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Catastrophe averted?

The leaders of the rich countries went to Washington to save the world from sliding into deep recess

Vincent Cable

Shadow chancellor, Liberal Democrats

By the low standards of economic summitry, the G20 meeting rated quite high. There was a predictable, no doubt pre-written, communiqué, full of the usual banalities. And the meeting suffered from the absence of the world's most important politician, who hasn't yet taken up office. But, these necessary caveats aside, there were important achievements.

The first is that the meeting took place at all. The ludicrous pretence of the G8 (or G7) that the old western powers should set the global economic agenda has been punctured for good. On a purchasing power parity basis, China has the second-biggest economy in the world and India the fourth. It has been clear for some time that China is lender of last resort to the global system (by, in effect, underwriting US government paper) and the main source of global incremental demand (and commodity price inflation). The Chinese self-parody as the pupil sitting meekly at the feet of a dominant, but erring, master defies belief. It is obviously right that China, India and the other main non-G7 countries should be at the top table.

The second achievement was the clear realisation that unless governments hang together they will hang separately. Enough has been learned from interwar history for us to understand the follies of beggar-my-neighbour economics. Perhaps a warning shock was being sent across the bows of the incoming Obama administration not to reinvent the protectionist tariffs of the 1930s in a new guise, directed at China or Mexico in particular, or aiming to salvage the US auto industry through public subsidy. But this new-found concern for open markets has not yet communicated itself to EU or Indian or Chinese trade negotiators, who show no enthusiasm for lifting the block on trade liberalisation under the Doha round.

While trade policy is on the back burner, macroeconomic policy co-ordination is not. With a few exceptions - Germany notably - there is recognition of the need for aggressive monetary and fiscal policy and for large-scale intervention to recapitalise banks. These interventions can be and are being undertaken nationally. But governments acting in isolation attract critical attention from capital markets and currency speculators, as Gordon Brown is discovering. Structures like the G20 are the best safeguard against chaotic, unilateral action.

Will Hutton

Economic commentator

It was remarkable to gather so much economic and political power in one room to address a common agenda. That was the good news - along with commitments to co-ordinate fiscal expansion, to expand the lending power of the IMF and World Bank (Japan's $100bn loan to the IMF will increase the Fund's lending capacity by 40 per cent), to boost cross-border supervision, to tackle credit rating agencies, to reassess mad accounting rules and require member countries to attack the bonus culture in the financial services industry. A year ago such an agreement would have been inconceivable.

The bad news is that much of this is shutting the stable door after the horse has bolted. Four things have to be recognised: that the world has profound imbalances between high-saving, high-surplus areas in Asia and the Gulf and low-saving, structural deficit countries in the transatlantic economy (Germany excepted); that a system of floating exchange rates and private banks can no longer take the weight of recycling those savings; that unless the system is de-risked and the burden of adjustment is placed on deficit and surplus countries alike, the global system faces breakdown; and finally, that the business model used by the banks to recycle surpluses - securitisation and hedging in the $360trn global derivatives market - is broken.

In plain English, China must accept that its currency must appreciate; Britain and America, that they cannot run their economies on foreign savings; and all players that there has to be a system of semi-fixed exchange rates between the yen, the euro and the dollar.

One tough reality is that, for all their new economic weight, China, Brazil, Russia and India do not have fully convertible currencies - nor do they want to accept the discipline involved in having convertible currencies.

Ann Pettifor

Fellow, New Economics Foundation

Over the past decade, the Group of Eight leaders turned their exclusive annual meetings into jamborees. Rock concerts, protesters and celebrities added populist glitz. However, the real purpose of the meetings - international co-operation and co-ordination - was ducked. At last year's G8 Summit in Heiligendamm, Germany, George W Bush and Gordon Brown vetoed Angela Merkel's agenda item for co-operation over tighter international regulation and financial oversight of capital markets. That task, they argued then, could safely be delegated to "the invisible hand". Now that the fantastic, self-regulating machinery of free markets has proved grossly malfunctional, it is good to hear talk of enhanced co-operation and regulation.

But, in places, the joint statement issued by the 20 world leaders borders on the delusional. The phrase "We must . . . ensure . . . that a global crisis, such as this one, does not happen again" implies that they are avoiding the next war when they are still losing this one.

Even more questionable is the call for continued "economic growth". In a world of finite resources on a planet with limited capacity to absorb toxic emissions, and with bushfires encircling Los Angeles, we would have hoped that world leaders had some awareness of the threat of climate change and of the limits to economic growth. But no. The gravest threat to global security - our rapacious attitude to the earth's resources - is once again whipped up with talk of "market principles, open trade and economic growth".

Jesse Norman

Senior fellow at Policy Exchange

One might have thought the G20 summit a good moment for some straight talk from the Prime Minister. Instead, the political wind machine was cranked up to full blast. The summit would be a second Bretton Woods. Gordon Brown would forge a new global consensus on co-ordinated intervention to stimulate growth (while, of course, leading reforms to prevent the banking crisis from ever recurring). Luckily virtually none of this was true, or the summit would have been a hopeless failure. With fiscal measures already widely adopted, the G20 hardly needed Brown's leadership. No surprise that he returned empty-handed.

Labour has moved from despondency to a manic desperation to remain in office. The result is that the ever-fragile concept of truth in politics has wholly been cast aside. Thus the humiliating bank nationalisation has been dressed up as an act of far-seeing economic statesmanship. And a sensible warning from the shadow chancellor that current economic policy puts sterling at risk has been condemned for breaching an irrelevant semi-convention dating from the time of fixed exchange rates.

Alex Brummer

City editor, Daily Mail

There is a golden rule of international financial meetings. The larger the "G" number, in other words the more countries involved, the less likely it is that any worthwhile or binding decisions will be taken. So while it was wholly encouraging that the G20 summit brought a number of emerging market leaders to the top table of finance, including China, Brazil and Russia, there was never any real prospect of the event becoming the new Bretton Woods.

Furthermore, the summit took place in the final days of the lame duck administration of George Bush. Once it became clear Barack Obama was going nowhere near the confab, the event became even more of an irrelevance.

European leaders may like to blame Wall Street and Anglo-Saxon capitalism for the credit crunch and the recession now spreading through the Group of Seven like wildfire, but there is no hope of concerted international action without the new White House and Federal Reserve on board.

Almost all that was agreed could have been decided before the leaders left home. The commitment to reviving the Doha trade round is pure motherhood and apple pie. The prairie populists on Capitol Hill are unlikely to be enthusiastic.

At the core of the proposals was the commitment to use fiscal measures, tax cuts and public spending to kick-start global economies. But despite Gordon Brown's enthusiastic embrace of a new Keynesian big-spending approach - as advocated by Nobel prize-winner Paul Krugman - he neatly forgot to mention that such big-spending ways were only for those countries with a "policy framework conducive to fiscal sustainability". The UK with its ballooning budget deficit, which could hit £100bn or more next year, is clearly in no such position.

It is hard to fathom in what way the G20 was "historic", as the Prime Minister claimed in the Commons. There is little original in a bunch of old ideas designed to remove risk from the financial system and control executive pay. That is what regulators should have done before the banks ploughed into the iceberg.

James Buchan

Author and financial commentator

What is the Financial Stability Forum? What is "mitigating against pro-cyclicality in regulatory policy"? What, if anything, has the G20 summit in Washington on the weekend of the 15 November achieved?

Nothing very much, is the answer to all three questions. In the twilight of a discredited US administration, and with President-elect Barack Obama absent, the meeting was never likely to achieve a great deal or generate excitement in the US. Yet the final declaration, drafted with suspicious ease by the delegations on Saturday night, has something for everybody but not enough of anything to scare the financial horses.

Nicolas Sarkozy, the French president whose idea the whole thing was, gained some support for more institutional government of trade and finance, but no super-gendarme international of the type that has been directing financial traffic in the French imagination since the 17th century. As Jean-Pierre Robin wrote in the Figaro: "Those with fantasies of supranational supervision will need to change therapist." The US, jealous of its commercial sovereignty even when it is going about without its shirt, put paid to those Gallic dreams and also gained some platitudes about free trade.

The new commercial powers, not only Brazil, Russia, India and mainland China but also rich oil producers such as Saudi Arabia, received diplomatic recognition of their deep pockets. "The world's geopolitical structure has a new dimension," the Brazilian president, Luiz Inácio Lula da Silva, said. "There is no logic to making any political and economic decisions without the G20 members - developing countries must be part of the solution to the global financial crisis."

I suspect the winner is Gordon Brown. The next meeting will be held under his presidency in London in April. The Washington ragbag of proposals to reform or tinker with the current system, such as reminding us about the Financial Stability Form and mitigating against that regrettable pro-cyclicality in regulatory policy, appeals to his technical vanity and plays to his technical strengths.

Paul Mason

Economics editor, Newsnight

There was a sense in Washington, despite the throbbing engines and bulletproof glass, of powerlessness. The communiqué was stronger on the causes of the crisis than on co-ordinated solutions. Policymakers are right to stay focused on the near-term dangers: these are country-level debt default, the rising cost of borrowing for non-financial companies, rapid job losses and - via feedback - further destabilisation of the banking system. We are moving into the phase of fiscal stimulus but there are powerful technical arguments that say without "quantitative easing" - that is, printing money to stimulate demand - it doesn't work. The same people who told me it would come to recapitalisation, that the TARP (troubled assets relief programme) would not work, are now saying: nationalise the banks and print money.

Despite the urgency of the focus on near-term dangers, what was obvious at G20 was the lack of vision as to the future growth model of capitalism. The problem was seen as a failure of regulation; the solution a pretty weak brew of re-regulation that will get diluted even more as the lobbyists begin to have influence. But the problem is more fundamental: the growth model based on high debt instead of high wages has failed and will be hard to revive.

Peter Mandelson

Secretary of State for Business

We have been caught in a global whirlwind of extraordinary force.

It has brought with it a fear that has gripped the world economy and taken hold here at home. We are seeing it every day, with fear among consumers that is depressing demand; fear among banks that is inhibiting them from lending; fear among small- and medium-sized businesses that banks are just about to cut off their credit lines. The choice facing us and governments around the world is this: do we act decisively to counter and overcome this fear, or do we become paralysed by it and fail to act?

The government has already shown its willingness to take the bolder course as the first mover in setting about stabilising the banks. What is needed now is action to stimulate the demand essential for recovery. The UK economy, like economies in the rest of the world, needs a shot of adrenalin.

The Bank of England has already made a significant cut to interest rates. This monetary stimulus now needs to be matched by a fiscal stimulus. And because this is a global crisis this is best done if the benefit of the measures taken nationally is maximised by the same measures being taken around the world. That was the message from the international conference in Washington, as governments recognised the need to take the action necessary to stimulate their economies.

People will say, "But you are resorting to borrowing in order to deliver the stimulus that's needed." My answer to that is, what is the alternative? We certainly haven't heard one from the Conservatives.

David Cameron and George Osborne, trapped by their desire to oppose everything the government does, refuse to accept the scale of the challenge the world's economies now face and the prescribed international action. Their stance appears to be, if the rest of the world disagrees with us, it is because the rest of the world is wrong. The result is incoherence and an Opposition at sixes and sevens. One minute this is "do all it takes" and the next it is - as we heard this week - leave the recession to "take its course".

Sitting on our hands watching houses repossessed and businesses go to the wall is certainly not the approach being urged on me by people I have been speaking to up and down the country. They want their government to act to stimulate demand in the economy here and now. With all due prudence, that is what we are going to do.

Diane Coyle

Author and economist

The G20 meeting confirmed a robust and rapid response (by past standards) to recession, even in the US operating under a rump free-market administration. Policymakers around the world have been shaken to see the financial system at the brink of collapse - on their watch.

Yet it is difficult to predict how severe the recession will be. Bank lending to businesses and individuals is virtually frozen. In many (but not all) areas of the economy, activity has come to a halt. The last financial boom and bust, ending in 2001, had surprisingly little impact on jobs and growth, as the financial bubble had become increasingly untethered from anything real. Today's vicious circle of evaporating liquidity is much more serious, but lower interest rates and bigger government deficits will help. The underlying trends are easier to outline. Some challenges are clearly unaltered, such as climate change and our ageing society.

The technological opportunities are still there, too, in communications, the internet and biotechnology. Globalisation will be less driven by finance in future, but it will not be unwound. It would take a generation to turn back the clock on economic linkages, and the cultural impacts are permanent. In fact, the crisis has underlined our interdependence across national borders.

What has changed is the political economy of globalisation. In the triad of efficiency, fairness and freedom which dominates political choice in democracies, fairness will take priority in the years ahead, and the drive for ever greater productivity gains will retreat. The semi-nationalisation of the banks has started to shift the boundary between public and private domains; we will have to think more carefully about how to govern private choices that have big social spillovers. The G20 did not touch on this profound question of governance.

Iain Macwhirter

Political commentator

The G20 was largely a throat-clearing session and was never going to put in place the foundations of a new international financial system. Progress on the stalled Doha trade talks is encouraging but provides no guarantee that protectionism will not raise its head in the coming economic slump.

It is inevitable that countries faced with financial collapse will try to defend their economies by any means possible. Britain is already far down the road of "beggar my neighbour" economics by the "managed" devaluation of the pound, a crude attempt to boost UK industry by lowering the prices of British exports and creating a de facto tariff wall around imports from abroad. It won't work because Britain does not make much of anything any more except debt, and the world has plenty of that already.

But the collapse of the pound will seriously damage what is left of UK financial services. No one in their right minds would put money into the UK economy now, with the property market collapsing, UK banks insolvent and government borrowing likely to reach £100bn in the next 18 months.

Gordon Brown seems to believe that sterling is like the dollar, and that people will buy our dud pounds whatever the likely losses. However, as we are discovering, sterling is not a reserve currency and unlike the US we cannot force other countries to pay our debts. The future for our battered island is likely to be hyperinflation punctuated by appeals to the International Monetary Fund for emergency aid. Forget about spending our way out of recession - the UK government simply lacks the resources to fund the huge borrowing that would be required. Something will have to give. Brown will have cause to regret being so beastly to the Icelanders.

Richard Reeves

Director of Demos

James Carville, the hardened political aide to Bill Clinton, said that if he was reincarnated he'd want to come back as the bond market: "You can intimidate anybody." Right now it seems odd to think of any financial markets threatening anybody. But it is one of the ironies of the current economic situation that the capital markets still have some serious muscle.

Western governments, faced with recession, need to throw a lot of money at their ailing financial institutions - money that can be raised only by selling Treasury debt, mostly to the capital-rich investors of the Far East. For Gordon Brown, this is likely to become a more difficult sell, as Prudence is given the push and the pound takes a nosedive. Even national exchequers invite sceptical scrutiny in this new, nervous world.

The financial crisis is at heart a loss of faith. The word credit derives from the Latin credo - "I believe". When the Titanic of the financial world - in the shape of Lehman Brothers - was allowed to sink, the bonds of trust stretching around the world were snapped. In an instant, everyone stopped believing in each other.

A number of sensible measures should be on the agenda when the G20 reconvenes next year, including legislation to ensure bonuses in financial services are paid on the basis of five-year performance; new "pro-cyclical" provisioning rules requiring finance houses to increase their store of capital in economic upturns; and tougher, independent regulation of the rating agencies whose doe-eyed assessments of banks built on a mountain of paper helped get us in this mess.

There is, however, no quick technical fix for such a dramatic loss of confidence. Trust can be lost in the blink of a market-trader's eye - but it will take years to rebuild.

TEN THINGS THEY ACHIEVED

  • 1 Created a road map aimed at stabilising the world economy and overhauling the banking system with targets for the end of March 2009
  • 2 Advocated Keynesian big-spending
    “fiscal stimulus”
  • 3 Expanded from a small club making world decisions to recognise the importance of the economies of Brazil, Russia, India and China
  • 4 Agreed to reform international finance institutions, including better transparency and supervision of credit ratings agencies
  • 5 Agreed that the Financial Stability Forum should include emerging economies
  • 6 Banks and hedge funds to hold increased levels of capital and cash
  • 7 Recommended “supervisory colleges” for all major cross-border financial institutions
  • 8 Return to the Doha round – trade ministers to meet in Geneva next month
  • 9 Instructed G20 finance ministers to draw up plans and timeline
  • 10 Agreed to meet again, in London next April

. . . AND FIVE THEY DIDN’T

  • 1 Agree a future growth model for capitalism. Instead they reconfirmed their “shared belief in market principles”
  • 2 Agree detailed plans for regulatory reforms of banking
  • 3 Establish a plan of action for achieving the already endangered Millennium Development Goals
  • 4 Set up an international supervisory body with sufficient power to control global markets
  • 5 Halt the run on sterling, which fell sharply against the euro and dollar

Alyssa McDonald

This article first appeared in the 24 November 2008 issue of the New Statesman, How to get us out of this mess

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The working class revolts

In the spirit of William Cobbett, a young writer travels by bicycle through Britain’s former industrial heartlands before and after the vote for Brexit.

One recent afternoon I set out on my old Raleigh bike on a tour of post-Brexit Britain. Two years earlier I had travelled the country on my bike as I researched a book. Now, after the vote for Brexit, I began another journey, this time with an even stronger sense of political disorientation. I wanted to discover what had become of the euphoria and, indeed, anger so present after the referendum of 23 June. For two weeks I cycled through the ex-industrial towns and cities of the Midlands and the north of England, two of the regions I visited in 2014.

My method then had been basic and, to some, ill-advised. Over the four months I cycled, I either wild-camped or stayed in the homes of people who had heard about my venture by word of mouth, or whom I’d met along the road, and I asked people, simply: “What is life like here?” I received a bewildering range of responses, from ­worries about wages or what world their children might inherit, to explanations about ecological and community projects built on a sense of renewal and hope. I encountered generosity and insight into different ways of life in Britain, and last summer published my findings as Island Story, a travelogue in the spirit of William Cobbett and Orwell.

Many of the areas I had written about are now readily associated with Brexit, such as Barnsley (68 per cent Leave), the former mining town in South Yorkshire. Covering the immediate aftermath of the referendum, Channel 4 News sent a crew there. Its report featured a local man who explained why he had voted Leave: “It’s not about trade or Europe or anything like that, it’s all about immigration. It’s to stop the Muslims coming into the country, simple as that.”

The presentation of what people in this town or Sheffield and Wakefield nearby had called “Barnsley Man” had been a sore point. In Sheffield (51 per cent Leave) Allie, an artist and teacher, felt it absolved the wealthier south of responsibility, even though the south had voted in far greater numbers to leave. Barnsley Man – old, white, working class, ignorant, racist, and unable to speak without losing his temper – was a sign of a prevailing narrative of Brexit as a catastrophic revolt by a misinformed and alienated northern working class, an explanation that became increasingly unsatisfactory as I travelled and talked to people.

“Damn good thing it were, too,” said one former miner at a working men’s club, as we discussed Barnsley’s vote to leave. Some agreed, others shook their head. I had passed “Vote Leave” stickers plastered on the walls of a derelict social club, and encountered common justifications that cited uncontrolled eastern European migration, resulting in the loss of local jobs. But people’s concerns were not about immigration itself, or cultural identity; rather, they centred on low wages and employment. “There’s nowt round ’ere ’cept call centres,” said Rory, a young betting-shop worker.

Many customer-service centres operate in the nearby Dearne Valley. The work is insecure, stressful and subject to a demeaning level of surveillance (call response rates, targets met, time spent in the toilet). Other sources of employment include distribution warehouses and factories of several major clothes retailers. I was told repeatedly that these companies recruited and bussed in Polish workers from Warsaw to work on a seasonal basis for low pay, at the expense of local people.

“I’ve been trying to take it to the papers,” a young woman said to me as the issue was raised in the back room of the Red Shed, the Labour club in Wakefield, West Yorkshire (66 per cent Leave). She had become aware of the practice of bussing in through a friend at one factory, but my later research showed that it’s an open secret. One must attribute some validity to such stories, at least in terms of how local people feel. They hint at the complex and contradictory stories and motivations behind Brexit in former industrial areas such as these.

“It’s divide and rule,” said a woman who had earlier told me about her involvement in the miners’ strike pickets thirty years earlier. “We have to fight to push up their wage, and challenge the bosses.”

 

***

 

In what the political economist William Davies calls a “shadow welfare state”, many people across the north are employed in poorly paid call-centre or service-sector jobs, subsidised by in-work tax credits. Child and working-tax credits, implemented by the New Labour government, in effect benefit low-wage employers as much as workers, and cost the state £30bn a year. A further £9.3bn in housing benefits was paid to private landlords last year. Though tax credits and housing benefits provide a lifeline to workers and their families struggling to make ends meet, they do nothing to address the underlying problems of low wages or unemployment, or the need for a new public strategy to encourage higher-skilled, higher-waged work.

Cycling from one former industrial town to the next, I observed that the primary contributions to the built environment in the past three decades or so are the retail park and out-of-town supermarket. Like the call centre or the distribution warehouse, they are the principal points of Britain’s service sector, and are enabled by unskilled local workforces on state-subsidised low wages and the complex logistics of globalised trade. Spread across Britain and similar in appearance everywhere, these bland structures signal the possibilities and pitfalls of state investment guided by short-term economic gain.

Workers are increasingly caught in a cycle of insecure and unpredictable shift patterns, thanks to zero-hours contracts. This makes claiming housing benefit difficult, and includes spells of unemployment during which credit cards, payday loans or borrowing from friends and family become the main means of subsistence. A recent Trades Union Congress report found that 3.2 million households were in “problem debt”, spending more than 25 per cent of their household income on unsecured debt repayments. Of this number, 1.6 million households are in “extreme debt”, handing over more than 40 per cent of their earnings to creditors. Some of the poorest households choose not to join the electoral register, fearing that their details will be shared with debt collection agencies, and are thus locked out of political representation.

In the wilted yet cheerful seaside town of Morecambe, Sonya painted a stark picture of her work as a private lettings agent. Over £9.3bn of public money was paid to private landlords in housing benefit last year, a doubling over ten years, and far more expensive than building affordable accommodation. Sonya’s tenants are “trapped” in cycles of poverty and debt, with no obvious reprieve or refuge. “What good are food banks when people can’t afford to pay their gas or electricity to heat the food?” she said.

Although such stories illustrate the UK’s gaping wealth inequalities, they also show the dismal progress in some areas in the quarter-century since John Major’s pledge of a “classless” society and the infamous (mis)quote of John Prescott that “we are all middle class now”. The political effects of such social shifts have not yet fully come to light. The surge in support for Ukip across the ex-industrial north and east over 2014-15 has been stalled, for now, by uncertainty about the party’s leadership since Nigel Farage’s resignation. But I was struck by a pessimism in these communities, so many of which felt overwhelmed by an unfair fate. The horizons of political possibility had been hemmed in by the miseries of economic hardship.

Many I met felt untouched by politics, perhaps because politicians of all stripes rarely speak with any insight into the difficult decisions involved in juggling household debt, or the mixed feelings involved in claiming benefits. It has become a banality to invoke the Stakhanovite image of “hard-working families”; less often do we hear directly from these individuals, with the occasional exception of exploitative TV series such as Channel 4’s Benefits Street or The Great British Benefits Handout (Channel 5).

On the road, few people spoke about political leaders, and Labour’s spate of self-flaying in its second leadership election since May 2015 prompted indifference or disappointment. Talk of Trident or renationalising the trains may be too theoretical, even middle class, in places where basic poverty is an elementary concern. Usually, luminaries on the left, such as the polemicist Owen Jones, address the comfortably converted, gathered punctually in town halls, immune from the debate among the depoliticised masses in the pubs, supermarkets and bedrooms of this island.

 

 

***

 

Cycling around Britain, I would set out most days without knowing where I’d end up. Such nomadism came not without stresses. But it was a fair exchange for serendipity – sunset conversations with shepherds along Loch Eriboll, blue jokes in the lock-ins of Liverpool and Dalmellington, or the drama of lugging a weighty steel mule up the steeps of Snowdonia and the eye-watering wonder of plunging down the other side.

I had no map, and sometimes relied on the tent and a discreet field or park for a place to kip, but more often I found contacts through a blog and social media. Pulling over on street corners or stopping at fast-food outlets, supermarkets and pubs, I would mine passers-by for clues.

As I travelled through Northamptonshire, Lincolnshire and Yorkshire, I listened to people projecting the effects of austerity on to migrants. In Corby, Scottish workers told me that Poles had “overrun” the area. “I just don’t like the ones claiming [benefits],” said a barmaid in one town-centre pub. Others such as Ashgar, a former steelworker in Rotherham, blamed the “greed” of “London” or factory owners for the loss of local steel jobs, rather than any government policy or trend towards deindustrialisation.

Stories of feeling left behind by the economic development of “London” were common. “London” had privatised industries and utilities, and cut funding from communities to prop up a corrupt banking system while people outside the capital were sanctioned for minor or non-existent benefit improprieties. “London” had imposed a narrow political and cultural vision on the rest of the country which gave communities no great say in how they were governed. To many of the people I met, the word “London” carried the same negative connotation as “neoliberalism” or “globalisation”, and had a similar meaning.

The chain stores may stock the latest cheap gadgets and clothes from the Far East, but for many communities the loss of jobs, community buildings, social care and affordable rents has been too high a price to pay. Voting Leave became a kind of protest button, pushed in anger at decades-long disempowerment. Brexit, a largely English independence movement ostensibly against the EU, is at times indistinguishable from a movement for independence from “London”. Voters judged that the potential hardships associated with leaving were a price worth paying to regain sovereignty from the capital.

In Nottingham (51 per cent Leave), David talked of friends in his home town of Long Eaton, Derbyshire, who had voted overwhelmingly in favour of Brexit. “A whole two generations of massively disenfranchised people put two fingers up to the elite,” he said. To Jeremy Corbyn’s chagrin, many Brexiteers live in safe Labour seats.

For the painter John Wilkinson, the problem was clear: “In England it is already yesterday.” Among left-wing artists in the exhibition “Fighting for Crumbs” in Sheffield, the mood was disillusioned yet reactive. In these pessimistic visions, the future seemed lost or abandoned. Beside Wilkinson’s paintings were photos by Connor Matheson capturing teenage ravers, food banks, Grimethorpe miners celebrating Thatcher’s death, and more mundane moments amid allotments and council estates festooned with St George flags. Reconstructions of the past seemed to preoccupy many people, as they struggled to identify new sources of pride in their decaying environment.

Dependency on benefits to subsist in boring, insecure or difficult low-wage work does not inspire gratitude. Writing in June in the London Review of Books, James Meek made a similar observation about farmers, many of whom supported Brexit even though they are heavily reliant on EU subsidies to augment the plummeting prices paid by supermarkets. “It’s an unholy mess that’s developing,” said Eden, as we spoke on his sheep-rearing smallholding beside a large Argos distribution centre in Darlington, on Teesside. Globalisation has reduced prices and forced many farmers into a race to the bottom. “People want to blame the poor for the situation they find themselves in,” he said.

But it’s not only farmers who feel beleaguered, their pride or way of life tested by recent developments. The collapse of manufacturing, mining and steel since the late 1970s has resulted in what Jeremy Seabrook, interviewing people in the West Midlands last summer, called “unhealed social and psychological lesions of class”. In his book Cut Out: Living Without Welfare, Seabrook argues that these areas were not given the chance to grieve for the industries they have lost and around which generations of communities had developed.

Travelling through the same parts, I found it common to hear of cities spoken about in the past tense. In Wolverhampton it was locks and furniture; Nottingham, bicycles and lace; in Bradford and Halifax, textiles. Each town had its trade. “It’s got a lovely history,” said Ian in Wolverhampton. “Shame it’s a s***hole now.” For there is no belonging or co-ownership in the glut of retail parks left behind, nor in the finance sector or on the property ladder. “We used to make things,” said Steve in Derby, using his own city’s economic uncertainties as a symbol of something broader.

Emma, a part-time teacher working in the Midlands in Tipton and Dudley, told me about young mothers to whom she taught basic budgeting and childcare. “People complain about scrounging . . . Most people I meet, they’re just trying to get by.”

The Brexit vote has exposed rather than initiated this incoherence. If a shared sense of place or identity is defined by making or doing, then those who cannot make or do – from welfare recipients to foreign nationals who use the NHS – become, in the eyes of some, despised. Two implications follow. First, pride in work correlates to a misleading notion of a “traditional working class”, readily linked to manual work, social conservatism and older age, such as that of Barnsley Man. This understanding of class as primarily cultural (through which the concept of a beleaguered, mythically homogeneous “white working class” often arises) obscures what is the original and more obvious economic definition of “the working class”: those who must work, will work, or have had to work full-time for a basic living. Class is no longer clear.

A second implication of pride in work emerges in how this is internalised where such work isn’t readily available, as in Barnsley or Rotherham, or the struggling former industrial cities of the north-east, such as Ashington and Middlesbrough, or Newport in south Wales. In Langley Moor, County Durham, Clarissa and her daughter told me about the high suicide rate among young men. Elsewhere I heard tales told, in hushed tones, of brothers, fathers and friends who had taken their own lives – each for different reasons, but so often in places bereft of investment and hope. Where communities, certainties and “jobs for life” are disarrayed by forces so distant and complex they might well be confused with fate, the individual effects can be terrible.

 

 

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Pessimistic narratives of decline and “Broken Britain” are tedious, and also stand as obstacles to imagining political alternatives. Seismic changes to the fundaments of the United Kingdom will have consequences over the coming decades, but exactly how so remains unclear. Absent from most of the debate during the Brexit campaign was a discussion about the future of the political union between not only Britain and Europe, but also the UK’s member states. What kind of society do, say, the English desire? How will it be powered, how will its people house and employ themselves, and how will it be governed?

Across my post-Brexit journey, I quizzed people about the kinds of political transformation they would like to see. In Nottingham, I heard compelling arguments for a universal basic income and a 30-hour working week, aided by automation and progressive taxation. In Sheffield, the artists Glen Stoker and Anna Chrystal Stephens invited me on a group trespass of a patch of derelict wasteland near the city centre. Discussions about what this site could become in public hands led to wider questions about who owns much of Britain. In Manchester (60 per cent Remain), Jen enthused about rediscovering politics along with neighbours in her community and Steve refused to acknowledge what some would call realism – the necessity of compromising one’s political intentions. In Liverpool (58 per cent Remain), Brian, an indefatigable trade unionist, debated with international students the need to invest in green energy.

All were inspired by developments in Scotland, where a very different-natured independence campaign has led to lasting discussions about a progressive and better future for all. Instead of reactions against low wages, or perceptions of immigration or the effects of austerity, here there are ­discussions about renewable power, buying back local land into common ownership, as well as rediscovering local histories and the Scots Gaelic tongue.

Is it naively idealistic to imagine that the same could happen here, elsewhere in our post-Brexit land? Perhaps, but within such hope lies the motivation to act.

J D Taylor’s book “Island Story: Journeys Through Unfamiliar Britain” is published by Repeater

This article first appeared in the 02 February 2017 issue of the New Statesman, American carnage