Tale of two Britains

The gap between rich and poor seems to be the only thing that is growing – excepting, of course, company profits – in Britain’s wildly unequal economy.
Take, for example, Marks & Spencer, in popular perception a benevolent and kindly employer. And it’s quite true, if you happen to be on top of the heap.
Our friendly high-street retailer rejigged its non-contributory pension scheme last year by giving its 26,000 current staff the unenviable choice of either starting to put around 7 per cent of their wages as contributions to the kitty or facing a reduced rate of benefits accrual.
On Friday, however, the company reduced the growth target which triggers top executives’ socking great bonuses.
Previously, chief executive Sir Stuart Rose, who collected his knighthood last week, would have had to achieve 12 per cent growth above the rate of inflation over three years in order to trigger his 400 per cent of salary bonus, worth a cool £4.2 million plus.
Now, he only has to achieve 8 per cent to trouser that nice little earner, to add to his £1.13 million annual salary and some rather juicy share options.
Sir Stuart received a £80,000 pay rise in January, taking his base salary to £1.13m.
At the same time, marketing director Steve Sharp has received a £40,000 rise to £565,000 and finance director Ian Dyson saw his salary rise from £525,000 to £675,000. It’s certainly nice at the top in that firm, if a little chilly down below.
And Aviva, the insurance giant which owns Norwich Union, has a fairly similar pot boiling.
On Friday, the bosses announced job losses of around 1,800 out of its 30,000 workforce and that’s just a minimum, with the company expecting hundreds more to up stakes and follow the remaining jobs to wherever they are relocated, a prospect that the Unite union describes as “inconceivable.”
And that’s on top of 4,000 job cuts last year, at a time when the firm raised its interim dividend by 10 per cent. This is the same firm that has recently completed arrangements for a massive payout of “orphan assets” to its policyholders and shareholders. The policyholders are to pocket £2.1 billion and the shareholders £230 million.
Negotiations are continuing on how the remainder of the £5.5 billion “surplus” assets should be divided up, with the company keen on retaining it.
Not so good for the poor old householders who insure with Aviva,however. They swallowed a 10 per cent increase in their premiums last year. Mind you, the company was bit worried, since it only managed to accumulate £3.29 billion in operating profits.
And it’s not only in the private sector. The NHS, which announced a £1.658 billion surplus for this financial year, almost treble last year’s, and a reduction of its cumulative deficit from £917 million to £122 million, is giving over 500,000 health workers the princely rise of 8 per cent over three years.
At a time when the retail prices index shows inflation running at around 4.2 per cent, food and fuel prices are soaring and more rises are expected, it was about as inappropriate as Health Secretary Alan Johnson could get when he gloated that this actual wage cut for all but the lowest paid was “great news.”
Everywhere one looks, the gap continues to widen and, unfortunately, some unions seem resigned to accepting the fact. Happily, however, other unions are not and theirs is the task of spearheading the fight against new Labour until the left manages to inject the will to fight back into their comrades.
Post new comment