The Future of Fair Pay

Recently, the Young Fabians unveiled ‘Recovering the Economic Initiative’, a guide for Labour on how to restore its economic credibility. The recommendations are broad in scope, yet all focus on placing growth, fairness and responsibility at the heart of future policy.

One of the flagship policy successes of the 1997 Labour government was one that guaranteed fairness for all workers. The National Minimum Wage Act enshrined in law the right of workers to be paid a fair wage for their labour. The opening sections of the Bill state in clear terms that a worker is entitled to this wage – it is not a perk, a bonus, or an earned privilege, but an entitlement: a basic right.

However, for over a decade Conservatives have been attacking this right, and by fair means or foul have attempted to undermine it. When Tories- including David Cameron- campaigned against the minimum wage in 1997, hourly wages of £1.20 were common and legal. Even today, some Conservatives still seek to undermine the very idea of a national minimum wage- by taking the ‘national’ out of it altogether. Chris Chope tried his luck in March, forwarding a Private Member’s Bill that threatened to cut the rate in certain regions of the country. Besides fundamentally missing the point of a ‘national’ minimum wage, the Bill promised to randomly condemn thousands of people to poverty wages for living in the wrong place.

This is not the time to cut the minimum wage. It’s the time to take it a step further. The current rate may protect employees from exploitation, and free them from poverty jobs. But it does not do enough for workers in these extraordinary times.

The Joseph Rowntree Foundation reported in July that a single person needs to earn £15,000 before tax to afford an acceptable standard of living. However, a worker on the current minimum wage, working 40-hour weeks for 52 weeks, can only earn just over £12,600. This rate of pay doesn’t even apply to workers under 21 years of age. Thousands of young adults are placed on a lower rate, meaning that the minimum wage effectively discriminates against them. Is the work performed by a 21-year-old really worth £1.10 more per hour than that performed by a 20-year-old?

Labour shouldn’t see the National Minimum Wage as the end of the road- but the beginning of the journey towards true wage fairness. Ed Miliband made a start on this with his Living Wage Campaign during the Labour leadership race, but this has been quietly dropped from Labour’s current agenda.

Worringly, Labour in the recent past has been flirting with the idea of a minimum wage that varies across the country. Gordon Brown thought about introducing a variable scheme in 2007, and it’s certainly gaining popularity on the left today, where the need to look economically credible seems to be overriding all other concerns. The flawed logic of some is that a minimum wage prices people out of employment- but what good is employment if you can’t live off your income?

Yes, there are regional variations in inflation. Yes, it’s more expensive to live in some parts of Britain than it is in others. Yes, small businesses may struggle with wage costs. But these are all problems that can be solved without undermining the idea of a fair wage. Labour should be seeking to attack the Conservatives from a different angle, by reviving the Living Wage Campaign and standardising the rate across all ages to end the downright immoral age discrimination the current scheme enforces. Tories, economists, and businesses all thought the minimum wage would lead to mass unemployment and national bankruptcy. They think the same would happen today with a Living Wage. They were wrong then, and they’d be wrong today.

You can download ‘Recovering the Economic Initiative’ here.

Louie Woodall is a Young Fabian Member and Assistant Editor of the Young Fabians Blog

Public v Private: The Wrong War

Yesterday, up to two million public sector workers went on strike in protest against reforms to their pensions.

 The largest strike action since the 1979 ‘Winter of Discontent’ was casually brushed off by David Cameron as “a damp squib”, a statement that woefully underestimated the extent of the disruption caused and the strength of feeling across the country. One poll reported that 44% opposed the changes to public sector pensions while another indicated that 61% of survey respondents thought the strikes were justified.

However, throughout the day the internet and media outlets were dominated by verbal clashes between public sector and private sector workers. The picture that emerged on message boards, blogs and news websites was of a country at war with itself. Public servants were accused of “living in a fantasy world” while private workers were urged to recognise that they too should fight for better pensions rather than complain about public sector employees enjoying an easy ride.

Britain needs to move away from this idea of a country divided into two spheres, with one set of rules for public workers, and another for private ones. The Prime Minister’s recession motto: “We’re all in this together” cuts both ways. The current economic crisis does not have to be understood as a requirement on government to squeeze everyone’s standard of living. In fact, it can be seen as a reason for everyone to unite and refuse pay cuts, pension raids or redundancies- regardless of whether they work in the private or public sectors.

Both sets of workers have more in common than most seem to think. A recent study by the Institute for Fiscal studies shows that, while at the moment public sector wages are above those of private workers, they are forecast to fall in line with them over the next two years. Average public sector and private sector salaries will be roughly the same by 2014-15. So much for the argument that public servants are living easy while the private sector suffers. As for the complaint that private workers can’t defend themselves by striking like public workers can- just look at the actions taken by Unilever staff, who voted overwhelmingly in favour of strike action in response to a threat to their pensions.

It is vital that all political groups- and Labour most of all- work to shatter the illusion that public and private sector workers are chalk and cheese. The IFS is predicting a 3% fall in average incomes for everyone next year, in a report arguing that what Britain is living through now is worse than that suffered in the 1970s.

We are all in this together, and we should all work together to secure fair salaries, decent pensions, and acceptable living standards for public and private sector workers alike.

The Squeezed Middle: How To Build A Fairer Economy

In this member post, Jeevun Sandher – a member of the Young Fabian Renewing and Reforming our Economy Policy Commission - reflects on how Labour can build a fairer economy.

Most of us have a vague idea of what the “squeezed middle” is. However, a precise definition seems to elude many in the Labour movement. Understanding precisely who this group is and designing economic policy to promote their interests is the key to building a fairer economy.

To define the “squeezed middle” we could do much worse than to look at the work of the Resolution Foundation, an organisation working to improve the lives of people with low-to-middle incomes. For them, this group constitute about 11 million working adults who tend to earn less than the median income but are above the bottom ten percent in the income distribution.

In short, they are people who are neither too rich nor too poor. They are too wealthy to get substantial state support, but too poor to flourish in an open market economy. Increasing amounts of them are unable to buy homes, and struggle with household bills. More than half have less than one month’s income in savings and face comparatively higher rates of inflation (due to the basket of goods that they buy).

However, the real tragedy for the squeezed middle is that while the economy grew by 11 % between 2003 and 2008, the median wage remained static. At the same time, those on higher wages saw their pay packets increase and executive pay rose exponentially. The squeezed middle saw their living standards reduce at a time when the economy grew and productivity rose, giving the lie to the neo-liberal idea that people are paid their “marginal product” – that the wage chosen by the market is a fair wage.

This problem runs straight to the heart of Labour’s “fairness” strategy. By and large, these are people who work hard, do the right thing, but still struggle to stay afloat in an increasingly precarious economic climate. Meanwhile, CEO’s saw their pay rise dramatically in the decade before the financial crisis and bankers continue to take home multi-million pound bonuses.

The challenge for Labour at the next election is to construct a vision that rewards hard work and shapes a free and fair economy. There is no silver bullet, however. What is needed is a raft of policies to build an economy in which all gain when there is growth.

To begin with, those in the squeezed middle tend to be those with low-to-medium level skills. Any economic strategy must be focused first on investment in education, in order to build up human capital. Given the increasing returns to education we have seen in the past 30 years, this is just common sense.

However, it is important to note that this does not merely mean reducing tuition fees. As a recent IFS study has pointed out, those with similar A-level grades tend to go to university in the same proportion but it is much less likely that the poorest students will get the top A-level grades. Earlier intervention is key (e.g. Sure Start, the pupil premium etc.) to promoting social mobility and building people’s skills.

But this should just be the beginning. For too long Labour has accepted the Thatcherite free market consensus as gospel, and only aimed to tweak it at the edges to help those on low to middle incomes with measures such as tax credits and lower basic tax rates.

It is time to consider and undertake more radical measures. We must design policies which create better corporate governance structures as well as more accountability and transparency surrounding pay in the private sector. Only then can we ensure that all people will share in the proceeds of growth and be paid a fair wage. Hopefully, with these goals in mind we can create a compelling economic vision that helps us win the next election.

Jeevun Sandher is a member of the Young Fabian Reforming and Renewing our Economy Policy Commission.

The pensions generation

In this member post, Young Fabian member James Gill argues that it has never been more important for young people to consider savign towards their retirement.

Last Tuesday, I attended a rather eye-opening Young Fabian Future of Finance Network discussion on the issue of Pension Reform and what it means for young people. Rachel Reeves MP, Shadow Minister for Pensions, attended the roundtable.

Before the meeting, I was but another lost young soul unfamiliar with the intricacies and importance of the need for young people in today’s economic climate to become engaged in pension discussions. Now I’m a sprightful Young Fabian committed now to increasing the knowledge that young people have of pensions.

Before, the word ‘pension’ seemed distant and something associated with retirees, or with people seeking to start building for their retirement in their mid-40s. But – as we discussed at the roundtable – as job insecurity and increased living costs kick into graduate life, saving for a pension should increasingly become a habit of younger workers as well as elders.

Knowledge of pensions is more vital than ever as we lurch towards another year of stiff job competition, a sluggish economy and a squeeze on the lifestyles and choices of many low and middle income citizens in this country.

As a recent graduate in history who has been looking for job opportunities for just under two months – and who has got £23,000 worth of student debt to pay off on top of maintaining a sustainable lifestyle for a young person – I will be looking for the earliest opportunity to start saving up for a good pension for later in life.

Yet only 15% of 16-24 year olds are currently saving for pensions in comparison to 58% of workers in their 40s and 50s, with the consequence that most people in their working prime of their 30s have no or very little pension wealth. This does not bode well for the future generation of young workers, in particularly those attending university from 2012 onwards who will leave with a prospective debt of around £53,000 and with predictions of an increase in graduates competing for jobs (the current average being 80 per job).

Shifting between occupations has to be considered as well. Some people in the mid-twenties have had up to four jobs (one per year) since leaving higher education, making the ability to save towards a pension considerably more challenging compared to previous generations with greater longevity in employment with specific employers.

The need to educate our fellow young on the need for pension saving is more pressing than ever.

In a world of constrained finances, we need to save and scrimp our pennies. And while pensions may seem to many a concern only for the elderly, they are increasingly linked to broader economic issues such as whether we can remain in employment, downward pressure on wages and increases in the cost of living.

James Gill is a member of the Young Fabians.

Pensions – keeping a roof over our heads

In this member post, Daniel Wilson Craw reflects on discussions at this week’s Future of Finance event on pensions with Shadow Pensions Minister Rachel Reeves MP.

Free tertiary education. A job for life. Affordable housing. Final salary pension. All a thing of the past. The children of the baby boomer generation are looking increasingly likely to be worse off than their parents.

The Young Fabians recently considered the implications of the last of these, and how individuals entering the world of work can be encouraged to start putting money aside in a pension scheme. There was a broad consensus that better financial education was needed and the demise of the Child Trust Fund – as a way to get citizens in the habit of saving from an early – was not. The pension industry’s marketing of itself to young people was found wanting, particularly as their selling points – the tax-free nature, the employer contributions – were not familiar to some of the young professionals in the session itself.

Rachel Reeves MP noted that formulation of pensions policy involved, quite rightly, the likes of the ABI, the financial services sector and employers, but seemed to have ignored the views of the very people who it was aimed at.

While the pensions industry could be given a kick up the arse, I get the feeling a significant barrier to take-up is the effect of the economic downturn. Since 2008 there have been three trends.

Firstly people, particularly the young, have a lot less job security and are less likely to want to put money away for a long period of time when they might need some in the bank in case things take a turn for the worse.

Secondly, with the cost of borrowing pushed down, there is no incentive to save as it is difficult to find an interest rate which will beat inflation.

Thirdly, the shortcomings of the financial markets as a generator of wealth have been exposed, so that the “value of investments may fall as well as rise” warning on financial products is even more ominous for an unseasoned investor.

Talking about pensions is not enough to address the generational divide. Even if we all signed up for a pension, retirement doesn’t sound like fun. With credit still crunched and house prices still out of the reach of thirtysomethings, there are going to be a lot of people who will not own a home outright by the time they retire.

Only one in twenty over-65s currently live in the private rented sector with three quarters in owner occupation and a fifth in social housing. In comparison, 36% of 25-34-year-olds rent in the private sector. Now of course many of them will buy eventually, but the rate of those still renting when they hit 65 (or whenever we’ll retire) is going to be a lot higher than 5% the way things are going. Apparently if I continue paying £1200 into my pension pot per year and assuming it earns an average of 7% growth a year, I will get around £5000 per year in retirement. This sum would barely cover rent this year, let alone after 40 years of inflation.

Housing will have to be made a lot more affordable if the pensioners of the mid 21^st century are going to keep a roof over their heads.

Dan Wilson Craw is a Young Fabian Future of Finance Network member.

Blueprint for a New Economy

In this Guest Post, Bren Albiston, a member of the Young Fabian Renewing and Reforming Our Economy Policy Commission, explores the ways in which we can change the way the country does business.

We have a big decision to make as to what future we want for this country.

Do we want to continue ever further down the road of an economic system that rewards rent-seeking more than productivity? Do we want to sustain an unfair system that generates friction between the Square Mile and the rest of the economy?

No. We can, and need to, improve this sorry state of affairs.

We have to grow our economy at more than 3% a year until 2035 in order to make up the losses incurred from the double-whammy of the credit crunch and recession. If we fail, we will lose something in the order of £4 trillion of productivity* . The task may seem insurmountable, but we must work to secure as much of that 4 trillion as we can.

Our capitalism is broken. This has been made clear by years of recession and static growth. We continue to pay the price of other people’s hubris; those who thought they could predict the unpredictable.

Despite this, we are still over-reliant on a financial system that is too cautious to invest. At the same time, the government is scaling back the public sector, our most potent means of inducing social mobility. We must reinvent the way we do business and the way that we create and encourage growth, not just because we need to recover economically, but because we need to recover socially as well.

Britain should not be afraid of taking the lead in reform. There are many ways in which the nation could change the way it does business. The establishment of a properly funded and empowered ‘Green’ investment bank is one option. As Will Hutton suggests, we should explore the benefits of a ‘Knowledge Bank’, a ‘Life Sciences Bank’ and perhaps a ‘National Infrastructure Bank’.

Through these institutions, we can invest in the technologies and expertise required to rebuild our economy. A new lending infrastructure will incentivise innovation, while benefiting traditional funding streams at the same time.

The new system would channel funds to those areas that are thought to be risky bets by orthodox lenders. However, it would need the backing of the state to succeed. It alone can provide the security and effective strategic direction needed, alongside a highly autonomous set of investment apparatus to keep its influence in check.

Fairness and just desserts should be the foundation stones of our new capitalism. In many ways, small business does more for this country than big business. At present, we neglect the small- and medium-sized businesses and leave them exposed to the predatory practices of our largest firms.

These giants operate largely unchallenged by both smaller competitors and government watchdogs. A study in 2005 revealed that the more competing firms were matched in terms of performance and productivity, the more they tended to register new patents** . We need a competition framework that actively promotes competition rather than protecting incumbent corporations.

Unfortunately, the balance between today’s consumers and tomorrow’s is too heavily in favour of the former. In consequence, there is little room for innovation and even less for emerging companies to replace those which are uncompetitive. We need an infrastructure capable of sustaining new corporate growth and innovation.

Britain is, in many respects, a world-leader in high technology and services. Yet as our manufacturing sector continues to decline, we remain over-reliant on financial institutions as the engines of growth. As the state retreats from its key role in encouraging social mobility, we are faced with a huge task: we need to reconstruct our capitalism to benefit society, and we need new institutions to help us do that.

• You can learn more about what the ‘Renewing and Reforming Our Economy’ Policy Commission has been doing by clicking here.

* H.M Treasury (2009) Pre-Budget Report: Securing the Recovery: Growth and Opportunity, HMSO. See Also: Will Hutton (2010) Them and Us. Little, Brown.

** Phillippe Aghion, Richard Blundell, Rachel Griffith, Peter Howitt and Susan Prantl (2005) ‘The Effects of Entry on incumbent Innovation and Productivity’, CEPR Discussion Paper No. DP5323.

Responding to the riots – Insights from Brixton

Tony Blair asked us to reject the idea that Britain is broken. However, the Young Fabians – never to accept any one view without question, debate and a few committee meetings - thought that further investigation was and is necessary. Certainly, there was blatant opportunist criminality in the youth riots and, likely, a small minority who operate ‘beyond the pale’ involved. But the scale, spread and nature of the unrest does seem to indicate something more; something wrong with our society. A very large number of young people have demonstrated a lack of connection to, or investment in, their communities and a separation from the norms of society. It would be wrong to be complacent about this challenge.

Of course, the issues can’t be looked at in isolation. The roots are in education, in the economy, in housing, in public service provision, and elsewhere. But just because something is complicated isn’t a justification for giving up on constructive solutions.

Over the last five months, Joani Reid has been leading the Young Fabian “Securing the Future of the Next Generation” Policy Commission to provide analysis of the broader problems hitting British youth.

As part of the effort to analyse the issues, last week, the Young Fabians teamed up with A4e to visit Brixton to try and better understand the skills and employment challenges in the area. Myself, Joel Mullan, Vincenzo Rampulla and Joani Reid all took part in the site visit and held a series of interviews at the Brixton A4e training centre.

What follows is not an exhaustive analysis, but a short personal report from what felt like a very worthwhile visit – and something that the current Young Fabian Executive would like to repeat, with other partners and other areas.

Firstly – without comparing it to its competitors (because we didn’t visit any on this occasion) – I, for one, was very impressed by A4e as an outfit.

There was a huge amount of optimism and energy in the building. I suggested that a lack of jobs in the economy might be an insurmountable problem for the centre, but they went on to tell me about all the vacancy relationships they’d built up to secure job opportunities. For example, a recently secured relationship with WHSmith enabled them to link forthcoming major recruitment rounds with training programmes in local areas.

I was also impressed by A4e’s emphasis on making sure the people of an area benefitted from big investment projects. It was clear that they rejected the idea that high value added investment, like the Silicon Roundabout, are just opportunities for high skilled talent to move into the area, but advocated, with enough time, planning and upskilling, the opportunities for unemployed local people. This approach offers a stern challenge to those who are satisfied with mere trickle-down benefits for the local community from cleaning jobs and selling sandwiches.

At a broader level here are a five big insights for policy thinking that I took away from the interviews and meetings:

1. We need a tailored and sequenced approach to helping jobseekers.

People differ widely and so do their needs. In Brixton, the range was from job-hungry out of work professionals who had just been hit by the downturn, to those in need of skills training and with an appetite to learn, to those with much more severe health, drugs, drink, or housing problems. Particularly for those in at-risk categories, their issues need to be dealt with in the right order in order to be effective, and to reach sustainable and gainful employment as an end goal. One size doesn’t fit all. We shouldn’t talk as if it does.

2. Business, educators and jobseekers shouldn’t operate in isolation.

Our current general modus operandi – of employers wandering blindly into skills shortages, trainers training without a clear view of an end goal, and jobseekers floundering in the middle – indicates some room for improvement. It may make more sense to encourage as much communication and planning between: what businesses need, which they often know many months in advance of the time; what the educators can provide; and the aspirations and development-reach of the jobseeker. The free market is a brutally efficient model of clearing, but it is not perfection. There is value in thinking about the limits of a wage/price solution. Greater understanding and planning across the silos can help.

3. Culture matters and for-profit shouldn’t be a dirty word.

Organisational culture is of the utmost significance. It struck me very telling that A4e refer jobseekers as ‘customers’.

Public service in general should be very far removed from a tick-box process of ‘recipients’, and be, as far as possible, about enabling committed and motivated individuals to have a personal stake in the experience of public service ‘customers’. This is not to bash state provision, just a nudge to try and dislodge any automated revulsion to the concept of for-profit public service. At the very least, we should try and incorporate the motivation and innovation that ‘for-profit’ can, sometimes, demonstrate into all aspects of public service.

4. We should do everything we can to make work pay.

In interviews with ‘customers’, it was clear that there was an entrenched view out there that welfare can pay more than work can. We need to tread carefully here, maintaining the protection for the vulnerable, for mothers and for the down-and-out. But we must do all we can to make employment attractive. While it feels like there is some way to go on this challenging agenda, it is should be at the forefront of policy makers minds. Part of the solution must lie with a relentless effort to raise aspirations in all communities, especially the most deprived.

This is no easy feat.

5. We need bigger thinking on internships.

In an interview with a highly educated jobseeker with two degrees and ambitions in the fashion industry, who had been out of work for over a year, it struck that he was being led on a path that was corrosive to his sense of purpose and confidence, as well as being costly to the economy. His university careers advice centred on the importance of getting experience and an internship to make it in his career of choice. Many readers in the political world will, no doubt, be familiar with this advice. He was financial-capital poor, but human-capital rich. If he went on an internship, he claimed he would lose his housing benefit and employment benefit; a non-option without family support in London. If he took a minimum wage job, the option presented to him by the jobseeker system, he saw only the prospect of working very long hours just to keep his head above water, without any surplus income to save.

The unsympathetic might say he should take whatever job is coming, and be grateful. But surely it makes no sense to consign those who have benefitted from a high level of education to the near poverty trap of minimum wage jobs – not from the perspective of jobseekers self-worth, nor when trying to enable the greatest possible constructive contributions to society, nor when trying to make good on the state’s investment in education, and nor in our effort to encourage the flourishing of high value added employment in the UK.

A potential solution might be (with lots of weaknesses no-doubt, but also some merit): a one-shot universal jobseekers credit for, let’s say, a 6-month unpaid internship? Bolstering skills development, entrenching high-value added jobs and making the UK a more attractive place to locate business, all the while costing the state less (bearing in mind how long this category might otherwise be on welfare). Accepting internship exists rather than trying to wish them away, this could level the playing field for entry to high-skilled professions and be a significant boost for businesses.

‘One Big Chance’ internships – you heard it here first.

Policy Commissions and Young Fabian next steps: everyone should get involved

Joani and Joel are taking forward the thinking in the “Securing the Future of the Next Generation” Policy Commission. The next Anticipations edition will also have a heavy focus on the Squeezed Youth theme.

Tony Blair may be right about the need to focus on the hard to reach dysfunctional families. Or perhaps we do have a broken society and there are big ideas needed to address a lack of hope or prospects in communities up and down the country, hitting the young hardest.

Regardless, if you want to contribute to the thinking and the debate, there are plenty of opportunities with the Young Fabians. Stay tuned for information about a debate on what to learn from the riots.

Please get in touch if you would like to be involved, at any level.

Nick Maxwell is Partnerships Officer for the Young Fabians

The ‘Invisible Link’

The connection between rioting and economic deprivation must be recognised by a government and public venting its fury in all the wrong directions.

The chaos and wanton destruction of the past week has provoked a new bout of soul-searching within Britain. In the race to identify the origins of the rot that spread out to consume an alarming number of our communities, politicians, broadcasters, journalists, and British citizens have scrutinised the social fabric of the nation and unearthed a rich variety of possible answers. The public can already choose from a range of conceptual lenses through which they can interpret the acts of rioting, looting and murder that have so shaken the national psyche. It is tempting for the politically conscious to grasp at the interpretation that best accords with their stance on the political spectrum to the exclusion of all others, and understand the rioting through the distortions of their personal ideological prisms.

There are many who have already taken this course of action, and are lashing out in screen and print with their own half-formed ideas on the cause of the rioting. The Daily Mail published Melanie Philips’ decidedly right-wing analysis of the riots, attributing “the violent anarchy” of the last several days to “the three-decade liberal experiment which tore up virtually every basic social value.” On the other end of the spectrum, Nina Power has projected the London riots as the inevitable manifestation of an unequal society where “the richest 10% are now 100 times better off than the poorest, where consumerism predicated on personal debt has been pushed for years as the solution to a faltering economy, and where, according to the OECD, social mobility is worse than any other developed country”.

In a previous post, Alex evaluated the riots as an economic equation balancing costs and benefits. Labour and their supporters have spouted dozens of statistics in a bid to prove a link exists between economic instability with social disorder. Such analysis may appear cold, sterile and unappealing to the passions of many who want to brand those responsible as “scum”, “feral”, and “evil” in order to vent their understandable frustration. But it has to be recognized, it must be understood that there is a real, tangible link between economic permutations and social unrest.

It also has to be made brilliantly clear that there is a link between personal economic success and psychological resilience. I have discussed the correlation between unemployment and mental health in a previous article, but still many will state that an individual’s employment status is detached from their internal moral compass. The real link must be made more explicit.

Why does a certain individual see a discarded brick, pick it and throw it through a window, while another walks on by? Why does one teenager loot while another, who has the same ability to take what he wants and the knowledge that no-one will stop him, attempt to prevent him?

The answer lies in the individual’s psychological make-up, and the temperament of the invisible policeman of his conscience. However it can never, never be said that the mental state of any individual is constructed in a vacuum. The argument that the environment an individual grows in shapes his character is termed ‘behaviourism’, and is studied as a branch of moral philosophy. It has featured many times as part of discussions on incidences of supposed moral disintegration, perhaps most recently in Britain with the 1993 murder of Jamie Bulger, when Shadow Home Secretary Tony Blair said: “We hear of crimes so horrific they provoke anger and disbelief in equal proportions… These are the ugly manifestations of a society that is becoming unworthy of that name.”

Would those words being any less aptly used today?

Were the riots a product of moral disintegration in some sections of our community? Yes – and the right is quick to acknowledge this. What it fails to do, and what the left must impress upon the public, is that this moral disintegration occurred in community environments that bred contempt, hate, and anger, and that these environments have been allowed to flourish because of institutional failures that neither Tony Blair, Gordon Brown or David Cameron have successfully addressed.

The depressed communities of Tottenham, Hackney, Birmingham, Salford and elsewhere have been failed by both left and right. They have been cut-off and isolated from the rest of society just as the rich and powerful have cloistered themselves away in opulent London enclaves.

The Prime Minister has been careful with his choice of language over the last couple of weeks, but I applaud him for acknowledging that this is still “our” society, thereby implicating all peoples and classes in the shame that has engulfed our country. As he stated in the Commons, “There are pockets of our society that are not only broken, but frankly sick”.

When one part of the body falls ill, the rest will soon follow unless immediate action is taken. That action cannot be isolated to condemnation, imprisonment, punishment and further deprivation. To do so would be to poison these environments further, and conjure up an even greater storm a decade down the line.

Instead, the link between deprivation and disruption needs to be made more explicit than ever, and severed once and for all.

Louie Woodall is Assistant Editor of the Young Fabian Blog.

Why we can’t turn into ‘part-time Britain’

Young people need to show they care about the type of jobs that are being created and not just the numbers.

Yesterday’s labour market figures are truly depressing. 38,000 more people unemployed than the previous quarter, 2.49 million people without work.  It puts Eric Pickles’ trumpeting of the Government Enterprise Zones, with the promise of 30,000 jobs by 2015, into perspective.

As David Blanchflower predicted last month, the Prime Minster is going to have to do some nifty footwork given his assertion that unemployment will fall each year this Parliament; both the PM and the Chancellor have been given their come-uppance.

But policy makers and politicians need to be mindful of the longer term social effects of this economic pain. George Eaton has pointed out the five worrying trends in the published figures but there are two areas Young Fabians should be especially concerned about:

1) Youth unemployment continues to rise and it is lasting longer –

One in five economically active 16-24 year olds are not working. A massive 39 per cent of have been unemployed for over 12 months (up 2.5 percentage points on last year) and 95,000 have been waiting over two years for a job.

That means more  young people starting life out on benefits which is precisely what the Government says it doesn’t want.

More worryingly, the longer young people stay out of the workplace the deeper and longer-lasting the social and economic consequences (David Blanchflower lists 10 reasons why politicians should care).

So the question is: how is the Chancellor’s Office of Budget Responsibility going to cost these long-term social and economic effects? And what is this going to cost us in the long run?

2) There’s a deepening dependence on part-time and temporary work –

Both the number of people in temporary and part-time work are up (1.2 and 0.1 percentage points this quarter respectfully).

But it is the number who fall into this type of work because they couldn’t find permanent or full-time work that is most worrying: a 5.1 percentage point increase and a 7 percentage point increase respectfully.

Let’s not pretend a job is a job is a job. The Government should recognise the negative and perverse effects of long-term involuntary involvement in part-time and temporary employment. It can be a trap as well as a short-term solution.

If young people are starting their careers here it needs to be out of choice not desperation. And there needs to be a clear route into permanent, full-time work.

It is easy to just see numbers when we talk about jobs and the economy. Instead young people need to start championing the kind of job creation they want to see, not just what politicians think they can make do with.

Vincenzo Rampulla is Officer without Portfolio on the Young Fabian Executive.

Smash and Grab Britain

Reflecting on all the online chatter about whether the riots were caused by the cuts and/or the recession, and also all the talk about the rioters having a sense of ‘unearned entitlement’, it struck me that a better reading might be that both phenomena (the recession/cuts and the looting/riots) may stem from the same social malaise, which has just manifested itself in different ways at the top and bottom of the social food chain.

The narrative would run something like this: Britain is country where for years smash and grab activities by banks and bankers have been tolerated, politicians have committed expenses fraud with impunity and where both politicians and the police have been in the pockets of the right wing media, where a credit orgy for the middle classes led to a credit crunch that has put thousands of working class people out of work, and where an unelected government intends to pay for the bail out of the very same financial system by cutting benefits and services to the most vulnerable, justifying its agenda with spin about a ‘big society’ that can only ever exist in communities that least need it.

When the culture of ‘Smash and Grab Britain’ hits the streets, should we be surprised?

Claire Leigh is Treasurer of the Young Fabians.