Sea Change

It is said that Jim Callaghan remarked to a colleague during the election campaign of 1979 that he thought he would lose, because there was a ‘sea change’ in the public mood. He was so right. The expression ‘sea change’ may again prove apt to describe the public mood, though which party will benefit is far from clear.

A contributor who rang a phone in programme set it out well. Expanded somewhat, the theme was this. For the last twenty years trade unions and strikes have hardly featured in the news. There was general public hostility, confrontational industrial relations had proved immensely damaging to British industry which had been brought to its knees and anyway everyone was better off. Two things were happening beneath the surface which now emerge to change our whole approach to the values which underpin the economic system.

The first is that we became a borrowing society. Everyone, not just the few, had a credit card, a loan and most a mortgage. What you had, your standard of living, depended on your credit rating and what you could borrow. Earnings had the primary function of servicing debt. Earnings grew, but borrowing grew more. Life looked good, with much of it new.

The second thing was that the earnings of so called top people took off into outer space. In older times you had to own the company to make personal wealth. Now you only had to help run it, to earn even millions. Sometimes you could make a bodge of the job but you still picked up a million or two when the board kicked you out. The most dramatic examples were the bankers, but among the civil service and local government top salaries exceeded in some cases £200,000 a year. Yet the ordinary people who worked further down in the structure were paid, are still paid just average incomes.

The gap between the average worker and the chief executive fifteen years ago was fifteen times more for the top slot. Now it is seventy five times. The bankers pay themselves incomprehensible sums but it does not end with them. The lady who runs Kraft which, to general  hostility among the workers, just bought Cadbury on borrowed money, then closed the Welsh factory she said she hoped to keep open, costing whole families their jobs, has just been paid an extra $ 28 million (yes $28 million!) for her ‘exceptional role’ in securing the takeover.

Everything for the average worker has changed but the structure above remains. Borrowing has dried up. Ordinary earnings fall and it is no longer possible for people to borrow to inflate their living standard. Their earnings do not match their aspirations. Yet above them the captains of commerce and industry are continuing to rake it in, even at the BBC. The unions spy a cause to champion. Threats of strikes begin to permeate the news. I thought the public would be hostile to the disruption or threat of it, but they are not or not as much as I expected. Suddenly the unions are the counterweight to this top end greed.

The present economic model is fiscally doomed and socially unsustainable. We cannot yet tell who will set about the fiscal re-modeling needed or when it will come. All the politicians are still in semi denial, but there will be a collective awakening to the coded warnings coming from the bond markets and the Bank of England quite soon. On the social front the unions have woken up already. I am surprised to see myself writing this but I cannot say I am sorry. This is how so many people feel. That is the sea change in public mood.