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''We've had to let six staff go this Christmas . . . people with families and mortgages''

Families all over Britain are bracing themselves for hard times. For some, they have already started

On first impressions, Rayne Precision Engineering is a neat little company. Tucked into the hills of the southern fringe of the Peak District, it consists of four solid modern sheds, built of a fake stone material that blends in with the local housing. These are arranged around a tidy yard next to a mobile hut that serves as office accommodation. The atmosphere in the yard is pleasantly quiet. There's a faint hum in the air, but none of the clashing or screeching of metal on metal that you might expect.

It quickly becomes apparent that there is a reason for this. The company's founder and managing director, Andrew Simmill, leads me into first one shed and then another to show me an array of laser-cutting and welding machinery, all of it standing idle. The signs of recent activity are all around - a scattering of little metal shavings; a neat pile of ring-shaped components bound for the automotive industry. Today the firm is having a shutdown, Simmill explains.

In the summer of 1997, Rayne Engineering, which is a few miles outside the market town of Leek, had 47 full-time staff, working five days and sometimes nights or Saturday mornings as well, making parts for JCB, GKN and a range of other engineering companies. Simmill bought a people-carrier so that his welders could drive in from Stoke-on-Trent, 20 minutes or so down the road. He had diversified, too, into making shopfitting parts for Waterstone's.

The crash, when it came, came fast. In April this year Simmill took on a salesman to try to boost a flagging order book, but to no avail. Now Rayne Precision is down to 26 staff working four days a week. There have been 12 compulsory redundancies. The remaining staff agreed to their hours being cut from 39 to 31 last week.

"Last week was my worst week," Simmill says. "We had to let six people go. You're looking people in the eye just before Christmas . . . these are people with families and mortgages. And there's nothing I can do - I've got to protect the business."

Simmill is a big, weather-beaten man in blue overalls and a sweatshirt. He looks out of place in the firm's meeting room, under the glossy banners he ordered so they could push for scarce orders at trade fairs. He looks as if he could shoulder quite a burden - and that is exactly what he is having to do now.

"Carol, who does the stores and the planning, came to me last week and said, 'I'll take redundancy, Andrew.' She's over 60. She didn't want a younger person with a family to lose their job. But she's a key part of the business. I don't mind admitting I've had sleepless nights about finding enough work for my men."

This little local heartache is solid evidence of the tectonic shift that has affected businesses across the world in recent months. The plummeting housing market, the struggling construction industry, banks cracking under the weight of bad mortgage debts and overextended credit, all lead here to this little office.

For Simmill it trickled down in part from JCB, which dominates the heavy industry in this area, previously employing 5,000 at its plants in Rocester, Uttoxeter and Cheadle. The digger manufacturer - for whom Simmill has nothing but praise - was forced to cut production by a third and to make nearly 600 staff redundant this autumn as orders, even from previously buoyant markets such as Russia, began to dry up.

In the nearby Potteries, there have been 350 job losses at Wedgwood and Spode has gone into administration, putting a further 150 at risk. The misery goes on, the figures stacking up in tens here, twenties there. On the day of my visit the front page of the Sentinel, Stoke's local paper, carried the news that Hinks Fine China, the UK's last china flower manufacturer, was to close with the loss of another 16 jobs. At Uttoxeter, Dairy Farmers of Britain announced it was closing its Fole Dairy with 250 to go. At Phones4u, another major Staffordshire company, 240 IT jobs were reported to be at risk. Simmill ("I'm 47 but I feel 67," he says, then laughs) has been here before. Twenty years ago he started an engineering business with his father during the tail end of the 1980s boom.

"Nineteen eighty-nine was an extremely good year, but 1990 . . ." he pauses for a moment. "I was financed up to the hilt. I had £70,000 debt on one machine. Then I had 12 months where my father died of cancer and my brother was killed in a road accident at 23.

People are buying cheaper cuts of meat rather than the high-end products on sale

"Everything came at once. I got married, my daughter Carly was born, and two weeks later the company went into receivership. I had finance people chasing me; my house was on the line. I was on the verge of being made bankrupt."

But Simmill doesn't give up easily. For a year he worked for the man who bought his business, then rented his machines. "It was just 12 months after I went down," he says. "The banks and accountants hadn't had any faith in me, and it was almost to prove them wrong. I'm a determined sort of fellow."

He and his wife Clare now have three daughters - Carly, 17, Sheri, 16, and Kate, 13 - and they never stop hearing about the evils of credit. "I was out shopping one time with Sheri when she was only four or five," recalls Simmill. "I ran out of cash and so I thought, 'I'll wait until next week.' She turned to me and said, 'Put it on your card, Dad.' I was really taken aback by that, and I thought about it a lot. What I'm fearful of is my children going through what I went through. There are too many credit cards, too much easily available credit. That's put us in this mess."

About 18 months ago this niggling worry turned into a family crusade. Sitting around the table outside their house one summer evening over a meal, they began drawing out a game on sheets of A4 paper. Then the girls got busy with clip art and a boardgame, Credit 4 Life, was born. Players start with £1,500 and on a throw of the dice they pay bills - mortgage £600; night out £50; credit card 30 per cent debit interest - and, if they are lucky, draw wages. The game, now in a smart box with a laminated board, has been sold to about 20 schools and is being supported by Caudwell Children, a charity funded by John Caudwell, the local Phones4u tycoon.

Simmill says he talks to his children about the problems his business is facing, and after school they often come to see him at work instead of going home. But he has no plans to bring them into the family firm. "I'm not being sexist, but I think manufacturing is a hard game," he says. "If the government doesn't believe in it there won't be any manufacturing here in ten years."

As you drive into Leek along the Ashbourne Road, the signs of economic gloom are easy to spot. A 19th-century mill stands with its glass grimed and a board outside advertises a small business within. Further into town the White Lion and Talbot pubs are both boarded up. The Leek Post and Times has a picture of Gary Clewlow of GJ's Greengrocers holding a sign saying "Closing Down (sorry)", over the headline: "Shoppers urged to stay local as credit crunch bites hard". Clewlow tells the paper he cannot compete with Aldi.

To be fair, the former textile town, which weathered the decline of the silk industry in the late 19th century and the globalisation of synthetic fabrics in the 20th, is not completely down at heel. Its market square is wide and cobbled, and a queue of shoppers is keeping its well-stocked fruit and veg stall busy. There's a half-timbered Marston's pub, the Bird in Hand, flanked by Cancer Research and Oxfam shops.

Businesses such as Simmill's are at the sharp end of the recession, and others in the area are less gloomy about the future. Off the A523 between Simmill's works at Ipstones and the town of Leek, signs point to enterprises with a more rural flavour: Beaver Hall Equestrian Centre, Middle Farm Bed and Breakfast. Down a long track, Janet Phillips runs the Threshing Barn, a small shop selling craft supplies and meat reared on the farm she runs with her husband, Dave.

Phillips says she always has a pot of coffee on the go in her shop, which is packed to the rafters with skeins of brightly coloured wool, Christmas wreaths and knitwear; it helps to make the place feel welcoming, she says. The craft workshops she runs - a launching pad for sales of equipment and materials - had their best October ever, she says. But the meat is doing less well. People are buying cheaper cuts rather than the high-end products they sell here.

"I think long-established businesses will survive, but January and February are going to be grim," says Phillips. "From December, we would usually expect big orders, and they're not coming in. I don't think people are going to go for the big items this year."

On Derby Street, a Butters John Bee estate agent stands with property details in its windows and a To Let sign above its door. At first glance the business seems to be occupied, but a closer look reveals too-neat desks with phones and notepads and nothing else, and a notice on the door confirms, "Please note: This office is now closed. We will continue to provide our services from our Hanley and Congleton offices." Just a few doors along, the Ponden Mill shop also bears a To Let sign and big banners announcing, "Twenty Per Cent Off - Everything Must Go", though an assistant says she doesn't know whether they're going to close.

Round the corner, near the now-defunct GJ's Greengrocers, is Photoprint, founded nearly 30 years ago by Brian Johnson, now the town's mayor and president of its chamber of trade and commerce. His assessment of the situation is relatively upbeat, and he attributes several of the town's business failures to a lack of initiative or staying power. Despite having spent half a million pounds on opening a horse livery last year and carrying a lot of debt ("You don't want to know," he says when I ask how much), he is investing £20,000 in a digital colour printing machine, which would have cost him £34,000 in normal times.

"You'll often hear people saying, 'Leek's always in recession - what difference does it make?'" he says. "People round here have been used to tightening their belts.

"But the new businesses have never had to face this before. They don't make allowances, they don't think ahead far enough. People will have to promote their businesses - they'll have to think positive."

Others in the town are struggling to follow his advice. Looking for the Diva shoe shop which, according to the local paper, is to close after Christmas, I stop to ask directions from a couple huddled against the cold and carrying a plastic bag of meat bones. They cheerfully offer to show me the place and as we walk along together the man, David, tells me he has been out of work for the past six months, after being laid off by a firm that makes parts for car exhausts.

"My old boss closed the doors," he says. "I'd take anything, but if you put on your CV that you were in engineering, they think you don't want a menial job. They think you'll take off as soon as something better comes - and I would as well.

"JCB has a massive effect on this area. Last year employees had a £1,000 Christmas bonus, but this year they'll be lucky if they get anything. I've given up."

He asks if I'm going for a job interview. I tell him no, I'm writing an article about the credit crunch for a magazine. "Well," he says without a trace of rancour, "at least someone's making money out of it."

Fran Abrams is the author of "Below the Breadline: Living on the Minimum Wage", published by Profile Books (£6.99)

This article first appeared in the 22 December 2008 issue of the New Statesman, Christmas and New Year special

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The English Revolt

Brexit, Euroscepticism and the future of the United Kingdom.

English voters have led – some would say forced – the United Kingdom towards exit from the European Union. Was this an English revolt, the result of an ­upsurge over decades of a more assertive, perhaps resentful, sense of English identity? At one level, clearly so. Surveys indicate that individuals who most often describe themselves as “English”, and regions where this is common, were more inclined to vote Leave on 23 June. Some of these are poorer regions where marginalised people think that their voices are more likely to be heard in a national democracy than in an international trading bloc, and for whom patriotism is a source of self-respect. But it would only make sense to regard Leave as essentially an English reaction if discontent with the EU were confined to England, or specifically linked with feelings of Englishness.

In fact, negative opinions about the EU, and especially about its economic policy, are now more widespread in other countries than they are in England. Polls by the Pew Research Centre last month showed that disapproval of the EU was as high in Germany and the Netherlands as in Britain, and higher in France, Greece and Spain. Though aggravated by the 2007-2008 crash and enforced policies of austerity, a decline in support was clear earlier. France’s referendum of May 2005 gave a 55 per cent No to the proposed EU constitution after thorough debate, and a now familiar pattern emerged: enthusiastic Europeanism was confined to the wealthiest suburbs and quarters of Paris, and the only professional groups that strongly voted Yes were big business, the liberal professions and academics.

Going far beyond the atavistic and incoherent English revolt that some think they discern, our referendum result is partly a consequence of transnational political phenomena across the democratic world: the disaffection of citizens from conventional politics, shown by falling turnouts for elections, shrinking party membership and the rise of new, sometimes extreme political movements; as well as the simultaneous detachment of a professional political class from civil society, and its consequent retreat into a closed world of institutions.

The EU embodies these phenomena in uniquely acute form. In several cases its central bodies have opposed – or, if one prefers, have been forced to deny – democratically expressed wishes. In Greece and Italy, the EU has enforced changes of government and policy, and in Denmark, Ireland and the Netherlands it has pressed countries to ignore or reverse popular referendums. Its own representative body, the European Parliament, has gained neither power nor legitimacy. Crucial decisions are taken in secret, making the EU a hiding place for beleaguered politicians as well as a source of lavish financial reward for insiders. In the words of the historian John Gillingham, Europe is now being governed by neither its peoples nor its ideals, but by a bank board. This is not the “superstate” of Eurosceptic mythology. Though it drains power and legitimacy away from national governments, it is incapable of exercising power effectively itself, whether to cope with short-term emergencies such as an inflow of refugees, or to solve chronic failings such as the creation of mass unemployment in southern Europe. The result is paralysis, the inability either to extricate itself from failing institutions or to make them work.

If popular discontent with the EU continues to increase (and it is hard to see how it could not) sooner or later there will be some unmanageable political or social crisis. The response of too many supporters of the EU is to screw the lid down tighter, including now by promising to make life difficult for the United Kingdom, pour décourager les autres. This is the organisation – unpopular, unaccountable, secretive, often corrupt, and economically failing – from which our decision to depart apparently causes people to weep in the streets.

***

Why this decision? Why in Britain? The simplest and perhaps the best answer is that we have had a referendum. If France, Greece, Italy and some other countries had been given the same choice, they might well have made the same decision. But of course they have not been and will not be given such a choice, barring severe political crisis. This is most obviously because countries that have adopted the euro – even those such as Greece, for which the IMF has predicted high unemployment at least until the 2040s – have no clear way out.

I make this obvious point to emphasise that the immediate explanation of what has happened lies not only and not mainly in different feelings about the EU in Britain, but in different political opportunities and levels of fear. The contrasting votes in Scotland and Northern Ireland have particular explanations. Scottish nationalists – like their counterparts in Catalonia – see the EU as an indispensable support for independence. Northern Ireland sees the matter primarily as one affecting its own, still tense domestic politics and its relations with the Republic. In a European perspective, Scotland and Northern Ireland are the outliers, not England and Wales. Indeed, Scotland’s vote makes it stand out as one of the most pro-EU countries in Europe. If ever there is another referendum to see whether Scots prefer the EU to the UK, it will show whether this level of support for the EU is solid.

If England is exceptional, it is not in its disaffection from the EU, nor in the political divisions the referendum vote has exposed (if France, for instance, had such a vote, one could expect blood in the streets). Rather, its exceptional characteristic is its long-standing and settled scepticism about the European project in principle, greater than in any other EU country. Every ­member has a specific history that shapes its attitude to the theoretical idea of European integration. As John Gillingham, one of the most perceptive historians of the EU, describes its beginnings: “to the French [supranationalism was] a flag of convenience, to the Italians it was preferable (by definition) to government by Rome, to the Germans a welcome escape route, and to the Benelux nations a better choice than being dominated by powerful neighbours”.

Subsequently, for the eastern European states, it was a decisive step away from communist dictatorship, and for southern Europe a line drawn under a traumatic history of civil conflict. There is also a widespread belief, powerful though fanciful, that the EU prevents war between the European states. All these are important reasons why there remains considerable support for unification as an aspiration. But all these reasons are weaker, and some of them non-existent, in Britain, and especially in England. The simple reason for this is that Britain’s experience of the 20th century was far less traumatic. Moreover, during that time loyalty to the nation was not tarnished with fascism, but was rather the buttress of freedom and democracy. Conversely, the vision of a European “superstate” is seen less as a guarantee of peace and freedom, and rather as the latest in a five-century succession of would-be continental hegemons.

Given all this, an obvious question is why the United Kingdom ever joined in the European project in the first place. The answer helps to explain the country’s subsequent lack of enthusiasm. Its first response to the creation of the European Economic Community in 1957 was not to join, but to agree to establish a separate European Free Trade Association (Efta) in 1959 with Austria, Denmark, Norway, Portugal, Sweden and Switzerland; over the next three decades the seven founder members were joined by Finland, Iceland and Liechtenstein. This worked efficiently, cheaply and amicably, and, in time, Efta and the EEC would doubtless have created trading arrangements and systems of co-operation. But then the historic mistake was made. Efta was considered too small to provide the diplomatic clout craved by Whitehall at a time of severe post-imperial jitters. A cabinet committee warned in 1960 that “if we try to remain aloof from [the EEC] – bearing in mind that this will be happening simultaneously with the contraction of our overseas possessions – we shall run the risk of losing political influence and of ceasing to be able to exercise any real claim to be a world Power”.

Besides, Washington disliked Efta as a barrier to its aim of a federal Europe, and the Americans put heavy pressure on London to apply to accede to the Treaty of Rome, which it duly did in August 1961. “It is only full membership, with the possibility of controlling and dominating Europe,” wrote an optimistic British cabinet official, “that is really attractive.”

As the former US secretary of state Dean Acheson (one of the early backers of European integration) put it, in a now celebrated comment in December 1962: “Great Britain has lost an empire, and has not yet found a role. The attempt to play a separate power role . . . apart from Europe . . . based on a ‘special relationship’ with the United States [or] on being the head of a ‘Commonwealth’ . . . – this role is about played out.”

Acheson’s words long haunted British policymakers; perhaps they still do. And yet Britain remains one of the half-dozen strongest and most assertive states anywhere in the world, just as it has been for the past three centuries.

To fear of diplomatic marginalisation was added fear of economic decline. A government report in 1953 warned of “relegation of the UK to the second division”. Over the next 30 years there was a chorus of dismay about “the sick man of Europe”. Belief that EEC membership at any price was the only cure for Britain’s perceived economic ills became the orthodoxy in official circles: Britain was “the sinking Titanic”, and “Europe” the lifeboat.

So, on 1 January 1973 Britain formally entered the EEC with Denmark and Ireland. Other Efta members remained outside the Community – Switzerland and Norway for good. Harold Wilson’s 1975 referendum on whether to stay in the EEC in effect turned on Europe’s superior economic performance – which, though no one realised it at the time, had just ended.

This memory of apparent British economic weakness half a century ago still seems to weigh with older Remainers. Yet it was based on a fundamental misconception: that European growth rates were permanently higher than in a supposedly outdated and declining Britain. In reality, faster growth on the mainland in the 1950s and 1960s was due to one-off structural modernisation: the large agricultural workforce shifted into more productive industrial employment. From the mid-1940s to the early 1970s this gave several European countries “windfall growth” at a higher rate than was possible in Britain, which since the 19th century had had no large agricultural sector to convert. By the early 1970s, once that catching up was finished, European growth rates became the same as, or slightly lower than, Britain’s. When measured over the whole half-century from 1950 to 2000, Britain’s economic performance was no different from the ­European norm. By the mid-1980s, growth was faster than in France and Germany, and today Britain’s economic fundamentals remain strong.

Slower European growth lessened the perceived attractiveness of EU integration. In 1992, on Black Wednesday (16 September), hesitant participation in the European Exchange Rate Mechanism led to forced devaluations in Finland, Sweden, Italy, Spain and, finally, Britain. This was a huge political shock, though an economic boost.

Black Wednesday subsequently made it politically difficult for Britain to join the eurozone – allowing us a narrow escape, attributable more to circumstance than to policy, as vocal political and economic lobbies urged joining.

Moreover, Britain’s trade with the rest of the EU was declining as a proportion of its global activity: as Gordon Brown observed in 2005, 80 per cent of the UK’s potential trade lay outside the EU. The EU’s single market proved not very effective at increasing trade between its members even before the crash of 2007-2008, and prolonged austerity thereafter made it stagnant. Consequently, in the 2016 referendum campaign, more emphasis was placed on the dangers of leaving the single market than on the precise benefits of being in it.

But the days when Britain seemed the Titanic and Europe the lifeboat were long gone. On the contrary, Britain, with its fluid and largely unregulated labour market, had become the employer of last resort for the depressed countries of the eurozone. The sustained importation of workers since the 1990s had become, for a large part of Britain’s working class, the thing that most obviously outweighed whatever legal or economic advantages the EU might theoretically offer.

***

What galvanised the vote for Brexit, I think, was a core attachment to national democracy: the only sort of democracy that exists in Europe. That is what “getting our country back” essentially means. Granted, the slogan covers a multitude of concerns and wishes, some of them irreconcilable; but that is what pluralist democracy involves. Britain has long been the country most ­resistant to ceding greater powers to the EU: opinion polls in the lead-up to the referendum showed that only 6 per cent of people in the UK (compared to 34 per cent in France, for instance, and 26 per cent in Germany) favoured increased centralisation – a measure of the feebleness of Euro-federalism in Britain.

In contrast, two-thirds wanted powers returned from the EU to the British government, with a majority even among the relatively Europhile young. This suggests a much greater opposition to EU centralisation than shown by the 52 per cent vote for Brexit. The difference may be accounted for by the huge pressure put on the electorate during the campaign. Indeed, arithmetic suggests that half even of Remain voters oppose greater powers being given to the EU. Yet its supporters regard an increase of EU control over economic and financial decisions – the basics of politics – as indispensable if the EU is to survive, because of the strains inherent in the eurozone system. This stark contradiction between the decentralisation that many of the peoples of Europe – and above all the British – want to see and the greater centralisation that the EU as an institution needs is wilfully ignored by Remain supporters. Those who deplore the British electorate’s excessive attachment to self-government as some sort of impertinence should be clear (not least with themselves) about whether they believe that the age of democracy in Europe is over, and that great decisions should be left to professional politicians, bureaucracies and large corporations.

Some have dismissed the Leave vote as an incoherent and anarchic protest against “the establishment”, or as a xenophobic reaction against immigrants. Some of the media in Britain and abroad have been doing their best to propagate this view. Yet xenophobia has not been a significant feature of British politics since the 1960s, and certainly far less so than in many obedient EU member states, including France, Germany, Greece and the Netherlands. As for the anti-establishment “revolt”, this emerged when parts of the establishment began to put organised pressure on the electorate to vote Remain. Would-be opinion-formers have hardly covered themselves in glory in recent weeks. They have been out of touch and out of sympathy with opinion in the country, unwilling or unable to engage in reasoned debate, and resorting to collective proclamations of institutional authority which proved embarrassingly ineffective.

Worst of all, their main argument – whether they were artists, actors, film-makers, university vice-chancellors or prestigious learned societies – was one of unabashed self interest: the EU is our milch-cow, and hence you must feed it. This was a lamentable trahison des clercs. The reaction to the referendum result by some Remain partisans has been a monumental fit of pique that includes talking up economic crisis (which, as Keynes showed, is often self-fulfilling) and smearing 17 million Leave voters as xenophobes. This is both irresponsible and futile, and paves the way to political marginalisation.

The Queen’s call for “deeper, cooler consideration” is much needed. I recall Victor Hugo’s crushing invective against French elitists who rejected the verdict of democracy, when in 1850 he scorned “your ignorance of the country today, the antipathy that you feel for it and that it feels for you”.

This antipathy has reduced English politics to a temporary shambles. It is too early to say whether there will be some realignment of the fragments: One-Nation Toryism, Conservative neoliberalism, “new” and “old” Labour, the hibernating Liberal Democrats and Greens, the various nationalists and, of course, the unpredictable Ukip. When in the past there were similar crises – such as Labour’s rift over the national government in 1931, the Liberals’ split over Irish home rule in 1886, or the Tory fragmentation over the repeal of the Corn Laws in 1846 – the political balance was permanently changed.

***

Many Europeans fear that a breakdown of the EU could slide into a return to the horrors of the mid-20th century. Most people in Britain do not. The fundamental feature of the referendum campaign was that the majority was not frightened out of voting for Leave, either by political or by economic warnings. This is testimony to a significant change since the last referendum in 1975: most people no longer see Britain as a declining country dependent on the EU.

A Eurobarometer poll in 2013 showed that Britain was the only EU member state in which most citizens felt that they could face the future better outside the Union. Last month’s referendum reflected this view, which was not reversed by reiterated predictions of doom.

In retrospect, joining the Common Market in 1973 has proved an immense historic error. It is surely evident that we would not have been applying to join the EU in 2016 had we, like Norway or Switzerland, remained outside it. Yet the political and possibly economic costs of leaving it now are considerable. Even though discontent with the EU across much of Europe has recently overtaken sentiment in Britain, Britain is unique, in that, ever since the 1970s, its public has been consistently far less ­favourable to the idea of European integration than the electorate in any other country. Hence the various “opt-outs” and the critically important decision to remain outside the euro.

Now, by a great historic irony, we are heading towards the sort of associate status with the EU that we had in the late 1960s as the leading member of Efta, and which we could have kept. Instead, this country was led by its political elite, for reasons of prestige and because of exaggerated fears of national decline and marginalisation, into a vain attempt to be “at the heart of Europe”. It has been a dangerous illusion, born of the postwar declinist obsession, that Britain must “punch above its weight” both by following in the footsteps of the United States and by attaching itself to the EU.

For some, money, blood and control over our own policy were sacrifices worth making for a “seat at the top table”. This dual strategy has collapsed. In future we shall have to decide what is the appropriate and desirable role for Britain to play in the world, and we shall have to decide it for ourselves.

Robert Tombs is Professor of French History at Cambridge University. His most recent book is “The English and Their History” (Penguin)

This article first appeared in the 21 July 2016 issue of the New Statesman, The English Revolt