Former Prime Minister David Cameron, infamous for the introduction of the disastrous austerity policies that wrecked the British economy, is back. The prime minister has appointed Cameron as foreign secretary after having given him a peerage to facilitate his return to the front bench. 

The move is unexpected, but it is not surprising. British politics is full of wealthy men failing up and, as Boris Johnson or Michael Gove could attest, introducing disastrous policies is rarely enough to end someone’s political career.  

Cameron’s appointment provides some clear benefits to both men. Rishi Sunak is now so far behind in the polls that it looks vanishingly unlikely that he will remain Prime Minister after the next election. 

If he loses, he would join James Callaghan, Gordon Brown and Liz Truss on the ignominious list of Prime Ministers who have never won an election. In this context, almost anything he can do to shift public opinion about his government is a good thing for the PM.

For Cameron, the benefits are also clear. Not only did Cameron leave the country in turmoil after leaving office, he has also been mired in scandal ever since; not least due to his relationship with Lex Greensill. 

Greensill owned a supply chain financing firm that encountered some serious financial difficulties during the pandemic. Its clients struggled to repay their loans to the firm, and its investors got cold feet as the world economy shut down.  

Cameron had been given an advisory role at Greensill after he left office — a role in which he reportedly earned $10 million. His ‘advice’ centred on setting up meetings between the company and senior politicians and civil servants — most notably officials within the NHS, which ultimately entered into a contract with the firm. 

By the time the pandemic hit, Greensill had used Cameron’s connections to embed itself within the British state. It was at this point that Cameron’s lobbying efforts reached fever pitch. 

Cameron texted Sunak and several of his advisors pressuring them to change the rules of the Bank of England’s lending scheme to allow Greensill to borrow from the Bank. Cameron reportedly claimed that it was ‘nuts’ to exclude Greensill from the CCCF. Sunak responded saying that he had ‘pushed the team’ at the Treasury to change the rules. 

The Bank did not bow to this pressure, but the British Business Bank (BBB) did. The BBB lent Greensill £350 million as part of the Coronavirus Large Business Interruption Loan Scheme (CBILS). This amount exceeded the cap that was supposed to apply to lending to any one company. And the vast majority of the money lent to Greensill went straight to the GFG Alliance, currently under investigation for fraud in multiple jurisdictions. 

On the surface, the Greensill scandal seems entirely separate from what will undoubtedly be considered Cameron’s main legacy — the disastrous austerity agenda that wrecked the British economy and left hundreds of thousands of people dead. 

But austerity was not just a bad policy choice. It was class warfare via economic policy. 

In the lead-up to 2008, the British ruling class had convinced the country that they had perfected the art of sound macroeconomic management. Brown famously declared the ‘end of boom and bust’. 

The financial crisis shattered this illusion and dealt a severe blow to the legitimacy of a political and economic system premised upon the promise of higher incomes and more wealth to a large section of wage earners. 

The bank bailouts made this blow even more severe. The cry of ‘the banks got bailed out, we got sold out’ resonated in a country where people were losing jobs and homes while bankers walked away from the carnage with massive payouts. 

In such a febrile environment, the ever-present threat was that workers might realise their collective class interest and begin to fight back. Austerity provided a way to alleviate this threat. 

First, it would lead to job losses that would weaken worker organisation. Second, it would make the threat of unemployment even more terrifying by chipping away at public services and the social security system.

Finally, it closed off alternatives to the status quo. Capitalism might be deeply unfair, but if there really was no money left, then it didn’t make sense to try anything different. Better to just hunker down and hope for things to improve. 

Naturally, things did not improve. As I wrote in my piece for Tribune this quarter, the British economy, and indeed society more generally, has been eviscerated as a result of more than a decade of near-constant spending cuts. 

The only exception to this period of retrenchment was the pandemic, when government spending increased sharply. Paradoxically, it was precisely this increase in spending that makes clear the class character of austerity. 

Lobbyists like David Cameron used their power within the British state to provide massive benefits to already wealthy men like Lex Greensill. At the same time, the government utterly failed to respond effectively to the crisis, leading to tens of thousands of preventable deaths, while working people lost their jobs and saw their incomes collapse. 

Once the pandemic was over, we were once again informed that there was no money left. But the cash that had been spent hadn’t gone to working people. 50 percent of the money distributed through the furlough scheme went into debt repayments and rent. The money had gone to people like Lex Greensill. 

The Bank of England lent billions on the cheap to some of the largest companies in the world. 21 of the companies that accessed cash through the Bank’s lending scheme paid out £11.5 billion to shareholders in the first half of 2020. Twenty-six of the companies laid off more than 40,000 workers. 

Politicians like David Cameron love to repeat the line that working people have grown fat off handouts provided by government. In fact, the people benefitting from the state’s largesse are the rich and powerful, who have close connections to those making decisions about economic policy.  

The issue with austerity isn’t that the British state doesn’t spend enough money — it’s that all the money it does spend goes to the rich. Nothing proves this point better than the shameful career of David Cameron.