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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Junior doctors’ strikes: the greatest union failure in a generation

The first wave of junior doctor contract impositions began this week. Here’s how the BMA union failed junior doctors.

In Robert Tressell’s novel, The Ragged-Trousered Philanthropists, the author ridicules the notion of work as a virtuous end per se:

“And when you are all dragging out a miserable existence, gasping for breath or dying for want of air, if one of your number suggests smashing a hole in the side of one of the gasometers, you will all fall upon him in the name of law and order.”

Tressell’s characters are subdued and eroded by the daily disgraces of working life; casualised labour, poor working conditions, debt and poverty.

Although the Junior Doctors’ dispute is a far cry from the Edwardian working-poor, the eruption of fervour from Junior Doctors during the dispute channelled similar overtones of dire working standards, systemic abuse, and a spiralling accrual of discontent at the notion of “noble” work as a reward in itself. 

While the days of union activity precipitating governmental collapse are long over, the BMA (British Medical Association) mandate for industrial action occurred in a favourable context that the trade union movement has not witnessed in decades. 

Not only did members vote overwhelmingly for industrial action with the confidence of a wider public, but as a representative of an ostensibly middle-class profession with an irreplaceable skillset, the BMA had the necessary cultural capital to make its case regularly in media print and TV – a privilege routinely denied to almost all other striking workers.

Even the Labour party, which displays parliamentary reluctance in supporting outright strike action, had key members of the leadership join protests in a spectacle inconceivable just a few years earlier under the leadership of “Red Ed”.

Despite these advantageous circumstances, the first wave of contract impositions began this week. The great failures of the BMA are entirely self-inflicted: its deference to conservative narratives, an overestimation of its own method, and woeful ignorance of the difference between a trade dispute and moralising conundrums.

These right-wing discourses have assumed various metamorphoses, but at their core rest charges of immorality and betrayal – to themselves, to the profession, and ultimately to the country. These narratives have been successfully deployed since as far back as the First World War to delegitimise strikes as immoral and “un-British” – something that has remarkably haunted mainstream left-wing and union politics for over 100 years.

Unfortunately, the BMA has inherited this doubt and suspicion. Tellingly, a direct missive from the state machinery that the BMA was “trying to topple the government” helped reinforce the same historic fears of betrayal and unpatriotic behaviour that somehow crossed a sentient threshold.

Often this led to abstract and cynical theorising such as whether doctors would return to work in the face of fantastical terrorist attacks, distracting the BMA from the trade dispute at hand.

In time, with much complicity from the BMA, direct action is slowly substituted for direct inaction with no real purpose and focus ever-shifting from the contract. The health service is superficially lamented as under-resourced and underfunded, yes, but certainly no serious plan or comment on how political factors and ideologies have contributed to its present condition.

There is little to be said by the BMA for how responsibility for welfare provision lay with government rather than individual doctors; virtually nothing on the role of austerity policies; and total silence on how neoliberal policies act as a system of corporate welfare, eliciting government action when in the direct interests of corporatism.

In place of safeguards demanded by the grassroots, there are instead vague quick-fixes. Indeed, there can be no protections for whistleblowers without recourse to definable and tested legal safeguards. There are limited incentives for compliance by employers because of atomised union representation and there can be no exposure of a failing system when workers are treated as passive objects requiring ever-greater regulation.

In many ways, the BMA exists as the archetypal “union for a union’s sake”, whose material and functional interest is largely self-intuitive. The preservation of the union as an entity is an end in itself.

Addressing conflict in a manner consistent with corporate and business frameworks, there remains at all times overarching emphasis on stability (“the BMA is the only union for doctors”), controlled compromise (“this is the best deal we can get”) and appeasement to “greater” interests (“think of the patients”). These are reiterated even when diametrically opposed to its own members or irrelevant to the trade dispute.

With great chutzpah, the BMA often moves from one impasse to the next, framing defeats as somehow in the interests of the membership. Channels of communication between hierarchy and members remain opaque, allowing decisions such as revocation of the democratic mandate for industrial action to be made with frightening informality.

Pointedly, although the BMA often appears to be doing nothing, the hierarchy is in fact continually defining the scope of choice available to members – silence equals facilitation and de facto acceptance of imposition. You don’t get a sense of cumulative unionism ready to inspire its members towards a swift and decisive victory.

The BMA has woefully wasted the potential for direct action. It has encouraged a passive and pessimistic malaise among its remaining membership and presided over the most spectacular failure of union representation in a generation.

Ahmed Wakas Khan is a junior doctor, freelance journalist and editorials lead at The Platform. He tweets @SireAhmed.