Recession blues

Both Labour and Tories have yet to confront the realities of the downturn - least of the full horror

Anyone who has ever experienced the misery of unemployment will have felt a chill on hearing this week's labour market statistics. It is a truth universally acknowledged that rates of alcoholism, drug abuse and depression rocket in times of recession. Joblessness has a devastating effect on people's health, physically and mentally, and the full social consequences of an economic crisis are felt in the criminal justice and education systems for years afterwards.

This is the week Britain finally woke up to the reality of the economic downturn, with levels of unemployment not seen since 1997. The latest job cuts, at Virgin Media, Yell, builders Taylor Wimpey and pharmaceuticals giant GlaxoSmithKline - more than 4,000 in total - show how widespread the downturn is likely to be. The number of people claiming Jobseeker's Allowance has nearly reached a million and could soon top the million mark for the first time this century. But most news organisations focus on the globally recognised International Labour Organisation (ILO) figure for all people without work. This figure is now 1.82 million and could hit the symbolically significant two-million mark by Christmas.

The two divergent figures are hugely confusing for the general public. One helpful adviser at the Department for Work and Pensions (DWP) explained it to me this way: "The ILO figure would include the middle-class journalist who loses his job or the lone parent on income support." Neither would show up as "claimants", but they would still be out of work.

For millions of people, this is new psychological territory. Anyone under 30 would struggle to remember the last recession, when unemployment reached three million. The Blair generation, which grew to adulthood under new Labour, has enjoyed a uniquely blessed period of economic prosperity. Whatever the truth of the claim that Gordon Brown failed to mend the roof while the sun shone, there's no doubt it was a balmy decade compared to what came before and what is likely to follow.

But for the "fortysomething" generation that now dominates British politics, the recession of the early 1990s remains etched on its psyche. This is certainly true of David Cameron, who worked in the Treasury for Norman Lamont during the darkest days of Tory economic mismanagement. Nick Clegg, David Miliband and Ed Balls all cut their political teeth in the 1990s recession, and their essential cautiousness as politicians is partly explained by this.

But it also means that younger politicians of all parties do not accept the old Thatcher-Major orthodoxy that unemployment is acceptable, or even necessary, if the alternative is rampant inflation. No Conservative today could get away with saying, as John Major did during the last recession: "If it's not hurting, it's not working." Cameron's mentor, Norman Lamont, put it still more brutally: "If higher unemployment is the price we have to pay in order to bring inflation down, then it is a price worth paying." Any senior Conservative who uttered such words now would be instantly dismissed. Tory plans to cut National Insurance to create jobs, when once they would have done so for its own sake, mark a sea-change in Conservative thinking.

The government will argue that this recession is different and that the job market still shows signs of good health. Although there was a net rise of 30,000 claimants in September, for instance, this was as a result of 260,000 coming into the system but 230,000 leaving it. The same is likely to be true for the October rise. Ministers are cheered by the fact that there are still around 600,000 job vacancies. But the November Labour Market Outlook, a survey of over 700 businesses carried out by Ipsos/MORI, revealed a significant degree of pessimism about the future. Over 80 per cent of employers thought the economic situation would worsen over the next three months. The number of companies planning to recruit in the near future had fallen and those preparing for redundancies had risen.

If you ask ministers how they are preparing for the consequences of the recession, they will tell you that the DWP is working closely with the Department for Business, Enterprise and Regulatory Reform and the Department for Innovation, Universities and Skills, to put in place early-intervention packages for companies which find themselves in trouble. The new regional ministers will also be expected to pick up specific problems around the country.

This is all to be applauded. But none of the major parties has yet found the language to describe the full horror of the return of mass unemployment. For Labour, employment has become a fetish and if we begin to witness large-scale redundancies it will be seen to have let down the very people it was elected to protect. The Conservative Party will have to show that it genuinely cares about a group of people it has previously seen either as collateral damage in the war on inflation or has blamed for their own predicament. In the end, the electorate will have to decide which party has its best interests at heart. Labour still has the most convincing story. Employment minister Tony McNulty spent almost two years on the dole in the 1980s and even the Work and Pensions Secretary James Purnell signed on for a short period. This is something George Osborne and Cameron have never had to experience. It is not in the interests of any politician to indicate just how serious the situation might get - they would be accused of defeatism and panic. But it is now certain that the next election will be fought over who can be trusted with people's livelihoods in potentially devastating economic times.

This article first appeared in the 17 November 2008 issue of the New Statesman, Obamania

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Has Arlene Foster saved power-sharing in Northern Ireland?

The DUP leader's decision to attend Martin McGuinness' funeral was much more than symbolic. But is Gerry Adams willing to make a deal?

After some prevarication, DUP leader Arlene Foster chose to attend the funeral of Martin McGuinness in Derry today. Her decision to do so cannot have been an easy one.

A substantial part of her loyalist base has noisily resisted attempts to memorialise the late deputy first minister as anything other than an inveterate killer. Foster herself notes in today’s Belfast Telegraph that the former IRA commander was responsible for the deaths of “many neighbours and friends”. And in 1979 – aged just eight – she bore witness to the bloody aftermath of an IRA attack in her own home: her father, a reservist police officer, was shot in the head by a gunman later eulogised by McGuinness.

Her attendance at today’s funeral is thus noteworthy and has been the subject of due praise. She was twice applauded by the congregation: as she took her seat, and after Bill Clinton singled her out in his eulogy. It is, however, much more than the symbolic gesture it might appear.

Last month’s election, which saw the DUP lose 10 seats and unionist parties lose their Stormont majority for the first time in nearly a century, proved Foster to be damaged goods. She was – and remains – tarnished by the RHI scandal but also by her crass behaviour towards the nationalist community, particularly on Irish language issues.

Her carelessly won reputation as a truculent bigot will therefore not be easily lost. Her departure remains a red line for Sinn Fein. But with just four days until the deadline for a new devolution settlement, Foster’s presence at McGuinness’ funeral is the clearest indication yet of the DUP’s carefully calculated strategy. It isn’t quite a resignation, but is nonetheless indicative of the new manner in which Foster has carried herself since her party’s chastening collapse.

She has demonstrated some contrition and offered tacit acknowledgement that her election shtick was misjudged and incendiary. Her statement on McGuinness’ death was delicately pitched and made only oblique reference to his IRA past. In the absence of a willingness to allow Foster to step down, the decision instead has been taken to detoxify her brand.

The conciliatory Foster the DUP will nominate for First Minister on Monday will as such at least appear to be apart from the dogwhistling Foster who fought the election – and her attendance today is the superlative indication of that careful transition. There has been talk that this increases the chance of a deal on a new executive. This is premature – not least because the onus is now almost entirely on Sinn Fein.

Theirs is just as much a mandate to reject Stormont as we know it as it is to return and right the DUP’s wrongs. Gerry Adams, the last member of the Armalite generation standing, has made this abundantly clear – and has hardened his line just as Foster has made sure to be seen magnanimously softening hers. He said last night that he would not tolerate any extension of power-sharing talks beyond Monday’s deadline, and called on Dublin to prevent the UK government from re-instating direct rule.

Though Adams also maintained a deal was still possible in the coming days, his statement augurs badly. As the former UUP leader Lord Empey told me on the day McGuinness died, the Sinn Fein president – the ideologue to McGuinness’ Stormont pragmatist – is now entirely without equal within his party. Though he has set the transition to a new generation of female leaders in train, he remains in total control. His demand for Dublin’s involvement is also telling: as the leader of the third-biggest party in the Dail, his is an all-Ireland long game. Enda Kenny will soon depart, offering Fianna Fail – riding high in the polls – a useful pretext to renegotiate or scrap their confidence and supply arrangement with his minority government. Sinn Fein are on course to make gains, but implementing Brexit and austerity as partners in a Stormont executive would undermine their populist anti-austerity platform.

As such, Empey predicted McGuinness’ death would allow Adams to exert a disruptive influence on the talks to come. “I don’t think it’ll be positive because for all his faults, Martin was actually committed to making the institutions work,” he said. “I don’t think Gerry Adams is as committed – and it was obvious from the latter part of last year that Gerry was reinstating his significant influence in the party. For that reason I think it will make matters more difficult.  I hope I’m wrong, but that’s my sense.”

He is not alone. There was, earlier this week, growing confidence in Westminster that some fudge could be reached on the most contentious issues. It isn't impossible - but Adams’ renewed dominance and rejection of the extended timeframe such negotiations would undoubtedly require suggests a new executive is as unlikely a prospect as it has ever been. With Foster quietly reinventing herself, the DUP could be the big winners come the next election (which could come this year and reinstate a unionist majority) – and the resurgent republicans might well rue the day they squandered their big chance.

Patrick Maguire writes about politics and is the 2016 winner of the Anthony Howard Award.