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How safe is your job?

This has been a year of financial panic, but 2009 will be dominated by unemployment. In a flexible l

The poster that won the 1979 general election was a fake. The "Labour isn't working" dole queue was ac tually composed of 20 fully employed Hendon Conservatives, photo graphed by Saatchi & Saatchi. But there was nothing synthetic about the impact that the poster had on the Labour government of James Callaghan. Never again, Labour resolved, could the party afford to go to the country when the country was out of work. Yet that is what Gordon Brown risks doing, if you believe the spin about him delaying the next general election until 2010.

This was a year of financial panic as oil prices spiked, banks collapsed and stock markets tumbled. But it is likely that 2009 will be the year of the dole. Unemployment, already higher than at any time since Labour came to office in 1997, is expected to climb to almost three million by 2010, according to the Confederation of British Industry. The turnaround in the UK employment market has been astonishing. The pace of job losses, led by the shake-out in the banking sector, has astounded analysts: the Centre for Economic and Business Research (CEBR) has forecast that 300,000 private-sector jobs will have been lost in the six months to the end of this year alone. The CBI's forecast, made only a few days ago, is almost certainly an underestimate, because it is based on Britain's GDP declining by 1.7 per cent in 2009. The Bank of England is now talking about the economy shrinking by 2 per cent next year, as Britain enters the worst recession since the 1980s. Capital Economics has forecast that unemployment will peak at 3.3 million in 2010.

The situation is already worse than the formal statistics suggest. Stephen King, of HSBC, argues that the official International Labour Organisation unemployment figures exclude two million people who are economically inactive but would like a job.

What is undeniable is that British firms are taking advantage of the "flexible" labour market to fire first and think later. Unusually, the region hardest hit is likely to be the one most able to cope: the south-east. The London area alone could lose 650,000 jobs, according to the Local Government Association. This is one of the wealthiest areas on the planet thanks to the financial services sector based in the City. Redundant middle-class professionals might find life a little different on £60-a-week Jobseeker's Allowance, but most can probably look after themselves. The people who will have their lives destroyed first are the legion of temporary and casual workers, many of whom do not figure in the unemployment statistics because of their age or country of origin.

Many of the new redundancies are unavoidable, but there are signs, too, that some firms are reducing their workforce as a message to shareholders, hoping to bolster their equity prices. When BT announced 10,000 redundancies on 13 November it made no attempt to play down the human cost and, according to some analysts, even exaggerated the job losses for effect.

After three decades of losing industries, the UK desperately needs to protect the skills it has left, not allow them to dissipate in the lengthening dole queues

Firms such as Virgin Media, Rolls-Royce, Yell, Wolseley and Citigroup have all announced thousand-plus job cuts in the past few weeks alone. The flexible labour market, inspired by the Tories and realised by new Labour, has allowed contraction to be a first, rather than a last, resort. It is the quickest way for a management in trouble to show that it is doing something.

The problem is that these job losses, rather like the banks' refusal to lend to small business, are enormously destructive to the broader economy. After nearly three decades of losing productive in dustries, the UK desperately needs to protect those skills it has, not allow them to dissipate in the dole queues. But with trade unions weak, employment law liberal and the government compliant, firms are being allowed to throw out the seedcorn of the future.

Only the state would be able to counter the effects of this attrition. In the pre-Budget report, the Chancellor's measures on benefits, pensions and VAT were intended to boost pre-Christmas demand in the high streets. However, the government is severely limited in its ability directly to fill the jobs gap. Yes, the public sector is still hiring, and will have put on 50,000 jobs in the six months to the end of the year, according to the CEBR. But, with public borrowing likely to reach at least £118bn next year, there will have to be a retrenchment in the labour-intensive public sector to get the public finances into some kind of order in the medium term. Make no mistake - the price of this year's fiscal stimulus is likely to be public-sector job losses, even with the Chancellor's heroic, and unrealistic, assumptions about an economic recovery in 2010.

In this instance, the weakness of the pound is unlikely to boost employment in export industries. This is a global recession, perhaps a global depression, and Britain cannot rely on international markets to replace lost domestic demand. There is also likely to be a wave of protectionism, starting in the US, as countries seek to save their own core industries with state subsidies and other anti-competitive tools. The world market may be a tougher place in which to sell in future. Anyway, Britain has lost most of its manufacturing base - down to 14 per cent of GDP.

In recent years, most of our "exports" have been in financial services - "invisibles", the demand for which will be slight for the duration of the credit crunch.

We can be thankful at least that the right man is in the White House at the right time. Alistair Darling has moved some way towards matching Barack Obama’s plan to create 2.5 million jobs over the next two years through public work projects and alternative energy investment. Yet this will not happen quickly and will do little to alter job losses already in train. And, in America, which is 12 to 18 months further advanced into the recession than Britain, life is already desperate for people on the margin.

The US department of agriculture reported on 17 November that the number of children who went hungry in 2007 - the first year of the credit crunch - jumped by 50 per cent to almost 700,000. It said that, overall, 12.2 per cent of Americans, 36.2 million people, "do not have the money or assistance to get enough food to maintain active, healthy lives". It could happen here.

At the very least Britain faces a return to a period of sustained joblessness, and to the destructive psychology that accompanied it. There will be dole queues, of course, but the social composition of the new jobless - led by financial services, property, retail - will be very different from what we saw in the early 1980s. As a recent report from the Chartered Institute of Personnel and Development argued, those at most risk in the coming "redundancy torrent" will be managers, professionals and skilled non-manual workers.

Tens of thousands of jobs are about to eva porate from British banks. Multiply that by all the professional jobs which depended on those middle-class incomes, such as estate agents and lawyers. Certainly, the first to be hit will be those at the bottom. But they are likely to be joined by large numbers of articulate, middle-class individuals shaken out of the financial, media and peripheral service occupations - from aroma therapy to management consultancy - which have grown up during the long boom.

Middle-class workers are not ready for this and it will be a shock to their self-confidence and self-esteem – a social and cultural transformation that could have profound political implications.

In the 1980s, the middle classes were still relatively secure in their career structures in management and the professions. They had homes, occupational pensions, clear employment paths. Certainly, they were a world away from the trade unionists fighting for their jobs in the old industrial heartlands of Britain. Margaret Thatcher relied on the middle classes to support her war on the militants with their braziers - and to blame them for the recession of the 1980s. The braziers are gone and the industrial working class has largely been dismantled. So, too, have the secure middle-class career structures.

Those who will suffer are the children of the baby boomers, who graduate with high debts and higher expectations

In the 1980s, professional and other white- collar jobs were, by and large, jobs for life, with annual pay increments, annual promotion, pension rights and a predictable future. Not any longer. The modern media, for example, are a shifting sea of freelance and contract workers for subcontractors to the large institutions. Even at the BBC, where I started out, there may be a crust of well-paid performers and anonymous executives who earn more than the Prime Minister, but below that is a huge army of irregulars, often on low salaries, coming in and out of the corporation's revolving doors. The commercial sector has been relying on large numbers of underpaid or unpaid "interns" desperate for work. This is the flexible labour market at its most pernicious. Such practices are widespread throughout the British economy.

Deregulation and leveraged buyouts by private equity over the past two decades have left many firms with flattened management structures, often relying on outside consultants to get them through busy periods. Occupational pensions have become a rarity. Promotion has become intensely meritocratic. Companies increasingly "offshore" white-collar functions to countries such as India, where an educated middle class is willing to work for much lower wages. Most of the job losses at BT are among self-employed contract workers in the UK; the firm has not cut any of the jobs it has outsourced to India.

The group hit hardest is the under-35s, sons and daughters of the postwar baby boomers, who have emerged from university with high debts and even higher expectations. These are the young people who have little experience of recession and none of mass unemployment. Neither have many of their parents, who lived through the 1970s and 1980s largely untouched by unemployment or debt. If there is to be a political response to the new depression, it is likely to emerge from this group of déclassé graduates, many of whom face a future without the security they have been brought up to expect. They will not be able to afford houses or establish careers. Indeed, the under-35s have so much personal debt that their net wealth is actually negative. Three-quarters of the under-35s are in the red, according to the Skipton Building Society, owing more than £9,000 on average. They will look to the state for security, but the state will not be able to deliver.

This time there is no trade union menace to blame for economic distress

A Ministry of Defence think tank has made a remarkable forecast about political militancy. The Development, Concepts and Doctrine Centre published a report in April 2007 in which it speculated that in coming years “the world’s middle classes might unite, using access to knowledge, resources and skills to shape transnational processes in their own class interest”. “The middle classes could become a revolutionary class taking the role envisaged for the proletariat by Marx . . . the growing gap between themselves and a small number of highly visible super-rich might fuel disillusion,” the report said.

The idea of a revolution sweeping suburbia is faintly risible, though it was a subject of a recent J G Ballard novel, Kingdom Come. But the MoD may have grasped an important truth about the nature of politics in the new global economy. It is beginning to erode class differentiation and has left many middle-income earners exposed to the kind of insecurities that formerly afflicted only lower-class workers. Clearly, the economic circumstances of management consultants cannot be compared directly with those of retail workers. But when they lose their jobs, they face very similar challenges: mortgage and credit-card debt, catastrophic loss of earnings and the need for retraining.

Part of the difficulty experienced by the Conservative leader, David Cameron, in developing a coherent political response to Gordon Brown's neo-Keynesianism, is that the party of capital has lost its "class enemy": the industrial working class. There is no trade union menace to blame for economic distress and the Conservatives have had to fall back on "fiscal conservatism" - or reduced public spending. This is simply not a priority for an electorate that is looking to the state to protect it from the predations of the market. Equally, new Labour under Brown has been forced almost against its will to become more critical of the plutocracy running the banks, to accept nationalisation and greatly increased government spending. Brown's government has even had to abandon one of the founding principles of new Labour by proposing higher taxes on the rich.

The Conservatives, who have not entirely lost their Thatcherite reflexes, are looking to the middle classes to react against the new profligacy - but they will find it difficult to do so. As un employment mounts among the middle classes, especially among the under-35s, there is going to be a much stronger demand for policies which promote jobs and growth even at the cost of public borrowing. The Tories cannot afford to be on the wrong side in this battle.

As Martin Hutchinson, author of Great Conservatives, has expressed it: "A world in which few if any have security in their livelihood is not conservative, it is anarchist. It is also deeply repugnant to the average voter."

If Labour isn't working, neither are the Conservatives.

This article first appeared in the 01 December 2008 issue of the New Statesman, How safe is your job?

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Why Tehran hates Isis: how religious rifts are fueling conflict

Above all, the Islamic republic wants stability – and to fight back against a group that despises Shia Muslims.

The alliance between Iran and Syria might seem an unlikely one. As Iran is an Islamic republic, one might not expect its closest ally to be a dictatorship that grew out of the political doctrine of Baathism, a secular Arab nationalist movement that originated in the 1930s and 1940s. But politics – and perhaps especially the politics of relations between states – develops its own logic, which often has little to do with ideology. Baathism advocated Arab unity but two of its founding fathers, Michel Aflaq and Zaki al-Arsuzi, both Syrians, disliked each other and would not be members of
the same party.

Projects to fuse Syria and Egypt and, later, Syria and Iraq foundered, creating in the latter case a personal bitterness between Bashar al-Assad’s father, Hafez, and Saddam Hussein, though both were Baathists, at least nominally. That led to the two states breaking off diplomatic relations with each other at the end of 1979. When Iraq invaded Iran the following year, Syria and Iran became allies against Iraq. Syria cut off an oil pipeline that had allowed Iraq to export its oil from a Mediterranean port and Iran supplied Syria with cheap oil.

Iran and Syria had other things in common, including resistance to the US in the region, opposition to Israel and a supportive relationship with the Shia Muslims of Lebanon, which led to the creation, with Iranian help, of Hezbollah after the Israeli invasion of Lebanon in 1982. Since then, Syria has been of value to Iran as a reliable ally but also as a bridge to Hezbollah.

How does all that affect the present desperate situation in Syria and in the Middle East more widely? The first point to deal with is Iran’s position towards Islamic State, or Isis. Some commentators would have you believe that Iran and Isis, as so-called Muslim fundamentalists or Islamists, have something in common, or that Iran’s Islamic Revolution had something to do with the origins of Islamic State.

That is wholly misleading. The extreme Wahhabi/Salafi form of Sunni Islam that underpins Islamic State regards Shia Iranians – and, indeed, all Shia Muslims – as heretics and apostates. This hostility is not somehow theoretical or theologically abstract: it is visceral, bitter and deep. It inspires frequent suicide bombings of Shia mosques and other targets in Iraq, Pakistan, Afghanistan and (more recently) Saudi Arabia. It is a major threat to Iran and to all Shia Muslims – a greater threat to them than the Isis threat to us, because they are geographically closer. The Iranians are supporting the fight against Isis in Syria and Iraq in self-defence and supporting the self-defence of those they are sympathetic to in those countries (the Iranians back the Alawite Assads in Syria because of their long-standing alliance but also for sectarian reasons). They are not acting, as the Saudis and some other Gulf Arabs would have us believe, because they have hegemonic ambitions in the region. That view arises from the insecurity and paranoia of the ruling elites in those states and their dislike of Shia Muslims.

The Iranian regime has many faults. We may deplore the repressive policies of the regime internally, its treatment of women and the unacceptably high level of executions there. But on most of those points, there are others in the region that are worse; and in our thinking about what to do in Syria, Iraq and the region more widely, we have to consider Iran’s record as a force for stability or instability. In both Iraq and Afghanistan, the Iranians helped to establish the proto-democratic governments we backed and, like us, have consistently supported them since, despite their weaknesses and failings. With the exception of its policy towards Israel, Iran has acted to favour stability elsewhere in the region, too. (Recent reports suggest that the Iranians have stopped funding Hamas.) Considering the actions of the Saudis towards Shias in Bahrain and Yemen, the Iranians have responded with restraint.

Iran’s acceptance of greater Russian involvement in Syria has to be seen in the context of the wider instability in the Middle East. Again, we should not misjudge it. It seems that the latest, more intensive Russian intervention came at a point when the Assad regime was coming close to collapse. The Iranians were therefore bound to welcome the intervention; but the history of relations between Iran and Russia is not a happy one and a greater Russian military presence in the Iranians’ near abroad must be making some of them uneasy. When Russian ships launched cruise missiles from the Caspian Sea that tracked across Iranian territory on their way to targets in Syria (announcing at the time that this territory was “unoccupied”), “uneasy” was probably an inadequate word.

After the settlement of the Iranian nuclear question in July (when Iran agreed to limit its nuclear programme in return for the lifting of economic sanctions), hopes for further immediate co-operation between Iran and the West have been disappointed – in particular by the apparent ban of the supreme leader, Ali Khamenei, on bilateral discussions with the US. Nonetheless, there have been discussions, notably in the margins of the recent multilateral talks on Syria.

Just as there was opposition to the nuclear deal within the US, there was strong opposition in Iran. Khamenei’s ban is best understood as reassurance to those hardliners that, apart from the nuclear deal, it will be business as usual.

The nuclear deal is a major event in Iran’s foreign policy but if the Iranians are cautious in developing their relationship with the West, that may be no bad thing. The multi­lateral talks on Syria could be a good place for that to begin – those talks are, in any case, the best hope available for a solution to the carnage in that country. There are models for that in what was done recently in Somalia; one fruitful avenue to explore for the Middle East as a whole could be a multi­lateral negotiation culminating in a treaty guaranteed by outside powers, along the lines of the Westphalia Treaty that brought the Thirty Years War to an end in Germany in the mid-17th century.

Lurking in the background to all this, however, and behind the shocking massacres in Paris on 13 November, is our queasy position towards Isis and the troubles of the Middle East. Some Iranians believe that western countries secretly support Isis. That is wrong, of course – it is a view based on conspiracy theories and misleading propaganda – but not as wrong as we might like to think.

Since 1979, when the Saudi royal family got a scare from religious radicals briefly occupying the sacred precincts in Mecca, it has appeased extreme Wahhabi clergy within Saudi Arabia and has supported the application of their doctrines within and without the country. Outside Saudi Arabia, it has funded mosques preaching Wahhabism throughout the Islamic world, to the point that their brand of Sunni Islam is now becoming dominant in many communities where previously it was quite alien, symbolised by the practice of those British Pakistanis who have begun to adopt dress codes from the Arabian Peninsula, such as the wearing of the niqab.

Al-Qaeda, Isis and their sympathisers are the result of those 30 years of preaching hatred (along with other contributory factors such as the collapse into civil war in countries such as Iraq and Syria and the alienation of young men of immigrant origin in western countries). Isis does no more than put into practice the doctrines of puritanical intolerance advocated by Saudi Wahhabism. Our too-uncritical support for Saudi Arabia puts us in a shameful position.

The debate over whether or not to send RAF warplanes to bomb Isis positions in Syria is secondary to the need for the bombing to be done in close, effective support of ground forces. We may have to swallow our misgivings and accept that we bomb in support of Iran’s troops, or Assad’s, in addition to those of the Kurds or others.

We also urgently need to re-examine our relations with the Saudis and the other Gulf Arab States that have supported and encouraged the spread of extreme Wahhabism. The Saudis have belatedly realised that Isis is as much a threat to them as to everyone else (it may actually be more of a threat to Saudi Arabia because the jihadis’ dearest wish is to establish their caliphate in Mecca and Medina).

Yet that is not enough. We need to make clear that our continued friendship towards the Saudis cannot simply be bought with the weapons we sell them but has to be conditional upon taking a more responsible attitude in their religious policies – not so much for human rights reasons, as Jeremy Corbyn and others have suggested (although those reasons have their place) but for our security and for the stability of the Middle East region.

If that preaching of hatred is not stopped – as the preaching of the Catholic Counter-Reformation eventually came to an end – then even if we, the Iranians, Russians and others succeed in defeating Isis, we will only find ourselves confronted in a few years by yet another generation of murderous jihadis, recruiting from another bunch of foolish, ignorant and disaffected young men, just as Isis followed on from al-Qaeda

Michael Axworthy is senior lecturer at the Institute of Arab and Islamic Studies at the University of Exeter and the author of “Revolutionary Iran”

This article first appeared in the 26 November 2015 issue of the New Statesman, Terror vs the State