The Scottish Mail on Sunday
Shock was ten years in making
THE seeds of this Election result were sown in the financial crisis, which began a decade ago with the collapse of Northern Rock. Because no matter what your views on Brexit, it is still true that ‘It’s the economy, stupid,’ – as Bill Clinton’s campaign had it – that was at the heart of this campaign.
That does not mean it was about whether Britain’s economy was booming or whether the FTSE 100 was going through the roof. It was about our personal economy – whether most of us were better off or not.
The answer for most people was that they were not: British workers’ wages fell by 10 per cent between 2007 and 2015 (when adjusted for inflation). In fact, our wages are unlikely to reach pre-crisis levels until 2020 at this rate.
This is not the case with our erstwhile friends in Europe: in France, which under President Hollande was routinely derided by British politicians as a basket case, wages increased by 11 per cent during the same period and in Germany they went up 14 per cent (the figures are from the OECD club of wealthy countries).
Nor were we ‘all in it together’ as the last Government but one – David Cameron’s, remember him? – would trumpet. In 1998 the average chief executive of a FTSE100 company earned 47 times more than the average employee. By 2016, bosses earned 130 times more – one reason, perhaps, why Labour’s call to cap bosses’ pay at lower than 1990s levels proved a vote winner. It was this sense of unfairness, that the system worked for the wealthy but not for most of us, that made Labour’s plans for privatisation of the water and rail industries so appealing to so many.
It was the financial crisis, too, that colossal jolt to the economy, that led to the huge deficits which have plagued successive governments and saw the Tories cut back on public spending.
Labour’s promise to turn its back on ‘austerity’ and prioritise spending on the NHS and education played a key part in energising its Election performance.
Both the Institute of Directors’ director-general Stephen Martin and the CBI president Paul Drechsler recognise that business has to make a concerted bid to persuade the public of its value. Business has to win back trust, too, which has been severely weakened after successive scandals over soaring executive pay and dodgy dealings on pensions. As this extraordinary Election shows, that effort cannot come soon enough.