Gilbey on Film: Tory Britain on screen

Our critic picks five films that evoke the spirit of Thatcherism.

Watching the new British film Sus ('Suspect under suspicion'), which is confined for its entirety to a police interview room, I averaged a wince every few minutes. It had nothing to do with the picture's forgivable deficiencies, which fall into two camps: when the director Robert Heath isn't displaying an exaggerated fidelity to the theatrical origins of Barrie Keefe's screenplay, he's trying too hard to shake them off. (In one scene, the camera makes so many 360° turns that it feels like we're trapped on a Waltzer, and the oily-quiffed operator has dozed off.) No, the source of my discomfort was also the reason why the film is being released this year, this month, this week: the action takes place through the evening of 3 May and into the morning of 4 May 1979.

Two white DSIs, Karn (Ralph Brown) and Wilby (Rafe Spall) are betting on the outcome of the general election. Karn has backed "the Thatch" and is all hopped-up on the prospect of what he keeps referring to as the new dawn. "A little bird tells me she's quite the admirer of policemen," he gloats. Every time the men have cause to leave the room where they are trying to pin a murder on their black prisoner, Leon Delroy (Clint Dyer), they return with further news of Labour's losses. Although their manner is aggressively theatrical to a Berkoffian degree, they embody a recognisable 1970s/1980s mindset -- the more abrasive side, in other words, of cuddly Gene Hunt (Philip Glenister) from Life on Mars and Ashes to Ashes. I suspect that it is the snarling parochialism of Karn and Wilby that Labour was trying to evoke with its unsuccessful David-Cameron-as-Gene-Hunt poster campaign.

It's a decent movie, and Keefe has already proved with his script for The Long Good Friday (written around the same time as Sus) that he can drop a Thatcherite at 40 paces. But the most pungent reminder in Sus of the horrors of Conservative Britain comes in the opening credits montage, accompanied by the Specials performing "It's Up to You." As a suave-looking David Dimbleby heralds "one of the most exciting election nights ever," and Robin Day reminds us that "it's not a horse race -- it's a human drama and a night of history", we see footage from a National Front march, with its "Don't Knock Enoch" banners, and an excerpt from the dubious sitcom Love Thy Neighbour. (The show actually ended in 1976, but we'll let that pass; there were plenty of repeats in the 1970s, and at least the continuity announcers didn't make out they were doing us a favour by saying, "Here's another chance to see...").

Sus would have worked much better had it been released a few weeks ago. Goodness knows how it is going to look when it reaches cinemas on Friday, when it will be too late to function as a warning or deterrent to anyone considering signing up to the Cult of Dave. (The best we can hope, in the event that the Tories are kept out, is that audiences will be able to watch it and think: "Phew -- that was close.") But should you have forgotten the putrid stench that is "essence of Tory Britain", or if you are too young to remember it, then any one of the following films should bring it flooding back:

Meantime (1983)

Mike Leigh's unbearably sad portrait of an east London working-class family, and the Chigwell-dwelling relatives with delusions of mobility, is one of his most eloquent works. With scorching early performances from Tim Roth and Gary Oldman, who can also be seen in...

Made in Britain (1983)/ The Firm (1989)

In the former, Roth is a violent but palpably intelligent skinhead who has been left to fester in the margins of Thatcher's Britain; in the latter, Oldman is an estate agent with a sideline in soccer hooliganism. Alan Clarke, Britain's foremost chronicler back in the days when it really was broken, directed both.

The Cook, The Thief, His Wife and Her Lover (1989)

Cannibalism, sexual humiliation and costumes by Jean-Paul Gaultier make this one of Peter Greenaway's most superficially extreme works; at its heart is Michael Gambon's towering performance as the gluttonous kingpin who is the embodiment of sadistic Thatcherism.

Bloody Kids (1979)/ Close My Eyes (1991)

Two Stephen Poliakoff scripts bookending the Thatcher era. Bloody Kids, directed by Stephen Frears, details the consequences of a schoolboy prank-gone-wrong; its depiction of a feral England would give Mad Max pause. Close My Eyes, which Poliakoff directed, situates a brother-sister love affair against a backdrop of Docklands developments, Home Counties complacency and Aids.

An American Werewolf in London (1981)

When I think of growing up under the Tories, this film conjures the mood of dread as well as anything by Leigh, Clarke or Frears. But for all the gore on show, there's nothing as gruesome here as the prospect of another Conservative government.


Ryan Gilbey is the New Statesman's film critic. He is also the author of It Don't Worry Me (Faber), about 1970s US cinema, and a study of Groundhog Day in the "Modern Classics" series (BFI Publishing). He was named reviewer of the year in the 2007 Press Gazette awards.

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We're racing towards another private debt crisis - so why did no one see it coming?

The Office for Budget Responsibility failed to foresee the rise in household debt. 

This is a call for a public inquiry on the current situation regarding private debt.

For almost a decade now, since 2007, we have been living a lie. And that lie is preparing to wreak havoc on our economy. If we do not create some kind of impartial forum to discuss what is actually happening, the results might well prove disastrous. 

The lie I am referring to is the idea that the financial crisis of 2008, and subsequent “Great Recession,” were caused by profligate government spending and subsequent public debt. The exact opposite is in fact the case. The crash happened because of dangerously high levels of private debt (a mortgage crisis specifically). And - this is the part we are not supposed to talk about—there is an inverse relation between public and private debt levels.

If the public sector reduces its debt, overall private sector debt goes up. That's what happened in the years leading up to 2008. Now austerity is making it happening again. And if we don't do something about it, the results will, inevitably, be another catastrophe.

The winners and losers of debt

These graphs show the relationship between public and private debt. They are both forecasts from the Office for Budget Responsibility, produced in 2015 and 2017. 

This is what the OBR was projecting what would happen around now back in 2015:

This year the OBR completely changed its forecast. This is how it now projects things are likely to turn out:

First, notice how both diagrams are symmetrical. What happens on top (that part of the economy that is in surplus) precisely mirrors what happens in the bottom (that part of the economy that is in deficit). This is called an “accounting identity.”

As in any ledger sheet, credits and debits have to match. The easiest way to understand this is to imagine there are just two actors, government, and the private sector. If the government borrows £100, and spends it, then the government has a debt of £100. But by spending, it has injected £100 more pounds into the private economy. In other words, -£100 for the government, +£100 for everyone else in the diagram. 

Similarly, if the government taxes someone for £100 , then the government is £100 richer but there’s £100 subtracted from the private economy (+£100 for government, -£100 for everybody else on the diagram).

So what implications does this kind of bookkeeping have for the overall economy? It means that if the government goes into surplus, then everyone else has to go into debt.

We tend to think of money as if it is a bunch of poker chips already lying around, but that’s not how it really works. Money has to be created. And money is created when banks make loans. Either the government borrows money and injects it into the economy, or private citizens borrow money from banks. Those banks don’t take the money from people’s savings or anywhere else, they just make it up. Anyone can write an IOU. But only banks are allowed to issue IOUs that the government will accept in payment for taxes. (In other words, there actually is a magic money tree. But only banks are allowed to use it.)

There are other factors. The UK has a huge trade deficit (blue), and that means the government (yellow) also has to run a deficit (print money, or more accurately, get banks to do it) to inject into the economy to pay for all those Chinese trainers, American iPads, and German cars. The total amount of money can also fluctuate. But the real point here is, the less the government is in debt, the more everyone else must be. Austerity measures will necessarily lead to rising levels of private debt. And this is exactly what has happened.

Now, if this seems to have very little to do with the way politicians talk about such matters, there's a simple reason: most politicians don’t actually know any of this. A recent survey showed 90 per cent of MPs don't even understand where money comes from (they think it's issued by the Royal Mint). In reality, debt is money. If no one owed anyone anything at all there would be no money and the economy would grind to a halt.

But of course debt has to be owed to someone. These charts show who owes what to whom.

The crisis in private debt

Bearing all this in mind, let's look at those diagrams again - keeping our eye particularly on the dark blue that represents household debt. In the first, 2015 version, the OBR duly noted that there was a substantial build-up of household debt in the years leading up to the crash of 2008. This is significant because it was the first time in British history that total household debts were higher than total household savings, and therefore the household sector itself was in deficit territory. (Corporations, at the same time, were raking in enormous profits.) But it also predicted this wouldn't happen again.

True, the OBR observed, austerity and the reduction of government deficits meant private debt levels would have to go up. However, the OBR economists insisted this wouldn't be a problem because the burden would fall not on households but on corporations. Business-friendly Tory policies would, they insisted, inspire a boom in corporate expansion, which would mean frenzied corporate borrowing (that huge red bulge below the line in the first diagram, which was supposed to eventually replace government deficits entirely). Ordinary households would have little or nothing to worry about.

This was total fantasy. No such frenzied boom took place.

In the second diagram, two years later, the OBR is forced to acknowledge this. Corporations are just raking in the profits and sitting on them. The household sector, on the other hand, is a rolling catastrophe. Austerity has meant falling wages, less government spending on social services (or anything else), and higher de facto taxes. This puts the squeeze on household budgets and people are forced to borrow. As a result, not only are households in overall deficit for the second time in British history, the situation is actually worse than it was in the years leading up to 2008.

And remember: it was a mortgage crisis that set off the 2008 crash, which almost destroyed the world economy and plunged millions into penury. Not a crisis in public debt. A crisis in private debt.

An inquiry

In 2015, around the time the original OBR predictions came out, I wrote an essay in the Guardian predicting that austerity and budget-balancing would create a disastrous crisis in private debt. Now it's so clearly, unmistakably, happening that even the OBR cannot deny it.

I believe the time has come for there be a public investigation - a formal public inquiry, in fact - into how this could be allowed to happen. After the 2008 crash, at least the economists in Treasury and the Bank of England could plausibly claim they hadn't completely understood the relation between private debt and financial instability. Now they simply have no excuse.

What on earth is an institution called the “Office for Budget Responsibility” credulously imagining corporate borrowing binges in order to suggest the government will balance the budget to no ill effects? How responsible is that? Even the second chart is extremely odd. Up to 2017, the top and bottom of the diagram are exact mirrors of one another, as they ought to be. However, in the projected future after 2017, the section below the line is much smaller than the section above, apparently seriously understating the amount both of future government, and future private, debt. In other words, the numbers don't add up.

The OBR told the New Statesman ​that it was not aware of any errors in its 2015 forecast for corporate sector net lending, and that the forecast was based on the available data. It said the forecast for business investment has been revised down because of the uncertainty created by Brexit. 

Still, if the “Office of Budget Responsibility” was true to its name, it should be sounding off the alarm bells right about now. So far all we've got is one mention of private debt and a mild warning about the rise of personal debt from the Bank of England, which did not however connect the problem to austerity, and one fairly strong statement from a maverick columnist in the Daily Mail. Otherwise, silence. 

The only plausible explanation is that institutions like the Treasury, OBR, and to a degree as well the Bank of England can't, by definition, warn against the dangers of austerity, however alarming the situation, because they have been set up the way they have in order to justify austerity. It's important to emphasise that most professional economists have never supported Conservative policies in this regard. The policy was adopted because it was convenient to politicians; institutions were set up in order to support it; economists were hired in order to come up with arguments for austerity, rather than to judge whether it would be a good idea. At present, this situation has led us to the brink of disaster.

The last time there was a financial crash, the Queen famously asked: why was no one able to foresee this? We now have the tools. Perhaps the most important task for a public inquiry will be to finally ask: what is the real purpose of the institutions that are supposed to foresee such matters, to what degree have they been politicised, and what would it take to turn them back into institutions that can at least inform us if we're staring into the lights of an oncoming train?