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Paid work is never enough: we need to pay attention to the quality as well as the quantity of jobs created

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Getting people into employment will not on its own ensure decent living standards and reduce poverty, finds Peter Taylor-Gooby. His research shows that, while higher employment is associated with lower poverty, other factors are more important. The most important factor in reducing poverty levels across the countries looked at was the strength of contractual rights, and other policies, such as access to child care, policies to reduce discrimination against women were also significant.

Most people think paid work is the royal road to a better life for people of working age. The value of work is at the centre of policy thinking across the board, from Labour’s Compulsory Jobs Guarantee to UKIP’s commitment to ‘enroll unemployed welfare claimants onto community schemes or retraining workfare programmes’. Ian Duncan Smith’s Universal Credit puts work ‘at the centre of our welfare system’. The EU’s 2020 Growth Strategy ‘is about more jobs and better lives.’ And so on.

The idea that getting people into work will solve the problem of achieving decent living standards for those of working age was given extra impetus as unemployment rose from about 5 to over 8 per cent between 2008 and 2012, paralleled with a rise in working-age poverty. Now unemployment is falling back towards pre-crisis levels but, as IFS analysis shows, poverty among working age adults is failing to respond. The poor quality of many of the new jobs indicates short-comings in the case for paid work as the foundation of welfare.

Most of those in poverty live in working households. Among families the proportion in households with at least one member in work rose from 50 to 68 per cent between 1996 and 2013 according to the DWP’s Households Below Average Incomes statistics. The job market started to recover from its low point in 2012 but many of the jobs on offer are far from satisfactory. The number of part-time workers rose from 7.2 million to 8.2 million between the recession in 2008 and 2014, the numbers of involuntary part-timers from 0.7 to 1.7 million and the number of temporary workers from 1.4 to 1.7 million. The Labour Force survey shows a doubling of zero-hour contracts between 2007 and 2013 to 300,000.

These statistics suggest that we need to pay attention to the quality as well as the quantity of jobs created. Our new research examines factors affecting employment and poverty across 17 European countries for the period of prosperity and growth between 2001 and 2007. This is the time when the sun shone, the most favourable period in recent history for the work = welfare = decent living standards project. The research shows that, even at this time, new welfare was much more successful at getting people into work than at reducing poverty.

Employment rates rose across Europe, especially for women. However, far from declining, poverty rates also increased (by the standard EU 60 per cent of median income measure) from 18 to 18.6 per cent between 2001 and 2007 in the UK, and also in other successful economies such as Germany (11 to 15.2 per cent), Sweden (9 to 11.5 per cent) or Poland (16 to 17.3 per cent). One explanation is to do with access to paid work. Governments need to make sure that even more people move into work. This is the logic that lies behind the EU’s Employment Strategy and Horizon 2020 programme and behind national work-centred policies such as Universal Credit. Then the great recession swept everyone towards work at any price policies, redoubling the stress on paid work.

These were the good times, when, if ever, the link between work and decent incomes should be strongest. Higher employment is associated with lower poverty, but the analysis shows that, even during this period, other factors were more important. In fact the most important factor in reducing poverty levels across the countries was the strength of contractual rights. Other policies such as access to child care, policies to reduce discrimination against women were also significant.

The level of employment plays a role in ensuring decent living standards, but one that is less powerful than that of employment rights. The suggestion is that while employment is probably a good thing, if we want people to be better off, we also need to make sure that the quality of jobs is adequate. The best way to ensure that is to strengthen contractual rights against dismissal and to promote trade union membership. Recent trends in policy to weaken employment protection, to undermine the role of trade unions and to introduce high fees for access to employment tribunals move us in entirely the wrong direction. Shovelling people into low-paid jobs is all the fashion, but it is not the answer to the problem of poverty among those of working age.

For more, see “Can ‘New Welfare’ Address Poverty Through More And Better Jobs?” by Peter Taylor-Gooby, Julia M. Gumy and Adeline Otto.

About the Author

Peter Taylor-Gooby is Research Professor of Social Policy at the University of Kent’s School of Social Policy, Sociology and Social Research. He chaired the British Academy New Paradigms in Public Policy Programme (2010/2011) and is Chair of the REF Social Work and Social Policy and Administration panel 2011-15, a Fellow of the British Academy, a Founding Academician at the Academy of Social Sciences and, previously, a Fellow of the Royal Society of Arts and President of the British Association for the Advancement of Science, Sociology and Social Policy Section.
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Increase in number of people on low pay

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Increase in number of people on low pay
By Left Foot Forward | Published: November 3, 2014

The number of people on low pay has risen by 147,000 to 5.3 million in the last year, according to a study by KPMG.

Childcare vouchersjThe research indicates that 22 per cent of employees are now earning less than the Living Wage – up from 21 per cent last year.

According to the data, part-time, female and young workers are the most likely to be earning a wage that fails to provide a decent standard of living.

The research, conducted by Markit for KPMG, also found that the proportion of people earning less than £7.65 per hour (£8.80 in London) is higher amongst part-time workers. More than 4 in 10 part-time workers take home less than the Living Wage, compared to 13 percent of full-time employees.

There are also more part-time roles paying less than the Living Wage (2.98 million) than full-time jobs (2.29 million), despite making up less than a third of all UK jobs.

The research revealed that during October of this year almost three times as many people who earned less than the Living Wage (29 per cent) reported that their household finances had worsened over the month, compared to just 10 per cent who saw an improvement. Meanwhile, twice as many people who earn below the Living Wage (18 per cent) reported an increase in their need to borrow, compared to 9 per cent who saw a reduction.

The financial outlook for many remains bleak. Five per cent of those earning less than the Living Wage said they expected to see their household finances worsen between now and November 2015. Almost a quarter (22 per cent) also reported fears over job security.

Commenting on the research, head of Living Wage at KPMG Mike Kelly said:

“Although there are almost 1,000 organisations pledged to pay a Living Wage, far too many UK employees are stuck in the spiral of low pay.

“With the cost of living still high the squeeze on household finances remains acute, meaning that the reality for many is that they are forced to live hand to mouth. Inflation may be easing, but unless wages rise we will continue to see huge swathes of people caught between the desire to contribute to society and the inability to afford to do so.

“For some time it was easy for businesses to hide behind the argument that increased wages hit their bottom line, but there is ample evidence to suggest the opposite – in the shape of higher retention and higher productivity. It may not be possible for every business, but it is certainly not impossible to explore the feasibility of paying a Living Wage.”

http://leftfootforward.org/2014/11/increase-in-number-of-people-on-low-pay/

Minimum wages: the economics and the politics

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Minimum wages are increasingly popular with politicians and the public; even most economists now agree that they have little or no negative effect on employment. Alan Manning discusses this newfound enthusiasm – and the likelihood that it will lead to much higher minimum wages in some parts of the world.

There was a time when the minimum wage was seen as a backwater of labour market policy, an appendix for which the best one could hope would be that it did not cause any problems. But no longer: in many countries, there is now a strong movement to raise minimum wages.

In November last year, Angela Merkel finally announced that Germany would be introducing a minimum wage, replacing or supplementing the current system that sets minima in a small number of lowpaying sectors and collective bargaining that sets minima in some other industries. In May this year, Swiss voters will be asked to vote on the world’s highest minimum wage – 22 Swiss francs an hour (about £15) – with one canton already having voted for that rate in principle though another has rejected it. And in 2011, the free market redoubt of Hong Kong introduced a national minimum wage.

In the United States, President Obama seems to have given up hope of his proposal to raise the federal minimum wage to $10 per hour in the face of an impasse in Congress. But he has recently used his executive power to impose a $10.10 minimum wage on the few hundred thousand people who work on federal contracts.

The president is also actively encouraging states and cities to raise their local minimum wages, thus bypassing the obstacles in Washington. Increasing numbers of them are doing so, and some are going further: Seattle’s mayor, for example, proposes a $15 minimum wage. Minimum wages at this level – about 60% of median hourly earnings – are pushing the envelope of what has ever before been attempted with the minimum wage.

The UK is not immune from this newfound enthusiasm for the minimum wage, with all the main political parties seemingly falling over themselves to find some way to inject new vigour into the National Minimum Wage. Last autumn, the business secretary Vince Cable wrote to the Low Pay Commission (LPC), asking it to consider the economic circumstances in which the minimum wage could be increased at a rate above inflation. And the Labour Party has set up a Low Pay Review to consider options.

Not to be outdone, Chancellor George Osborne in January expressed the opinion that the nascent recovery means that the minimum wage can now be increased substantially. Without quite saying it in so many words, he dropped a heavy hint that he thought £7 an hour would be reasonable within 18 months, which would be a 10% increase from the current rate of £6.31.

I was a member of an expert panel convened by the Resolution Foundation and chaired by the LPC’s first chairman George Bain to reinvigorate the National Minimum Wage. Central to our ideas was that the LPC has been very successful in doing a limited thing – setting a minimum wage to tackle extreme low pay. But the wider problem of low pay remains as serious as ever and – in spite of its name – the LPC has never attempted to develop a strategy for this bigger problem. The LPC seems to have convinced itself that the minimum wage could not be pushed much higher without threatening jobs, but the consequence is that we can never learn whether that judgment is correct.

So what explains this widespread enthusiasm for the minimum wage? In my view, both economics and politics are at play.

The economics of minimum wages

A generation ago, the vast majority of economists would have said that a rise in the minimum wage inevitably costs jobs. This has changed, with two strands of research having the biggest impact. In the United States, the work of David Card and Alan Krueger, then both at Princeton University, shattered the cosy consensus and argued that the actual evidence linking the minimum wage to job losses was weak. Although their findings were controversial (and the debates rumble on to the present day), there has been a large shift in the weight of academic opinion.

The other strand of research that has been very influential examined the UK experience, with CEP researchers playing a sizeable role, though not the only one. Some people predicted that the introduction of the National Minimum Wage in 1999 would cause hundreds of thousands of job losses, but this simply did not materialise. Any impact on employment seemed to be tiny and LPC research has reached similar conclusions for subsequent years when the minimum wage rose faster than average earnings. In spite of this accumulating empirical evidence, it is still common to find economists fall ing back on the argument that a minimum wage must cost jobs because demand curves for labour inevitably slope downwards. Faced with a conflict between the evidence and twentieth century economic models, they reject the evidence rather than the theory – not an ideal template for scientific endeavour. But there are, in fact, uncomplicated theoretical reasons why the minimum wage set at modest levels has little or no effect on employment.

First, the increase in total labour costs associated with a given increase in the legal minimum wage is often considerably smaller than the numbers suggest. As the minimum wage rises and work becomes more attractive, labour turnover rates and absenteeism tend to decline. Moreover, the cost associated with losing a job rises; so, arguably, workers are inclined to work a bit harder and need less monitoring. Of course, an employer could voluntarily choose to pay higher wages if net labour costs actually fell, so a reasonable guess here is that these offsetting economies reduce, but do not eliminate, the impact of a rise in wage rates.

Then there’s the gap between employer perception and reality. Individual employers often view a rise in wages with horror, assuming it will drive them out of business. But all too often, they are implicitly assuming that they alone will suffer the cost inflation when it affects their competitors as well. Prices rise a bit and the effect on employment is only through the effect of a fall in sales, which may well be minimal.

But there is a more fundamental reason why there is no evidence of the job losses predicted by standard economic theory. The key assumption – that labour markets are highly competitive – is often wrong. The view of the labour market that underlies ‘Economics 101’ is not one that many people would recognise. For in this hypothetical world, losing a job is no big deal because finding an identical job is no harder than discovering that the local Sainsbury’s is out of milk and going to Tesco instead.

But that is not most people’s experience of labour markets. The reality is that competition for workers is not as strong as many economists would have you believe. An employer who cuts wages will find that most employees are unhappy, but that few will just walk out of the door. So it may make economic sense for employers to pay workers less than the marginal worker adds to revenues. In this more realistic world, a rise in the minimum wage will not necessarily price the marginal worker out of their job.

The politics of minimum wages

Academics might like to think their research has a big influence over public policy, but the driving force behind higher minimum wages is that they are very popular. Many people think there is something very wrong with an economic system in which someone who works hard is still unable to provide an adequate standard of living for themselves and their families. Such views have always been common, but they are much more common after the crisis when living standards are threatened and the link between growth and living standards seems to have been severed.

So in most countries of the world, voters (including right-wing voters) support rises in the minimum wage. In the UK, a poll in January 2014 found 66% favouring a substantial increase in the minimum wage – with majorities among supporters of all main political parties. In the United States, a poll in March 2013 found 71% in favour of raising the minimum wage, including 50% of Republicans. In Switzerland, voters seem to support the record-breaking minimum wage even as it is opposed by their government.

In some places, these political pressures will almost certainly lead to much higher minimum wages than we have seen in recent experience – perhaps to around the 60% of median earnings mark. This is the point at which many economists get nervous that negative effects on employment must surely kick in, but we do not have many studies to know whether these concerns are valid. There are only a few countries around this level currently – Australia and New Zealand (with low current unemployment rates) and France (with a more dysfunctional labour market) – so this is hardly conclusive one way or the other. But it seems likely we may be about to find out.

Note:  This article was originally published in the Spring issue of the Centrepiece magazine and gives the views of the author, and not the position of the British Politics and Policy blog, nor of the London School of Economics.

About the Author

Alan Manning is professor of economics at LSE and director of CEP’s community research programme. His 2003 book, Monopsony in Motion: Imperfect Competition in Labour Markets (Princeton University Press), explains the theory behind minimum wages; and his 2009 CentrePiece article ‘The UK’s National Minimum Wage’ describes CEP’s role in providing the intellectual context for the policy, advising on its implementation and evaluating its impact.

‘More than a Minimum: The Resolution Foundation Review of the Future of the National Minimum Wage’, was published in March 2014.

A rotten sort of recovery

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The coalition’s ‘flexible’ economic model relies on cripplingly low pay and rising job insecurity

John Harris | Comment is free | The Guardian.

A choice passage from the coalition agreement, to which not nearly enough attention has been paid: “We will review employment and workplace laws, for employers and employees, to ensure they maximise flexibility for both parties while protecting fairness and providing the competitive environment required for enterprise to thrive.” The warmer words in that sentence now seem flimsy, to say the least. If you want a more precise flavour of where things are headed, consider one of David Cameron’s recent prescriptions for economic success, lacking any such cuddliness, and echoed in an answer at yesterday’s prime minister’s questions: the righteous path, he reckons, is all about “reducing regulation and maintaining a flexible and dynamic labour market”.

What that means is obvious enough: for millions, the same deepening insecurity they experienced under the last government, and then some.

Vince Cable’s business department has plans to make access to employment tribunals more difficult, cheered on by such friends of the worker as Boris Johnson, lately heard decrying their “barminess”. The CBI howls, as ever, about other red tape. Meanwhile the pushing of more and more work from the public to private sector shreds plenty of protection, the growth of temporary and agency work continues apace, and rising unemployment pushes wages and conditions further downward.

The essential reality of our times is captured in a socio-economic term coined by the academic Guy Standing, and used for the title of his imminent new book, The Precariat: The New Dangerous Class. No wonder this week’s inflation figures showed prices rising twice as fast as average pay.

If the near-silent, gap-toothed street that leads from the station to the centre of town is anything to go by, Swansea is as threadbare an embodiment of hard times as you could imagine. Heavily reliant on the public sector, it faces a three-way knot of problems: the axe falling on government jobs, poor prospects for local business and the key consequence of the “flexibility” gospel – that any new jobs will be uncertain and insecure.

And the average local hourly rate? “Just above the minimum wage – not great at all,” one man tells me. “I’m sure there are jobs that pay higher,” offers a NHS staffer on £7 an hour, “but I can’t seem to find any.” A young woman who’s an office receptionist on around £6 an hour tells me her outgoings have lately increased by £100 a month, and her weekly budget leaves only £40 for anything more than travel to work, rent and bills – including food. To everyone I speak to, the combination of stagnating pay and rising cost of living seems cruel and increasingly unmanageable.

At the council refuse depot I meet Ian Alexander and his two colleagues. As litter pickers they get £6.30 an hour, with a £54 a week bonus. The latter may soon go, thanks to the council’s belated embrace of equal pay: as in many places, it looks like resulting in a levelling down for men rather than appreciable improvements for women. Meanwhile the workforce is made anxious by ever-increasing numbers of agency workers, employed on inferior terms, who come and go at speed. In rubbish collection, one man tells me, they may number 70% of employees. Among those on fixed contracts the impression is of privatisation by stealth. “There’s so much uncertainty – I dread to think where we’re going to be in three years’ time,” says Alexander, a former steelworker.

And this picture is not restricted to unskilled work, or the more blighted parts of the country. When we appealed for information and testimony about low pay, worsening conditions and ever-tightening budgets from readers of Comment is free, responses came back by the score, seemingly covering all corners of Britain, both public and private sectors, and most parts of the economy.

“I’ve not received a pay rise in nearly three years,” wrote one poster. “I earn a little above the minimum wage. On this I have to support myself and my chronically ill partner.” Another said: “We had our salaries reduced by 10% 18 months ago after two rounds of redundancies at my firm. I am lucky to have very little responsibility outside of looking after myself and my partner … a child or even a larger house would completely cripple us. Following rent, tax, bills and basic living costs, I am left with practically nothing to actually live life on. I have to claim housing benefit just to afford living in my one-bedroom flat.”

A set of telling numbers from another contributor, who has children, ran as follows: “My partner is facing a 5% pay cut, and for less money they are going to ask him to work an extra 15 hours a week so they can make redundancies. He already works 45, so he has to choose between 10 hours a day, six days a week, or eight-ish hour days, seven days a week.” And what about this: “My son is working fulltime as a painter on the Olympics site. He is paid £42 per day plus £5 daily “bonus” if he is on time. He loses the whole week’s bonus (£25) if he is late on one day.

“He has not received any pay rise since completing his apprenticeship, though he has repeatedly asked about his situation. He is expected to buy all his own painting equipment.

“To arrive at his place of work by 8am he leaves home every day at 6.30am. He has to take three different forms of transport to get to work, and I have to subsidise his living costs because he is so low-paid. I hardly need point out that this company is non-unionised.”

Such are the wonders of all that dynamism and flexibility, and an economic model with a rotten promise at its core. Work for less, with even fewer protections than before, but fear not – because that way lies recovery, and prosperity. For whom, exactly?

To watch the third film, and contribute ideas, visit: guardian.co.uk/anywherebutwestminster, or email anywherebutwestminster@gmail.com

Spending cuts – the fightback begins

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Can this week’s violent protests in Westminster simply be dismissed as the hijacking of an orderly demonstration by a ‘small minory’ of anarchists. Or are they a sign of things to come for an ‘out-of-touch’ government with 18 millionaires in its cabinet?
On and on it went: aerial shots of the heaving crowd, rolling commentary, bursts of stuff shot on mobile phones, and the usual parade of talking heads. While what the BBC was calling a “mini-riot” happened both inside and outside the Millbank tower, the people in charge of its news channel were presumably ecstatic: this kind of stuff, after all, is what rolling news was invented for.
Over there: a fire! Suddenly, on the roof: more protesters! On the phones: frantic office workers, taken aback by the disruption of their day! And in the midst of it all: that delicate and ever-shifting line of police, anxiously trying to do whatever they could, knowing full well that the people they were up against had already – if you’ll excuse the pun – stolen a march on them.

Meanwhile, the president of the National Union of Students did the media rounds. Aaron Porter is 25; he stood for the office as an independent, but is a member of the Labour party, whose dress code – the Nick Robinson-esque glasses are a good example – rather suggests that he’s destined for a career in mainstream politics. Certainly, if you fancy being a high-ranking Labour MP, clambering to the top of the NUS isn’t a bad move at all. His predecessors have included Jack Straw, Charles Clarke, the current shadow defence secretary Jim Murphy, and Phil Woolas, the MP last week suspended from office for making misleading claims in the course of the last election campaign – all of which highlights the fact that NUS presidents are not exactly renowned for being what the French call enragés.

And so it proved. “Let me be clear,” he told yet another camera. “I absolutely condemn the actions of a small minority who have used violent means to hijack the protest . . . if some people think it’s appropriate to use violence, it’s a total disgrace, and they have completely hijacked this opportunity to make a serious point.” In his own way, he was endorsing the view that was subsequently splashed over the front page of yesterday’s Daily Mail: “Anarchists spark violence as 50,000 take to streets over student fees – HIJACKING OF A VERY MIDDLE CLASS PROTEST”.

On the BBC, there was a particularly priceless moment. When Porter once again talked about “hijacking”, the coverage cut to the mass of people outside Tory HQ, the presenter made the point that this was not what “a small minority” would look like – and Porter seemed momentarily lost for words. You had only to look at the crowd to know that the vast majority of them were not anarchists, but reasonably regular twentysomethings. As if to illustrate the point, when one of the people on the roof made the stupid decision to hurl down a fire extinguisher”>stupid decision to hurl down a fire extinguisher, they were met with an outraged chant of “Don’t throw shit! Don’t throw shit!”

Long after the fires had burned out, and the riot police had belatedly arrived, I spoke to a Guardian colleague who had spent most of Wednesday at the scene. Talk of cynical provocateurs, he said, was “nonsense”: the crowd was made up of “ordinary students who were viscerally angry”, but also mindful of what was ill-advised, or plain daft. When one of their number had prised up a cobblestone and moved to lob it at the police, he had been roundly told to “stop being an idiot”; moreover, the attempted occupation of Millbank had seemingly started on a whim, when a handful of people had walked into the foyer, not quite believing they had been allowed to do so, and decided to stay put. He was also unimpressed by talk of an assembly of self-indulgent, bourgeois moaners: time and again, he said, he had bumped into people from such northern towns as Bradford and Wakefield, who were students at FE colleges, angered to the point of fury by the government’s axing of the educational maintenance allowance – the means-tested benefit that has enabled so many people to take up post-16 education without being a drain on the family budget.

His basic point – and mine – is simple enough. What happened on Wednesday afternoon was not some meaningless rent-a-mob flare-up, nor an easily-ignored howl of indignation from some of society’s more privileged citizens. It was an early sign of people growing anxious and restless, and what a government pledged to such drastic plans should increasingly expect.

If you hadn’t noticed already, these are strange, tumultuous times. We are still in the midst of the uneasy period of phoney war before the cuts actually bite, but we now know what’s coming: the deepest and quickest reductions in public spending since the 1920s – which, according to an under-reported quote from David Cameron, will not be reversed, even when our economic circumstances improve (2 August, at an event in Birmingham: “Should we cut things now and go back later and try and restore them later? I think we should be trying to avoid that approach”).

The welfare state is in for an unprecedented reinvention, as ministers get dangerously close to reviving the nasty old trope of the undeserving poor; yesterday, as if to try to neutralise recent fretful noises from the Archbishop of Canterbury, Iain Duncan Smith talked about supposedly self-imposed worklessness as a “sin”. Changes to housing benefit look likely to drastically change the social makeup of our cities, and London in particular; even Boris Johnson has talked about the danger of “social cleansing”.

Meanwhile, just about every area of our lives will soon feel the pinch: travel anywhere in the country, pick up the local paper, and it’s all there – the imminent hacking back of youth centres, social care, school buildings, libraries, parks . . . you name it. Everyone will be affected: as ever, the most vulnerable will take the biggest hit, though it is no accident that the idea of the “squeezed middle” is being talked about as never before.

Of late, my mind has returned time and again to a celebrated article from 1999 by the Oxford academic Ross McKibbin, and one passage in particular: “The middle classes make more use of the NHS, public transport, public libraries, local swimming pools, public parks and their right to state welfare than anyone else.”

Underneath the coalition’s plans, there is an obvious enough agenda: not just the brutal cutting of public spending, but a decisive rolling-out of the market-obsessed, “choice”-fixated ideas that took root while Margaret Thatcher was prime minister, were revived and retooled once Tony Blair decided he had to define himself against the Labour party – and now look set to be taken to their logical conclusion by the Tories, and the like-minded Lib Dems who took their party into the coalition. Here lies another reason why Wednesday’s events were so significant – for within the government’s plans for higher education lie not just the hiking-up of fees, but an entire reinvention of the very ethos of our universities, whereby the idea of education as a public good takes yet another kicking, and everything comes down to “choice”, and whatever is meant to be good for business.

A recent issue of the London Review of Books featured an inspired demolition of the Browne review, the report into higher education by the former chief executive of BP that was hailed by the government as setting its “strategic direction”, and thereby opened the way for the lifting of the cap on fees, and much more besides. The LRB piece was written by a Cambridge don named Stefan Collini, and it quickly got to the heart of the problem: “Overwhelmingly, the general statements announce, with startling confidence, the real point of higher education: ‘Higher education matters because it drives innovation and economic transformation. Higher education helps to produce economic growth, which in turn contributes to national prosperity.’ . . . This report displays no real interest in universities as places of education; they are conceived of simply as engines of economic prosperity and as agencies for equipping future employees to earn higher salaries.”

Meanwhile, where are the public? When it comes to tuition fees, do not believe the voices who tell us that the average Briton thinks students are a pampered lot who should get with the government’s plans and count themselves lucky. A recent YouGov survey commissioned by the Sun found that the public opposed the Browne proposals by 45% to 37%; an ICM poll from around the same time offered the choice between raised fees and the far fairer option of a graduate tax, and found that people favoured the latter over the former by 61% to 29%.

More generally, presumably to the delight of the government, a cliche has long since oozed into the reporting of what they are up to: that people accept the need for drastic austerity, and are meekly preparing for the necessary dose of fiscal medicine. Browse the requisite opinion polls, and you could be forgiven for assuming the worst: late last month, for example, Ipsos Mori found that 59% of people agreed that there was “a need to cut public spending on public services” – the kind of statistic cited almost daily by those newspapers who habitually encourage the government to go further, and faster.

In fact, things aren’t as simple as that. According to the same poll, the share of people who think the government has made either the right or wrong calls on public spending is evenly split: 41% and 38% respectively, while one in five simply don’t know; 40% of people disagree with the idea that the coalition’s approach will improve the state of the economy; while 49% reject the idea that, as the coalition insists, public services will somehow improve in the long run; 47% oppose cutting back the number of people who work in the public sector. Public opinion, it seems, is as contorted and contradictory as ever – and for the government, there is much less comfort than you might imagine.

While the coalition comes over all Churchillian, endlessly talking about the “national interest” and the spurious idea that we are “all in this together”, there is also a low hubbub of noise about their shortage of a mandate. On Wednesday, the ire of the marchers was focused on all those Lib Dems who blithely signed the NUS’s anti-fees pledge (“I pledge to vote against any increase in fees in the next parliament and to pressure the government to introduce a fairer alternative” – yesterday, Nick Clegg limply said that he “should have been more careful” than to put his name to it). But there are also serious questions about the Tories – not just that they are pushing what Cameron recently called a “revolution” with the support of around one in five of the electorate, but also when it comes to the pronouncements they made during the election campaign.

Consider, for example, a now-infamous quote from the PM, issued on the Andrew Marr show on 2 May: “What I can tell you is any cabinet minister, if I win the election, who comes to me and says: ‘Here are my plans’ and they involve frontline reductions – they’ll be sent straight back to their department to go away and think again.” And really: they wonder why some people are increasingly angry.

And so to the wider context, and things that most of the media very rarely mentions. Political debate in Britain is endlessly distorted by the way that London so dominates the national conversation, and assumptions that run wide and deep in some of Britain’s more desirable postcodes are assumed to blur into the national mood. In Islington, Notting Hill, and the more upmarket corners of the home counties, austerity will doubtless be taken in a lot of people’s stride: if you have opted out of large swaths of the public sector and earn a six-figure salary, the prospect of the cuts will inevitably cause you relatively little worry. Self-evidently, this will not be the case in Bolton, Merthyr Tydfil, or Hastings; but neither will it hold true in Basildon, Crawley, or Harrogate.

At the top of government, what might be called the “experience gap” grows even wider. There are at least 18 millionaires in the cabinet: Cameron is said to be worth around £3.4m; Nick Clegg’s wealth is put at a mere £1.8m. Of late, even commentators on the right have been talking about the distance between some ministers and the people at the sharp end of their policies, not least when it comes to the middle class. Last month, for example, the Daily Telegraph’s Peter Oborne bemoaned their “devastating” fate, in a piece worth quoting at reasonable length, if only to prove that the idea of an out-of-touch elite blithely wreaking havoc is not the preserve of hard-bitten lefties.

Among Oborne’s most telling passages was this one: “Doubtless both David Cameron and George Osborne think of themselves, quite genuinely, as middle class. Indeed, a few weeks ago, David Cameron referred to himself as a member of the “sharp-elbowed middle class”, and the political intention of this remark was clear: he was claiming associate membership of the club of hard-working people who pay their taxes, do their best to rear their children and find it desperately hard to make ends meet. Few would challenge the Camerons’ fundamental decency. But the middle-class people David and Samantha Cameron know socially tend to be on quarter of a million a year and upwards. Life for them may indeed be tough, but only in the sense of whether they can afford a skiing holiday or a spring break in the Caribbean.”

In last week’s news that Cameron had put his personal photographer on the public payroll, there was a slight touch of the Marie Antoinettes, and a tension that may yet cause the government no end of trouble. It boils down to this: if you are secure in such an exclusive social bracket, it will inevitably distort your view of things. Around £27,000 for a university degree may well seem like the acme of both affordability and common sense; lost child benefit may seem like money dropped down the back of the couch; people on welfare will inevitably look like the residents of a completely different planet.

Meanwhile, some longstanding assumptions seem to be changing at speed. Wednesday gave the lie to the idea that our young people are thoroughly post-ideological creatures, with no fight in them; if even the most fusty newspapers are worried about the chasm that separates the government from the so-called squeezed middle, you can bet that the politics of class may yet make an unexpected comeback.

Oh, and one other thing. Though few people seemed to notice, on 3 November, a Treasury minister named Lord Sassoon served notice that the coalition’s work on City bonuses was done: “The government has taken action to tackle unacceptable bonuses in the banking sector,” he said, and that seemed to be that. Six days later, Barclays announced that its latest bonus pot would total £1.6bn – which is about a third of what the government currently spends each year on university teaching. The annual season of big executive payouts is about to commence once again; at this rate, do not be surprised if the seditious spirit of Millbank spreads – and fast.
John Harris, The Guardian, Friday 12 November 2010

http://www.guardian.co.uk/politics/2010/nov/12/spending-cuts-fightback-begins