Ever since it was founded by Margaret Thatcher and Keith Joseph in 1974, the Centre for Policy Studies (CPS) has been instrumental in laying the groundwork for much of the UK’s neoliberal project. Like a pernicious Forrest Gump, the thinktank is a historical ever-present, its fingerprints all over the legislation that has enshrined inequality at the heart of the UK’s economy.
The group’s latest offering, ‘A Northern Big Bang: Unleashing Investment in the North’, published last week, offers more of the same neoliberal blueprinting. It also provides a grim insight into how the current Thatcher tribute act in Downing Street may convert its sweeping Brexit majority into an even more sinister political settlement.
The report has received a glowing endorsement from the rightwing press. And given the track record of the CPS as a handmaiden of late-stage capitalism, it’s also likely to receive a generous hearing in the corridors of power. This affected concern for regional equality has potentially worrying consequences for both northern communities and the Labour party that has historically represented them.
Nostalgia for a non-existent neoliberal past.
In advocating for a regional extension of Thatcherite policies, the report outlines a false history of neoliberalism. It argues that Boris Johnson’s administration should accelerate a deregulation agenda to incentivise private investment to the north. Whilst it may seem strange coming from such a conservative thinktank, the paper’s repeated endorsement of “radicalism” operates as a shorthand for the imposition of an even more unchecked and pernicious form of capitalism. The fact that one of the report’s co-authors, Jake Berry MP, was key in designing the Towns Fund – an investment fund aimed at “levelling up towns and cities across the country” which has faced repeated accusations of cronyism, gerrymandering and of prioritising funding for Conservative-supporting areas – fails to inspire much hope that its professed desire for radical regional equality is genuine.
To its credit, however, the report does identify the severe extent of regional inequality. Recent analysis by the Institute for Fiscal Studies concluded that the UK is the most geographically unequal economy of 27 OECD members. In 2019, the IPPR thinktank found that the UK’s “regional inequalities in productivity, income and health are far worse than in any comparable country.” In 2017, 40% of UK output was produced in London and the south-east. Significantly, these were the only regions in the UK that recovered to pre-2008 prosperity levels after the global financial crisis. This disproportionate concentration of wealth demonstrates that large-scale investment in all of the UK’s regions is essential.
This, however, is where the report’s brief flirtation with reality ends. In an act of pure ideological fantasy, the CPS presents the deregulation of London’s financial sector in October 1986 as a successful and replicable policy template. But while this instantaneous deregulation – otherwise known as Thatcher’s Big Bang’ – may have created unimaginable riches for bankers and city traders, it simultaneously created shaky foundations for the national economy, with devastating generational consequences. By dismantling the barriers that existed between firms and stockbrokers, the deregulation of the financial sector laid the groundwork for the unrestrained casino-capitalism that led to the devastating 2008 credit crunch. Indeed, Professor Karel Williams argues that deregulation both moved financial services out of the remit of democratic control and contributed to our current zombie economy, which is kept afloat by chronic indebtedness. This is hardly a success story that ought to be replicated in other regions of the UK.
The CPS’s rose-tinted account also fails to acknowledge the fact that Thatcherite deregulation and deindustrialisation not only drove inequality between regions, but within communities, too. Even in London and the south-east – the regions held up by the CPS as neoliberal success stories – poverty and inequality are widespread. 27% of Londoners live below the poverty line – 58% of which live in a working household – compared to 21% across the rest of England. 50% of London’s wealth is owned by the wealthiest 10%, whilst the bottom 50% own only 5%. A quick walk through the city’s financial centre, which is littered with spikes and other cruel tools to disperse rough sleepers, is enough to recognise that the spoils of the so-called Big Bang were not shared equally.
The policies laid out in the report, such as curtailing oversight for large commercial planning applications, would only further expose northern communities to a rapacious, exploitative, and unregulated form of capitalism that enriches a few at the top, whilst normalising mass immiseration.
One of the report’s most alarming proposals is “full expensing”, a policy popularised by ex-Ronald Reagan adviser Stephen J. Entin which would allow firms to deduct the cost of any investment from their corporation tax bill. At a time when state capacity has already been stretched to breaking point by the Covid-19 pandemic, full expensing would transfer huge sums from the treasury into the pockets of wealthy shareholders. Such policies reveal the CPS’s true intention, which is to use feigned concern for northern communities to mask the imposition of even more vampiric forms of neoliberalism.
Climate action as an investment opportunity.
Climate breakdown is not a distant threat, but an immediate one, which requires urgent action on an unprecedented scale. Considering the need to move towards net-zero emissions as soon as scientifically possible, an ostensibly welcome aspect of the report is its focus on carbon reduction as a vehicle of regional equality. That said, the climate proposals in the report betray an inability to conceive of climate action as anything more than a business opportunity.
The report repeatedly calls for investment to entice Tesla’s Gigafactories to the north. But not only are electric cars hardly a panacea for carbon emissions, these factories can also have dire consequences for local environments. Europe’s first Gigafactory, which is currently under construction in Brandenburg, has faced protests by residents concerned about the factory’s projected water use and the deforestation it will bring about. Far from championing regional equality, the environmental damage of northern communities proposed by the CPS through lucrative infrastructure ventures would represent a direct continuation of central government’s historical neglect of the north.
The report also champions hydrogen as a key northern investment opportunity – even though the cheapest and most widely used hydrogen is made from reforming fossil fuels, which use energy to convert it into hydrogen and CO₂. The production of “green hydrogen” through electrolysis is currently much more expensive – and would remain so under the profit-driven, unregulated system advocated by the CPS. This speaks to a wider issue, namely that existential threats such as climate change cannot be left to the private sector to deal with. Decades of climate inaction demonstrate that the profit motive alone is incompatible with a habitable future.
Labour must oppose Thatcherism on steroids.
The CPS betrays its sinister motives by proclaiming that the north must revive the “spirit of ambition” of the industrial revolution, apparently failing to grasp the irony that the very inventions the report’s authors cite as examples of innovation, such as the spinning mule, were engines of violent class inequality. Working-class children under ten years old were commonly employed to work under spinning mules, which resulted in widespread mutilations and deaths, a practice that was only restricted by government intervention. This ought to be a clear reminder that exploitation is an inevitable by-product of the unregulated private sector. The fact that the CPS sees this as a golden era to be returned to confirms that this report is simply a blueprint for a new era of age-old inequality.
Yet this could well form the bedrock of a successful Conservative strategy. To mask its nefarious intentions, the report embraces the language of transformation, urging Boris Johnson to “adopt the spirit of radicalism”. Yet its vision would only make the UK even more radically unequal. Coupled with northern iterations of the headline-grabbing boondoggles that Johnson is infamous for, this disingenuous appeal to change could provide the velvet glove to mask the iron fist of Thatcherism on steroids.
But what is just as concerning as this rebranded conservatism is the complete lack of opposition, let alone alternative, from Keir Starmer’s nascent leadership. History is not on Labour’s side when it comes to opposing neoliberalism. After her time in office, Margaret Thatcher identified Tony Blair and New Labour – which are increasingly becoming the model of Starmer’s leadership – as her greatest ever achievement. Blair himself claimed that he saw his role as “building upon” Thatcher’s project, which created a near-half century of neoliberal consensus that has torn apart living standards, public services, and our social safety net.
Rather than meekly surrendering to a vision of society straight out of a Milton Friedman fever dream, Labour must lay out a vision to ensure that investment in the north and all regions does not only serve the interests of the few. Yet if the current leadership remains terrified of appearing anything to the left of Ed Miliband, and continues to treat the vestiges of Corbynism with considerably more disdain than they do the government, they risk inadvertently holding the door open for the ersatz populism outlined by the CPS.