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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In the 1980s, I went to a rally where Labour Party speakers shared the stage with men in balaclavas

The links between the Labour left and Irish republicanism are worth investigating.

A spat between Jeremy Corbyn’s henchfolk and Conor McGinn, the MP for St Helens North, caught my ear the other evening. McGinn was a guest on BBC Radio 4’s Westminster Hour, and he obligingly revisited the brouhaha for the listeners at home. Apparently, following an interview in May, in which McGinn called for Corbyn to “reach out beyond his comfort zone”, he was first threatened obliquely with the sack, then asked for a retraction (which he refused to give) and finally learned – from someone in the whips’ office – that his party leader was considering phoning up McGinn’s father to whip the errant whipper-in into line. On the programme, McGinn said: “The modus operandi that he [Corbyn] and the people around him were trying to do [sic], involving my family, was to isolate and ostracise me from them and from the community I am very proud to come from – which is an Irish nationalist community in south Armagh.”

Needless to say, the Labour leader’s office has continued to deny any such thing, but while we may nurture some suspicions about his behaviour, McGinn was also indulging in a little airbrushing when he described south Armagh as an “Irish ­nationalist community”. In the most recent elections, Newry and Armagh returned three Sinn Fein members to the Northern Ireland Assembly (as against one Social Democratic and Labour Party member) and one Sinn Fein MP to Westminster. When I last looked, Sinn Fein was still a republican, rather than a nationalist, party – something that McGinn should only be too well aware of, as the paternal hand that was putatively to have been lain on him belongs to Pat McGinn, the former Sinn Fein mayor of Newry and Armagh.

According to the Irish News, a “close friend” of the McGinns poured this cold water on the mini-conflagration: “Anybody who knows the McGinn family knows that Pat is very proud of Conor and that they remain very close.” The friend went on to opine: “He [Pat McGinn] found the whole notion of Corbyn phoning him totally ridiculous – as if Pat is going to criticise his son to save Jeremy Corbyn’s face. They would laugh about it were it not so sinister.”

“Sinister” does seem the mot juste. McGinn, Jr grew up in Bessbrook during the Troubles. I visited the village in the early 1990s on assignment. The skies were full of the chattering of British army Chinooks, and there were fake road signs in the hedgerows bearing pictograms of rifles and captioned: “Sniper at work”. South Armagh had been known for years as “bandit country”. There were army watchtowers standing sentinel in the dinky, green fields and checkpoints everywhere, manned by some of the thousands of the troops who had been deployed to fight what was, in effect, a low-level counter-insurgency war. Nationalist community, my foot.

What lies beneath the Corbyn-McGinn spat is the queered problematics of the ­relationship between the far left wing of the Labour Party and physical-force Irish republicanism. I also recall, during the hunger strikes of the early 1980s, going to a “Smash the H-Blocks” rally in Kilburn, north London, at which Labour Party speakers shared the stage with representatives from Sinn Fein, some of whom wore balaclavas and dark glasses to evade the telephoto lenses of the Met’s anti-terrorist squad.

The shape-shifting relationship between the “political wing” of the IRA and the men with sniper rifles in the south Armagh bocage was always of the essence of the conflict, allowing both sides a convenient fiction around which to posture publicly and privately negotiate. In choosing to appear on platforms with people who might or might not be terrorists, Labour leftists also sprinkled a little of their stardust on themselves: the “stardust” being the implication that they, too, under the right circumstances, might be capable of violence in pursuit of their political ends.

On the far right of British politics, Her Majesty’s Government and its apparatus are referred to derisively as “state”. There were various attempts in the 1970s and 1980s by far-right groupuscules to link up with the Ulster Freedom Fighters and other loyalist paramilitary organisations in their battle against “state”. All foundered on the obvious incompetence of the fascists. The situation on the far left was different. The socialist credentials of Sinn Fein/IRA were too threadbare for genuine expressions of solidarity, but there was a sort of tacit confidence-and-supply arrangement between these factions. The Labour far left provided the republicans with the confidence that, should an appropriately radical government be elected to Westminster, “state” would withdraw from Northern Ireland. What the republicans did for the mainland militants was to cloak them in their penumbra of darkness: without needing to call down on themselves the armed might of “state”, they could imply that they were willing to take it on, should the opportunity arise.

I don’t for a second believe that Corbyn was summoning up these ghosts of the insurrectionary dead when he either did or did not threaten to phone McGinn, Sr. But his supporters need to ask themselves what they’re getting into. Their leader, if he was to have remained true to the positions that he has espoused over many years, should have refused to sit as privy counsellor upon assuming his party office, and refused all the other mummery associated with the monarchical “state”. That he didn’t do so was surely a strategic decision. Such a position would make him utterly unelectable.

The snipers may not be at work in south Armagh just now – but there are rifles out there that could yet be dug up. I wouldn’t be surprised if some in Sinn Fein knew where they are, but one thing’s for certain: Corbyn hasn’t got a clue, bloody or otherwise. 

Will Self is an author and journalist. His books include Umbrella, Shark, The Book of Dave and The Butt. He writes the Madness of Crowds and Real Meals columns for the New Statesman.

This article first appeared in the 25 August 2016 issue of the New Statesman, Cameron: the legacy of a loser