Some eight month ago, a blog called “Like Wolves at Lambing” cited a number of diverse sources all, at the time, agreeing that it wasn’t just an economic but a moral malaise that had gripped the country. While yesterday’s budget might have shown leadership in fixing both, the only comment that signposts the dark road that now lies ahead is the one used by Clinton when locked in a ritual spat with a hostile Congress. Any hope for insightful alternatives to Osbo’s ‘Osterity’ evaporated yesterday in a tired and spitefully personal riposte from Ed MIlliband, who offered little beyond recycled jibes from last year.
This is serious stuff: recessions come and recessions go but the last one this deep and long gave us the Winter of Discontent, the lowest fiscal ebb since WW2. Dig into that era of ridicule for the UK on a global scale and you almost immediately find an economy that had lost its way. Still full of bomb sites and out-produced by the US, the UK rediscovered a non-superpower role in the fifties and sixties that boomed, filling latent domestic demand, the echoes of global dominance in the colonies and old Allies like Portugal. But while buses in 1970 Lisbon may still have been from Leyland, all the taxis were Mercedes.
This and similar points like the obsolescence of Clydeside riveting technology in a world of welding was lost on the TUC. The growth of union power—an absolute godsend against appalling conditions in Victorian times—was boosted by humming factories, railways, mines, etc in the ‘You’ve-Never-Had-It-So-Good” sixties. But while Wedgewood-Benn waxed eloquent on the “white-hot heat of technology”, it was all delusion. Outmoded working practices, insisted on by unions, meant most UK industry could offer nothing of the sort. The US developed airliners and computers, Japan mass-produced chips and consumer electronics, Germany made cars and precision machinery, Korea made steel and built ships. The emblems of the era were the Rolls washing machine and the Austin Allegro: both British-made; both crap; both firms went to the wall.
By 1978, although there were good British designs and conscientious workers, strikes were endemic, inflation out of control and faith in the ‘establishment’ of most generations—including the elderly—thoroughly undermined. It took the brutality of Thatcherism to slap Britain out of its self-inflicted stupidity of class warfare and see that profits could make prosperity for all. But, just as untrammeled sixties wage demands scuppered the seventies, so untrammeled nineties financial greed did for the noughties: Blair was a willing bearer of the new on-yer-bike standards and Irn Broon’s much-cited Prudence was a whore to any industrialist with a bulge in his trousers.
It is a fault of most people that they will forgive and forget much as long as the dosh rolls in. Mobster molls worry more about splitting their prestige nails than who hubby iced to buy them. Every wheeze Canary Wharf dreamed up or pinched from the Caymans was good to go. It’s surprising that more blatant rip-offs like unnecessary loan insurance didn’t occur. Whatever the FSA was doing, it wasn’t its job. Junk mortgages may not have been invented in London but they wrapped ’em in ‘securities’ and traded the sanitised result with gusto anyway—with the ludicrously styled ‘investment banks’ to the fore.
In 2007 when the whole Potemkin village of global equities that were actually worthless came unglued, the hale clamjamfrey should have gone down the toilet because anything else offends logic, morals and common sense. Dragging bankers through the streets to be pelted with ordure might be extreme but NONE were summarily fired and ridiculed for gross misconduct; most are still in the jobs and pulling down bonuses.
There is a kind of silent conspriracy among the press, politicians and the public just now to roll about in anguish at the present pain of austerity. But the previous quarter-century of increasing prosperity has made us forget what austerity really is. It is not holidaying in Mallorca instead of the Seychelles; it is not postponing replacing the Chelsea tractor for another year; it is not settling for a cheaper 42″ telly. We are not in austerity if we spend £40bn on war we don’t need to wage or £169bn on pensions and benefits (£3,000 for every person) when much of that goes to people who don’t really need it. The UK now has 306,655 millionaire households—more than 1 in 100—but, worse than that, most of the other 99 envy that one above all else.
It’s typical of an old fart to bemoan sliding standards and muse wistfully how it once was so much better. But that’s not the point I’m making. The fifties were a time of scrabble and hardships that makes today’s circumstances of care for the vulnerable and elderly seem luxury by comparison. But the mentality has changed. Whereas then, people would look after those in their family in need, it’s now seen as the state’s problem. As few now know their neighbours as they once did, they’re quick to sue them or plant leylandias. If the size and opulence of your house is not now the main measure of your worth then your car or job is. This rather poisonous inheritance from Thatcher grew rather than diminished under Blair.
So, whereas in the fifties, remnants of the ‘Dunkirk spirit’ got people to work together to generate a mini-boom and in the eighties, the constricting dead hand of the work-to-rule was swept away by right-wing radicalism to give the most prosperity any of us have seen, we now have neither to fall back on. The cohesion of society through contentment with their lot has long since given way to ambition clueless about how that could be achieved, other than through the lottery and similar opportunism. If bankers get £1m+ bonuses for demonstrably being incompetent clots, why shouldn’t I?
And so the hope of diminishing the benefits bill is illusory if everyone has now lost their fifties ethics and will claim every bean they can—whether entitled to or not. The only hope is a real stimulus to the economy by the incredibly simple concept of making stuff that people want to buy, of adding value. Danny Alexander just boasted of over 1m new jobs in the private sector, as if that were the philosopher’s stone. But how many of those are stacking shelfs at Poundland or sweeping up at a hairdresser’s?
It may be we need even more years of this stagnation before enough of us admit that we have grown fat and greedy, that we wouldn’t last five minutes doing the jobs our grandfathers did, still less survive on their wages—even their inflation-adjusted wages. What we need, since the public now owns them, is for the government to have the guts to take out the senior bankers of RBS and Lloyds/BoS and shoot them—even if only figuratively. They might consider shooting the business and investment elements too.
They will then take over the banks and start providing serious loans to small businesses at ludicrously small rates (because that’s where the much-tarnished LIBOR has been for years) and they will keep doing that even after the economy picks up. It will send a shock through the financial establishment that, for once, the country means business and that no cow is sacred. There are a few ideas in this budget that complement that, such as the 20% help with deposit for first-time buyers and there will be need for many building services companies to reverse the stagnation in construction in order to build those houses. But farting around with 1p off beer is Nero fiddling while Rome burns.
For Cameron, Osborne and either side in Westminster are all clearly in thrall to the City. So the bad boys will continue to pull down fat seven-figure pay cheques, innovation will stall on the bureaucratic incompetent caution of their so-called ‘business’ managers and we will see real austerity when yuppies find themselves rummaging in the out-of-date bin at Tesco. Or you can take a look at a man like John Swinney, the banker-that-never-was, and ask yourself if you would not prefer a man like that—clear competence and bankerly judgement—to be in charge of the much easier financial recovery of an oil-rich state whose people are famed for their canniness wi’ the bawbees.