In the mid-noughties, I was economics producer at the BBC, working with the then economics editor, Evan Davis. He had just begun presenting a new programme called Dragons’ Den, and had noticed something odd about the contestants. They would pitch up with their patter, their shiny prototypes, their occasionally plausible projections for how much cash would be rolling in by year three. And then, when asked how they actually planned to make their goods, they would shrug off this most fundamental of questions with a single word: China.
China! Anyone with a trial subscription to the Economist knew what magic could be worked there, even if they didn’t know precisely how. It had factories and shipping containers and, most of all, vast numbers of workers to fill that yawning gap between spreadsheet and reality. The British no longer needed to cast themselves as makers; instead they could focus on the designing and the selling, the dreaming and the bullshitting.
If it was staff you wanted, you could offshore your work to Asia, or outsource it to an agency that relied on imported workers from eastern Europe. Out of sight, out of mind, big companies could now make invisible large tranches of their workforce. A few years before Dragons’ Den first appeared, the renowned sociologist Zygmunt Bauman observed: “To an extent never achieved by the ‘absentee landlords’ of yore, capital has cut itself loose from its dependency on labour through a new freedom of movement undreamt of in the past.” Tabloids banged on about freedom of movement for Bulgarians and Romanians but Bauman knew its greatest benefits were lavished on capital, which was now “ex-territorial, light, disencumbered and disembedded”.
This great wave of globalisation crashed on to British shores just as Thatcher’s shock therapy was becoming cross-party consensus. The miners had lost, the bankers had won, the unions were at bay and factories were being rebuilt as call centres. Politicians, policymakers and businesspeople congratulated themselves for presiding over a society where they could enjoy manufacturing without manufacturers, products without producers and work without a workforce. Forwards, not back, to a knowledge economy! All that was solid had melted into flatulent air.
In this convoluted world of two decades ago, some of the basic problems we face today were already cropping up, only to be waved away. The Department for Transport has admitted to MPs that it knew there was a “significant shortage in lorry drivers” as far back as 2006. How did it respond? By crossing its fingers, closing its eyes and hoping for the best.
That is the backdrop to the current chaos, where food is being left to rot on farms, restaurants are closing for lack of staff, and our biggest retailers have seen stock levels plunge to their lowest since 1983 and can’t say how they’ll manage Christmas.
The UK is hardly alone in enduring these difficulties. Builders around the world are paying through the nose for plywood, while a lack of semiconductor chips has forced car firms to slash the number of vehicles they produce. But no other country faces our one-two of Brexit and Covid. That has prompted a mini-exodus of eastern European workers from the UK – more than one in four Bulgarian and Romanian workers have left since the start of 2020 – which is primarily what accounts for those empty supermarket shelves, the fruit left unpicked, the small-town hotels that have just lost their second summer in a row. Perhaps slamming the door on the way out is the only way an invisibilised, underprotected and underpaid workforce gets our attention.
Most of all, it is the British business model that leaves us dangerously exposed. Few nations can match our alloy of globalisation and a dominant finance sector, which together have stretched the supply chains of our most vital businesses so far they are now breaking.
The UK has run down its own capacity to manufacture goods and to produce food. When Margaret Thatcher was in office, Britain produced enough food to feed itself for 306 days of the year. By 2019, that figure had dropped to 233 days. As for manufacturing, the UK is now one of the most deindustrialised countries in Europe. The sector is now smaller and adds less value per capita than those of not only Germany and France, but also the Czech Republic and Slovenia. In the US, even the Gordon Gekkos of Wall Street never managed to inflict this much damage on the midwest. As an economy, we are takers rather than makers – a perilous position to be in when the world no longer has enough to sell us.
Where the UK leads the world is in finance – which is to its immense detriment. The demand from financiers that companies serve shareholders first and foremost has stifled business investment, suppressed wages, and encouraged the squeezing of suppliers. The result, according to Mark Gregory, who retired this summer as chief economist at EY UK and saw these processes unfold over decades, is that the UK stands out for “low wages, low value-added, low prices”. We have the cheapest food in western Europe; we also have food producers so throttled by the big supermarkets that, as Tim Lang points out in his latest book, Feeding Britain, four out of 10 farmers face going under without EU subsidy.
Henry Ford quipped that he paid his workers more so they could afford to buy his Model Ts. Twenty-first century Britain does Fordist economics in reverse: we smash down the price of chicken by taking money off the people who process the chicken. It is a vicious downward cycle but it works, provided you don’t care about the workers or the animals or the quality of the meat – and for as long as you can get the staff. Then one day you can’t, and the customers at Nando’s get peri-peri’ed off.
Our current storm has been so long in the brewing that it will not blow over soon. Neil Carberry, head of the Recruitment and Employment Confederation, talks of a crisis that will last at least a decade. One way to fix it is not as a problem of workers but of capitalists, who have had too much their own way for too long, to ruinous effect.So: raise wages, improve conditions and give workers more power. That’s what Labour should be explicitly calling for, rather than merely yelling “chaos”.
However far Boris Johnson may roam, he can never occupy this territory. So we have the farce of the business secretary, Kwasi Kwarteng, telling firms to hire British and hoping no one remembers the book he co-authored ranking British workers “among the worst idlers in the world”. So the government allows Morrisons, one of the supermarket chains that does look after its suppliers, to fall into the hands of private equity barons. So the government’s own brochure to encourage foreign investors boasts of our “competitive labour costs” and “low taxes”.
Germany’s Angela Merkel shouts about her highly trained workforce; Boris Johnson brags about how cheap his labourers are. In this, he is merely following a political tradition of advertising Britain as if it is a giant Poundland. Full of things sold so cheap you can afford to throw them away, Poundland is great for bargains – but it’s no way to run a country.