets of A4 and get them to agree to 50 steps towards work but they

dont know what a step is, so theyre sanctioned; their claim is shut down and

they disappear from the figures.

In an interview with the Sunday Times in 2012, Duncan Smith said he was

warning benefit claimants that: This is not an easy life any more, chum. I

think youre a slacker. His comments conjured up a huge pool of lifelong

idlers, but in 2012, of the 1.5 million people claiming jobseekers allowance,

barely 0.3% had been claiming for five years or more.

Another of Duncan Smiths major reforms failed on its own terms. The

bedroom tax was supposed to encourage social sector tenants who had spare

rooms to move into smaller properties by removing the spare room subsidy.

It sounded reasonable in theory, but accounts of resulting hardship soon

tumbled out the family charged for a spare room after a child died, the

mother charged when two army sons were sent to Afghanistan. And, thanks to

Britains housing crisis, there were few smaller properties to move to. Of

the 522,000 people penalised for having a spare bedroom, only 4.5% moved

out in the first year. Two-thirds of those affected were disabled, 220,000 had

children, all of them low-earners hard hit by an average extra 720 to pay per

year. The reform was instantly unpopular and saved no money, as evicted

people paid higher private rents, which ended up costing taxpayers more in

housing benefits.

Its just possible Duncan Smith never understood what he was doing. Never

underestimate Tory ministers ignorance of welfare and the lives of poorer

people. In 2013, Lord Freud, the employment minister, sniffed at an almost

infinite demand for a free good, apparently unaware that use of food banks is

carefully rationed by vouchers from councils and his own jobcentres. Duncan

Smith sneered that the Christian-inspired Trussell Trust was politically

motivated, as if its food banks handed out tins of baked beans to shame the

government.

Liberal Democrats chose not to understand either. Nick Clegg voted for the

hugely symbolic cut in the top of rate of income tax from 50 to 45% a gift to

the rich in exchange for cutting the personal allowance. No one earning

under 10,000 would pay income tax, which sounded good for the low-paid.

But the cost was high: the 10.7bn in lost revenue could have eased both the

deficit and public services. Worse, for low earners, most of the income tax gain

would be clawed back in tax credit deductions under Duncan Smiths universal

credit.

But, according to the rightwing narrative, social security was spiralling out of

control. Its true that the budget for the Department of Work and Pensions

(DWP) constitutes 23% of public spending. But half of that budget goes to

pensioners, a group the Tories protected for electoral purposes. Only 1 out of

every 33 spent on benefits goes to the unemployed. The governments own

policies sent DWP costs soaring. More hardworking families qualified for tax

credits because with jobs increasingly low-paid and part-time, they needed the

state top-up to survive. Meanwhile the number of people in work who also

draw housing benefit is set to double between 2010 and 2018, as rents rise.

More than 1 in every 7 from the social security bill now goes to private

landlords.

Dismantling the NHS

Nowhere was the dogma and disarray of Camerons style of government more

evident than in his reorganisation of the NHS. Nowhere was pre-election

subterfuge more apparent: ex-Tory minister Michael Portillo later said

simply:They did not believe they could win if they told you what they were

going to do. They pledged not to cut the NHS cash budget, but ignored

inflation, an increase in births, rising numbers of over-80s and how cuts in

council social care sent more of them to hospital.

The disaster of the 2012 Health and Social Care Act presided over by the

then health secretary Andrew Lansley stemmed directly from unpublicised

pre-election commitments to break the NHS up and introduce market

competition, as a step towards realising the Thatcher-era dream of an

insurance-based system where healthcare would be provided by profit-making

companies. Promises had been made to lobbyists and private contractors,

some of them Tory donors. During the late 1980s Lansley had employed a

young Cameron in Tory central office as he worked on gas and electricity

privatisation. Now, just as Thatcher had liberated nationalised industries,

Lansley was going to slaughter the most sacred cow of Attlee-era social

democracy.

Lansley was a fantasist. He promised patients, no decision about me without

me, but gave patients no say in running his local commissioning apparatus.

Besides, how could they choose the NHS if Virgin, Circle or Serco was running

a service? Liberating the NHS, the title of the 2010 white paper, turned out

to give the central healthcare regulator, Monitor, a remit to enforce

commercial competition. The chairmanship of Monitor was taken by a former

Tory health minister. At the head of the Care Quality Commission arrived

another Tory, former MP David Prior. Sir Malcolm Grant, who in 2011 was

appointed chair of NHS England, said he didnt use the NHS himself.

Governments commit sins of omission as well as commission. Under Cameron

another five years have passed in which the increasing numbers of older

people needing care at home have been neglected, with dementia cases set to

double over the next two decades. In this underfunded sector, staff earn little

yet care for those with the most complex disabilities and frailties. We talked to

the owner of a care home outside Bromsgrove in Worcestershire. Dryly, he

noted that you pay 73 a night at the local Premier Inn, around 4 a night less

than for his very frail residents who need round the clock care. This cant last,

yet councils are braced for greater cuts to come.

Goves puerile contempt

When Michael Gove became education secretary in 2010, he began by

renaming his department. It would no longer be the Department for Children,

Schools and Families, it would simply be the Department for Education, as if

schooling could be separated from family background. In an entirely

predictable error (which Clegg also made), Gove talked of social mobility as if

it could be injected into poorer children at school, ignoring all the evidence

that shows life chances are largely determined by background and household

income. To aid education, schools need to pay attention to social care but,

under Gove, programmes for nutrition and special needs were abandoned.

The reactionary strain in Gove was unmistakeable. He was largely

uninterested in what schools did for the less able. He attacked what he called

the careers lobby, whose offence seemed to lie in trying to ease young people

into the world of work. He insisted that the teachers craft is best learned on

the job so the number of unqualified teachers grew. An end to council

planning led to a shortage of primary school places in many areas.

Goves dash to create academies and free schools was in tune with the

governments ideology: remove the state and everything would spontaneously

arrange itself for the best. But the Department for Educations own research

suggested that left to themselves academies and free schools didnt necessarily

bear out these ideas. Nor were they accountable to anyone many now

operated by mysterious chains of sponsors, which Gove forbade Ofsted from

inspecting. Free schools careered along like driverless cars on unmarked roads,

and a few duly crashed as their unsupervised management plunged into

special measures or closure.

Gove, a former journalist, delighted his ex-colleagues in the Murdoch press

and the Daily Mail with his chortling description of school inspectors, civil

servants and teachers as the Blob. He treated the entire profession with

puerile contempt. Eventually, his abrasive style did for him and he, like

Lansley, was defenestrated.

Privatised Britain

In 2010 a government with half an eye on the future could have followed

Labours plan to speed the economic recovery by replacing Britains ageing

infrastructure. Even the International Monetary Funds austerity rules allow

capital borrowing against the creation of productive assets. Cameron

vacillated. An infrastructure plan took years to appear and its 500 schemes

claiming to be worth 500bn were a scratch list of projects under way or far

ahead. Ministers talked of mobilising friends in the private sector or pension

funds to invest: they didnt.

The governments dogmatism didnt make it coherent. Tory localism was

trumpeted as a way of slimming the central state and empowering

communities. Local government secretary Eric Pickles instructed councils to

empty refuse bins weekly while banning them from raising council tax. At the

same time he cut their budgets by a third in real terms over five years; the

revenue gap facing Tory Surrey as well as Labour Newcastle-upon-Tyne and

scores of other authorities is profound. The home secretary, Theresa May, had

promised to end centralisation, targets and ring fences for the police, but then

sought to centralise the purchase of equipment even constables shirts and

shields. On her watch a mighty constitutional change occurred in the 2011

Police Reform and Social Responsibility Act, which upset a 180-year-old

precedent by putting the police in England and Wales under the direct

supervision of politicians. But the introduction of elected police and crime

commissioners failed to spark any interest as only 15% of electors bothered to

vote for them in 2012.

In government you need officials. Downing Street said Whitehall was

overstocked with overpaid officials and cut them back. But a philosophical

problem for the Tories has been that whoever owns the infrastructure, the

state still needs to regulate and plan to ensure that the lights dont go out,

that goods can move around, that climate change is managed. That requires

officials with imagination and expertise. Even granting contracts to the private

sector requires skill and experience, as the transport secretary found to his

cost when he left under-strappers to negotiate the lucrative contract for the

West Coast train line. They were reduced to mincemeat by Richard Bransons

highly-paid barristers.

Tories did believe in parts of the state. Civil servants disappeared from the No

10 policy unit to be replaced by paid Tory advisers. The number of special

advisers to ministers went up from 85 to 98, defying a coalition agreement

pledge. When Cameron appointed as his political strategist Lynton Crosby, a

professional lobbyist for the tobacco industry, no one was surprised plain

packaging was swept off the agenda, only now to return, coincidentally just

before the general election. Adam Smith, special adviser at the culture and

media department, was caught collaborating in NewsCorps bid to take over

BSkyB; he loyally took the fall for his minister, Jeremy Hunt, who was on the

verge of gifting all to Murdoch before the Guardians hacking exposure.

Conservative governments have always sought to protect the wealthy, and over

the past five years the influence of the rich has if anything increased. In May

2013, the Tory party took over the Hurlingham Club in Fulham and, among

other trophies, auctioned off the chance to play tennis against Cameron and

Boris Johnson. The guest list, published in the Guardian, displayed the extent

to which Westminster has become government by the rich, for the rich. And

not just our rich but the global super-rich, including Russian and Middle

Eastern oligarchs. In parallel, Tory eagerness to avoid state investment has led

them to invite the Chinese to take over a significant proportion of the

electricity supply, along with the sewers under London streets. So national

security is compromised and an anti-state Tory government transfers vital

energy and transport infrastructure into the effective ownership of foreign

states. No wonder former patriotic and working-class Tories transfer their

allegiance to Ukip.

Broken Britain

Toryism is now in deep intellectual disarray. What is the party for, beyond

cosseting corporate interests, the much-praised wealth-creators? Shrinking

the state is a reflex, not a vision. Business goes on demanding public

investment and rightly so. Businesses, like everyone in Britain, depend on

the state to maintain the roads, promote the health and education of a useful

workforce, manage the police who provide security, and ensure the quality of

air they breathe and the water they drink. The desirability of Britain as a place

to live, work and invest all depends on the strength of the state.

At a deeper level, what kind of nation do Tories now believe in, at home or

abroad? They profess faith in markets but not in the UKs biggest market,

the European Union. If by design or bungling, they were to succeed in what so

many of them ardently desire and secure UK withdrawal, that would

precipitate Scotlands departure, dismembering the UK and making England

very little indeed. As with the related question of migration, Cameron is

incoherent, simultaneously for fortress and freedom. His foreign policy has

been a kind of armed voyeurism, more worried about Russian money than

incursions into Sevastopol. The RAFs air-sea rescue service has been

privatised and the UK has no aircraft to patrol its maritime borders. We

found it difficult to divine any strategic vision, said MPs on the Commons

defence committee, several times.

Cameron bequeaths a country that is fractious and anxious. He has proved to

be the great separatist. Once his party were unionists, now Wales never

escapes prime ministerial mention without a sneer; under him Scotland came

close to dissolving the United Kingdom. Us and them has been his governing

style. His macroeconomic policy failed; national debt has kept rising;

productivity and investment levels are as dismal as the trade balance.

Unpicking the values of the welfare state has meant undermining the idea that

people should care for others beyond their own. The big society is hardly

spoken of these days.

As recovery takes hold, the indices of inequality resume their upward flight:

the top 1% has flourished in the great recession. Social mobility depends on

opening up the closed spaces of elite Britain but they remain, as they were,

stuffed with ex-public schoolboys. Social policy has ossified, no longer attuned

to families with young children. The government has shrunk or shut Sure Start

childrens centres, abandoning a great evidence-based experiment in

improving the life chances of disadvantaged families.

Before Margaret Thatchers era, the Tories had a penchant for muddling

through, avoiding confrontations and sharp edges; they were conservators, not

wreckers. Cameron has gone much further than Thatcher dared. The survival

of the United Kingdom itself is in doubt and its an open question who the

British now are. An election result leaving the Tories at the helm would see

more destruction, financial, social and moral. What they offer as a vision of

who we are, what we value and where we belong in the world is small and

mean.