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After the coal rush

Not all of Kent is a tourist haven like Canterbury or as middle class as Tunbridge Wells. With the m

Betteshanger was the last of Kent's four main coalfields to close. On 26 August 1989, the pit drew its last coal - the same day of the same month, by chance, that Mick started to work there in 1952. "Thirty-seven years to the day," he says, leaning back in his chair at the Bettes­hanger Social Club. His friend Brian remembers his first day down the mine, too: it was his 15th birthday. But he was away on holiday when it closed. Brian's daughter picked him up from the airport. "Dad, I've got something to tell you," she said. He went straight to the pit, collected his tools and left. The two men have been friends for most of their lives and both went to work at the pit, after the customary 13 weeks' training, as soon as they left school aged 14. They have been coming to the social club for most of that time, too. The miners would gather here after work and have a cigarette, a cup of tea and a pie (the pies were famous, made to a secret recipe that recently lured ex-miners from all around the county to a reunion), before catching the bus back home to Deal, a lane-threaded seaside town nearby.

Now in their seventies, Mick and Brian come to the club every week for a coffee morning. They arrive together, sit at the same table and leave after an hour or so of conversation. Their memories, like their lives, are intertwined: they look to each other to remember names, dates and stories. Mining shaped their families. Their wives worked at the colliery - Brian's as a cleaner in the office and Mick's in the canteen - and their fathers, who had moved to Kent not long after Betteshanger opened in 1924, were both miners before them. Mick's family came from Wales and Brian's from Lancashire. It helped if mining was in the family - you knew what to expect when you went underground for the first time.

Coal was discovered in Kent in 1890 but many of the early collieries failed and were shut within a few years. Only four survived: Betteshanger, Chislet, Snowdown and Tilmanstone, of which Betteshanger was the largest, employing at its peak well over 1,000 people (the number had dropped to about 600 by the time the pit closed). The influx of miners apparently horrified the genteel residents of Deal, who put up "No miners" signs in their shops and cafés. The mines were under private ownership until nationalisation in 1947, and conditions at the pit were basic - there weren't even baths until 1934, so the miners would travel home each day blackened by coal dust.

Until the mines were mechanised in the early 1970s, the job was manual, men at the coalface with picks and shovels. As Mick puts it, "A lot of people would visit and say: 'I wouldn't work down here for a gold brick.'" Mick became a supervisor ("He went management," Brian says), mostly working nights. Brian, who had done a five-year mechanic's apprenticeship, moved to work on the machines above ground.

The community grew up around the mine. "We are close-knit. The work itself brings you together," Mick says. His friend agrees: "We worked together, lived together and, on a Saturday night, 80 per cent of us would come to have a drink here with our wives."

Looking back, both say they knew that the pit's closure was inevitable. Betteshanger had a long history of industrial action. In its early years, it attracted miners from all corners of Britain who had been blacklisted in their areas after the General Strike in 1926. Miners from the pit took part in the strikes of 1972 and 1974 and marched in London with the Betteshanger Brass Band. (The pit's red-and-blue banner, emblazoned with a picture of a miner gazing at the Houses of Parliament, hangs in a corner of the pool room at the club.)

But after Margaret Thatcher defeated the miners' strike in 1985, they knew that the end wasn't far off. Neither Mick nor Brian worked for the duration of the year-long protest. Brian says he was lucky - the bank let him off paying his mortgage - but others he knew lost their houses. In some cases, families broke up under the strain. "Brothers," Brian recalls. "One worked, one didn't. As soon as we started back to work, they were fighting."

After the pit closed, the miners were offered help to find work. A jobcentre was set up on the site but many went on the dole. Mick got a job on Deal pier. "I said I was the pier master," he says, "but I was just sweeping." Brian, grateful for his father's instruction to get a trade, found a job at a toolmaker's in Ramsgate. Both worked multiple jobs and were made redundant again at least once before they retired.

Not many other miners still live in Bettes­hanger. Mick and Brian live on Circular Road, a loop of 77 houses that were purpose-built for the pit's deputies and safety workers. Brian pulls a notebook from the breast pocket of his jacket. He is compiling a record of all the people who have lived in each house, from the day they were built. He dismisses the project as a "silly thing", but is taking it seriously. The book is filled with lists of door numbers and names; he says he knows many of the residents now.

Brian wants to memorialise a place transformed and the people long since departed. He seems to miss much of his former existence - his friends, the camaraderie, the miners' sports clubs and choirs, the trips to the beach they would organise every year, the way that no one bothered to lock their front door. "You used to walk into other people's houses and put the kettle on. They'd come in and say, 'Oh, have you made me one?'"

It took time to dismantle the pit, and even longer to replace it. For years, the land was left derelict. "[The place was] wrecked and ruined," Mick says. It was a similar picture around the country. After the last few pits were privatised or closed, the New Labour government, under the stewardship of the then deputy prime minister, John Prescott, eventually established a task force in October 1997 to examine the future
of the former coalfields. The Coalfields Regeneration Trust emerged from one of its recommendations and began making grants to former mining communities in 1999.

In 2000, the newly created South-East England Development Agency (Seeda) bought up land at Betteshanger and invested nearly £20m in regenerating the old pit site. But, according to Barry Roberts, chairman of the Betteshanger Social Club, most of the money didn't go on the village. Instead, it was used to create Fowlmead Country Park, on the other side of the main road, where the pit's dumping ground used to be. Now, there are carefully landscaped paths, saplings planted in neat rows and tarmacked routes for cyclists. Despite the transformation, Brian and Mick still call the park "the tip".

Fowlmead is considered to be a success, but attracting new industry to the area has been more problematic. A hopeful sign at the turn-off to Betteshanger points to a business park. "No one ever turned up," says Roberts. Much of the land, prepared into plots for industrial buildings, lies empty. There's a rumour that an agricultural college is moving in but no one knows for sure. It would be a welcome arrival - over 20 years after the pit closed, there is simply not enough work.

The main employers locally are large-scale commercial farmers, whose workers, townspeople say, are mostly immigrants - those willing to work for little in pitiful conditions. One woman, who asked not to be named, said that members of her family had worked for a salad-growing company; they had come home every day with their clothes covered in stains from washing vegetables in chemicals.

Another major employer in the area is Pfizer, which has its only British research and development facility nearby in Sandwich. In February this year, however, Pfizer announced that it would be closing the 2,400-worker facility - a decision that was described at the time as a "body blow" for east Kent by the local Tory MP, Laura Sandys.

Family business

Mick and Brian say that the government has been hyperactive since Pfizer's announcement, desperate to attract replacement industry to the region. They point out the contrast to the apathy they witnessed after the mines closed. Even after the Coalfields Regeneration Trust was set up, many residents in the area felt that its efforts were concentrated on the northern coalfields and that the mining communities in the south-east were neglected. Gary Ellis, the trust's chief executive, points out that Kent is "geographically isolated and, in percentage terms, a very small part of the former coalfield areas". But, he says, the trust has made grants to the county in every one of its funding rounds.

According to Brinley Hill, a local community development manager at Dover District Council, there is a more fundamental problem. People assume that Kent is a wealthy place, able to provide for itself. Sevenoaks and Tunbridge Wells are emblems of middle-class comfort, but not far from those prettified towns are areas of deep poverty, unusual in the south-east of England outside London. Since 2007, eight of the 12 districts in Kent have experienced an increase in deprivation, with Dover (which covers Deal and Betteshanger) leaping 15 places up the national scale (to 127th out of 326 local authorities in England). The neighbouring district of Thanet is the worst off in the county, ranking nationally at 49.

Hill's father was a miner and he laughs at the strange kind of family business they have concocted. "He did mining; I do regeneration," he says. In the years after the pits closed, efforts weren't helped by the "massive lack of trust" that was felt in the community. Miners and their families, he observes, can find it hard to move on. "Mining communities go back many years," he says. "In the east Kent area, families travelled from all around the country to work there. Memories go back - of grandparents walking from Wales or down from Durham or Scotland. There's such fondness about that."

Hill has worked closely with local people to try to rebuild relationships, improve the area's economic prospects and restore the sense of community that seemed to ebb away after the pits closed. Gradually, small local regeneration projects have got off the ground - he enthusiastically lists the cosmetic improvements at the Betteshanger Social Club, with its new kitchen, fresh paint and sprung floor for tap-dancing. "It's the best it's ever looked," he says.

The immediate future for the Coalfields Regeneration Trust looks promising, too: the government has just awarded £30m to the trust to invest over the next two years, ensuring its ability to make small grants to communities such as Betteshanger until 2013.

Beyond that point, however, the outlook is less certain. Ellis says that the trust, like many other government-funded public bodies, has been instructed to come up with an "exit strategy", so that by March 2015 (just before the next general election), the organisation will no longer be dependent on government money. The idea, a cornerstone of the Prime Minister's "big society" strategy, is that the trust will be able to function as a social enterprise, generating its own income streams through the various projects it supports, so that it becomes, in government-speak, "self-sustaining".

Ellis is aware that this will not be easy and he emphasises the need for continued direct intervention, not least because "some of the former colliery sites still need to be cleaned up". He points out, too, that many of the projects that the trust supports are already generating their own revenue. "We've got groups coming to us saying, 'We are sustainable; we have income streams coming from different places,'" Ellis tells me, "but, as a result of the public expenditure cuts, some of these income streams have now disappeared."

The public spending cuts have also affected the regional development agencies, including Seeda. By 31 March 2012, the agency will no longer exist and strategic and financial support for local industry and programmes will be either reassigned or terminated.

A fair Deal

In a large, converted church in Deal, three miles down the road from Betteshanger, Paula Moorhouse runs the Landmark Centre, a community association. The deconsecrated church was going to be turned into a supermarket until a local activist lay down in front of a bulldozer; the protest helped save the building.

Moorhouse says that she is not connected in particular to former miners in the community; her work focuses instead on the younger gen­eration and trying to tackle youth unemployment. She also runs gardening groups for those with mental health problems and dad-and-toddler groups for young parents. But she notes the miners' legacy. Deal, she says, has an unusually strong sense of community and people with little to give will empty their pockets for charity. She receives support from the Coalfields Regeneration Trust, which gave her funding to set up the centre's weekly job club to help young people into work.

Moorhouse needs all the financial support that she can get. Because of a long-standing, inherited debt problem, the Landmark Centre is in a precarious financial situation. Moorhouse is not able to apply for major donor funding and has to gather revenue however she can, mostly by hiring out rooms in the building. She has cut down staff members to three (herself, an assistant and a cleaner) and depends on volunteers to support the rest of the work. "We have a boot fair here, once a month, and I have a lady sitting on the door. She won't let people in unless they've put a few pennies in the box. That can raise me £25 in a morning."

Moorhouse looks, for a moment, a little desperate - her monthly fuel bills alone are more than £2,000. But she is evidently indefatigable. She does the job because she loves it and feels a duty and deep attachment to the area. She was born and grew up in Woodnesborough, a nearby village surrounded by apple orchards.

It seems the Landmark Centre is already a beacon of the big society. "That's what we say . . . We're a prime example." She has been working with mental health teams and Sure Start programmes for years, she says: a perfect example of local, interagency collaboration. The council had apparently been planning to open a new community centre in Dover modelled on hers - it was going to be called "Landmark II" - but the funding was cut.

The irony is not lost on Moorhouse. The day after we talk, she will be having a meeting with someone who runs a mental health group locally. Its property is being sold and now it has nowhere to go. "At the moment, the group meets three times a week and [for members] that's their lifeline. If someone with mental health issues suddenly loses their lifeline, there can be dire consequences."

Such financial insecurity seems to be common in this part of Kent. For Moorhouse, her set-up at the centre in Deal is, in essence, "hand to mouth". She has spoken to the council and it has offered its continued support, but she has yet to see what that means. For the moment, she will ignore the rhetoric and "get on with it" in her usual way.

You can understand why people in east Kent are sceptical of David Cameron's attempts to cut back the state and conjure up in its place
a big society. The overstretched, overworked managers of the Betteshanger Social Club and Deal's Landmark Centre already rely on the goodwill of countless volunteers - those who give up their time and money to make tea, run clubs and set up football academies.

These aren't overnight projects but established efforts, conceived long before the formation of this government and sustained by the support of a willing community. They don't need a directive to tell them to do what they are already doing - what any community with a sense of togetherness does. What they need is enough backing from the state to stay open so that they can continue to serve those who depend on them.

Mick finishes his tea at the Betteshanger Social Club. He says he was watching the ITV morning show Daybreak and it "latched on to Cameron's . . . What's he trying again?" He tries to remember the phrase. "Volunteering for everything." He goes on to recount the film that the programme had shown, about people going into schools to volunteer as teaching assistants. "But now, that's somebody else's job gone," Mick says. "The more people volunteer to do these things, the less people are going to have a chance to work. This is what upsets me."

Mick isn't especially political. He imagines that if he won the Lottery he might morph into a "raging Tory" - a notion that he finds amusing. But Brian shakes his head. "We're all in this together," he says and laughs.

Sophie Elmhirst is an assistant editor of the New Statesman

Sophie Elmhirst is features editor of the New Statesman

This article first appeared in the 13 June 2011 issue of the New Statesman, Rowan Williams guest edit

MILES COLE
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The new Brexit economics

George Osborne’s austerity plan – now abandoned by the Tories – was the most costly macroeconomic policy mistake since the 1930s.

George Osborne is no longer chancellor, sacked by the post-Brexit Prime Minister, Theresa May. Philip Hammond, the new Chancellor, has yet to announce detailed plans but he has indicated that the real economy rather than the deficit is his priority. The senior Conservatives Sajid Javid and Stephen Crabb have advocated substantial increases in public-sector infrastructure investment, noting how cheap it is for the government to borrow. The argument that Osborne and the Conservatives had been making since 2010 – that the priority for macroeconomic policy had to be to reduce the government’s budget deficit – seems to have been brushed aside.

Is there a good economic reason why Brexit in particular should require abandoning austerity economics? I would argue that the Tory obsession with the budget deficit has had very little to do with economics for the past four or five years. Instead, it has been a political ruse with two intentions: to help win elections and to reduce the size of the state. That Britain’s macroeconomic policy was dictated by politics rather than economics was a precursor for the Brexit vote. However, austerity had already begun to reach its political sell-by date, and Brexit marks its end.

To understand why austerity today is opposed by nearly all economists, and to grasp the partial nature of any Conservative rethink, it is important to know why it began and how it evolved. By 2010 the biggest recession since the Second World War had led to rapid increases in government budget deficits around the world. It is inevitable that deficits (the difference between government spending and tax receipts) increase in a recession, because taxes fall as incomes fall, but government spending rises further because benefit payments increase with rising unemployment. We experienced record deficits in 2010 simply because the recession was unusually severe.

In 2009 governments had raised spending and cut taxes in an effort to moderate the recession. This was done because the macroeconomic stabilisation tool of choice, nominal short-term interest rates, had become impotent once these rates hit their lower bound near zero. Keynes described the same situation in the 1930s as a liquidity trap, but most economists today use a more straightforward description: the problem of the zero lower bound (ZLB). Cutting rates below this lower bound might not stimulate demand because people could avoid them by holding cash. The textbook response to the problem is to use fiscal policy to stimulate the economy, which involves raising spending and cutting taxes. Most studies suggest that the recession would have been even worse without this expansionary fiscal policy in 2009.

Fiscal stimulus changed to fiscal contraction, more popularly known as austerity, in most of the major economies in 2010, but the reasons for this change varied from country to country. George Osborne used three different arguments to justify substantial spending cuts and tax increases before and after the coalition government was formed. The first was that unconventional monetary policy (quantitative easing, or QE) could replace the role of lower interest rates in stimulating the economy. As QE was completely untested, this was wishful thinking: the Bank of England was bound to act cautiously, because it had no idea what impact QE would have. The second was that a fiscal policy contraction would in fact expand the economy because it would inspire consumer and business confidence. This idea, disputed by most economists at the time, has now lost all credibility.

***

The third reason for trying to cut the deficit was that the financial markets would not buy government debt without it. At first, this rationale seemed to be confirmed by events as the eurozone crisis developed, and so it became the main justification for the policy. However, by 2012 it was becoming clear to many economists that the debt crisis in Ireland, Portugal and Spain was peculiar to the eurozone, and in particular to the failure of the European Central Bank (ECB) to act as a lender of last resort, buying government debt when the market failed to.

In September 2012 the ECB changed its policy and the eurozone crisis beyond Greece came to an end. This was the main reason why renewed problems in Greece last year did not lead to any contagion in the markets. Yet it is not something that the ECB will admit, because it places responsibility for the crisis at its door.

By 2012 two other things had also become clear to economists. First, governments outside the eurozone were having no problems selling their debt, as interest rates on this reached record lows. There was an obvious reason why this should be so: with central banks buying large quantities of government debt as a result of QE, there was absolutely no chance that governments would default. Nor have I ever seen any evidence that there was any likelihood of a UK debt funding crisis in 2010, beyond the irrelevant warnings of those “close to the markets”. Second, the austerity policy had done considerable harm. In macroeconomic terms the recovery from recession had been derailed. With the help of analysis from the Office for Budget Responsibility, I calculated that the GDP lost as a result of austerity implied an average cost for each UK household of at least £4,000.

Following these events, the number of academic economists who supported austerity became very small (they had always been a minority). How much of the UK deficit was cyclical or structural was irrelevant: at the ZLB, fiscal policy should stimulate, and the deficit should be dealt with once the recession was over.

Yet you would not know this from the public debate. Osborne continued to insist that deficit reduction be a priority, and his belief seemed to have become hard-wired into nearly all media discussion. So perverse was this for standard macroeconomics that I christened it “mediamacro”: the reduction of macroeconomics to the logic of household finance. Even parts of the Labour Party seemed to be succumbing to a mediamacro view, until the fiscal credibility rule introduced in March by the shadow chancellor, John McDonnell. (This included an explicit knockout from the deficit target if interest rates hit the ZLB, allowing fiscal policy to focus on recovering from recession.)

It is obvious why a focus on the deficit was politically attractive for Osborne. After 2010 the coalition government adopted the mantra that the deficit had been caused by the previous Labour government’s profligacy, even though it was almost entirely a consequence of the recession. The Tories were “clearing up the mess Labour left”, and so austerity could be blamed on their predecessors. Labour foolishly decided not to challenge this myth, and so it became what could be termed a “politicised truth”. It allowed the media to say that Osborne was more competent at running the economy than his predecessors. Much of the public, hearing only mediamacro, agreed.

An obsession with cutting the deficit was attractive to the Tories, as it helped them to appear competent. It also enabled them to achieve their ideological goal of shrinking the state. I have described this elsewhere as “deficit deceit”: using manufactured fear about the deficit to achieve otherwise unpopular reductions in public spending.

The UK recovery from the 2008/2009 recession was the weakest on record. Although employment showed strong growth from 2013, this may have owed much to an unprecedented decline in real wages and stagnant productivity growth. By the main metrics by which economists judge the success of an economy, the period of the coalition government looked very poor. Many economists tried to point this out during the 2015 election but they were largely ignored. When a survey of macroeconomists showed that most thought austerity had been harmful, the broadcast media found letters from business leaders supporting the Conservative position more newsworthy.

***

In my view, mediamacro and its focus on the deficit played an important role in winning the Conservatives the 2015 general election. I believe Osborne thought so, too, and so he ­decided to try to repeat his success. Although the level of government debt was close to being stabilised, he decided to embark on a further period of fiscal consolidation so that he could achieve a budget surplus.

Osborne’s austerity plans after 2015 were different from what happened in 2010 for a number of reasons. First, while 2010 austerity also occurred in the US and the eurozone, 2015 austerity was largely a UK affair. Second, by 2015 the Bank of England had decided that interest rates could go lower than their current level if need be. We are therefore no longer at the ZLB and, in theory, the impact of fiscal consolidation on demand could be offset by reducing interest rates, as long as no adverse shocks hit the economy. The argument against fiscal consolidation was rather that it increased the vulnerability of the economy if a negative shock occurred. As we have seen, Brexit is just this kind of shock.

In this respect, abandoning Osborne’s surplus target makes sense. However, there were many other strong arguments against going for surplus. The strongest of these was the case for additional public-sector investment at a time when interest rates were extremely low. Osborne loved appearing in the media wearing a hard hat and talked the talk on investment, but in reality his fiscal plans involved a steadily decreasing share of public investment in GDP. Labour’s fiscal rules, like those of the coalition government, have targeted the deficit excluding public investment, precisely so that investment could increase when the circumstances were right. In 2015 the circumstances were as right as they can be. The Organisation for Economic Co-operation and Development, the International Monetary Fund and pretty well every economist agreed.

Brexit only reinforces this argument. Yet Brexit will also almost certainly worsen the deficit. This is why the recent acceptance by the Tories that public-sector investment should rise is significant. They may have ­decided that they have got all they could hope to achieve from deficit deceit, and that now is the time to focus on the real needs of the economy, given the short- and medium-term drag on growth caused by Brexit.

It is also worth noting that although the Conservatives have, in effect, disowned Osborne’s 2015 austerity, they still insist their 2010 policy was correct. This partial change of heart is little comfort to those of us who have been arguing against austerity for the past six years. In 2015 the Conservatives persuaded voters that electing Ed Miliband as prime minister and Ed Balls as chancellor was taking a big risk with the economy. What it would have meant, in fact, is that we would already be getting the public investment the Conservatives are now calling for, and we would have avoided both the uncertainty before the EU referendum and Brexit itself.

Many economists before the 2015 election said the same thing, but they made no impact on mediamacro. The number of economists who supported Osborne’s new fiscal charter was vanishingly small but it seemed to matter not one bit. This suggests that if a leading political party wants to ignore mainstream economics and academic economists in favour of simplistic ideas, it can get away with doing so.

As I wrote in March, the failure of debate made me very concerned about the outcome of the EU referendum. Economists were as united as they ever are that Brexit would involve significant economic costs, and the scale of these costs is probably greater than the average loss due to austerity, simply because they are repeated year after year. Yet our warnings were easily deflected with the slogan “Project Fear”, borrowed from the SNP’s nickname for the No campaign in the 2014 Scottish referendum.

It remains unclear whether economists’ warnings were ignored because they were never heard fully or because they were not trusted, but in either case economics as a profession needs to think seriously about what it can do to make itself more relevant. We do not want economics in the UK to change from being called the dismal science to becoming the “I told you so” science.

Some things will not change following the Brexit vote. Mediamacro will go on obsessing about the deficit, and the Conservatives will go on wanting to cut many parts of government expenditure so that they can cut taxes. But the signs are that deficit deceit, creating an imperative that budget deficits must be cut as a pretext for reducing the size of the state, has come to an end in the UK. It will go down in history as probably the most costly macroeconomic policy mistake since the 1930s, causing a great deal of misery to many people’s lives.

Simon Wren-Lewis is a professor of economic policy at the Blavatnik School of Government, University of Oxford. He blogs at: mainlymacro.blogspot.com

 Simon Wren-Lewis is is Professor of Economic Policy in the Blavatnik School of Government at Oxford University, and a fellow of Merton College. He blogs at mainlymacro.

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