One of Labour’s main strategic preoccupations has to be how to unpick Britain’s ruling coalition of parties (if not interests). Labour’s return to power depends on the Tories and the Liberal Democrats hanging separately or being hung together. Either the coalition splits or it is likely to become extremely unpopular long before the next general election. Some may argue that an extended marriage of convenience between the Conservative Party and the Lib Dems is actually in Labour’s best electoral interests. But that would mean five long years in opposition and having to fight the next general election with a new “reformed” voting system unfavourable to Labour.
George Osborne’s Budget presents Labour with a golden opportunity to point out the massive internal contradictions submerged in this coalition of self-interest, exemplified by how allegedly progressive politicians are mealy-mouthed in the face of a Tory ideological drive to reduce the power of the state. The sheep’s clothing in the form of a small rise in personal allowances for a few does not disguise the ferocious impact of the 2.5 per cent rise in VAT for all, the massive cuts to the public sector, the slashing of housing benefits and the cutting of future pension rights. This is a Budget of deceit, sophistry and obfuscation. Those on low incomes, benefits or state pensions will be hammered by the VAT rise with no compensatory action to protect them.
Nick Clegg may claim that these cuts are “progressive”, but the millions who depend on the public sector will know the truth. A one-year freeze in council tax allied to a 25 per cent cut in central government grants to local authorities will guarantee massive cuts in jobs and services by local councils. Since rich Tories can afford to opt out of public sector provision, they do not have to avail themselves of council services much beyond having their bins emptied. The very wealthy in this country will remain unscathed by the forthcoming cuts.
The notion that the coalition will be able to ring-fence budgets for health and education is little more than window dressing, designed to appease Lib Dem MPs rather than convince the rest us. Vince Cable insists the Lib Dems have tempered Tory policies by persuading their new colleagues to raise tax allowances for some of the low paid in the country, In fact, this has given Osborne the cover to freeze child benefits for three years.
Those in David Cameron’s leadership clique are happy to go along with the Lib Dems’ aspiration of a move to a minimum income tax allowance of £10,000 for a reason. Both Cameron and Osborne are committed to the ideological prize of introducing a flat tax (in the region of 22 per cent for all taxpayers, including the mega-rich). Right-wingers see this as the holy grail of tax reform. It would mean the rich could insulate themselves from the needs of the rest of the population.
The introduction of either a flat tax or large rises in the threshold for inheritance tax or both would represent the greatest example of self-serving class interest at government level since Robert Peel’s 1845 administration. Then the landed gentry fought tooth and nail to keep the Corn Laws in the teeth of evidence that it was the poor who paid the highest price for such iniquities. Osborne’s token gesture of a net rise in income for lower-paid people amounts to £170 a year. This will be completely wiped out by the rise in VAT. To put that £170 into context, it is the equivalent of two days tuition fees at Eton College. Manifestly, we are not all in this together. The Budget will have no effect whatsoever on the trust funds of families such as the Camerons and the Osbornes. Millions of ordinary people will lose out.
Much of the mainstream media seems to think the recent compact between two parties of the centre-right (clearly, that is how we should now describe the Lib Dems) is sustainable. However, the DNA of the two parties is still significantly different. The coalition’s leaders may well sit comfortably with one another. They have privilege in common. There is little political capital to be gained in trying to define the differences between David Cameron and Nick Clegg – both are paternalistic “one nation” Tories in all but name. However, there are also significant elements in both parties, presently marginalised, that are as different as chalk and cheese.
It is instructive to examine the two extremes of the coalition. If we accept there are still some well-meaning Lib Dems who regard themselves as centre-left, then they are to be found in the Beveridge Group of MPs.
Meanwhile, a number of those on the right of the Conservative Party are members of the virulently Eurosceptic Bruges Group, whose libertarian tendencies are matched by an abiding belief in free-market fundamentalism. It is into these obvious fissures that Labour has to drive home its message. Osborne’s Budget is a bad one, but it does give Labour the chance to expose the crass hypocrisy at the heart of the coalition.
The idea that Lib Dems such as Simon Hughes and Don Foster can sit comfortably on the same House of Commons benches as the likes of Bill Cash, John Redwood and David Heathcoat-Amory is preposterous.
The social market values that the Beveridge Group used to share with Labour are anathema to most Tories. That’s why most Lib Dem MPs belonging to Beveridge Group have not been given ministerial posts, even junior ones. This faction of the Lib Dems is likely to be the focus of discontent with the direction in which the coalition is taking the country. Labour has to expose and magnify this Lib Dem discomfiture. The suggestion that the coalition can endure for five years must be challenged. It is a coalition of strange bedfellows and internal contradictions. Most Tories are instinctively anti-state and opposed to public investment, except as far as defence is concerned. The Conservative Party is now probably more anti European Union and pro neo-liberal than it has ever been.
Every Labour member and supporter must resist the threat to their interests and to the interests of the whole county by doing everything they can to shorten the lifespan of the Tory-Lib Dem coalition. There is already discord. Labour needs to create an irresistible momentum that destroys this iniquitous Government.
