A beta bailout: the near future of state intervention

Future Economies Research and Policy Paper No.9, 2020

Will this time really be different? There is little doubt that the impact of COVID-19 on the UK economy will be enormous. With each passing day and week, new economic policies are being drawn up in order to plug holes in the economy, both to advance support to those less able to earn a living from the labour market, and to mitigate against the economic depression that might result as a consequence of so many firms suffering from pandemic-induced paralysis. In effect, the economic policy rulebook has been discarded. A Conservative government has been forced to act in a way that would have been utterly unimaginable just a few short weeks ago. The challenge now is threefold. Firstly, to ensure that this newfound intervention serves to empower citizens and protect them from the economic downturn, rather than create new opportunities for disciplining individuals to conform to the whims of a failing accumulation model. Secondly, to ensure that its costs and benefits are shared fairly, supporting a broad range of people and economic activities. Thirdly, to ensure that we put something better in place of the economic rubble now confronting us, rather than simply rebuilding upon unsustainable foundations. This paper begins by surveying UK policy elites’ management of the inter-crisis period, and the alternative forms of economic statecraft which have now become imaginable. The second section focuses on issues around fiscal policy and taxation, and the third section focuses on the use of private banks in the economic policy response to COVID-19, amid significant changes to financial regulation and monetary policy. The fourth section considers employment and industrial relations, and the fifth section explores the radical shifts to industrial policy – very broadly conceived – which may now be possible and necessary, with particular reference to ‘the green economy’ and ‘the foundational economy’.

CFourton ESA conference paper 2021, 2021

This paper posits that the Covid conjuncture lays bare the key contradiction of neoliberal capitalism, ie the role of the State in organizing its own demise -- in the British context. It builds on a twofold argument: 1) the contradictory role of the State has been magnified under Covid because of the nature of the crisis (health-based) and of the crisis mangement policies which have been resorted to (test and trace, lockdown & suspension of labour for substantial streches of time). These two factors have meant that the welfare state has been relied upon intensely, both quantitatively (number of people on furlough and benefits or in hospital) and qualitatively (shift from benefits being used marginally to them being used somewhat universally). 2) the contradictory role of the State has been to some extent exposed as such during the crisis. First-hand accounts from NHS staff and from people surviving on out-of work benefits have played a key role: the subjective impact of neoliberal welfare state policies (opaque tendering of healthcare services, lack of investment & residual benefit system) has become a recurring narrative. All in all I argue that the current crisis has led the central neoliberal contradiction of the role of the State to be recognized as such. I argue that so far, this exposure has translated into recognition politics (clap for carers, rainbows, Captain Tom mania, debate on £20 Universal Credit increase), but not in any structural reworking of the contradiction. In other words, the crisis has made it clear that there can be no proper Welfare State / State for Welfare under neoliberalism, without this turning into substantial political change.

Cambridge Journal of Regions, Economy and Society

This paper explores the local impact of various forms of fiscal and monetary support for UK-based companies in the context of disruption caused by COVID-19 and associated public health restrictions, including support for household incomes (and therefore private consumption) via the ‘furlough’ scheme, the Covid Corporate Financing Facility and various national and local business support schemes. It shows that the economic crisis associated with the pandemic has been construed to justify interventions that preserve the spatially uneven status quo of the UK’s model of economic development, protecting business from harms arising, apparently, from the public’s reaction to the pandemic. To some extent, COVID-19 has been treated as a localised phenomenon that the national economy requires protection from.

Cultural Politics in the Age of Austerity

response to the most recent financial crisis has been an austerity drive, targeted at the welfare state; this approach can be understood as a continuation of the neo-liberal project to roll-back the state. It was a similar period of crisis following the end of the 'golden age of capitalism' and the dissolution of the PostWar compromise between capital and labour (Marglin and

Oxford Review of Economic Policy

This article considers policy responses to the COVID-19 crisis as they affect the labour market, how these policies are evolving and some of the design issues they face. The concentration is on the UK, but other countries are also discussed for comparative purposes. The Job Retention Scheme is a successful innovation to keep temporarily stopped workers attached to their employers. However, since economic recovery will be slow, it is not sustainable in its current form. A sustained rise in unemployment is inevitable and alternative policies to mitigate this and the dangers of scarring are discussed. The structure of output will change, as therefore will the composition of jobs. A comprehensive active manpower policy will be needed to efficiently match job seekers to available jobs. The young are likely to suffer disproportionately from the recession and this makes it essential to introduce radical policies to boost work-based training and to enhance the contribution made by further a...

New Political Economy, 2019

Industrial policy has been on the agenda of British policy elites since the 2008 financial crisis, particularly since Theresa May became Prime Minister in 2016. This has been seen as a challenge to pre-crisis norms of economic governance associated with neoliberalism. This article explores key aspects of industrial policy development in post-crisis Britain – new forms of vertical support for industry, local government reform, and the public financing of private sector R&D – in order to sketch a new understanding of political and ideological change. It focuses on the institutional mechanisms through which industrial strategy will ostensibly be implemented, including subnational and private spheres of governance. The article argues that recent industrial policy developments do not represent the receding of neoliberalism, but rather have provided opportunities for the reseeding of neoliberal norms in British economic statecraft. The strategy has reinforced forms of state machinery through which pre-crisis elite practice can be maintained and legitimated. By demonstrating that the apparent revival of state intervention in the wake of capitalist crises must not be assumed automatically to challenge pre-crisis economic orders, and highlighting the crucial role of exigent political circumstances, the article makes an important contribution to the literature on neoliberal resilience.

Industrial Law Journal, 2020

British Journal of Politics and International Relations, 2014

The ‘rebalancing’ of the British economy has become perhaps the central motif in the public political economy of adjustment to the financial crisis. The paper examines the social construction of the ‘rebalancing’ imperative and associated policies, arguing that rebalancing discourse has served to circumscribe the parameters of acceptable state intervention in response to the crisis. It is, accordingly, to be seen as a temporary exception, after which laissez-faire can be restored. But is there any evidence for such a rebalancing? In the second half of the paper we assess the extent to which its objectives have been realised in substantive economic policy change, demonstrating a disjuncture between the rhetoric and practice of rebalancing – a communicative dissonance. This leads us to question not only the extent to which rebalancing has been pursued in public policy, but also the likelihood that the interventions delineated by rebalancing can herald genuine economic change.

Cambridge Journal of Economics, 2012

This paper reviews change and continuity in social policy up to summer 2011, contrasting the liberal collectivist approach of New Labour with the reinforced neoliberalism of the coalition government. Given the ongoing uncertainty of economic conditions and the obvious difficulty of forecasting the stability of coalition policy, it is not possible to arrive at a firm conclusion as to the sustainability of the recent change of policy direction. Nevertheless, in a critical assessment of policy in three areas-labour market governance, the life course and the public sector-the paper argues that the UK is witnessing an intensified neoliberal policy emphasis, a redrawing or abolition of minimum standards and failures to meet changing patterns of social needs. While the collectivist elements of New Labour's social policy approach were contradictory in many respects, the coalition government through a withdrawal of the state and obtuse pronouncements about the big society is seeking to embed in the UK a stronger neoliberal approach to social policy. Flawed assumptions about the scope for traditional families and localised big society programmes to compensate for state withdrawal mean the trajectory of change is not clear-cut; preferences for collectivist and publicly accountable solutions to issues of social policy are unlikely to be easily eroded. However, ongoing policy change during the austerity crisis is already inflicting radical change with adverse impacts upon many groups of society.

2006

Business people, business associations and individual firms have been enlisted in various ways by New Labour as part of their strategy to identify and resolve a number of problems within the British welfare state. Business has been important to New Labour's welfare strategies in at least three ways. First, New Labour has endeavoured to gear social policy more towards the needs of the profit making sector in the hope that this would increase competitiveness and help it to expand welfare expenditure in future. Second, by increasing the inputs of business people and firms into social policy, the government hoped to rescue services from their inefficient public sector strait-jackets. Third, the government has looked to private firms as important new sources of financing for welfare infrastructure. However, this embedding of business culture, business people and private enterprise into social policy has produced few real benefits to services, their employees or their users. This paper examines and evaluates New Labour's strategy of embedding business into social policy in order to increase the efficiency and effectiveness of welfare services.