The Scottish Mail on Sunday

Shock was ten years in mak­ing

- by Jon Rees DEPUTY CITY EDI­TOR jon.rees@mailon­sun­

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.

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