During the middle of last year, Washington Post columnist Ezra Klein noted that rather than beating around the bush, he would call “what we’re in [now, in the US] a “household-debt crisis,” or something more elegant that gets the same idea across”.
The reason being that household debt to GDP ratio are dangerously high, banks aren’t lending, people aren’t spending, businesses aren’t growing, jobs aren’t being created and recession is giving us a sarcastic wink.
Perhaps as daunting is the growth industry of alternative lenders. What kind of household debt crisis awaits us if spending is only supported by rapid increases in borrowing from high-cost lenders, in a country where there is no law as yet to stop people borrowing over and over again, or borrowing to service other debts (roll over loans in other words).
Remembering the OBR’s forecast for household borrowing and debt, which show this rising from 160% of income last year to 173% by 2015, and prompted by being told by one Labour politician that the next economic crisis in this country will be one caused by household debt, I asked some economists and economy commentators their opinion on what they thought.
As this is research for something else I’ll leave names out, but one academic economist told me, bluntly, no. The reality, for them is:
levels of secured and unsecured borrowing are falling in nominal and real terms … the personal insolvency rate is falling … [and] the OBR’s projections appear too high
Contrary to that, the economics editor for a leading newspaper told me potentially yes. Aside from low interest rates acting as a mask for the real debt problem:
there has been little reduction in the level of household debt since the crisis started
He told me what potential damage there would be if the Bank of England pushed up interest rates back up to normal levels.
The Consumer Credit Counselling Service identified last year 6.2 million “financially vulnerable” households, 3.2 million of which “are already either three months behind with a debt payment or subject to some form of debt action,” and on top of that unemployment is rising fast.
Utilities are costing us more and our wages are not reflecting the increasing cost of living. When David Cameron asked us to pay back our debts, rather than doing as he says, we are doing as he is doing and staying in debt at the expense of some rather hideous economic policies.
Something exploding in household debt is clearly plausible. But depending on your definition of household debt crisis we could be experiencing one now. Or, indeed, OBR could have projected too high, too soon last year for 2014-15 and the whole thing could be fuss for nothing.
What do you think?
Peter Hitchens said something on Question Time last Thursday that no politician could ever say: “thank goodness we don’t have a democracy in this country”. For him this means that above elected representatives should be a level of unelected scrutiny, in the form of peers or, as he was referring, a constitutional Monarchy.
There is also another school of thinking, positioned by a quote which may or may not have come from Fredreich Nietzsche, questioning thus: “Do everybody deserve the vote”?
One might easily contend, also, that in the event of true British democracy Katie Price or Jeremy Clarkson could be our prime minister – so in a way we should count our lucky stars that our democracy is only a shadow of its full meaning.
I, however, take a different view, being in favour of democracy on principle and not seeing it as a utility that ought to be used when it suits me. As tyrants fall in the Middle East I know full well about the possibility of there being a radical Muslim Brotherhood element to post-Arab Spring politics, but appreciate that this must be challenged with ideas and committed action.
It certainly shouldn’t bolster the idea that more Middle Eastern democracy will be bad in itself. It might open the door to a raft of bad choices, but the importance of the freedom to do that trumps the sort of risk which would utilise tyranny as a precautionary mode of government.
Regarding mass political intentions, take the UK as an example. According to an Ipso Mori poll studying 2010/11 matters of political importance, immigration was more focal than the NHS, crime/law and order and unemployment, and leagues away from the 1997 general election run up where immigration was of very minor importance indeed.
In February 2011, from a sample of 1004 adults, 37% felt that immigration was a very big problem, 37% believed it was a problem, 16% felt it was not a very big problem and 5% felt it was not a problem at all.
Further, according to a YouGov poll studying the same period, 35% of those who voted Conservative in 2010 appealed to family values over anything else, 41% voted for them on matters of traditional values (compared to just 19% for Labour) and 28% on patriotism – while only 6% voted for the Tories appealing to tolerance and diversity (which, actually, Cameron sought to highlight).
In his efforts to woo the small l liberals and the Guardian reading middle classes, David Cameron paid less attention to the things the Tories had always trumped Labour on during the campaign before the 2010 election (immigration being key) and developed his narrative around public services, the economy, the environment and international development.
But clearly Cameron is not naive here. As Tim Bale in a recent article for The Political Quarterly has drawn upon, Cameron suffered a tough loss in the Ealing and Southall by-election in 2007, looked weak after the so –called “Brown bounce” – then by no coincidence at all appeared on Newsnight, talking about how people were worried about the pressures of immigration on public services.
However after some time, he went back to concentrating on the small l liberals with articles for the Guardian and his softly softly approach to crime; and it didn’t pay. The election that should have been a walkover for Cameron was scuppered, meaning he relied on the Liberal Democrats to join a coalition with him.
He failed to secure an outright majority, not because he failed to modernise his party, a project which has been in the making since Hague and possibly before that (given a slight shelving during Howard’s time – which Cameron was actually key to, writing as he did the manifesto which concentrated heavily on issues regarding asylum, a subject on which the Tories were predictably stronger on, according to the public, than Labour, who did, however, lead on everything else), but because he neglected what I want to call the Tories’ “toxic constituency” – those for whom no previous Conservative voting typology (for example nationalist, federalist, atlanticist, European, free market, interventionist, liberal, collectivist) has ever concentrated on.
The camp, you could say, who vote in accordance with Daily Express headlines.
Like Blair with the left wing of his party, he knew they had no other choice, so could shift the party to the right in full knowledge that he’d still benefit from their vote. Cameron assumed he could toe the centre ground of politics and keep his toxic constituency. He was wrong.
But perhaps he has realised. In October Daniel Knowles, writer for the Telegraph, criticised Mr Cameron for what he called his dog-whistle politics on immigration. As he said in his article “Like Europe, immigration control is one of those things which it’s much easier to shout about than to change.” He concluded by saying “If he were truly a liberal Conservative, the Prime Minister would face up to that, instead of trying to distract us with Right-wing mythology.”
But maybe Mr Cameron is liberal. The point is, is his core vote liberal? Is Cameron thinking what they are thinking? Has the time come for Mr Cameron to shift rightwards in order to keep his eyes firmly on the prize of overall majority? Polls and e-petitions certainly suggest that if he took that course he may have a fighting chance, which is depressing for those, such as myself, with ideas to contrary – but such is the reality.
Of course Cameron and his party could try and change hearts and minds. But political parties are not there to deal with ideas; they are there to win elections. For now that is.
Reduced to the confines of dusty academia, Dr Matthew Roberts at the Sheffield Hallam Univeristy, in 2006 wrote an essay entitled ”Villa toryism’ and popular Conservatism in Leeds, 1885-1902′, for the Historical Journal in which he talks about the complexities of Victorian popular conservatism.
He starts by unpacking the title of the essay, explaining the term Villa Toryism as one expressed by Lord Salisbury to describe the almost certain fact that the Conservative party had captured the hearts and minds of the urban and suburban middle class, who in their outlook were rather more anti-liberal (and anti-socialist as a standard) than pro-conservative.
Dr Roberts finds this explanation too simple, and too naive of the context.
Before going on to describe the role undertaken by the darlings of 19th century Conservatives in setting about a popular programme, he asserts: “Historians are still largely in the dark about suburban conservatism”.
Wisdom had it that the electoral success of the Conservative party back then relied heavily on low turnouts – which alleviated matters of appealing too much to the lower orders.
But Dr Roberts contends that much attention was made on knitting together different strands of popular conservatism.
One of the attractions, Dr Roberts posits, was the Leeds Conservative WL Jackson’s fondness for cricket.
Fast forward to today and the Conservative party are led by someone very engaged with the sentiments of the popular conservatism of the nineteenth century, and are also (not just by virtue of coalescing with the Liberal Democrats) very suburban.
The progressive conservatism, to which David Cameron avowedly subscribes, might be best summarised (indeed for a short time was summarised) by this statement of Philip Hammond, now Defence Secretary, in 2008: “sharing in the proceeds of growth”.
The quote is made up of paternalism, is no challenge to laissez-faire capitalism, but rather a re-capitalisation model – ideas of which can probably be directly attributable to the progressive conservative think-tank projects of the day.
To analyse Cameron’s electoral base, we see the suburbs catered for, an appeasement of Whiggish sentiment, and possibly the post-Basildon Man (now that he lives in Billericay, wears a pink shirt but insists isn’t gay, and likes the manner in which Cameron speaks).
The right, and especially the existing working class right (which incorporated the aspirational, working class conservative Basildon Man) is not catered for, which may be why the Tories have lost nearly 1 million voters to the United Kingdom Independence Party since the general election, compared to Labour’s 170,000.
For obvious reasons neither are the right catered for by the Labour party. The appeal to populism may be slightly too Blairite for Ed Miliband, but the assumption that the working class will vote Labour is obviously not (or in other words Polly Toynbee’s nose peg can be loosened, just slightly).
Though unlike with Blair, the economic game has changed. The assumption that the working class will vote for the Labour party, despite their main electoral targets being the squeezed middle, is slightly safer since we are no longer agonising over newly de-regulated banks.
The Brown years have passed us by – we are still in its shadow (and I dare say the Tories like it there), but rhetoric on the city will become less lenient from both sides.
The problem for the Tories is that under Cameron their politics are paternalistic and suburban, but the electorate is not. As a quick look at the e-petitions list will tell you, as well as yougov polls, what gets lots of voting people worked up is immigration, jobs and the EU.
Local Tory branches reflect these things more, and the national party may have to reflect that if they want to win a majority.
This change in tack is likely to happen anyway, but if Hague has any historical sense, he’ll remember what happened to him when he wanted to lower the age of consensual homosexual sex to 16 as leader of the Conservatives, and see the resignations of his comrades to Ukip as a wake up sign.
In order for the Conservative party to be electable, they have to appeal to their toxic constituency who have little time for their current Disraeli nicities.
When Cameron does change tack, to stop mass resignations from the right of his party, Ed Miliband will have two options: submit to the non-populist working class (which is as ill-defined as that), or show that he is the real man for middle.
The noble thing would be for Ed to do both; the depressing and more electorally favourable thing to do is to match Cameron’s hypothetical appeal to populism and say stuff you might read during the campaign trail of a euro election in the Daily Mail.
In short, Ed is stuck between a rock and a hard place. Today’s Tories are social luvvies with a toxic fanbase who probably hate that lot the most.
Watch this space: Cameron will have to move to the right, capturing the High Tory right and populist Tory far right in his stride. Until then Ed will have to play safe with the squeezed middle – but then, he may also have to stay there too.
To modify an old saying, my journalism skills knows some bounds!
I just put down the phone to one Richard Balfe, David Cameron’s envoy to the Trade Unions. During my minute long conversation with him I asked him if he’d heard about Plymouth’s Conservative-run City Council’s decision to “de-recognise” the biggest public sector union Unison.
He hadn’t. In fact he has just come back from Brussels and has not had a chance to catch up. I informed him about the details, which have come from the Political Scrapbook website. He replied that he was not going to comment, before politely putting down his receiver.
I quickly emailed him thanking him for taking the call, signing off by saying if he did feel like commenting not to hesitate in contacting me. He soon emailed back explaining, again, about having just returned to the UK, and not being up to speed on this matter.
When Mr Balfe does manage to get himself up to speed on matters I look forward to seeing what he has to say, particularly as this could prove very interesting for him, the link he has to his party the Conservatives (after leaving, or rather being thrown out of, the Labour Party in 2002) and the Trade Union movement who he will want to remain largely on good terms with – especially now that militancy is back on the cards.
Instead of offering Mr Balfe my own words of wisdom, I should like to remind him of his own, from ConservativeHome earlier this year: “let us not demonise the Unions, but realise they are doing what their members pay them for – that is getting the best deal possible for their members.”
If Mr Balfe really thinks this holds true, then the decision by Plymouth Council to tell Unison reps to vacate their offices, after refusing to sign up to what they say are discriminatory changes to terms and conditions, is contrary to his own heartfelt sentiments.
On meeting with David Cameron in his role as envoy, after he has settled back home and glanced over the papers (which, admittedly, will include a great many articles about riots and looters), I hope he puts forward serious reservations about these events.
Again, in his own words: “I don’t think I could have joined the [Conservative] party under Thatcher.” Possibly because its loathing for unions is much like Plymouth’s now. Let’s hope an arrangement is settled soon, and Unison offices are re-opened again pronto.
Ed Miliband, during some very wise soundbites on last week’s riotous events, today said:
There is an easy and predictable path for politicians.
It might even be the more popular in the short term – and I heard some people demand it on the streets.
It puts the riots down to “criminality” pure and simple. And stops there.
It says that to explain is to excuse.
If others wish to tread this path, that is a matter for them.
But it’s not the one for me.
It is not strength but an absolute abdication of responsibility to the victims, our communities and the country.
Because if we follow that approach, we run the risk of disturbances happening again. (My emphasis)
Nobody outside of the far right, epistemically closed, populist, fear-whipping press should be happy with the conclusion that riots were down to pure criminality. Especially not elected parliamentarians, and certainly not a Prime Minister.
In Criminological fields, the riots may look something like the routine activity theory (where crime arises out of an opportunity with three key ingrediants: a motivated criminal, a suitable target, and a lack of guardian, control or policing – basically what Clapham Junction looked like, with criminals targeting shops selling high-value purchases like phones or branded trainers, and with no police to stop them) and subcultural theory (where youths assume that given the current economic climate it is more profitable to engage in criminal activity than to try and enter mainstream society – where they may be absent from).
But on the question of criminality itself, I would see fit to utilise a theory that dates back a little further.
In Plato’s Republic, on the subject of the Ring of Gyges, Socrates discusses whether a typical person would be moral if he did not have to fear the consequences of his actions. A common example used today is whether one would hand back money if the cash machine they were using pumped out double that was being requested, in full knowledge that they could take the money and run and not be caught.
The problem (or shortfall) of the routine activity theory is that it provides no assumptions on what motivates a criminal, but the assumption I’d be willing to make is most of us would be motivated to commit something considered to be a crime if a) we didn’t fear the consequences (getting caught) and b) we could sufficiently absent the referent in our heads (remove the propensity towards guilt by assuring ourselves that what we’ve stolen is just a drop in the ocean for whoever or whatever faceless unknown owns it).
In this sense it is not just the lower class who are likely to cause acts of criminality, it is anyone who commits a crime they believe they won’t get caught doing – and judging by ad campaigns against crime that’s a lot of us (the advert that comes to mind is the one against illegal downloading which starts by saying “you wouldn’t steal a car” – the assumption being that downloading stuff from the internet does not carry the same amount of fear of consequences or guilt as stealing a car).
This is what made the expenses scandal so worrying – not that MPs were doing wrong (chance will be a fine thing), but that they had removed from their minds the people they were stealing from; us!
Many have been very quick to blame pure criminality, but there is a wider worry at play here, namely we live in a society that doesn’t offer enough to be respected in itself, we live in a society which only tries to disincentivise crime by making us fear the consequences. What stops a larger proportion of society than we’d care to admit from looting constantly in hard times is not full appreciation of right and wrong, but fear of getting caught. And that to me is not a happy society.
In a way society is ill, but not in a way David Cameron fully understands – and to be sure, this notion of pure criminality is a trivial sideshow.
Refound Labour, Peter Hain requests, go forth and change your party the way you want it. Simple. Or perhaps not. The impending cuts will hit home and hard very soon, trade union laws – already the tightest in the EU – are being toughened, Bob Crow won’t sit on his hands and watch it happen and nor, he supposes, will the rest of the TU movement.
Problem solved then; Labour should push to the Left. After all this Tory-led government, the most right wing and reckless for a generation, is stirring a previously untapped militancy in working Britons today. But wait. Ed Miliband has been told by his policy advisers that the British electorate want him to push through a brash agenda focused on “cutting crime, reforming welfare and reducing immigration”.
Surely his advisers wouldn’t deceive him, but yet Ed Miliband stands against New Labour – and this agenda sounds desperately New Labour-esque. Take crime for example. Under Labour crime fell by a third, but worry about crime reached fever pitch. Is Miliband being told to increase worry about crime to appease worry about crime?
Like Miliband noted during a speech given to his old school during the Labour leadership election campaign, we must criticise those arguing for more New Labour in the way they levelled against the social democratic side before; by saying that society has changed and it’s erroneous ignoring it.
Thought must be spared for the support the party lost in the heady days of New Labour, when the coffers were full and the cash cheap. Of the sections of society whose vote went elsewhere throughout New Labour’s governance, one particular grouping seems to stand out – parts of the Christian vote. 50% of voters who identified as Church of England voted Labour in 2001, that dropped to 31% in 2005 and to 25% in 2010. 60% of voters who identified as Catholics voted for Labour in 2001, that dropped to 53% in 2005 and then to 39% in 2010.
Last week I attended the launch of a new think tank – GEER (Gender, Environment, Equality, Race) – where some of these statistics have come from. During it, Grahame Morris, MP for Easington, acknowledged that politicians “can put ethical arguments in public policy”. This admission of his highlights an important point, similar to the statistics on Christian ex-Labour voters – namely ethics has been taken out of public policy in general, and the Labour party specifically, and it is high time for its return.
New Labour was a wholly individualistic affair, set on incorporating the Thatcherite inclination for ruthless self-interest and electoral success through media manipulation over fairness, reasonableness and responsibility. For the party today this should be reversed.
Universal insurance and welfare must be a right of citizenry, and the acknowledgement of our interdependency on each other must again be realised, where neo-liberalism has reduced it to ash.
Labour must show itself to be the party on behalf of the public sector, now that the coalition government has set about its destruction. But it must not stop here. Labour should legislate for a strong degree of employee self-governance to back track away from New Labour bureaucratic centralisation and managerialism.
Injecting ethics – and ethical socialism – back into mainstream Labour party politics might not fit the New Labour narrative, but that narrative is dead; times have changed. Instead, as Grahame Morris has said, ethical arguments have a place in public policy, but it was Labour’s lack of ethics that saw swathes of voters look elsewhere for a narrative to fit them. Ed Miliband can’t ignore that, but he can – and must – ignore what his advisers are reported as saying today if Labour is to survive.
Update: Second from last paragraph updated at 11.45 to read employee self-governance, and not employer self-governance.
As I said in February, I don’t think it’s correct for a person to be judged alone on the kind of support he receives – particularly if that support comes from opportunists trying to score column inches.
The same, I feel, goes for David Cameron. When he gave his speech on multiculturalism earlier in the year, the BNP called it “the Griffinisation of British Politics”, while the equally unpalatable English Defence League used the speech as fuel for their fire in Luton.
Pointing out these embarrassments should not be the crux of our criticism – since politics is not merely about doing the opposite of your counterparts. Ones political judgement should stand up by itself.
The problem with Cameron’s speech on immigration is that it reduces migrants themselves to stereotypes – namely that they pursue sham marriages, fail to assimilate and put pressure on the welfare state – while also reinforcing good immigration as the cheap commodification of labour.
However the problem does not begin and end with Cameron. This kind of low politics, deprecating immigrants, is the order of the day for the European right wing.
I found Nick Clegg’s reaction the most telling:
Cameron’s language isn’t what we would have used…but he’s a Conservative leader talking to Conservative voters in the run-up to an election.
How right Clegg is! But these are not conservatives, rather, Conservative voters who are lapping up this kind of flabby rhetoric. The worry is that this politics could fill the gap of third way politics, now in its declining hour.
In France, for example, President Sarkozy has decided to whip up tensions concerning Muslim immigrants, their headwear and assimilation, in a bid to attract voters away from Marie Le Pen’s National Front (FN).
As for Germany, during an argument inside Merkel’s cabinet about labor shortages, the chancellor chose to frame the terms of debate on the “failed approach” of multiculturalism.
In the Netherlands, fear of the immigrant is not restricted to Geert Wilder and his clan of PR-savvy stunt fascists; Netherlands immigration law now requires citizens to pass difficult tests demonstrating Dutch language fluency and cultural knowledge.
Earlier in the month, on this site, Paul identified three types of actors around the core executive of the new Conservative regime. The first being the upper class elite comfortable with high politics, the second as neo-liberal pacemakers defining the shrinkage of the state, and the third being the apologists whose presence is simply CV development. Though I think this is helpful, in order to properly understand the root of Cameron’s immigration speech, and the Tory party on social issues in general, we cannot ignore the emerging new rightist politics in Europe – immoderate on presentation, and epistemically closed in substance.