Archive for December, 2013« Older Entries |
Friday, December 27th, 2013
The seat of Manchester Central witnessed the Peterloo Massacre in 1819 but 200 years later few younger electors seem to think voting matters
It’s an awkward irony, to say the least. In 1819, the area of Manchester then known as St Peter’s Field was the scene of a watershed moment in the struggle for universal suffrage, when around 15 protesters were variously bayoneted, shot and trampled to death in the so-called Peterloo Massacre.
The site now sits at the heart of Manchester Central, the ultra-safe Labour seat that recorded the UK’s lowest turnout at the last general election: 44%. In 2012, a subsequent byelection registered an even more miserable figure: 18%, a low without precedent since the second world war.
Around 30% of adults here are reckoned to be in full-time education, which in tandem with the turnout figures underlines two things: that students form a very transient part of the population, and that there is a more general correlation between voting and age.
There is also the small matter of poverty and social exclusion: well away from the middle of the city, Manchester Central contains such neighbourhoods as Hulme, Moss Side and Ardwick, all affected by the kind of problems that tend to go hand-in-hand with political disconnection.
All in all, then, the seat suggests a messy tangle of all the factors that militate against turnout, with disaffection among the under-25s well to the fore.
Within sight of the commemorative Peterloo plaque stuck on the outside of the Radisson Hotel (once the Free Trade Hall, which probably says something about the smothering of civic values by consumerism), most of the young passersby I talk to amount to a case study in generational abstention, albeit for a variety of reasons.
In vain, I try to extol the wonders of putting your cross in the requisite box. “I don’t know how to do it,” says Jordan Storey, 20, who is currently unemployed. Was he taught about the importance of voting at school? “No. I didn’t learn anything at school. Not really.”
Rachel Fairburn, 21, is in the last year of a French and German degree at Salford University. “I feel like whoever I vote for isn’t going to do what they say,” she tells me. “I was going to vote for the Lib Dems last time – and they would have messed me about. The smaller parties don’t amount to much, so you’ve only got the big three to choose from. And they do sod all.”
Does she know about the Peterloo Massacre? “No. I understand that the vote is important. Especially … well, I’m a woman.” A pause. “It’s great that I have the right to vote, but it doesn’t get me anywhere. It’s really depressing. Horrible.”
Ten minutes away in Hulme is Loreto sixth form college, an award-winning Catholic establishment with an amazingly diverse student body (I did my A-levels there, not long after Peterloo). For an hour, I talk to five students who embody one huge tension within many young people’s perceptions of voting: the fact that plenty of under-25s are eminently politically aware, but increasingly fail to see the point of either the rituals of Westminster, or elections. They will all have the vote in 2015, but all five say that they will at least consider abstaining.
It is, perhaps, sobering to consider that they were all born between 1995 and 1996. “My life until 2010 was New Labour,” says 17-year-old Hattie Cooper Hockey. Voting, she imagines, would feel “sad”. Her generation, she says, is “not a major force in elections, so no one cares, whereas if you start attacking pensioners, that’s really going to go massively against you.” In which case, I suggest, more young people ought to vote.
“Yeah. More young people should vote. But if they’re not voting, that isn’t necessarily because they’re lazy and apathetic. It’s because politicians don’t appeal to young people.”
Their generation, they tell me, has been hugely affected by a couple of recent historical events. When they were seven or eight and had just started to notice what was on the news, they watched Tony Blair defying public opinion and sending British troops to Iraq. And seven years later, as they and their peers were finishing secondary school, the Lib Dems did their volte-face on tuition fees.
“There was a walkout at my high school because of that,” says Cooper Hockey. “It was the first time that a lot of my friends became aware of what was going on in politics, and it was against young people.”
And what did it tell her about the political process? “That you can vote for something, and it’ll never happen.”
Seventeen-year-old Tom Sullivan talks about non-party initiatives such as Unite Against Fascism and UK Uncut, and the fact that the main parties feel so distant from them. There is mention of such young(ish) columnists and online polemicists as Laurie Penny and Owen Jones: “They seem more like normal people,” reckons Rowan Gourlay, 17. “They interact with people on social media, and it makes them seem more in touch with what’s happening.”
Tribute is also paid to the ubiquitous Russell Brand, who has evidently become a byword for everything we talk about. “The thing I thought was surprising was that I logged on to Facebook one evening, and loads and loads of people had posted the video of the interview with Jeremy Paxman and his article from the New Statesman,” says Joel Pearce, 17. “People thought, ‘We like him. He’s saying something we relate to.’”
There are some complaints about the lack of political education that goes on in schools, though at least one of my interviewees thinks that’s a relatively minor problem. “I don’t think people need to learn more about the political system,” says Pearce. “People are aware of the issues; people are aware of politics. But they make an active choice, that there’s nobody on the ballot paper who represents them.”
To finish, I hark back to Peterloo. What about the fact that people were killed trying to get the vote?
“Just because people died for it, it doesn’t necessarily mean that it’s now politically useful,” says Sullivan.
“They fought for a change, but what’s the change now?” says Sara al-Attbi, 18. “Nothing’s happening. We need to do another march.”
And what would they write on the placards?
Her answer surely speaks volumes about the distance between her generation and the cliques of Westminster. “Stop being old men,” she says.
Thursday, December 26th, 2013
John Harris talks to young voters in Manchester Central, where 15 people lost their lives in 1819 trying to defend universal suffrage at St Peter’s Field
Tuesday, December 24th, 2013
In between the rightwing hysteria over the 1 January changes and liberal pleas for tolerance, is a public preoccupied with rent, not race
This weekend the president of Bulgaria, in the midst of an increasingly heated debate about the imminent lifting of restrictions on migration from his country to the UK, said: “Politicians should be ready to say the inconvenient truth.” They should endure short-term unpopularity, Rosen Plevneliev suggests, “preserve our values” and “keep the history of our proud tolerant nations as they are”. Given that his words were aimed at a Conservative party now zooming into pre-election mode under the supervision of Lynton Crosby, they read like subtle satire.
And on the same theme, Nick Clegg asked: “What would happen if tonight every European living in the UK boarded a ship or plane and went home? Are we really that keen to see the back of German lawyers, Dutch accountants, or Finnish engineers?” Full marks for his usual high-mindedness, but the contributions made by such professionals are only a fraction of the issue: the truth is that the British economy would be in a much more parlous state if it lost the low-paid Poles cleaning hotels, the Czechs serving cappuccinos, and the Latvians and Lithuanians working as security guards.
What a mess all this is. Next week, on 1 January, seven years after their countries formally joined the European Union, restrictions will be lifted on the number of Bulgarians and Romanians who can live and work in the UK. Exactly how many will come here is inevitably unclear, and clouded by the hysterical claims made by parts of the rightwing press, and the UK Independence party – one of whose leaflets in this year’s Eastleigh byelection stated that “the EU will allow 29 million Bulgarians and Romanians to come to the UK”. That number was derived by simply adding together the two countries’ populations.
The Tories are clearly panicked. Consequently, as of last week, the Conservative position on EU enlargement (long seen by the Tories as the best bulwark against political union) began to shift. David Cameron is now seemingly pledged to veto the accession of such countries as Serbia and Albania, unless there are new restrictions on the free movement of labour. Conservative high-ups are said to be considering an annual cap of 75,000 migrants from the EU – a move that, as Vince Cable pointed outon Sunday, would probably be “illegal and impossible to implement”, and has much more to do with moronic electioneering than serious politics.
Meanwhile, the liberal left is reprising its mantra: migration is good for us, new migrants from the EU pay about a third more in taxes than they cost in public services and benefits, Britain has a long tradition of tolerance and openness, etc. The abiding impression is of the kind of people who write headlines for the Daily Express facing off against people who often seem to speak only in platitudes and dry statistics, which only serves to obscure the issues even more.
Yet something is unavoidably up. According to YouGov, in 2005 Britons supported “the right of people in EU countries to live and work wherever they want” by a ratio of two to one. Today, we oppose free movement by 49% to 38%. One recent poll by ComRes – admittedly commissioned by an anti-EU outfit called Get Britain Out – found that 79% of people opposed the lifting of the restrictions on new arrivals from Bulgaria and Romania. All this cannot solely be traced to the screams of rightwing papers and the rise of Ukip’s Nigel Farage, let alone some metro-left fantasy that outside the M25 simple bigotry runs rampant.
The point is, millions of people will always be uneasy about large-scale change. Not because they are racist, or any more prejudiced than anyone else – but because human beings like a measure of certainty and stability. Further, it barely needs pointing out that immigration tends to impact places where certainty and stability are thin on the ground. If you pinball between part-time work and jobseeker’s allowance and feel about two pay cheques away from destitution, the idea that your meagre chunk of the rock may be about to shrink yet further will not go down well. Statistics, unfortunately, have precious little to do with this: there may be an argument that, viewed from a macro level, immigration does not drag down wages, but it seems to have an appreciable effect towards the bottom of the labour market – and besides, if you live in a constant state of anxiety, even the suggestion that it might will be enough.
Millions of people understand all this, as a matter of day-to-day experience. In Peterborough, employment agencies are stuffed with young eastern European men being packed off to do temporary work, and locals swear blind their sons and daughters either do not get a look-in or are caught in a grim race to the bottom. In Boston, Lincolnshire, a byword for tensions around immigration, people say that local market gardening businesses seized on newly arrived people who were prepared to live and work in the most abject of circumstances, and thereby cut the town in two.
Throw in former council houses now pulled into the most disreputable end of the buy-to-let market (as has happened in the areas of Sheffield that have attracted newly arrived Roma people), and you have even bigger problems.
And none of these tensions have anything to do with “health tourism”, the non-problem of EU migrants claiming benefits, or any of the other issues being played up by the Tories: instead they are reducible to the ideas embedded by the Conservatives in the 80s and 90s, largely sustained during the Blair and Brown years, and now being taken to new extremes by Cameron et al – surely the greatest dishonesty of all.
As an alternative to the politics of deception and displacement activity, we might accept that our membership of the EU brings far more benefits than costs, but understand that in the absence of dependable labour standards, housing and other essentials, it could well fall into disrepute. A half-repentant Labour party may be gingerly moving towards this position; the Tories remain much where they ever were; and the Liberal Democrats, long ignorant of anything to do with the nitty-gritty of the economy, do not seem to have a position one way or the other.
To go back to Plevneliev, politicians should indeed be mindful of their countries’ “tolerant” histories, and occasionally state inconvenient truths. But they are also going to have to look at one of the most awkward facts of all: that if the free movement of people has become synonymous with insecurity and anxiety, it should focus attention not on borders policy, but on the basics of our economy.
Monday, December 16th, 2013
After sweeping to power in 2010, the party talked of building a utopian future for British politics. But bitter infighting and the realities of austerity have left their dream in disarray
The popular image of Brighton is a city where it is sometimes easier to buy a vinyl copy of a Funkadelic album than a pint of milk, and people really do while away the days in vegan coffee shops, dressed in corduroy loon pants. The reality, of course, is more complicated, but the idea persists of a retro-fixated would-be utopia that has precious little to teach the rest of the country. And yet, for the past two years, Brighton has been blazing a trail away from Westminster’s tired three-party system towards a much more interesting way of doing politics.
At the 2010 general election the constituency of Brighton Pavilion elected Britain’s only Green party MP, Caroline Lucas. Since 2011, Brighton and Hove city council has been led by the same party. The Greens have 21 councillors to the Tories’ 18 and Labour’s 14 (just to prove that Brighton is cooler than a lot of other places, the Lib Dems have none at all). For the past two-and-a-half years, they have formed a minority administration, pledged to making the city fairer and more sustainable, despite cruel cuts handed down by the coalition. With a slight air of overexcitement, their leading lights say they want to make Brighton like Barcelona, Sydney or Toronto, while other Greens seem to think it can be some sort of revolutionary hotbed a la Petrograd, or Turin – or, if necessary, Liverpool circa 1985.
And there have been unarguable successes. Thanks to the council’s crusade for better pay, 102 of the 400 private UK businesses that pay the living wage are located here. The local Greens have embraced imaginative policies on housing and regeneration, and officially declared hundreds of acres of council land “open-owned”. Brighton has become the world’s first “One Planet” city, and much is made of plans for everyone there to “live well within a fairer share of the earth’s resources”.
What has played out here may well be a portent of life beyond traditional party politics, where a fiercely engaged, socially networked electorate send things spinning away from the usual way of doing things. The trouble is, it has been accompanied by an unholy series of battles that have set the Greens not just against their usual political enemies – witness an ongoing battle over raised parking charges and lowered speed limits – but each other. And now Brighton’s radical Green future is in real danger of being snuffed out before it has even got started.
The Greens still affect an air of determined optimism. “William Gibson once said: ‘The future’s already here but it’s not evenly distributed,’” says the Green’s council leader (or, to use their preferred title, “convenor”). “Maybe we’re seeing the future of politics in Brighton before the rest of the country catches up.” His name? Jason Kitcat. The surname, he tells me, comes from the west country, and an era long before chocolate snacks and cat food. It meant that he was teased at school. “Heavily, yeah,” he says, with a guffaw. “But it gave me the thick skin to be a politician now.”
We meet just behind Brighton station, in the New England quarter, at a huge block of reconditioned shipping containers that a local housing trust has done up as flats. They will be used by people currently in homeless hostels: an example, I’m told, of “the Brighton spirit”, which exemplifies creativity, ambition, and the idea that you can get things done quicker than some people think.
Kitcat is 35. He’s a warm, occasionally self-deprecating presence, with a goatee beard that probably makes stereotyping him easier than it should be. His Polish-born wife, Ania, is also a Green councillor. He came to Brighton in 2000 to start an internet business, joined the Greens because he liked the idea of “thinking very long-term”, and became the figurehead of the council in May last year. How has his first 18 months at the top actually been? “All councils are having a tough time,” he says. “But I’m not going to deny that we’ve had some ups and downs, and as the only Green council, and the first Green council, there’s been particular attention. And we have unfortunately provided some ill-advised stories which have not been helpful.”
It is something of an understatement. This summer, as hundreds of thousands of people swarmed to Brighton to enjoy the tropical temperatures, the Greens hit big trouble. First, the time came for Kitcat’s annual re-adoption as council leader, and one of his own colleagues sent a private tweet to the leader of the council’s Labour group, in effect asking if he would support an anti-Kitcat coup. Inevitably, Labour was delighted, and it gleefully went public. (”It was a tricky time,” says Kitcat. “But she apologised profusely, and I accepted her apology and we moved on.”)
Another Green councillor took to his blog and gave the following glowing summary of Kitcat’s record: “Jason Kitcat’s policies have time and again betrayed working people, city residents – and the electoral interests of the Green Party of England and Wales.”
That must have been nice. “I would have preferred it not to have happened,” says Kitcat.
Then came the infamous bin strike. Kitcat’s administration had resolved to belatedly bring the council into line with equal-pay legislation, but the process was handed over to council officers, rather than being worked through by politicians. As some saw it, he was washing his hands of responsibility for the proposed outcome – pay cuts of as much as £4,000 for some of the council’s rubbish-collecting and street-cleaning workers. The result was a week-long strike, and strange scenes indeed: rubbish piling up in the streets and businesses being warned against clearing the streets themselves by a mysterious outfit called “the Brighton and Hove Talibin“. Lucas supported the strikers; Kitcat was apparently nowhere to be seen.
Author and local resident Lynne Truss delivered a picture of what happened. “The place turned into Armageddon,” she wrote. “Helped by foxes and the seagulls … a tide of used teabags, eggshells, soiled kitchen paper, banana skins, smelly tin cans, and used sanitary towels (yes!) advanced in such a determined and menacing manner down nice residential streets, you could almost hear it breathing.”
“It wasn’t pleasant,” says Kitcat. “It was very difficult. Of course it was. We didn’t want to be there.”
And how did he feel about Lucas being on one side and him on the other? “Ultimately, we both wanted a fair outcome. The difference was, I was in the driving seat. From a negotiating point of view, I couldn’t be out on the picket lines, could I?” He insists that contrary to allegations that he hid himself away, he “was in conversation on a weekly basis with the union officials, and all the officers involved”.
He claims the eventual agreement as a success – but those who wanted to portray the Greens as a divided shambles had no end of ammunition, and they were helped by the party’s noble refusal to adopt an orthodox disciplinary system whereby any rebels could be whipped into line. Some of them, it was claimed, were “watermelons”: green on the outside, but red in the middle, and therefore dangerously leftwing. Others, such as Kitcat, were said to be “mangoes”, with orange metaphorical pulp, denoting the cautious and centrist instincts of the Lib Dems. There was even talk of “figs” – green-and-black types – who were essentially eco-anarchists.
“There genuinely isn’t a kind of hard split between different people, and fruits. It’s not the case,” Kitcat insists.
He laughs like a drain. “The media and the public seem to want authentic, free-speaking politicians, who seem genuine and honest, and not constrained in how they put forward their ideas. On the other hand, every time someone seems to break with the leaders or the party line, they’re a rebel, and it’s ’splits’. We’re in a bit of a bind, aren’t we?”
Next year, the Greens come to a big juncture. They will have to make around £25m of cuts from the council’s budget, and the scope for efficiency savings will have run out. Kitcat says his party will “do the best we can for the people of the city”, but the decisions required will inevitably be unpleasant. Some people think that pushing through such punishing measures will kill the Greens’ lefty credentials, and it would be much better if they picked a watershed fight with the government.
Ben Duncan is one of the alleged watermelons, and the councillor who accused Kitcat of betrayal in his blogpost. A former journalist who now works for a Green party MEP, Duncan has floated a handful of provocative ideas, including a “tourist tax” on some of the city’s bigger hotels, a possible boycott of one of the taxi firms opposed to the Greens’ 20mph speed limit, and the possibility of Brighton allowing the opening of cannabis cafes and becoming the British version of Amsterdam. When asked on Twitter if he himself inhaled, he said this: “I only smoke weed when I’m murdering, raping and looting!” It was, he says, a reference to the famous anti-cannabis film Reefer Madness, but his political enemies didn’t seem to get the joke.
Now, he is really on the warpath. There is mileage, he reckons, in the idea of the Greens following the lead of Trotskyite Labour councillors in 1980s Liverpool, refusing to set a cuts-based budget, and thereby putting Brighton in the vanguard of UK-wide anti-austerity resistance.
Appropriately enough, we meet in a city-centre cafe called the Red Roaster. “I think we need to do something that makes people think: ‘Hang on – if you vote for the Greens you get something different,’” he tells me. “On behalf of people around the country, we need to make it Brighton and Hove versus this government, about austerity. We should either refuse to set a budget or try and set a budget that under the current legislation would be unlawful, and say to the government, ‘Well, you come in and do it – you see how local people benefit from you sending a hit squad in to take over from elected politicians who won’t deliver your austerity measures.’”
Kitcat isn’t impressed. “It’s absurd, frankly,” he says. “Gestures like that will actually change nothing for residents, because the government will impose a budget on the council anyway.” Duncan, however, says he will keep on keeping on – so one presumes that in the buildup to a final decision, it’ll be mangoes and watermelons all round, again.
The leader of Brighton and Hove Council’s Labour group is 46-year-old Warren Morgan, who looks like Al McWhiggin, the villain in Toy Story 2 (thick-set, glasses, neat beard). In September, he called on the Greens to “get a grip, or quit”, said they were making Brighton “a laughing stock”, and proposed a moratorium on all new Green schemes, “unless it can be proved that they have public support”.
He has made a habit of going after the Greens on issues such as cannabis cafes and ill-advised tweets, which may indicate that by Brighton standards he’s a bit of a square. At this suggestion, he emits a noise halfway between a groan and a smirk. “Speaking personally, I’m not the most hipster of people,” he says. “Some people in Brighton would not identify with that image. It’s a very, very varied city. It’s not all hipster-cafe arts culture. And we try and represent everybody.
“The Greens’ focus has been far too much on the city centre,” he says. “They are not a party of the estates. They’re a party of the city centre and the universities. There’s nothing wrong with that electorate, but they need a broader view.”
With Labour on 38%, the Tories on 25%, and the Greens on 21%, Morgan seems to fancy his chances of being the council’s next leader. He and his comrades also want to use the Greens’ travails to bring down Brighton’s brightest political star, Caroline Lucas. If her seat fell to Labour, politics-as-usual would return to this patch of the south coast, and the short era of watermelons, mangoes and figs would be over.
“I have a lot of confidence in the people of Brighton,” she tells me. “And I’m confident that they’ll make a distinction where necessary … to be able to judge me on my record. I don’t think you can hold an MP answerable for decisions they had no control over. People like to have an independent Green voice in parliament, and irrespective of their views about the local council, I think many people would be very sorry to lose that voice, sticking up for Brighton.”
That might suggest she’s trying to distance herself from her own party’s local record, but when prompted, she comes out with a long list of Kitcat and co’s achievements. She also talks about her own work in parliament: reminding Labour of its supposed principles and opposing the renewal of Trident, putting the case for the public ownership of the railways, and more.
But what happens if all that gets sacrificed on the altar of ill-advised tweets and the bin strike? It’d be a crying shame?
“It would be a crying shame,” she says, and emits a mirthless laugh.
Does she think of herself as a mango or a watermelon?
“I’ve always refused to answer that question. I don’t think it’s a helpful question, and I’m not going to define myself as a piece of fruit,” she says.
I’ve always liked to think of her as having watermelon-ish leanings.
“Thank you. But I’m not commenting on my fruitiness, to you or anyone else.”
Monday, December 9th, 2013
Wages are low, debt is rising, and our economy is as vulnerable as it was five years ago. Yet the Christmas binge is back
It’s the sticky chicken lollipops that are the most baffling: £14 for a box from M&S, complete with a “sweet soy, mirin” – a Japanese condiment, apparently – “and ginger glaze”.
“Don’t bother – they are rank,” advises one poster on Mumsnet, but at both ends of the market, 2013 feels like the year of the absurd canapé, and one presumes that poultry done up to look like sweets is proving just as popular as spring rolls, sushi and the already legendary Bubble Bobble King Prawns (£1 for 10 from Iceland, but be warned: they involve Rice Krispies). Millions of us now obviously require a lot more than Christmas dinner, booze, and a smattering of Twiglets: £19bn is forecast to be blown this season on food and drink, up 3.9% on last year.
And under the tree? The drooled-over Sony PS4, a snip at £350, with games selling for around £50 each. For Dad, a selection of those boxed-up CDs that the music industry is using to wring the last drops out of its inventory – like Bob Dylan’s Complete Album Collection, which sells for the best part of £150. A tablet or two, even for Grandma and Grandad – the 128Gb iPad Air looks nice, at £740.
Forecasts of Christmas spending seem mixed: 2012’s figures suggested an average household spend no higher than in 2006 and people remain driven to find bargains, but there have been credible predictions of a 3.5% rise in 2013, and yuletide spending exceeding £40bn. Certainly, the seasonal noise suggests pathological consumerism is back in full effect, with near riots on so-called Black Friday, internet shopping breaking records, and adverts – adverts! – being treated as news events. “Britain’s Christmas spending binge leaves US trailing” was a headline last week on Bloomberg, which surely spoke volumes.
In some parts of the country, then, the giddiness sown by a hyped-up recovery and rising house prices – up by an annual average of 7.7%, according to Halifax, with George Osborne’s Help To Buy scheme having played its part – is evidently doing its work.
Meanwhile, the grim state of far too much of the economy is unchanged: 21% of employees are paid less than the living wage, and part-time and temporary jobs run rampant. The weekend brought news that, for the first time, more than half the 13 million Britons classified as being poor live in working households: a real watershed that needs to be endlessly highlighted. Even for people higher up the income scale, life remains pinched and anxious: petrol bought journey by journey; bills deferred; dread when a replacement car has to be bought. The fact that the ongoing fall in real wages has become a political cliche does not make it any less real: between 2010 and 2012, real earnings fell in every part of the UK – by 7.5% in London, and a mind-boggling 8.1% in Yorkshire and the Humber.
So, what pays for the sticky chicken lollipops and iPads? People are raiding their savings, which have lately undergone their biggest drop in 40 years, enough to prompt a former Downing Street adviser to warn that such figures are “desperately worrying … If you just withdraw money and spend you are talking about a recipe for long-term economic decline.”
And then there is debt. The Office for Budget Responsibility says that the ratio of household debt to income is set to start increasing again, and at a faster rate than it predicted in March. By 2015, household debt, including mortgages, is projected to exceed £2tn. And the critical point is how it is distributed. Last week, the Resolution Foundation’s ever-insightful Gavin Kelly had a piece in the Financial Times warning that a sixth of private debt is held by households that have less than £200 a month to cover anything more than basic essentials. Nearly a third of mortgage debt, he pointed out, is owed by people who have borrowed more than four times their annual income. And a watershed moment will be reached when interest rates start to go up again.
Which brings us to the next bit of seasonal good news. According to the OBR, unemployment will fall to 7.1% in 2014, and 7% the year after that. Seven per cent, let us not forget, is the rate of unemployment at which Mark Carney has said that the Bank of England will start to “reassess” its policy on interest rates. So far, he says, the figure represents a “threshold” rather than a trigger, but rates will sooner or later have to rise. As and when that happens, on the assumption that wages are hardly likely to skyrocket, tight household budgets could start to snap, and we may well be faced with echoes of 2007-8: mortgage defaults, a sudden crisis of confidence – and, this time, no munificent government to clear up the mess.
These are the ghouls swirling around this Christmas. For all the talk of growth, private investment is at its lowest level since the 1950s. Britain’s export performance remains disappointing: in the third quarter of 2013, exports suffered their biggest fall in more than four years. Pledges to somehow rebalance the economy show no sign of becoming a reality, and we are stuck with much the same model that made us so vulnerable five years ago, in which people work in shops, earning money to spend in other shops, and top up their budgets using credit.
The City, meanwhile, is brimming with both good cheer and grim auguries. Ten days ago, the return was announced of synthetic collateralised debt obligations: as one deadpan report put it, “the securities that probably contributed most to losses during the financial crisis” – revived by Citi, and marketed for the first time since 2007.
Quietly, jitters about all this are being expressed on the right, just as much as on the left. Last week, the Tory Bow group published its crisply written response to the chancellor’s autumn statement. “The current UK economic growth figures remain reliant on the financial sector and a rising housing market,” it said. “The bubble that burst in 2008 is being slowly reinflated, meaning [that] the danger of returning to the ‘boom and bust’ model of the past has never been higher.”
What’s driving the recovery, it seems, is thinking akin to the modern spirit of Christmas: an all-too-familiar urge to spend way beyond our means, and an aversion to worrying about the inevitable hangover. As those daft canapés do the rounds, some will be raising their glasses to growth. More sober minds will be thinking of no end of trouble, bubble-bobbling just under the surface.
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