Can the Liberal Democrats provide a vision for Britain that the disaffected can support?

A few weeks ago Liberal Democrat Voice published an article by Lord William Wallace entitled Could Trumpland reach Britain in which William Wallace argued that we need to firstly “pay more attention to ‘the bottom third’ of society.” He identified that “what used to be called ‘the white working-class’ has deserted the Democrats in the USA” and spoke of the rise of Marine le Pen in France and UKIP in Britain.

Lots of liberals talk of the rise of inequality over the last 30 or so years. However few if any talk of the major causes of this – firstly the rejection of managing the economy to provide full employment where everyone will have a job. Some people talk of their experience in the 1960’s and 70’s by saying you could hand in your notice on a Friday and within a week you would have a new job and some would say by Monday or Tuesday they would have started their new job.

Secondly the increase in the mobility of labour. In Britain we have seen this most clearly from the 2004 EU enlargement, but in worked in favour of British building workers in the 1980’s who went to West Germany as in “Auf Wiedersehen, Pet

Liberals talk of low wages and zero-hour contracts and the problems young people have getting their first job. If we only had unemployment of 2.5% of the working age population as we had between 1946 and 1970 there would be no zero-hour contracts and there would be economic pressure for wages to increase. This pressure to increase wages would reduce the inequalities in society as it did then. The richest in society would be unable to keep their high share of the returns from the economy, but would be forced to distribute them to all the employed. There would be fewer people unemployed for long periods of time, they would be part of the work force and would share in the economic benefits of being employed with increasing wages. With unemployment only at 2.5% of the population employers would have to take on young people because there would be no alternatives and they would have to provide training because they wouldn’t be able to just employ those already trained.

One way to achieve an unemployment rate of only 2.5% of the UK population without increasing immigration into the UK would be to leave the EU and ensure that Britain does not allow the free movement of people into the country. Another way would be to ensure that all national governments in the EU have to manage their economies to achieve this 2.5% level of unemployment. It should be this economic aim that should be at the heart of the EU not the ratio of national debt to GDP, the size of national debt or the size of national deficit.

If we can’t provide everyone with a stake in society by achieving full employment within the EU how can we provide it?

* Michael Berwick-Gooding is a Liberal Democrat member in Basingstoke and has held various party positions at local, regional and English Party level. He posts comments as Michael BG.

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25 Comments

  • nigel hunter 20th May '16 - 9:36am

    I agree with this article. In the 1960’s. I went from one job to another within days. Yes the EU should aim for the 2.5 % As far as national debt and deficit is concerned a lot of this is our way of life , encouraged by Government and businesses to buy a house buy a car, both on credit , debts that have to be paid back to banks, car firms

  • nigel hunter 20th May '16 - 10:02am

    Education, retraining should be a right for people to move up in life, to achieve there aims to create to aspire (even if this ‘aspiration’ is just to create a picture, have a holiday of a lifetime) to be confident in themselves.To learn a language is useful. A German has his own language and can also speak English for example and can travel the world knowing someone will be able to communicate with him. I admire a person with two languages. We should be teaching them more so ,again. people can become employed abroad. All ways should be employed to give the disaffected a chance to become positive in life.

  • Conor McGovern 20th May '16 - 11:22am

    I agree. I’ll also be voting to leave the illiberal and undemocratic EU as a roadblock to getting some control over our economic future.

  • Jobs aren’t the problem. As an economy we generate enough. The problem is mobility. Not social mobility but physical mobility. There are plenty of jobs here in Cambridge but no one to fill them except for young EU citizens willing to live in poor, expensive housing.
    And that’s the problem. Our stupid housing market which makes it impossible for families to move, which destroys any prospect of social mobility and is the enemy of meritocracy. Until we solve this problem we will continue to increase alienation and reinforce the increasing belief of a large section of our fellow citizens that politicians have no solutions to their needs.
    We need to be putting forward radical, almost revolutionary solutions to this problem.

  • Christopher Haigh 20th May '16 - 11:56am

    @Conor, when we joined the EU in 1973, the UK had not been performing well and living standards were in decline and well below the Common Market average. The EU membership has stabilised our economy until now. With the onset of globalised trade goodness knows what will happen to our wealth producing industry and our environment without the security provided by the EU trade agreements.

  • What trade agreements? The EU is a `protection racket`. There are NO trade agreements with China, India, Oz, NZ etc.

  • Are you sure you shouldn’t be in the Socialist Workers Party? Folk are unemployed because the Asians make things cheaper; raw materials, as well as finished products. That’s globalisation! We have no home-grown car industry because UK buyers prefer quality German cars. That’s consumer choice!

    The UK elected dictatorships of Thatcher & Blair, rightly or wrongly, decided that the UK should pretend there is a free market while other countries subsidised their workers. However the deindustrialisation is now complete and we cannot go back to the way it was, not least because high productivity demands more robots and less humans.

    For fuller employment we need to be forward-looking.

  • Geoffrey Payne 20th May '16 - 1:01pm

    Stopping immigration into the UK will not reduce unemployment. Those who come here become consumers who spend money and create more jobs. So it roughly evens itself out, depending on what else is going on in the economy.

  • paul barker 20th May '16 - 1:23pm

    This article is so confused & confusing as to be useless. Which Parties arent in favour of bringing down unemployment ? I just dont see the point of this piece.

  • Christopher Haigh 20th May '16 - 3:50pm

    @Jane, the EU believes in negotiating free trade agreements whilst also regulating the standard of goods traded. This is surely what as Liberal Democrats we agree with. Trading with authoritarian regimes like China obviously has free trade problems, but the trading power of the EU may eventually draw free trade concessions from China. UK manufacturers may find the removal of trade barriers outside of the EU trading organisation a more difficult prospect. What is the point of leaving the EU if the UK objective is free trade ?

  • Thank you nigel hunter I appreciate that you agree with me.

    @ Conor McGovern
    I think you have misunderstood what I am arguing for. I am not in favour of leaving the EU. I am arguing that all EU countries should change their economic target from the control of inflation to reducing unemployment to 2.5% of their working population. This would reduce equalities within each country and across the EU and would reduce economic migration within the EU by removing the economic inequalities between countries.

    @ Martin Land

    Mobility within the UK may be an issue, but I don’t believe that the UK economy should be run so London and the south-east of England has a low level of unemployment but other regions have higher levels of unemployment forcing people to be economic migrants within the UK and concentrating most of the population in London and the south-east of England.

    Unemployment in the UK rose to 1.7 million between December 2015 and February 2016 which is 5.1% of the working population, over double what the target was in the 1950’s, 60’s and 70’s (worse than it was between 1870 and 1876). In 2014 there were just over 1.1 million claiming employment and support allowance who have to do something towards getting a job and 1.1 million who don’t need to do anything.

    In the past employers gave assistance to workers to find accommodation because they needed to attract workers more than they do at the moment.

  • @ JamesG
    “Are you sure you shouldn’t be in the Socialist Workers Party?”
    During the 1950’s, 60’s and 70’s it was recognised that managing the economy to provide full employment was a liberal policy. Keynes was a liberal and the Liberal Party in 1929 had policies to end unemployment.

    As a liberal I think it is important that we ensure no one is left behind from our prosperity and that we consider how we can reduce inequalities, which were reduced during the 1950’s, 60’s and 70’s – the period of full employment.

    @ Geoffrey Payne
    “Stopping immigration into the UK will not reduce unemployment.”
    If the UK had an economic policy to reduce unemployment to 2.5% of the working population it would only work if people from outside the country didn’t keep coming here and increasing the number of workers in the UK. One way would be to stop them coming here; the other way, my preferred way, the liberal way is to remove the factors that pull them here, by reducing unemployment to 2.5% of the working population in their home countries.

    @ paul barker
    No UK parliamentary political party has a policy to reduce unemployment to 2.5% of the working population and I don’t know of any government in the EU that has this aim. No country in the EU has unemployment at 3% or less.

  • James Baillie 20th May '16 - 6:14pm

    I agree that a) we need to provide a better offer to disaffected communities and b) decreasing inequality should be part of that. I’m not convinced that doing it by trying to constrict the labour market and force wages up that way is optimal, however.

    The issue with moving back to an unemployment target as our way to tackle deprivation is twofold. Firstly, we are never going to get the whole world to agree to one, so the migration drivers will still exist and the dubiously moral shut-the-gate syndrome will still be in play. Secondly, it’s now far harder to do that anyway, because jobs more specialised, and so trying to keep unemployment down could create perverse incentives for governments to maintain industries that we need to ultimately be looking at disbanding (arms and fossil fuels, to take two examples) rather than managing decline, supporting retraining, and bringing new/viable technologies and businesses into play.

    Instead we should perhaps look at a mixture of a) providing more stable, less punitively restricted incomes to those out of work so that they have the time and flexibility to pursue retraining or other useful activities and accepting that we can’t have a 100% flexible labour market and b) creating conditions where more workers start seeing the profits they make, through a process of making cooperatives/social enterprises the norm in business. We need to press for a “social economy”, existing outside the mid-twentieth century state-sphere but also challenging the consensus around an increasingly hereditary shareholder class being the optimal way to deliver the profits of the economy.

    In disaffected areas I think as much of the problem lies in their disconnectedness than in low employment (my generation face the major unemployment challenge – but it is older generations who skew to UKIP). We may want to consider something like tied infrastructure funds to help deal with the localised impacts of migration, or a new infrastructure deal for disconnected parts of England, to be competitive in these communities and make good on our claims that migrants are a net benefit, which whilst entirely true is hard to convince someone of who’s stuck dealing with the years of neglect that some rural and coastal towns have suffered.

  • @ James Baillie

    It is not the role of the UK government to provide an open gateway to citizens of the world to our economic prosperity. The disaffected of the UK do not see it as immoral to restrict immigration into the UK. It is not the role of liberals in the UK to share the wealth of the UK with non UK citizens. It is the role of UK liberals to increase freedom and liberty in the UK and having a large disaffected population in the UK does not achieve this.

    I have not stated what an economic policy to achieve full employment would look like. There is no reason to assume that such an economic policy especially if carried out by liberals would include subsidising fossil fuel industries and international arms production. Nor is it the role of government to pick winners.

    It would be liberal to provide more income to those unemployed, but it will not reduce inequalities as much as full employment would. I suppose it would be possible to make it law that all employees received a share of a company’s profits, but this will not help those not working for companies. I suppose it would be possible to replace companies with worker cooperatives, but this seems more like socialism than liberalism, but again this wouldn’t help those not working for these commercial cooperatives.

  • James Baillie 20th May '16 - 10:03pm

    Hmm, there are several issues on which I disagree there.

    Firstly I didn’t mention subsidies per se, but the point remains that if you have an industry of specialists that is no longer needed, one can’t maintain arbitrary unemployment targets, and I think that the level of structural unemployment likely to be caused in the modern economy is larger than that in the 1950-70 period. Also, you were talking about pushing for this as an EU-wide strategy, so it couldn’t be assumed that it would always be liberals implementing it.

    I utterly disagree that cooperative or social businesses are more socialist than liberal; they are quintessentially part of our heritage, something Jo Grimond for one was personally involved in. The liberty of having a say in the running of one’s workplace and not being the economic dependent of its owners, the equality gained from more profit flowing into the base of the economy, and the opportunity from a more financially secure workforce, are a win-win situation for the values enshrined in our constitution. These benefits would spread across society by injecting more money into the base of the economy, boosting spending levels and increasing wage expectations.

    Most importantly though I think it is extremely short-sighted to restrict the aims of British liberals to Britain. The core values that make us liberals do not end at Dover, and we’re in a globalised world. We can’t just say that it’s our role to increase freedom and liberty in the UK, and we can’t morally or reasonably just pull up the drawbridge, wherever the drawbridge is. Whilst we clearly shouldn’t instantly or unilaterally drop all borders, we need to think globally about migration as an issue (see recent UN warnings that resettlement rather than controls may be the only option to safely deal with current crisis levels of migration), and we may need to think about the global distribution of wealth in the interests of maintaining any sort of reasonable global stability, not least given the fact that we got much of our current wealth via a fairly brutal process of surplus extraction from the remainder of the world.

  • @ James Baillie

    The point of changing government economic policy to reduce unemployment to 2.5% of the working population is to make people in Britain better off, reduce inequalities and provide a solution to those disaffected with our current economic policies that leaves over twice the share of the working population unemployed than during the period 1950-70 and which has greatly increased inequalities in Britain.

    My point was that to replace all companies with worker cooperatives seems socialist, not that setting up a worker cooperative is socialist. Or that a social business is socialist. It is the implied imposition that I saw as socialist. You stated you wanted to make cooperatives and social enterprises the norm, which to me means restricting the freedom of people to have other types of commercial organisation.

    You have made a great case for the benefits of cooperatives and social businesses which I don’t disagree with, but you haven’t addressed the issue of not everyone being employed in them.

    As a liberal I would like to see liberty and freedom increased across the whole world. However a liberal government of the UK has to put the interests of the UK first and failure to do so I think would mean a liberal government would not be elected again. I think all economic migration is a bad thing and liberals should be trying to create a world where it is not necessary, not encouraging it. Also I don’t see how a Britain that sees trying to reduce economic migration as morally bad would appeal to the disaffected, which is the vision I am looking for.

  • Conor McGovern 21st May '16 - 2:07am

    If I thought the EU were reformable, I’d back remain. As it stands, many alternative economic policies (including subsidies for example) clash with EU law. It’s also changed very much from the Common Market of the 1970s, by the way. It’s a poor comparison really.

  • I dunno, sometimes I think rather than strive for full employment we should just admit it is no longer possible and reorganise things accordingly. At the moment we seem to be trying to force people to work in jobs that are barely there.

  • Hazel Thorpe 21st May '16 - 8:48am

    Interesting and thorough debate here gentlemen but let’s look at this from the outside. The SE region, where I come from benefits most from the EU , to the tune of £89,541 million in trade deals and businesses , and hence jobs; London £47,065 million , down to £23,933 million in the Humber region , and lower still to £8,284 millio in Northern Ireland . Shouldn’t we be addressing the inequalities of opportunity across the North South divide by enabling Councils to access the opportunities the Eu provides ? If the SE can do it, though not particlularly well in my Tory district, then so should other areas. If we addressed this inequality, prosperity could come to all areas, be more evenly distributed and offer mobility of movement, employment , affordable housing and better safeguards for the NHS through improved social mobility.

  • @ Conor McGovern

    Those campaigning to leave the EU tells that the EU has changed from the Common Market we joined in the 1970’s. And they are correct. The EU has changed. This seems to imply that it can change in the future. The question is can we persuade a majority of people involved in the running of the EU to support and fight for the change or reform that we desire? As Liberal Democrats we must be optimists who believe we can convince others that the changes we desire should be made.

    @ Glenn

    I have sympathy with your view, but there still seems a great demand for workers in the UK, which is why over 4 million people from outside the UK have come here to work since 2001. We experience shortages in particular areas – doctors, nurses and care workers to name a few.

    @ Hazel Thorpe

    Of course we should address inequalities across the regions of the UK in the same way as we address inequalities across society and across the EU.

  • Conor McGovern 21st May '16 - 3:08pm

    Michael, the EU has changed by becoming more distant and undemocratic. What makes you think any of us has a voice to steer it towards reform?

  • Simon Banks 21st May '16 - 5:11pm

    As Liberals, we can’t allow policies to reduce UK unemployment and poverty to focus purely on exporting the unemployment and poverty to poorer countries, which is what strict immigration controls do.

    Big business and the Right have been very capable in persuading poor White people that their poverty is the fault of foreigners or Blacks, whereas for example all the problems poor White people experience in this country are experienced by Black people to at least the same extent. So our approach must be to talk about issues faced by all these people in terms they can understand, and to find solutions that are credible. We’re doing that on housing. The decline of bus services and the promised retreat of police to being distant and reactive are other such issues.

    Unemployment is nothing like the problem it was in the 1930s and most of the people who feel ignored and discriminated against have jobs or are retired. Job security is an issue and here we can differentiate easily from the Tories. As in the 1930s there are communities that are in deep depression, but they tend to be much smaller – Merthyr Tydfil rather than all South Wales, say. Here we can advance Liberal regeneration – giving powers and resources to the communities instead of coming in like colonialists to direct regeneration.

  • @ Simon Banks

    The idea that the UK government should be run for the benefit of being living outside the UK is totally against the idea of representative government. Should the UK government be responsible for paying benefits to people living in foreign countries who would be entitled to UK benefits if they lived in the UK? Of course not. Should it be the role of the UK government to run its economy to provide jobs for people from another country so they move to the UK to work? Of course not.

    Liberalism has always accepted the representative nature of modern government. It has never believed that a liberal government should run its national government for the benefit of the population of the whole world. Liberals believe in increasing liberty and freedom not only in their own country but across the world, but they have always acknowledged that increasing liberty and freedom in other countries in not what people elect them to do. Yes liberals need to consider causing little harm to people in other countries.

    If a nation does not run its economy to reduce unemployment is a liberal government in the UK that does to blame. I would say no.

    I don’t understand why anyone would believe that unemployment is not an issue in the UK. I don’t understand why they wouldn’t think youth unemployment is an issue. I don’t understand why they would think it is a good idea that over 2 million UK citizens are not employed because of health issues. I don’t know why they wouldn’t understand that lots of people feel that some people can choose a life on benefits. I don’t understand why someone would not recognise that economic inequalities reduced the most in the UK during the period of full employment and have increased greatly since 1979 when UK governments gave up trying to achieve full employment.

  • Simon recons the answer for Britain’s disaffected, who are not really disaffected, …but only think they are disaffected… :
    “So our approach must be to talk about issues faced by all these people in terms they can understand,…”
    Good idea, ‘these people’ would surely benefit from a bit of re-educashun . But don’t forget to Lib-splain it loudly and slowly.., so’s them poor white folks don’t miss any of it.?

  • Christopher Haigh,

    ” the EU believes in negotiating free trade agreements whilst also regulating the standard of goods traded.”

    I seen this view, namely that the EU is regulating standards as part of free trade agreements, expressed several times recently which is rather odd because that’s not what the TTIP’s promoters say.

    They acknowledge that tariffs between the EU and USA are already so low that the potential benefit of further reductions is negligible in the scheme of things. So instead they are focussing on regulations; not just of goods, but more widely. The argument is the Tory one, that regulations are a “Bad Thing” that stand in the way of profits and therefore something to be eliminated wherever possible. In the context of international trade it is argued that they can be used as non-tariff barriers.

    Well, they can be used as non-tariff barriers but I’ve yet to see persuasive evidence that this is a systemically important problem. Really it’s just being used as an excuse to make an end run around any regulations that large multinationals find inconvenient by passing authority from democratic governments to the multinationals themselves thereby setting up a race to the bottom on standards, including many that keep us safe. It’s profit above everything, or, in an older terminology, Mammon.

    It’s an incredibly dangerous plan; trading democracy for the unsubstantiated promise of greater profit for a few.

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