Simplification in politics is often necessary. This means breaking down fifty page policy papers in to sound bites or adverts or spewing a biblically sized party manifesto in three minutes on the doorstep of a disillusioned voter that is preparing to take great pleasure in slamming their front door in your face. It prevents the distortion of a clear message and allows for the digestion of often complicated debates. This form of simplification, although it may not always be underpinned by a positive message, is to all intents and purposes necessary for the mass consumption of politics. No one truly believes, within the political classes at least, that the British economy can be compared to a household in debt. However, it serves the purpose of explaining and personalising complicated deficit economics. There is one simplification however, that rather than be the tool for explanation, has become the policy itself.
New Labour tended to define social mobility as an ever expanding middle class. It was a metaphorical synonym for their real aim, which was to improve the living standards of those in the bottom quartile. They made accessing debt facilities cheaper and in turn, combined with favourable exporting conditions and a strong financial centre Britain found itself in an economic environment where it became natural for people to live beyond their means because there would be “no bust” this time around. John Lanchester in Whoops, estimates that the debt to earnings percentage stands at 140% in Britain compared to the continent which hovers at around 50%. As a result, one could realistically define these improvements as cosmetic. This is especially so when we consider the strong evidence which shows that the wealth created during the economic boom stratified at a faster rate than during the Conservative era that preceded it.
The issue is not just that it didn’t happen; “it” being everyone waking up as Middle Class. Rather the issue here is that the simplification that was presented as politically plausible was in reality a fallacy when combined with the policies and culture of the New Labour government. Social Mobility is the measure of a society’s ability to have people both rise and fall. The corollary of this of course is that increased social equality makes social mobility easier. This is because the more equal a society is the smaller the divide between the top and bottom and as a result the easier it is to move between wealth brackets. New Labour however, spent their time in office determined to avoid the topic of social equality lest they resurrect that old dichotomy of “electability vs. principles.”
Blair and New Labour shied away from debates on social equality and attempted to buy off the working classes and lower middle class with an unsustainable increase in spending on the welfare state. They expanded university access without improving the education system, meaning that many of the very people they were trying to help ended up in substandard higher education institutions. The elites however, carried on as ever attending the very institutions they had always attended fearing that only positive discrimination, as opposed to real improvements in education, could unseat them from their Russell Group place. Trying to tackle this, New Labour created Academy Colleges so as to increase funding to state schools. What they didn’t tell anyone was that it wasn’t the private or charitable sectors pumping most of the money in to academies. Under Labour, state spending per head on the children who attended academies was more than at their comprehensive equivalents. All we learnt from that experiment was that more money and nicer buildings make students happy and they may or may not get better grades (the academic success of academies is chequered). On the topic of improved social mobility the Labour Party were more trigger happy cowboys than coherent reformers.
As much of New Labour’s legacy (/ad hoc policies) is washed away by the realities of recession economics, we must accept that Blair and those who supported him, made little head way in to creating sustainable structures that improved social mobility in Britain (OECD statistics prove this). What filled this vacuum was a cultural shift towards the disinclination of shared economic responsibility that took three forms.
The first form was that being rich alone was service enough to society. Mandelson shone an unsubtle light on Labour’s absolution of their responsibilities by stating that New Labour was “comfortable with people becoming filthy rich”. Thatcher allowed people to get “filthy rich,” Labour made it cool, trendy and acceptable. Ha-Joon Chang is right however. The CEO’s of multinationals now being paid more than their lowest paid professional by 100 times in contrast to the 60’s and 70’s where that gap was closer to 10 times are not worth their pay packets. He provides evidence to show that not only are they not 10 times more profitable than their predecessors they are on average less so. Furthermore, in real (and comparative) terms many corporations pay their staff, who have a higher propensity to spend and therefore stimulate the economy via consumption, less. This may have been forgivable during the good times (it wasn’t), but the financial crisis has shone light on a win-win culture where the rich are rewarded for failure as well as success.
The second aspect of the cultural shift was that corporations were absolved of all duties beyond job creation. It has become a fall back when a company’s moral compass is in question to state that “they create several thousand jobs for the British economy.” This justification has gone on to support unpaid taxes, weapons sales to authoritarian states, the treatment of foreigners as slave labour and the failings that led to a recession in 2008. You then have the major gas providers who have by and large increased their rates. The only exception to this rule has been, unsurprisingly, The Co-Operative who have cut rates by 2%; they however only provide for 60,000 homes. According to Ofgen, although costs to energy suppliers are falling below 2008 levels, the charges to the consumer is rising leading to nigh on record profits in an industry that has the ability to directly affect the spending power of even middle income earners. Corporations have never been known for their inherent benevolence (regardless of what Michael Moore says), however in recent years we have come to expect almost nothing from them but jobs and they have come to deliver on that contract.
The final aspect that underpinned the decline of shared economic responsibility has been the marginalisation of the working class. Mired in their snobbery, it took New Labour too long to realise that not everyone wanted to attend university to study History but rather some people enjoyed manual professions. Better late than never, they responded accordingly with apprenticeship schemes. However, the damage was deeper than that. They created a society where the wealthy were glamorised and accepted into the political elite as inherently good and proper. Peddling a dream that any and every one could be middle class, they intentionally marginalised those who did or could not buy in to that aurora-borealis as lazy and undeserving. It was only at the end during the recession that Labour moved against the wealthy, but for years previously Blair had created and encouraged a Daily Mail society that attacked those on the margins of his political experiment. It was unsurprising then that when the financial crisis hit and people saw the extent to which bankers had lived it large that graduate applications to banking increased astronomically, money had become the new moral currency. So why are we then surprised that in many communities in Briton people would rather live on the dole than earn the minimum wage in a job that years of marketing and political indoctrination have served to dehumanise? Why should we be surprised that the corollary of Blair’s Britain is one where people riot not for food or against political subjugation but for Nike trainers and plasma t.v.’s? New Labour made consumerism the standard; it became a standard that could only be achieved via heavy borrowing for most.
Ultimately, the starting premise was a dangerous one, this being the idea that everyone could be middle class. The premise was dangerous because it was based on those at the bottom moving up without an acceptance that those at the top should move closer to the bottom. On the contrary it encouraged the rich to become even more distant and devolved of social responsibility. Ignoring those at the top was the first mistake, but this led to others. New Labour, unable to create a culture of shared economic responsibility found itself buying off the working and lower middle classes via astronomical increases in welfare spending which depended on the constant consumption of those with a high propensity to spend, the poorest in society. At the end of it all we are no closer to social mobility, in fact Britain according to the OECD is edging closer and closer to America (and in some cases Portugal) on the topic of social immobility a trend that has continued with the coalition, not begun by it.
So as our society continues to obsess about social mobility, we should always remember New Labour’s example of what that can lead to when we are ignorant of social equality.
Babs Williams is the President of the Queen Mary Student Union and former Chairman of New Turn.