Immigration and the ‘left behind’

Statsmeister Michael O’Connor produced this gem of a chart a few weeks ago, breaking down the post-recession employment recovery by region, type of employment and country of birth. It shows how much of the job growth outside London has come from self-employment, especially for those born in the UK. Even now, there are still fewer people in employee jobs in Yorkshire and Humberside than there were before the recession. Among the UK-born, there are fewer people in employee jobs in Yorkshire, the Midlands, Scotland and, most surprisingly, the South-East.

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Some of this might be due to demographic change. The population of working age UK-born has fallen in some areas. But that wouldn’t explain why there has also been a growth in self-employment among the UK-born. If it were simply a case of there being fewer of them, surely the number of self-employed would fall too.

Mobility, and the lack of it, provides some explanation for these patterns. In any society, people in their twenties and early thirties, without children, tend to be the most mobile. They are free to travel for work and happy to live in relatively basic accommodation. After all, it won’t be for long and the money and experience will set them up for a (hopefully) more stable future.

The effect of free movement of labour throughout the EU has been to gather all these people, across Europe, into a single labour pool. It is a pool in which British employers have found it easy to fish. With English being the most popular second language in Europe and wages in the UK being relatively high, it was inevitable that a lot of these people would be attracted to the UK. As a Centre for Population Change report published earlier this year showed, the proportion of people in their twenties and thirties is much higher among EU migrants than among the UK-born population

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These are the people who can move most freely across the continent, making them highly responsive to the demand for labour. (More on this in last week’s post.)

Many of the UK-born population find it difficult to do some of the jobs current filled by migrants. It’s not because they are lazy it is simply that the sort of flexibility the migrants provide, and employers have come to expect, is hard to maintain when you have a home and a family. As Sarah O’Connor said:

When people say “migrants are doing the jobs that Brits are too lazy to do”, they are missing the point. These jobs may be palatable if you are a single person who has come to the UK to earn money as a stepping stone to a better future. But if you live here permanently, have children here, claim benefits here, they are not jobs on which you can easily build a life.

James Gleeson produced an interesting chart earlier this week showing how the geographical centre of gravity for jobs has shifted further south over the past decade or so, while the people and, especially, the housing have lagged behind. (He explains the methodology behind it here.)

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To a certain extent, then, people are following the work but many are, for obvious reasons, staying where their families and accommodation are.

Recent research by the Joseph Rowntree Foundation suggests that there is a similar problem in microcosm in many of the large cities. The prosperity of the shiny new city centres in Manchester, Leeds and Birmingham does not flow to the areas round about. This doughnut problem sees unemployment and underemployment in the periphery of major cities existing alongside unfilled jobs in the city centres. A mixture of skills mismatches and poor transport disconnects suburbs and small towns from the employment opportunities in the cities close by.

Perhaps this explains some of the rise in self-employment among the UK born in the Midlands and North. In the absence of new local jobs, people have set up their own businesses. The trouble is, as Paul Nightingale and Alex Coad point out, a lot of these businesses are likely to be marginal, lacking the capacity even to provide a minimum wage income for their owners. The vast majority of businesses set up in recent years have turnover below the VAT threshold and the incomes of the self-employed have collapsed since the recession. Even so, subsistence-level self-employment is preferable to no employment at all.

This raises another question though. If we hadn’t had free movement of labour and a young mobile workforce on tap, would the labour shortage have forced employers to train more people and to move to areas where they could find workers? Might they have had to put a bit more effort into using the workers we already had available in the UK? Or might it simply be that, without the ready supply of migrant labour, a lot of the jobs and a lot of the companies that have appeared since the recession would simply not exist?

The end of free movement of labour probably won’t make us any the wiser. The effects will be dwarfed by the economic downturn. As Jonathan Portes notes, there are already signs that the weakening UK economy is making the country look less attractive to migrants. The Resolution Foundation points out that, even if annual migration is cut to below 100,000, any increase in wages brought about by the resulting labour shortage is likely to be cancelled out. The pay squeeze caused by the economic shock of Brexit will obliterate any gains.

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Their report showed that, while immigration does create some downward pressure on pay, it is nothing compared to the effects of an economic slowdown. Recessions hit people’s pay packets much harder than migrants do.

The next recovery will be different from the last one. Recessions and recoveries always are. Whether the absence of free movement of labour from the EU will make much difference to the overall pattern of job growth is difficult to say. Without concerted effort from government and employers on infrastructure, training and technology, it looks unlikely that much will change. Without that, Brexit or otherwise, the workless, the underemployed and those in precarious jobs probably won’t see much improvement.

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Are we prepared for post-Polish Britain?

The HR director at an organisation I worked with a few years ago, commenting on people’s refusal to engage with change until the last minute, said: “When a decision is announced in this place it’s a signal for the debate to start.”

I was reminded of this when I read Heather Rolfe’s report on employer responses to Brexit, in which a number of employers commented that there had been more workplace discussion of the referendum since it happened than there was before it:

While referendum discussions were described as fairly limited before the vote, levels of interest were considerably higher after June 23rd. The surprise of employers was shared by employees and accompanied by a good deal of informal discussion, often focused on free movement issues. The manager of a hotel chain described how this included ‘concern around whether the people are wanted in the UK’. Some respondents felt it was ironic that interest in the referendum and in the EU was higher in the aftermath of the vote. The HR director of a food manufacturer stated:

‘My disappointment from people generally is if there’d been that level of discussion and engagement prior to the Referendum… perhaps the outcome might have been different’.

The shock among the employers surveyed is a reflection of how dependent they are on workers from the EU. The possibility of a reduction in their labour supply fills them with horror.

For over a decade, the UK economy has been built on the assumption that there is a massive pool of flexible labour available. Free movement rules and geographical proximity mean that the EU migrant workforce is highly responsive to changes in the economy. People come and go according to how many jobs are available. As the ONS migration statistics show, migration from the EU tailed off during the recession and then picked up again as the economy recovered.

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At the same time, many of the EU migrants already here went home (or somewhere else) when the economy crashed and the work dried up.

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While these charts only cover migration of more than a year, we also know, thanks to Michael O’Connor and Jonathan Portes, that there is a considerable churn of short-term migrants from the EU. The difference between long-term migrants and the number of NI allocations shows that a lot of people come to the UK to work for short periods.

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Chart via Guardian

As the Resolution Foundation’s recent report on migration and the labour market showed, the employment rate among EU migrants has tended to be higher than for the UK born, and is especially high for those from eastern Europe. Furthermore, their employment rate recovered more quickly after the recession. This is due, in part, to their mobility. When there is more work, more of them come. When there is less work, fewer come and more leave.

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From an employer’s point of view this is great. There is a ready supply of labour, much of it highly qualified, that responds quickly to changes in demand. When you want more people they arrive. When you don’t need them any more they go home.

Around half of the net increase in employment since the recession has been due to EU migration.

Emp Chg country of birth Aug 2016

Source: ONS EMP06, 17 August 2016

It is disingenuous of politicians to boast about the ‘jobs miracle’ while, at the same time, demanding a reduction in immigration to under 100,000. Many of these jobs would probably not exist without the ready supply of EU migrants. As the Resolution Foundation research shows, entire sectors are now dependent on labour from the EU and it is unlikely that UK-born workers will take these jobs over should they leave.

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It is unlikely that native workers will totally fill the gap at current wage rates. Pay in these sectors averages £9.32 an hour, significantly below average native wages of £11.09. We know that lots of workers in these sectors are migrants from the EU ‘accession’ countries, whose average earnings are £8.33, £2.76 below that of natives. With employment at an all-time high it is unlikely that there are large numbers of natives either looking for work that will be attracted to these sectors given the low-wages on offer. Similarly these kind of wage rates are currently not sufficient to bring those not in the labour market into participation. It seems unlikely that the simple absence of migrants would be enough to change that situation.

Sarah O’Connor wrote about the potential impact of the end of free movement on the food industry:

Have you ever noticed how supermarkets run out of fruit salads on sunny days when everyone decides they fancy a picnic? No? That’s because they rarely do.

I never really thought about the mechanics behind this until I interviewed a man who supplied temp workers to a British company that made bagged salads and fruit pots. Demand would fluctuate according to the weather, but British weather is notoriously changeable and fresh products have a short shelf life. So the company would only finalise its order for the number of temps it required for the night shift at 4pm on the day. Workers on standby would receive text messages: “you’re on for tonight” or “you’re off”.

Most of this hyper-flexible workforce had come to the UK from Europe. “We wouldn’t eat without eastern Europeans,” the man from the temp agency said confidently.

And there are many good reasons why the locals won’t take over when they are gone.

[T]here are already plenty of jobs for British people. The proportion of UK nationals in work is at a near-record 74.4 per cent, higher than in 2004 when the “A8” eastern European countries joined the EU (which is when migration to the UK began to increase sharply). Torsten Bell, director of the Resolution Foundation think-tank, says the only significant pocket of unemployment left in Britain is among disabled people. “And we’re not about to send them out into the fields”.

There is also something about the nature of these jobs that makes them tough for UK nationals to do. These sectors usually require extreme flexibility from staff: the salad-baggers who wait for a text message to say they have work that night; the cleaners who cobble together piecemeal shifts at dusk and dawn; the fruit pickers living in caravans on farms.

When people say “migrants are doing the jobs that Brits are too lazy to do”, they are missing the point. These jobs may be palatable if you are a single person who has come to the UK to earn money as a stepping stone to a better future. But if you live here permanently, have children here, claim benefits here, they are not jobs on which you can easily build a life.

There you have it. British employers have access to a plentiful supply of Europe’s young, mobile and hyper-flexible employees. We have structured many sectors of our economy on the assumption that there will always be a steady stream of them.

Of course, the supply won’t disappear overnight. As the Social Market Foundation said, by the time we actually leave the EU, a majority of the EU migrants who are already here will have permanent residency rights.

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But, as the tap is turned off, the hyper flexibility will disappear. If, in future, EU citizens are subject to the same immigration rules as those from outside the EU, firms that have come to rely on that flexibility will struggle to find workers.

An optimistic view is that this may lead to more investment in technology and training as employers find ways to produce the same with fewer people. Last month, I went to a Resolution Foundation conference on robotics. (The accompanying report is here.) The combination of economists and robotics experts produced some fascinating discussion. One scenario had the post-Brexit labour shortage kick-starting massive investment in technology, with robots picking crops in the Lincolnshire fields and the UK becoming a world leader in artificial intelligence by 2030.

The trouble is, such a re-orientation of our economy would require a complete change in British corporate culture, much of which has been short-termist and reluctant to invest for several decades. The more troubling possibility is that the reduction in EU migration will simply lead to an increase in the number of illegal workers. Should that happen the enforcement agencies would struggle. As the Resolution Foundation warns, their resources are already stretched as it is:

[T]he three existing labour enforcement units have a combined staff of less than 350 – equivalent to one enforcement officer for every 20,000 working age migrants.

These agencies could be given responsibility for enforcing and policing any temporary workers schemes that might be set up in the future, but they are already stretched carrying out their current duties. If temporary labour migration is not to become illegal migration there would need to be significant investment in the future.

Cutting off or even significantly reducing migration from the EU will be a shock to an economy that has been built on the assumption of a plentiful on-tap supply labour. As Sarah said, we have come to take for granted much of the work that the migrants do. We will only really we’ll only really understand that when they have gone.

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There will be no post-Brexit dividend

I was invited onto Tom Swarbrick’s show on Saturday to comment on Brexit and, particularly, the chancellor’s pledge to maintain the EU spending on agriculture and some scientific projects. As I said on the programme, and as several other people have pointed out, this isn’t really a big deal. The funding is only guaranteed until 2020 and as it is unlikely that the UK will be out of the EU until 2019, this only amounts to one year’s funding.

There is a wider issue here though. As one commenter later in the programme put it, leaving the EU is like trying to take the stripes out of toothpaste. The EU economy is integrated and rests on a set of assumptions built up over 23 years of the single market. Supply chains stretch across Europe. Businesses have been built on the basis that goods, services and workers can move freely.

Last week, the Institute for Fiscal Studies published a report on the likely impact of the various Brexit scenarios on UK trade. It focused on the important distinction between membership of and access to the single market, making the point that once the UK leaves the single market, trade becomes a lot more expensive and bureaucratic, mainly due to non-tariff barriers. (For more on this see Ben Kelly’s piece.) The impact on trade will, says the IFS, have a knock on effect on the public finances through reduced tax revenues and increased welfare payments “as higher-than-expected unemployment – and prevalence of low incomes – pushes up spending on working- age benefits and tax credits.”

This will blow a huge hole in the budget. The IFS estimates that the public finances will be between £24 billion and £39 billion a year worse off by 2020. It was already going to be extremely difficult for the government to eliminate the public deficit by the end of the decade. Brexit will make it impossible, which is why Theresa May has abandoned the idea.

Set against this, the amount the UK will save by not contributing to the EU is puny. An IFS report in May calculated the likely net contribution over the next few years at around £8 billion a year. Once you allow for the rebate and EU spending on the UK, the much-trumpeted £350 million a week is reduced by more than half.

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This will be completely obliterated by the hit to the public finances, which will dwarf it by three to four times.  On top of that, there will be extra pressure on the public purse, not least from the increase in the size of the civil service that will be necessary just to deal with what the Economist called “bureaucratic marathon” of Brexit.

The upshot of this is that there will be no extra money from leaving the EU. It will be eaten up by the cost of Brexit. The cost of guaranteeing funds for farmers and research projects will therefore either have to be met by taking funds from somewhere else or by increased taxation and borrowing.

The chancellor’s pledge to maintain funding would need to be renewed after 2020 and could therefore become an issue at the next election. Do you want to maintain the support for farmers and for other former EU funding recipients like Wales and Cornwall? If so, should we take that money from the NHS or schools or defence? Or would you rather pay extra tax or have the government borrow more? Those are the options. There is no Brexit dividend. Our EU refund has disappeared into the vortex of the post-Brexit slump.

It will be interesting to see what the voters decide.

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Brexit: Enough David Brent, this is serious!

A few years ago, I was listening to a talk by a coach and motivational speaker who was extolling the virtues of positive thinking and the new empowered, non-hierarchical, collaborative workplace. I said that, while I loved his wonderful image of the future of work, I didn’t see much evidence of a trend in that direction. We had been talking about these things for twenty years, yet command and control was still the norm in many industries and technology was making some workplaces more regimented than ever. Not to mention the people on various forms of precarious contract at the whim of their managers.

His response was that, by choosing to focus on such things, I was displaying my negative mind-set. I was filtering information according to my preconceived ideas and refusing to allow in the positive and hopeful future. See what he did there? He turned his complete lack of supporting evidence for what he was saying into my problem. It was me being negative, not him ignoring the data.

Alas, the cod-psychology of self-help and motivational mumbo-jumbo has seeped into the Brexit debate. Leave campaigners are telling anyone who raises concerns about Brexit to ‘be positive’, ‘just get on with it’ and, my personal favourite, ‘move on’. It’s the sort of language adopted by managers who want to railroad a project through and don’t want to hear the staff tell them it might go wrong.

But just get on with what? Move on to what? I’m as happy as the next person to move on if it’s clear what we are moving on to but, at the moment, we have no idea. We might have voted against the EU but what did we vote for? The government should have had a plan, say the Brexit campaigners. (There it is again; turn your own failings into someone else’s problem.) But it is difficult to see how anyone could have planned for this, especially when we don’t know what ‘this’ is. “Brexit means Brexit,” said Theresa May, which sounds decisive but is anything but because Brexit can mean all sorts of things.

I have managed any number of change programmes over the years, consisting of multiple but mutually dependent projects. When I look at this, though, I wouldn’t even know where to start. I tried to draw a diagram of the various options but I gave up because each one of them has so many potential permutations and stumbling blocks, each dependent, in turn, on the political pressures on many different actors.

Just deciding the UK’s starting position is going to be difficult enough. Most business groups are adamant that the UK should retain its membership of the single market while a lot of those who voted Leave did so on the assumption that, after Brexit, free movement of people from the EU would stop. At the moment, EU governments and, perhaps more importantly, their voters, are very reluctant to offer the UK a deal that allows both.

Eurotrack EU trade-01

The next diagram* shows the various relationships that different countries have with the EU. Broadly speaking, the further right you go, the more control you have over things like regulation and immigration but the less favourable the trade terms get. Switzerland, for example, is being threatened with reduced market access if it goes ahead with its plans to restrict immigration from the EU. Beyond the red circle, you leave the EU orbit altogether and either negotiate free trade agreements with the EU or trade under WTO rules. (More on this later.)

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We start from the point, then, that there is no consensus in the UK about what Brexit should look like. Going into a negotiation without knowing what you want and hoping it will become clear as you go along is really not a good place to start. Ideally, to satisfy everyone, we would need to have Norway’s single market rules and Canada’s right to restrict migration from the EU. It is very unlikely that other EU countries would agree to that.

Even if we can agree a starting point which a majority of people in the UK might accept and which would not trash our economy, the negotiations are likely to drag on for some time.

As Bloomberg reported earlier this week, each EU country is drawing up a shopping list of the things it wants and doesn’t want from Brexit. Some positions are defensive, others are looking at exploiting the opportunity, such as Luxembourg going after London’s financial trade and Spain grabbing Gibraltar. Against this background, just agreeing an EU-wide position will be difficult enough and it is something over which the UK has very little control. There will be negotiations nested within horse-trading nested within more negotiations.

Then there are the negotiations with those outside the EU to consider. The UK will have to re-negotiate its membership of the World Trade Organisation. Again, this could be subject to a veto from any one of the other countries. The head of the WTO has warned that such talks are likely to be long and tortuous. And all this before any bilateral trade deals can be agreed.

The simplest option would be to leave the EU and remain part of the European Economic Area (EEA). The plug-in-and-play option is always worth considering when planning any major change. The consequences of leaving the single market (as opposed to leaving the EU) were not really discussed during the referendum. This piece by Ben Kelly, a pro-Leave campaigner advocating the EEA option, goes into some of the detail. It’s not just tariffs that are the problem, he says, it’s the non-tariff barriers too.

At the moment, all goods produced in the UK are assumed to be compliant with EU rules. That is the point of the single market and all that horrid EU regulation. But the moment we leave the EU, we will no longer be part of that single market so our goods will be produced outside the regulatory area. Once the UK leaves the EU, therefore, the EU will have to start inspecting all UK exports in the same way it would goods from any other country. As Ben Kelly explains:

The great benefit of the Single Market is that border checks have been eliminated; facilitating free trade. The common rules are monitored by relevant national authorities and there is mutual recognition of standards. This makes it possible to load a lorry in Glasgow and ship goods all the way to the Turkish border with little more than occasional document checks.

If we leave the EU and the Single Market without negotiating an agreement to replicate these benefits, this all stops. The exported goods may still comply with exactly the same standards, but the testing houses and the regulatory agencies are no longer recognised. Thus, the consignment has no valid paperwork and is subject to border checks, visual inspection and physical testing.

In practice this mean the shipment is detained while samples are taken to be sent to an approved testing house. With a container inspection costing approximately £700, and detention costs running to around £80 a day for ten days or so it takes to get the results back, plus a testing fee, exporters are paying over £2000 just to deliver a container to an EU Member State.

This would have serious economic consequences. The delays would be devastating. Supply chains across European industry are integrated, with many working on a “just in time” regime. This means that any delays even to a small number of consignments will have an adverse effect on the whole system.

So the ‘just get on with it and leave’ option would be extremely dangerous. If we found ourselves outside the EU without a trade agreement we would be in big trouble. Advocates of the WTO Option, the default of simply leaving the EU without any agreements, claim that the US, China and Australia have no trade agreements with the EU yet freely trade with it. But all these countries do have agreements with the EU on regulation. These Mutual Recongition Agreements (MRA) recognise each other’s regulatory standards thereby reducing the amount of inspection needed at borders and simplifying customs procedures. Regulatory regimes are a bit like traffic lights and road markings. They help things move more quickly. If you got rid of road rules, traffic would grind to a halt. If the UK quit the EU’s regulatory framework without negotiating a MRA, something similar would happen to our trade with the rest of Europe.

Even the EEA option would not be without its problems though. We would be left with similar rules on free movement, which a lot of Leave voters would see as a betrayal, and there is no guarantee that the other countries involved would agree to it anyway. As constitutional law professor Michael Dougan says, there are 32 potential vetoes over the UK’s membership of the EEA; the 27 other EU countries, the 4 EEA countries and the European Parliament. Norway is already threatening to block the UK’s EEA membership.

There really are no easy answers here. The idea that we can just walk away from the EU is utter nonsense but all the other options are complex. The length of time they will take and the resources needed to bring them to a conclusion are impossible to forecast.

Which brings us to the final piece of the problem – resources. As anyone who has ever run a major project will know, being clear on the objectives, tasks, dependencies and sequencing is only half the battle. You then have to secure the resources to do it.

In another announcement that barely made the news, National Audit Office boss Sir Amyas Morse warned that the government doesn’t have the spare capacity to carry out all the extra work that leaving the EU will bring. This, he said, is not just a matter of capability:

We will have set civil servants a Herculean task and set them up to fail. And none of us can afford that.

Please don’t misunderstand me, I am not joining the clamour pointing to our lack skills in trade negotiation.

My point goes further. If that were the only issue, we’d be relatively well placed!

Brexit, he concluded, will have to be prioritised with consequences for all other major government projects. In short, without a significant increase in the size of the civil service, just about everything else will have to be scrapped.

With no clear objectives, an incalculable number of dependencies, unfathomable sequencing, timescales impossible even to guesstimate and depleted resources, any project planner might be forgiven for throwing in the towel. Some sort of plan will emerge eventually but, at the moment, just making one for the project’s first phase, defining what the hell it is we want, is going to be difficult enough.

So spare me the pseudo psychology and the David Brent-isms. Trite phrases like ‘move on’, ‘be positive’, ‘just do it’ and ‘we are where we are’ reflect a failure to understand the magnitude of the Brexit task. There’s no ‘just’ about any of this. It is a colossal and eye-wateringly complex task. It will take years and will dominate UK politics for the rest of the decade.

*Update

The chart above is not a Venn diagram. It is simply an illustration of the levels of trade integration with the EU but, as some people have remarked, it simplifies the nuances of the countries relationships with the EU. The EU is not a subset of EFTA and EFTA is not a subset of the Customs Union.

This one from a recent EFTA report (which is an interesting read) shows the varying relationships and agreements between European countries, including those that are not related to trade. Turkey, for example, is a member of the Customs Union but not of the EEA. Norway is a member of the EEA without being in the Customs Union.

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There is a discussion of the pros and cons of each option in this FCO report from earlier this year. The Institute for Government has a useful one-page explainer.

At the moment there is no provision for countries to become part of the European Economic Area without either being in the EU or EFTA, as this useful FAQ page on the EFTA website says. As some people have pointed out, it would, at least in theory, be possible for the UK to negotiate a similar arrangement without being an EFTA member and to lob in some restrictions on immigration too. It looks unlikely, given current political and public opinion in the EU, that there would be much support for such a deal.

Confused? You will be… and this will all drag on for some time.

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The not so new illiberalism

Authoritarianism seems to be on the rise, says Chris Dillow, citing the rise of Donald Trump and the Brexit vote. After 30 years of tub thumping about liberty, a style started by Margaret Thatcher and Ronald Reagan, today’s politicians, he observes, seem to have gone very quiet about it.

One reason for this might be that libertarian ideas were never that popular in the first place. Of course, if a pollster asks someone about their own freedom they say they want as much of it as possible but that doesn’t always extend to freedom for others.

Selling social libertarianism to the British has been difficult. Politicians like Roy Jenkins who led the socially liberal measures of the 1960s were way ahead of the electorate. It took until last year for the British Social Attitudes Survey to show that the majority in favour of capital punishment had finally disappeared. For most of the last 45 years, had that question been put to a referendum, the death penalty would almost certainly have been re-introduced. It took until the mid-1990s before a majority agreed that abortion should be legal other than on medical grounds, and that majority seems to have stabilised at around 60 percent.

Attitudes to homosexuality took a while to change too. Only 5 years ago, Ipsos MORI found that those who thought same-sex relationships were not wrong at all were still in a minority.

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We are now just about at the point where, if asked, the public might vote for the socially liberal measures of the late 1960s but it has been a long time coming. Liberals sometimes talk of a progressive majority in the UK but if there is one, it’s very recent and not very big.

If people are lukewarm about social libertarianism, economic libertarianism is even further out on the fringe. Radical deregulation, state shrinkage and privatisation sound like mainstream ideas because they are espoused by some very wealthy, powerful and influential people. Every so often, therefore, a think-tank will publish a report, a politician will make a speech or a journalist will write an article advocating deregulation and a much smaller state. But, despite all the speeches and column inches, the voters are really not interested in significantly reducing the size of the state. Over the past 30 years, all the small-state advocates have managed to do is increase the proportion of the population that  thinks taxation and spending should stay the same and reduce the proportion that thinks it should increase. Even that has started to reverse over the last couple of years. Support for cutting the state has never gone above 10 percent.

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Chart by British Social Attitudes survey

Contrast this with the re-nationalisation of utilities and transport, which has, for 20 years, been dismissed as a throwback. Until Jeremy Corbyn’s election as Labour leader, few mainstream politicians had advocated it and, apart from the odd article in the Guardian, it seemed to be permanently off the political agenda. Anyone supporting re-nationalisation was dismissed as a crank.

The trouble is, despite two decades of omertà on the subject, most voters still think it would be a good idea.* There is even a small majority in favour among Conservative voters.

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Chart by YouGov

It is the state-shrinkers not the re-nationalisers who are the eccentrics. The only reason it looks the other way round is because the former have more editorships and think-tank funding.

The voters that delivered the Leave verdict were a coalition of traditional shire Tories and working-class Labour voters. Economics is part of the story but by no means all of it. There are clear clusters of attitudes and values which correlate strongly with the Leave vote. They are anything but libertarian.

Ill-vs-Good

Chart by Lord Ashcroft Polls.

Last year, British Social Attitudes looked at the factors behind the rise in UKIP support. It found not only that authoritarian attitudes were strong among UKIP voters but also that they were not that far out of step with the rest of the population.

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UKIP’s website used to describe the party as libertarian and its constitution still does. Its supporters, though, have firmly rejected libertarianism in both its social and economic forms. The same could be said of Leave voters generally. These are not people who want less state, they want more. A lot more.

More border force staff, more prisons, more police officers, more nationalisation and more money for the NHS.

Professor Alan Wolfe’s excellent quote, which sums up the politics of the last 30 years, sheds some light on this:

The right won the economic war, the left won the cultural war.

Or, as David Goodhart put it, when he presciently predicted the emergence of a ‘post-liberal majority’, this period saw a victory for the social liberalism of the left and the economic liberalism of the right. The trouble is, most voters were never really that keen on either.

*That doesn’t necessarily mean it would be a good idea but that’s an argument for another day.

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‘I own you’ – work as subordination

“I own you,” Philip Green is alleged to have said to one of his employees, who then replied, “Slavery was over a long time ago.” Which it was, of course. Slavery was abolished in the British Empire in 1834 and the feudal bondage of serfdom much earlier in 1574.

Even so, the idea of workers belonging to their employer was a long time dying. As James Fisher said a couple of weeks ago in his article Work as Obedience, the social and political belief in subordination is a neglected strand in studies of the history of work. The idea that the demise of serfdom gave way to a society based on contract labour is an over-simplification, to say the least.

One of the most profound social changes during this period was the overall increase in the number of people engaging in wage labour. According to the standard liberal narrative, this brought about a fundamental transition in the form of work from status to contract: from labour performed according to social status to labour performed according to a negotiated contract.

Many historical narratives exaggerate the extent to which this move from status to contract represented genuine progress for the labourers themselves. Political commentators were clear in the seventeenth century that wage labourers were not free. The historian Christopher Tomlins, among others, has challenged the legal history associated with the status-to-contract narrative, arguing that the defining relationship in the development of English and American labour law was between master and servant, not employer and employee. The master-servant relation was part of a series that governed the patriarchal household, replicated between husband and wife, and parent and child. This master-servant relation was explicitly one of power and domination. Servants were under the authority of their masters and acted according to their will like mere extensions of the master’s body.

Until the last quarter of the 19th century, harsh laws effectively tied workers to their employers, or masters as they were more often known. Until 1867 a worker who ‘deserted’ his employer, what we would describe as walking off the job or just leaving without due notice, was guilty of a criminal offence and could be flogged or imprisoned. Penalties for masters who breached contracts had to be enforced through the civil courts where the restrictions and burdens of proof were so great that few were ever challenged. In Britain’s 18th and 19th century economy, which we tend to think of as the cradle of free-market capitalism, workers could still be tied to master and to place.

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Chart by Suresh Naidu and Noam Yuchtman

Of course, this worked well for some employers although perhaps it was not to the benefit of the economy as a whole, given that it impeded the movement of labour and therefore the deployment and development of skills and knowledge. More importantly, though, it was regarded as the natural order of things. It kept people in their place and upheld the social order. To many, the idea that bands of free labourers could wander around the country, stopping where they pleased and negotiating pay rates with whichever master they chose, was deeply disturbing.

It is only 140 years since these coercive labour laws were abolished and the idea of one person being owned or being under obligation to another was a feature of working relationships for hundreds of years before that. It would be surprising, therefore, if some of the attitudes that underpinned the idea of master and servant did not persist. As James Fisher concludes:

Today, work retains this sense of obedience (if only implicitly), of toiling under abstract social obligations that are specified in practice by the wealthy and powerful. It manifests itself in the belief that we have a duty to work hard regardless of both the specific ends and the conditions of work itself.

In business-school theory, organisations are run for profit and therefore seek to maximise efficiency and profitability. In practice, though, they are power structures in which hundreds of people have their own different agendas. The horrible truth is that, among them, are people who get off on dominating others. Most don’t do it to maximise the company profit. Many don’t even do it to increase their own remuneration. Management abuse is often simply about ‘owning’ other people. Clever bosses can dress up publicly humiliating employees and making them do demeaning things as ‘morale building’ or ‘performance management’ but it rarely does anything other than destroy morale and diminish performance. Many people still seem to believe that positional power in a large organisation confers upon them some kind of rights over other human beings.

The legacy of master and servant law and its forebear, feudal serfdom, runs deep. Even in 2016, I suspect that the phrase “I own you” is uttered more often than we would like to think. And, for every bombastic bully that utters it, there are several more that think it.

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Taking back control – if only for a day

John Lanchester has a long piece in the London Review of Books reflecting on Brexit. It’s worth making the time to read it in full but this piece struck a chord:

To be born in many places in Britain is to suffer an irreversible lifelong defeat – a truncation of opportunity, of education, of access to power, of life expectancy. The people who grow up in these places come from a cultural background which equipped them for reasonably well-paid manual labour, un- and semi- and skilled. Children left school as soon as they could and went to work in the same industries that had employed their parents. The academically able kids used to go to grammar school and be educated into the middle class. All that has now gone, the jobs and the grammar schools, and the vista instead is a landscape where there is often work – there are pockets of unemployment, but in general there’s no shortage of jobs and the labour force participation rate is the highest it has ever been, a full 15 points higher than in the US – but it’s unsatisfying, insecure and low-paid.

There’s work but it’s not like work used to be:

This new work doesn’t do what the old work did: it doesn’t offer a sense of identity or community or self-worth. The word ‘precarious’ has as its underlying sense ‘depending on the favour of another person’. Somebody can take away the things you have whenever they feel like it. The precariat, as the new class is called, might not know the etymology, but it doesn’t need to: the reality is all too familiar.

This is the story that the economic statistics don’t always show. Sure, the employment rate is at a record high and inequality has barely risen since the early 1990s but the experience of work has changed. The sense that somebody can take away what you have almost on a whim makes people feel less secure. Of course, it has always been possible to sack people and evict them from their houses but go back a couple of decades and it was a lot more difficult to do so in practice. Furthermore, people had more of a sense that they had some say in the matter and some form of redress against unfair decisions.

Many years ago, I read an article (I can’t remember where) applying the concept of property rights to jobs. It was an intriguing piece, arguing that organised labour had challenged the employer’s ‘ownership’ of a job. It was no longer his to do with as he saw fit, a part of it ‘belonged’ to the worker. This was certainly the case when it came to disposing of employees. Unions often resisted the right of employers to sack people. In some industries, such as printing, they even told the employer who to hire. The job was as much the ‘property’ of the worker as the employer.

To stretch the analogy even further, you could argue that there was even a sense of hereditary rights over jobs. Many of the large industrial organisations recruited from families. In the company I worked for at the end of the 1980s, entire extended families were employed. Fathers, brothers and sons as engineers or on the labouring gangs, mothers, sisters and daughters doing clerical jobs in billing or dispatch. Some of them rose  through the ranks to become managers. It was very unwise to slag off a manager in public because you could never be sure whether or not the people you were talking to were related to him.

The longer you had worked for the firm and the better your reputation, the more likely it was that you could get friends and family members jobs as well. This didn’t do much for workforce diversity but it did give people a stake in the system. Loyalty to the company paid off in the form of patronage. Being able to get your son or nephew a start at the works reinforced the status gained from working for a recognisable company, like Ford, or a big utility like the local electricity board.

Something similar happened with housing. Go back 25 years and most people who didn’t own their homes lived in council houses. They had secure tenancies with fixed rents. Priority was given to people who had lived in an area for some time. You can argue about whether this was fair or not but, as with jobs, there was (and still is in some places) a sense that these homes belonged to people and to their families. They might not have been people’s property in the legal sense but their residents certainly had a sense of ownership.

Underpinning all of this was a lot of talking and listening. Paul Bivand and I were discussing this just after the referendum. There were joint committees of managers and trade union reps at national, regional, local and plant level. There is much talk now of Employee Voice but there was plenty of it in the unionised workplaces. The people sitting on these bodies came from the same backgrounds as those they represented. Sometimes even those on the management side had originally come from the shop-floor. In the company where I worked at the end of the 80s, on the joint committee for the London area, the management side was headed up by a staunch Labour supporter and the union side by a member of the Conservative trade unionists.

All this began to fall apart in the late 1980s and early 1990s. Liberal legislation is sometimes blamed but really it only played a minor role. The company where I worked, for example, was criticised by the CRE for recruiting from families. It had done it for so long that it barely occurred to anyone that the practice made it less likely that people from ethnic minorities would be recruited. That said, ideas of meritocracy and the drive for shareholder value would probably have done for such practices anyway. At the same time, union power declined, due in part to government policy but also to the disappearance of many of its strongholds as industries were restructured and jobs automated or offshored. All this happened remarkably quickly. Unions which had seemed all powerful a dozen years earlier were on the ropes by the early 1990s. As Paul Mason said, in his review of the Shane Meadows film This is England 90, a lot was about to change:

I recall feeling on that day that a lot of certainties were falling apart around me: the deference and hierarchy that had kept protests self-controlled, even during the fractious 80s. The social solidarity that enforced law and order in working-class towns, the maleness and the straightness of public life were fading; recreational drug use was flaunting its smiley face across mainstream culture.

This new fluidity meant that, when the economy recovered in the mid-90s, the labour market would become more stratified. The rungs on the earnings ladder separated rapidly, leading to sharp and rising wage inequality. It trapped the poorest but – as the free-market model found its stride – enabled the return of upward mobility by the 2000s.

If they’ve been lucky, the real Lol and Woody will be living in a nicer part of Sheffield having survived several episodes of layoff, retraining, outsourcing and offshoring. The real people I remember from the riots and raves of 1990 – mainly the clever non-graduates who populated the trade union movement – are now ward sisters, chemical engineers, shift supervisors in highly automated factories. Whatever the job title, most are working with a raw material that barely existed in 1990: digital information. The ones who didn’t escape will be living a life you know all too well from the benefit-porn documentaries: poor, hopeless and stuck; dazzled by the celebrity circus, perennially hounded by the DWP.

Many will no doubt take issue with this, pointing out that there has been no noticeable increase in inequality since the early 1990s and that, with the exception of the mid 2000s, real household incomes rose faster for those on lower incomes than for those in the upper deciles.


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Chart via Resolution Foundation: Living Standards 2016

But while that is true, it doesn’t tell the whole story. The cost of rented housing has risen faster than incomes and the proportion of the population in council housing has shrunk. As Declan Gaffney pointed out a couple of years ago, the caseload for most benefits has fallen since the early 1990s while that for working age housing benefit has risen sharply.

caseloadchart

Chart via Declan Gaffney

This chart tells the story of our times. The proportion of people on out-of-work benefits has been falling for the last two decades. The majority of people are now in some form of paid employment but these jobs are supported by tax credits and in-work housing benefit.

Furthermore, as the Joseph Rowtree Foundation found, a lot of people regularly move in and out of low paid work. Compared to most other countries in Europe the UK has relatively few people trapped in persistent poverty. This is because we share our poverty out more evenly. Most people don’t stay on a poverty-level income for long but typically around a third of the population will have had some experience of it during the last four years. It is no wonder, then, that people feel insecure.

This brings us to the nub of it. As John Lanchester said, the new work doesn’t do what the old work did. It feels less secure. Employment protection comes from the courts, if you can afford them, not from your own representatives. Employers may ask for your opinion and take an interest in your morale but they do so because they think it will improve productivity, not because of your bargaining power. The fact that an experiment in employee empowerment and a neo-Taylorist workplace autocracy can operate under the same corporate roof shows just how arbitrary people management policies can be. In the past, employers had to talk to worker representatives. Nowadays they do so because they think it might improve their profits. Tomorrow they might change their minds.

It’s the same with housing. The proportion of people in council housing and other social housing continues to fall. Even the secure tenancies that once went with council houses are now under threat. Those in rented accommodation have very little protection against eviction. To cover rent and bills, many find themselves relying on tax credits and housing benefit.

That sense of control, of ‘property’, over jobs and homes has gone, taking with it the sense of permanence and rootedness that employment once gave people. Nowadays there is the sense that it all depends on the favour of someone else and could all be taken away from you at any point. Even if you are in a permanent job, your employer could sack you tomorrow and you’d have to pay to go to court to sort it out. He might decide to abandon the employee engagement programme and introduce the Sports Direct approach to management. If you are on zero hours or agency employment, he might just stop phoning you. The landlord might evict you next week or the government might tell you the house you have lived in for years is no longer yours. Or it might decide to take away your tax credits and housing benefit. Just like that!

The point about all this is that it is someone else decision. The protection people might once have had, through their trade union reps or tenants’ associations, has either gone completely or is much less powerful than it once was. In short, there was a time when people had more control and a lot of them can still remember it. Whether the slogan ‘Take Control’ was a clever but cynical pitch, as John Lanchester says, or just a stroke of luck, it clearly struck a chord with people who have been feeling a loss of control for years.

It was when I read this piece by Lisa Mckenzie, a week before the referendum, that I feared the game was up. I grew up in Nottingham and I already knew from friends and relatives that there was a groundswell of opinion there in favour of leaving the EU. Lisa Mckenzie put these feelings in context. Voting for Brexit, she said, was the only way people who felt powerless could change anything.

[T]he EU referendum debate has opened up a Pandora’s box of working-class anger and frustration. It is clear that the Westminster politicos are quite unnerved by this. Even I am surprised by how the referendum has captured the attention and the imagination of the same people that only last year told me they had no interest in the general election “because ‘they’ are all the same”.

In the mining towns of Nottinghamshire where I am from, the debate again is about Brexit, and even former striking miners are voting leave. The mining communities are also worried about the lack of secure and paid employment, the loss of the pubs and the grinding poverty that has returned to the north. The talk about immigration is not as prevalent or as high on the list of fears as sections of the media would have us believe. The issues around immigration are always part of the debate, but rarely exclusively.

From my research I would argue that the referendum debate within working-class communities is not about immigration, despite the rhetoric. It is about precarity and fear.

Working-class people in the UK can see a possibility that something might change for them if they vote to leave the EU. The women in east London and the men in the mining towns all tell me the worst thing is that things stay the same. The referendum has become a way in which they can have their say, and they are saying collectively that their lives have been better than they are today.

Suddenly, people had power in their hands. The sort of decision that was usually reserved for politicians had been handed to the electorate. They could make a choice which would have a direct effect on the future of the country. That, only one month later, that choice has already lead to a complete change of government ministers and has had repercussions around the world, shows just how much power the voters were given. They voted so that something, anything, might change. Briefly, people who had seen their control over their lives ebb away were granted immense power. And they used it.

Whether it will make their lives any better in the long run remains to be seen. I think it unlikely. The damage caused by leaving the EU will almost certainly hit the poorer areas hardest. That said, I retain just enough optimism to hope that, rather than shrugging off the anger, our shaken up political establishment might pause and reflect. Rather than condemning people for doing something so destructive, shouldn’t we be asking why they were so angry in the first place?

Update

On a similar theme to this, Anthony Painter has written a good piece on insecurity and the new world of work in which he draws on data from the British Social Attitudes survey. There are a couple of particularly interesting findings here.

Firstly, the study finds an increase in feelings of insecurity among older workers and those in more routine jobs.

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The age difference might be because older workers can remember when they had greater job security than they have now and the younger ones don’t miss what they have never had.

Secondly, the sense of control over the organisation of their work has risen among professional and managerial workers but declined for those in routine jobs.

Screen Shot 2016-07-27 at 16.50.52This reminds me of a discussion I had with Chris Dillow a while back on whether workplaces are more controlled and regimented now than they were 20 years ago. I suspect that your view of this will depend on the type of work you do and how many layers there are above you in the corporate hierarchy.

In general, though, these findings suggest that working class and older workers feel they have less control and security at work than they once did.

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