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Editorial: Tory tax tiffs have roots in strategic differences on managing capitalism in crisis

SKIRMISHES within the Conservative Party over potential tax rises point to divisions in how to navigate an ongoing crisis of political legitimacy engulfing Western states.

Tory boys schooled in the pieties of Thatcherism — cut taxes, cut spending, shrink the state and trust the market — aim to signal to Boris Johnson’s government what they will and will not tolerate from a Budget. 

They revive policy disagreements that, before coronavirus swept through British politics like a hurricane, saw Sajid Javid resign as chancellor and before the last election informed Johnson’s decision to make an example of leading pro-Remain Tories by booting them out of the parliamentary party.

At root they emerge from the increasing difficulty politicians have in winning public endorsement for neoliberal globalisation. 

The process lost its shine in the bankers’ crash of 2008, even if the political reaction, at first confined to street movements such as Occupy, took some years to derail “business as usual” in the corridors of power. 

The global economy has not become more stable since 2008. The intensifying trade war between the world’s two biggest economies, the US and China, is one indication that we are in a period of deepening crisis. But other factors undermine the legitimacy of modern capitalism. 

These include concern at widening inequality, horror over the environmental impact of our current socio-economic model and alarm over our increasing powerlessness as decision-making is outsourced by governments to banks and quangos or subordinated to the requirements of transnational treaties or organisations designed to serve markets rather than citizens.

They have given birth to phenomena as diverse as Donald Trump in the US, Italy’s Five Star Movement, France’s Yellow Vest uprising and in Britain, Brexit. They have also caused a revival in specifically socialist answers to the current crisis, with Bernie Sanders in the US and Jeremy Corbyn in Britain both posing, for a time, a threat to the status quo that terrified elites.

Seeing off that socialist threat required tactical shifts by the Conservatives. Johnson was elected on promises to increase public spending and could not have won without making a show of being serious about divorce from the EU where his opponents were not. 

The question, once Corbyn’s Labour was routed, was how real the change in Tory policy was. Would the party decide its sops to economic nationalism had seen off the socialist menace and the free-market politics of all British governments since 1976 resumed? 

Javid’s resignation, after he clashed with Dominic Cummings over public spending, suggested that Johnson intended to cement Tory dominance in the new era by continuing to appeal to the anti-Establishment majority. Labour’s election of a leader strongly associated with the pro-EU cause, a cause that has often been indistinguishable from nostalgia for the days of liberal capitalist consensus, appeared to play into his hands. 

With the onset of lockdown placing unprecedented strains on society, few Tories objected to the big-spending relief schemes announced by Chancellor Rishi Sunak. Now the conversation has shifted, with a powerful trend in government (and opposition) pushing for a return to the pre-pandemic status quo. 

For the left, these arguments matter. For one thing, the Tories have consistently outmanoeuvred Labour since Johnson became their leader precisely because they positioned themselves against globalisation and rule by “experts” when the Labour left was unable to overcome forces loyal to those. 

For another, Tory “populism” is skin-deep: as the way the Covid-19 crisis has been exploited to further embed private providers into the NHS shows, there has been no fundamental change of direction. 

The socialist left urgently needs to promote its own politics in contrast to the “insurgent nationalist” posturing Johnson adopts from Trump and the status-quo managerialism that unites Keir Starmer and Joe Biden. 

First of all, that must mean insisting that a return to pre-pandemic “normal” is not acceptable. The country is crying out for a better deal.


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