Two Britains: a gulf separates the poor from the "squeezed but safe". Photo: Phil Noble/Reuters
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Life after crash: why have hard times made us harsher?

In contrast to previous recessions, after Lehman Brothers crashed the belief that excessive benefits bred indolence spread. This view was endorsed by 61 per cent by 2009. 

George Osborne caps some benefits, time-limits others and invites inflation to eat into them all for years ahead. It amounts to an assault on the welfare state defying all precedent. Despite the recovery, the effect is evident in London’s resurgent rough sleeping and the preponderance of food banks in market towns.

Where Margaret Thatcher hesitated to tread in the 1980s, the polls today suggest that the right is carrying all before it. Why? Because, as I argue in my book Hard Times, the Great Recession has shifted most voters’ calculation about where self-interest lies.

This may seem like a paradox. The collectivist postwar institutions now under attack were put in place in response to the Depression. Back then, fear of a storm that could lash anybody ensured that solidarity rose as the economy sank.

The pattern held into the late 20th century. As unemployment soared by a million between 1990 and 1993, working voters reasoned that “there but for the grace of God go we”. The British Social Attitudes survey found that the proportion suspecting that benefits were “too high and discouraged work” fell to less than a quarter. After Lehman Brothers imploded, in contrast, the belief that excessive benefits bred indolence spread; the view was endorsed by 61 per cent by 2009. Why have hard times got harsher? In essence because, after 35 years of rising inequality, the old understandings about shared risk have ceased to apply.

First, there is the spectacularly unequal incidence of redundancy. After 2008, already inflated unemployment rates for the unschooled, for ethnic minorities and dead-end towns increased more rapidly, often rising twice as fast.

In some disadvantaged subgroups, such as young black men, joblessness exceeded 50 per cent. Meanwhile, the luckier segments of society – white, middle-aged graduates, for instance – were almost immune.

Redundancies occur in every recession; the more distinctive hallmark of the recent downturn – and the current recovery – is unreliable and insecure jobs. These, too, are concentrated among the already disadvantaged and barely affect the middling majority.

The people of Middle England are further protected by property. It provides a substantial cushion against adversity for ordinary homeowners, whose path through the slump was eased by super-low interest rates that did little for renters.

Put it all together, and the chief victims of the recession emerge as almost preordained. The rest can be forgiven if they conclude that hard times hold few terrors. To be sure, most people’s pay packets have been squeezed, but a few years of getting by without a rise is no disaster if you were comfortable before. It does not trigger recourse to the safety net; indeed, the most reliable way to ease the pinch might be to vote for lower taxes even if that leads to lower benefits. Self-interest has a way of warping perceptions, and so this line of thinking slides into suspicions about those who do rely on the state.

The Great Recession has bequeathed Britain two political nations. Among those substantially hit by austerity, 62 per cent told YouGov last year that they rejected the coalition’s cuts as too hasty; among those not much affected, a similar majority of 65 per cent felt that the cutting should be maintained or stepped up. Britons directly affected by the downturn said the government was “too harsh towards people on benefits”; those unaffected said it was “too soft”.

The most vulnerable minority has grown more supportive of state assistance, while the rest have become more inclined to leave victims on their own. Given that the latter are in the majority, the overall drift is rightward.

Saving social security depends on appealing across the economic gulf that separates victims of the recession from the “squeezed but basically safe”, few of whom expect to need the safety net any time soon. A pitch rooted in naked self-interest is not going to work as it might have done in more equal times, but it does not follow that social security cannot be made legitimate to the majority.

New Labour’s tax credits channelled money towards cash-strapped families simply because they were poor, and thereby failed this test. Instead, we must shore up the foundations of economic shelters in working life. This entails, first, looking beyond state benefits, and regulating or nudging employers to do more for their vulnerable staff on security and pay. Second, it entails reinventing social insurance. It would be costly to find funds for, say, a higher rate of Jobseeker’s Allowance for those who have “paid a stamp” or contributed to the community in some other demonstrable way. But doing something explicitly extra for unarguably deserving victims could break us out of the Benefits Street discourse.

The squeezed but safe could coldly conclude that it would be better to go uninsured than pay premiums to cover others. But if they are assured that those being bailed out deserve it, opinion would surely shift. Faced with a welfare system that nobody bothers to explain or defend, those who don’t need help are bound to do the selfish calculation and vote for cuts. The left should take its cue from Franklin Roosevelt’s defence of a “legal, moral and political” right to contribution-based benefits. It might just find that most of us still understand that bad things can happen to good people.

Tom Clark is the author of “Hard Times: the Divisive Toll of the Economic Slump” (Yale University Press, £18.99)

This article first appeared in the 23 July 2014 issue of the New Statesman, Summer Double 2014

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PMQs review: Jeremy Corbyn prompts Tory outrage as he blames Grenfell Tower fire on austerity

To Conservative cries of "shame on you!", the Labour leader warned that "we all pay a price in public safety" for spending cuts.

A fortnight after the Grenfell Tower fire erupted, the tragedy continues to cast a shadow over British politics. Rather than probing Theresa May on the DUP deal, Jeremy Corbyn asked a series of forensic questions on the incident, in which at least 79 people are confirmed to have died.

In the first PMQs of the new parliament, May revealed that the number of buildings that had failed fire safety tests had risen to 120 (a 100 per cent failure rate) and that the cladding used on Grenfell Tower was "non-compliant" with building regulations (Corbyn had asked whether it was "legal").

After several factual questions, the Labour leader rose to his political argument. To cries of "shame on you!" from Tory MPs, he warned that local authority cuts of 40 per cent meant "we all pay a price in public safety". Corbyn added: “What the tragedy of Grenfell Tower has exposed is the disastrous effects of austerity. The disregard for working-class communities, the terrible consequences of deregulation and cutting corners." Corbyn noted that 11,000 firefighters had been cut and that the public sector pay cap (which Labour has tabled a Queen's Speech amendment against) was hindering recruitment. "This disaster must be a wake-up call," he concluded.

But May, who fared better than many expected, had a ready retort. "The cladding of tower blocks did not start under this government, it did not start under the previous coalition governments, the cladding of tower blocks began under the Blair government," she said. “In 2005 it was a Labour government that introduced the regulatory reform fire safety order which changed the requirements to inspect a building on fire safety from the local fire authority to a 'responsible person'." In this regard, however, Corbyn's lack of frontbench experience is a virtue – no action by the last Labour government can be pinned on him. 

Whether or not the Conservatives accept the link between Grenfell and austerity, their reluctance to defend continued cuts shows an awareness of how politically vulnerable they have become (No10 has announced that the public sector pay cap is under review).

Though Tory MP Philip Davies accused May of having an "aversion" to policies "that might be popular with the public" (he demanded the abolition of the 0.7 per cent foreign aid target), there was little dissent from the backbenches – reflecting the new consensus that the Prime Minister is safe (in the absence of an attractive alternative).

And May, whose jokes sometimes fall painfully flat, was able to accuse Corbyn of saying "one thing to the many and another thing to the few" in reference to his alleged Trident comments to Glastonbury festival founder Michael Eavis. But the Labour leader, no longer looking fearfully over his shoulder, displayed his increased authority today. Though the Conservatives may jeer him, the lingering fear in Tory minds is that they and the country are on divergent paths. 

George Eaton is political editor of the New Statesman.

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