Consciousness of Sheep
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Nobody can doubt the web of contradictions that beset the UK economy. The stock market is at an all-time high; house prices are booming; unemployment is at a low last seen in the early 1970s; more people are in work than ever before. And yet we have seen the longest period of declining wages since the 1800s; productivity has slumped; the retail sector is on the verge of collapse; life expectancy has gone into reverse, with an epidemic of mental illness and male suicide leading the way; and the whole economy is propped up on a mountain of dangerously unstable debt.
One reason for the apparent contradiction is simply that economists, politicians and journalists are the only people who believe in averages. To talk about a “British economy” in 2017 is to obscure more than is revealed. The financialisation of the British economy on the back of the North Sea oil boom of the 1980s served to undermine social cohesion in the UK. So long as the banks kept lending, and so long as enough working people could continue to treat their houses as ATMs, the illusion of a British economy and a British society could be maintained. But in 2008, the illusion came to an end. Since then we have witnessed the development of two economies – the wealthy, metropolitan economy of the 39 plus-1 percent that continues to benefit from a declining banking and financial sector that still services the global economy; and the economy of the 60 percent (and growing) who have been left behind in the new low-paid, part-time, zero-hours, self-employed, gig-work economy within which people are remorselessly failing to make a living.
The two economies have a geographical dimension too. As Mathew Lawrence in Red Pepper notes:
“British capitalism is deeply dysfunctional. We have the richest region in Europe – inner London – but most British regions are now poorer than the European average. The UK’s productivity performance has been abject for a decade. We are in the middle of the longest stagnation in earnings for 150 years. Young people today are set to be poorer than their parents and poverty rates are rising. The environmental impacts of our economy are damaging and unsustainable. In short, while the UK retains significant endowments and capabilities, our economic model is failing too many people and needs radical reform.”
In an excellent piece of in-depth journalism of a kind rarely seen in modern mass media, Sarah O’Connor writing in the Financial Times goes into considerable depth to show what life is like in just one northern town on the wrong side of the economic divide:
“Blackpool is suffering from a highly concentrated dose of what seems to be going wrong in pockets of many developed countries. Economists in the US often contrast the dynamism of America’s coasts with the malaise of its heartlands. But in Britain, it is increasingly on the country’s physical edges, in its seaside towns, that you find people on the outside of the economy looking in. Blackpool exports healthy skilled people and imports the unskilled, the unemployed and the unwell. As people overlooked by the modern economy wash up in a place that has also been left behind, the result is a quietly unfolding health crisis. More than a tenth of the town’s working-age inhabitants live on state benefits paid to those deemed too sick to work. Antidepressant prescription rates are among the highest in the country. Life expectancy, already the lowest in England, has recently started to fall.”
The article highlights many of the flaws in the reforms to social security that have been implemented since 2010. Back then George Osborne and Iain Duncan Smith assured us that by cutting housing benefit they would drive down the high rents charged by private landlords across Britain. Instead, the poor have been driven to the margins:
“In a country where affordable housing is hard to find, people are gravitating to coastal towns such as Blackpool, where the receding tide of tourism has left behind a surfeit of old B&Bs that have been turned into bedsits…”
Reforms that were supposed to assist disabled people to find work are also exposed as a cruel trick in high-sickness towns like Blackpool:
“In 2012, the Office for Budget Responsibility, the UK’s official fiscal watchdog, predicted the rollout of welfare reforms would cut the caseload by 21 per cent between 2010 and 2015/16. In fact, it only fell 4 per cent. Spending on these benefits was predicted to fall 27 per cent to about £10bn a year but actually rose 6 per cent.”
In an interview with Iain Duncan Smith – the minister responsible for the reforms – for the article, O’Connor gets to the nub of the problem:
“In Blackpool, the jobless rate is above the national average and Iain Duncan Smith admits places such as this are ‘the hardest nut to crack. You want many of them to get back into the world of work, but you can’t get them back into the world of work if there aren’t jobs there.’”
If there is no longer something we can recognise as a “British economy,” then we should not be surprised to find that a package of social security reforms designed for some average person or community that doesn’t really exist has failed either. What may work for central London and the Oxford-Cambridge region where global finance and tech companies continue to provide a shrinking number of high-paid/high-skilled jobs is simply not going to cut it in the UK’s “Shit Life Syndrome” towns and regions.
Although O’Connor doesn’t mention it, there is a political consequence to allowing towns like Blackpool to slowly sink into intractable poverty. A quick search of the local paper – the Blackpool Gazette – reveals that the town delivered a resounding 68 percent vote in favour of leaving the EU last year. The neighbouring council areas of Fylde and Wyre also delivered high votes (57% and 64% respectively) to leave the EU. Given the choice between business as usual and change – any change – why are we so surprised that Blackpool opted to leave?
The problem with O’Connor’s article is with the unspoken assumption behind it. A London-based journalist who also works out of Washington DC, O’Connor assumes that Blackpool is the anomaly and that somehow it will find its way back to the globalised metropolitan world from whence it was banished:
“Blackpool’s housing, its jobs, its isolation, its drugs, its booze, they wear people down and sometimes suck them under. But beneath all that mess, perhaps there is something therapeutic about the place as well.”
That Blackpool (and Ebbw Vale, Merthyr Tydfil, Oldham, Jaywick and many more) might be the future doesn’t enter into O’Connor’s (or her London-based editor’s) thinking. But nowhere is it written in stone that London’s prosperity must go on for eternity.
Since the end of the Second World War, and especially since the early 1980s, Britain has bound its fortunes to an America which, given the factors that led to the election of Donald Trump, is quite obviously a good way along the slope of decline too. For Britain – whose modern fortunes rest on a fragile (especially post-Brexit) financial sector that is ultimately underwritten by a fast declining North Sea oil industry – it is difficult to imagine the circumstances in which the prosperity of the past can ever return. All of those lost manufacturing jobs that successive Neoliberal governments of both colours said were unimportant are gone forever. When the asset bubbles and paper derivative wealth is devalued in the next recession, there will be no going back. Without a steady flow of credit, most of the tech/digital economy fantasy will evaporate along with the value of our houses.
Blackpool, and towns like it, is precisely the post Neoliberal future that we were warned about back in the 1980s. The warning has come true. But worse is yet to come. Blackpool is not an anomaly; it is London’s future. And if the 60 percent of people who already live in that economy have a message for the metropolitan 39 plus-1 percent it is: “We’ll see you on the other side of Neoliberalism.”
As you made it to the end…
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