The land of broken promises

The coalition may claim to be committed to front-line services and public-sector jobs, but the econo

I listened to the Old and Sad by-election results online on Radio 5 Live from sunny Florida, which, incidentally, was the only US state that didn't have snow this past week. The British electorate was inevitably going to turn against the coalition and Nick Clegg was only able to avoid disaster because the Tories didn't try very hard. Apparently, they were away skiing with their banker friends -- George Osborne was, anyway.

Economic data continues to worsen in four crucial areas -- construction, net trade, business investment and unemployment -- even before the cuts and tax rises take effect. The volume of construction output in the latest data release fell by 0.7 per cent. New work fell by 0.5 per cent and repair and maintenance fell by 1.1 per cent. The biggest fall -- 6.4 per cent -- was in infrastructure new work. Construction was the main driver for the growth that was observed in the second and third quarters of 2010.

New figures for 2010 Q3, published by the Office for National Statistics [PDF] on 22 December, show that business investment, in seasonally adjusted terms, rose by 3.1 per cent. This is good news -- but total manufacturing investment decreased by 2.5 per cent compared with the previous quarter. Apart from a period of strong growth in 2010 Q1, business investment is yet to show any significant momentum since GDP started to recover in 2009 Q4. No individual industry has acted as a catalyst for overall growth. The Office for Budget Responsibility's forecast assumes that investment is a major driver in the recovery and will grow by more than 10 per cent per annum.

The latest net trade data was also bad. The UK's deficit on trade in goods and services was £4.1bn in November, compared with a deficit of £4.0bn in October. On average, forecasters expect the UK net trade deficit to make a 0.5 per cent contribution to GDP growth in 2011, having detracted from growth in 2010.

Worst of all, the number of unemployed youngsters under the age of 25 has hit a record 951,000, surpassing the previous record of 944,000 reached in June and September 2009. This represents an increase of more than 50,000 over the past three months.

More than 225,000 youngsters have been unemployed [PDF] for more than 12 months, increasing fears of a "lost generation". What a shame, then, that Alastair Darling's plan to tax the bankers and use the money to pay for measures to reduce youth unemployment has now been ditched for no good reason by the Con-Dem coalition

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The list of the government's broken promises is growing. Before the election, the Tories promised a "fair fuel stabiliser" to keep petrol tax rises down when oil prices are high. It looks as if they have reneged on that promise, even though David Cameron raised hopes that it would be implemented. And then there are those bankers. In opposition, Osborne and Cameron played a dirty political game, suggesting that they were going to restrict bonuses. They said that no banker's bonus would be higher than £2,000 -- a policy that is still on the Conservative Party website. Slasher Osborne has also delayed plans to force banks to disclose all bonus payments exceeding £1m -- despite the government naming every public official earning more than £55,000.

As my old friend Will Hutton wrote in the Observer this week:

Bankers' bonuses unite everyone in outrage -- from captains of industry, bewildered how top bankers can earn so much more than they do, to the newly unemployed, who wonder what they have done to deserve poverty and hardship while the money men pocket millions . . . The banks, far from serving the real economy, have become a tax on it.

The public has no objection, as far as I can tell, for payment for performance. The objection is mostly about payments for lack of performance.

Comments by the CEO of Barclays, Bob Diamond, in front of the Treasury select committee that the "period of remorse and apology for banks . . . needs to be over" didn't seem to capture the public mood. You would have thought Diamond's advisers would have warned him about other recent PR disasters, including that of BP's Tony Hayward, who said "I want my life back" after the Deepwater Horizon oil rig explosion killed 11 workers and leaked 206 million gallons of oil into the Gulf of Mexico. Similarly, the CEOs of the big three car makers flew in on luxurious private jets to give testimony to the US Congress that the auto industry was running out of cash and needed $25bn in taxpayer money to avoid bankruptcy. The next time they testified, the CEOs of Chrysler, Ford and GM drove the 500-plus miles in their latest fuel-efficient models.

People compare themselves to their friends and neighbours and workers care about the salaries of their colleagues. So taxpayers are angry about bankers getting big bonuses at a time when almost everyone else is experiencing declining real incomes. The recently published earnings data from the Annual Survey of Hours and Earnings (Ashe) for 2010 show how tough things are. Mean annual earnings for the 25 million employees in the UK grew, on average by only 0.2 per cent on the year; while in the private sector earnings fell by 0.8 per cent. Public-sector earnings grew by just 0.6 per cent. However, this wage growth partly reflects the transfer of the publicly owned banks Lloyds and RBS in October 2008 from the private to the public sector -- moving a number of relatively well-paid workers with them. And there is a public-sector wage freeze, along with a hiring embargo, so there is no likelihood of an explosion in wage inflation.

The table below shows the differing levels of importance of the public sector by regions in Britain, according to the Ashe survey. The public sector accounts for 39 per cent of workers in Wales, 38 per cent in Scotland and 37 per cent in the north east; it accounts for around a quarter in London and the south east. The second column shows that public-sector jobs outside London and the south east, on average, are better paid than private-sector jobs. Public-sector job losses are going to hit hardest regions such as the north east, Wales and Scotland, which have relatively high unemployment rates. We are demonstrably not all in this together.

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In a speech on public services on 17 January 2011, David Cameron said: "As we take the tough but necessary steps to deal with the deficit, our first priority is to protect front-line services and to protect jobs in the public services." Don't laugh.

David Blanchflower is economics editor of the New Statesman and a professor at Dartmouth College, New Hampshire, and the University of Stirling.

David Blanchflower is economics editor of the New Statesman and professor of economics at Dartmouth College, New Hampshire

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The World Cup you’ve never heard of, where the teams have no state

At the Conifa world cup – this year hosted by the Autonomous Republic of Abkhazia – ethnic groups, diaspora communities and disputed territories will battle for footballing glory.

Football's European Championship and the Olympics are set to dominate the back pages over the next few months. How will Team GB fare in Rio? Will the zika virus stop the tournament even going ahead? Will the WAGS prove to be a distraction for the Three Lions? And can Roy Hodgson guide England to a long-awaited trophy?

But before the sprinters are in their blocks or a ball has been kicked, there's a world cup taking place.

Only this world cup is, well, a bit different. There's no Brazil, no damaged metatarsals to speak of, and no Germany to break hearts in a penalty shootout.  There’s been no sign of football’s rotten underbelly rearing its head at this world cup either. No murmurs of the ugly corruption which has plagued Fifa in recent years. Nor any suggestion that handbags have been exchanged for hosting rights.

This biennial, unsung world cup is not being overseen by Fifa however, but rather by Conifa (Confederation of Independent Football Associations), the governing body for those nations discredited by Fifa. Among its member nations are ethnic groups, diaspora communities or disputed territories with varying degrees of autonomy. Due to their contested status, many of the nations are unable to gain recognition from Fifa. As a consequence they cannot compete in tournaments sanctioned by the best-known footballing governing body, and that’s where Conifa provides a raison d’être.

“We give a voice to the unheard”, says Conifa’s General Secretary, Sascha Düerkop, whose world cup kicks off in the Autonomous Republic of Abkhazia at the end of this week.

“We are proud to give our members a forum where they can put themselves on the map.

“From that we hope to give back in the long run and invest in the football infrastructure in our member nations to help them grow.”

The two week footballing celebration starts with an opening ceremony before Kurdistan and Székely Land kick off the tournament. It follows on from 2014’s maiden competition which saw The County of Nice avenging a group stage defeat to Ellan Vannin from the Isle of Man, to take the spoils in the final via a penalty shoot-out.  There were some blowout scores of note however, with South Ossetia smashing Darfur 20-0 and Kurdistan beating the Tamils 9-0 at the event which took place in Östersund, Sweden. Neither of the finalists will be returning to the tournament – throwing down the gauntlet to another twelve teams. 

This, the second Conifa world cup, is testament to the ever-expanding global footprint of the tournament. Abkhazia will welcome sides from four continents – including Western Armenia, the Chagos Islands, United Koreans in Japan and Somaliland.

Despite the “minor” status of the countries taking part, a smattering of professional talent lends credibility to the event. Panjab can call on the experience of ex-Accrington Stanley man Rikki Bains at the heart of their defence, and the coaching savoir-faire of former Tranmere star Reuben Hazell from the dugout. Morten Gamst Pedersen, who turned out for Blackburn Rovers over 300 times and was once a Norwegian international, will lead the Sapmi people. The hosts complete the list of teams to aiming to get their hands on silverware along with Padania, Northern Cyprus, and Raetia.

A quick glance down said list, and it’s hard to ignore the fact that most of the nations competing have strong political associations – be that through war, genocide, displacement or discrimination. The Chagos Islands is one such example. An archipelago in the Indian Ocean, Chagos’ indigenous population was uprooted by the British government in the 1960s to make way for one of the United States' most strategically important military bases – Diego Garcia.

Ever since, they've been campaigning for the right to return. Their side, based in Crawley, has crowdfunded the trip to the tournament. Yet most of its members have never stepped foot on the islands they call home, and which they will now represent. Kurdistan’s efforts to establish an independent state have been well-highlighted, even more so given the last few years of conflict in the Middle East. The hosts too, broke away from Georgia in the 1990s and depend on the financial clout of Russia to prop up their government.

Despite that, Düerkop insists that the event is one which focuses on action on the pitch rather than off it. 

“Many of the nations are politically interested, but we are non-political,” he says. 

“Some of our members are less well-known in the modern world. They have been forgotten, excluded from the global community or simply are ‘unpopular’ for their political positions.

“We are humanitarians and the sides play football to show their existence – nothing more, nothing less.”

The unknown and almost novel status of the tournament flatters to deceive as Conifa’s world cup boasts a broadcast deal, two large stadiums and a plush opening ceremony. Its aim in the long run, however, is to develop into a global competition, and one which is content to sit below Fifa.

“We are happy to be the second biggest football organisation,” admits Düerkop.

“In the future we hope to have women’s and youth tournaments as well as futsal and beach soccer.”

“Our aim is to advertise the beauty and uniqueness of each nation.”

“But the most important purpose is to give those nations that are not members of the global football community a home.”

George Weah, the first African winner of Fifa World Player of the Year award remarked how “football gives a suffering people joy”.

And after speaking to Düerkop there’s certainly a feeling that for those on the game’s periphery, Conifa’s world cup has an allure which offers a shared sense of belonging.

It certainly seems light years away from the glitz and glamour of WAGs and corruption scandals. And that's because it is.

But maybe in a small way, this little-known tournament might restore some of beauty lost by the once “beautiful game”.