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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?

Getty/Julia Rampen
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View from Paisley: How the Conservatives are wooing Labour's Scottish heartlands

Not so long ago, Conservative activists in Paisley could expect doors slammed in their faces. A referendum has changed that.

Tony Lawler, a Labour activist, was recently knocking on doors in the Scottish town of Paisley, when he came across a disgruntled resident. “I’m really disappointed in Douglas Alexander,” the potential voter complained. “I haven’t seen him. He used to be in Morrisons.”

Douglas Alexander, of course, has gone. He was the longstanding Labour MP and onetime International Development secretary who lost his seat in 2015 to a 20-year-old rival, the Scottish National Party’s Mhairi Black. He does not plan to stand again. But when I visit Paisley, a short train ride from Glasgow, I find that memories of him linger on. 

Two years after Alexander’s defeat, I meet Lawler and other local Labour activists in Morrisons, where Alexander used to hold his surgeries. As checkouts beep and trolley wheels roll over linoleum, they point to an empty table in the corner of this hallowed ground: “He used to sit just there.”

In 2015, the SNP’s victory in this former manufacturing town seemed to epitomise the earthquake in Scottish politics. But as the Labour activists know too well, no political fortress is undefeatable. And in Paisley, the home of one of the oldest workers’ festivals in the world, the party with the most to gain is one that previously never dared to canvass in the high street – the Conservative party. 

The town the Brexiteers forgot

In 1988, the historian Sylvia Clarke reflected on Paisley’s lost industries, wondering what was next for the former weaving towns. “Paisley as a tourist centre?” she wondered, in Paisley: A History. “Paisley as a place for visitors to come to, rather than a send-out of goods and emigrants?” 

For all Paisley’s industrial decline, it’s a pretty place. The town is in the running for the 2021 City of Culture, and has the second biggest number of listed buildings after Edinburgh. When I visit in the middle of April, blossom floats on the trees, and a river meanders through a neighbourhood of old, stone houses. It takes a moment to notice weeds tightening their grasp on the window frames. When I try the door of the ancient Paisley Abbey, it’s locked.

Perhaps if Paisley had been located the other side of the border, in Sunderland or Northumbria, it would be voting Leave and flirting with Ukip. But in the most deprived areas here, Labour activists tell me the EU referendum tally was still almost 50-50, and overall the town voted Remain.

There is a view that Brexit is an English concern. “We haven’t picked up anything about the EU referendum,” says Lawler of his doorstep conversations. “What people are talking about is the independence referendum, Jeremy Corbyn and the kids’ ward.” Scotland’s health secretary, Shona Robison, is due to make a decision on whether the specialist ward should be moved to a large hospital in the First Minister’s Glasgow constituency, against the wishes of many Paisley residents. The hospital in question is nicknamed “the Death Star”.  

Another concern, reminiscent of small towns across the UK, is the decline of the high street. When I walk down the historical shopping area Causeyside Street, I find mother and daughter Kate and Linda Hancy packing up what remains of The Pattern Café and Gift Shop. The wallpaper is a glorious Paisley print, but the scented candles are in boxes and a spray soap bottle hangs from a chair. After two years of trying, they are closing down.  

“People just don’t have money to spend,” Kate says. “A lot of people have been on the same wage for more than five years.”

Linda chimes in: “The cost of living going up but wages aren’t the same. I work in a supermarket, and people come in and say ‘How did I spend this much money?’ A lot of people are paying by credit cards.”

The Hancys voted to remain in the UK, and the EU. Although they knew Alexander, they have never met Mhairi Black, and feel devolution, if anything, has made politicians less accountable. “Why are we picking 1,2,3,4,” demands Kate, referring to Holyrood's voting system, which rejected first past the post. “Why can’t we pick one like we used to?”

Without the EU to blame, the most obvious culprits for Paisley town centre’s decline are the out-of-town shopping centres, where cinemas are opening just as historical ones in town close their doors.

Gavin Simpson, owner of Feel the Groove, a new record shop, remembers the 1980s, when a new release would have shoppers queuing round the block. However, he believes the town is over the worst. (As we speak, a customer comes in to reserve such a record and cheerfully warns Gavin that “even if I ask for my money back, don’t give it to me.”)

One thriving business is the longstanding butchers, Wm Phelps. Manager James Peacock tells me it is down to the trustworthy Scottish produce, which is carefully tracked and labelled. But the business has also embraced globalisation.  After noticing a large number of South African customers, Peacock began selling boerewors and biltong.

The other referendum campaign

If Paisley has been spared the divisions of the EU referendum campaign, its “buddies” – as residents are known – are still reeling with the repercussions of an earlier referendum, that on Scotland in the UK. In 2014, the town voted for independence, although the county overall opted to stay in the UK. 

The town is home to a particularly brash strain of indyreffers, including the “Smith Commission burners”, three SNP councillors who gathered in front of the council headquarters to burn a copy of the report setting out new powers for Scotland. One of them, Mags MacLaren, went on to manage Black’s constituency office.

But if the Paisley independence movement has been well covered, less is known about its opposite - the rise of pro-unionism. 

Of the three mainstream parties opposed to independence, it is the Scottish Conservatives, with their unconventional leader Ruth Davidson, who have most effectively capitalised on the pro-union message. In the 2016 Scottish Parliament elections, the Tory Jackson Carlaw captured the West of Scotland constituency of Eastwood, which had been held by Labour since its creation. 

In Holyrood, the Scottish Tories benefit from proportional representation, which allows voters to choose a constituency MSP but also rank parties. 

According to Paul Masterton, the Tory candidate for East Renfrewshire, and the secretary of the Renfrewshire and Inverclyde Scottish Conservative Association, the Conservatives are now getting huge numbers of first preference votes, including in neighbourhoods like the suburb of Ralston, where both Black and Masterton are from. So who are these voters? Masterton describes them as “New Labour voters who were happy with Tony Blair and Gordon Brown but didn’t like Jeremy Corbyn and get tied up into knots by [Scottish Labour leader] Kezia Dugdale flipflopping on the union stance".

The 2016 election saw the Scottish Conservatives surge to second place in Scotland – a superb comeback for a party once ridiculed as being rarer than pandas. The next electoral test is the local council elections. In Paisley, even Labour activists acknowledged the Conservatives were likely to be the most notable winners.

“For a long time we simply didn’t go out in Paisley," says Masterton. "We were written off and we allowed ourselves to be written off.”

But the referendum has changed this. “What I found was that last May, people weren’t shutting the door in your face," he adds. "Once you started the conversation they were far more receptive to that.” 

Like the Labour activists, Masterton argues that the constitutional question matters more than Brexit. “When Theresa May said ‘now is not the time’, I think a lot of people across Paisley did a small quiet fist pump,” he says of a second independence referendum.  

Ironically, after the early election is called, the Scottish Conservatives do everything they can to mention the prospect. “Don't mention the 'i' word,” crows a recent press release about the “SNP indyref ban”. Davidson tweets: “Nicola doesn't want to stand on her record. She knows the country doesn't want her #indyref2.” A Panelbase survey commissioned by The Sunday Times Scotland published shortly after the early election was announced finds support for the Conservatives at Scotland at 33 per cent, 18 percentage points higher than in 2015. 

What you stand for

For now, Paisley remains a Scottish National Party stronghold. George Adams, the MSP with an office off the high street, proves elusive – Labour activists confirm his reputation as a hardworking local. Black’s aide turns down my request for an interview for similar reasons, but I bump into her that evening at a protest against cutting child tax credits in Glasgow’s George Square.

Black, an admirer of the left-wing Labour figure Tony Benn, once said she feels "it is the Labour party that left me". I ask her if she, like her Labour predecessor, holds surgeries in supermarkets. Black says she’d considered it, but given the sensitivity of some of the issues, such as benefit problems, she thought her constituents might appreciate a more private space. “The main thing that crosses the door in my offices is Universal Credit changes,” she explains. She says she has raised her concerns about the children’s ward.

As for the independence debate, she argues that the Scottish government have been “incredibly compromising” since Brexit, but adds: “A lot of folk want another chance at the question.”

Black is standing for re-election. With a majority of more than 5,000, and neither of her previous challengers in the running, she’s likely to keep her seat, even if buddies' discontent over local issues rumbles on. 

Still, as I have discovered, the 2014 referendum continues to reverberate in towns like Paisley. It has divided friends and neighbours on constitutional lines, galvanised new strains of politics, and brought a Labour heavyweight crashing down, with no appetite to return. 

The Tories believe their unionist message is enough to flip seats like East Renfrewshire, once Conservative, then Labour, and now an SNP marginal. As the SNP's shine wears off, could Paisley, with its long tradition of the left, one day follow? It no longer feels implausible. “The one thing about the Scottish Conservatives - and this is true whatever you like us or not,” says Masterton. “You know what we stand for.”

 

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines. 

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