So, he announced, from now on, the Treasury’s forecasts would be rigorously vetted by an independent body, the new Office for Budget Responsibility (OBR) – and, as a result, the chancellor’s public credibility would be restored.

Trailed as an innovation on a par with Gordon Brown’s 1997 decision to set up an independent Monetary Policy Committee within the Bank of England, the OBR looked like it could be a potentially useful body.

Two months on, however, Osborne’s cunning plan seemed in tatters. First, after a Treasury leak raised serious questions about the employment forecasts presented in the coalition’s emergency budget, the OBR rushed out some fresh figures conveniently in time for Cameron to head off the critics during prime minister’s question time in the House of Commons.

Shortly after, it was announced that the OBR’s chief, former top Treasury adviser Alan Budd, was going to resign after only three months in post. It also turned out that for all its vaunted independence, the OBR had set up shop within the Treasury, a few doors down from the chancellor.

Was this another political fiasco, on top of the abrupt departure of the first coalition chief secretary David Laws? Had the unexpectedly self-confident Osborne shot himself in the foot?

Well, not really. It turned out that Budd had all along only intended to head the OBR for three months in order to get it established. As for the physical location of the OBR, one might as well argue that the chancellor’s residence at 11 Downing Street meant that the prime minister could easily keep him on a tight leash. Try telling that to Tony Blair.

However, the establishment of the OBR does raise some important issues about how economic policy is made in a capitalist democracy.

Back in 1944, the Polish socialist economist Michal Kalecki famously predicted that as public spending became more and more important, governments would be tempted to engineer a boom towards the end of their term of office in order to get re-elected. Once back in power, they would then slam on the brakes and restore the fiscal balance, only to start spending again as the next election loomed. He called this ‘the political trade cycle’.

To avoid this political manipulation, a fiscal authority completely independent of the government of the day might seem to be a good idea – but it would also make ministerial government largely pointless.

Osborne’s OBR is an attempt to shore up the chancellor’s credibility by at least ensuring that his plans are based on ‘reliable’ forecasts of where the economy is going. But reliable forecasts can’t be made in a capitalist economy.

True, they are based on statistical models of how the economy has behaved in the past. But economists have fundamental disagreements about past economic behaviour, and in any case a capitalist economy is not like a machine that functions on the basis of stable linkages between its components.

As we know only too well from the credit crunch of 2007-08 and the ensuing crisis, the behaviour of financiers, businessmen and other economic actors – even politicians – is fundamentally unpredictable. Someone, therefore, has to make what amounts to a set of reasonable guesses.

The real story about the OBR concerns these guesses. Osborne’s budget projections over the period to 2014 are based on growth of 1.2 per cent this year and 2.6 to 2.8 per cent thereafter, despite falling public spending, notably a halving of investment. Yet an unprecedented private sector recovery will apparently reduce the number of unemployed people claiming benefits, from 1.6 million last year to 1.2 million. To most commentators, this is pie in the sky.

In addition, the profits of the financial sector are supposed to grow at nearly 9 per cent this year and 6 per cent a year thereafter, while house prices go up on average nearly 4 per cent per year. So forget about reining in the City and making housing more affordable: it’s back to business as usual – until the next crisis.

Hugo Radice is a political economist and visiting research fellow at the University of Leeds

The ‘post-bureaucratic age’ is the Tory leadership’s grand theory, their version of Blair’s third way. It is presented as the idea that links Cameron’s anti-state rhetoric, his new-found love of localism and the detail of policies from education to regulation. But the thinking is riddled with contradictions, and if the Conservatives triumph the country may strain under the weight of them.

With such a dull name the new epoch is never likely to be as popular as, say, the Stone Age, but the post-bureaucratic age comes with its very own narrative. In the beginning people didn’t have the internet or even mobile phones, so no one knew what anyone was doing. They were pre-bureaucratic. Eventually the telegraph was developed and the bureaucratic age was born. This was okay; it brought progress and suited us all pretty well right up until John Major’s government fell. But then came Gordon Brown, and life wasn’t worth living.

By this time, however, the internet had been invented, allowing everyone to know what everyone was doing. Bureaucracy became unnecessary because, as Cameron puts it, ‘the argument that has applied for well over a century – that in every area of life we need people at the centre to make decisions on our behalf – simply falls down.’ All that was needed was a Tory government and Lo! the post-bureaucratic age would be upon us.

You see, David Cameron has a vision. Either that or a highly developed sense of irony. He looks at the way neoliberalism nearly died from gluttony after being freed from the nagging restraint of the state and concludes, as any rational person might not, that the state got us into this mess. His ‘post-bureaucratic’ solution is more neoliberalism.

An odd effect

The recession has had an odd impact on Cameron. Before the crash he wasn’t too worried about public spending. In fact he put much of his energy into fighting his own party over the issue, pledging to match Labour’s spending in key areas. But after global capitalism crumpled, Cameron decided that domestic public spending was to blame, and pretended he had always said so.

Cameron and Osborne now present the problem as public debt, rather than recession. Their solution is a quick and sharp reduction in spending. Many economists believe this will be a disaster that will tackle the symptoms of the crisis while aggravating the cause, but it means that if elected the Tories will have a mandate to cut.

At the Conservative conference in October, Osborne declared ‘we’re all in this together’ before singling out public sector workers for a pay freeze. The measures he outlined totalled around £7 billion of ‘savings’, a fraction of the £70-80 billion needed to tackle the debt on the Tories’ timescale. The cuts will be huge.

Cameron has pledged that spending on health and international development will continue to grow. Education, the home office and defence will probably be shielded. That means that welfare will bear the brunt. The first step will be to throw 500,000 people judged capable of work off incapacity benefit and onto jobseekers’ allowance, worth £25 a week less. The whole benefits system will be made harder to access, and money will be withheld from anyone who refuses job offers.

The Conservatives describe this policy as ‘tough and tender’. Tough and tender. Like nasty and compassionate. It’s fishy and fowl.

But here’s where the post-bureaucratic age comes into its own. The unemployed will be freed from ‘bureaucracy’. The task of finding them work will be privatised, with companies being paid a premium if their ‘client’ stays in work for a year.

There’s just one flaw. This is a policy that will work best when it’s not needed, and badly when it is. In a recession, jobs don’t exist to get people into, especially if the Tory spending squeeze keeps unemployment high. Private firms will be reluctant to take part. Inevitably the terms will have to be skewed in their favour, and the whole thing will cost a fortune.

The Tories stole the policy from Australia, where it worked so badly that the government had to tighten regulation because of fraud and market failure. The result was more bureaucracy and cost.

Uncounted sums

Privatisation and bureaucracy – this turns out to be characteristic of the post-bureaucratic age. The Conservatives claim they will reduce the cost of NHS bureaucracy from £4.4 billion to £3 billion – figures that bear no relation to the real cost, which under New Labour has been hyper-inflated by market reforms. Pointless tendering exercises, contracts, lawyers, billing and now even NHS advertising have diverted uncounted sums of money. Yet the Tories will go even further with ‘true payment by results’ – paying hospitals according to health outcomes, not activity. Imagine the bureaucracy needed to grade the success of every procedure and allocate funds accordingly.

In a post-bureaucratic world, Cameron says, centrally run services will be replaced by ‘local control over schools, housing, policing’. But Cameron shares the Thatcherite notion that consumer choices are equivalent or preferable to democratic ones.

So in education all schools will have the chance to become academies. Local authorities will be sidelined in the name of localism. Academies will be run by faith groups, charities, companies or parents. Tory spin has focused on the latter, but after initially saying academies would be non-profit the Conservatives have revealed they will allow the running of schools, including teaching, to be outsourced. Companies will be able to charge a management fee and make a profit.

Since planning is an idea from a previous epoch, academies will be allowed to open even where there are surplus school places. There will be competition for finite resources. For every winning, profitable ‘local’ academy there will be a local comprehensive loser.

Despite the talk of localism, shadow education secretary Michael Gove plans to micro-manage from the centre any area of school policy he feels strongly about. He is particularly concerned that all pupils must wear a tie; ex-soldiers will be recruited to enforce discipline; a propagandist version of British history will be taught; and he will personally sack bad headteachers.

The new Conservative rhetoric sets great store by local government. Osborne has said: ‘When it comes to rooting out waste and cutting costs or improving services through innovative new policies… Conservative Whitehall will have much to learn from Conservative town halls.’

If we take him at his word it seems the country will be run like a budget airline. Conservative controlled Barnet has branded itself ‘easyCouncil’. Its leader Mike Freer, a banker, has adopted Ryanair’s business model and told residents not to expect services to be comprehensive.

Instead, in social care, recipients will be given a budget and told to choose whether they want to use it for help with, for example, shopping or cleaning. Freer showed how seriously he takes social care when he said people could spend it on a weekend in Eastbourne if they want. The no-frills strategy also involves Ryanair-style extra charges for priority treatment, such as jumping the queue for a planning application. And Barnet aims to privatise as many services as it can.

The goal is lower council tax, but vulnerable people will pay the price in lost services. Freer has already tried to cut live-in wardens in sheltered accommodation, but in a possible glimpse of the future the plan has been halted after residents (who are presumably local people too) took it to the courts. Another threatened area is social housing. Stephen Greenhalgh, the leader of Cameron’s favourite local authority, Hammersmith and Fulham, has proposed ending social housing as we know it by putting council house rent up to market levels then offering means-tested housing benefit. He wants to end secure tenancy and bring back a partial right-to-buy with a moralist twist, saying: ‘We want to give tenants the right to acquire “free equity” of up to 10 per cent if they are good tenants, and the right to buy up to 25 per cent of their home on a “buy one get one free” basis.’

Labour’s failures

The closer you look, the more the post-bureaucratic era resembles the Stone Age after all. There are plenty of opportunities for Labour to attack, yet Brown and company are consistently missing them.

Key Conservative proposals won’t work because they are only extensions of New Labour policies that don’t work. For all the bluster about Brown’s statism, Labour is heavily implicated in this ‘post-bureaucratic’ dystopia. Market reforms in the NHS have prepared the ground for the Conservatives.

The ‘tough and tender’ benefit reforms are an extreme version of James Purnell’s policies (introduced before his entirely principled resignation). Even the plan for profit-making state schools is inspired by the example of a London secondary run by an American firm with the current government’s blessing.

Most significantly, Labour has accepted the Conservative focus on the deficit, not the recession, with Brown pathetically announcing cuts of his own after seeing the positive reaction to Osborne’s conference speech. The government has left itself with little in the armoury to fight the election.

So buy plenty of tinned food and bottled water, and brace yourselves for the new epoch.

Cameron’s first term has been marked by two main themes: painful restrictions in public spending, primarily focused on the welfare budget, and a dramatic acceleration of privatisation in the public services. Many health services are now routinely provided by the private sector, and most new schools have been ‘new academies’, set up by private benefactors. But privatisation has been given far wider scope: the task of getting people into work has been privatised, prisons make a profit, and media deregulation and budget restrictions have sent the BBC into a spiral of decline.

This has not gone unnoticed by the public. Services that used to be taken for granted are no longer available. Others are harder to access. The quality of service has declined, and there is frustration that companies cannot be held to account for their mistakes. And there has been a series of scandals as corporate contract negotiators have ripped off the taxpayer for millions of pounds.

While privatisation has proved controversial, the big headlines have been reserved for the severe restrictions Cameron has put on public spending. The Tories found themselves in a bind after the election. They had promised to ‘share the proceeds of growth’ by reducing public spending as a proportion of GDP, but the global economic slowdown that began in 2008 was far more intractable and lengthy than they had expected.

Cameron’s chancellor, George Osborne, seemed to have little room for manoeuvre – the Conservatives had promised to match Labour’s spending on the NHS, and education was one of their flagship policy areas. So Osborne turned his sights on the welfare budget, the largest component of public spending, where cuts could be made without much political risk. The government launched a propaganda campaign deriding benefit scroungers, incapacity cheats and immigrants on state handouts.

This rhetoric proved popular, encouraging the re-emergence of the nasty streak in the party. But gradually news seeped through of the losers – those who had fallen through the now-threadbare safety net into destitution; vulnerable people, unable to speak up. The public noticed an increase in homelessness. Poverty, including child poverty, rose dramatically, regardless of the new Conservative rhetoric about helping the poorest. Crime ballooned, as it had under Thatcher, despite harsher penal policies. The Daily Mail carried screaming headlines about the ‘feral underclass’ and their lives of crime, drugs and prostitution. It was all a far cry from David Cameron’s promise to fix the ‘broken society’.

Workfare

The Conservative government’s earliest reforms were designed to make the benefits system more difficult to access and far more judgemental of the citizen, in order to reduce the welfare budget. Benefit claimants who don’t participate in back-to-work programs now lose their benefits. The penalty for not accepting a job offer is the denial of a month’s jobseekers’ allowance. Three months’ benefit is docked for refusing a second offer, and if a third offer is turned down then the allowance is stopped for three years. Furthermore, anyone who has received jobseekers’ allowance for two out of three years is required to do community service.

The policy has achieved its objective – it has saved money – but it has proved far harder to actually get people into jobs. Instead, large numbers have simply disappeared from the system and descended into a black-market world of poverty and hopelessness, causing further social breakdown.

Those that have taken work have found that unscrupulous employers are well aware of their situation. Afraid of being left without jobseekers’ allowance, the new pool of unqualified labour is in no position to question illegal practices and poor conditions. They simply have to grin and bear it, clinging onto jobs with zero prospects for money that is never a penny over the minimum wage (which has risen far slower than inflation).

The problem has been exacerbated by the continuing long-term decline of manufacturing. The proportion of skilled employment has fallen, and the economy is now dependent on unskilled jobs. Eastern Europeans previously occupied many of these, but there has been a trend for migrant workers to return to their home countries – the workfare labour army has taken their place.

The Tories believed that the real treasure chest in the welfare budget was the money being spent on incapacity benefit. They thought that they could save more than £3 billion a year by 2014 – like New Labour before them, the Tories had a preconceived notion that many, if not most, of the two and a half million people claiming incapacity benefit were well enough to work. So the first step was a massive programme of ‘work capability assessments’, not just for new claimants (New Labour had already instituted much tighter criteria here), but for all existing incapacity claimants too.

This was a vast and hugely costly exercise, but the results were not what the Tories wanted. It has proved extremely difficult to significantly reduce the numbers on incapacity benefit. Those found partially capable of work by the assessments have been placed in jobs that are often inappropriate and stultifying.

It is the mentally ill who have suffered the most – because of the nature of their illnesses, their attendance at work is impossible to guarantee and confidence easily dashed, especially when the resources are not there for the kind of one-to-one support needed. For some, the harshness of the new regime has exacerbated their condition. So, despite making life very unpleasant for people on incapacity benefit, the Conservatives have not managed to make big spending reductions.

Poverty, tax credits and marriage

The Conservatives intended to use the savings from benefit cuts for other social ends, such as making marriage more fiscally rewarding and tackling poverty. But even if this had been possible, the problem of poverty has had its own impetus.

In opposition, the Tories were critical of Labour’s tax credits system, and so it has been no surprise that the value of tax credits has diminished. Child poverty is a hot issue. The Conservatives never committed to Labour’s target of ending child poverty by 2020, and this has served them well, as there is no way of achieving the target without massive investment. New Labour had believed the solution was to increase dramatically the number of parents in work, and to this end they ended income support for lone parents with children over the age of seven just before the election. But even before this change, low pay meant that two million children were living below the poverty line in working households.

Under the Tories, little has been done to combat bad employers. People have simply been moved from workless poverty to in-work poverty, and their inflexible, poorly paid jobs have undermined family life – the very thing that Conservatives said was essential to fix the ‘broken society’.

Cameron and Osborne championed marriage as one of their distinctive themes in the 2010 election. They promised to eliminate what they called the ‘couple penalty’ in the tax credit system. But the marriage issue came back to bite them when several cabinet ministers later went through messy divorces – to the delight of the tabloid press.

Housing

Some families have stuck together, but more out of necessity than desire. The ever-rising waiting list for dilapidated social housing has led to overcrowding in bad, privately-rented accommodation that has drawn parallels with Victorian times. But the most significant change has been to abandon the idea of mixed communities.

Particularly in London, under Ken Livingstone, it was accepted that the relationship between social housing and poverty, ill health and poor-quality education should be tackled by planning for mixed housing provision – having rich and poor living side by side, doing away with so-called ‘sink estates’. A clue to the different direction the Tories would take came immediately after Boris Johnson was elected as London mayor in May 2008: one of his first acts was to allow Conservative-led Hammersmith and Fulham council to cut all planned social housing from a new development in White City.

Under the banner of ‘decentralisation’, the Conservatives have reformed the housing revenue account – the mechanism Labour used to redistribute housing money from rich areas to poor, causing Conservative councils to claim that they were being ‘robbed by Whitehall’. Already-struggling estates have been left to deteriorate, while the more affluent Tory-controlled areas have built up surpluses. For inner cities, this has meant a return to the very worst kinds of neglect seen in the 1980s and 1990s, with huge backlogs of repairs. ‘Shameless estates,’ as they have become known (the Shameless TV show is now in its 17th series), are areas where unemployment is rife, prospects poor, and health bad.

Crime

With so many disappearing from the benefits system and living in poverty, often on abandoned estates, it came as no surprise that crime rocketed – except, that is, to the right-wing press and the Conservatives. They had thought that a tough penal system would deter people from breaking the law. Certainly, the small armies of mainly young people doing community sentences, dressed in their distinctive overalls designed to shame, are a visible symbol of punishment. But they also draw attention to an uncomfortable question: why are there so many criminals?

The prison population, already sky high under Labour, has grown exponentially. The Tory government has changed the sentencing rules so that judges set a minimum and a maximum sentence, ending automatic release. They had anticipated that this would lead to a 10 per cent increase in the average length of determinate sentences, but they thought this would be compensated for by a much-vaunted ‘rehabilitation revolution’, to be brought about by the involvement of private companies. It wasn’t: the effect of the Conservatives’ other social measures contributed to the sharp increase in crime, and that, in turn, kept prisons overcrowded, despite a prison-building scheme. This made rehabilitation work much more difficult.

Pensions and social care

For the elderly, times are hard. The pensions system has not yet reached complete crisis – that will be for the next generation – but the state pension has fallen further behind earnings, and pensioner poverty is rife. The Cameron project’s political strategy has been aimed at younger people from the start, as can be seen in George Osborne’s call for ‘fairness between the generations’ back in 2008, which suggested that the young were bearing the burden of an older nation. The elderly were never at the top of the priority list.

The most severe consequences have been in social care. The Tories have not cut spending on social care, but neither have they raised it to meet the enormous extra need. Since Derek Wanless’s social care report for the King’s Fund in 2006, it has been known that costs would rise from £10.1 billion in 2002 to £24 billion in 2026 just because of the ageing population. But under both Labour and the Conservatives the English government (unlike its Scottish counterpart) has been unwilling to take responsibility. The question has therefore been whether the state should ensure that the poorest in need of care get as much help as possible, or simply protect the assets of those who have property wealth.

The loudest voices in the debate have been the middle classes, understandably worried that they will have to sell their houses to fund care. So the Conservatives have looked for market-based solutions that protect property. For those without any assets, the quality of social care is in decline. It is the worst-case scenario – people have to get very poor or very ill before they can receive care that is patchy and poor quality.

The situation has attracted much political flak – and not just from the left. Tory councils, still in charge in most of the country and quite a force, have been under pressure to meet everyone’s needs with inadequate resources. Their rebellion has placed the issue in the spotlight, and it is looming large in the 2014 election.

Environment

The gravest consequence of the dearth of public investment has been the lack of progress on climate change. The ‘vote blue, go green’ slogan was a key part of the Tories’ rebranding exercise in opposition, but in 2011 the PR strategy backfired when journalists noticed that Cameron’s personal wind turbine kept on turning even when there was no wind. It transpired that it was powered by mains electricity, and was just for show.

Even so, Cameron has continued to make worthy speeches on climate change and has pushed for more international action. Unfortunately, the measures needed to avert climate catastrophe are ultimately incompatible with Conservative market philosophy.

The key area has been energy policy. The Tories went into the 2010 election with an ambitious plan for the micro-generation of energy, with German-style feed-in tariffs allowing individuals to sell sustainably-generated power to the national grid. In some pockets of the country, this has worked very well. However, coverage has not been national, and it has allowed the Conservatives to pose as a green party without bringing about a fundamental transformation of the energy sector.

Such a transformation would require a major role for the state, with massive investment in renewables, carbon-capture technology and energy efficiency. Britain’s private energy companies are simply not up to the job. There has been huge under-investment in energy infrastructure ever since the Conservatives privatised the sector in the 1980s and 1990s, and we are now starting to see the results.

Today, policy is adrift. Frequent climatic disasters keep the issue close to the top of the agenda, but all of the major parties still see the world strictly through the prism of the market. The political impetus to tackle climate change is lacking.

Privatisation

That same prism has refracted the state into a privatised entity. The second main theme of Cameron’s term in office, after the spending restrictions, has been the sweeping privatisation of public services. In many ways, it was laid out on a plate for him: New Labour fatally undermined the idea of public provision and changed the funding structures in areas such as the NHS, ready for an influx of private companies. It was as if New Labour had arranged all the dominoes in line, inviting the Tories to knock them down in one go.

Nowhere was this truer than in the English health service. By the time Tony Blair resigned, the English NHS was run on a payment-by-results basis, putting hospitals in competition with each other. Huge corporations such as Virgin and United Health were running GP surgeries, with a select few contracted for the crucial commissioning function, giving them control of billions of pounds of public money. (Blair, incidentally, has just taken up a £450,000-a-year part-time job as president of the Washington-based Institute for Christian-Muslim Relations, following his successful stint with the Exxon-sponsored Iraqi Freedom Foundation.)

It was difficult to see how the Tories could do more damage. In fact, they have managed to go even further down the market route. They have instituted what they call a ‘true payment-by-results system’ whereby hospitals are paid according to health outcomes rather than activity. This has been a disaster. Hospitals have no idea how much money to expect, leaving them with no ability to plan. The bureaucracy required is immense. League tables are produced for every conceivable treatment, with unintended consequences – private companies misreport their performance, as their profits depend on it, while NHS facilities are routinely pilloried in the tabloid press for supposedly poor (but in reality more honest) results.

All NHS hospitals are now foundation trusts, and, freed from Gordon Brown’s rather weak restrictions, they can now borrow like private hospitals. (Since resigning as an MP, Brown has focused on his writing, but his publisher has cancelled the release of his latest book, Vision, the follow up to 2007′s Courage.) Unprofitable treatments are no longer available. Again, this process began under New Labour with the denial of hernia operations in Oxfordshire, but it has greatly accelerated.

Conversely, the market leads hospitals and corporate-employed GPs to find ways to treat lucrative cases while shunting others aside. Also common is the levying of fees for extra services – some hospitals have even attempted to charge ‘bed rent’.

The public has perceived a degradation in service, but there has been no commensurate reduction in the cost of the NHS – indeed, the enormous performance bureaucracy created by the Tories, combined with the billing, contracting and accounting necessary in a market, means that costs are rising. Curiously, the public places the blame for this not only on the Conservatives but also on the NHS itself, feeding the frenzied calls of right-wing commentators for the complete handover of the service to the private sector.

Education

The same privatised vision informs the Conservatives’ education policy. In England the key Tory idea has been the establishment of ‘new academies’ (although they aren’t really much different from the old academies). They can be set up and run by companies, charities, trusts, voluntary groups, philanthropists or co-operatives, and all the same fears attached to New Labour’s academies still apply, especially in regard to sponsorship and the capitalist – and sometimes religious – ethos of the schools.

New academies are outside the national curriculum and independent of the local authority – in fact, they compete with local authority schools, as their funding depends on the number of children who attend. They can be established even in areas where there is a surplus of school places. This is justified on the grounds that it ‘drives up standards’.

While the Conservatives have drawn on the Swedish example of diverse schools, studies have shown that Finland’s fully-comprehensive system is more successful. Although new academies are supposed to be non-selective, the schools are outside local authority control and deal with their own admissions, which has inevitably led to a more socially-segregated education system.

The policy’s only saving grace has been that there were not many people who wanted to establish a new academy. They are still not allowed to make a profit, so business wasn’t interested, and the Tories were surprised to find that parents were largely indifferent to the idea of opening and running their own schools.

Wider education policy has been marked by inconsistency and contradiction. Despite the rhetoric about ending central control, the Conservative government has insisted that schools must have a formal uniform, place children in sets, and use synthetic phonics. It has also required the teaching of a skewed version of British history that amounts to propaganda, designed to stir national sentiment.

Public dissatisfaction in England has been exacerbated by the contrast with the rest of Britain. Even under New Labour, the Scottish Parliament and Welsh Assembly set themselves against privatisation in health and education, and with the Tories in power the disparity has become even more pronounced. It is now a common theme of news coverage and pub conversation that the Scottish and Welsh are getting a better deal.

Welfare privatisation

As well as squeezing the benefits system, the Conservatives have privatised its job placement function. Jobcentres now grade potential benefit claimants according to their capability for different kinds of work and refer them to a private company to find a job. This fundamental reshaping of the welfare system built on New Labour’s reforms – Tory ministers defend their policies by saying they are only continuing James Purnell’s work.

The ‘payment-by-results’ system, under which companies’ funding depends on getting people into jobs and keeping them there, is meant to provide the state with the levers it needs to control the process. But it doesn’t work like that. The Tory plans were largely based on the Australian system introduced by the Howard government, but in that country the profit motive produced perverse outcomes and fraudulent behaviour. There was no real market, because the ‘customers’ (unemployed people) didn’t pay for the service and couldn’t choose to switch between companies. Although private providers were paid by results in Australia as in the Tory scheme, there was minimal competition once a few companies became dominant. To compensate for the failure of the market, the Australian government was forced to tighten regulation and central control – undermining the original aim of cutting bureaucracy and costs.

The Conservatives chose to ignore this evidence, and promptly repeated the Australian experience. They also faced an outcry from the voluntary sector, which had been promised a key role delivering job placement services but didn’t have the capital necessary to win many contracts. The sector belatedly realised that its involvement had been used as PR cover for privatisation.

Prison privatisation

Conservative rhetoric on prison reform also emphasised the voluntary sector, but the reality has been the privatisation of prisons. To use the jargon, there is now an ‘offender management marketplace’. All public prisons have been made into Prison and Rehabilitation Trusts, along the lines of Foundation Trust hospitals, with financial independence. The government has encouraged the private sector to build more prisons, which then compete for the same funding as the public prisons through a tariff system. Prisons are paid a set amount for each convict, and get a premium if a former prisoner doesn’t re-offend for two years. Newly-released prisoners are handed over to the private workfare companies to be put into work.

But if the market fails in welfare because the jobseeker is not a real consumer, then it can hardly work for prisoners, whose defining characteristic is a lack of choice over their destiny. Re-offending rates have proved stubborn. Ex-prisoners don’t seem too bothered that their activities might cost their former institution its premium tariff.

The media

The erosion of the public sphere has even spread into the broadcasting industry. The Tories have never been fans of the BBC, and the snappily dubbed ‘multi-channel, multi-platform era’ has provided the perfect excuse for Cameron (a former director of corporate affairs at Carlton Communications) to undermine it.

The Conservatives argued that it was unfair to expect commercial channels to carry current affairs or children’s programmes without a subsidy. Thus, the licence fee has been ‘top-sliced’: a proportion of the money is now distributed to commercial channels, leaving the BBC with less revenue and forced to close down channels.

Impartiality requirements on non-publicly funded broadcasters have been relaxed, meaning TV news on commercial channels can now wear its biases on its sleeve. While the BBC’s news still has to be impartial, all the editorial pressure now comes from the more boisterous and slanted end of the market, pulling even the publicly-funded newscasters rightwards. Newspapers have opened stations that follow their editorial line – and worse, Rupert Murdoch is in the process of launching a UK Fox News. The BBC has seen itself relegated to the role of making up for market failure, as it gradually loses out against its competitors. This has eroded faith in public broadcasting. People no longer expect to be treated as citizens by the broadcast media – merely as consumers.

The labour movement

The hurricane of privatisation has been opposed tooth and nail by the trade unions, and for good reason – union power is overwhelmingly centred in the public sector. Foundation hospitals, prison trusts and new academy schools have opted out of national pay bargaining agreements. The new, hostile employers make it difficult for unions to recruit members working for the private organisations that now deliver so many services, such as the health corporations or job placement companies.

Most of Margaret Thatcher’s anti-union legislation remained in place after 13 years of Labour government – it was nice of them to save the Tories the job of reintroducing it – but that hasn’t prevented further attempts to undermine the unions. In the first year of Cameron’s premiership, Boris Johnson, who had been kept on a tight leash before the 2010 election, was given free rein to take on the RMT transport union. He believed this would be popular with commuters. A drawn out battle ensued as the RMT surprised the Tories with its doggedness, and the dispute marred Cameron’s early period in office, casting an image of social strife.

Since then the Conservatives have been more subtle. Behind the scenes, the government has encouraged public sector employers, particularly in the NHS, to derecognise unions in areas where branch membership is not what it might be. After disputes in the health service and the fire brigades (where the Fire Brigades Union is fighting another wave of ‘rationalisation’ by cash-strapped local authorities), there is talk of strike bans in essential services.

A more fundamental change has been the end of direct union funding of the Labour party. Labour had the chance to settle the party funding issue before they left office, but lacked the political energy. So, under the guise of cleaning up politics, the new Conservative government outlawed donations of more than £50,000 from individuals, companies, organisations and trade unions, rejecting desperate pleas to allow individual union members to pay an optional affiliation fee as part of their annual membership. This was a financial disaster for Labour, as 90 per cent of the party’s money came from the unions in 2010.

Former Labour affiliates were left with a sudden surplus of cash that they could use for political ends, but only as third-party campaigning organisations. So, as the 2014 election looms, the big unions are agitating for a rise in the minimum wage and supporting candidates who back it, without directly mentioning the Labour Party. In many ways, this has made the unions higher-profile, more vibrant campaigning organisations.

For Labour, the change has made the party reliant on its members – and wealthy donors. This has pulled it in two different directions, causing tensions that have not been resolved as we go into the general election. The party has to compete for members in a political marketplace (an analogy the Conservatives are delighted with), and has found it easier to attract supporters by sounding social democratic and mildly left wing, keeping quiet about Blair and Brown. But the big £50,000 individual donations, which have started to pick up after four years of Tory government, generally come from unreconstructed Blairites who still want Labour to be like the US Democratic Party.

One of the great problems for Labour in opposition has been its inability to make political capital from unpopular Tory reforms. Whether it’s NHS privatisation or the brutal tightening of welfare, Labour has no credibility, thanks to its record in government. The Conservatives’ most effective defence has been to say ‘we’re only finishing what you started’. Without this handicap, Labour would be far more likely to win in 2014.

Tory England

Even if Labour can scrape back to power, though, its long-term future in England is threatened by developments north of the border. The SNP narrowly lost the first referendum on Scottish independence in 2010, throwing Alex Salmond’s party into temporary disarray. But seeing a Conservative government in London soon revived the nationalist cause, and opinion polls now suggest that the Scottish public will vote for independence if given another chance – a referendum is expected imminently. Welsh nationalism is also on the rise. (See ‘Break up of Britain’, p33.)

The secession of Scotland would leave a very Conservative England – a Tory dystopia of a neoliberal, privatised state, dominated by a political consensus that stifles any hope of challenging the market. It would be a truly broken society.

Yet there are rays of hope. It was not public clamour for right-wing policies that brought the Tories to power in 2010, but recession and an apparently bereft Labour party. Cameron’s programme in office has been blunted – sometimes by lack of public interest, sometimes by obstruction – and where policies have been put into action, they have rarely worked as expected. The results are already generating opposition, and how this opposition will be expressed is the key question for the future.

Alex Nunns is a Grammy award-winning rock star. His band’s fourth album, Singing the Blues in Red, was the biggest-selling record of 2013

With thanks to the Fire Brigades Union for their support

On the surface, there are some obvious similarities. Blue rinse brigades across the land are being offered a straight choice between blandness and perceived political suicide. ‘Compassionate Conservatism’ may have been dropped as Cameron’s headline slogan, but expect a love-in as Tories endorse warm platitudes about their ‘open, meritocratic and forward-looking’ party.

This all smacks of an elaborate marketing scam, which should come as no surprise now that Philip Gould’s Unfinished Revolution seems to have replaced Adam Smith’s Wealth of Nations as the shadow cabinet’s favourite bedtime reading. But the original clause four moment was about more than marketing. It was an effort to enshrine in Labour doctrine an ideological shift that had already largely happened. The party leadership had long since abandoned any notion of the ‘common ownership of the means of production, distribution and exchange’, which was what the pre-Blair clause four of the Labour constitution used to uphold. The Labour left fought a rearguard action against a symbol of New Labour’s abandonment of socialism. Tory headbangers, by contrast, have barely offered a whimper.

It would be tempting, and comforting, to conclude from this that the Cameron leadership offers merely cosmetic changes that do little to alter the Conservative Party’s anatomy. David Cameron is basically an iPod, a fashion device onto whom right-wingers of all tastes can download their favourite Conservative tunes, be they 1950s crooners or 1980s classics. The left can play with this Cameron iPod too. We can project him as a vacuous moderniser, the Conservative marketing department’s chosen successor to Blair. We might equally interpret the Tories’ endorsement of a pro-fox-hunting Etonian as a reversion to type. But these caricatures do not take us far in understanding the specificity of the emerging Cameron agenda – its distinctive mix of something old, something new, something borrowed and something blue.

Take the example of localism, the Cameronites’ ‘big idea’. To an extent this a rehash of the communitarian strand of Blairism. Built to Last commits the party to ‘harnessing the entrepreneurial spirit in our communities’, praising social enterprise, community and voluntary organisations as vital agents in the battle against poverty and deprivation. Just like New Labour’s ‘new localism’, this promises devolution-by-marketisation. Extending competition in the provision of services that were once public is preferred to, say, the democratisation and reinvigoration of local government through participatory decision-making.

So far, so Blairite. But the grounds for accepting this ‘localist’ framework are drawn from a more conventionally conservative canon. Danny Kruger, special advisor to David Cameron, has recently written of the central importance to Conservatism of social enterprises, ‘the institutions that stand between the individual and the state’. The point being that the Conservatives perceive the need to ditch their Thatcherite association with aggressive, me-first individualism – not least because such values undermine the social basis of conservatism, breaking down traditional social bonds and melting venerable prejudices and opinions into air.

Beyond this, the new Tory localism is a pre-emptive strike against the Gordon Brown leadership. Conservative strategists long ago identified Brown as the head nanny within the New Labour household. At the extreme end, they accuse him of a ‘nationalisation of childhood’, claiming that initiatives for more childcare centres and after school clubs serve the sinister purpose of enforcing an equality-ofoutcome upon children.

More generally, Brown is accused of encouraging the micro-management of public services from the centre, and misunderstanding the free market with his insistence on a web of tax credits to mitigate its inegalitarian effects. In their 2001 book, A Blue Tomorrow, Ed Vaizey, Nicholas Boles and Michael Gove – now three of Cameron’s closest allies – condemn this ‘misplaced dogma … that government intervention, from a distant centre, always makes things better’. Boles, in particular, argues that the Tories should dismantle this ‘centralised state’, a position that he has consolidated as the director of Policy Exchange, Cameron’s favourite think-tank.

Compassionate Conservatism, Policy Exchange’s book-length attempt to furnish these next-generation Tories with a political philosophy, extends the argument by differentiating between ‘social’ and ‘state’ provision. Whereas the state encourages vertical linkages between people, society is characterised by horizontal connections. The goal of compassionate conservatives should be to reflect this positive vision of society ‘beyond the state’, which they see as fundamentally unproductive.

These distinctions can seem obscure, but they are worth noting as clues to the ideological framework through which Cameron’s new generation Tories understand the world, and in relation to which they will develop their policies. New Labour had a vision of the ‘entrepreneurial state’, the state as contractor of services. Cameron and company are not wrong that this is unsustainable.

Market-driven states tend to produce corporate monopolies and expunge democratic accountability. Sensing a political opportunity here, Cameron’s turn to Danny Kruger is noteworthy, since he is also a leading figure behind the ‘Direct Democracy’ manifesto (www.directdemocracy.co.uk). Its signatories pledge, among other things, that ‘independent schools and hospitals should be free to compete for state-funded parents and patients’. Perhaps this is what Kruger meant when, during the 2005 election campaign, he referred to a Conservative ‘plan to introduce a period of creative destruction in the public services’.

Cameron’s Tories are engaged in a similar ideological realignment in their approach to foreign policy. In a speech on 11 September, co-authored by Kruger, Cameron now claims to be ‘a liberal conservative, rather than a neoconservative’. But the substance of such statements is that he accepts all of the basic premises upon which the ‘war on terror’ has been conducted: the idea that the scale of today’s terrorism is unprecedented (the world changed on September 11); the legitimacy of pre-emptive military action as a means to tackle this; and a belief in ‘promoting freedom’ in ways that include regime change.

Liberal conservatism apparently means accepting all of these things, while recognising that the US has so far failed to provide sufficient ideological cover for their use by way of multilateral fig-leafs and the wider extension of its soft power. It is not a criticism of empire, in other words, but an argument for its extension. Moves to withdraw from Iraq, and criticism of Israel’s policies towards Lebanon and Palestine, are viewed as appeasement of ‘jihadist anger’ – much as, on the home front, Michael Gove has railed against progressives”appeasement’ of ‘Islamist totalitarianism’.

It is hard to explain this as simply a marketing exercise. Despite the unpopularity of the Iraq war, the Notting Hill neo-cons have embraced it with fervour. If they differ from their US counterparts, it is only in placing a faith in the good of interventionism above a strategic lust for oil as their guiding principle. The differences in the basic approach are minimal, but they are accompanied by a large shift in emphasis. To sell such moves to a domestic audience, Cameron and his supporters now seek to embed neo-con interventionism with an embrace of market-driven strategies on global poverty and climate change.

Their stance on the latter is particularly revealing, with Cameron claiming that ‘climate change is the single biggest challenge facing our planet’. Underlying this are attempts to wrest environmentalism as an issue from the left – much as Blair, while shadow home secretary, sought to claim law and order authoritarianism for Labour.

No doubt there are several layers of greenwash here, as well as an instrumentalisation of environmentalism as a means to portray a softer, more ‘caring’ image of the new look Tories. But that should not blind us to the fact that there is a conservative tradition of environmentalism – as well as one of environmental damage and complacency – built around a mix of localism and market fundamentalism. ‘Green growth’ is to be encouraged by market incentives alongside increased capacity for sustainable production. As Kruger writes in this month’s Prospect, ‘microgeneration might be seen as the policy trope of the Cameron project: decentralised, diverse and sustainable’ – terms as glowing as any anarchist or deep green activist might wish.

This is not entirely cynical. Cameron’s Tories would no doubt welcome a flourishing niche market in microgeneration – a useful reminder to the green left that anti-capitalism is not a necessary condition for autonomist selfsufficiency. Instead of dismissal, then, a better response would be to engage with this argument – highlighting the contradictions of a free-market environmentalism accompanied by a push for deregulation, usually a code for removing environmental protections, while at the same time pressing for an environmental justice approach that attends to the inequalities and perverse incentives produced by carbon markets.

Such ideological engagement should serve as the wider spirit underlying our approach to the new-look Tories. Cameronism is not yet an ideological project in the Thatcherite mould, but it certainly represents a more considered attempt to develop a politics for the post- Blair age than recent Tory leaderships gave us reason to expect was still possible. On the left, we would do well to recognise the conditions of its emergence, and its attempt to reframe politics around a mix of market-driven localism and soft-power, neo-conservative internationalism, if we are to mount our own hegemonic challenge to reshape British politics after Blair.