This article was originally published in Renewal.
The government response to the coronavirus crisis involves an unprecedented level of intervention in the peacetime British economy. But the rhetorical and ideological underpinnings of these new policies reveal that little has really changed in Conservative thinking.
On 17 March, Rishi Sunak told Parliament that the ‘national effort’ against Covid-19 would be ‘underpinned by government interventions in the economy on a scale unimaginable only a few weeks ago’. He went on: ‘this is not a time for ideology and orthodoxy’.1 Under May and more so under Johnson, the Tories have attempted to reinvent themselves as the party of workers, or even the working class, as the party for industry and regional ‘levelling up’. But old economic orthodoxies still underpin Tory decisions.
In subsequent weeks and months, the government has indeed made unprecedented interventions in the economy: government-backed loans to businesses, the Coronavirus Jobs Retention Scheme, small increases to Universal Credit (UC), deferring tax, supporting the incomes of self-employed people, and so on. But examining Sunak’s rhetorical justifications for this set of interventions demonstrates the underlying structure of his beliefs about the economy, and here, in fact, not much has changed. On 17 March he talked about supporting ‘jobs’, ‘incomes’ and ‘businesses’.2 On 20 March he said, ‘I have a responsibility to make sure we protect, as far as possible, people’s jobs and incomes’.3 And on 27 April he clarified that the ‘goal’ was to provide a ‘bridge’ over ‘a sharp and significant crisis’, by ‘keeping as many people as possible in their existing jobs; supporting viable businesses to stay afloat and protecting the incomes of the most vulnerable’. Sunak spelled out the fundamental goal of all this: ‘to maintain the productive capacity of the British economy’.4
In talk about supporting ‘viable businesses’ we see the persistence of longstanding Conservative framings of the economy as a competitive arena in which the weak must fail in order to promote productivity gains and innovation. Sunak admits not all businesses will make it, but implies this is unavoidable: survival of the fittest.
But how does the government justify paying one group of people up to £2,500 a month while they are not working, while another group gets £342.74 a month (the rate, after 6 April, for single UC claimants aged under 25)? One idea underlying this, of course, is the deep-rooted division between the ‘deserving’ and ‘undeserving’ poor. These categories have long been leveraged by Tories to stigmatise people who rely on benefits. But as the claimant base for UC drastically expands – 950,000 people applied successfully between 16 and 31 March – this rhetorical strategy becomes more difficult to pull off.
Sunak’s justification for the furlough scheme is that it is necessary, not so much to protect any single individual’s right to keep their job, but, rather, to protect the economy as a whole. ‘The economy’ is bigger than all of us, and we all need it to be strong. It must be protected from huge, paralysing dislocations. Labour markets are extremely – risibly – far from the perfectly-clearing market ideal constructed in economics textbooks. Huge spikes in unemployment leave deep scars. In early May, HMRC released figures showing that nearly a quarter of employees had been furloughed. The interconnected nature of the economy means it must be protected from the severe shock of so many jobs suddenly evaporating. Hence jobs and ‘viable’ businesses are to be protected, in the service of ‘the productive capacity of the British economy’.
The Conservatives have to ignore the failings of our current economy in order to be able to argue that preserving it (or putting it on ice to reanimate it later) is the sensible thing to do. Their strategy is premised on this unspoken, foundational assumption: that things were working before. But this is patently untrue. Even on the favoured measure of orthodox economists – GDP growth – the UK economy has been performing sluggishly for years. Wages growth at the bottom of the income distribution has been practically non-existent. Work is less and less likely to provide a route out of poverty, and with inequality at extremely high levels, it is unsurprising that on other measures, like health and happiness, we also perform poorly.5
As Felix Römer’s research, published in this issue, demonstrates, the Conservative Party’s assertion that the work of the ‘wealth creators’ was creating ‘trickle-down’ benefits for everyone in the 1980s was based on faulty statistics. But by the time this ‘statistical error’ was brought to light in the 1990s, it was too late. The discourse of ‘wealth creators’ and ‘free markets’ remains alive today, and these conceptual frameworks are all the more powerful because they are often not explicitly stated. They provide the grammar in which the Conservative Party speaks. Sunak may argue (he may even believe) that the time of ideology is over, but that is simply not true.
Some on the right who want to challenge, if not end, the lockdown have argued that possible deaths from Covid-19 must be weighed against possible deaths resulting from the lockdown, because economic downturns drive early deaths (‘poverty also costs lives, by shortening them’, said Steve Baker on BBC Radio 4’s The World at One on 4 May). The danger of making this argument, for Tories, is of course that other choices made by the Conservatives over the past decade have clearly led to many deaths that could have been avoided.6
The Conservatives are holding tight to the line that state intervention in the economy is a pragmatic necessity in this rare moment of crisis (‘this is not a time for ideology’). The implication is that the government mostly stays out of the economy. Some early studies of neoliberal political economy associated it with the ‘free market’. More recent studies have almost all emphasised that what’s distinctive about neoliberal governments is that they are activists and interventionists to create and police markets. In fact, there are almost no markets that come close to that ideal (or fantasy) of freedom. Sunak’s framing obscures this.
Conservative politics today is not the politics of ‘There is No Alternative’, but the politics of ‘There are Only Two Alternatives’ – lockdown, or return to the ‘old normal’. Labour needs to not only engage in constructive criticism of the govern- ment’s rescue packages; we also need to make the argument that other ways forward are possible.
There’s huge historical debate over whether at the end of the Second World War ‘the people’ wanted a radical turn to social democracy, or were just unimpressed with the Conservatives’ record in the 1930s and lacklustre plans for peacetime reconstruction. This misses the point though. Times of crisis create huge demand for change, and simultaneously, profound desires to return to ‘normal’. Surveys of women workers in the Second World War often found that women thought with longing of a time when they could return to housewifery and motherhood, but after the war, within just a few years, the participation rate for married women started to climb. It’s possible to yearn for a return to something familiar even as we recognise that the old, familiar set-up was profoundly inadequate. It is political leadership that shapes these conflicting longings and gives form to vague hopes that a different social and economic settlement is possible.
Florence Sutcliffe-Braithwaite is a lecturer in twentieth-century British history at UCL and a co-editor of Renewal.
1 Rishi Sunak, 17 March 2020: https://www.gov.uk/government/speeches/chancellor- of-the-exchequer-rishi-sunak-on-covid19-response.
3 Rishi Sunak, 20 March 2020: https://www.gov.uk/government/speeches/the- chancellor-rishi-sunak-provides-an-updated-statement-on-coronavirus.
4 Rishi Sunak, 27 April 2020: https://www.gov.uk/government/speeches/chancellors- statement-to-parliament.
5 Richard Wilkinson and Kate Pickett, The Spirit Level: Why equality is better for everyone, Allen Lane 2009.
6 For one estimate, see: Johnathan Watkins, Wahyu Wulaningsih, Charlie Da Zhou, Dominic C. Marshall, Guia D. C. Sylianteng, Phyllis G. Dela Rosa, Viveka A. Miguel, Rosalind Raine, Lawrence P. King, Mahiben Maruthappu, ‘Effects of health and social care spending constraints on mortality in England: A time trend analysis’, BMJ Open, Vol 7 No 11 2017. The NAO has linked at least 69 suicides to the UC system: Patrick Butler, ‘At least 69 suicides linked to DWP’s handling of benefit claims’, Guardian, 7 February 2020.