Why Rachel Reeves’ ‘sado-monetarist’ stance on winter fuel payments is a grim sign
Rachel Reeves announced she was scrapping winter fuel payments for most pensioners to roars of approval from the Masters of Foxhounds of high finance, who like to see every new Chancellor ‘blooded’ by taking a ‘tough decision’ that hurts the vulnerable
In the old British fox-hunting tradition, there is – or was – a ceremony called “blooding”, in which, after the kill, the youngest new member of the hunt, often a child, was singled out by the Master of Foxhounds, and smeared about the face with the fresh blood of the fox.
It was an aspect of the hunt viewed with peculiar horror, of course, by opponents of the whole practice; and even this year, Labour’s election manifesto contained a pledge to end the residual forms of hunting that survived its formal banning, in the early 2000s.
Yet if the party opposes that particular form of ritualised cruelty, it remains extremely difficult to read where the new Chancellor of the Exchequer, Rachel Reeves, now stands on the much more damaging form of establishment sadism known as neoliberal economic orthodoxy, the post-Keynesian and Thatcherite argument – famously dubbed “sado-monetarism” by the journalist William Keegan – that national budgets resemble household ones, and that, as Reeves put it this week, “if we can’t afford it, we can’t do it”.
In fact, what Reeves offered this week was a relatively modest package of spending cuts, likely to be more than balanced by future tax rises.
Yet among the cuts she administered was the abrupt and unexpected removal of the much-valued winter fuel payment, a £300 bonus paid to all pensioners each winter to help with fuel bills. The payment will continue to be made to poorer pensioners already claiming pension credit. Yet the sudden removal of a familiar universal benefit for that age group, much appreciated by many who are living modest lives just above the pension credit level, seemed like an egregious act of cruelty given the small saving involved; not to mention the fact that there may be no saving at all, if Reeves’s move encourages many more people to sign up for the notoriously under-claimed pension credit.
Hurting the vulnerable
Yet still, an exhilarated-looking Reeves made the cut, to roars of approval from the Masters of Foxhounds of high finance and their representatives in parliament, who like to see every Chancellor well and truly “blooded”, within a few weeks of taking office, by some “tough decision” that visibly hurts the vulnerable.
She did it, too, while deploying much of the “household budget” language of the orthodox neoliberals whose world-view she has, in the past, explicitly rejected. This is a Chancellor who knows that national budgets are nothing like household ones, and that sovereign governments can always afford to spend and invest, provided the returns on the investment are positive in terms of economic activity and public well-being. And yet here she is now deploying exactly the same language, and the same dubious conceptual framework, used by the author of austerity, George Osborne, when he first entered government 14 years ago.
So what is she up to? Well, it is to be hoped that she is not deliberately throwing some red meat either to those who like to portray all pensioners as a pampered class hogging the nation’s resources, or to the enemies of universal benefits, an unlovely bunch – including many knee-jerk detractors of Scotland’s SNP government – with whose subtle undermining of the very stuff of social solidarity the new Labour government should have no truck.
The best guess therefore has to be that, like the Blair-Brown government before it, this new Labour administration is trying to create some financial wiggle-room by bowing publicly to the lords of the market, while hoping to be able to do some good by stealth. If that is their plan, though, they are playing a far more dangerous game than their late-1990s predecessors, for whom relatively good times rolled, in financial terms.
Humble submission
Today, by contrast, the UK Government in particular, and other governments worldwide, face crises of an entirely different order, ranging from the self-inflicted economic wound of Brexit to a deteriorating geopolitical scene that requires more attention to defence and alliance-building, and a global climate crisis that absolutely demands major government intervention to enable a peaceful transition to a new low-carbon economy.
Under these circumstances, the new Labour government will soon need much bigger and bolder financial and administrative tools to tackle the job they have set themselves; and they would do well to prepare the public, and the markets, for that shift by signalling not a humble submission to the failing economic orthodoxies of 40 years ago, but a willingness to engage alongside all major global players in serious debate about how this crisis can be negotiated, while providing citizens with enough security to avoid major political conflict and societal breakdown – debates about new financial systems for new times that are already well under way across a range of global forums, including the United Nations.
Cuts to essential services
For the moment, though, we are left to contemplate the strange spectacle, at Westminster, of the sado-monetarist “blooding” of Reeves, over a measly £1.5 billion of spending on Britain’s old folk; a ritual that now begins to seem almost as retro, and as out of time, as the cruel fox-hunting culture it echoes. For after the last 14 years, the last thing the people of Britain need is more financial bullying, and more cuts to essential local services.
What they need, on the contrary, is a new age of strong and thoughtful government that will care for them and the services on which they depend, while supporting and investing in the new economy of the future. In that, the people of the UK are not alone. And that makes it doubly depressing that we have now to put up with another round of dumbed-down domestic chat about the pressures on Britain’s “household” budget; at a time when we so clearly need new language, new structures, and a new vision of how our world should work, to lead us through the profound threats and challenges of the decades ahead.
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