Bill Jamieson: Corbynomics fuelled not just by Left
WELCOME to the politics of convulsion. The surge in support for Jeremy Corbyn is the latest manifestation. The fiery campaign for Scottish independence, the sweeping victories of the SNP, the collapse in support for Labour and the Liberal Democrats – all conform to a pattern. Now comes the upending of all consensus predictions about the Labour leadership contest and the ascendancy of the hard left candidate.
Every Labour establishment intervention warning against a Corbyn victory only seems to swell the packed-out Corbyn rallies, where even the overspill rooms are over-spilling. And it is unlikely this latest convulsion will stop here.
This is the latest sign of a widespread disaffection, not only over Labour “politics as usual” but about life in modern Britain. The latest consensus conviction is that a Corbyn victory will doom his party and pave the way for a Conservative electoral surge stretching a decade or more ahead.
But this wisdom, too, is set to be shaken. Is a Corbyn massacre at the polls so much of a certainty? Picture where we may be a few years ahead. The economic cycle that brought recovery and rising employment since 2009 has run its course and turned down. Global growth has faltered. A China recession, convulsions in the Middle East and policy failure in Europe have combined to dent confidence in global uplift.
And with them, the bold assertions of the Cameron-Osborne era have also crumbled. Old truths have reasserted themselves. Britain still has a weak and unbalanced economy, its true condition hidden behind a façade of policy interest rates near to zero and a monetary base expanded by Quantitative Easing. When these were removed by a central bank anxious to restore “normality”, rising rates accentuated a declining growth rate and rising unemployment. Household wealth and consumer spending took the hit. Rising debt, government and private, did for the rest.
What revealed itself was an economy characterised by service sector dependency, low pay, low skills and cities and regions that had been in decline for more than a generation. And as recession approached, the government found itself with no weapons left in the armoury to fire – fiscal or monetary – other than resort to borrowing. A soaring Conservative ascendancy against this backcloth? Don’t be too sure.
Now imagine the potency of the Corbyn critique against this backcloth: cliché-ridden politics, vacuous dissemblage and a “same-old” rhetoric and scare-mongering from opponents that fails to inspire. Corbyn’s championing of a publicly owned rail system may have drawn derision today. But, as rural train services are pared back, the maddening HS2 sails on at an estimated cost of £42.6 billion. Yet my local station is now unmanned, has just had its toilets closed and the ticket office replaced by a fitful cash-only dispensing machine. Many voters would prefer the money spent on track upgrade and reinstatement of local services. And why proceed with another runway at Heathrow when regional airports have a strong case for expansion?
Corbyn’s proposal for a national investment bank has also been mocked. But few are rushing to defend the current banking system. Many, by no means confined to the hard Left, may find the idea of a “people’s QE” targeted at infrastructure projects preferable to the present indiscriminate “system” that has worked to pad out bank balance sheets and inflate property and equity prices – enriching the already wealthy.
As for state ownership, it was deemed acceptable for the government to step in with rescue takeovers of Britain’s troubled banks but outrageous bonuses and gross market abuse, mis-selling scandals and regulatory failures continued. Indeed, the big charge against UK Financial Investments – the Treasury vehicle that holds the shares in RBS on behalf of taxpayers – is not that it was a dangerous extension of state control but that it didn’t extend itself far enough in wielding its power to punish market abuse and mis-selling at RBS.
Meanwhile, what has unfolded on the business pages during Corbyn’s campaign? The latest survey from governance concern Manifest and pay specialists MMK, reveals that the fat cat pay bonanza carries on regardless of “austerity” and prime ministerial admonition.
Mick Davis of miner Xstrata was awarded £18.4 million. Michael Spencer, the former Conservative Party co-treasurer who runs broker Icap, got £13.4m. Bart Becht, the just retired boss of Reckitt Benckiser, earned £17.9m. The survey found that, between 1999 and 2010, the median remuneration of a FTSE-100 chief executive rose annually by an average 13.6 per cent – up from just over £1m to more than £4.2m. Over the same period, the average annual rise in the FTSE index was just 1.7 per cent. By comparison, average employee earnings increased by 4.7 per cent a year.
The upshot is a rapidly widening pay gap in Britain’s biggest companies. In 1998, Britain’s chief executives earned 47 times the average worker. By 2010, that figure was 120 times.
Anger and frustration at this explosion of fat cat boardroom pay tears at the social solidarity that any stable and orderly political system needs if it is to survive. It has certainly fuelled Corbynomics. But it is far from confined to “the hard Left”. It has been as much a cause for consternation among right of centre private shareholders. For years they fought in vain at annual meetings to bring some restraint to bear on the greedy corporate titans.
Then there is the relentless loss of UK industry to global corporations, the outsourcing of key functions to faraway call centres, the ceding of power to Brussels that has added to a growing sense of loss of national control and a politics little more than the management of shrinkage and decline. Establishment politics is failing to tap into popular disillusion and to tackle the changes required.
Add to this the sense of government as a closed elite circle, the growing demands for devolution and localism, the failure of the political class to inspire, the outcry over the over-stuffed and expenses-grabbing House of Lords, and it is not hard to see why we are now in an era of political convulsion and turbulence without modern precedent.
While non-Labour voters may not take well to the tax implications of Corbyn’s programme, at least he is up front about his tax agenda – unlike the dissembling Labour contenders who never fess up to the implications of their programme but who will tax, spend and borrow with all-too inevitable consequences.
Corbyn’s crusade may be fantastical. It may be doomed to crash head-on with the eternal constraints of economics. But it has a resonance far beyond those over-spilling rallies. This is a turbulence that, like the general election result, the pundits failed to predict. And it has further yet to go.