The Contracting State: Cameronism and the Politics of Austerity

Since 2010, the British Conservative Party under David Cameron has driven through a radical response to austerity. I characterize this as the pursuit of the ‘contracting state’.  The radicalism of this approach was unexpected. After a long period of electoral failure, the election of Cameron as leader of the Conservative Party in 2005 seemed to signal a move to the centre. Cameron was to be ‘heir to Blair’and he committed the Conservatives to Labour’s relatively generous spending plans. The sudden financial then economic crisis in 2007/08 led Cameron to jettison that commitment.

The ‘contracting state’ is an appropriate description in two senses. First, UK state spending is shrinking relative to the size of the economy. As Taylor Gooby and Stoker wrote in 2011, ‘On current projections public expenditure in the United Kingdom appears likely to fall below that in the United States by 2014 or 2015 [as a proportion of GDP]. This is simply unprecedented and, if fully implemented, indicates a radical new departure in British policy directions.” Second, advocates of the contracting state reject the direct use of the state to achieve social ends, in favour of a variety of methods of contracting out services. The government’s White Papers on Health and Open Public services epitomize the approach. This paper discusses the British experience of austerity, in terms of both political economy and ideology, and the development of the contracting state. It also draws parallels with earlier attempts to reshape the state in response to perceived crisis.