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The International Writers Magazine: The Consensus

By George!
• Tom Kilcourse
On Friday, 3rd October, George Osborne made a speech to the Institute of Directors in which he accused the Labour Party, trades unions, the Eurozone, UKIP and charities of being anti-business.


He asked those present to ‘raise their heads above the parapet’ to defend ‘business’, which he conflated with enterprise and ‘the free market’. Osborne claimed to have believed that arguments about capitalism had been resolved when the Berlin wall fell.

The implied contrast between what he calls capitalism and communism is disingenuous, to say the least. The vast majority of people who oppose Osborne’s version of capitalism are neither communists nor anti-business. Nor are they against enterprise or the operation of market forces. What they are opposed to is the cronyism thinly concealed behind a veil he refers to as the ‘free market’.

He told the gathering ‘You have to get out there and put the business argument. Because there are plenty of pressure groups, plenty of trade unions and plenty of charities and the like that will put the counter view.’ If that is so, George, perhaps you should ask yourself ‘why?’ If, as you claim, your version of business ‘delivers prosperity for the people’, how could anyone conceivably argue against prosperity? Who but a fool would listen to someone making the case for less prosperity?

Osborne claims that a consensus had existed between political parties that ‘national economic interest’ should be put ahead of ‘opportunist advantage’ and that this consensus is now a thing of the past. This is rich, coming from the Chancellor in a Party that sees the two as synonymous, and has done so for many years. Since the days of Margaret Thatcher’s premiership opportunist advantage has been the name of the game, with the opportunists often being from abroad.

The loudest cheers for Osborne’s speech were probably heard overseas, in France, Germany, China, Russia and some Arab states, not to mention the USA. One wonders how the ‘national economic interest’ is served by having four of the big six energy companies owned by foreigners. How is it in our national interest to be subsidising French electricity consumption through the profits of EDF earned in Britain?
In truth, the Conservative Party’s obsession with divesting state owned assets set in motion an orgy of ‘opportunist advantage’ mainly involving supporters of that party. Take Thatcher’s naïve belief that her right to buy council houses would lead to a property owning democracy. The vast majority of the houses bought at knock down prices by council tenants are now in the hands of private landlords, some boasting property empires, who let them at inflated rents. Those rents are affordable in the main by people supported by state payments of housing benefit.

Then, in the nineties we saw the vandalisation of British Rail and its replacement by a diverse bunch of businesses, the whole overseen by Railtrack. Remember Railtrack? That is the outfit that had to be scrapped after wasting £billions of public funds partly because, having rid itself of BR engineers, it had nobody left who knew how to run a railway. Now, the majority of people are in favour of renationalising the railway network, but despite their wishes, this government is determined to re-privatise the East Coast main line, which is currently being run successfully by public enterprise.

I happened to be employed by British rail at the time as Director of The Grove, BR’s management development centre in Watford, having been recruited from GEC to prepare The Grove for privatisation. In that position I witnessed at first hand the shameful behaviour of the Major government and its lickspittle servants, who were interested only in breaking up BR and flogging off the bits at any price.
At the time, BR was an asset rich business, being the owner of land in most British towns and cities, often in prime positions, particularly in London. Those assets were not drawn upon to fund the business because as soon as they were realised HM Treasury would have grabbed the lot. So, there existed a viable alternative to the piecemeal privatisation that we witnessed. BR could have been left in one piece as a government owned, but not government run, business, self-financing with a brief to break even only. Britain would have had a unified railway system offering an affordable service. Was such an alternative even considered? It is worth noting that not a single foreign country has followed Britain’s example on railways. Perhaps that is why we still dream of a high speed line, while Europeans and Japanese have had them for years.

Housing and BR apart, privatisation has proved to be a very expensive exercise without offering the anticipated efficiency. That has not prevented the likes of George Osborne from supporting opportunist advantage, irrespective of the effects on our national economic interests.

It is interesting to see that Osborne did not include banks in his list of anti-business institutions, yet the Chancellor knows well that British banks failed to support business at a time when they could have accelerated economic recovery. As Owen Jones explains in his excellent book ‘The Establishment’ “Yet rather than lending to businesses, banks used their new money to rebuild their balance sheets instead.” The same author tells us that in the autumn of 2013 bank lending plunged by £4.7 billion.

Perhaps George would have found mention of the banks embarrassing. Some in the audience may have wondered why the banks were seen as an exception to the rules of free market capitalism so beloved by the Chancellor and his colleagues. Why was it seen as fitting to nationalise the very institutions that brought about the crash of 2008?

The Berlin Wall fell in 1989, since which time Britain has been ruled either by Conservatives or by a Blair led New Labour government. Both parties were imbued with devotion to the free market philosophy. That is why Osborne thought the debate settled. Perhaps this unholy consensus explains why the UK has declined in the international economic league table in recent years.
© Tom Kilcourse October 6th 2014

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