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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?

RICHARD SAKER/REX
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Electric dreams

How the “hippie tycoon” Dale Vince – a pioneer of renewable energy – plans to turn football and our motorways green.

In the hills above the tiny Cotswolds town of Nailsworth, on a road named Another Way, is an unusual football stadium. As you enter the New Lawn ground, the first thing you see is a pair of Nissan Leaf electric cars plugged into charging stations; on the reception counter are flyers for the Vegan Society. This is the world’s only meat-and-dairy-free football club, where players and fans enjoy Quorn fajitas, veggie burgers, cheeseless pizza and tea with soya milk.

Look out from the main terrace at the Forest Green Rovers club and you’ll see more curious sights. An array of 170 solar panels is positioned atop the south stand. Behind a corner flag is a large tank for storing water that has been recycled from beneath the organic pitch, which is fertilised with seaweed. Even the advertising banners stand out: the most prominent bears the white skull-and-crossbones logo of Sea Shepherd, the marine conservation charity.

It might all seem quaint and worthy, the vanity project of a hippie tycoon. But Forest Green Rovers are a serious club. The team of full-time professionals sits in the playoff places near the top of the National League, the fifth tier of English football. If they keep that up, they stand a good chance of winning promotion to League Two, for the first time in the club’s 127-year history. But the longer-term goal is to make it all the way to the Championship, just a step from the
Premier League.

That is why Forest Green Rovers are moving ahead with plans for an extraordinary new stadium near Stroud, in Gloucestershire. Designed by Zaha Hadid Architects, the firm that built the London Aquatics Centre for the 2012 Olympics, it will seat 5,000 people, with a capacity to expand to twice that. And it will be constructed almost entirely of wood. “That’s never been done before, anywhere,” said Dale Vince, who rescued the club from near bankruptcy in 2010 and is now its chairman. “It will be the greenest stadium in the world.”

We met in early November at the Stroud headquarters of Ecotricity, the renewable energy firm he founded in 1995, which runs 19 windfarms and two solar parks. Vince, who is 55, is not your typical corporate boss. He was wearing brown boots, ripped jeans and a black T-shirt. His hair is shaved on the sides, with a small ponytail on top, and his sideburns are long. A silver ring hangs from the tragus of his left ear.

Vince’s office is scantily furnished with two beanbags, a standing desk, a small, round table in the middle and a large, green Union Jack on the wall. If you didn’t read the newspapers, which drew attention to his wealth last summer while covering a legal battle with his ex-wife, you would have no idea he was worth more than £100m.

It is a fortune that has allowed him to spread his green dreams into areas beyond football. Before the 2015 general election, Vince gave £250,000 to Labour, £50,000 to the Liberal Democrats and £20,000 to the campaign of the Green MP, Caroline Lucas. But he may yet make the biggest difference with transport. Ecotricity has built what it calls the Electric Highway, a network of 296 charging points at motorway service stations which has made it possible to drive from Land’s End to John o’Groats in an electric car. Vince says he is trying to accelerate the demise of the internal combustion engine. “Our government is not the most ambitious on green issues but by 2030 it wants all new cars to be electric or hybrids. We think it could happen sooner.”

 

 

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Vince grew up in Great Yarmouth, Norfolk, in a two-bedroomed ­bungalow. His father was a self-employed lorry driver who worked hard yet worried about being able to pay the bills. “That’s why I decided to drop out and live like a hippie,” Vince wrote in the Daily Telegraph in 2009. “I didn’t want a career or a mortgage.”

He left his local grammar school at 15 and four years later became a New Age traveller: his first home was an old ambulance. He toured Britain and Europe, and along the way he got married, painted, learned to bake bread – and had run-ins with the police. He was part of the Peace Convoy, a confederation of anti-authoritarian travellers, and in summer 1985 he took part in the “Battle of the Beanfield”, when police trying to prevent a free festival at Stonehenge clashed with protesters. Some travellers were beaten and vehicles were smashed.

Vince, a tinkerer, built a small windmill on top of his van to power the lights. In the early 1990s, while living on a hill in Gloucestershire in a former army truck, he had an epiphany: what if he could harness the wind on a much bigger scale and change the energy industry? He decided to “drop back in” to society to set up Ecotricity, which claims to be the world’s first green energy firm. The model was simple: the company would produce as much renewable electricity as it could, buy in any extra fossil-fuelled power it needed, and use customer revenues to construct more windfarms until the operation was fully green.

“I built my first windmill in ’96, after a five-year battle with all-comers – Nimbys, bigots, planners, big power companies, you name it – and went to Kyoto in ’97,” Vince wrote on his blog, Zero Carbonista. “The rest is just more history.”

That windmill is still turning: its blades can be seen from the top of a stand at the New Lawn. And like the football club, which has doubled its home attendance in six years, Ecotricity is thriving. It has nearly 200,000 customers. Accounts filed at Companies House show turnover for the year ending April 2016 of £126m, up from £109m; pre-tax profit was £6.7m. Vince is the sole shareholder but the company does not pay dividends and he draws a salary of less than £150,000. The converted 18th-century fort where he lives with his second wife and their son is worth more than £2m, but he says he is not motivated by money.

Despite Ecotricity’s success, the firm faces several challenges, including the implications of Brexit, which Vince opposed. “We have not left [the EU] yet, but the pound has slumped and banks are thinking of leaving,” he said. “The process of leaving will be tortuous, and the idea that we can trade better outside the EU – that’s nonsense.”

A more immediate problem for Ecotricity is regulatory. The last Labour government introduced attractive incentives for companies and homeowners to produce renewable energy, especially wind and solar power. These subsidies amounted to billions of pounds – since 2002 Ecotricity has received £36m towards building windmills costing over £100m – and have helped make Britain a world leader in green power. In 2011, 9 per cent of Britain’s electricity came from wind, sun and other renewable sources; in 2015 the figure was 25 per cent.

But since the Conservatives won a majority under David Cameron in 2015, breaking free from the restraints of their coalition partners, the eco-friendly Lib Dems, the government has made it harder for green projects to secure planning permission. It has also reduced financial support for the industry. In December 2015, days after helping seal the Paris climate-change accord, which called on all countries to reduce their dependence on fossil fuels, the government announced a series of cuts to subsidies for renewables, which are paid for through business and household energy bills.

“They [the Tories] have smashed renewable energy with a sledgehammer,” Vince said. “And they’ve done it in a deceitful way, saying it was for the good of the industry. They’ve practically shut down solar and onshore wind in the UK. Bringing forward new stuff now – I don’t see it happening.”

At the same time, the government is promoting fracking, a controversial process that involves blasting water and chemicals into rocks to release trapped gas. Fracking has been suspended or banned in France, Germany, the Netherlands, Scotland and Wales because of environmental concerns. Official surveys show that fewer than one in five Britons supports fracking, yet in October the government overruled councillors in Lancashire and approved plans to explore for shale gas there. “[Fracking] is a big risk to take for a gas that we cannot afford to burn if Britain is to hit its carbon-reduction targets,” Vince said.

His proposed alternative is to produce “green” gas from grass grown on marginal farmland. Ecotricity will build its first grass-to-gas mill in Hampshire next year, and Vince says that in theory the green fuel could be used to heat almost all homes in Britain within two decades. His vision is unlikely to get much support from Theresa May, who, after taking office in July, abolished the Department of Energy and Climate Change and transferred its functions to an enlarged department responsible for business. “It’s ideological when it comes to green stuff,” Vince said. “The left embraces it and the right does not.”

That is why, in February 2015, he donated funds to Labour, the first time he had done so. What does he think now, with Labour trailing so far behind the Tories in the polls? “Jeremy [Corbyn] is a lovely man. He believes that he can lead the party to a general election victory. But if I were him I might be inclined to stand aside. The party seems so riven, and that is a real problem. The Tories are having a free-for-all.”

He believes that Tony Blair has a role to play in restoring the fortunes of the left. “I am against Trident and nuclear energy, and for social justice. But I’m also a practical person. What Tony Blair did with Iraq was disgraceful. But there was more that was right. I think Blair did a fantastic job, and rumours of his return excite me.”

Ask Vince what he would do if he were Energy Secretary and he reels off a list: ban fracking; rip up the Hinkley Point C nuclear power contract; spend “a billion dollars” on promoting energy efficiency; tax polluting power companies; perhaps renationalise the energy industry, from producers to suppliers. He would also give green vehicles a big stimulus, as has happened in Norway with marked results. Thanks to tax breaks and incentives – exemption from VAT and public parking fees, freedom to use bus lanes – plug-in cars now account for over a quarter of new car sales in Norway. “It’s economic signals that change behaviour,” Vince says.

 

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As a boy, Vince was astonished at how many cars there were on the road. Surely the fuel they were burning couldn’t last for ever, he remembers thinking. But the oil companies kept discovering reserves, so there was no incentive for manufacturers to develop green cars. In 2008, when there were fewer than 2,000 electric vehicles on the road across 40 of the world’s most developed countries – and barely any at all in the UK – Vince and his engineers decided to take the initiative.

“I’m a bit of a petrolhead and also a tree-hugger, which is a dilemma. I could not get an electric car at that time, so we bought the shell of a Lotus Exige on eBay and turned it into a supercar,” he told me.

The Nemesis, as it was called, broke the British land speed record for an electric car in 2012, clocking 151.6 miles per hour. By then, however, Vince had realised that building cars was a different proposition from generating energy. Instead, he had started rolling out the infrastructure that he hoped would hasten the take-up of electric vehicles.

“We wanted to break the chicken-and-egg scenario,” he said. Few people owned electric cars, so there were barely any motorway charging points in Britain, which in turn discouraged people from buying the vehicles. Ecotricity started with a three-pin-plug point at a service station in 2011. It took eight hours to charge a Nissan Leaf, a small, five-door family hatchback that at the time had a 73-mile range. “We knew it was not good enough, but that a massive increase in technological capacity was coming.”

Today, a Nissan Leaf, the world’s bestselling electric vehicle, can drive for 80 miles on a half-hour power-up at a service station, which isn’t a full charge. Most new electric cars can run for between 100 and 150 miles before they need to be plugged in. “Range anxiety”, which has been a deterrent for many potential buyers, is fading away. “In a few years’ time you’ll be able to drive 400 miles on a 15-minute charge,” Vince said.

The Electric Highway has encountered some bumps along the way. Early on, Ecotricity entered into an agreement with Tesla, the Californian electric car company run by the technology billionaire Elon Musk (who also plans to colonise Mars). But in 2014 Ecotricity claimed that Tesla had gone behind its back, negotiating with service stations with a view to installing its own chargers. Ecotricity sued Tesla, which then countersued; the companies reached an out-of-court settlement in June 2015. (Vince was involved in another settlement a few months later. His former wife, whom he divorced in 1992 when they had no assets, had claimed nearly £2m of his fortune, and was awarded £300,000.)

As with his early embrace of wind power, Vince’s bet on the Electric Highway looks a smart one. According to the International Energy Agency, there were 1.26 million either fully electric or plug-in hybrid vehicles on the road at the end of 2015, more than three times as many as in 2013. The IEA forecasts that by 2040 there will be 150 million plug-in cars in service. With petrol consumption accounting for nearly 20 per cent of all oil consumed, that has huge implications for the petroleum industry – and the planet’s climate. In November, Shell announced that overall demand for oil could hit its peak in as little as five years.

Ecotricity had allowed drivers free use of its motorway plug-in stations since 2011, but in July it introduced tariffs for the first time. A half-hour charge now costs £6. The move angered some motorists; but Vince, who says the Electric Highway should cover its costs this year, is unapologetic. “We don’t have to make money in everything we do,” he said, referring to the football club and the car-charging network – but however altruistic his motives might be, he is also a businessman.

Green cars remain relatively expensive in the UK – the cheapest model in the Nissan Leaf range costs more than £20,000. But prices are falling and choice is growing, with more than 40 electric or hybrid models on sale in the country.

“The stumbling block was the range of the cars and the cost. What’s happening is one is going up and the other is going down,” Vince said. “The technology is on the cusp of mass appeal. You will see the government jump in before long and claim credit for that.”

As for Vince, he doesn’t even own a car. On a beanbag at the office in Stroud are the helmet and jacket he uses when riding in to work on his KTM motorcycle. And yes, it’s electric.

Xan Rice is the features editor of the New Statesman

Xan Rice is Features Editor at the New Statesman.

This article first appeared in the 05 January 2016 issue of the New Statesman, Divided Britain