by Owen Jones
Shamefully, Britain negotiated an opt-out from the European Working Time Directive that caps the working week at 48 hours. In theory, workers can only work longer than this if they agree to. But, according to a survey conducted by the Trades Union Congress(TUC), one in three workers do not know the option even exists, and another two in three who regularly work more than 48 hours were never given a choice. We have ended up in the shocking situation in which around one in five of us regularly work more than the 48 hours enshrined in the Directive.
But there is even more damning evidence of exploitation. In 2009, over five million workers did more than seven hours of unpaid over- time on average each week-and the trend is up. Having so many people working for free is worth a huge amount to bosses. According to the TUC, business made a stunning £27.4 billion out of it-that's £5,402 per worker. It is a figure worth recalling the next time you hear businesses complaining about the cost of sick leave: according to the CBI, the resulting losses are less than half the amount.
We are not even compensated with time away to unwind. British workers get an average of 24.6 leave days a year, below the EU average and well below Sweden's thirty-three days. No wonder stress has become endemic. A fifth of workers surveyed by the mental health chariry Mind had phoned in sick on some occasion because of 'unmanageable' stress levels.
We have seen how service sector workers in particular have had an increasingly rough ride over recent years. But what about the one in five who work in public services? After all, both right-wing journalists and politicians have encouraged the idea that public sector workers are overpaid, underworked and living it up at the expense of the taxpayer. When the government bailed out the banking system and suffered a collapse in tax revenues from the Ciry, a political consensus developed around 'savage' cuts to public services. The realiry of Britain's six million public sector workers is nowhere to be seen in all of this.
'Going back many, many years, people may have seen this image of white-collar workers who perhaps thought they were doing alright, had quite an easy job, good conditions and were fairly well paid,' says union leader Mark Serwotka, 'I think that caricature has been deliberately put out there by all political parties in order to, firstly, justify attacking them and, secondly, trying to spread a very divisive image: that "Well, they're bureaucrats who don't really do anything, we can cut them, they're not real people who offer stuff to society."
Serwotka believes this 'demonization of the public sector ... was a deliberate political strategy to try
massive cuts they announced.' He
and see off any opposition to the bitterly recalls then-Chancellor of the Exchequer Gordon Brown sacking 100,000 civil servants on live TV in 2004. The union was not even consulted beforehand. 'We saw [former Tory leader] Michael Howard at the 2005 election with his 500 cardboard cut-outs of bowler-hatted, pin-striped mandarins, and it's the same story.' When the Tories came to power after the 2010 election, they immediately set to work cultivating this image, harping on the 172 civil servants who were paid more than the prime minister as if they were in any way representative of the public sector.
Like the service sector, the public sector has filled part of the vacuum left by the collapse of industry in many working-class communities. Nearly 850,000 new public sector jobs were created in the New Labour era. There were around six million public sector workers before the Conservative-led coalition unveiled its programme of cuts in May 2010. Again, as in services, women dominate. According to economics expert Professor Prem Sikka, eight out of every ten new jobs taken by women since the late 1990s were in public services. In a former indus- trial heartland like the North East, around one in two women work in the public sector.
Yet the idea that these employees are in any way 'pampered' is a myth. Nearly a quarter of workers earning less than £7 an hour can be found in the public sector. 'We have 100,000 members in the civil service earning £15,000 a year or less,' says Mark Serwotka. 'We have 80,000 people on less than the average wage in the country in the civil service. We're told that they have "gold-plated" pensions yet the average pension of all civil servants is £6,200 a year. If you strip out the top mandarins, it's £4,000 a year:
Consider, too, the fact that public sector workers do the equivalent of 120 million hours of unpaid overtime a year. According to researchers at Bristol University's Centre for Market and Public Organisation, that's the equivalent of employing an extra 60,000 people. One in four public sector workers put in unpaid overtime worth almost £9 billion a year-s-compared to one in six in the private sector. Pampered? On the contrary. Public sector workers rank among some of the most exploited, low-paid people in the country.
It is these workers who face the brunt of the cuts programme, because a crisis of private greed has been cynically transformed into a crisis of public spending. But as politicians sharpen the knives, it will not just be those workers directly employed by the state who will suffer. If you are in the bottom fifth of the population, over half of your income comes from state support. In the fifth just above that, itis still over a third. Even in the middle fifth, 17 per cent of people's income comes from the government. Huge numbers of working-class people depend on having their income topped up by the state to make ends meetthrough tax credits and housing and child benefits, for instance, many of which face real-term cuts.
The great, continuing legacy of Thatcherism is that the working class is, for the time being, on the losing side of the class war. 'There's class warfare, all right,' as multi-billionaire US investor Warren Buffett put it a few years ago, 'but it's my class, the rich class, that's making war, and we're winning.'
Over recent years we have witnessed an astonishing wealth grab by Britain's businesses at the expense of their workforces. At the turn of the millennium, top bosses took home forty-seven times the average worker's wage. By 2008, they were earning ninety-four times more.19In some companies, this gap has become mind-bendingly wide. Take Bart Becht, chief executive of Reckitt Benckiser, which makes everything from the painkiller N urofen to the household cleaning product Cillir Bang. Lucky old Mr Becht makes do with the equivalent income of 1,374 of his workers put together. Or behold Tesco boss Terry Leahy, pocketing 900 times more than his checkout workers and shelfstackers.20
You might think that the greatest economic crisis since the 1930's would have given major businessmen pause for thought. Not for long, though. In October 2008 it was revealed that boardroom pay had soared by 55 per cent in just a year, leaving the average FTSE 100 chief executive with a wage packet 200 times that of the average worker. This bonanza did not stop them pressing ahead with pay freezes and massredundancies. And when the Sunday Times published their annual Rich List in 2010, it revealed that the collective wealth of the 1,000 richest people in Britain had increased by 30 per cent. This was the biggest rise in the history of the Rich List.
Call centre worker Carl Leishman recalls being made redundant by his former employer at the height of the financial crisis. 'I was in the interesting position of working for a bank when it all kicked off. The whole thing is the reason I got made redundant. I think the day after I officially finished with the bank they announced £8.3bn profits. Yeah, that stung a little. "Yeah, by the way, you've got no job now, but we've made £8.3bn profits this year." Well, that's it: everyone suffering for what a few idiots did, and they're still getting paid millions for it.'
Such is the extreme distribution of wealth that the top 1 per cent scoffs a hefty 23 per cent slice of the national pie. The bottom half, on the other hand, has to make do with a meagre 6 per cent between them. Even this is misleading, because much of the 'wealth' of the bottom half is borrowed, through mortgages and credit. The top 1 per cent owns its wealth outright.
This 'trickle-up' model of economics has not come about because the people at the top have become more talented or more profitable. It has been driven by the smashing of the trade unions, a hire-and-fire labour force, and a taxation system rigged to benefit the wealthy. Even Jer
emy Warner, a right-winger and deputy editor at the conservative newspaper the Daily Telegraph, finds something amiss: 'It is as if a small elite has captured-and kept for itself-all the spectacular benefits that capitalism is capable of producing."
'There's no doubt that the current tax system is regressive,' says chartered accountant Richard Murphy. After all, we live in a country where the top decile pay less tax as a proportion of income than the bottom decile. Murphy identifies a number of reasons, including the fact that poorer people spend more of their income on indirect taxes like VAT; that National Insurance is capped at around £40,000; and that those earning between £70,000 and £100,000 a year can claim £5,000 of taxrelief a year over and above their personal allowance.
'We are intensely relaxed about people becoming filthy rich,' New Labour's high priest, Peter Mandelson, once said, 'as long as they pay their taxes.' In practice, wealthy businessmen and corporations go to great lengths to avoid paying tax at all. Murphy calculates that tax evasion costs the Treasury around £70 billion a year-that's seventy times more than the estimates of benefit fraud. With armies oflawyers and tax experts, the economic elite has become skilled at exploiting loopholes and shuffling money about to avoid paying a penny.
'There's some quite blatant activity, particularly within the middle classes and the wealthy, where there's a lot of income splitting going on,' he says. 'Tax shifting by moving income from one part within the relationship to another has become an extremely common way of avoiding significant amounts of tax. The self-employed are also past masters at this, through limited companies.' What better example than Philip Green, a British billionaire businessman appointed by the Conservative government to advise on its spending review. Sir Philip gets away with paying no tax in Britain because he has given his Monaco-based wife legal ownership of key companies such as Topshop.
Looking beyond the statistics for a moment, clearly we are dealing with two groups of people with irreconcilable differences. On the one hand those who scrimp and save, relying on often poor and stagnating wages to pay the rent or the mortgage. Their long hours and growing productivity have gone unrewarded. They send their kids to local schools and when they get ill,they depend on the local GP and hospital. They pay their taxes. With the death ofindustrial Britain, many of them depend on relatively low-paid, insecure service sector jobs. Their needs and concerns are ignored by the middle-class worlds of politics and the media.
On the other hand we have a wealthy elite whose bank accounts have exploded in value, even in the midst of economic meltdown. They live global, jet-setting lifestyles, with mansions, villas and penthouse suites scattered around the globe. They may work hard and for long hours, but can be paid as much in a day as other hard-working people earn in a month. Many of them pay little or no tax, they send their kids to expensive private schools and use costly private health-care schemes. They have opted out of society. Not that this has dented their power and influence. After all, the tentacles of big business reach far into each of the main political parties. As well as their huge political power, it is this rich elite who run our major newspapers and broadcasters.
The idea that the working class has withered away, with just a 'chav' rump left, is a politically convenient myth. But there is no denying that it has changed profoundly over the last three decades. The old working class tended to thrive in communities based around the workplace. Most were men who had the same job for life, which was very likely to be the same as their father and grandfather before them. Many of these jobs had genuine prestige, and were well paid. People were more likely than not to be members of unions, and enjoyed genuine power in the workplace.
The modern working class resembles the old in one respect: it is made up of those who work for others and lack power over their own labour. But the jobs they do are generally cleaner and require less brawn: how fast you type is more important than how much you can lift. They work in offices, shops and call centres, often for relatively less pay and with greater job insecurity. Even before the Great Recession, wages were stagnating or, in many cases, declining. Millions of workers hop from job to job with an ever-growing frequency. A sense of community, belonging and pride in work has been stripped away. Terms and conditions are often poor, particularly for the army of temps who enjoy virtually no rights whatsoever. Entire swathes of the workforce are non-unionized, and labour's bargaining power is weaker than ever.
A blue-uniformed male factory worker with a union card in his pocket might have been an appropriate symbol for the working class of the 1950s. A low-paid, part-time, female shelf-stacker would certainly not be unrepresentative of the same class today. But this contemporary working class is almost absent from our TV screens, the speeches of our politicians and the comments pages of our newspapers. Tory leader David Cameron spoke of the 'Great Ignored' during the 2010 general election. Who has better qualifications for this label than the British working class?
There is an insidious side to the pretence that class no longer exists in modem Britain. Rarely a day goes by without some politician or commentator paying homage to 'meritocracy', or the idea that anyone with talent and drive can make itbig in modem Britain. The tragic irony is that the myth of the classless society gained ground just as society became more rigged in favour of the middle class. Britain remains as divided by class as it ever was.
6
A Rigged Society
The Britain of the elite is over. The new Britain is a meritocracy.
-Tony Blair, 1997
'I'm definitely middle class, but I'm married to a man who's upper class,' Rachel Johnson said to me in the same cut-glass accent as her brother Boris. There seemed no more appropriate place to talk about class than in the rather quaint Covent Garden offices of Britain's poshest weekly, the Lady. Johnson has been the magazine's editor since 2009,but even a woman with her privileged background feels as though she lives in a different world from its blue-blooded readership. 'I'm sort of on the tectonic plates, at the grinding plate of two class systems, class divides ... It's like the San Andreas Fault in British society, which is between the aspirant middle class and the downwardly mobile aristocracy. That's what we're seeing at the moment which I think is an interesting area for me to talk about, rather than the working class or the lower middle class.'
Perhaps surprisingly, I discovered that the sister of London's Old Etonian mayor felt like an outsider. 'I come from a very odd background and I'm completely unrepresented in British society because all my ... How many great-grandparents do we have? Eight?' She goes through the nationalities of each, one by one. French, Swiss, Turkish ... 'So I've never felt remotely within the bloodstream of the class system.'
Rachel Johnson may not seem the most likely person to offer a searing indictment of the class system. But that is what she does. What we have seen, she argues, 'are the middle classes sort of sailing into the jobs, taking all the glittering prizes as a result of their contacts and peer group. And the working-class or the lower-middle-class children struggling to get their first foot even on the ladder.'
At the root of the problem, she says, is the 'nepotistic way that British society operates'. Is that really still a big factor, I ask?
It's a massive factor! All middle-class parents do is go around sorting out jobs and work experience for their offspring with their mates ... The one thing that the middle classes are really good at is survival. They never lose out. If you look at how they work systems ... the NHS, the state education system, they're the ones who are going to win, because they're prepared to put in everything.
Johnson's fear is that cuts--which she knows 'are going to be brutal'will make this imbalance a whole lot worse.
This is going to inevitably, in a sense, entrench the middle classes and the upper middle classes in their positions of power and influence, because they have the money to have their children living at home with them, they have the money to support children through unpaid work experience, which can go on for years. To support them through un
iversity without saddling them with student loans, which means when they approach employment they can pick and choose a bit more than those who come into adulthood or the post-training period with huge debts. Imean, the playing field has not levelled, it has become ... I don't know what the opposite oflevel1ed is.Ithas become much less fair, less of a straight playing field.
She lists a few of the myriad ways in which middle-class people grab a head start. What she calls 'add-ons', for instance. 'Like work experience, you know: "1 trained as a tennis inspector in my long vac", sort of thing ... The sort of things that middle-class graduates can display are now the things that differentiate them to employers: If more people are achieving the same high grades, she argues, then the middle-class hand is even stronger. 'This is going to mean that the middle classes are going to have 12 A*s and grade 8 violin, and they're a judo blue ... But of course, that's why the middle classes are always going to succeed. Because they can build on the extras that employers are going to want.'
When I asked her how class divisions could be overcome, her solution was rather surprising for a woman of her background.
You know what I'm going to say. Education! You probably have to abolish private schools, and introduce a French lycee system where everybody-whether you're in the sixteenth arrondissement, or whether you come from an Algerian banlieue [suburb], goes to the same schoo!. It's easy! No one's going to do it. We can't do it in a free sociery. We should do it, though, for the sake of everybody, actually. Even for the sake of David Cameron's Tory Parry they should do it!
Rachel Johnson can hardly be accused of having an axe to grind. She is no left-wing hammer of the middle classes: she finds Margaret Thatcher 'inspirational'. She is simply being honest about the class she was born into. But her analysis puts her at odds with politicians and commentators who believe that inequalities are explained by a 'lack of aspiration' among working-class people. The reality is that we live in a society rigged in favour of the middle class at every level.
