Abstract
The 2008 financial crisis initially appeared to challenge the sustainability of neoliberal finance capitalism. However, the focus of political and public debate soon shifted to state spending and the need for austerity. This research examines how this shift took place in the British press during 2009. The article begins by charting the rise of neoliberalism and its role in financializing the economy. It then examines how such developments impacted news production and made neoliberal perspectives more prominent in the media. This meant, as the data in this article demonstrate, that the key definers of the crisis in the media were among the strongest advocates of neoliberalism. Reporting of the deficit was characterized by fear appeals, the presentation of misleading data and false comparisons. Finally the article notes the consistent endorsement of austerity measures, by almost all newspapers, despite their consistent history of policy failure during recessions.
Introduction
On 15 September 2008, Lehman Brothers filed for bankruptcy presaging the near downfall of the global financial system. Over the next eight weeks major financial institutions across the developed world were saved from bankruptcy by unprecedented state intervention. Britain’s banking system came within hours of collapse on 13 October 2008 before a government bailout stabilized the sector. Crouch (2015: 6) argues the crisis represented ‘a fivefold defeat’ for the neoliberal economic model: First, the earlier success of the neoliberal economic approach could be seen as having been based in part on consumer debt. Second, it clearly disproved the economic theory that failure of deregulated finance was impossible. Third, if firms could become so large that they could not be permitted to fail, then this was not a true market economy. Fourth, state intervention of the kind required for the bank rescue contradicted the tenets of free-market doctrine. And fifth, neoliberal economies do not in theory run up high debts, but the involvement of several of them in the crisis – including Ireland, the UK and US – meant that they were found among the world’s major debtor states.
However, questions about the sustainability of the ‘regime of accumulation’ associated with neoliberalism and finance capitalism soon receded (Jessop, 2014). Instead, the responsibility for the crisis and the fiscal burden of adjusting to increases in state deficits were shifted to the public sector and low to middle income earners (Morris, 2013). This was achieved via the introduction of austerity policies. Blyth (2013: 2) defines austerity as ‘a form of voluntary deflation in which the economy adjusts through the reduction of wages, prices, and public spending to restore competiveness, which is (supposedly) best achieved by cutting the state’s budget, debts and deficits’.
This article examines how the press explained the deterioration in the UK’s public finances during 2009 when they became a major news story and political issue. Its purpose is to explore what Clarke and Newman (2012: 300) describe as the ‘intensive ideological work’ required to shift the locus of the crisis from a financial to a fiscal problem. Central to this is an examination of how a particular set of institutional sources, think tanks and ‘experts’ influenced how the crisis was defined and managed.
However, first this article will situate the study within its sociological and economic contexts. This will involve two elements. First, it will consider how neoliberalism emerged out of the crisis of capitalist profitability in the 1970s and how its rise was fostered by a set of free market think tanks. This rise, it will be noted, and the subsequent forces it unleashed created the conditions for the rise of the finance sector and the broader financialization of the economy (Epstein, 2006; Jessop, 2014; Palley, 2009). It also paved the way for the increased penetration of corporate power into the debating and making of public policy. Second, the article will explore the role of the press and broadcasting in these developments. This will involve an examination of both their role in selling neoliberalism and how the shift from an industrial to a finance dominated economy changed the sociology of news production. Finally, it will note how the two key groups who would have traditionally contested the shift to neoliberalism, the trade unions and the Labour Party, either vanished from the media or embraced the free market.
The Rise of Neoliberalism and British Finance Capitalism
The long boom of the 1950s and 1960s came under increasing pressure during the 1970s. Capitalism faced a number of challenges including a squeeze on profits due to the power of organized labour, a fracturing of the US centred post-war economic order, a series of oil shocks and a slowdown in productivity growth (Glyn, 2006). The response of the New Right was to recast radically the state and society along market lines and re-establish the conditions for effective capital accumulation: Their project was to roll back the priorities of the social democratic state, with its commitments to welfare, full employment, and ‘high’ taxation to fund these. The state would shrink and its role would instead be to remove the ‘restrictions’ on the free market, to de-regulate (as with the banks) and to produce a ‘flexible’ labour market (which involved removing trade union powers). This would increase the mobility of capital and allow larger units to form, making money wherever possible. (Philo et al., 2013: 572)
To understand the turn towards the free market it is usual to cite either the power of interests, ideas or broader historical contexts (Gamble, 1989). Certainly powerful business interests had swung behind such policies in the 1970s, due to concerns over the power of organized labour and threats to management control (Leys, 2003). Economic liberalism had initially struggled to gain a foothold in the post-war era, but had been kept alive in the Mount Pelerin Society. Later, organizations such as Institute of Economic Affairs, Adam Smith Institute, Institute of Directors and the Centre for Policy Studies were critical players in establishing the hegemony of neoliberal ideas and dismantling the post-war Keynesian compact (Desai, 1994; Gamble, 1989; Stone, 1996). These think tanks concentrated on influencing key political actors and provided both ‘a maximum agenda from which the Thatcher government could pick and choose’ but also a system of ‘reverse flow’ where successful policy experimentation could be refined and extended (Desai, 1994: 35). Many key policies of the era including monetarism, the lifting of capital controls, ‘right to buy’ and restrictions on union power had originated in their study groups and publications (Desai, 1994).
These policies transformed social, political and economic institutions and both their relationships with each other and with civil society (Leys, 2003). They also shifted the economy away from manufacturing and towards financial services. As Gamble (2009: 15) notes the rise of this sector created a new economic model, where growth became dependent on increased leverage, managed through supposedly sophisticated forms of risk pricing: The ingenuity of the financial sector was set to work to create new ways of spreading risks, new ways of expanding credit, new ways to encourage individuals, companies and governments to borrow, employing new devices such as financial derivatives and credit default swaps and in this way to keep spending, asset prices and jobs continuously rising.
The finance sector also became increasingly integrated into political decision making via the revolving door between policy makers, regulators and banks leading to a situation of ‘regulatory capture’ (Engelen et al., 2011; Miller and Dinan, 2009). This was symptomatic of the broader growth of corporate power, enabled by the swing to neoliberalism, which has manifested itself in the increased prominence of corporate lobbying and the penetration of the private sector into public governance (Crouch, 2004; Leys, 2003). Corporate actors, particularly from finance, have also increasingly become, as we shall now see, key media sources who shape public debate.
The Media and Neoliberalism
The relationship between the British media and the development of neoliberalism is complex. At one level some of the key themes of neoliberalism such as its anti-government and anti-welfare rhetoric had been a regular theme of press coverage before the election of the New Right (Golding and Middleton, 1982). The media’s hostility to trade unions also predated the New Right, though the existence of a well-defined industrial ‘beat’ did at least mean that during the 1970s, the union movement was able to secure some representation even if its perspectives were downgraded in relation to its opponents (Glasgow Media Group, 1976, 1980; Hartmann, 1975).
However, the emergence of a more interventionist group of press barons in the 1970s shifted the gravity of Fleet Street further to the right. Proprietors such as Victor Matthews, Conrad Black and, in particular, Rupert Murdoch, transformed their titles into newspapers which strongly endorsed neoliberalism (Curran and Seaton, 2003; Greenslade, 2004).
The spread of neoliberal ideology in the media was also facilitated by the expansion of the public relations industry in the 1980s and 1990s (Miller and Dinan, 2000). PR was used to manage crises such as the steep rise in unemployment and conflict with trade unions (Jones, 1986; Philo, 1995a). It also played a crucial role in generating favourable news coverage for the privatization of state assets (Miller and Dinan, 2000). Newman (1986: 144–5, cited in Miller and Dinan, 2000: 17) notes that the PR campaign for the privatization of British Telecom ‘virtually captured the press’ and transformed the ‘pervasive doubts’ of the media into headlines ‘almost unanimous’ in their enthusiasm. During the later floatation of BP, Philo (1995a: 211–12) found that broadcasters were ‘drawn as if by invisible threads to focus on the agenda’ set by the government’s PR so that coverage focused on the potential profits to shareholders while excluding those who argued that ‘80% of the population would no longer have a stake in the industry’.
The increased prominence of neoliberal ideology was also a function of the changing structure of newsbeats which has seen a marked increase in business and financial reporting (Duval, 2005; Peck, 2008). This shift has given more prominence to financial sector ‘experts’: By the end of the 1980s, financial and City news had become central areas of media reporting, especially on television. This was one consequence of the dominance of Conservatives and their promotion of the merits of share ownership, entrepreneurs and business dealing in general. Consequently movements in the City were routinely reported and ‘experts’ from merchant banks and finance houses were consulted for their apparently neutral opinions on the latest trade or financial news. This gave them an important status as ‘impartial’ commentators. (Philo, 1995b: 413)
The contemporary dominance of financial sector sources is borne out in studies of the post-2008 financial crisis which have pointed to the dominance of City voices in news accounts (e.g. Berry, 2013; Rafter, 2014).
Changes to the structure of newsbeats have also reduced the space available to groups who oppose neoliberalism, such as trade unions. Prior to 1979, even strongly Conservative newspapers employed three or four labour correspondents, but the decline of the industrial and labour beats in the 1980s reduced the area where union perspectives could be aired (Manning, 1999). This decline was due to both ‘changes in the economic and political environment’ and the ‘reordering of specific power webs’ as Conservative politicians sought to bypass industrial correspondents and downgrade their status (Manning, 1999: 328). Recent research has found the almost complete disappearance of trade unions from key parts of the media (Berry, 2013; Wahl-Jorgensen et al., 2013).
However, the most significant factor in the decline of voices contesting neoliberalism was the decision by the Labour Party to abandon contestation of economic policy following a series of bruising election defeats in the 1980s. The 1992 Labour manifesto contained no mention of the Conservative government’s economic record and instead the party concentrated increasingly on style and image management (Philo, 1995b). Following the 1992 election defeat and the death of John Smith this process intensified with New Labour wholeheartedly embracing neoliberalism and the primacy of the finance sector in the economy (Jessop, 2014).
Finally, it should be noted that the unleashing of the free market changed the structure of the news industry in ways which favoured the reproduction of neoliberal ideology. In broadcasting, deregulation intensified commercial pressures which reduced the space for critical journalism and current affairs and led to news more geared to a tabloid agenda (Barnett and Seymour, 2000; Leys, 2003; Philo, 1995a). In the press, similar tendencies were visible with celebrity and consumerism displacing hard news and market pressures increasing journalism’s reliance on PR (Davies, 2009; Franklin, 1997).
So far, this review has sketched out a series of interlinked sociological and economic processes. The review began by noting how a crisis of capitalist profitability in the 1970s intersected with the election of a Conservative government heavily influenced by free market think tanks. The shift to neoliberalism increased corporate power, particularly that of the financial sector, and increased its penetration into policy making and the shaping of debate in the mass media. This latter process was assisted by the emergence of a new interventionist group of Thatcherite newspaper proprietors, the use of PR by the Conservative Party and the changing structure of newsbeats. Meanwhile the most significant opponent of laissez faire, the Labour Party, embraced the free market. Finally, the review considered how neoliberalism changed the structure of the media industries making them more consumerist, tabloid and less amenable to critical journalism.
The article will now present empirical data which address two research questions that emerge from the review. First, it will identify the key sources and who framed the terms of debate over how to respond to the deficit:
Research Question 1: Who were the sources who were featured in discussion of the deficit across different parts of the UK national press?
Second, the article will examine what the consequences of that pattern of source access were for how the crisis was explained to news audiences:
Research Question 2: How were the origins, consequences and potential solutions to the deficit explained to news audiences across the UK national press?
Methodology
The sample for this study consisted of 14 days of weekday coverage in six national newspapers: the Guardian, the Daily Telegraph, the Daily Mail, the Daily Express, the Sun and the Mirror. These newspapers were chosen on the basis that they represented all three segments of the UK national newspaper market (broadsheet, mid-market and tabloid), were high circulation and thus likely to have a broad impact on public knowledge and attitudes. The Guardian was chosen in preference to The Times, despite its lower circulation figures, because it offers a centre left counterpoint to the Telegraph and has a readership heavy in professionals and opinion formers. The sample period was January to August 2009. This timeframe was chosen because it was the period when the deficit became a major political issue which was covered extensively in the media. Newspaper articles were selected via the Nexis database using the search string: public debt OR national debt OR government debt OR deficit OR public finances. These searches were then sifted to leave only articles which discussed the debt and/or deficit. This search string was run for each day for the first seven months of 2009 in order to identify the peak days for coverage. The two peak days for each month were selected for the sample with the proviso that they had to come from separate weeks. If the two peak days occurred in the same week then the peak day would be sampled together with the next highest news day from another week within that month. This reduced the possibility that a newsworthy event such as the Budget would capture all the coverage for a particular month and skew the representativeness of the sample. The 14 days sampled were 5 and 26 January, 2 and 20 February, 20 and 26 March, 9 and 23 April, 7 and 22 May, 19 and 25 June, 6 and 22 July. In total the Nexis search captured 166 articles: 50 from the Daily Telegraph, 37 from the Guardian, 41 from the Daily Mail, 20 from the Express, 11 from the Sun and 7 from the Mirror.
This sample was subject to a thematic analysis. This is a method which has been developed by the Glasgow Media Group over more than 30 years and used to analyse such diverse areas as industrial news, food scares, risk and war/conflict reporting (Glasgow Media Group, 1976, 1982; Philo, 1999). The method is based on the assumption that in any contested area there will be competing ways of explaining events or issues. These explanations are linked to particular interests which seek to explain the world in ways that justify their own position. The purpose of a thematic analysis is to map which explanations were featured in news accounts and which were absent. In the analysis the quantity of news text given to different arguments was counted as was the frequency with which they appeared. The newspaper sample was also subject to a source analysis to provide a measure of who was seen as a credible voice and framed the parameters of debate.
Findings
Who Gets to Speak?
As previously noted, the period since 1979 has seen major changes in the networks of actors structured around newsbeats. Table 1 shows the range of sources accessed by different newspapers during our sample period. Visible is what Hall et al. (2013: 61) have described as the ‘systematically structured over-accessing to the media of those in powerful and privileged institutional positions’.
Proportion of total lines of news text by source.
Prominent among these are politicians of the two major parties, who are guaranteed access as elected representatives. More space was given over to Conservative politicians in right-wing newspapers, while Labour received more representation in the Guardian and the Mirror. Also prominent is a particular class of commentator, the City analyst or economist, who is cited in between a quarter and a third of all articles in the broadsheets and mid-market tabloids. Such sources equate to what Hall et al. (2013: 61) describe as ‘experts’ whose ‘calling’ – the ‘disinterested’ pursuit of knowledge – not his position or his representativeness, confers on his statements ‘objectivity’ and ‘authority’. However, City experts represent a sectional interest and in their promotion of austerity they do not represent the mainstream of macroeconomic opinion (Wren-Lewis, 2015).
Table 1 also shows the prominence of other neoliberal sources such as business lobbies, the Bank of England, the IMF and the OECD. Such sources automatically receive access because of their status or because they represent an important interest group. Also visible is the Adam Smith Institute, who first formed a relationship with the Telegraph’s editors in 1974 (Desai, 1994). Other visible right-wing think tanks included Policy Exchange and the Taxpayers’ Alliance which has become the most high profile source in the right-wing and local press, providing packaged news to overstretched journalists (Merill, 2008). The only other major think tank to appear is the National Institute of Economic and Social Research which represents the mainstream of UK macroeconomic thought.
As Hall et al. (2013: 61) have argued, the ‘tendency towards ideological closure’ depends on the strength and legitimacy of groups that can offer ‘counter-definitions’. What the data presented show is the almost complete lack of any left-wing or even Keynesian alternatives to the neoliberal consensus in the press. The embrace of the free market by Labour, the disappearance of unions and lack of a major left-leaning think tank is symptomatic of both the hegemony of neoliberal ideas and the general weakness of the left (Mudge, 2014).
What Caused the Rise in the Deficit?
The proximate cause of the large rise in the UK deficit (and debt) post-2007 was the contraction in the tax base created by the slowdown in the economy following the banking crisis in 2008 (see Table 2). From the beginning of 2008 to the end of 2009, income tax fell in absolute terms by 4.5 per cent, national insurance by 4.9 per cent, VAT by 13.1 per cent, corporation tax by 22.7 per cent and stamp duty by 44 per cent (IFS, 2012a). The sharp falls in corporation tax were concentrated in the financial sector which had become the economy’s key source of corporate profits and tax revenues (Engelen et al., 2011).
UK Public Accounts 2004–11 in billions.
Source: IFS (2012a, 2012b).
However, at a deeper level, the recession and subsequent rise in the deficit were caused by deleveraging as the private sector sought to pay down debt following the collapse of asset bubbles (Koo, 2011). This weakened consumer spending and subsequently business investment. The crisis thus presented challenge to the neoliberal growth model based on increased corporate and consumer debt.
As can be seen in Tables 3 and 4 the deeper structural causes of the rise in the deficit do not appear in coverage. What is also clear is that information about the economy is heavily stratified by newspaper. The Sun and the Mirror combined only provide 11.75 lines of explanation as to the origins of the deficit. Furthermore, the Sun completely fails to mention the key proximate cause, the contraction in tax revenues. However, the Guardian and the Mail do provide accurate accounts of the immediate causes of the rise in the deficit: Tax revenues are being decimated by sharply contracting economic activity, declining corporate profitability, surging unemployment, markedly reduced bonus payments, the VAT cut and substantially weakened housing market activity and prices. Sharply rising unemployment is also resulting in higher benefit claims, pushing up government expenditure. (Guardian, 20 March 2009)
Proportion of articles featuring explanations on the expansion of the public deficit.
Proportion of news text allocated to explanations.
There is also significant space given over to highlighting the costs involved in bailing out the banks across the newspaper sample. The false argument that the deficit was caused by Labour overspending prior to the recession was featured in the right-wing press but is largely absent from accounts in the Guardian and the Mirror: Until Gordon Brown accepts he must bring the public finances back under control ending the profligacy of recent times the Labour Government is going to face a far harder task in selling its bonds. (Daily Mail, 26 March 2009) The extent of Gordon Brown’s mishandling of the economy is now plain for all to see. He borrowed like a man possessed in the boom years when he should have been paying off debt. (Express, 22 July 2009) As the latest figures showed yesterday the state has borrowed and spent too much. (Daily Telegraph, 22 May 2009)
The positive case for deficit spending, that it prevented a depression, appears in only four-and-a-half lines of news text across all 166 articles. Across the sample, explanations for the rise in the deficit are sparse. However, while there were few explanatory statements on the origins of the deficit the coverage took place against the backdrop of a campaign, stretching over decades, of vilification directed against the public sector for its alleged waste, inefficiency and capture by ‘producer interests’. These are the arguments that Crouch (2011) notes reflect the dominant neoliberal critique of government.
What Were the Consequences of a Rise in the Deficit?
The UK had entered the 2008 recession with an internationally and historically low public debt burden (Neild, 2010; Webb and Bardens, 2012). Furthermore, most of its debt was long dated and domestically held. Approximately 70 per cent of UK debt was held by British individuals and pension funds, while the UK’s average debt maturity was the longest in the developed world at 14 years as compared to four years for the USA, six years for Germany and seven years for France (Aldrick, 2009). Writing in the newsletter of the Royal Economic Society, Neild (2010: 12) commented: Today’s ratio of debt to GDP does not look abnormal, let alone alarming … Our deficit – the one figure picked out by the Chancellor – is high, but our debt to GDP is average and our tax ratio is low. Our good corruption score indicates that we are capable of raising tax or cutting expenditure … One would conclude that some action was needed, but not that there were any grounds for alarm.
A very different picture is visible in the British press. Here discussion of Britain’s deficit was infused with fear appeals and apocalyptic language, some examples of which are reproduced in Table 5.
Descriptions of the public finances.
International and historical comparisons were also almost uniformly negative (see Table 6) and there were very few articles which featured the counter-arguments outlined above. There are, however, clear patterns in that the Guardian featured less negative assessments and more positive ones while the Express, the Mail and the Telegraph were overwhelmingly negative with few balanced articles. Some coverage offered misleading or false accounts of Britain’s public debt. At the close of 2008 the national debt was 57.1 per cent of GDP (Webb and Bardens, 2013). In 1970 it had been 70 per cent, for the whole of the inter-war years it was well over 100 per cent and in 1945 it was 225 per cent (Neild, 2010). However, the Daily Mail reported that: ‘The shortfall sent the national debt soaring to £799bn – a record 56.6pc of national output’ (22 July 2009).
Proportion of articles featuring different assessments of the deficit.
Incorrect international comparisons were also employed. In 2009 the UK’s debt burden at 68.7 per cent of GDP was lower than the USA’s 84.8 per cent, Italy’s 115.8 per cent or Japan’s 218.6 per cent and was projected to remain below those countries in the foreseeable future (BBC, 2009). But the Express reported that: BRITAIN will soon have the biggest national debt in the industrialised world, finance experts said last night. The International Monetary Fund warned that Treasury borrowing is on course to hit £165 billion next year. That would make the country’s public debt 11 per cent of Gross Domestic Product – the highest in the G20 group of industrialised nations. (20 March 2009)
The same false claim also appeared in the Sun: ‘The International Monetary Fund forecast that by next year Britain will have the highest level of Government debt of any of the top 20 economies in the WORLD’ (20 March 2009). An even more erroneous international comparison was offered in the Daily Mail: These latest official figures show that Britain’s financial state is now far, far worse than countries such as Greece or Italy, which we have traditionally looked down upon and sneered at for their profligacy. Italy’s indebtedness, though frightening, stands at little more than 100 per cent of GNP. Ours stands at twice that percentage and may well not be sustainable in the long term. (20 February 2009)
Other reports also drew direct analogies with struggling Eurozone economies such as Ireland, ignoring the fact that the UK retains its own central bank and currency and its debts are largely domestically held. Another dubious comparison which was repeated uncritically in all newspapers (23 April 2009) except the Guardian and the Mirror was the claim that Britain would borrow more between 2009 and 2011 than all previous governments had borrowed. This claim was based on borrowing in nominal rather than real terms.
Six dangers were identified in relation to the deficit and used to justify calls for either accelerated deficit reduction or opposition to a further fiscal stimulus: Britain might lose its AAA credit rating; foreign creditors may stop buying UK gilts; sterling could fall sharply; interest rates may rise making debt servicing very expensive; the IMF may be required to bail out Britain; and the UK could go bankrupt. These arguments were made primarily by City economists, right-wing think tanks and Conservative politicians but did not represent majority opinion among macroeconomists (Wren-Lewis, 2015). As can be seen in Table 6, these arguments were used extensively in all newspapers but particularly so in the Telegraph, the Mail, the Express and the Sun while the Guardian was more likely to feature balanced articles with counter-arguments.
The argument that Britain could go bankrupt, which had been raised by Conservative politicians, appeared in 15 articles: five in the Telegraph and the Mail, three in the Express and one each in the Sun and the Mirror. Of these only one each in the Mail, the Mirror and the Telegraph featured balanced articles which offered competing accounts. The rest directly endorsed the idea that bankruptcy was a real possibility: This is a time when Britain stands on the brink of bankruptcy, with the Government’s debts expected to reach an unprecedented £1.5trillion. (Daily Mail, 5 January 2009) Labour reverts to type and bankrupts Britain. (Daily Express, 23 April 2009)
But Britain as a sovereign with a central bank and currency issuing powers cannot not go bankrupt because it can always print money to buy its own debt in the event of a gilt strike (Coppola, 2013; Wren-Lewis, 2013). The real danger was inflation but that was extremely unlikely during the post-2008 recession. However, even newspapers which featured the most apocalyptic assessments of the public finances occasionally featured dissenting voices. For instance, Professor Ray Barrell of the National Institute of Economic and Social Research argued in the Daily Mail that the national debt was relatively modest in historical and international terms and that the UK had entered the recession ‘in a better position than most large countries’ (26 January 2009). The upshot, argued Barrell, was that the debt ‘would be dealt with’ and that those who warned of a possible default ‘can be safely ignored’. However, arguments warning of the dangers the deficit posed were much more heavily featured and directly endorsed. On a quantitative level, excluding Guardian coverage, arguments stressing the grave dangers posed by the deficit appeared in 458.5 lines of news text against 52.5 lines for the counter-narrative.
What Were the Policy Options for Dealing with the Debt/Deficit?
As Gamble (2009) notes, there were a wide range of potential responses to the crisis from market fundamentalism through to radical anti-capitalism. There were also questions about how quickly the deficit should be reduced and whether it should be achieved via tax rises or spending cuts. As can be seen in Tables 7 and 8, almost all of the space given over to solutions in newspapers except the Guardian focused on calls for austerity or arguments against raising taxes on the wealthy. These accounted for 76 per cent of the news text given over to solutions in the Telegraph, 81 per cent in the Mail, 83 per cent in the Express and 100 per cent in the Sun. Across all newspapers, austerity measures were presented as unavoidable: The deterioration in the public finances means the winner of the next general election – which has to take place by next summer – will have no choice but to slash public spending and hike taxes. (Daily Mail, 22 July 2009) Cuts and tax rises: there is no other way. (Daily Telegraph, 25 June 2009) We must freeze or even cut the cost of keeping six million state workers on the public payroll – or be abandoned by international creditors. There can be no sacred cows. The NHS budget has trebled in ten years. It must accept real cuts. So must every other Whitehall and town hall budget. (Sun, 6 July 2009)
Proportion of articles offering different solutions to deficit.
Total number of lines of news text allocated to different solutions.
Across the right-wing press there were calls to cut public sector staff, pay and pensions because, it was argued, they were economically unavoidable and unfair on those working in the private sector: ‘Public sector pay must be on the table. So, in due course, must public sector pensions and staff numbers. Talking about these issues is as politically uncomfortable as it is economically unavoidable’ (Telegraph, 6 July 2009).
Clarke and Newman (2012: 312) have suggested that the ‘public sector pensions dispute of 2011–12 in particular opened up new lines of perceived inequality and blame’ between private and state employees. However, the evidence here suggests that such fissures were being prepared beforehand as an example of how the mobilization of ‘particular discourses of crisis … can open up the way for particular policy ideas to become dominant’ (Clarke and Newman, 2010: 711).
Once again, the Guardian differed from other papers. At times it advocated pro-growth policies and argued that spending should not be cut until the recovery was established. It was also the only newspaper to argue that the deficit could be closed via a crackdown on tax evasion and avoidance. Excluding the Guardian coverage, 208.25 lines were given over to arguments in favour of austerity and against tax rises on high earners as compared to only 8.75 lines for Keynesian alternatives. While the calls for austerity were well developed, the arguments for stimulus appear as scattered fragments. Furthermore, the key argument that much of the deficit was cyclical and would decline naturally as the UK came out of recession appeared in a single line in one article in the Daily Telegraph (2 February 2009). Alternatives to spending cuts, such as making the tax system more progressive appeared very rarely. There was no mention of introducing financial transactions taxes or abolishing the interest relief on company borrowings (Compass, 2009; PCSU, 2009; Sikka, 2008). There was a single line mentioning property taxes in a Guardian article which noted the ‘perverse’ concentration on cuts when the deficit was caused by a ‘collapse in tax revenues’: It seems perverse that the current debate is all about which bits of spending should be cut rather than which taxes should be raised. There are plenty of ways to raise revenues. Darling could delay the introduction of the 50% tax rate but lower the threshold; he could prevent corporate tax avoidance by taxing companies on their turnover rather than their profits; he could deter speculative holdings of property through a land value tax. (22 July 2009)
In contrast there was considerable space in the right-wing press given over to arguments against making the tax system more progressive. These deployed claims that taxing high earners could harm entrepreneurship, investment and jobs: It [increasing the top rate of income tax] will simply encourage tax avoidance and lead wealth-creators to reduce their effort and working hours. In the end it will raise no money, reduce economic activity and initiate a ‘brain drain’ of talent abroad, leaving the whole country worse off. (Express, 23 April 2009) High earners will pay a 50 per cent rate – which threatens an exodus of entrepreneurs and making foreign businessmen think twice about coming here. (Sun, 23 April 2009)
Such themes fit into a long tradition emphasizing the need to nurture ‘enterprise culture’ and not penalize the ‘wealth creators’. They also work by disguising what are private interests as appeals to the common good (Gamble, 1989; Philo et al., 2013).
Conclusion
The meaning of crises is not pre-inscribed; instead, as Clarke (2010: 383) notes, ‘we are invited to perceive particular phenomena, causes, tendencies and potential routes to salvation’. Within the press these are refracted through the editorial lines set down by proprietors and editors as well as the commercial, political and social factors which structure the production of news. This research has demonstrated that the key definers in the deficit debate were drawn from a narrow range of sources supportive of neoliberalism and finance capitalism. This meant that the crisis was defined as a problem of public rather than private debt, which necessitated sharp cuts to public spending.
The dominance of these perspectives is indicative of how countervailing forces to neoliberalism have been in retreat since 1979. The unions have seen their status in public debate downgraded while Labour, like many traditional centre–left parties in Europe, has responded to the crisis with watered down versions of austerity. As Mudge (2014: 1) notes, this state of affairs ‘is markedly different than the 1930s, a time in which some left parties (or factions within them) broke from economic orthodoxies and mobilized a “new economics” that called for pro-spending, employment-boosting, reflationary policies’.
At the micro level, the shift from a financial to a fiscal crisis was facilitated by the long-standing circulation of neoliberal discourses about the profligacy of the state sector. Arguments for austerity were couched in terms of economic necessity relying on intense fear appeals. A number of highly contested arguments about the dangers of increased state debt were featured across the right-wing press and there was little attempt to balance these with competing perspectives. There was also evidence of substantial disinformation and incorrect accounts of the UK’s fiscal position, together with false comparisons with Eurozone states. Austerity as a policy received almost no critical scrutiny outside of the Guardian despite its poor record in practice (Blyth, 2013).
Polling shortly after the 2010 election revealed that most people who expressed an opinion blamed Labour for the deficit, saw cuts as unavoidable and thought austerity would be good for the economy (YouGov, 2010). Such judgements are likely to have been influenced by discussion in the press. As this research has shown, most readers will have encountered information that was both partial and misleading about the condition of the public finances and the range of options for managing the rise in public debt.
Footnotes
Acknowledgements
I would like to thank Simon Cottle, Justin Lewis, Karin Wahl-Jorgensen and the two anonymous reviewers for their helpful comments and suggestions.
Funding
This research received no specific grant from any funding agency in the public, commercial or not-for-profit sectors.