March 9, 2012
“The problem is that policy is being run by two public school boys who don’t know what it’s like to go to the supermarket and have to put things back on the shelves because they can’t afford it for their children’s lunchboxes. What’s worse, they don’t care either.”
If this quote came from Vince Cable it could safely be dismissed as the peevish mutterings of a typical Lib Dem malcontent doing his damnedest to tar the Conservatives as a party for the spoiled, remote, arrogant rich.
But it doesn’t come Cable, it comes from truest of blue Tory backbenchers Nadine Dorries. And Dorries is absolutely right: under Cameron, Osborne (and with able assistance from yet another millionaire ex-public schoolboy Nick Clegg) the Conservatives really have become the party of the spoiled, remote, arrogant rich. So much so that it makes you wonder why anyone on an income of less than £200,000 a year would even consider voting for them.
Don’t get me wrong. I have no problem whatsoever with Cameron’s £4 million plus property portfolio, nor to Gideon “Despicable” Osborne’s vast wallpaper inheritance, nor yet to Nick Clegg’s estimated £1.9 million net worth; still less do have any issue with the fact that they were all superbly educated at Eton, St Paul’s and Westminster. But what I do seriously object to is the effect this cushion of comfort has on their policy-making. As Dorries correctly observes – and no matter how many ludicrous photo shoots Cameron arranges in order to be caught shopping at the fish counter of his local supermarket for sea bass, just like all the ordinary folk do – Cameron and Osborne (and, though she didn’t mention him, Clegg) simply have no idea how badly this recession is treating those struggling middle class families who constitute their core vote.
Dorries is also right about this: they really do not care.
As far as Cameron is concerned, the only problem with his wealth and entitlement has to do with negative image. That’s why he did his best to bury Horsegate, why he persists in being so embarrassed by that Bullingdon photograph and why he has been so slow in defusing Gordon Brown’s time bomb, the 50p upper band tax rate. For Cameron (as you’d expect from a PR man) it’s all about surface, about perception, not about doing the right thing. He could easily, very early on, have made the simple case that needlessly high tax rates cause revenues to fall not rise and that they jeopardise economic growth and deter mobile entrepreneurs from setting up shop in Britain. But he didn’t because he couldn’t bear the idea of the Conservatives being tarred as the party of the superrich.
But the Conservatives ARE the party of the super-rich. Not because David Cameron went to Eton or has an incredibly rich father-in-law or because Osborne goes on yachting-n-birch-twig-flagellation cruises with Russian oligarchs, but because this is the effect their policies are having.
Nowhere is this more evident than with George Osborne’s Quantitative Easing. Here’s how Nassim Taleb put it in the Spectator:
“Quantitative Easing is a transfer of wealth from the poor to the rich,” he says, “It floods banks with money, which they use to pay themselves bonuses. The banks have money, and assets, so they can borrow easily. The poor guy, who is unemployed and can’t borrow, is not going to benefit from it.” The QE process pushes asset prices up, he says, which is great for those who own stocks, shares and expensive houses. “But the state is subsidising the rich. It is the top 1 per cent who benefit from Quantitative Easing, not the 99 per cent.”’
Here’s how Bill Jamieson described “possibly the greatest gamble in British economic history.”
‘Low rates of interest are, of course, great news for a government which needs to borrow £4,000 a second — but not for savers who see the value of their nest egg destroyed by inflation. It hurts pension funds, so what we think we’re putting towards retirement will be worth far less. Companies see the value of their pension fund plunge — and have to top it up. This is what QE does: transfers wealth from savers to borrowers. If the Chancellor stood up and admitted as much, it would cause uproar. But because QE is a complex Bank of England mechanism with a boring name, no one much cares.We need not guess at its effects. The Bank’s own analysis has confirmed that the first £200 billion of QE pushed up inflation by anything from 1 to 2.6 percentage points. This was slipped out in the small print of a Bank report, barely making a ripple. Compare this to the political outcry which surrounded the 2.5 percentage point rise in VAT last January. Every household had to pay considerably more for shopping due to QE, too, and, as with VAT, it has hit the poorest households hardest.’
The Conservative party is traditionally associated with economic competence and with middle class aspiration. Between them David Cameron and George Osborne are destroying this tradition. When the core membership finally wakes up to what’s going on it’s not going to be happy. Indeed I think the damage these two remote, arrogant public schoolboys have done is already so great that they may well have destroyed the cause of conservatism in Britain.
Good show, chaps! Not.