Why do current affairs seem to order themselves into decades?
Reviews of the year and the decade are really just a journalistic device for filling space during the winter holiday season. But somehow events conspire to arrange themselves accordingly. For it is impossible not to look at the last 10 years as a meaningful collision of events. It cries out as the decade of delusion – and 2009 was the year in which, to mix metaphors, the delusions all came home to roost.
A global economic crisis brought to an end a decade of cheap money, hyper-consumerism, bankers’ hubris and unsustainable debt. In politics, our illusions about the Westminster system were shattered when it was revealed that our “honourable members” are as capable of petty corruption as the “wabenzi” of any dysfunctional African state. And at the end of a decade in which we all tried to ignore the reality of climate change, the world’s leaders finally came together in Copenhagen to disagree on how to tackle it. It’s as if someone had planned it all, like a Hollywood blockbuster, leaving the climax till the last reel. Unfortunately, there’s no happy ending.
The cosy delusion that climate change could be tackled by co-operation and consensus was blown out of the water as China emerged as a self-interested world superpower determined to be recognised as co-equal with America in decisions about the planet’s future. The poor and vulnerable nations were left out in the cold – or rather in the hot, since low-lying countries like Bangladesh and the Sudan are likely to be the first casualties of global warming.
As temperatures rise, so will conflict as poor countries who consider themselves victims seek compensation from rich countries who don’t accept they are to blame. There is a sense of injustice developing which could fuel terrorist movements that make al-Qaeda look like a branch of Friends Of The Earth.
And we’re not good at dealing with terrorism. The pivotal event of the decade was, of course, the plane-bombing of the World Trade Centre on 9/11 by Bin Laden jihadists. As the twin towers smouldered, President Bush declared a “war against terror” – to which Tony Blair was the first naive recruit – and then perversely went on to attack a country which had nothing to do with the bombing or with al-Qaeda. The British people were told that Saddam Hussein had weapons of mass destruction that could destroy us in 45 minutes – which must count as one of the biggest lies in the history of modern warfare. The Iraq invasion played into the hands of the mullahs and militants whose websites claimed it as proof that Western “crusaders” are determined to crush Islam.
Never has a political leadership – the Bush administration – proved to be so militarily inept, so morally deficient, so lacking in political vision or the instinct for self-preservation. The war in Iraq, which the new US President Barack Obama has promised to end in 18 months, has cost more than a trillion dollars and 4000 American lives, and led to hundreds of thousands of Iraqi deaths. It has been a diplomatic and military disaster, leaving America a bankrupt pariah – a dumb and dumber superpower humiliated by a few thousand Islamic militants. And for an encore? Another hopeless engagement, this time in Afghanistan, propping up the corrupt and untrustworthy regime of President Hamid Karzai. Throughout 2009, exhausted British soldiers have fought and died valiantly with inadequate equipment and without any clear idea of what they are actually doing there or what they hope to achieve.
Back home, the noughties were the years when everyone became obsessed, as never before in modern history, with house prices. For most of the decade the value of this one asset rose year-on-year in double digits, leaving us a nation divided between those who have made huge capital gains out of doing nothing and a new generation who can’t get a roof over their heads. It will be regarded by history as the ultimate delusion: that you could build an economy on ever-increasing house prices, as if money grew on trees.
British manufacturing dwindled as our economy became dominated by financial services, managing the assets of the property-owning classes. British consumers shopped till they dropped, and when they ran out of money took another chunk of equity out of their homes or took on ever bigger mortgages.
House prices were not just a Daily Mail obsession, they were absolutely central to the financial crash of 2008/9. Bonds based on the nominal values of homes owned by sub-prime borrowers in US inner cities became traded as if they were safe as, er, houses. It was utter madness. Bankers were earning bonuses of hundreds of thousands of pounds a year buying and selling financial instruments they didn’t understand, or didn’t want to understand. When someone asked the awkward question of what these mortgage bonds were really worth, the whole system collapsed. Banks refused to lend to each other because they no longer trusted each other to be honest about their solvency. Indeed, most banks in Britain and America became insolvent and remained so throughout 2009, supported by the taxpayer. The public ended up owning most of RBS, the biggest bank in Britain, and supporting the rest through a £1 trillion bail-out.
The crash turned politics upside down, with Labour initially defending the City of London, and the Tories, under David Cameron, calling for an end to bank bonuses and the curbing of financiers. However, during 2009, the political parties reverted to type, with the Conservatives calling for deep cuts in public spending to get Britain out of debt, while Labour insisted that the priority must be to keep the economy from slipping back into recession. As the stock market has rallied recently, so has Prime Minister Gordon Brown, whose popularity has been flatlining all year. Suddenly, there is hope.
But no-one should be under any illusion that the fundamental problems of the British, or the world economy, have been addressed. Colossal public spending and near-zero interest rates have brought economies like ours back from the brink. But the banks are still hiding the true scale of their losses and Britain has not worked out how it is going to pay its way in the world now that the banking sector is, well, bankrupt. Britain is borrowing £20bn a week and running a public deficit of 13%, which is simply unsustainable, though Brown hopes the roof won’t fall in until he is back in Number 10 after the next General Election.
The banking crisis turned into an unexpected political crisis for the Scottish National Party. First Minister Alex Salmond has had cause to regret holding up countries such as Iceland and Ireland as role models for an independent Scotland. If Scotland had the misfortune to be fully independent last year, the government would have been left slashing wages and public spending because the country had become even more dependent on scumbag bankers than the Celtic Tiger. As it is, Scotland faces real term reductions in public spending through the Barnett mechanism. SNP election pledges have fallen like needles off a Christmas tree: local income tax, student debt, first-time buyers’ grants, smaller class-sizes, the Scottish Futures Trust.
It’s by no means clear, however, that the Nationalist experiment is over in Scotland. Indeed, the very scale of the financial crisis, and the big cuts coming south of the Border, have given the SNP a get-out-of-jail-free-card as far as broken manifesto pledges are concerned. Mr Salmond remains extremely popular and has until now played a blinder leading Scotland’s first minority government. However, in 2009, there was a growing sense that the SNP isn’t quite sure where it goes from here. There is a tension between the social democratic wing identified with Health Secretary Nicola Sturgeon, and the neo-liberal instincts of the Finance Secretary John Swinney, which may become acute when spending cuts become a reality in 2010.
The public meanwhile are bemused at Mr Salmond’s enthusiasm for holding a referendum on independence which the polls suggest he would lose. There isn’t a snowball’s chance of the current referendum bill being passed by the Unionist majority in the Scottish Parliament – unless Labour decide to call the Nationalists’ bluff. The SNP leadership are hoping that a slash-and-burn Tory government in Westminster will give Scots the stomach for constitutional change, but that is by no means certain and Labour could even find itself leading opposition to the Tories in Westminster.
So, is Scotland any closer to independence in 2009? Not really – people don’t like to go out on their own in a storm, and the financial crisis is far from over. The success of the SNP has largely been down to Mr Salmond’s political genius rather than a popular desire to leave the UK. Its success is also down to the Scotland Act, 10 years young, which set up the Scottish Parliament and gave a determined government scope to make a real impact within the flexible terms of the devolution settlement. There will be no going back for the Union.
The decade of devolution has seen something of a reversal of fortunes between Holyrood and Westminster. In the early years of the noughties, it was the Scottish Parliament that seemed mired in scandal and expenses rows. MPs up from Westminster shook their heads in disbelief at the latest lobby-gate, taxi-gate, medal-gate scandals. But the boot is now very much on the other foot following the scandal of MPs’ expenses.
Members of Parliament misused their second homes allowances to speculate on the London property market, flipping their second homes to avoid paying capital gains tax. They furnished their properties lavishly from the infamous John Lewis’s List, bought everything from toilet seats to duck houses and put it on the tab, somehow believing that this was acceptable to the British taxpayer. Well, now they know. It was the delusion of the decade.