Britain is suffering the longest peacetime slump in decades. Panorama asks whether Britain is able to cope with a new age of austerity with surprising echoes of the 1970s.
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double-dip recession was in the mid-70s. That led to social unrest
and political upheaval, but are all of the ingredients here for a
similar reaction? If we don't find solutions they could have very
large social ramifications, and not very nice ones.
With many predicting that the worst is still to come, tonight Panorama
asks whether Britain is ready and able to cope with a new age of
Times are tough. People worry that we are facing a dismal future.
No growth, high unemployment, deep cuts and little hope.
Clapham, South-west London. For most of the past hundred years or
so, this has been the home to the ordinary man on the street. Average
income, average house price, average lifestyle, home for 9 "man
on the Clapham omnibus". So, how is the ordinary man on the
Clapham Omnibus going to cope with the financial and the economic
challenges that we are facing today? Well, he's been here before.
Tickets, please. The 1970s began with such hope, but
ended with strikes, crippling public finances and soaring prices.
It resulteded in a political and economic revolution, and massive
social upheaval. The land of hope and glory has
become the land of beg and borrow. It is that is ruining this country.
We are not a sinking ship. This country is more like the boiler
room of the Titanic every other day. The only difference is that they
had a band. On the surface, we have come a long
way from the dark days of the 70s, but could today's crisis
destabilise the country in a similar way? Well, it is already
having a severe impact on the lives of many ordinary people.
Hayley Gay is a single working mum, living in south London. She is
juggling her role as a school administrator and bringing up her
two children. You get the wages that come in once
a month. You budget that across the time. The fuel bill, for instance,
whether it is energy, electricity, gas, or car bills are spiralling
out of control. We either buy food or school shoes, but sometimes the
school shoes are bought and therefore you downgrade on the food.
It strikes me as odd that a very advanced country like the UK,
places ordinary working people like you in a situation where you have
to decide between buying shoes for the kids to go to school or buying
food... Yes, it is a decision, yes. It is bleak? It feels that way.
But Hayley's circumstances are not exceptional. One in five UK
families admit that they are now financially living on the edge.
I feel that we have to common miez on everything that we do.
Therefore, I basically do not eat as well, necessarily, so that they
can have the things that they should be provided with.
One of the big financial strains for ordinary working people is the
cost of housing. Back in the 70s, Clapham was seen
as the stereo typical home of the average man, the man on the Clapham
Omnibus. And there was good reason for that.
Houses and rents here were far more affordable then.
Clapham was a place where working- class people grew up, people like
actor, Neil Pearson. I know it was a fairly close-knit
community. I did seem to know pretty much everyone who lived on
the street. When Neil was growing up on the
street, living conditions were often poor and dilapidated, the
kind we thought that we left behind in the archives of the 70s sitcom.
Good Lord! I know it is not five- star, but it is short notice.
There is water running down the walls! You expect champagne? Your
house is on the corner? Yes, the one with the royalist Union Jacks.
This two bedroom flat was home to Neil, his brother and sister and
mother. All three children shared one bedroom. There was no bathroom,
just a tin bath on the sitting room floor.
This is... As I remember it. This is the kitchen.
This is the living room, also unchanged.
This is pretty much as it was. I haven't been in here for 42 years.
It's a little overwhelming. Yvonne Hunt and her husband have
rented the flat since Neil's family moved out 40 years ago. While
inside has remained remarkably unmodernised, outside of the front
door it is now a very different world.
Do you recognise much of Taybridge Road or Clapham as a whole from
those times? It has all changed. You are a lone recommend naent of
that period? Yes. There are more people with more money and sort of,
the people that we know have either died or moved on.
Yvonne is one of the last survivors of a class which is no longer
living on streets like this. It was soldly, what we would see
now as working-class? This was a solid working-class area? I would
not have art I can lated it like that, but I recognise everyone as
being like me it was monolithically one class then. I think it is now
also, but it is a different class. The middle-classes moved in and
gentrified the area, but the rise of financial services as the new
engine of Britain's economy, brought in an even wealthier class.
Yuppies. ! It is them that is pushing the
rents up. These houses were five bob a week rent once. I could
afford to own. Not now, though. What sort of people could buy a
house today? It will be bankers, flavour of the month, obviously.
Definitely bankers, accountants, lawyers, it is a fact if a house
costs �1 million, you must be well paid or independently wealthy to
afford it These price tags have put Clapham
beyond the man on the ordinary Clapham Omnibus. In the 70s house
prices were three tievs average earnings u, now it is over five
times. In London it is worse than that. Pricing people out of their
traditional neighbourhoods have v has made many working-class
families marginallised. The discrepancies between the house
prices and the wages is so great now to when it was in the 70s, when
this was affordable. We are now coming to a point where that is not
the case and aspiration starts to fall back. Once it starts to go,
the aspiration, the hope disappears. For ordinary working professionals,
getting the keys to a family- sized home can involve moving many miles
and hours from your place of work. It's a move that the Pilditch
family felt forced to make, leaving their Clapham flat behind for a
house 06 miles away in rural Berkshire.
We needed to put our roots down and purchase, to get on the ladder. We
could have done a tiny little two- bedroom flat in Clapham. For the
money it would absmall shoe box. Now, Justin, a website designer and
Rosanne who works as a personal manager, each spend three hours a
day compute commuting two and fro work in London.
I think if you are professionals, bankers, lawyers, those are the
people who can have the houses. There is talk of a squeezed middle,
do you feel squeezed? Yes, definitely. The costs and the
expenses in life are going up. Not least of which the train fares, the
electricity and everything else like that, but salaries are not
going up in the same way that they did 20 years ago. You have to draw
the balance between what you are going to eat, not the meat, you
have to get them meat for their diet, but if food, fuel, everything
is increasing, the challenge is harder and harder, you run out of
options. The notions of a squeezed middle is
more than middle-class mooning. Average real earnings fell by 3% in
2011, that is the largest one-year fall for 30 years.
Little wonder the Government's just reversed its plans to raise duty on
fuel. That squeeze is also felt in the
falling amount of money we have in our pockets for essential weekly
shopping. Although average inflation has been relatively mod
estover the past few years, the cost of things that we buy each day
has gone up dramatically. My daily cup of coffee, for instance, is
around 30% more expensive than it was just four years ago. That is
around 2.5 times the rate of inflation.
Tastes the same, though. It's not just coffee, over the past
year or so, fuel and utility bills have rocketed. Gas is up 16%, the
cost of childcare is up nearly 6% and this while we are told that
official inflation is just 2.8%, but what many notice the most is
the rising cost of food. Been here before as well! Yesterday
I went in the same shop it were 7.5 for a tin of tomatoes. They have
gone to so.5. They were doing them like that that is in a day! In the
70s, in flaigs pressures were clear to everyone, but -- inflation
pressures were clear to everyone, but are they so cleared to today?
We are at a fish stall, what has happened to the price of white?
What do you say? Shout it out, what do you think? Gone up. It has gone
up 12%! So that is something like four times the actual rate of
inflation. That's just the past year! What
about over the last four years? What do you think may have happened
to the price of rump steak in the past four years? 10%? 10%? It is
worse than that. Is a%.
Is a%? It is worse than that. It is worse than that. 20%.
22% it is worse than that, over the past four years, the price of meat
is up 26%. Despite the fact that the inflation
rate is not up to the levels of the 70s, people are feeling the pinch.
Poorer people spend a higher proportion of income on basic
products like food and fuel. Exactly the feigning thing thats
that have gone up the most. There is a big difference between
the general inflation rate and the rate at which the things that we
really need, food, housing or childcare are becoming more
expensive. At the same time, their incomes are stagnant or sometimes
going down. So you are trying to pay for the same thing, with more
for it and less money to spend. The lowest-paid are the worst
affected. Their pay fell by almost 5% between 2010 and 2011.
While so many are struggle, there is a growing feeling that the rich,
by contrast, have never had it so In fact, the share of income of the
top 1% doubled between the years The highest earners often justify
those kinds of rewards by claiming they're creating wealth for
everyone, producing jobs, businesses and money that would
It wasn't restraint that started the Industrial Revolution. It
wasn't restraint that inspired us to explore for oil in the North Sea
and bring it ashore. It was Positive, vital, driving,
Margaret Thatcher became leader of the Conservative Party in 1975, the
last time the UK was in a double- dip recession. Her answer to that
economic chaos was to release the full force of the free market.
We'll do it by letting profits rise to a level which offers a real
One of the biggest long-term beneficiaries are the bankers and
Fund manager Crispin Odey is one of the new class of Britain's super-
rich. According to the Sunday Times Rich List in 2010, he took home
Together we shall meet the crisis of this country, and tomorrow the
Show me the incentive, and I will show you the outcome. If you're
wanting a vibrant economy, you are going to have winners and losers.
We will only basically save ourselves if we start forgiving the
bankers, because we've got to allow banking to be profitable. If
banking is profitable, people will lend money. If people lend money,
the economy will grow. So you're saying it's actually good for the
whole nation to have an elite group who are wealth creators, because
they drag, in your view, the whole of the nation up. That's what I'm
saying. There's been no shortage of
incentives for the top earners in recent years. It's a reward many
feel is unpalatable, given others in the City are today accused of
sharp practice and potential illegal behaviour. The wider
question is whether the rewards at the top trickle down to the rest of
the working population. If we have an economic model which
increasingly concentrates the fruits of that economy at the very
top, then what happens is you create consumer societies without
the capacity to consume, and that is because you're cutting
Do you want a vibrant economy in which there is change, and where
there is improvement, and there is a general sort of entrepreneurism?
In which case, you're going to get these inequalities. Or do you want
a much more stable society that might not move at all? You can
either all be richer, or you can all be more equal, you can't be
both? That's what I'm saying. And in fact the gap between rich
and poor has grown faster in Britain than in any other developed
country in recent decades. We've done research that's looked into
the future, looked to the year 2020, and what that's telling us is that
gap's going to continue to get The gap's even more obvious when
times are tough, as in this recession. This is a rare sight
South Yorkshire was once synonymous with coal, but now the industry is
all but dead. Hayley Taylor is among those trying to pick up the
pieces. Half a mile below the wet streets of Dennerby lies the seam
of coal upon which the town's poor fortunes are literally built.
There's over a million unemployed now, in't there, so where else can
we go? There's nothing else round here.
Pit villages like Stainforth grew up around Doncaster to service the
mines. Once models of activity and industry, they are now among the
worst unemployment black spots in the country. OK, who's got a mobile
phone on them? What's that mobile phone doing right now? I want it
off. Employment consultant Hayley Taylor
is running a jobs workshop for young unemployed people. Almost a
quarter of under-24-year-olds here are not in work, education or
training. You don't read the paper, how do you find a job in the paper
if you don't read it? Hayley finds that the youngsters she meets are
ill-prepared for the harsh realities of today's employment
market. They don't understand what a CV is, they don't know how to
apply for a job, it's never taught. What is required of them in work,
what a National Insurance card is for, what happens in the working
world, what are the expectations of an employer from an employee.
Teresa is 17. She left school last year but has so far failed to find
work. You don't believe in yourself, why? What is there not to believe
in? I don't know, I've had experience, but when you've tried
so much, it just... I don't know, it makes you feel worthless and
you're not going to get anywhere. It kind of makes you want to give
up, but you don't want to, because you want to get out there and get a
For youngsters like Teresa and her friend Amy, prospects are bleak.
The employment landscape is wholly different to what it was in the
'70s. It was an automatic assumption that all the guys that I
was at school with would follow in their fathers' footsteps, which was
to go and work in the mining industry. The girls, they were very
much evolved in wanting to work for the farm stores, which was packing
food for the supermarkets at that time, whereas now those openings
don't exist, because you know those industries, unfortunately, in
Yorkshire have all gone. Teresa may lack confidence, but she
certainly doesn't lack determination.
When you come into town looking for work, you often can't afford the
bus, can you? No, we walk. How long is it? It's like six or seven miles
each way. That's a long walk. it's tiring. But it shows we're
trying and not just sitting at home doing nothing. It shows we're up
early and wanting to get out there In places like this, the journey
back to work is not one that people can make without help. 20 years
after the coal mining industry largely left the region, there is
still nothing to replace it. It has therefore fallen to the public
purse to support much of this A third of all jobs in Doncaster
are in the public sector. Around a fifth of the working population are
on benefits. How many jobs do you apply for?
week, I would say about 12 or 13. Like two a day. You're not fussy
about the jobs you take? anything. You just get nothing,
just like e-mails, you're either too young or inexperienced.
ruins your confidence, just trying and trying and just getting shot
down. There is talk about an actual lost generation of youth, do you
think that's accurate? I think that's totally accurate. Their
opinion is that there there's no hope, there is no hope for them.
There is no hope of opportunities, no hope of employment, there's no
new business being created. You know, this is just an existence and
not a life, and to hear that is so Though the latest figures show a
slight drop in overall unemployment, more than a million under-24-year-
olds are still out of work. That's one in five, just down from its
record high early this year. The consequences of cutting off a
generation from work and opportunity could be severe.
Those people who are taking the biggest pain are people who had no
responsibility for this crisis. There is a danger of, you know,
spreading social unrest and antagonism towards a society that
seems to deny a significant proportion of the population decent
opportunities and decent Though the causes were complex and
hotly debated, we caught a glimpse of what that kind of social unrest
In August last year, this corner of Clapham descended into chaos. The
shops were looted, buildings burnt on and pitched battles fought with
There were similar scenes in other city centres. More than 4,000
At times of crisis, we've traditionally turned to our
political leaders, trusting they'll have the answer. Today that's no
longer true. In a survey for Panorama, we found that over two-
thirds, 67% of the population, have little or no confidence in our
politicians' ability to get us out Most of the country believes our
political class are simply not up If you had to pick a word to
describe this situation that we're all in now, what would that be?
Quite angry in a lot of ways, because I think the way I see it is
that the people who are actually making the decisions for the
country are people who are out of touch with the people who are
actually at the bottom, who are actually suffering. And also a
sense of not being able to change it, not just being frustrated but
being... Helpless. Helpless, yeah, A lack of faith in politicians is
only part of the problem. Today there is an increasing sense that
we are not all in this together. There are symbols of growing
inequalities everywhere. Take our In the 1970s, footballers on the
pitch felt much like they were the same people who were on the
terraces, there was a continuity between the two. That simply
doesn't exist anymore. Footballers have become so well paid that the
connection between the supporters and the players has disappeared.
Today you have to come down to football's lower leagues, to places
like Brentford, to recapture the togetherness of the '70s, where
supporters still feel they're living in the same world as the
players they're watching. There was a sense that we were, to coin a
phrase, all in it together, that I think is going to be very difficult
to recapture now. Because I think people will look at the super-rich,
the elite in society, and say, well, clearly we're not all in it
together, there are things that I don't know how I'll get through.
Cheer up, could be worse. The state this country's in, you could be
free. Stuck outside, with no work and a crumbling economy. How
The visibly growingly gap in inequality in society is adding to
a sense of tension and anger. Even those who have benefitted the most
in recent years agree that their advancement has caused a sense of
frustration. I think that when the train stops, like it's stopped,
it's then that everybody starts to say who's in first class and who's
in second class, and basically, you know, let's storm the first class.
The disadvantaged feel increasingly lost and isolated. The gap has
widened between those who have and those who have not. People just
don't know where to go. Every time they turn around, there's more
money been taken off them and more charges been put on them. One of
the fears about the country is that there's what they're calling a lost
generation. Do you feel lost? without a job, a job's mainly all I
want, just to get out there and just to do something with every day.
At the end of the 1970s, Britain found an answer to the economic
chaos by identifying the unions as a common enemy and turning to the
free market instead. This time it seems we have a new common enemy,
City bankers. But unlike the '70s, there's no obvious radical
alternative, even though the sense of frustration and anger which lead
to such huge change back then is Next week, Panorama is on the trail
Britain today is suffering the longest peacetime slump in decades. Our economy is in a double-dip recession for the first time since 1975. Panorama asks whether Britain is ready and able to cope with a new age of austerity with surprising echoes of the 1970s. Reporter Adam Shaw examines if we're about to suffer the same social and political upheaval that emerged from that decade.