For sanity's sake, let's keep things in perspective

Yes, it's going to be painful but nothing like the suffering our grandparents went through

This has been the week of the doomsters. The Governor of the Bank of England declares that we face deep recession. The pound has sunk. Businesses of all kinds are announcing lay-offs, with the assurance of many more to come. Forecasters talk of three million unemployed.

Many businesses are cancelling Christmas parties. Retail sales have slumped. In the City of London, which last year the Prime Minister proclaimed complacently to be enjoying a golden age, thousands of jobs have already gone, and lots more will follow.

Britain, far from being 'best placed to withstand the recession' as the Government has claimed, is likely to suffer more severely than any other major Western economy.

This is because our borrowing, both state and private, has been more reckless; and because our economy is so dependent on the financial services industry.

Only a hermit living in a cave on South Uist might doubt that we face hard times. But it may help us to get through them if we keep a sense of proportion, of history, about what 'hard' means.

The foremost purveyors of gloom say that we could face a slump as grave as that of the 1930s. Yes. Well. Hang on a minute. It may be true that we risk deflation, unemployment and business bankruptcies at levels unseen since the 1980s.

Great Depression

The daily grind: Life was a struggle for many families in the 1930s

But nothing, absolutely nothing on the horizon, suggests that the British people face sufferings of the kind that were commonplace 70 or 80 years ago. Those were the days when millions of residents of major cities possessed barely the means of survival.

In those days, poverty did not mean being unable to afford a flatscreen TV. Take Bristol, in modern times one of the most prosperous places in Britain. In 1937, 19.3 per cent of its people were reckoned to have 'insufficient means'. A further 10.3 per cent fell below the poverty line, some existing in 'utter destitution'.

Rickets was not uncommon. Hunger was endemic. In many parts of the country food was sold in ounces, not pounds.

Doctors on emergency calls to poor districts carried flashlights, knowing that slum-dwellers could often not afford money to run gas or electricity meters. Disease was everywhere. It was the era of the dreaded means test for public assistance, of wholesale unemployment and indeed despair. 

Between the wars, one-third of the workforce in Britain's cotton, mining and shipbuilding industries lost their jobs, together with a quarter of those in the once thriving woolens trade.

Many did not find new employment until World War II. In some northern towns, pawnbrokers owned the only boom businesses.

In 1939, when millions of children from cities threatened with bombing were evacuated to the countryside, relatively prosperous areas were stunned to come face to face with the plight of their slum-dwelling fellow countrymen. Most such evacuees were unwashed, prey to headlice and scabies.

In Lincolnshire it was reported that 'many children arrived in rags', which were burned in fear of infection. Some of these newcomers had been brought up to relieve themselves indoors on newspapers on the floor.

Throughout World War II, the British Army faced difficulty in making chronically malnourished teenagers physically fit to fight Hitler's Wehrmacht.

I have never forgotten an American GI of that period telling me that his foremost memory of our soldiers was of their terrible teeth  -  in many cases, an absolute lack of them.

Is that enough history to be going on with? We need not go further back, to Edwardian Britain with its yawning class divide, to Dickens' portrait of Victorian cities in which tuberculosis and a host of other diseases killed children and young adults mercilessly.

The first thing to be said about our troubles today is that they look pretty paltry alongside those of our grandparents.

Whatever happens to us in the next few years very few people, thank goodness, will be threatened with hunger or absolute poverty. This crisis threatens many with disappointments, even distress. But we shall remain a rich enough society to protect everybody from anything like the miseries which befell the afflicted in the 20th century's slumps.


Unemployed men seek work in Leeds in 1925

During the 1930s, the burden fell overwhelmingly upon Britain's industrial North. The South-East, and even the Midlands, fared quite well in those years, on the back of new industries such as motoring and electrical goods manufacturing, together with the hotel and restaurant trade.

In the early 1980s, much of the bitterness towards Margaret Thatcher was in Northern England and Scotland  -  derived from the fact that 'her' recession seemed to leave Southerners little worse off.

In 2008, by contrast, the Southern middle-class will feel much more of the pain, partly because we have become a much more middle-class society. Already a lot of estate agents and financial engineers are losing their jobs.

The white-collar private sector and the businesses which feed off it  -  retailers, restaurants and bars notable among them  -  will have little to celebrate this Christmas.

Private schools will find families struggling to meet their bills. Already one hears rumours about parents seeking bursaries and conducting furtive negotiations about deferring fee payments. The big problem for many middle-class people is that, like businesses, they are going to find it hard to borrow.

Watch money like Scrooge

I don't know about you, but in my younger days we survived financial crises by running up overdrafts which frightened us very much, but somehow kept households going. In 2009, banks will be reluctant to lend even to old and trusted customers. Cheques without supporting funds will simply bounce.

There is a noticeable generational divide, I think, about attitudes to what is happening.

The instinct of older people, founded in experience, is to behave cautiously. We stop buying non-essentials. We try to create a modest war chest in the bank, against possible troubles ahead.

The young, however, see things differently. I threw up my hands when my daughter told me that she and her husband had booked a winter holiday. She said: 'Look, Daddy, we work very hard. Life wouldn't be worth living if we couldn't get away to the sun.'

Maybe she is right. As the Prime Minister will assuredly keep saying in the year ahead, as he adds yet more billions to the national debt: if we all stop spending, we shall turn a recession into a full-blown slump.

Yet it must be right to watch like Scrooge where our money goes, whether from our own pockets or from those of the Exchequer. Of course, health and educational standards must be maintained, and there is a case for spending on national infrastructure.

It will be quite another matter if ministers continue to squander huge sums on the bloated public sector; bribing Scottish Labour voters; funding grandiose venues for the London Olympics; propping up local authorities' obese payrolls.

Gordon Brown

Prime Minister Gordon Brown plans to spend Britain out of trouble

I have become regretfully convinced that the Royal Navy's two planned aircraft carriers should be axed. With the aircraft to fly off them, they will cost some £25 billion. The Government wants those carriers for one reason: they will mean jobs in Scottish Labour constituencies.

In a sane world, we would agree that we simply cannot afford the ships in the financial mess we are now in.

Yet we are going to hear the great economic guru Maynard Keynes's name taken in vain by ministers again and again to justify profligate public spending 'to keep the economy moving'.

We should swallow very little of this, instead pouncing on every manifestation of government waste, even marginal ones.

My own hobby horses are information gantries on motorways which warn us not to drink and drive, or suggest avoiding Coventry on June 25.

Gantries cost more than £1 million apiece. No sensible society would keep erecting those monuments to mindless technology all over Britain at a time when we shall struggle to have doctors' and nurses' wages paid.

In the times ahead most of us are going to need a little courage. I do not, of course, mean the kind demanded of our grandparents in the Blitz, or of soldiers in Afghanistan.

I am talking about moral courage. In some ways this is harder, because the circumstances are unglamorous. No medals are awarded for getting through a recession.

But it is a measure of a grown-up nation that we should show ourselves capable of bearing bad news, surviving a massive blow to the country and its economy, without moaning too much or sinking into despondency.

What goes up must come down

We have had it fantastically good for an unprecedentedly long time. Though bankers were fools enough to think otherwise, most of us recognise that nothing continues going up for ever.

It would be silly to suggest that suffering is good for us. But troubled times enable us to rediscover the values that matter most: self-help and mutual support; solidarity within families and communities; love, friendship, a capacity to endure.

Most of us, even the young, know that the boom times caused us to live with a recklessness that defied reason and providence.

We have eaten and drunk too much, partied too extravagantly, bought and discarded too many expensive toys  -  cars and TVs not least among them.

When the dust settles after this crisis, a lot of people will find themselves with somewhat less money. At the very least, their incomes will not rise as they have grown to expect.


Unemployed ex-servicemen receiving food parcels at the Ivy Club, Manchester

Yet if we still have health, families, jobs  -  even if these are different from those we started with  -  there is no cause for despair. It is hardly a disaster if we must learn to value more highly the possessions we already own; to keep clothes a little longer; replace appliances less often.

None of this, however, should suggest that we take the recession in our stride, or forgive those responsible. It is vital that the financial system should recover and prosper. But never again must those who run it be allowed to act with such irresponsibility, or profit so obscenely from doing so.

Our money is being used in vast quantities to bail out both the banks and Gordon Brown. Government borrowing already runs at the equivalent of £155,000 for every household in the land. It is sure to go higher. We shall be making repayments through our taxes for at least a decade.

Yesterday, I was queuing behind a young girl who tried to withdraw £30 from a cash machine. It spurned her plea. She tried for £10, and once again was rejected. She turned away in dismay.

'My dear,' I was tempted to say to her poor, forlorn face. 'I know how you feel, but there are going to be lots more disappointments where that one came from.'

We must tough out the bad times ahead, recognising that the sacrifices demanded from most of us will be infinitely smaller than those of past generations in crises of war and depression.

But remember: we are richly entitled to nurse our anger towards those who presided over our fools' paradise, bankers and politicians alike. There will come a day for venting this at the ballot box.