It was only a short while ago that Britain’s working classes were on the rise. Brexit was to a large extent a working class revolt against the status quo, and our ruling elite seemed to get the message: “we will … [shift] the balance of Britain decisively in favour of ordinary working class people”, declared prime minister Theresa May at the 2016 Conservative party conference. May’s calling of a snap election in 2017 led to her party losing its majority in the House of Commons, paving the way for a parliamentary impasse over Brexit. When this impasse was finally broken, working class votes were once again crucial. The December 2019 election saw many traditional Labour constituencies – the so-call ‘red wall’ – turn blue, giving May’s successor, Boris Johnson, an emphatic victory.
Following this victory, many commentators forecast that the Conservatives would become a blue collar party. The academic Philip Cunliffe wrote that “the Tories will now lead a working class revolt to overturn the neoliberal order”. There were solid grounds for thinking this. The Conservatives not only pledged a number of pro-worker policies – such as using post-Brexit state aid and procurement freedoms to revive industry – they also had a material interest in delivering: without the red wall, Labour would have practically no chance of forming a majority government, at least for the time being.
It was for this reason that Keir Starmer, upon becoming Labour leader in April 2020, quickly set about reaching out to the working classes, as shown by the emphasis he placed on patriotism. Though some took umbrage with this approach, arguing that Labour’s “old heartlands [were] gone for good” and that the party should focus on consolidating its support in big cities among young graduates and professionals, these critics ignore basic electoral realities: parties with geographically concentrated vote-shares struggle to win under first-past-the-post.[i] (You could also say that Labour has a historic obligation to rebuild the red wall since the party was founded to protect working class interests.)
By spring 2020, then, both the Tories and Labour had a political interest in, and seemed to be committed to, making life better for the working class. Yet over the last two or so years the policy choices of our rulers have made the working classes worse off.
Take lockdowns. Though framed as a collective sacrifice for the common good, some parts of society clearly sacrificed more than others. “In general, wealthier households … accumulated savings” during lockdowns, the Bank of England informs us. The middle classes got richer, largely because people from this background were more likely to be able to work from home on full pay while cutting travel costs and spending on non-essentials. Many blue collar Britons saw their incomes fall, by contrast, due to their concentration in jobs that can’t be carried out remotely. This loss of earnings wasn’t typically offset by extra savings, moreover, as working class households tend to spend a greater share of their income on essentials. Further evidence from the Bank of England suggests that a lot of people in this situation had to “take on additional debt to manage their spending commitments”. They became poorer and more insecure.
Another feature of lockdowns was school closures; and here again we see a class divide. According to the London School of Economics’ Centre for Economic Performance,[ii] 74 percent of privately educated pupils maintained full access to schooling during the covid pandemic. Only 38 percent of state educated students had the same experience. As the academics Lee Elliot Major, Andrew Eyles, and Stephen Manchin show, this difference in school access has resulted in “disadvantaged students [falling further] behind their more privileged peers”. Furthermore, there’s a real risk that these “pupils suffer permanent ‘educational scarring’”, meaning that they never make up the education they missed and so see their life chances significantly reduced.
The response to covid has fed into another major issue of our time – inflation. Rising prices in Britain (and globally) stem primarily from what economists call supply-side shocks, events which in one way or another result in a fall of aggregate supply. As indicated, one such event has been lockdowns. In the words of the economics writer Philip Pilkington:
These lockdowns had a brutal impact on the supply-side of the economy. They interfered with factory operation and maintenance, placed restrictions on trade and commerce, prevented new truck drivers from obtaining training and licences – the list is endless. We did not notice the impact on the economy as we sat in our homes, but the supply side was withering on the vine like an unpicked grape.
The war in Ukraine constitutes a further supply-side shock. Britain, along with other western countries, imposed sanctions on Russia following its invasion of Ukraine. And like other western countries, we did this in the belief that we could crush Russia’s economy and so undermine its military capability. So far, this looks to have been a grave miscalculation, as sanctions have “led to a seizing up of world energy and commodity markets”, pushing up the prices of oil, gas, and other primary products. This has not only provided a windfall to the Russian state – up to an extra $100billion from oil and gas sales alone – it has also raised living costs in the UK (and elsewhere) – so much so that come winter some will have to “choose between eating and heating”.
An additional factor fuelling inflation has been corporate profiteering. Firms in the UK (and around the world) have been using the supply-side shocks detailed above as a “smokescreen” for price gouging: charging consumers more than is required to cover rising input costs so as to accumulate more profit. A recent report from the Unite trade union,[iii] drawing on data from the Office for National Statistics, shows that between October 2021 and March 2022, overall prices in the UK rose by 3.45 percent. While 33 percent of this increase went on non-labour inputs, and 8.3 percent went on labour costs, 58.7 percent went on profits. Over this period, real profits across the UK economy grew by 8.03 percent. Conversely, real wages declined by 0.8 percent. So, whereas capital has contributed to and has materially benefited from the current inflation, workers have been made poorer.
How have policymakers sought to deal with inflation? Instead of focusing on supply-side reforms and curtailing profiteering, as you might expect, they have concentrated on wages and interest rates.
Officials such as the Bank of England governor Andrew Bailey have stated that to combat inflation, workers need to exercise “wage restraint”, implying that rising living costs are being driven by excessive pay requests. But as we have seen, it’s not an excess of aggregate demand that’s fuelling inflation; and while there has been demands for higher pay from some trade unions, British workers have been largely pliant in the face of declining real wages. Comments such as those made by Bailey effectively blame the current inflation on those not responsible for, and most likely to suffer from, spiralling living costs.
The more substantive policy response has been for the Bank of England to raise interest rates; from 0.1 percent in December 2021 to 1.75% as of now. The purpose of these measures is to curb inflation by generating unemployment, so decreasing aggregate demand in the economy. While this policy may ultimately have the desired effect, as the economist Servaas Storm notes, it “will cause substantial collateral damage” along the way, “particularly to low-income households”. In other words, the policy for dealing with inflation requires the working classes to bear most of the pain.
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In early 2020, things were looking up for the British working classes. They seemed to have a government, a parliament, and an opposition willing to represent their interests. Yet the ruling elite’s policies towards covid, the war in Ukraine, and inflation have made many working class people poorer and less secure. The question is, why? Why have the working classes borne the brunt of these policies?
[i] Jonathan Rodden, cited in, William Roberts Clark, Matt Golder, and Sona Nadenichek Golder, Principles of Comparative Politics, Sage Publications, California, 2013, pp. 778-80
[ii] Lee Elliot Major, Andrew Eyles, and Stephen Manchin, “Generation Covid: Emerging Work and Education Inequalities”, Centre for Economic Performance, No. 011, October 2020, pp. 5-8
[iii] Unite, the Union, “Unite Investigates: Corporate profiteering and the cost of living crisis”, June 2022