Cameron and the economics of the family

You can tell the Tory Party is in trouble.  Dreadful economic numbers, NHS reforms in tatters, public sector workers declaring that enough is enough.  So, once again, David Cameron uses Father’s Day, that annual festival for the greetings card industry, to make pronouncements on family issues in a piece in the Sunday Telegraph today.

At one level you have to hand it to the Tories.  In the old days, kicking a few single mothers would have been enough.  Now it’s more sophisticated – now it’s fathers who run away from their responsibilities who are in the firing line and there’s even a reference in Cameron’s piece to heroic single mothers.  Progress of a sort, I guess, but Cameron’s argument still shows overwhelmingly that he doesn’t get it on the family, and what his chosen economic ideology does to them.

Cameron’s article is couched almost entirely in terms of the economic role of fathers, and underlying it is a potent but nonsensical myth – that families can and should be supported by a single male income.  Pernicious, because it involves an economic determinism of gender roles that has no intellectual support, but also mendacious because it ignores how the balance of economic power has shifted against those on average incomes in the neoliberal decades – indeed, how it has shifted from wage-earners to the holders of capital.

My father was a skilled worker earning quite a bit more than the average wage.  Growing up in the 1970s that allowed us to live comfortably, as homeowners in a pleasant suburban semi.  In other words, on one income we had a lifestyle that increasingly now takes two full-time incomes to maintain.  Moreover, we had the expectation of things like a free university education – I was the first member of my family to go to university as a result.  I guess we were pretty normal.  We certainly – apart from the mortgage – never used credit – to this day my father refuses to have a credit card.  It’s quite hard to think that how recent that all is, and how different it is from the economic struggle families face now, balancing their working lives and sinking scarce resources into childcare.  I don’t want the old split of men earning, women at home; I want both parents to be able to make their own choices about how they raise children, without both being forced into full-time employment.

Much of the change is due to housing costs.  The idea that you could buy a family home for a little more than twice the national average wage is laughable now – if Cameron is sincere in looking for factors that have had a serious impact upon family life he might want to consider the house price inflation of the past decades, in which we have become brainwashed into thinking that rising house prices are a symptom of prosperity.  Home ownership was once the bedrock of Tory social ideology, reaching its apogee in what we now know was the disastrous policy of selling off social housing – now, for a whole generation, it is an impossibility, while renting has none of the security that legislation provides to tenants in mainland Europe.  And lifestyles are increasingly funded by the rolling over of credit.  And this is increasingly a cause of economic instability – as David Harvey has convincingly argued, every economic crisis since the 1970s has originated in a credit bubble fuelled by speculative property-price inflation.  Speculation, house price inflation, economic instability and credit-fuelled consumption have meant that economic life has become more and more difficult for people – families – who are earning average or above-average incomes, while wages continue to decline as a proportion of total income.

So Cameron’s vision of father going to work to provide economic security is no more than a piece of nostalgia – the sort of nostalgia that survives in the most economically privileged Cabinet for decades but has no relation to daily life as lived by the vast majority of citizens.  Yes, marital breakdown is an issue and of course there are men who run away from their responsibilities, economic and otherwise – but let’s stop making easy judgements about individuals when the system is stacked so firmly against them.  And New Labour, locked in its free-market mindset, is guilty of exactly the same simplifications.

Most of all, this is about allocating blame for poverty to the poor themselves.  Children and single mothers do not, in Cameron’s view, live in poverty because the economic system has failed them and because the ideology of market economics is stacked so overwhelmingly against them, but because of the actions of feckless individuals.  We are back to the ideological distinction, so important to neoliberalism and the intellectual core of the Big Society, the contrast between the deserving and the undeserving poor.  It was a lie that Beveridge and his successors nailed more than half a century ago, but ideology, the illusion of prosperity, the growth of evangelical religion and the cheap moralism of the media have allowed its return.  It’s as toxic as it ever was and it’s the duty of anyone who believes themselves to be on the left  – are you listening Ed Miliband – to fight it with every weapon they have.

Always with us?

Sometimes the most interesting news stories are hidden away in the odd recesses of newspapers, especially when they sit uneasily with conventional narratives

This story from today’s Guardian seems to me to fit into that category – it points out that poverty in Britain is on the increase among those in work as well as those out of it; partly because the recession has meant more part-time working, but also implying that even with Labour’s minimum wage it is becoming increasingly difficult for those in work to survive financially.

And I think there’s a much bigger story here – one to which I aim to return in future posts.  There is a lot of rhetoric about economic growth and high living standards, and how progress has been made in recent years; but I believe there is considerable evidence to suggest that more than thirty years of free market economics has had precisely the opposite effect.  Not only has the gap between rich and poor got larger, but most people, on middle as well as low incomes, have in real terms got poorer.  The presence of a lot of shiny toys – TVs with larger, flatter screens, holidays in increasingly remote places – hides the fact that many of the essentials of life have become more difficult for an increasing proportion of people to obtain.

The most obvious one is housing.  Quite how massive house price inflation can be seen as a symptom of wealth completely beats me.  In precisely what way can a vast increase in the price of the most basic commodity of life – a roof over one’s head – be a sign of prosperity?  How can the increasingly desperate struggle of many people to find decent housing possibly be something that should be regarded as a good thing?

Of course, those people who already own houses have seen their assets increase on paper, but the difficulties for those looking to buy a family home for the first time are obvious.  It’s a huge form of redistribution from the young and poor to the old and rich, in other words towards the people for whom the media in general look to cater.

But there are other things too – what in the 1970s used to be described as the social wage.  Pensions, for example – increasing numbers of people find their pension provision being gambled away by the city, or diminished by corporate pension holidays.  Education – it’s  not so long since higher education was free, and now Government is preparing to allow British universities to start charging fees of Ivy League proportions, without the generously-endowed scholarships of the American elite universities.  The cost of travel for those who do not own a car has soared; for the privileged car owners (and it’s worth remembering that a third of the population has no access to a car), it has fallen.

I could go on,  There are innumerable examples of ways in which for the average individual, life has become more expensive, more uncertain, less secure.

And to return to the Guardian article, there’s a message that Government is missing.  We hear quite a lot from politicians about getting people into work as the way out of poverty.  We’re going to hear quite a lot more, I’d guess, from our new Government about the workshy on benefits.  But the research quoted in this piece shows that this rhetoric doesn’t survive scrutiny.  At a stroke it rewrites market ideology, and demonstrates poverty is far more pervasive than politicians of all parties are prepared to admit.  Low-paid jobs are the key to poverty, not unemployment.  Outsourcing, privatisation, the decline of trade unionism, the pathologising of solidarity.  That’s where the blame lies.

Where is the politician who is campaigning to change this?

… but it's booming in Basra. Possibly.

The folks in Britain contemplating an economic situation that appears to be going downhull fast could at least celebrate the fact that, according to today’s Guardian, the economy in Basra is booming.  That was the message from the outgoing UK Commander, the splendidly-named Major General Barney White-Spunner.

It appears that property prices have doubled since March,  restaurants are opening up and oil-rich Kuwaitis are beginning to move in.

It’s no doubt considerable comfort to the locals if the security situation is improving – though some interviewed by the Guardian challenge this, and elsewhere in the paper Richard Norton-Taylor argues that the British military should be wary of taking the credit - but it’s the measure of prosperity that seems to me to be so striking.  The things the Major-General are essentially privatised pleasures, and closely echo the language that New Labour politicians in Britain use to identify a “thriving community” – more cafes and restaurants, a dynamic housing market (not that there’s been much of that lately).

Values

It’s a take on prosperity that I find hard to accept.  I still cannot understand why a rapid increase in the price of that most basic commodity, a roof over one’s head, can be taken as a sign of well-being; the reality is that those in need are excluded.  And why is a “thriving community” never defined in terms of the collective things – schools, libraries, allotments, public space?  In the chaos of post-invasion Iraq, surely the most important aspiration of the population is security – the dissenting voices in the Guardian piece surely imply that.  Why, then, if the Major-General has a good story to tell, does he find it necessary to resort to the language of consumer frippery?

UK house prices – it could be worse than we think

News from Britain’s largest mortgage lender, HBOS, suggests that house prices in the UK fell 1.7% in July - giving an annual fall of 8.8%.

But there’s some evidence that this underestimates the size of the fall.  Lord Oakeshott, the Liberal Democrats’ Treasury spokesman, has argued that prices of domestic properties at auction have fallen much more steeply – by 18.7% between the second quarter of 2007 and the same quarter of 2008.  Oakeshott argues that this figure has greater immediacy than the more widely published figures, since buyers at auction have to exchange contracts and pay their deposits immediately the sale is made.

If this is true – and events do seem to have indicated the Liberal Democrats, in particular Vince Cable, have read the situation much more accurately than most mainstream politicians – it is a dramatic indication of the sheer irrationality of what was happening in the UK housing market a year or two ago, and the poisonous impact of cheap credit and irresponsible bank lending.  And the question remains – in what sort of society is the price of the most basic commodity of all, a roof over one’s head, left in the hands of an unstable and speculation-driven market?

Bursting the bubble

On a day when the Nationwide Building Society published figures showing that UK house prices fell by 2.5% in May, there has been some reflection in the media on whether this is a good or a bad thing. Larry Elliot’s column in the Guardian was a particularly welcome piece of common-sense; he recognises that the so-called “housing boom” has seen a massive shift in resources from the younger and poorer to the older and richer.

But, nagging away behind all this, there’s a much more fundamental question. Supposing that, in the longer term, there is a fundamental instability in house prices? After all, the story – in Britain at least – has been long term cycles of boom and bust, a market that is apparently incapable of settling into a stable equilibrium. Now there’s quite an interesting issue here of the psychology of the market, and the way in which it has been a vehicle for speculation. As this article by ABN AMRO bank suggests, the UK’s house price trends have been much more volatile than in the US, where the current credit crunch is supposed to have originated; it identifies speculation and willingness (and ability, supported by lax monetary policy) to service debt as important features in the UK, and argues that houses may be overvalued by as much as 50%.

Obsession with property is a peculiarly British condition.  Back in the late 1970′s – another boom-and-bust period – Harold Lever was arguing persuasively that this obsession was damaging the British economy.  But since then we have been increasingly suckered by the view that the market can do no wrong.

We’ve also seen the social and economic divisions it causes – the redistribution of wealth to the already wealthy, the fact that increasingly both parents in a family have to work full-time to pay the mortgage, the vulnerability of people who have to borrow increasingly large multiples of income to buy a house at all.

The question may be whether we are prepared to accept what looks in the long term to be a fundamental instability in the market for the most important commodity of all – indeed to accept regulatory “reforms” and tax regimes which offer incentives to speculate – in the name of cultivating this socially and economically divisive obsession.

Gordon Brown and the Labour debacle

One could be forgiven for feeling that more than enough cyber-ink has been spilled over Labour’s disastrous showing in the local elections and the events leading up to them. But there are some quite important things going on here, with roots in events long before Brown’s ill-starred assumption of the Labour leadership. So here are a few thoughts.

The 10p tax band

This, of course, is the big one. It was obvious a year ago that this was going to hit Labour’s core support hard. With hindsight it looks like the most appalling misjudgement; one wonders why on earth Brown, Prime Minister in waiting, decided to do it, and why Tony Blair – fatally compromised by the Iraq disaster but still with a political nous that Brown all to evidently lacks – concurred.

One interpretation is hubris. Perhaps an Autumn 2007 election was already in the offing; here was a nice tax bribe to the middle classes that could be presented as tax reform (the 2007 Budget documents describe the measure as being about fairness). Labour felt confident that it could count on the support of its heartlands while bringing along suburbia with a bribe.

What sort of mindset does this reveal? Is there anyone in the New Labour high command who understands life on £18,000 per year – not least given the huge increases in energy and food costs in recent months, and the utter impossibility of buying a house on those sorts of earnings (more of which in a moment)? People don’t like being taken for granted, and New Labour appears to have no understanding of the sort of pride and solidarity that lies at the heart of the old Labour movement. This was an insult. New Labour is made up of people who simply haven’t been there.

The real economy

House prices are coming down with a crash. Now that hurts the middle classes – but Labour’s core supporters on lower incomes have been denied the prospect of ever owning a house, in a society whose obsession with property ownership can be seen on every news-stand and across hours of television scheduling.

New Labour and the like-minded media have failed to answer a simple question – in what way can Britain be said to be a prosperous society when the ability to own the most basic necessity of life – a roof over one’s head – is denied to an increasing number of people?

And there’s more – how can Britain be said to be a prosperous society when the economy has been driven by record levels of personal debt? And when commodities that were once free (like higher education) attract an ever increasing cost? And when public services are perceived to be declining, but are increasingly run for profit by unaccountable businesses?

There is a powerful contrast between the rhetoric of New Labour politicians, of the media and of the interminable lifestyle programmes on TV, and the reality for many people. And who is the Iron Chancellor who has presided over all this?

Now I’m not going to get into the rhetoric about “tax and spend” Labour. A lot of the rhetoric about high taxation is in my view essentially middle class whingeing, and unsupported by the facts (for example the cost of motoring has fallen substantially, and continues to fall, in real terms. Fact.) And I’m not going to defend Cameron’s Tory Party, which seems to be about putting a new gloss on the same old people and policies. But there is a real feeling that people have got poorer, and have less power, under New Labour. And it seems to me that that is what really did the damage.

And Gordon Brown’s mea culpas on network TV today showed no sign of recognising this, and it is not really possible to see how they could.