Once a week, about half of the Cabinet make the rather pointless journey into an underground bunker in Whitehall to learn just how quickly the British economy is disintegrating. This is all to humour Gordon Brown, who calls them his ‘National Economic Council’ and has them meet in the nuclear-proof room as if they were at war with the recession. After six months of such meetings, it is depressingly clear to all concerned that the recession is winning, and in ways that they never really thought possible.
Given that almost everyone in Westminster is trying desperately to read the politics of the recession, those summoned to the Brown bunker have at least one clear advantage. They are learning about its character: how, for example, the City of London’s pain is being shared in unlikely satellite towns such as Bournemouth, which had grown a mini-financial services industry. They know there is no sign of Mr Brown’s stimulus making a blind bit of difference anywhere. Among developed countries, only Iceland’s economy is contracting faster than Britain’s.
Just as economic growth was not shared evenly — being disproportionately generated in the south — so too the recession is uneven in its impact. This was shown in a stark briefing prepared for MPs last month by the House of Commons library, reproduced here. While unemployment is certainly rising in such places as Liverpool and Glasgow, it makes relatively little difference to the overall picture. But in the south of England, things are changing at a dizzying pace.
A list of the areas that have experienced the sharpest rises in unemployment include Buckingham, Christchurch, Wantage and Wiltshire: of the top 75 constituencies where unemployment has doubled, 49 are Conservative-held seats. Of course, in such locations the figure tends to be rising from a small base. The claimant count in Blaby, Leicestershire, soared from 581 in January last year to 1,263 in January this year. The figures may be comparatively small. But the psychological impact on such places will be all the more acute: communities that have barely known joblessness in the last decade now find it rising, and vertiginously so.
The story is little better in Labour’s marginal seats — the key battleground of the next general election. Unemployment doubled last year in Brighton, Burton, Corby, Crawley, Redditch, Swindon and Tamworth — all Tory target seats. If anger at joblessness translates into anger at the government, then Labour is facing wipeout in the south. ‘We will say in these places: we warned you that Labour cannot be trusted,’ says one shadow Cabinet member. ‘They will be feeling especially betrayed.’ Unlike the unemployment of the 1980s, this is a white-collar recession whose pain is concentrated most acutely on the battleground seats.
In Labour’s heartland, by contrast, the impact is comparably much smaller. It is steadily becoming clear that the posts that are disappearing are the higher-paid, higher-skilled jobs. I met a welfare-to-work provider recently who told me how astonished he was to find hardly any change in the number of lower-paid jobs on the market. His rivals are having some fun with the government, demanding greater premiums for placing people in this supposedly tougher market. But it is harder to find people work in Kingston-upon-Thames, he told me, than in Hackney or Tottenham.
Two extraordinary scenes illustrate the nature of this recession better than any statistic. One was Twycross Zoo in Warwickshire last month where 3,000 people queued for just 150 part-time jobs. When the prospect of weekend work as a cook or a ranger causes three-mile tailbacks on the A444, it is a sign of something fairly extraordinary happening to the economy. In the constituency of Bosworth, home of the zoo, claimant unemployment has almost doubled to 1,500 over the last year. Surveying that queue, one could tell that the number out of work, and still resisting signing on — presumably for reasons of pride — is much greater.
This makes it all the harder to understand why so many are once again gathering in Calais, using it as a staging post to enter Britain. Why flee to a country where unemployment is rising faster than anywhere in Europe? Because, crucially, there is no drop in the demand for immigrant workers. The Office for National Statistics confirms that so far the number of foreign-born workers (who took or created four out of five jobs since 1997) is still rising steadily.
All this is inextricably linked to the nature of the recession. Immigrants are still finding work here without much trouble. Many of these jobs will be ones which, as Lord Mandelson says, British people choose not to do (or, more accurately, are being paid not to do). But all this will look mighty suspicious to those who are actively seeking work. As immigrants are clustered in the south of England, there is the potential for political poison. It is a situation that could be horribly suited to the British National Party as they prepare for the June European and local elections.
Little wonder that Mr Brown has dropped his initial ambition to meet his National Economic Council twice a week in the bunker. The diet of bad news is overwhelming: official unemployment passing two million, heading inexorably to 3.5 million with a recession lasting well into next year. But worse for a Prime Minister for whom everything is party political, this is a recession taking its toll specifically on the voters to whom New Labour so energetically devoted itself before 1997. They are facing joblessness, negative equity and the conclusion that Labour has failed, utterly.
This article first appeared in the print edition of The Spectator magazine, dated March 21, 2009