by James Ruddick

Alistair’s Darlings imploring to George Osborne, delivered this past weekend, will not fall on deaf ears for the obvious reason.   It will do so instead because it makes a fundamental mistake in assuming that George Osborne is remotely interested in its subject matter of economic growth and prosperity.  He isn’t.  Osborne is the first chancellor in history who places social transformation before economic performance.  He is a kamikaze chancellor.  He knows his policies will ultimately wreck his career.  Yet he believes his self-immolation serves a higher calling.

Make no mistake, this recession now belongs to Osborne.  It is no longer the fault of the banks, of the Eurozone or the Royal wedding, the bad weather, the extra bank holiday, the last government, the global financial crisis or any of the other fake alibis conjured up by the government.  This recession is his and his alone.  It was manufactured in the treasury by his own hands.  It was made, one might even say sculptured, for a noble Tory purpose – to render the public sector unaffordable so that it can be closed down for good.

In that sense, it must not be subject to any amelioration of the kind urged by Alistair Darling until it has done its work.  It must just burn through the system.  When it has finished, in Margaret Thatcher’s words, “there will be no such thing as society.”  That is its purpose.

Conservatives have never made a secret of their longing to abolish the welfare state and the NHS and to outsource their services to Wall Street and the City.   It is the stuff of Tory wet dreams: creating a world that genuflects to Herbert Spencer, a world in which the impeccable sanatoriums of the privately insured sit next to the charity hospitals coping with everyone else, a world where big society volunteers dispense the only care the disabled can get; where those who suffer misfortune or dispossession are punished, made to wear orange suits and pick up litter, where only poor children are educated inside the state sector, in dilapidated halls miles from the chrome and smoked glass of the “free schools” fast-tracking middle class children to golden lives.

Until George’s recession, this always proved to be a doggedly elusive world.  It was the hinterland that Margaret Thatcher and her cronies spent their days marching towards – her voice crashed through the octaves whenever she thought it was in sight.   But Thatcher never got there.  She made the mistake of generating too much cash through looting the public utilities – gas, electricity, water, telecoms – to ever plausibly close the public services on financial grounds.

She couldn’t abolish hospitals en masse when the treasury was awash with so much stolen money it could barely launder it.  For decades the Tory party found itself caught between its two most fundamental instincts – its idolatry of greed and its hatred of the human instinct for community.  And greed always won.

But then came Rupert Murdoch’s new generation of lieutenants – Cameron, Osborne, Duncan-Smith.  If anything, they were even more enthusiastic about the destruction of public services than Margaret Thatcher.  She at least had lived through the war.  They had lived through fights over the pâte levée feuilletée in stately homes.  And they were never going to repeat her mistakes.

If the public services were to be dismantled it could not be done during a boom.   Full blooded recovery was an enemy of opportunity.  A slump, by contrast, provided an irresistible decoy.  Public services become too expensive. Wall Street comes to tea.  Barely settled into the treasury, George Osborne set to with the kind of financial terrorism that had every leading economist scratching their heads.

It was not an easy achievement, reversing Labour’s recovery.  George had to work long and hard to undo the strong, steady growth he inherited. Obama and Brown had both employed what was universally recognised as the only strategy for ending a recession and repaying debt: adrenalise the economy with investment, then withdraw support as it improved and begin gradual deficit reduction using the rising tax receipts.

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