On Saturday 19th July, Tim Farron gave the third annual William Beveridge Memorial Lecture at the Social Liberal Forum conference in London. The title of his lecture was "building a new consensus" and it was a direct challenge to the Thatcherite consensus of the last 35 years. I agree with Tim that the contemporary political consensus has failed and that we need a new one.
The Failure of the Thatcherite Consensus
The Thatcherite consensus and its mixture of free markets, deregulation, and small state economics is something that both the Conservatives and Labour have supported for two decades. The light touch regulation of the banking industry by both Tory and New Labour politicians was one of the main reasons that led to the financial crisis in 2008. The burst of the unsustainable housing bubble and the bank bailouts showed that the Thatcherite consensus was a failure.
Since 2008, Thatcherism has gone from strength to strength; harsh cuts have been enacted on the welfare state, the market continues to encroach on public services, a new housing bubble is inflating, and the wealthy are still not taxed enough. What should have died off six years ago or perhaps 30 years ago is back. The centre-right believes that they have won the big economic argument and for too long the centre-left have let them think they have won the argument. This old broken consensus needs to be challenged by a new progressive consensus inspired by William Beveridge.
The Plight of the Poor and the Young
Nowhere is the failure of the Thatcherite consensus more evident, then in the looming social crisis that faces this country in regard to the situation of the poor and the young. One of Beveridge’s giant evils was want. There can be no greater want than the ability to be able to feed yourself and yet, there are now almost one million people using food banks run by the Trussell Trust alone. It is terrible that in the seventh richest country on Earth some people can still not afford to feed themselves. Many of the reasons why people use food banks are related to welfare reforms and benefit delays. The social security rug that was laid down by Beveridge in the 1940s is gradually being pulled from beneath the feet of those who most need it.
Youth unemployment is still a big issue facing Britain. There are still almost 1,000,000 young people out of work. Workers in their 20s and 30s are also having to struggle by with little job security, student debts, and no wage increases. Central to Beveridge’s philosophy was the belief in tackling unemployment through state intervention and economic stimulus. Today the state seems unwilling to provide a social framework through which secure, well paid jobs could be created.
For many years very few politicians have sought to reach out to the young and the poor, this has led to many of them being effectively disenfranchised from the political system as they are unwilling to vote and feel unenthusiastic for the results of democracy. Politicians need to reach out to these groups and have policies that will engage and encourage people to participate in our democracy once again.
The Role of Global Corporations
During the SLF Conference, Mark Blackburn asked a question to Tim Farron regarding “corporatism.” It is important to recognise the role that globalisation has played in the Thatcherite consensus. Many aspects of globalisation are very positive, Britain has benefited immensely from global technological innovation and multiculturalism. However, some aspects of economic globalisation can be more negative. Some corporations are wealthier than nation states, and where wealth leads, power will surely follow. In 2009, according to the World Bank, corporations like Royal Dutch Shell and Wal-Mart had a bigger GDP than EU countries like Belgium, Sweden and Austria. Global corporations exert immense pressure on nation states to have favourable tax policies and labour laws. There needs to be global cooperation to ensure that companies pay their taxes, and that those companies that do not pay their workers a fair wage, or that ruin the environment are held to account.
A new consensus for Beveridge Liberals
Social liberals such as Beveridge and Keynes helped to create the post-war consensus. Once again, social liberals need to be the architects of a new progressive consensus to replace the Thatcherite consensus. This new Beveridge consensus must give everyone, young or old, rich or poor, man or woman, north or south, an equal stake in society.
It can no longer be acceptable to allow masses of younger and poorer voters to be effectively excluded from having a political voice. It also cannot be acceptable to base an economy on many people being paid low wages and many more struggling with low standards of living. Furthermore government needs to be actively preparing for the future; whether this is ensuring that enough houses are built or whether ensuring that the NHS is fully equipped for the health conditions of the 21st century.
The greatest achievement of social liberalism was the welfare state. A new Beveridge liberal consensus must protect and enhance Beveridge’s achievement. People must have enough social security to live free of poverty and unemployment. Finally the state must remain vigilant of global threats whether they come in the form of climate change or unaccountable corporations.
The Democratic Fight for the Future
As Tim Farron alluded to in his speech, a new consensus will have to be fought for. This democratic fight, must engage people with a social liberal vision for the future to replace the Thatcherite consensus and the broken ideas of the right. The Liberal Democrats must lead this democratic fight and they can only do it by sticking to their historic roots as a centre-left, social liberal, active party. The vested interests of Thatcherism in both the Tories and Labour are well dug in, but a radical social liberal agenda can help to displace them at the ballot box. Britain needs vision, Britain needs hope, and Britain needs a new Beveridge Liberal consensus.