It is arguable that, despite the radical changes that have transformed the British economy over the last three decades, the political economy underlying the welfare state remains intact. This compact, forged following the swing to the left in 1945, was based upon a universal benefits system, that all members of the national community would benefit from. The postwar Labour government wished to extend the perceived benefits of wartime mobilisation and national solidarity, transforming the People’s War into the People’s Peace. Such was their success that the underlying principles of the welfare state and the National Health Service, ‘from the cradle to the grave’ and free healthcare for all, became defining qualities of the British national identity.
Despite the dismantling of the nationalised industries, the third pillar of the welfare state, and the contraction of the benefits system by linking pensions to prices and the use of mens testing, the underlying principles were maintained. Indeed, they were strengthened by the development of the welfare state into a subsidised service for the professional middle classes, with free health and cheap university education. What the Labour government giveth, the Labour government can taketh away. A striking feature of New Labour policy, or its Brownian version, is the gradual reorientation of the welfare state from its universalist roots towards a structure that favours the public sector professions. This trend appeared during the last Parliament, where the idea that government should automatically finance the university education of the middle classes was broken by the introduction of tuition fees.
Now, in the early days of the Blair administration, there are indications that New Labou is abandoning the principles underlying the universal benefits system in favour of structures and policies that benefit public sector employees. Instead of dismantling the benefits, except where they are financially unviable in the long term, the government has opted for positive discrimination.
This includes the possibility of subsidised mortgages for first time buyers who work in the public sector. Non-graduates will be able to retire at the statutory retirement age, but the government is considering whether graduates, especially private sector professionals should be forced to take their pension state benefits at the age of seventy in recognition of their statistical propensity to live longer. As an aside, this currently favours public sector professionals who will be able to retire at sixty on a defined benefit scheme whereas the private sector pension systems have been crippled by the downturn in investment returns since 1999 and the huge increase in taxation. The immoral viciousness of this government shines through in their willingness to increase the taxes on savings that people put by for their retirement.
Whilst these developments expand the welfare state, they strike at the social contract which supports the system, including the perceived values of fairness and inclusivity. New Labour mouths these slogans but takes steps to discriminate against the middle classes. The governent is closing off alternative routes that were utilised to provide education or an inheritance for their children. A possible example is the removal of charitable status for private schools, a change that may force many of them to close.
Whilst the expansion of the state should always be opposed, the development of overt discrimination within the public sector towards an embryonic nomenklatura, may be a positive development. For, within a democratic system, those discriminated against, will increasingly question why they should pay their taxes for deteriorating or stagnant services that are used to benefit others more than themselves.
I think you’re putting an unwarranted libertarian spin (= distortion of the facts) on things here.
Firstly, the mortgage deal is not specifically for public sector employees, but for aimed at people buying property for the first time – whether they work in private sector or public. As anyone who had bothered to pay attention to the announcement would know.
Secondly, the retirement age differential suggested is actually not only because graduates tend to live longer but because the start paying tax and NIC three to five years after non-graduates and are more often in jobs that don’t have set retirement ages. In any case, retirement age differentials based on educational attainment would be politically difficult to implement and are, frankly, far from certain. Also, the current public sector retirement age of 60 is unlikely to last much longer.
I think if you filter out the anti-state hysteria you will find that the reasons measures like these are being proposed is that the current system is heading for collapse in the light of demographic changes and an increasing average lifespan. It’s bugger all to do with any “embryonic nomenklatura,” and to suggest it is is delusional.
EG
My first thought on seeing the mortgage announcement is that Brown is getting desperate to prop up the housing bubble. He has to stop that bubble from popping before Blair resigns because if it goes so does his chance of becoming PM. Of course once he becomes PM he won’t give a damm.
I like the way you think! It sounds like something out of “The Road to Serfdom”… great write-up. As for the historical accuracy, I’m uneducated on the recent history of the UK, so it’s a moot point. If what you said is a historically coherent perspective, then you’re right.
1327 – Yes.
Philip, although Comrade Brown would love to finance a nomenklatura and has no doubt juggled such thoughts around in his strange dreams, this is about a socially acceptable face of keeping the mortgage market afloat. Because the government’s “helping first time buyers”. QV 1327.
That it’s none of the government’s business to involve itself in the housing market, or the DVD market or the holidays in Spain market has been tamped down by the carey-sharey feeling being promoted.
Real life: If people can’t afford to be first time buyers, tough. They’ll have to live with their parents or rent until they get a better job, the mortgage market comes up with a solution for them, or their parents kick in with a down payment. Or there’s a downturn in the market. Under no conceivable circumstances is their failure to be able to buy property the business of an elected person.
As 1327 says, Grim Gordon’s (doesn’t he look even more repellent when he smiles?) concern is not the woeful buyers but his personal future. To hell with the UK economy! To hell with the mortgage markets! It’s all about meeeeeeeeee! I’m not going to be robbed of my destinee!
Actually, the idea is not new. It is just a ramping up of the ‘shared ownership’ scheme currently operated through Housing Associations.
As per usual Mr. Gray is indignant. If you look at the world through ‘society-is-a-machine’ eyes then, of course, the machine needs the occasional drop of oil or bit of maintenance. What he does not seem to grasp is that the Samizdatistas do not see the world through those eyes.
Only because the facts are being twisted, presumably in the interests of making the story more appealing to libertarians. It’s not exactly lying, but it’s not exactly the whole truth either, is it?
Neither do I, but I take it as it comes and not filtered through the lens of dogma and ideological preconception. However Samizdatists look at the world, there is no justification for distorting the facts and bending truth to make a story where one doesn’t exist.
Euan
Taking it as it comes means you never see the bigger picture. Put this idea alongside all the other measures to build Labour’s client state and the real intention becomes clearer.
It needs repeating often that New Labour isn’t about governing, it’s simply a machine for winning and holding power.
Therefore, 850,000 new public sector jobs since 1997. Therefore, the welfare state is rolled out until no-one is excluded. Therefore, a corrupt voting system. Therefore, I not only pay for my home but I’m required to pay for someone else’s.
If this policy is put into place expect it to apply only to public sector employees in certain areas of the country. Non-Labour areas.
The idea that graduates might be expected to retire at a later date has been attributed to Adair Turner, chairman of the Pension Commission thinktank looking into ways of reforming the UK system. He has distanced himself from a report in the Sunday Times about it.
The idea of subsidised cheap mortgages comes a bit rich from a government like this which slaps massive stamp duty costs on first-time buyers (I speak from bitter experience).
The experience of subsidized mortgages is a mixed one. Arguably, tax relief on mortgages in the 1980s merely served to push up house prices overall. It was one of Maggie’s blind spots that she did not realise this.
I think there is a quite conscious attempt, though, by this government, to create a client class of public sector voters, Euan Gray’s dismissive remarks notwithstanding.
Euan, The issue of the delay of 3-5 years between a graduate and a non-graduate starting work was already addressed 25 years ago (and possibly still earlier). There are such things as Class 3 NICs. They are (fixed rate) voluntary contributions with which a graduate (or any other person with gaps in his/her contribution record) may purchase equality of entitlement to state retirement pension with a person with a full contribution record. It may well be the case that in marketing this aspect of the system to higher earning graduates, the government has made a bad bargain on behalf of the tax payer, but for the government to tear up that agreement retrospectively is an even more flagrant example of pension mis-selling than that for which New Labour pilloried the private pension providers.
Sorry Euan,
I did not mean to make you appear to be arguing with yourself. I am gettin used to a new mouse and though the input focus was on the text box for the salutation when it was in the Name: field.
Pete,
How so? I do see the bigger picture, but I’m not paranoid about it.
Ah yes, talking of paranoia…
That’s what political parties are for, isn’t it? The same applies to the Tories, but since they can’t both win at the same time one party is at any one time a loser.
And so on. Yes, but this is the governing party essentially bribing and inflating its natural support base. All parties once in office do this. In the same way, a more business oriented and individualist party would privatise the functions carried on by these people, flog the shares to everyone else, and let somebody make a profit from it – thus bribing and inflating ITS natural support base.
What goes around comes around, as they say. The feeling on the right of the UK political spectrum right now seems to be not dissimilar from that on the left in the late 80s/early 90s.
RTFA.
As it happens, the area where house prices are most distorted is the south-east. The fact that this is where there is likely to be most take-up of this scheme is not in itself indicative of a sinister Gramscian conspiracy to perpetuate the Labour nomenklatura on the backs of useful dupes on the state payroll (unless, of course, you’re paranoid). I know some would like this to be so, but there’s no need to spin the facts to suit preconceptions.
On another tack, this is what the established news media are often criticised for. Blogs sometimes put themselves forward as being somehow above all of that, and yet here we see EXACTLY the same thing happening, and not for the first time. Unsurprisingly, however.
The established media is biased one way or another not because of evil Gramscian conspiracy, but because it is made up of human beings who naturally gravitate to others of a similar outlook. In the same way, blogs (being run by human beings) tend to do a similar thing.
EG
If the current system is to be retained, even in attentuated form, this is not enough. After all, who in their right mind pays for something they’re expecting to get whether they pay or not? One might see this as making these NICs compulsory.
Either way, it isn’t a conspiracy.
EG
We may well end up with a system like that in Itayl, where there is overt and legal discrimination in favour of state employees (“statali”) and against private people (“independenti”). The private sector people have to work harder, pay more taxes more quickly, get fewer holidays, retire later, and generally get pushed around.
And the system is self-sustaining because the state employs so many that there’s a vested interest majority in keeping things as they are.
This “key workers” nonsense is the start of it in the UK.
Well all credit to Mr Gray for sallying forth but, as the sainted Mark Steyn pointed out last week, the public sector payroll vote in Blighty is almost exactly the same as the proportion of the electorate which voted Labour in 2005.
It seems to me that, slice it where you will, government public policy on a range of issues privileges some at the expense of others. It’s the old familiar argument about equality of outcomes versus equality of opportunity. Put another way, do the ends justify the means?
British government policy, thus, is coercive and feudal because our status and due in life is determined by our membership of one or other designated client group, from Muslim school girls to ‘key’ workers, from first time home buyers to make-workers in public sector jobs. You name it.
May I refer the Hon Gntlmn to my own scribblings on the subject at (Link), scroll down to ‘Two Nations’ and ‘Preferential Treatment’.
And another thing: how is this Brownite central plan anything but homes for votes?
Shirley Porter must be kicking herself.
Edward Lud,
Absolutely. Gordon Brown is corrupt, as is this entire government, and I have absolute contempt for the people who voted them back in. I hope their vote comes round to bite them in the arse and they all get stuck with mortgages with high interest rates (thanks to the BofE ‘s remedial action to control an economy falling to pieces under G Brown).
BTW, I don’t like this Labour elitist “key worker” crap either. Workers in the private sector are the key workers – from the girl who asks “What would you like to drink with your burger?” to the real estate agent to the family that runs the corner shop to the barrister with the £150,000 retainer fee. They are the key to Britain’s economy. The rest of them are passengers.
Yes, it is corrupt. And wicked.
How, how, did they ever purport to occupy the moral high ground with this dross?
It is the single greatest political propaganda coup (with the possible exception of Goebbels’ success in persuading people that Hitler was elected by a popular vote in 1933).
Edward Lud, excellent, excellent comments. Keep visiting this site.
Of course the Tories in the past have tried to solidify support for their cause by things like selling council houses to the private sector, encouraging wider share ownership via privatisation, etc. It had a limited amount of electoral success although the “new capitalists” that were created in many ways got burned in the recession of the early 1990s.
There is no doubt in my mind that Blair/Brown are creating a client pro-Labour electoral force through such policies, although they may have other motivations.
Subsidized mortgages for “key” workers will distort the housing market and as Verity rightly puts it, how is one going to decide what a “key” job is?
If the government really wanted to help first-time house buyers, it would lower stamp duty, or better still abolish it, as well as freeing up our planning laws and encourage more housebuilding. But the latter measure would be politically controversial, of course.
The national health care system in Britain is a good example of getting what you pay for…so is Canada. The hospitals in the US near the Canadian border do a brisk business whilst US citizens send to Canada for their medications.
The dis-incentive to strive, built into all socialist systems, demoralizes those it intends to benefit.
What is the current percentage of home-owners in Britain? Here in the US with the subsidy for mortgages (as a tax break) ownership is reaching seventy per cent. That’s amazing, considering the cost of housing, but then many people end up ‘house poor’ as a result.
In New Labour speak, “key worker” means, of course, public sector worker. The public naively believes (because it’s repeated so often) that public sector workers are paid less than private sector workers. In fact, even without taking their generous pensions and early retirement options into account, the average is almost exactly the same, the median is higher and the median per hour is 20% higher in the public sector. In some areas public sector workers are paid below market rates (and in others well above), but that it only because the unions insist on national wage bargaining.
I read today (in The Times) that nursing graduates are paid, on average 10% higher in the UK than graduates in electrical or electronic engineering. This is madness given the huge differential in the intellectual and skill level involved.
HJHJ is correct. “Key worker” means public sector worker. It is absolutely outrageous that these are now being presented as a special status class. Oh, what the hell am I saying? It is not outrageous at all. It is the norm under the Blair regime. So the police who are rude to you on the phone when you call for help, and who don’t bother showing up – unless you say: “Help I’m being burgled by two armed men who have are holding my 10-month old baby hostage – and I’m parked in a fire lane!” Nurses who wear their hair fetchingly around their shoulders so it sometimes brushes against patients and who sometimes wash their hands, when they can tear themselves away from exchanging news and views with one another. Teachers, diversity counsellors, outreach counsellors, real nappy counsellors, Bangladeshi interpreters, a zillion hospital “administrators”, public housing officials, inspectors of every goddamn’ thing in Britain, etc. Key workers.
And now, cheap mortgages and unwilling help from the wealth creators. As I said above, when interest rates rise, as they most assuredly will, I hope this special status tears a painful chunk out of their arses as they have to pony up money for homes they could not have afforded in the first place without special concessions and grants. God, I hate socialism!
And I hate you, Verity.
Apologies…couldn’t resist
Will Atlas Shrug?
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