In short, IDS is a paternalistic klutz.

the void

rent-bookA perverse incentive in the Universal Credit pilot scheme has already emerged which will mean that social housing tenants who go into rent arrears will be able to have the housing element of the new benefit sent direct to their landlord.

Universal Credit will feature Direct Payments, meaning that council or housing association tenants will receive a monthly cash payment towards their rent.  At present Housing Benefits for social tenants go directly to social landlords in most cases.

This senseless move is based on yet another of Iain Duncan Smith’s pet obsessions, which is that housing benefits going direct to tenants will teach claimants to manage their money.

Housing Associations have been horrified by the changes, issuing warnings that they expect rent arrears to soar.  The DWP’s panicky response to this has been to decide that claimants who fall two months in arrears will automatically have payments switched back…

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by Martin Odoni

Two major but basic economic terms are routinely confused by many in the wider public. They are debt and deficit. They are two very closely linked terms, but there is a very important difference between them; –

A debt is the total amount of money owed.

A deficit is the total amount of money that has to be borrowed to meet spending commitments.

In effect therefore, an annual structural deficit is the amount of money a debt is set to increase by. A deficit will only develop when the country’s tax yields are lower than the total price of its spending commitments, and so it has to borrow extra money to make up the shortfall. When there is an outstanding National Debt, it will keep increasing so long as there is any deficit; even a substantial reduction in the size of a deficit will not mean the debt goes down, it will simply continue to rise, only more slowly. The debt can only start being brought down when the tax yields are higher than the spending commitments, which is called a surplus.

In the case of the UK, it has a current National Debt of approximately one-point-four trillion pounds. It further has an annual structural deficit of roughly one hundred and twenty billion pounds. Were the deficit to remain at its present level, this time next year the National Debt would rise to over one-point-five trillion pounds (interest rates notwithstanding).

In tandem, these figures look very sobering. The obvious, logical reaction to them would seem on the face of it to be that to get rid of the deficit, the UK needs to reduce spending to the tune of approximately one hundred and twenty billion pounds. So let’s find bills the Government pays each year of that total and stop the spending programs, and the National Debt will stop rising. Right? Sure, the programs that get cut will be bad news for people who currently benefit from them, but if the country can’t afford them, it can’t keep paying for them. Right?

In fact, this is more or less what the coalition Government has been trying to do over the last three years, since coming to power. George Osborne, the Chancellor Of The Exchequer, has cut scores of billions of pounds from the public sector budget, in terms of large staff cutbacks and reductions in spending programs. This was the return to what is sometimes called ‘Austerity’; a severe, pared-to-the-bone reduction in Government spending, with all services that are not urgently necessary either starved of funding or cut off completely. Somewhat counter-intuitively, while the deficit has reduced by approximately a third – roughly sixty billion pounds – since the Government was elected, this deficit-reduction is substantially less than the Government was expecting. The Office for Budget Responsibility (OBR) had calculated back in 2010 that the structural deficit for 2013 would be down to eighty-nine billion pounds if its Austerity plan were strictly adhered to.

Furthermore, the cuts to public sector spending programs have allowed the Government to cut taxes for employers and companies. Money that was previously being diverted from the private sector to the Government was now being retained by companies again. This should have made money available for firms to hire more staff, increasing income tax yields, as well as more private funds available for people to make more purchases, which would logically increase VAT receipts. This would, in theory, allow the economy to grow, for the country’s total economic output i.e. its annual Gross Domestic Product (GDP) to rise, and so eat further into the deficit.

The problem in all this reassuring theory is that, no, the economy has not grown pretty much at all. Instead, the nation’s GDP has more or less flat-lined from the moment the coalition got in. Indeed, there was a rather weak spell of growth in the last months of the outgoing Labour Government, and it stopped when the coalition started its Austerity measures. Since that time, there have been spells of recession, including late in 2012 the dreaded ‘double-dip’ recession, where the economy shrank in two periods either side of a very, very slight period of growth.

If, as the theory goes, an ultra-low tax-and-spend Government program should lead to a healthy and vibrant private sector, free of the financial burden of propping up the public sector, something appears to be going quite bizarrely wrong. The economy is actually, and has remained steadly for the entire period of the coalition, far more sluggish and listless than it was at any stage under Labour (bar during the ‘Credit Crunch’ of 2008), when public spending was consistently a good deal higher than it is now. If lower public spending should lead to a healthier economy, why is it instead remaining slow and unresponsive?

Well, there are many and varied reasons, some of which are beyond my fairly basic understanding of economics, but I can give you the five main ones here.

1. National economies are cyclical and not linear in function.

The greatest problem with the low-tax-and-spend notion is that it fundamentally misunderstands the natures of both state funding and private enterprise, and the fact that money moves in cycles, and not in a one-way motion from being called into existence until ceasing to exist once it is spent.

One of the misleading illusions we suffer from is that when our money is spent, it is gone and will never return. But of course, this is not really true. All that has really happened is that the money has been transferred from one person’s possession to another. This is what happens pretty much indefinitely. Money goes round and round the population. National prosperity is not just a measure of how much capital it has, it is also a measure of how consistently the capital is able to keep cycling around. Every time money is spent, or paid out in wages to an employee, some of it is siphoned off in taxation to the Government, while the company or person receiving the money is able to spend money as well in turn, repeating the cycle. (This is why thrift with household income, or “good housekeeping” as the young Margaret Thatcher so erroneously called it in last year’s film, The Iron Lady, is a poor analogy for Government spending, as Government spending has money-generating feedbacks that the weekly household shopping will not, as we shall see below.)

With this in mind, it stands to reason that the more people in an economy have money to spend, the better the cycle is maintained, and the more broadly the money is spread around. Where a person becomes unemployed however, they cease receiving money, and so cannot spend. The businesses that they previously purchased from, be it a greengrocer, a supermarket, a corner shop, a tobacconist, a newsagent, a pub, or any of dozens of options, cease to do any trade with that person, resulting in a reduction in profits. (Fewer sales also mean less VAT for the Government.) If enough people become unemployed in an area – say a factory gets closed down and its entire workforce of a few hundred are left out-of-work – a number of the businesses they used to buy from will see a serious fall in profits. One or two of them may even have to lay off staff as well, meaning more unemployment, which will cause further loss of trade for other businesses in the area, and on and on.

However, if the Government intervenes and pays money to the people who have lost their jobs, then they can keep spending with the local businesses. Probably not as much as when they were in work, but enough to maintain sales that would otherwise be lost. With luck, it will probably be enough to make sure more job-losses don’t have to follow.

Therefore, benefits are not the damaging drain on resources that they are often assumed to be by one-dimensional thinkers who are usually looking for scapegoats for the nation’s problems.

Furthermore, public spending in other areas also has a positive consequence for the economy; investment in infrastructure such as roads and railways improves transportation and makes delivery of goods more efficient. Investment in an effective police force reduces crime, which otherwise does serious economic damage of various direct and indirect kinds too obvious to require explaining. Investment in education provides a literate and skilled workforce for the private sector to hire from. Investment in public healthcare provides a healthy workforce for the private sector to hire from. Investment in scientific research provides new technologies that can be used to run businesses more efficiently. All such investment by Government improves industrial efficiency and reduces the likelihood of extra overheads for private companies.

In other words, it does not necessarily follow that public sector spending is a burden on the private sector. It is true that it is an expense, but it should not be seen as the net-drain on resources it is often painted as. Instead, it has a more appropriate analogy within the private sector itself; it should be seen as an investment, in the same way that a commodities speculator invests in goods by paying money rather than by hoarding money – the speculator expects to get a larger sum of money later when he re-sells the stock to someone else who has a greater need for it.

These public sector investments are measured by a calculation known as a ‘Fiscal multiplier’. An investment that has a Fiscal multiplier rating of precisely 1.0 will result in a boost to the economy exactly equal to the amount of money paid into it in the first place. An investment that has a Fiscal multiplier rating of 0.5 will give a boost to the economy of half the value of the money put in. An investment that has a Fiscal multiplier rating of 2.5 will give a boost to the economy of exactly two-and-a-half times the value of the money put in, and so on.

The average Fiscal multiplier rating for public sector investments during the era of the Labour Government, not including the bail-out of the banks, was a little over 1.3, and none of the investments had a rating lower than 0.9. Therefore, the coalition cutting a lot of these services has actually stifled the economy, not boosted it, as although it has saved on the initial investment payments, it has also surrendered the greater profit that they had previously yielded. This has resulted in a net decline of about thirty per cent of the stimulus provided to the economy by public sector investment.

See 5. for more on the issue of Fiscal multipliers.

2. Benefits reforms are actively discouraging job creation.

This one isn’t so much the doing of George Osborne or the Treasury as it is the doing of Iain Duncan-Smith, alias ‘IDS’, at the Department of Work & Pensions (DWP). His handling of benefits during his time in office has so far been astonishingly bad, in a way that makes it all-the-more alarming that once upon a time he was briefly elected leader of the Conservative Party; if he was once considered the outstanding talent on the Tory frontbenches, how bad a shape must the rest of his party have been in after the 2001 General Election?

I am not just critical of his amoral stance on treatment of the out-of-work, or indeed on his equal heartlessness in his treatment of those on the lowest wages in the country. That sort of hatred-of-the-poor is merely to be expected, alas, of any Tory-led Government. I am equally critical of his amazing stupidity, as pretty well all of his changes to the benefits system have served only to make proper paid jobs less likely to become available – arguably have even encouraged increases in unemployment – have fundamentally worked against the Government’s own soundbite aim of, “Making Work Pay”, and actively reduced the stimulus created by general private spending.

The most critical blunder IDS has made is the scheme called ‘Workfare-in-the-UK’, which I am convinced he only introduced to make a big show of sounding ‘tough-on-scroungers’, to please the prejudicial snobs in the right-wing media. The Workfare system, in a nutshell, puts unemployed people into mandatory periods of work for private companies in return for receiving their Jobseeker’s Allowance, and any other benefits. (The DWP insists that the scheme is not mandatory, but as refusal to take part in it can result in the cancellation of an unemployed person’s benefits, this is a pretty empty objection.) This has been presented as a kind of ‘work experience’ scheme, as though everybody forced to do it has not yet left school.

Now, it is hardly necessary to go into too much detail about the moral void of forcing unemployed people to work for their Jobseeker’s Allowance, when the Allowance is so far below the Minimum Wage. It is not quite, as some people call it, slave labour, but it is still appallingly exploitative, and as the period on Workfare will not in any way improve a person’s chances of getting a job – the company recruiting staff through Workfare is under no obligation to offer them a paid appointment at the end of the period, and a Workfare term will not look very impressive on a CV, especially if all it says is, “Stacked shelves at J. Sainsbury for six weeks” – it is pretty well useless as work experience too.

But just as much as it is heartless, the scheme is also completely mindless, and has proven, as people were warning before it was even implemented, to be a free gift to employers whose only interest is to reduce their own overheads. When work needs doing, without a Workfare system in place, a company is forced actually to employ somebody and pay them at least the Minimum Wage. But if they sign up for the Workfare-in-the-UK system instead, they get allocated staff whom they do not have to pay anything, as the work done is effectively funded by the taxpayer. Therefore, many companies have simply signed up to Workfare and got extra staff at no cost at all, and so are now less inclined to hire anybody for real. So efforts to tackle unemployment have been hindered by a scheme that actively discourages companies from offering paid work. Furthermore, having to do unpaid work takes up a lot of the time the unemployed have, so they are given far less time in which to search for a job, presenting a further hindrance, while employees at some companies are resentful that exploitation of Workfare participants has made overtime a lot rarer – why should a company pay time-and-a-half when extra work needs doing when they can get in someone paid for by the taxpayer instead?

There are even claims from some out-of-work people – which I must stress I have no way of verifying – that they have been dismissed from their jobs to make way for Workfare participants. The most bizarre example of this I have heard so far is that one person was apparently laid off from her job at Poundstretcher, was put on Workfare as soon as she signed on as unemployed, and was allocated by her Jobcentre to do her Workfare at… Poundstretcher, where she resumed doing her old job, only now for no wages! (I repeat, I can’t verify whether this story is true or not, but it is entirely possible.) Given that Poundstretcher is part of Baron Philip Harris’ corporation of companies (the Baron, may I just point out, is a Tory member of the House of Lords), it is difficult to believe that it is so short of money that it needs the state to step in and pay its wage-bill.

Workfare kills employment

I don’t know whether this story is genuinely true, but there is certainly nothing in the Workfare system to prevent it.

The system is making unemployment worse. And as already explained in 1., unemployment is a key killer of economic growth.

So, the Workfare scheme is not only amoral, it is also economic suicide.

And it doesn’t stop with Workfare. In the last month, the so-called ‘2013 Benefits Uprating Bill’ (which is the paper-name equivalent of ‘Ministry Of Love’, seeing its only effective purpose is to downgrade benefits for the most disadvantaged in society) has done the passage through Parliament. With this legislative bullet-in-the-foot, IDS has set firm restrictions at precisely one per cent on how far benefits can increase during the remaining lifespan of the present Parliament. Given that one per cent is way below current inflation, this is in effect a serious reduction in benefits, and as I outlined in 1., this reduction can again stifle economic vigour. But more importantly, the overwhelming majority of people who will be affected by the caps in this Bill are not the unemployed, but people who are actually in work. Benefits such as Maternity Pay, Paternity Pay, Statutory Sickness Benefit, Council Tax Benefit, Working Families Tax Credits, and many more, are all being capped well below inflation. If unemployment is truly, as so many Tory-supporters in this country are so desperate to believe, a simple matter of lazy people who have no inclination to get off their backsides and earn their keep, a system that effectively reduces the amount of money working people receive will not do anything to incentivise them.

So much for ‘Making Work Pay’.

We can add to this IDS’ much-publicised direction of the multi-national private IT firm Atos to perform assessments on behalf of the DWP of people claiming incapacity benefits, to establish whether they are able to work. IDS incentivised the firm to find against claimants wherever possible by setting it targets to reduce the total number by. With these targets in mind, Atos has pulled every dirty trick it thinks it can get away with to find excuses to stop benefits for disabled people, either by unfairly loading questions at assessments, or even by making assessment appointments almost impossible for the claimants to be able to attend. (Claimants who are unable to walk being made to attend assessments on the top floors of buildings without wheelchair facilities, for instance.) The upshot is that large numbers of people who are not able to work are no longer receiving the benefits they need just to survive. And some of the people who have been ruled ‘fit-to-work’ are so transparently not fit-to-work at all that the amorality of the assessments has struck many members of the public dumb in shock. (See this video for one of the most brow-raising examples. EDIT: This article from the Daily Mirror provides a lot of numbing examples of Atos’ cynicism. And more here.)

Once again, this is not just deeply immoral, it is yet another economic backfire, for without any income, these jettisoned claimants are now unable to spend, and are effectively taken out of the economy’s spending power. So long as the private sector is dependent on selling its products to members of the public, an economy will require as many members of the public as it can find to have money to spend.

EDIT 8/9/2013: More IDS-shaped folly coming out of the DWP, read about it here.

3. The UK’s Debt issues are about private sector debt far more than public sector debt.

There is a bizarre myth that has taken root in this country over the five years of the economic crisis, a myth about where people seem to think most of the current National Debt problem came from. The idea that was allowed to take hold, especially in the aftermath of the General Election in 2010, was that excruciatingly high and reckless public sector spending through the years that Tony Blair and Gordon Brown were in office had piled up to trillions. Some people even seem to think that it was the cause of the financial crash – the notorious ‘Credit Crunch’ – of 2008. Now in fairness, public sector spending did add a lot to the National Debt in the last couple of years of the Labour Government, but nowhere near as much of it originated there as originated in the private sector. It’s not even close. The problem is that Gordon Brown’s administration managed to muddy the waters and make the public sector look like it was to blame, by effectively transferring the burden away from failed banks.

As recently as 2007, the whole public sector debt was around five hundred and one billion pounds. Still a lot, but at around forty-four per cent of GDP it was far lower than at present, while public spending was at a manageable forty-one per cent of GDP. These proportions were absolutely nothing out of the ordinary, and fairly consistent with previous Governments. (John Major’s Tory Government was never in surplus  in any of its seven years in power, and in 1993 it was running a deficit of fifty-one per cent.)

During this period, thanks to the absurdities of the US Derivatives Market, banks were lending crazy amounts of money to consumers who clearly had little chance of ever paying even half of it off. As many of their debtors were struggling to return funds on time, and in order to drum up extra business in the hope of eventually getting a better supply of capital in the longer term, the banks found even more customers to lend over-valued sums to, which inevitably increased the amount of bad debt, as still more of these customers proved unable to pay back their loans as well. By 2008, there were simply too many bad consumer debts that were going into default, and banks found they were suddenly running extremely low on liquid capital. A similar squeeze was occurring in the USA, some of whose banks had lent substantial sums to UK firms, and were now calling in the debts. The British banks hadn’t enough money to spare to make the repayments, and so finally the long-delayed-but-inevitable crash arrived. Some of the country’s largest banks, most notably Northern Rock, had choked, and they now went cap-in-hand to the Government, crying out for state investment to keep them from folding altogether.

(It is argued by some that blaming the banks exclusively for the crisis is unfair, as the customers who were unable to repay their loans still committed to something that they shouldn’t have. This may seem a fair objection from a personal responsibility standpoint, but it ignores two problems. Firstly, many of the loans were promoted by the banks in such ways that never really drew attention to how large the repayments would ultimately prove to be. Secondly, the general cost of living since Tony Blair had first come to power in 1997 had surged upwards, far in advance of the average wage-increase in the same period – house prices had worse than doubled, as had many basic living expenses (a loaf of bread, for instance, was nearly two-and-half times more expensive by 2009), whereas the average working wage by the late-2000’s had only risen by about fourteen per cent – in fact, consumer debt was deliberately used by the Labour Government to screen the fact that wages were rising far below inflation. So anyone down the social scale wanting to get on the property ladder, or even just wanting to ease the pressures of life on a low wage, needed to borrow quite a lot of money, and sometimes the deeply ill-suited loans the banks wanted to push were all that was available.)

In order to stave off a full meltdown, Gordon Brown’s Government agreed to bail out the banks. The initial bail-out was officially set at eight hundred and fifty billion pounds, which is startling enough, but in real terms it actually caused the National Debt to surge to over one trillion pounds, effectively quadrupling the public sector debt overnight. And of course, the bail-out was not conditional on any increased state regulation, nor, more importantly, on any consumer debts being written off.

None of this had anything to do with public sector spending on the unemployed, the disabled, or people in low-paid jobs, and yet it is the benefits system that the coalition Government is now putting the squeeze on in the name of cutting costs, reducing the deficit, and paying off the National Debt. The problem is, this approach actually makes the Debt problem worse; –

Many of the people who owe consumer debt in the UK are among the unemployed and low-paid – as highlighted in 1., the Austerity approach is killing stimulus and increasing unemployment. Even those who have lost their job but have received a new one are usually being paid less than previously, while other people have had to accept a pay-cut to avoid being laid off. This means the average working wage in the UK is slowly trickling downwards, while people on the bottom rung in general are getting less in benefits than before.

In short, even as the cost of living continues to rise, the poorest in society are receiving less money than they were a few years ago, and those of them who received unsuitable loans have now got less money with which to pay back what they owe. Many of them will be doing well just to pay off the monthly interest on their debts. Most cannot afford even that, and so the amounts they owe are rising faster than they can pay. And of course, as the debts get bigger, the amount of interest being charged each month increases as well. The Income Tax and VAT these people are paying back to the Government therefore isn’t rising.

This is why the National Debt is continuing to rise. Not because the public sector is paying too much in benefits, but because banks in the private sector have taken a huge bail-out of public money while still charging high interest rates on what the public, supposedly, still owes them. The attempt to make the public sector the scapegoat for the crisis is just a cynical blame-shift by the financial industry to evade the consequences of the chaos it created.

4. Tax-cuts have often resulted in money going out of the country instead of into creating more jobs.

Cuts in corporation tax and the top rate of income tax were supposedly designed, as I said above, to encourage firms to recruit more staff, and to help bring down unemployment. But unemployment has continued to rise. Why should that have happened?

Well, this is a quick, easy one to answer. There are the reasons listed in 1. about public spending cuts causing a loss of stimulus. But also, a lot of bigger companies have simply absorbed the extra cash that the tax-cuts have presented to them, and, taking the ‘let’s-bury-our-treasure-and-run-for-the-hills’ approach of the Dark Age Romano-British when boats of Anglo-Saxons arrived, they’ve transferred much of it off-shore into countries or provinces with far lower tax rates, such as the Cayman Islands, or even Jersey and Guernsey. (This technique of cowardice and greed is called ‘capital flight’.) Their hope appears to be to keep their money safely tucked away until the problems have all blown over, and to hell with trying to help with the business of making the problems blow over.

So all that the tax-cuts achieve is for banks in traditional tax-havens to get a juicy injection of liquid capital, while the UK has less money inside the national system. And of course, less well-off Britons – the people who are by far the most likely to spend money when they receive some (simply because they have to just to be able to eat) – have less to spend than they had before the crisis. And so the small businesses they used to purchase from are losing sales… oh, just go back and read 1. again – this is simply the other side of that.

5. The ‘Austerity’ program was based on data that the International Monetary Fund only arrived at by arbitrary – and very inaccurate – guesswork.

When the coalition Government was formed in 2010, one of the earliest policies they put into effect was to establish the OBR. (This was a jolly useful exercise that involved, a) setting up an office, and b) naming it the OBR. Other practicalities beyond that are still to manifest themselves.) To a large extent, this office has proven to be just a local mouthpiece for the International Monetary Fund (IMF), as all it seems to do is tell George Osborne the same things that the IMF have been mechanically reciting for thirty years. Rather than setting up a new Government department, it would surely have been less fuss or expense for Osborne just to pick up a telephone and call the IMF directly whenever he wanted advice. But then in truth it would have been even better if he had just ignored both of them altogether.

When the OBR set out its opening Austerity plan, it of course set the tone for its consistent behaviour since, as it simply took calculations from the IMF and set out a projected year-by-year budget entirely on that basis; how much should be cut from public spending each year, and what the structural deficit would look like at the end of each year accordingly.

There was a snag that neither the OBR nor George Osborne was aware of until late in 2012.

The IMF had spent most of the previous thirty years trying to push the whole planet into a uniform monetarist system. Almost everyone who has ever run the Fund has swallowed the ‘Friedmanite’ dictionary (see below) whole, and as a rule has spent far less time examining what effects its implementation has in the real world. This is why the IMF is often taken completely by surprise when economic crises occur, and will usually single out exactly the wrong things to blame for them – consequent remedial action therefore has a tendency to be ineffective, or to make matters worse. (See what is presently happening in Spain and Greece for examples.)

In this case, the snag of ‘heads-buried-in-the-books-so-intently-as-they-walk-that-they-don’t-notice-what-they-are-about-to-trip-over’ was an assumption the IMF had held for about three decades; a wild overestimation of the net expense of public sector spending. As explained in 1., the net expense of Government spending varies quite widely from service to service, and many services create an effective profit for an economy by generating knock-on stimuli. The measure of how profitable or profligate a public sector expense can be, as mentioned above, is called a ‘Fiscal multiplier’. The rather startling, and lazy, parameter that the IMF had been fouling up its own calculations with for decades was a completely arbitrary assumption that the Fiscal multiplier for all Government spending is 0.5. In other words, the IMF had been assuming for about thirty years that all Government spending generates a feedback of precisely half the value of the amount spent. No wonder that the IMF has always pictured all Government spending to be a burden and ipso facto a nuisance to be avoided as far as possible.

And this was a central parameter in the OBR’s calculations when helping Osborne to draw up an Austerity program in 2010. It was just assumed that all Government spending was running an automatic loss of fifty per cent for the country, in which case every time they cut a spending program, they would automatically get a net increase in money of one hundred per cent the value of the former feedback, which would help the private sector to generate growth.

It is hardly necessary to point out that the IMF’s assumption seemed highly unlikely even before it was finally checked late last year – it would seem an amazing coincidence that all services would generate exactly the same proportion of loss – but worse, no one at the IMF has ever been able adequately to explain where they got that figure of 0.5 from. It seems likely that they just made it up.

Needless to say, the figure was not just wrong, it was hopelessly wrong, as the IMF discovered to its deep embarrassment in the autumn of 2012. As mentioned in 1., no long-term British spending program prior to the bail-outs had a multiplier lower than 0.9, and although 0.9 still constitutes a loss, it is only a loss of about ten per cent, nowhere near the fifty per cent that the IMF had plucked out of thin air. Far more importantly though, the IMF discovered, and announced rather sheepishly in October (in a great blaze of suspiciously-little publicity across the British media), that most of the long-term public spending in Britain had actually been generating a profit through knock-on stimulus effects. The Fiscal multiplier range extended from no lower than 0.9 to as high as 1.7. In other words, at the high end of the range, for every pound that the Government invested, it was returning one pound and seventy pence to the economy. This was essential growth for tackling the deficit, growth that the Austerity cuts were sweeping away.

And Osborne shows absolutely no sign of grasping it, even though both the IMF and the OBR have finally admitted to him that they had got it completely wrong.

The interesting thing is that, historically, Austerity has never really worked when it has been tried. In the inter-war period, Britain, and many other countries, entered a period of Austerity, in the hopes it would help the country recover from the First World War. It failed to generate prosperity then, or to reduce the enormous debt burden the country owed the USA. And in the late 1920’s, the Wall Street Crash caused the Great Depression. Bizarre that such a Crash could occur during a period of prudent international Austerity, perhaps? Either way, it is noticeable that the Depression never really showed signs of ending until the US Government decided to take direct control of its economy with President Franklin Roosevelt’s ‘New Deal’ program from 1933. A Government intervening in the economy is the very antithesis of Austerity, or of Neoliberalism (which is really just the more typical modern name for Austerity). But the intervention worked, and it helped change the USA from an industrial power into a super-power.

It is also worth considering that there was substantial nationalisation of Britain’s industries after the Second World War. Now there were certainly many problems during the period, but between the early 1950s and the mid-1970s, Britain saw its longest ever sustained period of continuous growth. Growth averaged at over four per cent during that period, the proportional National Debt reduced from over two hundred per cent of GDP to a little over forty per cent, and even though there were frequently declines in growth, in only one year was there an outright recession. That was in 1974, and the Government had been powerless to prevent it due to the sudden surge in world oil prices caused by the ‘OPEC Oil Shock’ and the International Stock Market crash. Other than that hitch, growth was continuous for over a quarter of a century.

Recessions happen more in a free market than in a regulated one

You think regulation is what causes economic downturns? Think again.

And all of this was happening while the welfare state was being built from the ground up. It seems public spending and state intervention were not the burdens they are routinely painted as by right wing economists.

Yes, there were economic problems, especially in the 1970’s, but those who saw the Neoliberal/monetarist ideas of Milton Friedman as the answer were trying to solve the wrong problem. They saw regulation of the market and the nationalisation of industry as stifling the economy, when in truth many of the international circumstances of the period meant a decline was going to be difficult to avoid. But recessions became a more frequent event after Margaret Thatcher began the job of dismantling the post-war state institutions that Clement Atlee had started building, while spells of economic growth became far shorter and less pronounced than before. Regulation is not necessarily a safeguard against economic hardship of course, but it is clear that deregulation is even less reliable.

And the current crisis is absolutely a symptom of deregulation, regardless of Conservative claims to the contrary. The banks were reckless in lending to people they should not have lent to vast sums that should not have been lent. They did it in large part because policymakers refused to keep an eye on them, for apparent fear that to do so would ‘stifle’ economic growth – even though there was the obvious danger that, without oversight, some bankers would be tempted to fiddle the figures. This meant that the ‘growth’ could at any time have proven completely illusory, which is indeed what happened.

The odd reality is that Friedman’s monetarist ideas were always entirely hypothetical, and were never based on anything other than his own imagination. They were thought-provoking and ‘outside-the-box’ for sure, but they were completely untested in the real world when they started becoming popular in the 1970s, and part of the reason they appeared to be successful, at least in patches, for about thirty years is that the complete lack of market regulation meant it was very easy for failures in the system to be covered up. Fraud was a standard free market tactic from the early-1980’s right up to the very recent past.

But the current Government – and probably Labour as well should they get back into power in two years’ time – looks certain to persist with Austerity, like a World War I Army General persisting with constant trench attacks, even as hundreds of his own men get mowed down by machine gun-fire. In this stubbornness, there seems to be an ingredient of ‘doublethink’, almost.

Partly, the Tories have taken the Austerity route because it is good for their core supporters – or at least appears to be in the very short term – and by extension improves their own chances of re-election; lower taxes mean richer upper class people, as a rule.

But also, with at least parts of their minds, the Tories genuinely seem to believe that what they are doing will lead to fresh growth, when in fact it is killing it. They have their eyes so firmly fixed on the Friedmanite literature that keeps telling them that what they are doing is for the betterment of the whole economy – and it’s always a nice sop to your conscience to be reassured that what you are doing for your own good will also be for the greater good (it makes choices so much simpler) – that it genuinely catches them completely off-guard when it has the opposite effect.

I am fairly sure that Osborne’s stubborn persistence is as much because he has no wish to face an ugly fact – the fact that rich-people-friendly theories he has believed in religiously his whole life are inherently flawed – as it is because his current course is good for his chums. Hence his reaction is the same no matter what happens; –

When it’s bad economic news, he proclaims it a sign that the situation for the country is precarious and so we must stick with Austerity – we must not risk increases in spending when there is so little money available.

When it’s good economic news – is it ever – he proclaims it a sign that Austerity is clearly working, and so… we must stick with Austerity, because that is what has produced the good results. (Quarterly growth of 0.3%, as announced in the last few days, is a good result. Or at least that is what I am assured… by Conservatives.)

Osborne wants it both ways, as that allows him to continue denying to himself that his lifelong ideas are wrong. Osborne has never exactly been what you would call ‘a man of first-rate intelligence’, and his selection in 2010 to be Chancellor of the Exchequer was frankly mind-numbing, given the Prime Minister David Cameron had the options of both Kenneth Clarke and Vince Cable to appoint instead, both of whom are experienced economists. Osborne’s comparative inability is almost painful to behold at times, his attempts to take pro-active measures always taking him in the wrong direction, while his ideological blinkers stop him even from offering the right reactive responses.

Osborne’s denial – indeed the denial of most of his monetarist Cabinet colleagues – is a bit like Creationists when you try to explain to them why we know the Bible is a book of fantasy.

Although in this analogy, for the Bible you can substitute almost any book written by Milton Friedman.


More on monetarist fallacies can be read at How Thatcher Embodied The Conservative Lie

Beautifully articulate explanation for why the current Tory approach to dealing with the recession is actually making things worse. Partly it is because any measures that radically reduce the size of the public sector will cause unemployment to rise, and rising unemployment will always lead to recession, but also because much of the national debt is in fact private debt and not public debt. With austerity causing unemployment surges and overall wage reductions, debtors are finding it impossible to pay back what they owe faster than the interest mounts.


Scriptonite Daily


The Financial Crisis of 2007/8 was a crisis of private debt.  It only became a crisis of public debt when states around the world made the taxpayer guarantor for this debt and bailed out banks.  However, since then conversation and policy has focussed almost exclusively on public debt, as if this were the source of the crisis.  This has seen devastating impacts on public services, and public perceptions on the welfare state.  In doing so, the government is not solving the financial crisis, but causing it.

Public Debt before and after the Financial Crisis


In the last year before the Financial Crisis, public spending in the UK stood at 41% of GDP and national debt was just 44.1% of GDP. This was consistent with the level of debt and public spending as a proportion of GDP for around the last fifty years.

Running budget deficits has also been a…

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£53 a week, IDS? For one year. Go on. Then we’ll listen to you, you privileged twat.

by Martin Odoni

It’s hard to imagine in these customer-oriented, Health & Safety days, but there was a time when a paying audience wanting to watch a sporting contest in the UK, or indeed in much of Europe, was treated with utter derision by the providers of the service. British football grounds in particular were hives of squalor that loyal devotees of the game paid for the privilege of standing in; they were primitive, crumbling, poorly-maintained stadia whose only design-advancements tended to be haphazard obstacles aimed at restricting movement.

In fairness to the authorities overseeing the British game, by the mid-1970’s they did have good reason to want to restrict the movements of spectators. Over the previous twenty years, an ugly element in society had increasingly attached itself to football, using its large, often-unmanageable crowds, and rugged, insalubrious stadium environments as ideal ‘battlegrounds’ on which to unleash an almost primeval thirst for violence. This element became known as ‘football hooligans’, and they became a serious blight on the professional game. Between stampedes by fans of rival teams against each other through the terraces and stands, large numbers invading the field-of-play during matches, and occasional fighting in the streets outside stadia, hooliganism was a very ugly phenomenon, one that often caused considerable embarrassment to the Government when British – usually English – sides travelled abroad to play against teams from other countries, and unwittingly took hooligan followers with them.

Hooligans, it must be stressed, were a small minority, and even many of the largest and most high-profile incidents usually involved tiny numbers – often just a few dozen in stadia with capacities of upwards of thirty-five thousand. But it was the hooligan element that got all the attention, especially in the media, and there was a growing, lazy desire to paint all football supporters the same bleak colour.

After one incident at Wembley Stadium in 1977, the British Government decided it wanted action taken to prevent spectators invading the pitch (‘rushing the field’, as Americans would put it). The actual incident in question was a rather odd one to provoke such a response, as it wasn’t really a case of violent behaviour at all, but it involved so many people that the Government clearly took fright. An international match between England and Scotland had ended with Scotland beating their ‘auld enemy’ on English soil for the first time in ten years. The Scotland fans, who had travelled to Wembley in such great numbers that there were actually more of them in the stadium than England fans (which happened a lot during the 1970’s – the Scots always took the annual fixture between the two countries far more seriously than the English), were so ecstatic at the victory that more than half of them spilled out of the terraces onto the Wembley pitch to celebrate. The field-of-play was absolutely flooded with over-excited Scotland fans, singing and dancing, surging back and forth in large packs, and tearing off pieces of the ‘hallowed Wembley turf’ as souvenirs. More worryingly, they pulled down the goalposts. If the crossbars had landed on anyone, they would almost certainly have killed them.

It wasn’t fighting, it wasn’t a riot, it wasn’t violent, and in the event, nobody got hurt, but it was getting quite dangerous. It was also an increasingly familiar experience seeing mass-pitch invasions at big fixtures, and so the Government decided it was time for crowd-control measures at all football grounds in the UK to be tightened. In consultation with the Football Association, new guidelines were introduced recommending that effective obstacles be placed between the stands and the field-of-play. The obvious option seemed to be to put up fences right on the front of the terraces, and construct them to run around the full perimeter of the pitch.

Fencing in spectators was not an entirely new idea – they were mentioned in the 1976 ‘Green Guide’, which was a non-binding series of guidelines for making sports grounds safe for spectators; the guide even gave recommended measurements for the size of fences and what provision should be made for escape routes in the event of emergency. (The guidelines would be seldom adhered to.)

Many Health & Safety experts were more than a little agitated at the prospect of fencing in very large numbers of people in what were already very confined and uncomfortable spaces. Even more, they objected that in the event of an emergency, fences would be a major obstacle to honest evacuation efforts. Nothing daunted – or perhaps just not wanting to argue while there was such a strong public mood of antipathy towards football hooligans (any resistance might have provoked the Government to enshrine the recommendations into law) – most of the clubs across England started installing fences in their stadia. A few clubs dissented, sometimes, in the case of really small clubs, simply because they had insufficient money available, but enough co-operated to give the Government the impression that the hooligan issue was being addressed, and so reduced the danger of fences being made mandatory.

Of course, the hooligan issue wasn’t being addressed at all. Far from it, the problem of crowd misbehaviour got a lot worse over the next eight years, with many of the most notorious chapters in the hooligan story being told in the season 1984-1985. Perhaps the most dreadful, certainly the most infamous, crowd disturbance in European history happened on the 29th of May, during the very last fixture of that season – the 1985 European Champions’ Cup Final between Liverpool of England and Juventus of Italy, at the Heysel Stadium in Brussels. Bitter fighting between rival fans in a dilapidated stadium that was already scheduled for demolition (I kid ye not) led to a ferocious stampede across a terrace by a small band of Liverpool supporters. Most of the Juventus fans in their path broke in fear, and ran away along the crumbling concrete terrace. Many stumbled as the aging concrete broke up beneath their feet, and were then inadvertently trampled by fellow Juventus fans who were immediately behind them. Those who didn’t stumble soon arrived at a wall at the end of the terrace and could retreat no further. Again, their fellows came hurtling in behind them, and very soon, fans were colliding with each other and increasingly pinning the earlier arrivals against the wall. In no time at all, there was a mad crush of hundreds of panicking supporters, and those right against the wall were unable to breathe.

It was a sign of how awful a condition the stadium was in that the walls at the ends of the terraces did not in fact have foundations, and were not even built into the surface of the terrace. They had been erected in place on the concrete over fifty years earlier and simply sealed into position with a thick smear of cement. By the mid-1980’s, that cement had long-since decayed, and the only thing holding the walls up was their own weight. Under the even greater weight of hundreds of panicked people pushing against it, such an unstable edifice could not hold up for long. The wall at the end of the terrace teetered over, and collapsed, and the teeming multitude of bodies that had been pressed to it toppled over as well, en masse. Under the chaotic pile-up of hundreds of squirming bodies, there was no room even for air to get in.

The death-toll from asphyxia and other crush injuries eventually peaked at thirty-nine.

The weight of so many spectators propped against it caused the wall to collapse.

The deathly crush of spectators at the Heysel Stadium in Brussels. 39 died of asphyxiation and other crush injuries.

The upshot of the Heysel Tragedy was that the hysteria against football hooliganism in the media and in Government now had its richest fuel yet. English football clubs were banned from playing in European competitions any further until such a time as they could eradicate the hooliganism problem, and new measures were to be introduced by the Government to restrict the movements of football fans even further – both outside stadia, and within them.

(Click here to read more details about the Heysel Stadium Disaster.)

Perhaps the saddest irony of Heysel though is that the dimension of hooliganism effectively blotted out a real opportunity to address more significant worries about safety. Not only was Heysel itself an unsafe stadium – the dilapidated structure was at least as great a factor in causing the Tragedy as fan behaviour – but it was not the first disaster to happen in football in 1985. In fact it wasn’t even the first disaster to happen that month.*

Less than three weeks earlier, in Yorkshire, Bradford City Football Club was celebrating its first trophy-winning season in thirty years, having secured the Championship of the then-Third Division of the Football League. The 11th of May was the last day of the league season, and, although the result of the game would be immaterial, Bradford eagerly played host to Lincoln City, and to a promotion party, at the Valley Parade stadium. It was a very old ground whose almost-eighty-year-old main stand was made mainly of wood.

Around ten minutes before half-time, several Bradford fans near one corner of the main stand noticed that their feet were feeling strangely warm. Initially, they thought nothing of it and kept their attention on the game, but after a few more minutes, the sensation had grown stronger. They looked down and noticed through gaps in the floorboards that there were flames under the stand. They were surprised, but still not particularly concerned. One fan announced he would go and look for a fire extinguisher – it later turned out that there weren’t any – and all the others around him assumed that would be that, and resumed watching the game.

For some of them, this would prove to be a lethal mistake. What happened over the next six minutes or so defied belief for those who were there to see it.

Firstly, after about one more minute, the flames had climbed just enough to start poking through the floorboards. People started moving away from the affected area, but still made no particular attempt actually to evacuate.

After another moment, the fire had engulfed an entire small block of seating, and was now large enough to be noticed by people elsewhere in the ground. John Helm, a reporter for Yorkshire Television, was sat on the roof of the tiny stand opposite, commentating on the game, and it was around this point that he noticed the flames. After a few more seconds, the Lincoln City goalkeeper, David Felgate, also noticed the blaze, but knew no one would hear him above the crowd-noise when he tried to draw attention to it. Thinking quickly, and knowing that most eyes in the stadium would keep following the ball, as soon as he next received it, he kicked it straight into the stand, in the general direction of the fire. There was by this point a lot of very thick smoke puffing out into the air, and there was no way anybody who had been watching the ball could miss the fire now. Within seconds it had spread even further and filled up the entire section of seats at the top-right end of the stand. Police officers arrived on the scene to order an immediate evacuation. Fans finally started scrambling clear as the fire began to spread at a speed that did not seem possible. Hundreds ran forward and climbed haplessly over advertising boards that lined the perimeter of the pitch, escaping onto the field-of-play. Many others however decided to head for the back of the stand, where they knew that there were fire exits that they might be able to escape through onto the main road outside the ground.

Unfortunately, the speed at which the fire was spreading, and the extremely flammable materials the old stand was made of, meant that the air around them was soon filled with unbreathable, opaque, sooty, black smoke. Many lost their way as they tried to edge along the back wall of the stand. Some were struggling with smoke-inhalation and shortage of oxygen. And of the very few who ever did manage to reach the fire exits, they were unable to see the doors through the dense miasma. The fire exits were of a standard push-bar design; locked to anybody standing outside, but with a horizontal bar on the inside at about waist-height that, when pushed, would unlock the door and allow escape. But in the thick black smoke, most of the supporters who had made it this far could not find the bars in order to push them. And the fire was now approaching them at the speed of a charging rhino. The peculiar shape of the stand’s timber roof had drawn the flames up towards it, and a freak fireball now rushed through the interior, along the full length of the old structure. Anyone in its path did not stand a ghost of a chance.

The speed of the Valley Parade fire seemed unthinkable to those who saw it.

The 1985 fire at Valley Parade is famous for taking just four minutes to fill the main stand from end-to-end. But, while this is technically true, it is even more shocking to realise how quickly it spread from filling one section of seating to filling out the stand in its entirety – not much more than *one* minute.

Just four minutes after the ball had been so unceremoniously hacked out of play, the entire stand was ablaze from end-to-end. Literally. The entire main stand – which by a very bitter irony had been due to be part-demolished just two days later and its roof replaced with a modern, state-of-the-art model – had been reduced to a charred skeleton in just a few short minutes of pandemonium.

(Footage from Yorkshire Television of the whole blaze can be viewed at – please be aware before watching that some of the images are disturbing.)

The whole nation was sent into shock over that weekend as the news of the death-toll came through on television and radio; a horrifying fifty-six people had failed to escape the blaze in time. Fifty-four from Bradford, and two from Lincoln. Many had died of smoke inhalation, but some had been burned to death in the most hideous way imaginable.

The precise cause of the fire was never firmly established, but the likeliest explanation was assumed to be that someone had carelessly dropped a smoldering cigarette-end through a gap in the floorboards of the stand. It was later discovered that mounds of flammable litter had been allowed to gather in the cavity below the stand over many long years, and this litter was what had initially caught fire. Some fragments of litter to survive the blaze were found to date back to the post-war period, highlighting the casual attitude of British football clubs towards basic maintenance of their stadia.

The Valley Parade Fire was, at that point, the worst stadium disaster in English football history, and second in British football history only to the Ibrox Disaster of 1971 – when sixty-six fans of Glasgow Rangers were crushed to death at the end of a match after falling down an unsafe staircase as they were leaving the stadium.

As we know now, Britain’s worst sporting disaster of all was still to come – also in Yorkshire –  just four years after Valley Parade, when ninety-six would be killed on the crushingly overcrowded terraces of the Hillsborough Stadium in Sheffield. But the poignancy of Valley Parade and Hillsborough when viewed in tandem is that lessons from the one, had they been heeded fully, could have prevented the other. For in the weeks after the blaze at Valley Parade and the riot at Heysel, Lord Justice Oliver Popplewell performed an investigation at the Government’s request into both tragedies. In his eventual report, there was something Popplewell noted that seemed to get lost in all the anti-hooligan hysteria that Heysel had re-triggered. It was on the subject of fences.

At Heysel, there had been fences, including a very optimistic stretch of chicken wire, to keep rival fans away from each other and away from the field-of-play. They had proven inadequate. At Valley Parade, there had been no fences, chiefly because Bradford City had never been able to afford them. We should thank heaven for poor budgets therefore, because, as Popplewell had noted with some alarm, most of the fans who had escaped the fire had only done so by climbing over the advertising boards onto the pitch. Had the perimeter of the pitch been fenced off, as at most other grounds, this escape route would have been cut off. Everybody would have had to try and evacuate through the back of the stand, and seeing how ineffective the fire exits had proven for just the few dozen who had tried to go that way, the terrible congestion that would have been caused by several thousand taking that route means there wouldn’t have been a hope. No two ways about it, if the fences had been there, the death-toll at Valley Parade would have been literally hundreds, and it was only a fluke of backhanded good fortune i.e. the club had been too strapped-for-cash to afford fences, that had prevented such a toll.

Had it not been for the anti-hooligan hysteria following Heysel, then this serious safety issue from Valley Parade would surely have at least been considered. Even with Heysel, it still should have been – the death-toll in Bradford was after all significantly higher than the death-toll in Brussels – as indeed should other safety problems that were brought to light by Heysel itself. But the Government’s one-eyed attitude to football, an attitude that said, “Once the hooligans are gone, all the problems of football will be gone with them,” more or less blinded them to the very obvious danger that was right there in front of them, almost clamouring to be recognised.

That danger was that fences, especially perimeter fences, were a bad idea. Hooliganism had not been neutralised at all by their installation. Instead, it had become worse, far worse, than it had been before they were put up. It probably would have become worse anyway, but either way, the fences were clearly not having the effect that was expected of them; indeed, one school-of-thought even suggested that they simply changed the parameters of the problem. In the 1970’s, hooligans fought each other hand-to-hand on the pitch or on the terraces. By the mid-1980’s, with full segregation and fencing, fans were as likely to resort to throwing missiles at each other instead, and probably more brazenly, as they knew that the fences would protect them from direct retaliation. (That was undoubtedly a factor in the early stages of the riot at Heysel, where for a significant period, the only fighting between the Liverpool and Juventus fans had been stone-throwing.)

But far more significant than their ineffectiveness for purpose, was the effect fences potentially could have in the event of an emergency. That effect was bound to be wholly negative, more or less by nature, for in an emergency, smooth, free movement of hundreds, or even thousands, of people away from the danger is the objective. Fences are designed to prevent movement, not to facilitate it. If a fire broke out in a stand or terrace, or if a part of a stand or terrace collapsed, or if there were overcrowding, fences would effectively neutralise the widest and most immediate evacuation-route for the spectators i.e. straight ahead onto the field-of-play. Instead, fans would be forced to retreat through much, much narrower passageways through the backs of stands in order to escape. That was not necessarily going to be a safe option, especially if, say, the emergency was a fire that was between the spectators and the exit-route. Or if there were overcrowding, which would automatically cut off access to the back of the stand for people near the front, because all the people behind them would be between them and the exit.

Valley Parade was a great tragedy in its own right, but it also should have served as a warning – that safety was as big an issue for the game as hooliganism, and that the two issues were possibly in direct conflict with one another. The Popplewell Inquiry was compelled to consider the implications of the fire for other stadia if a repeat of the disaster were to be prevented in future, and that inevitably led to the consideration of fences. And sure enough, Popplewell did warn of the danger of closing off evacuation routes in his report. But when it came to implementing his recommendations, the Government’s only concern was with ‘getting tough’ on hooligans, and so the need for safety provisions was largely ignored, as restrictions on movement, even on basic civil liberties, of football supporters were tightened up more than ever before. With increased electronic surveillance, vicious barbed wire lining walls, and high fences bordering the unclean, dilapidated terraces, football stadia in England were starting to look less like places for communal entertainment and more like Prisoner-Of-War camps. All because of a matter that was being rather exaggerated by a media that was always hungry for dramatic headlines. Sixty-six had died at Ibrox because of an unsafe stadium. Fifty-six had died at Valley Parade because of an unsafe stadium – and it would have been far more had anti-hooligan measures been fully implemented there. Thirty-nine had died at Heysel, partly because of hooliganism, but also partly because of, yet again, an unsafe stadium.

In this context, safety should surely have been seen as the priority for football to sort out. Instead, the Government was more interested in law and order for the masses than in imposing regulations on businesses. No change there.

In truth, although hooliganism was very ugly and did often produce inexcusable property damage, actual deaths as a result of it were extremely rare. Even at Heysel, none of the victims had died as a direct result of the riot. There were often very ugly scenes of violent behaviour through the 1980’s – the most frequent perpetrators probably being fans of Millwall in London – but it was an animal whose bite was seldom as fierce or bloody as its looks would suggest. All the intensive efforts to contain it, while ignoring the many other problems afflicting a sport that had clearly been rotting away since the war, showed that the Government was getting its priorities wrong, probably just for PR reasons; it has been an abiding characteristic of British Tories for decades beyond counting that they love having a crime problem to over-react to, as it gives them a chance to make a posturing show of being ‘tough’, and of being ‘the party of law and order’. While there was no doubt that hooliganism was a serious issue and that it did need to be stopped, as was usually the case with the Government of Margaret Thatcher, the solution chosen to the problem was to keep hitting it as hard as possible, and if innocent bystanders got a bloody nose at the same time, well, omelettes and broken eggs.

There was a failure, not just in Government but in football’s own authorities, to recognise that the game’s infrastructure and facilities had withered, and were both deeply obsolete and threadbare. Old, crumbling stadia, unhealthy, badly-constructed environments providing almost no comfort for paying customers. Many stadia still had no seats available, and were composed pretty much exclusively of standing terraces, many of which had changed little since the Second World War, bar the onset of decay. A lot of the time, clubs would give so little thought to maintenance of grounds that they were frequently smelly and unclean. They were also undersized, for a terrace area was always given an estimated capacity that would allow the maximum physical number of spectators to be crammed into the space given, in order to maximise gate receipts. Room to move shoulders was a luxury that football clubs apparently felt that their loyal followers did not pay enough to merit.

Although many fans preferred to stand at matches, and even today a large number of them would still like to see terraces brought back (because they create a more exciting atmosphere), the reality was that the terraces were implemented and maintained so irresponsibly in the 1980’s that they were an environment that invited trouble. Most fans were well-behaved, and they tolerated the grubby, uncomfortable conditions, but those who actually thrived on the conditions and really loved the squalor of it all were almost certainly going to be the sorts of people who enjoyed the uglier side of life in general. Thus the dirty, unsafe environment of English football stadia in the 1980’s very much contributed to, might even have been a root cause of, the encroachment of hooliganism. It was the culture of English football that had gone rotten, and until the turn of the 1990’s, there was no attempt whatever to address that, or even to face up to the reality that the game needed reform at its structural level if it were ever going to bring hooliganism under control. Getting rid of terraces would not be a necessary part of that process, but rebuilding them to be safer, designing them better, maintaining them far better e.g. cleaning them every once in a while, and assessing capacities with safety in mind ahead of profit, would all be critical to making the game appealing enough to the better-behaved supporters, who had gradually drifted away from football over the previous ten years. Alienated and intimidated by increasingly unpleasant viewing conditions, ever harsher policing, and by the hooligan element itself, ordinary well-behaved fans who just wanted to go and watch their team play every Saturday were deserting the game in droves throughout the 1980’s. Attendances were already falling thanks to the mass unemployment of the period, and they were by the mid-1980’s at a desperate low. Fans were for too long taken for granted by the game, and their average match-day experience, nothing much to write home about to begin with, was deteriorating with every passing season.

None of this was even considered through the late-1980’s. Spectator safety and comfort continued to be seen as an irrelevance, as though the misdeeds of a relatively small number of hooligans somehow forfeited the right of the majority to be treated with dignity. They were not even seen by the wider public as having the right to be safe, while the police routinely treated them with paranoid suspicion, prejudice, and a heavy-handedness that often came close to provoking the very violence that they were supposedly there to prevent.

It is in this context that the Hillsborough Disaster of 1989 should be viewed. Not in the idle, prejudicial context of, “Oh it’s those Scousers again! They killed at Heysel, then they killed each other!” Now it is fair to say that Hillsborough would never have happened were it not for the hooligan problem of the era, but even so, it had nothing directly to do with hooliganism. Indeed, if we wish to sum up what caused Britain’s worst sporting disaster in a single word – as if labelling is ever a wise approach to defining a problem – the correct word would not be ‘hooliganism’, it would in fact be ‘anti-hooliganism’. The attempts to prevent crowd violence at any cost were bound to have a particularly high cost sooner or later. The extreme measures to contain and control large crowds, the callous, indifferent harshness and suspicion of the police towards ordinary members of the public who just happened to be wearing a scarf in the colours of their team, the irresponsible casualness of the clubs and the wider football authorities, and the rabid, unimaginative desire of the Government and media to keep trying to deal with hooliganism by simply hitting it, all added up to create a sporting environment so contemptuous of its own paying public that it was more or less impossible for any spectator to be safe in it. Entire terraces were fenced up into cages, capacities were never properly calculated, and what calculations there were were always rounded upwards to increase gate receipts when they should have been rounded downwards to decrease crowd pressure. Travelling fans were marched between railway stations and stadia by police like cattle being herded by impatient farmers, or worse, like Prisoners-of-War being marched from the battlefield into a Stalag. Freedom of movement, either inside the stadium or through the streets of the cities they visited, had been taken away from them, as the price for daring to wear a scarf or a rosette.

On the terraces, the individual fan was crammed into about fifteen square inches of space, with little room to move, occasionally crushed against people around him, all in an often smelly and dirty environment that would be chaotically and peculiarly designed. Attending a home match was bad enough, but visiting the stadium of a remote club was a confusing, degrading and undignified business, and so utterly remote from how conditions are today, it almost sounds like a comparison between two different countries. It was in fact the disaster at Hillsborough itself that finally taught the lessons needed to change this shabby culture of hostility and contempt.

On the 15th of April 1989, just one element was needed to light the combustible mix; that element was incompetence. A police officer with almost no experience of policing a football game was made match commander for, of all fixtures, an FA Cup Semi-Final at Hillsborough, and his complete inability to understand how to direct the operation or how to marshal a large crowd meant the dangerous, obsolete lay-out and facilities of the stadium, and the unthinking hostility many of his officers harboured towards football supporters, could not be guarded against. The lack of know-how when it came to handling a crowd meant that far too many fans were shepherded into two enclosures behind the goal at the Leppings Lane end of the stadium. The fences lining the perimeter, designed to prevent spectators from invading the pitch, now blocked the beleaguered supporters when escaping onto the field-of-play was not a matter of mischief but a requirement of survival. And the sneering attitude of the police meant that it took a long time for many of them to cotton onto the reality that people were being crushed to death just yards away from them.

It was not hooliganism that caused Hillsborough. It was anti-hooliganism that made it possible – anti-hooligan feeling and anti-hooligan measures – complacency that allowed it, and incompetence that triggered it.

Once this context is understood, it becomes clear that hooliganism is neither needed nor plausible in order to understand the Hillsborough Disaster. For it was not the final destination of hooliganism that it has for so long been coloured as. Instead, it was the final reckoning of an ill-considered attitude that those in authority had held for much too long; –

The belief that the only way to fight aggression, is with even more aggression.


* There were in fact three football disasters in May 1985, arguably four. As well as the Valley Parade Fire and the Heysel Tragedy, in between times there was a stadium crush in Mexico City that claimed another ten lives.

On the same day as the fire in Bradford, a riot broke out at St. Andrews Stadium in Birmingham, between fans of Birmingham City and Leeds United. Over five hundred people were injured, and a fifteen-year-old boy was killed. Justice Popplewell did reference the riot in his report into the Valley Parade Fire, comparing it to the Battle Of Agincourt.

1985 really should be seen as the darkest year in the sport’s history.


Other essays about the Hillsborough Disaster; –

The Myths

Ticketlessness Was Not A Factor And This Is How We Know

The Air Of Shock Should Itself Be Shocking

Changing Statements

Is Thatcher Guilty? And If So, What Of?

Anne Williams – A Real World Heroine

Discursive Types

Meet A Silly Old Dear

Lateness Caused The Disaster? Are You Serious? What Lateness There Was Saved Lives

After A Year The Sun’s Apology Is Still Not Accepted – And Nor Should It Be

The Institutional Guilt Lies Not Only With The Police

Where Was I?

The Crush Barrier – A Smoking Gun?

The Name That Became A Moment

Oh, It’s The Drunken Fans Chestnut Again, Is It? Don’t Even Go There

Forged Tickets? Only If You Think Star Wars Is A Documentary

by Martin Odoni

The word ‘hero’ is much over-used these days, a word whose application and impact are greatly cheapened by being brandished on such meaningless figures as sports stars and actors. The word ‘heroine’ has not yet been cheapened so much; probably for reasons of unconscious sexism, most people in society associate heroics with males, especially two-dimensional males who are dressed in silly, vaguely effeminate costumes and have the words “POW!” and “SPLAT!” annotated over their image in comic books.

So, as this seems to be a time in history when the word ‘heroine’ can still have the impact it deserves, I wish to use it to pay tribute to a remarkable woman of unabashed courage, who yesterday succumbed cruelly to the scourge of cancer before she could see the rewards her fortitude deserved.

Anne Williams, for those who do not know, was the mother of Kevin Williams, who was one of ‘The 96’. Which is to say that Kevin, at the age of just fifteen, was one of ninety-six people to die as a direct result of the calamitous crush at the Hillsborough Stadium in Sheffield in 1989. (The number who died as an indirect result of it, say from post-traumatic stress, is not clear, but we do know that it’s too many.) A little under two years after the Disaster, a Coroner’s Inquest was performed in Sheffield. It ruled that all the victims had died of the same cause; traumatic asphyxia, inevitably leading to death within four-to-six minutes of the victim’s airway closing. The Inquest also ruled that all the victims were beyond saving by 3:15pm on the day, and so no evidence from after that time was accepted or analysed at the hearings.

Anne was mystified and appalled at such rulings. She had strong reason to believe that Kevin was still alive as late as 4pm; if we are to accept the notion of death being inevitable within six minutes of the 3:15pm ‘cut-off’ time, all victims would surely have been dead by 3:21pm. But verbal evidence given by several witnesses, most notably Special Constable Debra Martin of the South Yorkshire Police, indicated that they had seen Kevin still alive, and even speaking (albeit incoherently), at the turn of the following hour.

At the Inquest, the West District Coroner for South Yorkshire, Stefan Popper, would have none of it. It is clear from transcripts of the court proceedings and correspondence with members of the West Midlands Police and his legal peers that he had, for whatever reason, premeditated the outcome. By quite explicitly declaring that all the victims were sure to die by 3:15pm, he had decided in advance what the cause of death was in all ninety-six cases, and barred exploration of all avenues that might have led to a different conclusion. This of course meant the outcome was entirely dependent on his own untested assumptions, and so defeated the object of holding an Inquest in the first place.

The verdict of the Inquests was Accidental Death, instead of the hoped-for ruling of Unlawfully Killed, or even Accidental Death Aggravated By Lack Of Care. The bereaved families were devastated that the state was effectively rejecting that the deaths were the by-product of its own failures, and that it would not allow any attempt to demonstrate those failures. It later emerged that Debra Martin had been one of a number of witnesses who had been pressured by the West Midlands Police into changing their statements.

Anne rejected the death certificate issued and, along with fellow members of the Hillsborough Family Support Group, lodged an appeal to have the Inquest verdict overturned. The appeal was turned down in 1994.

Again frustrated, but nothing daunted, Anne appealed again within a year, this time through the office of the Attorney General. Again, the appeal was rejected. Anne’s son had been dead for six years now, and not one responsible party had faced prosecution for the Hillsborough Disaster. There was not the barest sign of Anne, or any of the other bereaved families, receiving justice, or even genuine acknowledgement of the debt the British legal establishment owed them. Around the country, the majority false impression was still that the Liverpool supporters themselves were the ones to blame for the Disaster, and there was an almost complete lack of sympathy in most of the media.

Most people in such a position would surely have just decided by this point to accept that the ceiling was caving in on them. But not the Hillsborough families, and least of all Anne Williams. In 1997, at the behest of the newly-elected Labour Government, the HFSG attended an unofficial ‘Scrutiny Of Evidence’ enacted by Lord Justice Murray Stuart-Smith. With no cross-examination of evidence or witnesses allowed, and a needlessly narrow scope that barred re-analysis of evidence submitted to previous investigations, the ‘Scrutiny’ proved to be another empty gesture, a process largely designed to keep the full truth quiet while giving the appearance of thoroughness. Sure enough, early in 1998, Stuart-Smith reported that he could find no evidence to merit a renewed Inquest or Inquiry. Another wall for the families’ foreheads to collide with. For Anne Williams, after nine years she had found nothing but maddening resistance from the British legal system to the evidence she had that her son’s Inquest had been inherently flawed.

During this period, to add to her pain, she and a number of the families had a falling-out with the HFSG. Anne had been personally treated with real harshness by the Group’s chairman, Trevor Hicks, who terminated her membership for supposed ‘self-interest’. The Group began to fracture under the strain of growing infighting, until a secondary faction split off to form the Hillsborough Justice Campaign. Anne herself would become its chairman for a time.

In 1999 – ten years after Kevin had died – the bereaved families were preparing for what looked like being the final roll-of-the-dice, a Private Prosecution against the police officers in charge of the matchday operation on the day of the Disaster. At the same time, Anne wrote a book detailing the full story of her decade of heartache and frustration, titled, When You Walk Through The Storm: The Hillsborough Disaster And One Mother’s Quest For Justice. It was a soul-destroying account of her and Kevin’s story, conveying the heartlessness of British law, and the intimidating odds that Anne had had to face down. And yet it was also a story filled with hope. Her tale of, in effect, becoming a private detective to track down the witnesses and medical experts who could contradict the Inquest verdict, as well as studying to become a learned expert on the intricacies of the law, showed her to possess a shrewd mind – perhaps without even realising it. But more even than that, what always came across stridently on every page was that it was written by an author who, no matter how hard she had been bitten, had lost not a jot of her determination to win justice for her son. She had faced setback after slap-in-the-face after blind alley, and yet she gave no doubt that she would persevere.

Anne Williams - a modern legend in Liverpool.

Anne Williams – a hero-figure in the struggle between the rights of ordinary people and the monolithic power of state institutions.

A year on, the Private Prosecution again ended in favour of the establishment; the jury acquitted former Superintendent Bernard Murray, once of the South Yorkshire Police, of two counts of manslaughter, and was unable to reach a verdict on charges against former Chief Superintendent David Duckenfield – the notorious match commander who had made the fateful decision to open an outer exit gate without first sealing off access to enclosures that were already full. Lord Justice Hooper, presiding over the trial, ruled that Duckenfield could not be re-tried over the Hillsborough Disaster. Another door slammed shut in the faces of Anne and her fellows. Eleven years of determined struggle, a marathon of legal avenues pursued, and it had resulted in no accountability or acknowledgement at all by the British legal establishment. Although since 1996, Jimmy McGovern’s ITV docu-drama, Hillsborough, had started to correct the urban mythology surrounding the Disaster, the lack of formal acceptance by, and prosecutions of, the South Yorkshire Police continued to colour perceptions of what had happened, while formalising the unspoken idea that the victims were in some way ‘expendable’.

Once again, Anne could not accept that. She would fight on. Over the next few years she pieced together more new evidence, and in 2005 she made a fresh submission to the Attorney General’s office. Again, her appeal was rejected. Her son had been lost to her for some sixteen years, and still nobody had ever been held to account for his death. The following year, Anne withdrew from the Hillsborough Justice Campaign to form a smaller campaign called Hope For Hillsborough, allowing her to focus exclusively on pursuing what she probably thought was her absolutely final legal avenue; she would take her son’s case to the European Court Of Human Rights, on the grounds that the flaws in the Inquest had robbed Kevin of the right to a fair trial. It was an imaginative, clever interpretation of Habeas Corpus, an Act of law that was invented to protect the accused rather than the victim. It was brave, it was determined, it was clever, and it was futile. The European Court turned her appeal down in March 2009, stating that the time period in which to make her challenge had expired many years earlier. Anne’s long-suffering comment afterwards remained defiant, while hinting at the familiar obstacles presented by legal minutiae. “I am used to the setbacks now. Interestingly, they have not refused me because I am not right, it was because of timing… A while ago, I was going to stop fighting, but now I have decided to carry on.”

Is it not amazing? By this point, twenty years had passed since Kevin had been taken from her at Hillsborough. He would have been in his mid-30’s by then had he lived, and Anne had been brushed aside again and again in her bids to bring him justice. She had now taken her case to Europe, and been rebuffed again. At this point, almost anybody would surely have just accepted that it would never happen, and nobody would blame them for it. And yet still Anne Williams would not give up, because she knew the truth had been concealed, and she knew there had been an injustice against her son. For sure, anybody would have told her, if she cared to ask, that she had already done more for her son’s memory than could ever be demanded of her. But still to her, knowing she had tried would never be enough on its own, not so long as she could carry on, and so long as Kevin was still denied justice.

Ignorant naysayers have growled at Hillsborough campaigners down the years, “Oh will you people ever get over it?” as though their persistence is a sign of weakness. All the bereaved families have shown this to be untrue to differing degrees – the fact that they have fought on in the face of intimidating legal machinery, media hostility and public indifference speaks of courage rather than mawkishness – but Anne Williams’ story perhaps most of all resonates with – here comes that word – heroism. She remained conscious at all times that being repeatedly denied was not her failure, it was a failure of the state. The only failure she could be guilty of was to stop trying, to be cowed or intimidated, and she just would not let that happen.

With the release of the Report of the Hillsborough Independent Panel in September 2012, at long last, Anne Williams – and her son – received half the reward they were due, when it revealed the chilling truth of what happened at Hillsborough, and the even uglier truth of what followed. At last, the Liverpool supporters were completely exonerated, those who were truly responsible for what happened were firmly exposed, and the attempt to hide that responsibility was unambiguously revealed. And above all, it was finally confirmed, exactly as Anne had always protested, that the Coroner’s Inquest had been intrinsically flawed, and had reached an erroneous conclusion. At least forty-one – yes, forty-one – of the victims, perhaps as many as fifty-eight, had still had the potential to survive after 3:15pm on the day – maybe if there had been a more appropriate emergency response. And yes, Kevin Williams was one of those victims who might still have been saved.

But revealing the truth was, as I say, only half the reward. It was not enough on its own to bring justice. That could only follow when the consequences of the cover-up were reversed. For a start, the Inquest verdicts might finally be quashed, but that would still take several months thanks to the aforementioned obstacles of legal minutiae. And in the meantime, there came yet another new bombshell from an unexpected angle. In October, Anne Williams announced that she had been diagnosed with terminal cancer. Hillsborough campaigners all over the country, many of whom had been fighting her corner for years, were devastated. After everything that had happened, after the years and strength she had invested in the campaign, after Anne had finally found the breakthrough she had waited over two decades for, this news sounded like nothing short of a crime. Theft. Fate had found a new way to steal the boon from her.

Thankfully, she at least lived long enough to see the flawed Inquest verdicts overturned shortly before Christmas, and with them the last vestiges of the cover-up were swept away. There was no mistaking the joy on her face as she was interviewed by television reporters outside the High Court in London. It was also heartening that she got to attend the first annual Hillsborough Memorial service to be held following the Report’s publication.

But still, just a few days later, she was taken from the world, and even though she saw the injustice reversed, she can now never see justice served. It is a national indictment that, even though it is finally heading in the right direction, British justice has still failed her completely. How much the strain of fighting the system might have played in her illness, I do not care to speculate on, but it would not surprise me if it played a role. If so, it would be no exaggeration to say that she died for justice, a justice that she did not get to see. That is the epitome of a heroine.

Margaret Thatcher died a little over a week earlier, and the Conservative Party fought tooth, nail, claw and talon to get her a state funeral (in all-but-name anyway). Why? Because she ‘saved the country’, so they claimed. It sounds very heroic, put that way.

Anne Williams actually fought the country, stared down its heartless, bludgeoning legal mechanisms, exposed a sinister, corrupt element in the way it was policed, and revealed to it some unsettling truths about itself. She took up such a daunting, unequal struggle for nearly a quarter-of-a-century. And she won. That doesn’t just sound heroic. It was heroic. I would be amazed if there were any national tribute to her of any description from the direction of the state, because she wasn’t a politician, and she wasn’t rich, and she didn’t go to one of ‘the’ schools.

But surely that makes her achievements all the more impressive. I don’t care what the ‘traditional’ criteria are, she deserves real recognition. If she could not see justice in life, the country owes her recognition in death. Recognition of what was taken from her in 1989, and recognition of the untold fortitude she displayed to win redress for her son.

Why did Thatcher get a state funeral ahead of Anne Williams?

One of these women headed the Establishment and damaged hundreds of thousands of lives. The other woman fought the Establishment and helped end a protracted web of corruption and injustice.
Guess which one got the state funeral.

The real world does not need comic book heroes. The real world has – or at least had – a heroine of a far likelier kind. A figure so familiar to us we have almost stopped appreciating the remarkable feats she is capable of.

A mother fighting for her child.

EDIT 16-12-3013:
Last night, on the annual BBC Sports Personality Of The Year show, Anne posthumously received the Helen Rollason Award, for outstanding achievement in the face of adversity. Rollason was a BBC sports presenter who, like Anne Williams interestingly enough, succumbed to cancer ahead of her time. During her declining years, Rollason helped raise over five million pounds to set up a cancer wing at North Middlesex Hospital.

It is no state funeral of course, but this award means that at least Anne Williams has finally received some form of national recognition. It is the barest minimum that her country owes her, after so many years of letting her down.


Other articles about the Hillsborough Disaster; –

Hillsborough: The Myths

Ticketlessness Was Not A Factor And This Is How We Know

Digging The Dirt

Changing Statements

Discursive Types

Hillsborough: In Its Correct Historical Context

Lateness Caused The Disaster? Are You Serious? What Lateness There Was Saved Lives

After A Year The Sun’s Apology Is Still Not Accepted – And Nor Should It Be

The Institutional Guilt Lies Not Only With The Police

by Martin Odoni

So, the house from Kansas has finally departed the cyclone and crash-landed, and the victim whose feet protrude from under its foundations is the Wicked Witch of Grantham. Margaret Thatcher is no more.

As I type this, it is in fact nine days since her final demise, and they were nine days of almost stupefying predictability. Every day, we’d hear a sentimental Tory politician of past or present offering words of mourning and nostalgia that would completely misrepresent the realities of the 1980’s, words that as soon as I heard them would provoke me to sneer, “Oh, I just knew he would say something like that.” And every day, a thousand other people would respond with equally predictable expressions of joy and celebration, including street parties in many of the nation’s favourite cities; predictable not least because most of them had been loudly promising for years that a party was precisely what they would throw once the Iron Lady had kicked it.

Now I have said more than once before that I have little time for people who go so far as to organise celebrations for the passing of a political or military opponent – see – and indeed the more prolonged and triumphant the revelries become, the more ill I start to feel. This is true even for the worst of tyrants, and the reality is that, heartless, anti-democratic, and dictatorial though Thatcher was, she wasn’t quite the free market answer to Pol Pot (her prized ally against Vietnam) that she is sometimes painted as.

I concede I allowed myself the privilege of a smug grin for most of the day when her death was announced, and even a satisfied drink or two when I got home from work, but I was never going to organise a parade through the streets. As much as a matter of seemliness, it would be quite pointless and empty to start partying, as her death has come much too late for it to have any beneficial effect for anyone whose lives she made so miserable while she was Prime Minister. She fell from power only a few months after her favourite false-bogeyman-of-Africa, Nelson Mandela, was freed from prison, and since then, the real world Margaret Thatcher has been increasingly a figure of quaintness. Either clinging with increasing exasperation to obsolete, 1940’s Neo-Toryist ideas of patriotism, obsessing over the phantom ‘menace’ of Trade Unions that were already more or less crushed by about 1987, or just retreating into rather poignant and enfeebled dementia. By the end of her days, she was no longer a figure to be hated so much as a doddering, mad old granny to be treated with reluctant pity.

In her time, she was like the 2005 revival of Dr Who; you hated her, everyone you knew hated her, you were convinced everyone in the country hated her, and you could never find anybody who would admit to not hating her. And yet somehow, every election, she kept getting back into power anyway. Just like the new Dr Who is largely made up of over-loud, sentimentalist rubbish, but when it comes down to it, nobody dares to suggest it should be taken off the air.

Why did Thatcher keep getting back in though?

One argument I’ve been hearing a lot over the last few days is that she was prepared to face realities that her predecessors – both Labour and Conservative – were too blind to accept. The 1970’s, according to these people, were the darkest, gloomiest and shabbiest decade in living memory (er, never heard of the Blitz, anyone?) with the structure of British society wearing thin under the grinding strain of planned economics, nationalisation of industry, and subsidisation of failure – be it failed industries or indolent people. Thatcher was respected, they argue, simply because she formalised reality; she merely did what would have had to be done sooner or later,  they say, irrespective of who was in power.

The standard hagiographic clichés to sum this view up have been as follows; –

“She deserves our love and respect, because she put the ‘Great’ back into Great Britain!”

“Even if you didn’t agree with her, you have to admire her convictions!”

“The country was about to go bankrupt. Thatcher knew we couldn’t keep paying for things we couldn’t afford!”

“She really believed in what she stood for!”

But is any of this really true? The trouble is that most of the people who say it are part of the large minority who inevitably benefited from the changes she made, which were designed to concentrate wealth. Many of these people were part of the obnoxious ‘Yuppiedom’ culture of the mid-1980’s. But did Britain really become ‘Great’ again, given that it finally lost, once and for all, its production and resource bases, and so became completely dependent on foreign imports and investment to get by? Britain has mines across its length and breadth, and yet the country hardly extracts any coal, tin or iron from its own soil. Almost all such resources that the British use are now imported, creating trade deficits, and presenting the countries the resources are bought from with considerable potential to ‘strong-arm’ the British Government.

As for the secondary sector, contrary to popular myth, manufacturing is still alive in Britain. However, the great bulk of it is run from other countries these days, which again makes it very easy for multi-national firms to twist the arm of British policymakers, with the threat of closing factories and laying off workers any time the “economic climate in the UK ceases to be as appealing” i.e. any time that running a business in the UK becomes a bit more expensive or becomes subject to rules that already exist in other countries – workers’ rights that are actually worth something, for instance.

I am not disputing that the British primary and secondary sectors were in a poor way at the turn of the 1980’s, but what they needed was reform. That does not mean that they needed butchering, and the price the UK has paid in the decades since Thatcher just dismantled them and sold off the assets has been a very high one, in the sense that, far from being ‘Great’, the country has almost ceased to be able to sustain itself without foreign investment. (Some might well argue, given how much Britain was dependent on lifting unpaid resources from its Empire in past centuries, that this ‘greatness’ was always an illusion.)

And did Thatcher really know we couldn’t keep paying for things we couldn’t afford? And more to the point, did she put a stop to it? On close analysis, the answer appears to suggest a split-personality at best. Roughly speaking, she wanted to cut public spending, but she didn’t know how to do it. At all. Yes, she cut spending on education, health, and support for the unemployed, but in real terms, public spending almost always went up during the period from 1979 to 1990. In only two years while she was in office did public spending decline. In all the others, spending continued to go up, even though she was reducing monies paid to its previous beneficiaries.

The reason for this is as true of her as it has been of almost every prominent Tory in the years since; she just never ‘got’ (perhaps wasn’t willing to ‘get’) the circulatory nature of how an economy operates. She understood enough that low taxation could plausibly increase private spending, and so increase profits for companies, which in turn would lead to greater tax yields. Unfortunately, she couldn’t spot everything else that could and would happen all around it when spending is reduced in a frantic rush to allow taxes to be cut in the first place. She seemed convinced that everything could be solved with a mixture of ruthless impatience and aggression.

The difficulty was that she denationalised or closed down much British public industry. Some people will sniff, “Good, less time and money spent on failing industries” at that, but this is not only a generalisation, it is also short-sighted. For consider, what other knock-on effects would happen when you close down firms, be they private or public, and thus make their staff unemployed? The answer is, of course, those who have lost their jobs will stop spending, because they have no money to spend. And so the shops and businesses who had previously profited from their custom suddenly lose trade. And as the businesses lose trade, revenue would go down, offsetting the benefit of the tax-cuts. The top and bottom of the matter in the early-1980’s was that the tax-cuts were not sufficient to increase tax yields, because they would not result in increased sales all around, nor in companies taking on more staff. Sometimes they would even have to lay off staff to cope with the loss of sales, repeating the cycle. This is a contributory reason why unemployment surged so wildly for much of the decade.*

It was therefore necessary to compensate for the loss of spending power by allowing people to stay on benefits – albeit reduced – even though Thatcher never really believed in them and tried to make them harder to obtain. (This goes to show that, contrary to right wing dogma, benefits are not only good for the disadvantaged, they in fact provide good stimulus for an economy, at least in the short term, as they make sure that those who are out of work can at least carry on spending money.) So public spending was merely diverted, not reduced, from paying for people to work – which at least provided an end-product – to paying for people merely to avoid starvation. Given Thatcher was always so obsessed with her father’s notion that, ‘Anyone can do well so long as they work hard,’ and therefore wanted to end state-support for those out of work, this does rather put a different complexion on matters for those who say that she “believed in what she stood for”. Her own hyper-aggressive approach cornered her into doing the opposite. Whether or not you see that as a good thing (which I do – benefits are not only sound morally, but they are, as I explained above, of far more practical value than they are often given credit for), it is clearly a paradox in her position.

But even more so, when people say Thatcher “believed in what she stood for”, it rather invites a question; what exactly did she believe in? This is where we arrive at the central lie of her entire worldview. She believed in, and embarked on, a campaign of Milton Friedman’s monetarist ideas. The monetarist philosophy argues that the state should not be allowed to interfere in the market at all. The less regulation there is, according to Friedman, the freer the market becomes to take the actions that are needed to keep an economy ticking over and vibrant. The more a state intervenes, he believed, the more reluctant companies would become to make decisions, or to employ staff.

But further, he also theorised about one of the sporadic blights that haunted many a successful economy. That was inflation, the phenomenon of a currency declining in value. Inflation can be caused, not just by economic hardship, but even by economic success. The better an economy is doing, the more people there will be in work, the more money there is moving around, and the more people there will be with money to spend. And in all probability they will spend it. When spending is not merely high but manic, demand will be high. And when demand is high, the tertiary sector will know it can afford to charge the maximum price for its goods and still make its sales more often than not. The higher a price people have to pay for goods means, by definition, that the currency they are using is worth less than it used to be, for they are unable to buy as much for the same amount of money as they could previously. Friedman’s idea to address that was to keep wages for the majority low. If people couldn’t afford to buy much more than the occasional luxury, he opined, then demand could be kept from turning manic.

The best way of keeping wages low, Friedman argued rather insidiously, was to keep demand for labour low. One of the main circumstances that cause wages to rise is when there are fewer workers available than the number that are needed by industry. At such times, those people who receive an offer of work have a powerful bargaining chip with which to negotiate a better wage, for the simple reason that the employer may not have an alternative candidate to turn to. (In England, the aftermath of the Black Death of the Fourteenth and Fifteenth Centuries was a prime example of that. The population had halved in size, and suddenly there was a severe shortage of workers available to farm the land, and so the surviving serfs began to demand much better terms from landowners. Any landowners who refused to do a deal would soon see the serf walking away to offer their services to someone who had a better grip on reality.)

The answer as Friedman saw it was to make sure that demand for work was higher than the demand for labour. This is to say, the number of people looking for work needs to be substantially higher, at least in monetarist eyes, than the number of jobs available. That way, any time a candidate is angling for a job, they won’t be in much of a position to haggle; if the candidate refuses the offer put on the table in front of them, the employer can be sure of finding somebody else who will tolerate low-payment terms soon enough, because the number of unemployed people to choose from is substantial, and most of them will be desperate for an income.

By the cynical logic of Friedmanite thinking, unemployment – usually between five and ten per cent of the working-age population – is a good thing, as it keeps inflation contained. This is to say, monetarism wants there to be unemployment.

And here is the lie in Thatcher’s philosophy, indeed in conservative philosophy as a whole, not just in the UK but around the world. Thatcher hated unemployment, and she despised those people who were unemployed for long periods of time. Conservatives the world over despise the unemployed. They speak of them as ‘scroungers’, or ‘parasites’, or ‘moochers’, and are forever grailing against the ‘burden’ that benefits claimants heap on ‘hard-working’ (by which they really mean upper-Middle Class) society. Thatcher always maintained unflinchingly that anyone who needs help should get up and help themselves, and that if anyone wants to get on in life, they will always be able to do so, as though it is a simple matter of trying a bit harder.

And yet, while loudly and contemptuously berating what she (quite wrongly) called ‘parasitism’, and the largely mythical culture of dependency, she was very actively, very willingly, even proudly, creating more unemployment, and making it more or less impossible for unemployment ever to be really eradicated. It is quite true that, under James Callaghan, the era of full employment had already ended – unemployment had increased to one and a half million by the time he fell from power in 1979 – but Thatcher made no attempt to stop the slide. On the contrary, she butchered public industry, and that soon doubled the sum, probably worse than doubled it. (We may never know the exact real number of Britons out of work around 1983, thanks to the rather obvious figure-fiddling that was going on at the time, but there is a growing suspicion among historians that the number might even have exceeded four million. In a population of under sixty million, as it was at the time, that is truly horrendous.)

And Thatcher revelled in it. She wasn’t sorry for it, she wasn’t hesitant to do it. She wanted to put large numbers out of work, because it was what the monetarist doctrine told her to do; to get Government out of the economy by denationalising, and to reduce demand for workers. And the most vile aspect was that she offloaded the blame for the consequences onto her victims; she condemned people for being unemployed, while condemning them to unemployment. She castigated those who were out-of-work, while taking away their option to be anything else.

So either Thatcher did not believe in what she stood for after all, or she believed in two mutually exclusive premises, and tried to speak up for both of them. Either way, she was lying. Lying to the country, or lying to herself, well who knows? But what she said and what she did were not compatible, and almost every ‘Neoliberal’ conservative since her time – not just in the UK, but in the USA, Australia, Italy, Germany and many other countries beyond – who have invoked those same philosophies, have been telling the exact same lie.

The lie is to say that being unemployed is shameful, while making sure that there will always be large numbers out of work. It is a lie used as a substitute for justifying monetarist policy. The policy is convenient, so conservatives adhere to it, but it has terrible repercussions for innocent people, and will always cause opposition. The most effective way of evading criticism for unfairness is to blame its victims for their own misfortune. To condemn them for their ‘idleness’ or their ‘profligacy’. So when conservatives throw ordinary people on the scrapheap for the sake of monetarist convenience, the easy way to avoid a shaming argument is just to condemn those who have been scrapped. Call them ‘dependent’. Call them ‘parasites’. Call them ‘useless’ or a ‘burden’. Call them ‘lazy’. And try not to let attention be drawn to the fact that they are on the scrapheap because conservatives put them there – usually without even consulting them.

This is why I find Tory appeals for ‘respect’ over the last few days, in response to the anti-Thatcherite rhetoric,  to be empty, pompous and two-faced. Conservatives have spent their lives insulting the poor, often in Thatcher’s own name. If the poor wish to condemn Thatcher in return, when finally she is gone for good and can hurt them no more, who can blame them?

So now, in the aftermath of Thatcher’s funeral – insultingly paid for by public funds of all things – and a week of listening to the usual history-rewriting, dewy-eyed Tory mush about Thatcher being the ‘saviour of Britain’, I look back on those vulgar days of revived class snobbery in the 1980’s, and compare them with now, and realise that they are right in a sense. She did save Britain, but not in the way her acolytes would have us believe. What she saved was Old Britain. Not the Britain of state-run industries or trade unions, but a much older idea. The Britain of elitism; sure the elite may have changed names, or even where some of them came from, but they were still an elite as much as the old aristocratic ruling class of previous centuries. The Britain of jingoism; a country where the definition of doing the right thing is being pro-British, thus allowing Thatcher to be dear chums with PW Botha, General Augusto Pinochet and General Suharto while condemning the African National Congress as terrorists. And a Britain that convinced itself it was ‘Great’ simply because it was British. As I said earlier, there was something unsettlingly Neo-Toryist about Thatcher’s worldview, like a 1940’s Conservative desperately trying to convince himself that Britain was not in decline after the colossal strain of fighting two World Wars in thirty years. Some people might acclaim Thatcher to be a radical, or even, really perversely, a ‘working class heroine’, simply because some of her Yuppie supporters emerged from the lower classes. But for most on society’s bottom rung, life got far worse thanks to her, and that was because she believed it should. Despite her claims, it was not possible for absolutely anybody to make it in her Britain by working hard. Hers was a Britain designed not to have enough to go around. Since the war, the nation had moved away from that old idea of itself, and the idea was starting to die out, only for it to be revived with a vengeance in 1979. That was the Britain that Thatcher saved – by reversing the steps taken away from it.

And if the public funding Thatcher failed to cut must now be used for her funeral, purely because conservatives like it, then it simply proves what many of us have known all along; ‘austerity’ does not mean cutting needless expenditure to repair the British economy. It means that, from now on, the Government will only spend money on the things that rich people like.

Should we even be surprised? That was what always happened in Old Britain. It is a sick but fitting tribute to Margaret Thatcher that, having restored Old Britain, she should be given the only kind of send-off that Old Britain could possibly like.


* Today, we have a similar problem with George Osborne’s one-eyed obsession with getting rid of public sector workers. Every single worker he gets rid of will end up with little or no income. How are they supposed to contribute to the nation’s already-dwindling cash-circulation when they have no money to spend? If he really believes that the cutback approach is correct – which it probably isn’t – he needs to do it in stages, offloading staff at a trickle, and allowing time for the private sector to take up the lost public sector workforce without it being hit by a private spending down-surge. Instead he is trying to remove many thousands of people from the state payroll en masse. By any perceived wisdom, of either the left or the right, that is self-destructive folly.