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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?

MILES COLE
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The Brexit plague

With the sacking of Michael Gove, the leaders of the Leave campaign are being destroyed.

Brexit: the career killer. Boris Johnson: humiliated and felled, even if he ended up with foreign secretary as a consolation prize. Michael Gove: tainted by his ruthlessness against Johnson and also by his late acceptance of conventional wisdom (that Johnson is talented but unreliable) and finally sacked. Nigel Farage: resigned. Andrea Leadsom: brutally and almost instantly exposed as out of her depth and sent to the ministerial wasteland that is Defra.

With Theresa May in No 10, ­experience and competence have been restored. For that reason, there is room in May’s ­cabinet for some of Brexit’s fallen leaders. For the time being, however, the Remain ­campaign’s repeated warnings that Brexit would be bad for jobs have already proved prescient in one respect. The referendum has destroyed the prospects of Leave’s top brass. The Brexit crown won’t stay on anyone’s head for more than a few days.

We once imagined, ironically, that the Brexit movement would be vulnerable to cynical exploitation by careerist politicians who were keen to make a name for themselves. They would climb aboard the Brexit bus, take an easy ride, and get off higher up the mountain. Quite the reverse. Politicians have not ridden to power on the back of Brexit; Brexit has ridden to power on the back of them, breaking them in the process.

Like a superbug, Brexit inhabits its host spokesmen and women before choking the life out of them. The illness takes a horrible course, first imbuing the victim with great energy and enthusiasm, as though the ailment was in fact a cheering tonic. Then, at the peak of Brexit bounce, when the victim’s mood seems most adulatory, despair and withdrawal set in.

To adapt the celebrated lines spoken by Anthony Blanche in Brideshead Revisited, does Brexit, politically speaking, spot and kill everyone it touches?

At the outset, I must make an important distinction between the perfectly legitimate and finely balanced argument about whether Britain should be outside the European Union – the Brexit debate that might have been – and the one that actually happened, with its £350m a week for new hospitals and the exploitation (or wilful blindness) of the emotive power of anti-immigration. The first debate, the proper one, might well have allowed the finest Brexit minds to shine. The second (that is: real events) has left them vulnerable, floundering amid tectonic shifts in the political landscape that they helped to initiate.

What about Andrea Leadsom, the darling of Brexit’s hard core? Here the career-killing superbug showed the speed with which it operates. Have no truck with the fantasy that Leadsom was brought down by an establishment plot, the “black ops” imagined by Iain Duncan Smith. Leadsom, despite being a very inexperienced politician, applied for immediate promotion to the office of prime minister. She initially made great use of two cards – her “business experience” and her maternal instincts – but it turned out that both were liabilities once the serious campaign for high office began.

There is no need to revisit how several aspects of Leadsom’s CV unravelled. Her supporters put out the word that she was a high-flying banker who had “managed billions”. In effect, Leadsom’s team suggested she was Cristiano Ronaldo, while the evidence suggests she worked for Real Madrid’s PR team. Important work and all that, but not quite the same thing.

Her interview with Rachel Sylvester in the Times on 9 July exposed some of the problems not just with the candidate, but also with Brexit catchphrases. The interview showed the difference between believing that “the old way of doing politics” is too cynical and polished, and assuming that being incompetent in handling the ­media is a virtue.

Without saying anything interesting as a trade-off, Leadsom made several huge blunders. She offended people without children, perhaps entirely unintentionally, by implying that being a mother made her the superior candidate, with “a tangible stake” in the future. Then she offended feminists – and many non-feminists as well – by stating that she isn’t a feminist because she isn’t “anti-men”. Third, she blithely assumed that the EU would not impose any tariffs on a post-Brexit Britain. Finally, in furiously demanding that the Times retract the article and release the tape of the interview, she unwittingly exposed one last blunder: that she herself (or an aide) had not recorded the interview, though speaking on the record to a journalist from a leading newspaper.

The fiasco contributed to Leadsom withdrawing from the two-woman leadership contest, before her current career suffered a calamitous fate – never mind the reading of jobs she held previously. Brexit, having first apparently been the making of Leadsom, quickly struck her down, too.

She deserves some sympathy. Her leadership campaign can be seen as the logical culmination of the political pressures on Brexiteers as they seek to turn serious. The political challenges are doubly difficult. First, there is the negotiation with Brussels, with rather a lot promised to the British public and nothing less than the survival of the EU at stake. Second, in office, any Brexiteer would have to level with the movement’s supporters.

***

The Leave campaign, evidently, rested on a delicate set of alliances, including as it did sovereignty-focused intellectuals, rural Conservative voters and the disenfranchised “left-behinds”. To say these groups voted for different things does not do justice to the problem.

It is worth recalling that Boris Johnson’s Telegraph column in the aftermath of Leave’s referendum victory, which caused him so many difficulties with hardcore Brexiteers, had also been read, adapted and signed off by Michael Gove. In other words, two experienced columnist-politicians, both of them media-savvy and intellectually gifted, found the challenge of converting Brexit the movement into Brexit the reality beyond their combined and considerable rhetorical gifts. During the campaign, Johnson’s popularity and Gove’s intellectual confidence powered the Brexit movement. Then Gove abruptly ended Johnson’s leadership hopes, thereby ending his own.

At a stroke, the argument – popular among Brexiteers – that the new prime minister had to be a Leaver pointed no longer to a leading politician, but instead to the inexperienced Leadsom. Within days of its electoral triumph, the Brexit movement found itself in a leadership vacuum of remarkable proportions.

Having finished off the politicians possessed of a track record, Brexit anointed someone without a recognisable political past. The flight to neophilia says a great deal: which experienced politician would fancy squaring that circle? In retrospect, Leadsom’s Mary Poppins approach – it’s fine, absolutely fine, let’s be positive – was the logical conclusion of an unplayable hand. Sometimes rational logic has nowhere to go. Airy aspirations are all that remain.

As the author of a book called Luck, I am the first to admit that events take on a momentum of their own. Things could have been different. It was not inevitable that Gove would consult his conscience and conclude that he could not, in good faith, be Johnson’s kingmaker. Alternatively, if Gove’s conscience had hurried along a little quicker on its journey of discovery – whether this led to backing Johnson, or aban­doning him – then there could have been a recognised heavyweight Brexit candidate for prime minister.

But laughing off Brexit’s leadership deficit with a shrug in the direction of rogue circumstance leaves out too much. Its post-referendum leadership tumults are the rational consequence of fault lines running through the Leave campaign.

It is one thing for a Tory gentleman Brexiteer, taking a psychological canter over to the wrong side of the tracks, to conclude that Britain is two countries and that the poor are having a tough time, thanks to globalisation and the “establishment”. But what is his prescription for the social problems of Boston? Extra evensong? An added dollop of deference, spread evenly across the parish? Free community copies of Edmund Burke?

That the Brexit movement benefited from anti-immigrant sentiment and then conceded that immigration is unlikely to be reduced any time soon – if at all – was only one example of a recurrent theme of Brexit: capitalising from something that lots of people don’t like without having a solution on hand. An anti-establishment movement can gloss over policy; a government cannot.

Leadsom’s campaign raised the question of whether the Brexit movement is in fact governable. Or, as any potential Leave leader gets close to the real corridors of power, does the movement’s anti-establishment rhetoric undermine its own latest figurehead? After all, it is a lot easier to rail against the Westminster elite when you’re not imminently approaching the top of it.

The case needs to be addressed that the Brexit career carnage has been caused by an intransigent Remain establishment. Having won, some of my Leave friends say, we are ready to compromise; it’s you lot who are the problem.

That sentiment has not been shared by the Brexit movement’s most recognised faces. Indeed, Leadsom’s candidacy presented a new test of character to Brexiteers. Would they rally around the steely experience of Theresa May – a credible prime minister – or cling to whichever Leaver was left standing? It is one thing to divide a party and destroy your prime minister, on the grounds that leaving the EU is more important than loyalty or party politics. But would Brexiteers endorse Leadsom over May, hence cementing the perception – often present, though previously unverifiable – that the question of Europe, among some sections of the Tory party, takes precedence over every aspect of political logic? Boris Johnson and Iain Duncan Smith had no hesitation in giving an early answer: Leadsom.

***

As I write this, I can hear in my head the counterarguments to my case, so indulge me a brief autobiographical aside as I address them one by one. Am I writing through the prism of bitterness? Are these the laments of a Remainer who can’t accept we lost? Far from it. There was always a legitimate case that the EU is a failing institution and that Britain would be better served by making arrangements outside the EU earlier rather than later. I wouldn’t make the case myself, but I can see the logic.

The idea that Brexit would inexorably lead to long-term economic catastrophe ­always felt far-fetched; I recoiled at the ­convenient precision of George Osborne’s prediction that households would be £4,300 worse off after Brexit. I am fortunate, though I, for  one, voted Remain, that some of the most intelligent people I know argued for Leave – and none of them is remotely interested in immigration.

A tribal liberal? Again, not so. My temperament is sceptical, pragmatic and anti-utopian: conservative, you might say.

Stuck inside a metropolitan bubble? The Leave movement made much of Remain’s elitism, its failure to understand – or even acknowledge – the rest of Britain, especially the rest of England. By chance, I spent 13 years working in an antique travelling circus. We toured the nation, plying our trade in unflashy cities and county towns, rustling up whatever small crowds we could, chatting to punters after the final curtain, trying to keep a faltering show on the road. That is to say, I was a county cricketer.

Aigburth, Southend, Maidstone, Colwyn Bay, Chesterfield, Colchester, Haslingden, Malvern, Swansea, Portsmouth, Scarborough, Cheltenham, Blackpool – these places were my life for more than a decade. I am no stranger to England’s northern cities, still less to the Tory shires. They made me.

So it is with some perspective that I have watched the Brexit career plague sweep through its leadership ranks. After initial shock and disbelief, I began to discern a kind of inevitability. Single-issue movements, which circumnavigate the compromise and consensus-building that is hard-wired into conventional politics, are structurally ill-equipped to adapt to serious government. It is housebuilding without the foundations.

The Brexit career carnage should prove a salutary warning. “We need a whole new political class,” Brexiteers have often said lightly. The crucial words are missed out – a new “and better” political class. Indeed, last week the possibility loomed of a Leadsom-Farron-Corbyn triple whammy.

I’ve always believed that politics should be porous to the “civilian” world rather than a closed guild of insiders. I’m all for opening political conversation to fresh voices; not everyone has to study PPE at Oxford. Yet we can now see that change does not automatically bring renewal; outsiders do not always know best, and a base level of competence is a prerequisite. As proof, look again at Leadsom’s outraged reaction to the Times printing what she had said. There is, you might say, a place for expertise. Promising a new politics is easy; high office is difficult.

Hence the last word belongs to an unlikely hero of political analysis. Andy Murray, having won Wimbledon, demonstrated an emotional intelligence equal to his deft touch on the court. Moments after sobbing into his towel, the release point after two weeks’ pressure and control, the Scot thanked David Cameron for watching the match. Some applauded, others jeered. Murray, in an instant, sensed he had to diffuse the awkwardness. “I think playing a Wimbledon final’s tough – I certainly wouldn’t like being prime minister: it’s an impossible job.”

People who think Britain has much to be proud about – that we live in one of the most civilised and well-governed countries in the world – might consider that logic: it might be an impossible job but it’s a successful country. The people doing those ­impossible jobs have contributed to that success. Unless moderates celebrate the track record achieved by compromise, expertise and sound judgement, unless competence finds a more confident voice, then movements such as Brexit will be just the beginning.

Ed Smith is a contributing writer for the New Statesman

Ed Smith is a journalist and author, most recently of Luck. He is a former professional cricketer and played for both Middlesex and England.

This article first appeared in the 14 July 2016 issue of the New Statesman, The Brexit PM