Corbyn and Grenfell: Britain’s Rapidly Changing Political Landscape

4th July 2017 / United Kingdom
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By Graham VanbergenYouGov’s latest favourability figures show Jeremy Corbyn with his highest score to date, while Theresa May’s ratings have crashed to where the Labour leader’s were last November. This rapid change of public sentiment supported by an unexpected seminal event is about to lead to a seismic moment in British politics. The first evidence of the collapse of neoliberal capitalism will be the Conservative Party rolling back austerity measures as they attempt to scramble back to the political centre ground in a bid to maintain power whilst a stronger more forceful form of socialism gains ground every day.

 

This article is made up of statistics, quotes and research published in the mainstream media over the last few years. Each piece of information is damning but collectively, they add to the crisis of every day life for nearly half of society where almost every measure of public well-being has plummeted. Right-wing neoliberal politicians took advantage of the financial crisis to implement a flawed economic model designed to asset strip the nation though the ideology of austerity and an accelerated privatisation drive whilst undertaking a huge transfer of wealth from the poor to the rich. The Grenfell Tower inferno is the manifestation of that ideology and the symbol of change.

Inequality

Successive governments have failed to improve social mobility in Britain and reduce the gap between Britain’s ‘haves and have nots’, according to a highly critical report by the Social Mobility Commission published last week. New social divides have been created across geographies, income groups and generations. The report says deep seated social and economic divisions in British society are likely to widen and negatively impact upon community cohesion and economic prosperity.

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In another report, Pressure on the government to help struggling Britons has intensified after a leading think-tank warned that falling living standards for the poor threatened the biggest rise in inequality since Margaret Thatcher was prime minister. This is further supported by evidence that the bottom 20% of earners in the UK have just 3 days pay saved and where a TUC report confirms that UK workers have now joined Greece at the bottom of the earnings growth league.

An ONS report in January confirmed that the bottom 60% of workers in Britain are suffering greatly since the financial crisis. The bottom 20% earn just £7,153 a year, the next 20% earn £13,877. To make it into the 1 per cent, you need £2,872,600 of overall household wealth. The bottom 1 per cent has negative wealth at minus £4,434 plus debts such as credit cards and unofficial loans.

Research by Inequality Briefing found that nine of the top ten poorest regions of Northern Europe are in Britain, by contrast, the richest region in Northern Europe is London.

 

Employment and falling wages

Over 7 million people or 1 in 5 workers now have working conditions described as ‘precarious employment conditions.’ These people can quickly lose work with little to no compensation – half are in low pay and take home less than two-thirds of median earnings.

Exactly one million public sector workers have been sacked since September 2009 where only one job in 40 has been created in the private sector since 2008 which is full-time and permanent. In the meantime, nearly one million workers are now relying on zero-hours contracts – a 400 percent increase in a decade.

The resolution Foundation found that wages in the UK have fallen by 11 percent since 2007 and are expected to be almost £1,000 a year lower in 2017 in real terms than previous forecasts. In addition, new figures from the Office for National Statistics (ONS) show a further fall in living standards as inflation outstrips growth in pay.

 

Homelessness

The Chartered Institute for Housing has responded to “worrying” homelessness statistics, which show that the number of households accepted by local authorities as statutory homeless is still rising, now up 61 percent since December 2010.

The Institute also said, in addition to the statistics “The number of households trapped in bed and breakfast accommodation has also risen, and includes thousands of families with children. This type of accommodation is often very poor quality and highly unsuitable, especially for families.

 

Student debt spirals

The Intergenerational Foundation recently reported that the average student loan debt is now calculated to be £60,000 AFTER 30 years of paying it due to “exploitative” interest rates and compounded monthly charges by banks. Student loan debt in the UK has risen to more than £100bn for the first time, underlining the rising costs young people face in order to get a university education. Outstanding debt on loans jumped a massive 16.6% to £100.5bn at the end of March, up from £86.2bn a year earlier, according to the Student Loans Company. One third of all students end up working in non-professional employment where degrees are not required where student debt snuffs out any aspirations of home ownership for many.

 

40 percent of households with children too poor to participate in society

Nearly four out of 10 households with children, or 8.1 million people, live below an income level regarded by the public as the minimum needed to participate in society, according to research commissioned in 2015 by the Joseph Rowntree Foundation. The number of those on less than the so-called minimum income threshold in 2012/13 was up by more than a third from 5.9 million in 2008/09, and rising, the charity says.

 

‘Middle income working families’ now classed as the ‘new poor’

Middle income working families are the “new poor” – increasingly dependent on benefits despite ministers’ promises to “make work pay” Britain’s leading economic think-tank has warned. Meanwhile the gap between Britain’s poorest households and those on medium incomes has fallen to the lowest level for 20 years as the middle classes are decimated with rising household costs, falling incomes and spiralling debt to stay above the water line. Another report suggests people are increasingly dipping into their savings as disposable income falls which has eroded their savings to a record low at the end of 2016, raising fears that the UK is on course for a fresh consumer debt crisis.

 

Child poverty rapidly increases

About 30% of Britain’s children are now classified as poor, of whom two-thirds are from working families. Analysts said planned cuts to working-age benefits were likely to dramatically increase poverty rates over the next three years.

Campbell Robb, the chief executive of the Joseph Rowntree Foundation, said: “These troubling figures are warning signs we could be at the beginning of a sharp rise in poverty, with forecasts suggesting child poverty will rise further by 2021.”

The government has ignored child poverty statistics where grim warnings from the Institute for Fiscal Studies state that levels are set to rise by 50% in the next few years. This means by many measures that 45-50 percent of Britain’s children will experience poverty as they grow up by 2020. London, one of the richest cities in the world, already has a child poverty rate of 37 percent.

In 2014, the Children’s Commissioner warned that the increasing inequality resulting from the austerity cuts, means that Britain is now in breach of the United Nations Convention on the Rights of the Child, which is supposed to protect children from the adverse effects of government economic measures.

Just two years later that came true. In another astonishing report, Britain dropped to 156th place in a global ranking of just five measures for the human rights of children ie a right to life, health, education, protection and environment. This is a damning achievement for the world’s sixth wealthiest nation.

 

The next generation

The idea that each generation would be more fortunate than the last no longer applies. The political economy of their parents age was based on the idea that people would have secure, full-time employment that would enable them to save the deposit on a home relatively quickly like it did for so many of the middle aged today.

Two new reports show how that model has completely broken down. The under 35’s of today are largely facing a life of renting but by 2025 nine out of ten are projected to never be able to afford a home of their own with an increasingly insecure and casualised labour market in which low pay is endemic.

 

The housing crisis

The result of decades of Thatcher’s deregulation of the financial markets has led directly to today’s housing crisis. According to a major study, housing conditions in Britain reached among the worst in Western Europe and cost the nation about £7bn a year by adding to the pressure on the NHS and other public services. An alliance of housing experts warned then that a lack of affordable, decent homes, cuts to local authority housing budgets and the Government’s benefit reforms were creating “real hardship, misery and ill-health.”

There has now been catastrophic slump in home ownership. Real house prices have jumped 151% since 1996, while real earnings have risen only about a quarter as much. Now, nearly 2 million people are languishing on housing waiting lists in England after 4 million council homes were sold off, while more than 6 million face tenure insecurity and no prospect of ever buying their own home. Meanwhile the Lyons Housing Commission reminded how, after decades of failure to build the homes the country needs, public concern about housing is the highest it has been for 40 years.

 

But…

In the meantime, corporate profits are now at record highs. The FT explains (paywall) that “increased productivity of capital is reflected in an increase in monopoly power.” This is amply demonstrated by the combined Revenue of Apple, Amazon, Google & Facebook that exceeds the GDP of 88% of countries worldwide but employs about as many people who live in and around the small spa town of Cheltenham in Gloucestershire. At the same time CEO pay has increased 90 times faster than the average worker since the late 1970’s in both the USA and UK and is 386 times more than the national living wage (not minimum wage) in the UK – that many companies don’t even pay.

Part of the reason for such outstanding corporate profit returns is the lack of tax many transnationals get away with not paying to the public purse. Some independent estimates of Britain’s tax gap, including work by the tax campaigner Prof. Richard Murphy have suggested the figure could have reached as much as £119bn in recent years, enough to solve many of the social problems the country suffers from listed above.

 

Grenfell – the icon of a failed ideology

Sometimes an event takes place that changes everything. The June 14th Grenfell Tower inferno marks such an event. It has become part of the iconography of the beginning of the collapse of extreme neoliberalism in Britain. The stark contrast between one of the richest cities in the world and the underlying social realities of daily life affecting millions in the same city has shattered the austerity myth as merely an ideology, not a workable economic model.

Festering for 40 years was a growing political underclass being ulcerated by the capitalistic greed of the ideologies of Thatcher and Blair leading to the strangling of society under Cameron’s austerity drive, the biggest post-war spending squeeze that ended up accelerating the numbers being left behind. As a result, that so-called underclass have swelled to such an extent that Jeremy Corbyn is being heralded as the new Messiah of socialism. The Conservative party are now scrambling back to the centre ground chasing after a defiant Corbyn who is milking this failed economic model and that icon for all its worth.

 

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