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Socialist Review Index (1993–1996) | Socialist Review 169 Contents

Socialist Review, November 1993

Notes of the Month


Portillo’s private practice

From Socialist Review, No. 169, November 1993.
Copyright © Socialist Review.
Copied with thanks from the Socialist Review Archive.
Marked up by Einde O’Callaghan for ETOL.

If the Tories thought that the right wing populism which dominated their recent conference could smooth over divisions within their ranks, then they were sorely mistaken.

The fallout from the Thatcher memoirs is only a hint of much deeper divisions. Huge cracks are appearing at every level of the Tory Party. Right wing ‘bastards – Lilley, Portillo, Redmond – are slugging it out with their supposed ‘left wing’ colleagues – Clarke, Heseltine, Hurd. Political headaches face the government at every turn.

Rebellions and rows over VAT on fuel, rail privatisation, spending cuts and taxation (to name a few) are likely to worsen as the budget looms nearer. Already backbench Tories have lined up to demand compensation for the elderly in the face of increased fuel bills.

More importantly, at every stage the Tories risk stoking up greater public resentment at their policies. Major is still more unpopular than Thatcher ever was. Kenneth Clarke has to tread a precarious path in the coming budget. Measures being mooted such as an end to the zero rating of VAT on food, children’s clothing or newspapers and books could become a political nightmare for him.

The Tories are hampered by, at best, a rocky and weak recovery and at worse by the prospect of a double dip recession. Central to their current problems is the mounting level of government borrowing. They are caught in a debt trap of huge dimensions. The current budget deficit is nearing 1 billion a week. The public sector borrowing requirement rose by £5.9 billion in September alone, and had reached £24.2 billion for the first half of the current financial year.

Attempts to scapegoat single parents and hit out at alleged social security fraud do not even begin to get to grips with the scale of the crisis facing them.

Hence one of Major’s cabinet ‘bastards’, Michael Portillo, attempting to move the debate onto new terrain with his hints at ending the universal right to state-funded old age pensions. Future generations, he warned, could no longer rely on the state to protect them from the vagaries of old age:

‘One of the things in the 21st century you cannot rely on the state to do is to sustain the standard of living that you have achieved, which I think by then will be very high, into your retirement.’

Accompanying his remarks on pensions, Portillo voiced the right’s agenda for the NHS by saying that the government could not be ‘dogmatic’ about drawing a line between public and private health care provision. The state, he said, would find it impossible to keep up with ‘infinite’ demands for healthcare.

Public spending is a problem which plagues the rulers of all the advanced Western economies. Total government spending in the advanced OECD countries has risen from 28.1 percent of gross domestic product in 1960 to 43.8 percent in 1990 – largely through increased costs in pensions, healthcare and unemployment and social security benefits. Social security payments have more than doubled in this 30 year period. The biggest single cost to most Western governments is pensions, which account for a quarter of the increase in spending. Governments in Germany and Italy have already suggested raising the pension age.

Average government debt in the advanced OECD countries has risen from 23 percent of GDP in 1979 to some 44 percent in 1992. Ageing populations and rising levels of unemployment have exacerbated the crisis for the bosses. According to a report in the Financial Times, drastic measures are needed:

‘Significant cuts in benefit levels, for example, may be needed – including greater targeting of benefits on the most needy. User charges could become increasingly widespread, especially for the better off. They could rise to cover a much larger part of the costs of welfare services. And the demand put on the welfare state might be eased by encouraging more private provision of pensions and healthcare.’

It is these kind of Thatcherite proposals that Virginia Bottomley is already trying to force through in the NHS. But the Tories face narrowing options.

The huge deficit means they will be forced to slash into public spending on a greater scale. As Will Hutton in the Guardian commented:

‘With the vast bulk of overall spending “non-discretionary”, which means it is governed by legal commitments, and more than two-thirds in implicitly sensitive areas such as education, health and social security, the only way to make the sums add up is by further running down Britain’s dilapidated public capital stock.’

That means more run down schools, more decrepit hospitals, worsening service and an increasingly deficient transport system – all areas where the Tories face growing fury against their attacks.

Every new government measure raises a howl of outrage. The imposition of VAT on fuel has all the hallmarks of being a new political timebomb for the Tories – as potentially explosive as the poll tax. Pensioners have already staged militant protests against the tax in Scotland and outside the Tory Party conference.

Unfortunately the Labour Party has failed to capitalise on such anger. Although vocal in its opposition to VAT on fuel, it has refused to commit a future Labour government to repeal the extended tax.

But the anger of pensioners fighting VAT, of workers facing pressure on pay, and millions of people who face deteriorating healthcare and transport is not so easily placated. A monster turnout on the TUC demonstration in defence of the NHS on 20 November could galvanise and unite opposition to the Tories. Building this kind of opposition from below can force the Tories into retreat.

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