The Tories are building the new economy that they want.
Yes, there are more jobs, and that has to be good news.
But those jobs are not paying well: wage increases are running at less than 1% and even if inflation is now only 2% that's still a continuing pattern of cuts.
So we have an economy where people are marginally employed by which I mean they are in low paid jobs with little security. That leaves them with almost no room for financial stress - and that stress can always occur.
The result is that business has access to a compliant, subjected, and stressed workforce who have little choice but do what is demanded of them, not least because they know the state's safety net has been taken away from them.
Is this, was this, always the plan? I think so. This is the modern incarnation of the fight against labour.
But equally they know just how risky that plan is. Earlier this month I wrote about the fact that a 1% mortgage rate rise could increase household costs for many households by £80 a month - a sum way beyond their means. So we had a Conservative Party political broadcast last night saying that interest rates must not rise and Matthew Hancock MP on Channel 4 news saying recovery was very vulnerable. He might as well have been on his knees begging Mark Carney not to increase interest rates.
The Tories are building a marginal rather than a robust economy. The trouble for them is that weakness is always at the margins. And in this case with 15 months to go before an election the whole charade of recovery that they have built may be exposed before May 2015.
I can't really say I wish for that: people will be hurt in the process if that happens and I would deeply regret that. But the fact is that people will be hurt as much if there isn't a change in policy towards building that more robust economy that this country needs, where people can afford to live without fear.
We have a long way to go to achieve that.
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Its really no different to the labour policy over the past 13 years.
I am not saying Labour was innocent
It wan’t
But it did produce the minimum wage, tax credits, sure start, a jobs guarantee and more
So it was better
But not optimal, I agree
I think Luke was referring to the 13 years of debt. Which is still affecting the UK even now.
Property prices are still high, as they have been since 2000. Personal debt is still high as it has been. Its really difficult to break the cycle people have got them selves in.
Unless there are lots of defaults and therefore a small group of people getting credit for the next six years. This will again affect the banks, which will affect everyone.
I appreciate this is all caused by the baby boomers. They had children when they were in their twenties or early 30s. Now they are having children, moving up the career ladder and taking debt on.
“I think Luke was referring to the 13 years of debt. Which is still affecting the UK even now.”
Public debt (what you’re probably referring to) was not high. It was actually quite low before the crash – around 40-45% of GDP.
Luke, I can’t agree. Blair’s New Labour WAS appalling, causing me to resign from the (New) Labour Party in 2001, feeling the Party had left me, rather than I the Party.
But Richard’s correct – even New Labour did do some good things, I have to fear more by accident than design, given New Labour’s “Thatcher-lite” instincts.
However, I DO think there was a substantive difference between Thatcher and Blair – between Thatcherism and Thatcher-lite and it was this: Thatcherism proper was, from the start, aimed at the defeat of all “enemies” of the new “aristocracy”, and so constituted a re-igniting of the Class War, where New Labour was simply an act of surrender to marketisation – NOT the same thing.
Blair only wanted the markets to work more efficiently, and to introduce market efficiency everywhere (almost an oxymoron, given the incompetent operation of some markets, and their inappropriateness in some sectors such as health and education).
Thatcher, by contrast, saw how close the attainment of REAL people’s (meaning working class) democracy was in the 70’s (I have a 1974 Pengiin book called “The Death of Business Civilization”!), and she used the stupidity of the Winter of Discontent to capture the Castle, AND North Sea oil income streams to build a neo-liberal state as the foundation for a neo-feudal state (= serfs ALL the duties, 1% ALL the rights and profits) which is now being implemented – someting I am SURE Thatcher intended fro day one of her entry into No. 10.
The real bitter irony is that she cast back the Bennite claim of the 1974 Labour Manifesto about “the permanent transfer of wealth and power to the working class”, by claiming her “reforms” had actually done this, and the poor saps couldn’t see that being “allowed” to buy what they already owned (British Gas, BT etc) was a master con trick – a fraud on the majority, which didn’t constitute a spreading, but a concentration of wealth and power. As Warren Buffet said of the USA “There’s a class war, alright, and my class is winning,”
Andrew
Agreed!
Richard
Indeed, Andrew, Thatcher was a liar in the sense that she pedalled a 19th Century methodist capitalism that conned people into thinking there would be , in Mill’s words, ‘wealth diffusion’. The opposite happened -by the late eighties inequality had polarised but the myth that everyone can ‘get on’ (foul expression) if they just work hard enough is still out there. Thatcher married into wealth (inherited at that) and recent revelations about tax dodges confirm her ‘rentier’ status – not very John Stuart Mill after all!
“The result is that business has access to a compliant, subjected, and stressed workforce who have little choice but do what is demanded of them, not least because they know the state’s safety net has been taken away from them.”
Supply Side Economics in a nutshell. Boris Johnson, in his Margaret Thatcher memorial lecture, spoke about the economists who wrote to Mrs Thatcher circa 1981 criticizing her policies. He delighted in her ignoring them and “going ahead with supply side economics which have made us all better off.” US?!
Cameron at the Lord Mayor’s banquet spoke of his belief in a “small state”.
We are having an ideology imposed upon us while most people seem to speak as if it’s politics as usual. If they succeed we really won’t have the excuse that we didn’t know.
Johnson is a liar – the state is not small when it comes to protecting the economic Royalists!
Very true! The size of our defence budget is one clear example; the corporate subsidies that go to big farming is another.
Not forgetting intellectual property rights in which the state protects private profits!
I agree that this was the plan from the beginning. It was a long process involving a great many changes, not least of which was the complete corruption of official statistics through manipulation of various measures, including unemployment statistics. It is interesting to note that we are currently seeing yet another change in the language and focus: there is a great deal about the numbers “in employment” and less about the unemployment rate. Where the latter is discussed I notice that there is no longer any outrage about the level of unemployment, still at more than 2 million. Yet Thatcher came to power on manufactured indignation about unemployment in 1979, then standing about 1 million and seen as utterly unacceptable. How times change.
One consequence of this is that the official figures bear no relationship to lived experience, and so the loss of trust in the state increases. That, too, is part of the plan, as I see it.
The biggest fraud perpetrated on the public was the real change in their status, promoted as a shift to a “property owning democracy” as the phrase was at the time. This preposterous doctrine was attractive to many, who do not seem to have understood the implications. The change in status was real enough: many who could not afford to buy a house did so on cheap credit and a tale that property prices never fall. The effect is to align many more people with the interests of the wealthy, who are not income rich but rather asset rich. Inflation is an enemy for those people, as it is a tax on idle wealth. High interest rates are also an enemy, for similar reasons
Ordinary people were persuaded that they could join the ranks of the wealthy through home ownership. In the absence of all other sorts of security, engineered through the dismantling of the welfare state; the acceptance of mass unemployment as a permanent state (remember that it was to be a short term pain necessary to make a leaner and fitter economy *snort*); draconian laws against any other power base (like unions) while spouting the language of decentralisation and localised power; and the withdrawal of council housing, people had little choice even if they saw what was happening. So we have replaced true social security with the security of home ownership. Shame that the value of a house has no solidity, unlike a proper system of benefits nor; any real capacity to provide income at need.
By now people have forgotten that social security ensures that lack of wealth is not a disaster, and they live in fear of the poverty which is the outcome of the political choice that they made. Many cannot even imagine the freedom from fear which was taken for granted in the period of the post war consensus: and they cannot support the policies which would get us back to that because they are very heavily indebted
I watch with amazement when the press reports that there is a recovery under way. I read the ONS announcement that unemployment has fallen to 7.1% stated as if that were in any way acceptable, even if it were true. I struggle to make sense of the information that unemployment fell by 167,000 in the three months to November presented side by side with the information that the number of people in work rose by 280,000 in the same period. Where did they come from if they were not unemployed? Oh, that is right, they don’t get counted any more for the unemployment figure is not the unemployment figure: it is the claimant count (as the BBC normally makes explicit) and more and more people are ineligible to claim.
Then I go to work and find that some of this is made up of people who are persuaded by their job seeker’s adviser to become self employed. They get a grant of £1000 to set themselves up selling animal feed or website services to take just two recent examples. Doesn’t matter that they are mentally ill, nor that they have no experience. Doesn’t matter that these businesses are to be run from their houses and they are not advised that it will affect their council tax benefit or even their tenancy: tenants are not allowed to run businesses from their homes. Gets them out of the count, though such people shouldn’t be in the count in the first place, being ill. Getting them out of the count is all that matters.
Would be nice to think that official statistics have any meaning. But anyone who believes in this “recovery” is deluding themselves.
And now we see today the government producing a set of so-called ‘statistics’ showing that, apparently, everybody but the wealthiest 10% are better off than a year ago!
So you are correct Fiona, the government is lying through it’s teeth. The spirit of Dr Goebbels is alive and well in the coalition.
Jonathan Portes has rubbished those stats
Portes:
What about the claim that middle and low earners did well, while top earners lost out?
Here, the trick is in the timing.
Mr Hancock’s figures run up to April 2013 — when the tax cut for those on more than £150,000 kicks in.
With the economy growing, I would expect living standards to rise for most working households — that’s good news and overdue.
But messing around with the statistics won’t make it happen any faster.
The figures ignore benefit withdrawal and maybe even VAT, not sure about latter though
I agree with every word Fiona except that anyone is deluding themselves. As you mention the press and media cheerfully trot out the party line about the ‘recovery’ at every turn, with no small amount of neuro-linguistic programming going on. The nation are being brainwashed into believing that the recovery is real by some very clever mass control techniques.
I agree that propaganda is in play. But I am not an economist or an accountant or a statistician: yet I can see that the story told is fantasy. If I can, so can anyone. There has to be an element of self delusion, because other people are not more stupid than I am and they can see what I can see. I believe that a great many people do see it: what they (and I) do not see is how to do anything about it. Richard Murphy and a few others show that one can make a difference but most of us do not have his deep understanding of what is happening and are not articulate enough to get a platform even if we did. So we are silenced and ultimately disengaged. For evil to triumph……
I thought you were as clear as anyone could be…
Fiona, I’m not in any way disputing any of what you say, I absolutely believe it’s true. Moreover, as I’m sure Richard would confirm, I regularly use his blog to drone on about the feeble nature of political opposition in this country.
But you ignore the fact that, down here at the bottom of the pile, people are not waving, they’re drowning.
People doing two jobs or working overtime just to keep the lights on simply don’t have the luxury of time for investigating the truth behind the government/media sponsored dissembling and lies. (And why should they, really, when her majesty’s loyal opposition simply spout a different version of the same deceptions.)
The lack of a champion for the majority has created a rage, a real burning rage in almost everyone I speak to. Many years ago I suffered a nervous breakdown, and I remember that feeling only too well. And that’s what this feels like. A society on the brink of nervous collapse.
At every turn society, decency, democracy are under the most massive onslaught as the neo-lib agenda turns back the hands of time, not a hundred years, but a thousand. It comes at us from every angle. Welfare, fracking, NHS, crime statistics, free trade agreements, the list goes on and on.
There is only so much the human mind can cope with. The stress of so many unaddressed issues has only two outcomes. Switch off, or go mad.
So people switch off, they cease to question for the sake of their own sanity.
Who invented the myth, I wonder, of voter apathy. It is disaffection, it is alienation, it is disenfranchisement by stealth. It is not apathy.
It is unwise to presume to judge the actions of people, without understanding their realities.
A man with a vote and no voice is as powerless as one with a voice and no vote.
I agree with all of that, Martin Snell. But I think it leads to my own conclusion. The people are not, for the most part, successfully brainwashed. That is not to say the effort to do that to them is not made. It is not to say that it is unsuccessful, in some terms: no accessible alternative narrative means that they have no recourse either in voting terms or in organised resistance of another sort. There is some potential for violence of the kind seen in the riots, and it appears that the police and politicians are aware of that and are continuing to prepare to deal with it. But it is not manifested in this country as it is elsewhere, where the people appear to have a much clearer idea of what is being done to them, and by whom. Here is much more inchoate and far less effective.
I am not ignoring people’s desperation, actually. It truly angers me what is being done to the poor of this country. I am frankly disgusted by the success of divide and rule, so that immigrants and scroungers are routinely demonised and the people let it pass. Sometimes I hate my fellow citizens, though I am ashamed of that. There is some responsibility for following an increasingly ugly narrative, no matter how comprehensively it is presented in the political and media landscape. There is also some responsibility for the my own occasional acceptance of the obverse; of distaste for the people themselves: for they are lied about as well as lied to, in reality.
We are a more mean spirited polity than we used to be. We are prepared to accept the child of Omelas. The extent to which cooperation or competition is dominant at societal level is mirrored by the extent to which altruism or selfishness is dominant at the individual level. We have been moving in the wrong direction for decades and the process is mysterious in the end, though some influences can be identified. A lot of them are very practical: an elite cannot divide and rule unless they can engender fear, and the fear of poverty is very real now. Though not for them.
You are correct in reframing the narrative of apathy: there is no apathy, but rather learned helplessness. That is abundantly clear.
Yet your story is predicated on the notion that the very poor do not understand any of this: they do. The anger you identify shows that they do.
Those who were conned into thinking of themselves as middle class, while being no such thing, are the ones who may be fooled by the propaganda narrative. They sell their brains for the privilege of being eaten last, and that would be funny if it were not so damaging. Their voices are loud, because those few journalists still employed see the abyss very clearly. Peppiat’s evidence to Leveson made that very clear but it is merely a stark example of the position of many “white collar” workers who fondly imagined that they were middle class on merit. They did not understand that they were next but it is dawning on them. They are nasty when they are frightened.
@Fiona
“The biggest fraud perpetrated on the public was the real change in their status, promoted as a shift to a “property owning democracy” as the phrase was at the time.”
All you have said here is excellent but the above is particularly perceptive. There has been a distinct change in the attitudes of ‘the working class’ since council house were put up for sale. My particular baby, as you may know, is promoting land value tax, which I believe would address many issues, including tax evasion/avoidance, inequality of wealth, unaffordable housing and the boom/bust cycle. In 1931 a Labour government actually enacted LVT, although it was never implemented before being quickly repealed by the Tories. The problem LVT campaigners now have is to sell it to politicians who believe it will not sit well with their electorate, 64% of whom have an interest in the family home. Full LVT would reduce the value of their main asset and many would pay far more in LVT than their Council Tax bill (although other taxes they pay would reduce). Thus an important policy change, supported by the founders of the Labour Party and recognised by all serious economists as ‘a perfect tax’, is rejected by the current leaders.