The FishTank

Since last week’s budget the Guardian has been awash with sob stories about those adversely affected by the coalition’s money-saving measures. Some have been people in a state of denial – convinced that the thousands of pounds of benefit they receive for a house in inner London is not a large sum of money, or that all was milk and honey before the credit crunch; others have been ill-informed – claiming that VAT rises will affect those on the lowest pay more than those with money to spend, or that the public sector and the economy are one and the same thing; still more have been wilfully misunderstanding – describing measures designed to help people move to follow work or to work longer as if they were measures to force them to do so. All, however, have been united firstly in being written by obvious Labour voters and secondly in being written by victims not of the coalition, not of the bankers, but of New Labour.

Take one case in today’s Guardian. A single-mother, divorced, formerly working full-time to raise her one child, finds herself suffering from stomach pains and other stress-related symptoms. Her doctor advises her to give up work – advice she follows without reluctance as it gives her more time with her child. She still makes money from writing, but for the most part she is better off from the benefits that pay her rent and cover her council tax. Now her writing job is being axed and her benefits reduced. She has, she says, done all the right things, but is being punished for it.

Only, of course, she hasn’t. Because for every mother like her there are dozens of young women who have no child, not because they don’t want one, but because they are realistic enough to understand that even if they could afford to raise them, they would have to work long hours and hardly see them. They could, like the columnist, have chosen to do it anyway, but they have chosen to put it off until it is viable – if it ever is. Some, particularly on the left, would characterise these people as selfish, declining to have a child because they give their own lives precedence, but isn’t it is vastly more selfish to have a child you can’t support?

And then there’s the stomach pains and the weight loss. Some people are martyrs to conditions such as this. Irritable Bowel Syndrome, M.E. – complaints both real and imagined blight many in our highly charged modern lives. But the doctor’s advice, if reported accurately, was wrong. Stress in the workplace is not a reason to stop working – it is a reason to look for another job. That a person would choose to give up work, knowing they will be dependent on the State, clearly not intending to return to the workplace any time soon, this is a symptom of a culture fostered by New Labour – a culture which, left unchecked, will destroy our society.

Of course, that statement left unqualified probably sounds as exaggerated as any in the Guardian’s pages, but consider forty years ago. During the 1970’s, there were many households where people struggled to make ends meet – industrial unrest and rapidly rising inflation meant that putting food on the table was a genuine concern. Some fathers – mine included – worked such hours that they barely saw their children, and job security was incredibly uncertain in the teeth of the three day weeks and wildcat strikes that dragged a struggling nation to the IMF. People lost jobs and responded by looking for new ones. Reality was stressful, but few claimed that stress was debilitating enough that they shouldn’t have to work. And the reason for this was because the State – whether under Labour or Conservative governments – gave short-shrift to the workshy. You kept working not just because you ought to, but because you had to.

Underneath this unrest, meanwhile, the British economy was transforming. Low-skilled heavy industry jobs like steel-working and mining – the heart of many of the industrial disputes – were slowly but surely losing their competitive edge. Strikes and skyrocketing wage inflation meant that the country simply couldn’t afford to keep the industries going. When the Miner’s Strike of 1984 brought the coal industry to collapse it was the end of an era. It was also the start of a new one.

Because one of the things that militant unionism did was to breed a sense of entitlement. Miners who were paid higher than average earnings for a relatively unskilled job could have retrained and got other jobs. Many did, but many more chose to martyr themselves to long-term unemployment rather than take less money in a job they considered beneath their dignity. They weren’t thrown on the scrapheap – they climbed on it for themselves. And Labour, despite Clause IV, signed up to this new agenda of unionised inactivity. If voters could be persuaded that Conservatism was about keeping the poor under the heel whilst the rich got richer, then both the working class and the new underclass would be their natural constituency. So, when the Conservatives tried to do something about the increasing abuse of the welfare state by workshy teenage mothers, Labour threw reality aside and attacked the Government as the nasty party. When spending was restrained in the face of recession, Labour accused the Conservatives of deliberately setting out to attack the poor. They built a vote round those who chose a life on benefits and those gullible enough to believe it was Conservative policy to ruin the poor for the sake of the wealthy.

In office, the project picked up pace. New Labour might not have invented the idea of reclassifying the unemployed, but they built on it, moving millions from unemployment to incapacity benefit, creating the myth that those who lost their jobs in the mines were somehow disabled as a result of that loss. They introduced tax credits, taking money from the poor and making them fill in reams of paperwork in order to get it back. They might have claimed the money came from the rich, but the 40% top rate of tax – only lowered there in the late 1980’s – didn’t rise until after the credit crunch, and capital gains tax – now seen as a tax on rich property owners – was lowered on Gordon Brown’s watch. Far from encouraging people to self-reliance and industry for the good of the country, Labour actually went as far as to encourage – or at least allow – doctors to write off perfectly healthy people as disabled, increasing the underclass and – as they thought – their vote share as they went.

And so it might have continued were it not for the credit crunch. The danger in 2008 was not of us becoming a second Greece, it was of us becoming a second Sweden – a country with punitive taxation and an addiction to benefits, where anyone who has the capacity to prosper flees, leaving the remainder to fund their welfare state by exporting raw materials. It might work with a nation of 8 million people – it would be a disaster in a nation of 62 million. The credit crunch rewrote the script: the deficit had been at its highest in 50 years before the crunch, but nobody had batted an eyelid. With the collapse of Northern Rock, attention turned quickly from the state of private banking to that of public finance and the necessity of retrenchment.

What would have happened without that crunch? We can only speculate, but it’s not unreasonable to assume that Labour could have won the 2010 election and gone on to increase the deficit close to current levels over the course of a parliament. In that time, more and more people would have become trapped in benefit dependency. Eventually taxes would have risen, and each time they did it would have reduced our national competitiveness, more so if other countries were also free from recession. The Guardian wouldn’t have seen it that way, of course: the same culture shift that has made people think it’s fine choosing to live off benefits has made pariahs of anyone who refuses that choice and prospers. The rich are there to be soaked – unless they’re popular celebrities – but just as in the 1960’s and 70’s jobs and businesses would have left, the tax take would have fallen and the deficit risen. Eventually, tough choices would have been forced on the government – or possibly even taken for them by the IMF. And it’s the IMF who have mooted the idea we should remove VAT exemptions on food and baby clothes – measures that genuinely would hurt the poor.

One thing the Guardian has got at least partially right is that Conservatives have embraced austerity as an opportunity. Osborne was quick to change the agenda, his age of austerity speech another masterstroke from an often underestimated politician. As with much of their reporting, however, the Guardian either missed or chose to ignore the point. The Conservatives are not, as the New Labour dogma has it, striving to attack the poor and the needy to enrich their friends in the city. As the only party to genuinely understand the market the Conservatives know what will happen if matters are allowed to continue as they have been. They alone appear to understand that business is mobile and that soaking the hard-working to support the workshy is a recipe not for a neo-Edwardian age of happy idleness, but a slide into poverty, potentially losing us our place in the G8 as other countries follow China and Brazil in rising above us. This shift in international league tables may seem unimportant, but it is symbolic of a deeper truth. For people in a country to get better off, the country as a whole has to get better off. For this to happen, businesses have to open more markets and export more products. And that means we have to be a good place both to find workers and profits. If we want to encourage businesses to set up in this country, to pay us taxes and give us jobs, we have to reassure them that they won’t, in a few years time, be facing increasingly punitive taxation in order to support a growing legion of people who have decided that work is fine for people who like that sort of thing, but not for them – they enjoy watching daytime television with their children too much.

In the end it is always possible to find people who consider themselves hard done-by after a budget. Every shift in spending or taxation creates both winners and losers. The Telegraph were as biased as the Guardian when they campaigned about the rumoured rise in capital gains tax, but they appear to have accepted George Osborne’s decision with good grace. The Guardian are, however, obsessed with attacking the coalition’s budget. It is as if this were an unjustified smash and grab raid on the poor in a time of surplus. With the exception of the 10p tax debacle, I don’t recall their ever looking so hard for losers in Labour’s budgets. But that’s the thing, really. A credible newspaper would be one which could differentiate reasoned critique from political bias and you can’t expect that from a paper which has spent thirteen years living off of public sector job adverts, can you?