Above Public Opinion

The​ UK is experiencing levels of strike action not seen in decades. Postal workers, train drivers and guards, nurses and ambulance workers are contemplating their second, third or fourth round of strikes this winter. Court officials, teachers, NHS physiotherapists, civil servants and university staff have balloted to walk out in the coming weeks. The simple explanation for many of the strikes is that they are the result of government policy. Even where the government is not the employer, as with the rail companies, it has a big say over what employers can offer. Both the RMT union and the Rail Delivery Group blamed the failure of negotiations before Christmas on the interference of the transport minister, Mark Harper.

Public sector pay has increased at a lower rate than private sector pay almost every year since 2011. At the end of last year, private sector wages were increasing by just under 7 per cent, while public sector wages were rising by less than 3 per cent. This growing disparity has led to increased vacancies in public sector jobs. The latest data show a 25 per cent increase in the numbers of NHS nurses leaving their role; 40 per cent of junior doctors plan to leave the NHS as soon as they can, and trainee numbers for secondary school teaching are at only 59 per cent of the targets. It is clearly unsustainable for the government to continue to reduce public pay while job shortages in the public sector increase, so why is it picking these fights? With railworkers, the suspicion is that it thinks opposing the strikes will be popular. Poll results vary, but a YouGov poll from 16 January found that 51 per cent of the public opposed the rail strikes compared to 42 per cent who supported them – 51 per cent is well above the Conservatives’ current position in the polls. But if political advantage were the only consideration, you would expect the government to quickly settle disputes where the strikers have public support. A poll at the end of last year suggested that 66 per cent of people support striking nurses, with only 28 per cent opposed. That the government hasn’t come to an agreement with the Royal College of Nursing suggests either that they are poor tacticians, or that they are unwilling to countenance tax rises, no matter the cost to public services.

This helps to explain the government’s attitude to the crisis in the NHS. British citizens are dying who would otherwise have lived because ambulance waiting times have rocketed. A&E departments are overloaded and delays to routine operations are at record levels. High numbers of excess deaths can no longer be solely attributed to Covid. Yet the prime minister’s response to the figures was, first, to deny there was a crisis, then to blame the pandemic. Even to the extent that the pandemic is the cause, it is a strange government that doesn’t try to do more to help. A Conservative government provided a large sum of money to support people when Covid was at its worst, so why do so little now? As the editor in chief of the British Medical Journal wrote recently, ‘If your genuine concern is the health and wellbeing of the population, then you don’t waste time contesting plausible data on excess deaths.’

The crisis in the NHS is the result of longer-term government decisions. Since 2011, funding has fallen well below the level needed to prevent the system from deteriorating. Under Labour, the share of GDP spent on healthcare was increased to bring it up to the average among similar countries. Over the course of the 2010s that share rose in most countries, but in the UK it fell. In particular, the share of GDP spent on investment in healthcare (new hospitals, new beds etc), which in 2010 was around the average among ‘peer’ countries (Austria, Canada, Denmark, Finland, France, Germany, Netherlands, Norway, Sweden, Switzerland and the US), fell to well below the level in any of those countries, and that is where it remains. This underfunding of the NHS – and of social care – left no spare capacity to absorb the additional burden of Covid: a crisis was bound to emerge. The number of English NHS hospital beds fell by 8.3 per cent between 2010-11 and 2019-20, leaving the UK with just 2.4 beds per thousand people in 2020, compared to an average of 5 per thousand among other OECD EU nations.

Public sector strikes and the NHS crisis are not the only problems that have been created or made worse by government policy. The increased cost of living has been particularly acute in the UK because austerity and Brexit left UK real wages in 2020 no higher than they had been in 2009. The biggest crisis facing the world today is climate change, but this government has opened a new coalmine and allows energy producers to keep their record profits if they are used to invest in new oil wells. The government’s own net zero tsar, Chris Skidmore, has warned that climate targets may be missed because of inconsistent policies and a lack of commitment.

Why does the UK have a government which is so reluctant to tackle the problems it has created, and which is so prepared to put party-political interest above national interest? All governments since 1979 have pursued or maintained some of the neoliberal policies introduced by Margaret Thatcher. While economic growth in the UK had been lower than in most other G7 countries before 1979, during the Thatcher, Major and Blair administrations it caught up or lifted higher. Perhaps as a result, many of these policies were popular with voters. The Labour government of 1997 broadly retained them, but combined them with measures to tackle poverty and support a larger public sector, including higher spending on the NHS.

When Labour fell in 2010, it was not because its domestic policies were unpopular, but because the finance bubble that had been facilitated by governments since 1979 finally burst. In the British Social Attitudes survey that year, just 9 per cent of people wanted the government to reduce taxes and spend less on health, education and social benefits. The financial crisis had made the dangers of deregulation clear and there was little popular enthusiasm for it. This presented a serious problem for the Conservatives, most of whom continued to favour a smaller state with lower taxes, and many of whom wanted to push even further with deregulation. They responded by encouraging a panic about the scale of the budget deficit, even though it was a predictable consequence of recession, and blaming it on Labour rather than the global crisis. Once in office, Cameron and Osborne made deficit reduction the primary goal of macroeconomic policy and ensured that it was done mainly through spending cuts, not higher taxes. Indeed, some taxes (such as corporation tax) were reduced. Deficit reduction was simply a ruse to achieve a smaller state.

The Conservative government of 2010 marked a contrast with Thatcher’s 1979 government in two respects. First, the central goal of the Cameron government – a smaller state – was achieved by deceit rather than by making a public case for it. Second, while business owners benefited from lower taxes, UK business did not benefit from a prolonged recession. This pattern was repeated even more vividly with Brexit. Leaving the EU was against the interest of large sections of UK business, but it was nevertheless pushed by many Conservative MPs and almost the entire right-wing press.

The independent Office for Budget Responsibility has shown that austerity after 2010 led to a delayed recovery from the recession after the 2008 crash. It has also calculated that Brexit will reduce UK GDP by around 4 per cent in the longer term. Both policies went against received wisdom among academic economists. One feature of austerity was that spending on public services was cut substantially without any significant reduction in the scope of what they were meant to provide, so a gradual reduction in the quality of provision and relative pay was almost inevitable. The Brexit referendum result also led to an immediate depreciation of sterling, which reduced the purchasing power of UK incomes.

Under Thatcher, the proportion of income going to the top 1 per cent increased substantially. A significant number of the people who benefited were prepared to use some of their money to help ensure not only that these changes persisted, but were extended. This was done through donations to the Conservative Party or by funding right-wing think tanks, and in a few cases by influencing the editorial line of the newspapers they owned. The views of a relatively small number of wealthy individuals have therefore come to dominate business thinking in the Conservative Party. These people often come from the financial sector, or have international business interests, making them less interested in promoting UK economic growth. The party has increasingly seen itself as representing these monied interests, wanting deregulation and lower taxes rather than adequate public services and pay. This was epitomised by the PPE scandal, where private companies or individuals with the right political connections were paid over the odds to provide unusable PPE, then paid to store it, and now other private companies are being paid to dispose of it. Some people and businesses have grown immensely rich, and a good deal of public money has been wasted. But a party that sees itself as promoting the interests of a small minority of wealthy individuals is not going to change its policies just because they prove unpopular. Increasingly, it will see itself as apart from or above public opinion.