Inside Story: Nobody is safe: The culture of insecurity has the middle classes in its grip. Nick Cohen on the steep decline in permanent employment
Sunday 24 October 1993
The victims were not casual applicants, but graduates who had slogged through an ordinary degree course and then gone on to take and pass the solicitors' finals exams - some of the most difficult and tedious tests the British education system has devised. The Law Society had 1,700 registered as willing and ready to start as trainee solicitors. It had encouraged legal firms to provide vacancies and found that there were just three places on offer.
Tim Toghill, the Law Society's manager for careers and recruitment services, broke the bad news to the applicants: 'We have done our best,' he wrote, 'it may be worth taking a year or so off.' The Law Society has closed its employment bureau. It is only one route by which would-be solicitors find work. But even the optimists in the profession predict that this year 6,000 students will be chasing 3,000 jobs.
The law is not a special case. Pick any traditional middle-class career and ask if new recruits or established employees can expect to stay until they are 65. Ask if they can do their time, retire with a watch and spend their later years indulging the grandchildren. The answer will be no.
The public services, from the BBC to the NHS, are in the grip of what one union leader calls a 'Maoist permanent revolution' in which staff jobs are being replaced with short-term posts and services previously provided in-house are being contracted out. In the private sector, white-collar employees have learnt to dread a peculiar new phrase: 'flattened structures'. A flat structure is one in which middle managers have been squeezed out.
Safe jobs are a thing of the past. A degree, a suit and tie and payments into a pension scheme no longer add up to a guaranteed career, and the middle class is discovering anxieties and a culture of insecurity that many in the working class have known for decades.
FOR LAW students who have passed the solicitors' finals exams all this is terrifying. The hard work would be justifiable and financial burdens bearable (one in three has borrowed pounds 5,000 or more to pay for his or her education) if trainee places with a good firm were guaranteed at the end of it all. Now they are not.
Worse still, for the first time in living memory even those who jump through the academic hoops and then get into a firm are no longer secure.
Alex (not his real name) was recruited by Clifford Chance, a City law firm that boasts it is the biggest legal conglomerate in Europe. He was a model child of Thatcherism. His parents were working-class Labour voters who lived on a Yorkshire council estate. Alex was bright and disciplined. He won a place at Queen's College, Oxford, and joined the university's Conservative Association. 'My philosophy was you don't get anything out of life unless you get it yourself,' he said. 'You don't expect any favours . . . people who expect favours aren't worth bothering about.'
Clifford Chance came to Oxford on the graduate milk round and Alex, who was heading for a 2:1 in history, was impressed. 'We were all caught up in the yuppie idea. All these lawyers were wearing braces, flash ties and striped shirts. I thought OK, I can't make as much as a City dealer, but he could be out on his earhole at any moment. As a lawyer, I would get a decent amount of cash and have security.'
In June, he was nearing the end of his two years' training with the firm and expecting to be taken on full-time. He was not stupid or incompetent. But his attitude was wrong. On his own admission, he was a true plain-speaking Yorkshireman who did not take any nonsense. Clifford Chance told him to go.
The Law Society runs a helpline for men like Alex. Every day, young and, more often, middle-aged lawyers call in, angry and stunned that they have lost their jobs. Many of the older lawyers are in tears because they know they will never work again. About one in a hundred, said a counsellor, is positive and talks about striking out on his own and setting up a new business.
'The truth is a lot of people are learning humility,' said John Balsdon, chairman of the Law Society's trainee solicitors' group. 'The new, hard culture has destroyed our arrogance. No one believes you can have a stable job for life anymore. That was for our parents.'
Alex was a little more blunt. 'I just thought: 'the bastards',' he said.
ARE there still safe careers? Jobs that will allow you, as Louis MacNeice put it, to 'sit on your arse for 50 years and hang your hat on a pension'?
The Civil Service? Last week, Virginia Bottomley announced that 1,900 NHS executive and clerical jobs would go in the next six months. The redundancies would allow a 'simpler and sharper' management, she said. This week, Michael Howard, the Home Secretary, is expected to announce that senior police ranks will be abolished.
The whole of Whitehall, meanwhile, is being threatened by 'market testing' - the process by which officials are ordered to compete against private companies bidding to manage their work. In the past year 44,250 people, 8 per cent of the Civil Service, have had the management of their jobs put out to tender. The Government plans to test the jobs of another 44,000 in the coming year - and so on until all 555,000 civil servants have been confronted by the market.
The armed forces? Last Thursday the Ministry of Defence announced compulsory RAF redundancies. Between October 1992 and the end of next year, the Army alone expects to have cut the jobs of 3,840 officers.
The BBC? For decades it was a good bet for the educated and creative, but now about one-third of journalists and production staff are on short- term contracts of one year or less. A survey by the National Union of Journalists has found that 61 per cent of employees have been told they will have to give up staff status and accept a fixed-term contract if they want promotion.
Even the Church of England is closing theological colleges.
These organisations are merely following a trend that began in the private sector. BT has got rid of 80,000 managers and staff since 1989. Lucas, Marks & Spencer, the high street banks, BP - any large company you choose to name - has cut swathes through middle management. Accountancy, advertising and estate agencies, the Thatcher professions, have suffered devastating job losses.
Those who remain on staff are likely to find themselves on performance-related pay with a personal contract and the constant threat that their work will be found to be unnecessary.
A new branch of management theory says that the 'casualisation' of the middle classes is not just the result of cost-cutting in a recession but an efficient and rational response to the modern world. In a language that sounds like a second cousin to English, they justify the sacking of middle managers with talk of 'downsizing' and 'rightsizing', of 'delayering' and 'flattening', of 'shedding' and 'process re- engineering'.
It is easy to mock the people who coin these terms, but it would be wrong to ignore them, if only because they are so influential. Ira Chalphin, employment and education spokesman for the free-market Institute of Directors, describes what is happening.
Global competition in services and manufacturing has forced companies to concentrate on 'core business' - another key phrase. In-house services are cut because it is cheaper to contract them out and they are a distraction for a company concentrating its energies on what it does best. Localisation is the other side of the coin. To succeed in a worldwide market, a firm must be acutely sensitive to local demands.
The combination of these pressures makes the traditional middle manager in head office literally redundant. A company needs a few people at the top planning national or global strategy and workers at the sharp end making sure that contractors deliver goods and services 'just in time'.
'Companies across the world are becoming flatter, leaner, more decentralised,' Chalphin said. 'There's just not much left in the middle anymore. There's not much point having a lot of managers sitting in head office in Tokyo or London.' To Chalphin, the new role for the middle classes is to become freelance consultants, selling their skills to whichever firm wants to contract their services. 'People should expect to work for 10, 15, 20 employers,' he said. 'They could have a lot more personal power if they did.'
SOME people have already got the power and find the new world congenial. Rosemary (not her real name), a money market dealer, started her working life with a City bank 10 years ago. Her boss was 'sexist, lazy and a fool'. So she left. Moving from bank to bank she pushed her salary and bonuses into six figures. Last year her first bank took over her latest company and she found herself confronted with the fool again. He was in no position to sack her or even interfere with her work: she just could not stand the sight of him.
'I did not even need to pick up a phone,' she said. 'I was already getting two calls a week from people offering me jobs. I decided to go for one which put me at the head of a dealing team and resigned.' Rosemary, 33, plans to retire by 1996.
Or take the case of Harry Thompson, who joined the pre- Birt BBC as a gruadate trainee and became the script editor of radio comedy. 'If I had stayed, I would still be knocking on the door trying to get into television,' he said. 'It was a slow- moving conveyor belt.'
The BBC's decision to contract out 25 per cent of programme-making gave him his chance. He broke into television by joining a small, independent company, became producer and co-writer of Have I Got News For You and more than doubled his salary.
'The ironic thing is that Birtist and Thatcherite policies have allowed Ian Hislop to appear on the BBC and say Thatcher's mad and John Birt's got it all wrong,' he said.
But most middle-class people are not like Rosemary and Harry Thompson. They do not live in London, do not work in volatile industries like broadcasting or the City and do not prefer risk to security. For them, the idea that professionals should go into the market place and try to make their pile by 40 sounds absurd. Mortgages, children and dependent parents make it impossible.
Peter York, management consultant and commentator on social trends, is one of the few in his business to regard the talk of 'delayering' and 'flattening' as nothing more than 'fashionable rhetoric'.
'There are people peddling these pieties in the Anglo-Saxon economies and it's spreading to Europe and Japan,' he said. 'To listen to some, you would think we were creating new people with a new sensibility who want to live their lives as if they were in video promos.
'But no one knows what the effects are of removing stability and losing in-house expertise. No one knows if it works. At best it's certainly de-stabilising for long service and loyalty to be regarded as a negative rather than a positive. At worst, the net effect of the removal of loyalty is a mugger's charter, licencing everything from fraud in the office to crime on the streets.
'Above all, most employees don't like it. They don't want the life of a maverick.'
Anecdotal evidence suggests York may be right. Industrial psychologists such as Cary Cooper at the University of Manchester Institute of Science and Technology worry about the uncalculated cost to firms of staff deciding to look after themselves after seeing hard- working, long-serving colleagues dismissed.
James Kydd was one such. He joined the Euro RSCG advertising company after leaving university and was on the board by the time he was 30. In July, late on a Friday afternoon, just before he was going to fly away on holiday, he was told the company had to strip out executive 'layers' and he was being made redundant.
'Since then, 25 per cent of the total staff has resigned,' he said. 'My friends said 'if it can happen to you it can happen to anyone' and put their CVs on the market.'
A spokeswoman for the company said that the 25 per cent figure was an exaggeration. Ten per cent had gone, she said.
ON 24 May, Viscount Ullswater, the Government employment spokesman in the House of Lords, gave an honest description of the official attitude to labour relations. 'It is, of course, the employer's right to decide exactly how he wants to negotiate with his staff,' he said. 'It has always been the Government's policy to ensure that employers have the freedom to act in this way.'
The first employees to suffer from these new freedoms for employers were in the working class, but now the advertising executives, lawyers, middle managers, and civil servants - many of them traditional Conservative voters, are feeling the pinch. To many on the left, this middle-class insecurity offers a political opportunity.
John Monks, the new general secretary of the TUC, believes the Labour movement 'can connect' with frightened professionals. In the process, he hopes to break open the 'two- thirds/one-third society' in which the economically fortunate two-thirds control government, oppose public expenditure on the poor one-third (while demanding subsidies for themselves) and make tax cuts the central political issue.
'John Major keeps talking about stability and community, while his policies are destroying both,' Monks said. 'I think we can now connect with the middle class when we talk about, say, the fight for the European social chapter. The argument resonates because the ordinary guy with a full-time, stable job is now an endangered species.'
His views have a long pedigree. In the 1930s, in the closing sentences of The Road to Wigan Pier, George Orwell appealed to 'the sinking middle classes - the colonel's spinster daughter with pounds 75 a year, the jobless Cambridge graduate, the civil servants, the commercial travellers' to sink into the 'working classes where we belong'. It will not, he concluded, be so dreadful. 'We have nothing to lose but our aitches.' Well, aitches are long gone in the Conservative Party. But the middle managers' belief in his superiority remains. After all, if you lose your job and you lose your home, your illusions are all you have left.
Alex, the Yorkshire solicitor, said his dismissal had not changed his beliefs. 'I always thought that British managers were totally incompetent,' he said. 'But I didn't believe in collective action before and don't now.' Alex has a new job and is still a member of the Conservative Party. James Kydd always had sympathy for the unemployed, but does not 'feel like one of them'.
One who recognises this view is John Kenneth Galbraith, Professor of Economics at Harvard. Speaking from his home in Vermont last week, he said that no amount of insecurity in the British middle class would change his belief, expounded in his best-received book for decades, The Culture of Contentment, that Anglo-Saxon governments would continue to be dominated by conservatives who let short-term self-interest stand in the way of facing up to painful social realities.
'People who are 'shed', if I may use the subtle modern term, expect one day to be shedders again, even if they experience how the great majority of insecure people live,' he said. 'If you have been a middle manager in a corporation, I think you will always stick with the ideas, or lack of them, which corporate life cultivates.'
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