A new kind of Tory regime?

Six months in, what sort of government do we face? Neil Faulkner and Phil Hearse explore the character of the Johnson-Cummings regime.

22 July 2020

The Covid-19 crisis has exposed the incompetence of the Tory government, but behind the smokescreen of the virus, the Boris Johnson-Dominic Cummings government is planning to impose hard right-wing policies of austerity and against immigration, democratic rights, and the public sector. At the same time, it is consolidating its nationalist stance on the world stage, modified only by its subservience to the diktats of the United States (its decision to exclude Chinese company Huawei from 5G contracts is a clear example of this).

‘Populist’ nationalism is also evident in the decision to close down the Department of Overseas Development and merge it with the Foreign Office, on the grounds that UK aid to poorer countries has become a ‘free money tree’. Now foreign aid is going to have to show economic benefit to UK companies. This move to gut UK overseas aid is a sop to every brain-dead saloon bar racist who has ever said ‘we shouldn’t send money overseas: we need it for our own people’.

Nothing reveals the hard-right, racist nature of the government more than its response to Black Lives Matter protests. The government urged people not to demonstrate (because of the virus, of course), took up the far-right cry that there was a danger to war memorials, threatened ‘fast track’ imprisonment within 24 hours for people involved in ‘disturbances’, and supported the call of 125 Tory MPs for a new law on damaging war memorials (which were not being targeted anyway). In other words, the problem was protest, not institutional racism.

Anti-immigrant, anti-EU nationalism is a crucial part of the government’s sustained ability to maintain its position in the opinion polls. As discussed below this nationalist stance is likely to go hand-in-hand with a turn towards a new economic nationalism. It poses the question whether this is just another Tory government, or whether this regime is heading in the same direction as Viktor Orbán’s semi-fascist regime in Hungary.

On Covid-19, the Johnson-Cummings regime has presided over the biggest death toll in Europe. At the core of this chronic failure are the neoliberal policies to which the regime is committed. The long-term rundown of the NHS is one example, and, more immediately, the fact that lockdown was delayed too long and is now being lifted too early is another. Other homegrown Tory disasters include: the neglect of pandemic preparation despite repeated warnings; delaying an emergency response to the pandemic in deference to fascist-eugenicist garbage about ‘herd immunity’; and serial failure to manage the medical emergency preparations (lack of PPE, cock-ups in testing and tracing, moving infected people from hospitals into care homes, and so on).

In a rational world, the regime would be in political meltdown. It is what Marina Hyde writing in The Guardian calls a ‘wallyarchy’—a regime whose dominant characteristics are negligence, failure, and bluster. Even in the world as it is—where minds are frazzled by spin, spectacle, and social media—it should be reeling from the blows of an opposition ‘Labour’ party doing its job. Instead, we have Keir Starmer, a neoliberal lawyer of numbing dullness, propping up a hollow narcissist and Daily Mail bigot by offering ‘constructive engagement’.

Of course it is the case that Starmer is partly to blame for Tory opinion-poll leads. But this is not the whole story. The Left needs to pay attention to the character of the regime. Today’s Covid-19 emergency and the furlough scheme can lull people into a false security about what is to come, and how this will impact on local authority services, unemployment, immigration and immigrant communities, and on democratic rights. Let’s look at these before discussing the trend towards a new style of Tory neoliberalism—debt-based economic nationalism.

Austerity and racism

Savage austerity is on the way. The virus has shrunk profits, and that means the returns on local authority investments have declined rapidly, at the same time as routine municipal revenues have plunged because of lockdown. But the government has said that no bailout is available to councils, and they must balance their books by dipping into their (largely non-existent) reserves—or by cutting services. This follows a 40% total cut in government funding of local councils since 2010.

The implications are obvious. Massive cuts will mean that tens of thousands of local authority workers will be sacked. These will join the three million workers likely to be unemployed when the furlough scheme ends. As for those who keep their jobs, a bosses’ offensive has already begun, with massive wage cuts of 15% or more, a bonfire of terms and conditions, and probably tax rises on top of that. Millions will struggle to keep their heads above water.

So we need scapegoats, and Home Secretary Priti Patel is busy supplying them. She has announced a raft of harsh anti-immigrant policies. Central to these is the limitation of immigration of EU and non-EU citizens alike, usually to people with a guaranteed job at a minimum of £25,000 a year—a tiny minority of potential foreign workers. While nurses will be exempted, care workers will not. The result will be a collapse of employment in the social-care sector. The Immigration Observatory has estimated that under there rules, 744,000 foreign workers currently in the UK would not have been able to come.

Parts of the Left have been in denial about what is happening on the right of British politics ever since the 2016 EU Referendum. Having taken a ‘Lexit’ position and misunderstood the trend towards anti-democratic right-wing regimes (the ‘creeping fascism’ thesis argued by Mutiny and others) they have since been peddling their own version of left nationalism, a warmed-up ‘Alternative Economy Strategy’ of 1970s vintage, which imagines a go-it-alone Britain forging an independent path to socialist transformation. Lexit nationalism has become, amongst other things, a barrier to proper analysis of the Johnson-Cummings regime.

So let us take a close look at what is actually happening. The regime can be defined in terms of three dominant trends:

1. Centralisation of power

Johnson rode to power on a programme of national regeneration based on state infrastructure spending in the context of ‘Get Brexit Done’. One reaction to this is to deny it any substance: Tory governments cut and privatise; they don’t spend and build. But that was then, and this is now. This is not same old, same old.

For one thing, the Tory Party has been captured by the Tory Right, whose politics are barely distinguishable from those of Farage and the Brexit Party. The old liberal Tories have been purged. The ‘one nation’ grandees are gone. A new tranche of reactionary spivs now sits on the Tory benches. The cabinet is stuffed with second-rate opportunists. The real power is wielded by a blokey inner circle of businessmen and former public schoolboys, centred on Number Ten, where Dominic Cummings presides as master strategist, his importance to the regime laid bare by Johnson’s refusal to sack him after flagrant violation of lockdown rules.

Cummings has made no secret of his authoritarianism. He favours centralised executive power at the expense of other state institutions—Parliament, the civil service, the judiciary. He sees the traditional structures, procedures, and protocols of liberal parliamentary democracy, with its division of powers, its checks and balances, as barriers to the implementation of the regime’s programme of national regeneration. There is a ‘hard rain’ coming, he has warned the British Establishment; what is needed is a ‘smaller and more elite’ system of control.

This includes attempts to rein in the media, shown by the government’s intention to get rid of the BBC TV licence and to privatise Channel 4—doubtless in the hope of hobbling Channel 4 News, a permanent thorn in the side of the government. Private trash TV channels will replace the BBC, which is likely to be closed down, with the space for critical documentaries and news much reduced.

Strengthening central government control is behind the ‘radical NHS overhaul’ just announced. In the same style as extreme-right leaders, the regime is blaming NHS management for its own serial failures in relation to the Covid pandemic. Apparently, it was all because Health Secretary Matt Hancock didn’t have enough power vis-à-vis NHS Chief Executive Simon Stevens.

No socialist, or indeed anyone who defends public services, should be taking sides here. Hancock is a Tory pipsqueak and Stevens was appointed some years ago as NHS privatiser-in-chief. This is a squabble inside the ruling class devoid of any higher purpose than to shift power from one faction to another. The point to make here is that the proposed ‘overhaul’ has nothing whatsoever to do with improving public-health provision, and everything to do with centralising power in the hands of the executive.

This process has gone further elsewhere. To identify the species, look not at the embryo, but the developed form. Creeping fascism is a global phenomenon. The whole trend of politics on the right—in the context of a deepening world capitalist crisis—is towards authoritarianism and nationalism. The frontal attack on democracy in Hong Kong by China’s neoliberal-Stalinist leadership lies at one extreme. Points on the spectrum are represented by Recep Tayyip Erdoğan’s mass incarceration of opponents, purging of public servants, and police repression of dissent in Turkey, or by Viktor Orbán’s assumption of emergency powers during the Covid pandemic in Hungary. The threat to civil liberties and democratic freedoms is global.

2. Magic money and the new state capitalism

Following the 2008 financial crash, the US and European governments pumped unprecedented amounts of public money into shoring up the private banking system. The super-rich had turned the world economy into a casino, had indulged in an orgy of ‘get rich quick’ speculation, and then, when the bubble burst, had been bailed out by the tax-payer. Profits, it seemed, were private, but debts were public.

Heavily indebted governments then turned on the working class, imposing a decade of austerity, effectively dumping the full cost of a crisis caused by the greed of the rich on the mass of ordinary people. It was bailouts for the rich and austerity for the rest.

We are still living with the consequences—the underemployment, the shrunken wages, the rotting estates, the collapsing public services.

But we must not assume that what is coming next will follow the same pattern. The austerity of the last decade was a class war waged by the corporate rich against the working class—a class war enabled by the crisis and the lack of effective resistance. The ruling class used the crash to redistribute wealth from working people and the poor to themselves. They have emerged richer than ever. The number of billionaires, for example, has doubled since 2008.

It was easy to be sceptical, therefore, when Johnson promised largesse during the 2019 general election campaign; easy to scoff when, following his victory, he announced that the Tories would live up to ‘the trust’ placed in them by people who had ‘lent them their votes’ in traditionally Labour constituencies.

But what is now clear is that something different may indeed be happening. As the economy has collapsed under the impact of the Covid pandemic, the Tories have borrowed unprecedented amounts of money to sustain base-level activity, most obviously by paying for the furloughing of 9.4 million workers. State debt was 75% of GDP in 2010 when the newly elected Con-Lib Coalition government-imposed austerity. It is now 100% and rising, expected to reach 110% by the end of the year. The last time it was at this level was in 1963, when Britain was still paying off debts incurred during the Second World War, which had peaked at 250% of GDP.

There is no inherent reason why high levels of state borrowing and spending should not continue indefinitely. Interest rates are very low, so borrowing is cheap. If the financial stimulus effect results in a higher rate of economic growth, tax revenues may well exceed the cost of the additional borrowing. In any case, government debt in a developed country is a very safe kind of debt, because it is secured against future tax receipts. Debt is profitable for finance capital—it is one of the principal mechanisms by which surplus capital has been absorbed in the neoliberal era (‘financialisation’)—so there is no reason why private banks should not be willing to underwrite much higher levels of government borrowing.

In any case, if push came to shove, the government of a developed country could simply cut out the private banking system and borrow from itself. The simplest way to do this would be for the Treasury to issue government bonds and for the Bank of England to buy them: a simple accounting exercise—and a reminder that money is nothing more than electronic numbers. In the last resort, because the state is a monopoly issuer of its own currency, it can simply, as the expression goes, ‘print money’ to buy its way out of a hole.

Inflation—the primary risk—only follows if the stimulus fails. What matters in the long run is that the financial stimulus generates a corresponding increase in real economic activity. As Keynes explained, anything we can do, we can pay for. His point was that creating new wealth automatically generates the resources to pay off old debts.

‘Magic money’ (as it is being called) was used to bail out finance capital after the 2008 crash. It looks as if it is now being used to bail out neoliberal capital as a whole in the context of the pandemic. This amounts to an amplification of a central feature of the entire neoliberal era.

Afflicted by a chronic problem of economic stagnation due to over-accumulation and under-consumption, neoliberal capitalism has become both a debt junkie and a state dependant. Government, corporate, and household debt is not only necessary to sustain demand, but has also become an increasingly important tradable commodity in its own right: that is one kind of fix. State contracts—for public services, infrastructure projects, armaments, etc—provide another kind of fix, another way in which surplus capital can be invested, in this case with state borrowing (secured against tax revenues) providing the flow of profit.

‘Magic money’ may become a primary mechanism in, first, sustaining and augmenting private capital accumulation, and second, providing jobs, services, and a measure of economic and social regeneration that can help consolidate the electoral base of right-wing political regimes. In short, we may be looking at a form of neoliberal state-capitalism, where state spending is invested in national infrastructure but the profits go to the private transnational corporations contracted to do the work: a modern form of corporate state with echoes of the interwar fascist model, but transposed to a world dominated by globalised corporate power.

This is speculative. It is early days. But we must keep alert to the fact that the Johnson-Cummings regime shows strong signs of being different from its mainstream Tory predecessor, and that the shape of an alternative economic programme—shall we label it ‘neoliberal corporate state-capitalism’?—may be already be discernible.

3. National regeneration, racialised exclusion, and police repression

Inherent in interwar fascist programmes was social exclusion. State power was used to regenerate the economy and remodel it in line with the regime’s military-imperial objectives. Fascist repression raised the rate of exploitation, and the combination of state contracts and lower wages restored the rate of profit and triggered rapid economic growth. In Nazi Germany, one in four had been unemployed when Hitler came to power in 1933; six years later, when the Second World War broke out, unemployment was minimal.

But in the context of a fascist police dictatorship—with the labour movement destroyed, parliamentary democracy dismantled, and civil liberties rescinded—Nazi persecution of the Jews and other minorities had escalated rapidly to the point of effective social exclusion.

The fascist cocktail—nationalism, militarism, authoritarianism, police repression—was laced with racism. The Jews, in particular, became the ‘enemy within’ against whom rage and blame could be channelled.

So let us conclude by reminding ourselves that the Johnson-Cummings regime is the product of a surge of nationalism and racism—especially against Muslims and migrants, but also against ‘foreigners’ more generally—that found expression first in the Leave victory in the EU Referendum in 2016, then in the Tory General Election victory in 2019. ‘Take Back Control’ was code for ‘Keep Out Immigrants’. ‘Get Brexit Done’ was code for ‘Build Strong Borders’.

And, true to form, even at the height of the Covid pandemic, when migrant workers were dying on the front-line and being charged to use the NHS services they themselves were delivering, the Tories brought their racist immigration bill to Parliament.

The Johnson-Cummings regime is a Tory regime of a new kind, using nationalism and authoritarianism in ways redolent of the fascist playbook. We need to understand its nature and build the resistance.

Neil Faulkner is the author of A Radical History of the World and a co-author of Creeping Fascism: what it is and how to fight it. Phil Hearse co-authored Creeping Fascism and contributed to The Far Right in Europe.

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