Guy Rundle examines the Cameron government’s latest UK budget and finds it comes up sorely lacking.
Few pennies off a pint, a cut in the fuel levy … why does David Cameron’s latest budget sound so familiar? Ah yes, because behind the shoulder of hapless chancellor George Osborne falls the shadow of … Lynton Crosby, Oz fixer extraordinaire, who now has godlike status among UK Tories. Crosby appears to be well-liked by the Right of the party, loathed by the “Cameroons”/Notting Hillbillies at the centre, but tolerated by them for pinch-hitting.
Last year’s Osborne budget was dubbed the “omnishambles” — a Thick Of It term, further indication that the show has more or less supplanted actual politics in both the UK and Oz — with a series of U-turns and a huge confusion as to whether caravans would be taxed or not. It’s a measure of the gentlemanly amateurishness of British politics that slinging a few pennies by way of the price of beer, and heating the house, is seen as a mark of transcendent political genius.
This budget is in some ways worse, since last year’s budget was predicated on the idea that recovery would have taken off by now, and the deficit would have come in a little from increased tax gathering. It hasn’t, and the recovery curve has now been so elongated that it does not come above the 2010 point — that of the last election — until 2017. So the Cameron government will be going to the electorate with an economy in worse shape than it was when Gordon Brown — GORDON BROWN — was PM, and still trying to blame it on him. By the time this putative recovery does occur, the country will have been in stagnation for a decade.
By now you can start to notice it, really notice it. The UK has been fraying at the edges for 40 years now, outer areas such as Wales and small northern cities going first, then coastal towns of the south-east, and now it is creeping up the train lines into the heart of big cities. I always wondered what the ’70s looked like, and now I know. The areas that are dynamic soar ever higher, while a kilometre down the road, the high street is half-boarded up.
The shift from full-time to part-time work is massive, but the most noticeable thing is the debt. Everyone in the UK is trading on day-to-day debt, either because they can’t support a middle-class lifestyle on tightening salaries or because they can’t live at all on benefits and part-wages. Payday lending is the growth industry in the UK, and the friendly ads, with the small print subscript (APR: 4700%), fill the TV.
By now, a sort of resignation appears to have set in among the Tories. There appears to be no decisive striking out in one direction or another. They will not apply a genuine austerity budget, one that would cut the deficit back to zero in three years or so, yet nor will they genuinely reinflate the economy by acknowledging that austerity has failed and is worsening the situation by shrinking their tax base. They now have to borrow 250 billion pounds more than they had thought to service the accumulated debt.
Yet the one scheme for refiring demand — a “help-to-buy” scheme, offering low-cost mortgages to encourage home ownership — is widely seen as the worst possible response, since it does nothing about supply or the form of housing being built. Without a guarantee that developers will open up the millions of hectares of land they’re sitting on, help-to-buy will simply feed a house price bubble.
Over in the distance, the Cyprus collapse suddenly reminded people the eurozone remains in crisis, and the currency may fold. But what seems dominant in the mood of the UK is a new realisation, or at least supposition, that it might be like this for ever — that the West has had its last surge. Post-Cold War prosperity was built largely on credit extended into the far future, dependent on growth that could not be assumed. That growth has failed to appear at the same time as it did so spectacularly in China and elsewhere.
The axis has tilted, and there is no mechanism by which to get it back. Or so it appears to many. The entire budget sessions had a zombie quality to it. The Tories are shattered, but Labour doesn’t believe its own “borrow to repay” strategy either. The protest movements of 2010-11 have all but flickered and died. Whatever sort of politics emerges from this will be, like today’s Big Bang photo, the energy that emerges from nothingness. Still, beer’s down.