inequality | ukwatch.net

A taxation solution to recession

eddie — Fri, 31 Oct 2008 14:27:16 +0000

The economic crisis has seen the government act with a boldness of which many doubted it was capable. Similar boldness is now needed to confront damaging systemic inequalities, which have contributed to the crisis and which New Labour has all too often sidestepped or papered over. The underlying structural weaknesses of high risk, bonus-crazy capitalism have been exposed. At last, ministers are extending the language of irresponsibility, so often used to try to change the behaviour of those at the bottom, to nail those at the top for their culpability.

As we face recession, rising unemployment and economic uncertainty, Labour must now use what may well be its last chance to reassure and inspire with a concrete vision of the good society and a clear explanation of why building it must be a priority.

Equality, combined with ecological sustainability in an agenda for environmental justice, has to be the central leitmotif of this new social, economic and democratic settlement. The immediate target must be to reduce the gap between rich and poor by the next general election. Despite the improvement since 2000 identified by the OECD, the gap is still wider than in 1997 and than in three-quarters of OECD countries. This means urgently stepping up action against poverty at the bottom while, at the top, a more fundamental assault is required on the huge disparities of rewards than is involved in merely depriving (some) bankers of their bonuses.

At a time when many more may have to turn to the safety net of the benefits system, it is more urgent than ever to strengthen it so as to ensure an income that enables people to live decently and with dignity in keeping with human rights principles. There could not be a worse time to wield new sticks to push jobless people into a shrinking labour market, as envisaged in the welfare reform green paper. A large-scale green reconstruction programme, as recommended in A Green New Deal, could spearhead a new environmental justice initiative.

With public spending and borrowing under pressure, part of the cost of protecting the poorest victims of the crisis, should be met by the wealthy fulfilling their responsibilities to society through more progressive taxes. Exceptional times call for exceptional measures we are told. So, it is legitimate for the government to renege on its manifesto pledge not to raise the higher rate of income tax. The case for a higher rate of 50% for high earners still stands. If applied to those earning over £100,000 per year, it could raise nearly £8bn, more than twice the minimum needed to meet the next child poverty target, even allowing for any behavioural changes in response to the tax increase. Such changes could be minimised through much tougher action on widespread tax abuses. The money is more likely to boost the economy in the pockets of low income mothers than the bank accounts of high earning men. Inheritance tax must also be reformed to reduce wealth inequalities.

In July, a man on incapacity benefit wrote to the Guardian that he and his wife “sit destroyed by poverty … I can speak but have no voice, and those claiming to represent me have failed me. As the gas and electric prices rise for all, they may also become out of reach for many. Now I fear the winter and hope for nothing”. Hope not fear is what the government must now provide for him and millions of others.

“After New Labour”, the second debate in the “Who owns the progressive future?” series, organised by Comment is free and Soundings journal, will take place in London at Kings Place on November 3 at 7pm. Guardian readers can obtain tickets at a special rate of £5.75 by phoning Kings Place box office on 0844 264 0321 and quoting “Guardian reader offer”. For full details click here.

Join the Soundings journal facebook site and continue the discussion.

Blindingly obvious

tim — Tue, 02 Sep 2008 11:47:36 +0000

Home Office Minister Tony McNulty is correct to point out that suggesting that economic recession could lead to an increase in petty crime, violence, racial abuse and far-right extremism was a “statement of the blindingly obvious.”

Unfortunately, the minister seems to assume that the recession is an act of God and the government powerless to influence matters.

While the international downturn in trade is a reality and the knock-on effects of the credit crisis detonated by the US subprime mortgage scandal undeniable, every country will undergo its own economic experience that is dependent on specific national characteristics.

And the level of the crisis that is already hitting Britain is conditioned by the pro-business policies pursued by new Labour.

Recession will not cause the problems itemised in the Home Office draft letter. There is already huge resentment in working-class areas across Britain that will be exacerbated by rising unemployment, mortgage defaults and a general depression of living standards.

Governments tend to appeal to the mythical Dunkirk spirit to ride the wave of hardships, but that is less likely when people can see clearly that there is no equality of sacrifice.

Indeed, new Labour has made a virtue of inequality, with Chancellor Alistair Darling simply the latest leading advocate to say that he is not perturbed by the prospect of hugely differing levels of income.

And this is not simply rhetoric. New Labour has presided over a widening gap in income and wealth more akin to Victorian norms than to a supposed modern democracy.

The revelation by the TUC PensionWatch survey that top bosses can retire on average annual pensions of £200,000, 25 times what the average worker will get and 50 times more than the basic state pension, illustrates a grotesquely divided society.

Employers and managers have, in recent years, launched a concerted drive against workers’ pension entitlements, while ensuring that their own are safeguarded.

The government has acquiesced in this process, lecturing workers about their own supposed fecklessness while running down the value of the state pension.

And its obsession with leaving economic priorities to be decided by the vagaries of the market has seen Britain’s manufacturing sector inexorably eroded, with over a million relatively well-paid jobs, complete with decent conditions and a pension, scrapped and replaced by a combination of McJobs and dead-end “training” schemes.

It has claimed that there isn’t the finance available to improve the state pension, take the railways back into public ownership or invest to defend manufacturing jobs.

But it has been able to find billions of pounds for overseas wars and £50 billion to bail out Northern Rock shareholders.

The government’s wars have not only been costly but have created a new enemy – international terrorism – which is used as an excuse to cut back human rights and to increase xenophobia.

This combination of crimes against working people makes new Labour unfitted to lecture anyone on the effects of recession. It is implicated up to its neck.

The only way to avoid the negative consequences in the Home Office letter is to fight back against the economic and social policies that cause them in the first place.

Why David Cameron Blames the Poor

tim — Sun, 03 Aug 2008 21:47:00 +0000

David Cameron’s ‘blaming the poor’ speech in Glasgow may be more than just an attempt to placate the unreconstructed right of the Conservative party. It is not often recognised how far British public opinion has shifted towards a liberal individualist stance on social issues in recent years. In some ways we are more Thatcherite under New Labour than we ever were under the Conservatives.

Evidence from a range of attitude surveys points in the same direction. Sympathy for the poor, growing steadily stronger through the 1980s and early 1990s, has collapsed. By 2006 the situation was almost exactly reversed. The public is roughly twice as likely to attribute poverty to laziness or lack of will power now compared with a decade ago. The numbers thinking the government should spend more on the poor has steadily declined.

People are also much readier to accept the inequalities of the market. In 1997, slightly more people thought it unfair that those on high incomes could buy better health care or education than the rest of the population than took the opposite view. Now nearly twice as many think buying better health care or schooling is perfectly acceptable as don’t.

Various factors contribute to explaining the shift to the right in social attitudes. Our recent qualitative work examined how people discuss fairness and government services. A strong theme across our interviews was the acceptance of inequalities. While the better off should be expected to contribute in the same way as everyone else does (and tax avoidance by the super-rich was seen as just as outrageous as benefit cheating by the poor), there was little support for redistributive taxation. Such attitudes are buttressed by a strong and widespread belief that opportunities to succeed, while not entirely equal, are open to those prepared to make the effort across society. Why fleece the better off when they pay in just as much as anyone else, and anyway we all stand a reasonable chance of getting there if only we try hard enough?

Opportunity for all and tolerance of income inequalities are strong themes in political discussions and in public opinion. Turning that round, sharply progressive tax and direct interventions to help the most vulnerable become unacceptable. When it pursues such policies, the government is careful to do so by stealth. Perhaps the success of those ideas is reflected in the lurch to the right of public opinion. Cameron’s claim that ‘social problems are often the consequences of the choices people make’ is the logical extension of this view.

A Just Transition?

Ellie Keen — Sun, 20 Jul 2008 12:38:17 +0000

In the past few months, outbreaks of industrial unrest and protest have been occurring throughout Europe in the industries most affected by the rising price of oil. Starting with Grangemouth refinery, Unite workers in went on strike over reduction in pension rights. Workers in haulage companies delivering to petrol forecourts followed in a dispute over pay. More recently we have seen the protests of the haulage companies themselves demanding special reductions in tax on fuel – by the time this article goes to press, we will know whether Gordon Brown has held his nerve on that. In France, railway workers and fishermen have been involved in industrial action and in Spain public transport workers have likewise struck over the impact of the rising price of fuel. Meanwhile, oil companies continue to make record profits. These are signs of things to come. At the end of June, the list of oil companies invited to tender for lucrative contracts in Iraq was published. On the same day, the price of oil increased to $140 a barrel, the highest ever recorded. Each month for the past six months, the price of oil has been the highest on record. As we approach peak oil, when supply cannot meet demand, the price of oil is spiralling upwards, and the distribution of the costs and benefits of this are profoundly unequal and increasingly contested. Ten years ago, the economist James O’Connor described how states treat oil as not just a commodity but as an extension of state security, backed by military apparatus.

These are elements of the supply side of the oil industry. If we look at the waste stream, the carbon dioxide emissions which are accumulating in the atmosphere and disrupting the climate, we are seeing increasing frequencies in the occurrence of cyclones, hurricanes, floods, although the debate often takes an apparently more arcane, esoteric form. Is it possible for the climate to withstand a carbon dioxide concentration of 450 parts per million, or will it be necessary to reduce to 350 ppm or less? Just how disrupted will the climate be with each 0.1 degree Celsius and at what point do the changes become irreversible? Essential though these debates are – and each scientific report which hits the public domain points towards more worrying scenarios – it should not be forgotten that two thirds of the excess carbon dioxide in the atmosphere originates from the G7 countries, with currently 13 per cent of the world’s population. There is no doubt that there is a crisis, and that the rich countries need to cut oil consumption almost to nothing.

Currently, the principal mechanism for cutting carbon dioxide emissions is carbon trading, which essentially entails enclosure of the last remaining commons – the carbon absorption capacity of the atmosphere – by allocating property rights to those who are already destroying it. This is none other than a neoliberal extension of commodification of the atmosphere, whilst shifting costs onto the poorest who are dispossessed by ‘green development projects’. Ideological justification is provided by individualising responsibility as a form of consumer choice. Climate disaster is happening because western consumers made the wrong choices! Whatever happens to the climate, the interests of global capital cannot be jeopardised.

How are we going to get out of this mess? In short, we don’t know, but the solution must be radical, it must be socially just and it must challenge the interests of big business. We can transform this oil-drenched economy and overturn poverty and have decent jobs. Potential solutions are emerging in debates across the left, but a solution must emerge from social processes more than ideas. As we stand in Scotland, the only party in Parliament which is opposed to the interests of big business is the Green Party whose support comes, more or less, from the professional middle classes who support the NGOs and the ‘new’ social movements of which they are part. The most directly affected working class movements are challenging the oil companies, but in terms that ignore the climate crisis that we are facing. The other left parties are recognising the ecological challenge, and despite their current relative weakness, remain active in community and working class struggles. We need the collective knowledge of all political movements critical of or operating out with the neoliberal framework of economic growth, all groups whose interests are being actively damaged, in Parliament, in communities, in the social movements and in the trade unions. Only by working towards some kind of bloc will we shift the hegemony sufficiently to implement change. We need such a broad alliance like never before if we are to work out a just transition to a sustainable solution.

Justin Kenrick, in SLR earlier this year, argued for a transitional alliance to tackle climate change. This has been interpreted in different ways and stimulated an important debate, generating significant connections across the left as well as raising fears. As a result of these debates, a conference is being organised by activists from across the left and green movements to explore how we can move forward. None of the parties which might form a government in the foreseeable future will implement a radical changes needed on their own, and to imagine that they can be persuaded otherwise before the damage is done is unfortunately a false dream. The damage is already well underway, and it’s time for a new dream.

Conference: transition to tackle climate change, Edinburgh, 18th – 19th October 2008

Eurig Scandrett is a member of the Scottish Green Party and Democratic Left Scotland

The unsurprising casualties of capitalism

Ellie Keen — Sat, 19 Jul 2008 20:01:29 +0000

Fatherhood is back in the political ring. In the right corner, David Cameron’s comments about black fathers revive the Conservative instinct for a scapegoat. In the left corner, the Equalities and Human Rights Commission’s Working Better initiative has joined with Mumsnet.com and Dad Info to launch ‘Home Front: What do mums and dads need to make life work?’ For the right, paternal responsibility is the bedrock of patriarchal social order. For the left, paternal responsibility is about a new kind of democratic settlement between men and women.

Fatherhood today is measured against the model of the man as family provider, the breadwinner supporting wife and children. This is a modern invention of the middle classes and only became the norm in the 1950s. In the past paternity was never enough to qualify men for fatherhood. Patriarchy was limited to propertied men. Colonialism ensured it was further restricted to white men.

There were plenty of biological fathers who lived without families. This was not about men’s moral failings, but a structural problem. Since the 1950s historic changes in the economy and in gender relations have returned us to this age. Paternity no longer means fatherhood.

In the 1980s, mass unemployment and the closure of manufacturing industries destroyed many men’s role as family breadwinner. Capitalism restructured around a low-wage, flexible labour market. Men’s ‘family wage’ and job for life disappeared and large numbers of women were drawn into the workforce. As men’s incomes stagnated or fell, women took on a double shift of paid work and unpaid domestic labour. Working class survival and middle class lifestyle once managed on a man’s single income now require two incomes, and often multiple part-time jobs. The role of family breadwinner is now unattainable for the majority of fathers in Britain.

For many young working-class people, marriage and setting up a family home has become a distant dream. Low wages and a lack of affordable housing makes it increasingly difficult for many young men to create an independent life of their own. The traditional rites of passage into adulthood – leaving home, entering employment, establishing a family, and taking on legal obligations and rights – have disappeared.

Research by the centre right think tank Civitas suggests that the higher rates of single parenthood and cohabitation in low income areas are not about feckless fathers or an anti-marraige trend but to do with the structural problems of poverty and a low wage economy.

Debates about fatherhood in recent years have all failed to recognise the structural changes within which men and women are forced to make choices and take decisions. Politicians of all parties go along with tabloid explanations of ‘deadbeat dads’. The Right wants to rewind 200 years and reimpose the patriarchal roles of mothers and fathers. Labour, despite the best efforts of feminism, is silent and evasive about both masculinity and fatherhood.

The growing popularity of Cameron’s Conservatives has emboldened them to revive the old right wing ‘responsibility agenda’. Chris Grayling, the Shadow Minister for Work and Pensions has made a number of eloquent speeches on the subject: “We have a growing generation of young men, alienated and drifting without a purpose in life; They are causing trouble; Welfare programmes don’t work and the criminal justice system is too soft; Many have grown up without fathers and many are becoming ‘fathers in name but not in action’; The lack of fathers is a huge problem for all of us.”

Grayling is good at describing the problem, but pointing the finger of blame at individual behaviour does not confront the bigger problem. He has no solutions. Nor, for that matter, does Labour. The fact is that the kind of democratic fatherhood society aspires to is not compatible with our economic and class system which leaves men with either too little or too much work. Only one in five men takes advantage of the new paternity leave provision of two weeks off, paid at £117 a week. Because of financial pressures 40 per cent don’t take up the right. As the EHRC’s NIcola Brewer has argued, “The central issue is that the economic penalty for fatherhood is too high.”

Inflation: the poor pay More

Ellie Keen — Sun, 29 Jun 2008 21:47:57 +0000

The rising cost of living is leaving millions of workers in Britain in poverty. Spiralling food prices have pushed inflation to a 16-year high.

Rises in the cost of food jacked up the official Consumer Price Index by 0.3 percentage points last month to 3.3 percent.

The slightly more realistic Retail Price Index – which includes some housing and other costs such as council tax – has risen to 4.3 percent.

The underlying reason for this is the spiralling cost of essentials. For instance, vegetable price rises almost doubled from 3.8 percent in April to 7.2 percent last month.

A basic basket of a dozen essential items has soared by an average of 23 percent in the past year. For example, 12 eggs, which cost £2 last May, are now £2.92 – a 46 percent leap. The price of a bag of rice has increased by 93 percent.

A chicken costs £1.50 more than 12 months ago and bread is up 28 percent, butter 30 percent and milk 17 percent.

Food prices across the board have risen by 6.6 percent in the last year, with the cost of staple foods soaring even faster.

A typical family’s annual shopping bill has gone up by about £1,000 in the past year – that’s an extra £2.70 every day.

Figures also show gas and electricity were 11.2 percent more expensive last month than May 2007.

They are set to go up by as much as 40 percent this year. This is another harsh blow for those who are already struggling with the average bill of more than £1,000 a year.

The average price of a litre of unleaded petrol was £1.11 in May, up 16.8 percent in a year. Diesel was up 26 percent to £1.21.

However, the truth about soaring prices is being systematically distorted. The reality is that the rate of inflation for ordinary people is rising twice as fast as the official figures show.

Based on Office for National Statistics calculations, a family in the south west of England with a mortgage and two children faces an inflation rate of 6.5 percent.

If they live in London it’s 7.3 percent. Pensioners are enduring even tougher times. One estimate shows they struggle with a real inflation rate of over 9 percent.

Elderly people are hit hardest by inflation because they spend a larger proportion of their income than other groups on basic goods such as food and fuel.

The official inflation rate is calculated on a basket of 650 goods. Some of the goods used are somewhat removed from most people’s reality – chocolate biscuits were recently taken out of the basket and champagne added in.

The Office for National Statistics also added fees for stabling horses to the basket of goods in spring this year.

But the real problem is the weight given to different items. Utility bills are given similar importance to luxury goods, for instance.

That means that falling prices for flatscreen televisions effectively cancel out rising gas bills in the figures.

So for the affluent, prices might be falling. But the daily necessities that all of us are obliged to spend money on are subject to massive price rises.

What we need is a new dawn

Ellie Keen — Sun, 08 Jun 2008 23:02:06 +0000

Gordon Brown’s apparent decision to build more nuclear power stations because fuel prices are going through the roof is bizarre. It takes 15-20 years to build a nuclear power station. Hard-pressed hauliers and the fuel poor cannot wait that long. Nuclear power is irrelevant to addressing the present cost of fuel. And it can do next to nothing to ease the cost of heating homes.

Rising oil prices are already significantly reducing car and plane use. For home heating, the sensible way to proceed is by a rapid shift to domestic renewable energy: solar, wind-power, air or ground heat pumps, biomass (wood-burning boilers) and micro-generation. Germany is already proving the huge success of this policy through feed-in tariffs which enable families to generate their own energy and sell on any excess to the national grid at a profit.

Sadly, the British Government has turned its back on such ideas because it is committed to industrial vested interests. We hear a lot about empowering the consumer, but where this would really count – with decentralised energy systems – the fossil fuel and nuclear industries have the inside track.

This is not the only example of Government prejudices holding back desperately needed changes. In the current turmoil in financial markets, as the crisis broke and it became clear that City trading in near-worthless financial derivatives or “structured investment vehicles” had been a major ingredient in the collapse, it was decided there would be no change in light-touch regulation.

No committee of inquiry would be set up to deal with the rottenness of the financial system. Despite the toxic mix of poor accounting transparency, risk-laden financial products, evasive offshore operations, weak banking regulation and a gross lack of public accountability, a return to business-as-usual (if that were possible) was judged better than cleaning out the Augean stables.

As far as housing is concerned, the shortage of social, affordable housing has reached crisis levels. There are 1,634,000 households on the waiting list in 2004, according to the latest available data. The actual figure is probably nearer two million. In addition, nearly 100,000 households are registered homeless. Yet virtually no council houses have been built over the past 10 years.

Local authorities get no grant from the Government for house-building and are forbidden to borrow on the open market against the security of their housing stock to fund the tens of thousands of affordable houses for rent that are needed. However, housing associations are permitted to borrow on the market, to an extent equal to their grant from the Government, so that their house-building is doubled. Making a political point against council housing because of an obsession with owner occupation is wholly unacceptable.

If council tenants want their homes to be repaired and modernised, they have been required to vote in a ballot either to be transferred to a private landlord, a housing association or a so-called arm’s length management organisation. If they reject these options and opt to stay with the council, their homes have simply been left to deteriorate.

This is about ideology, not meeting housing need. Are ministers oblivious to the needs of the quarter of the population with the lowest incomes who do not have the wage levels or the regularity of employment to afford owner-occupation when mortgage debt to income is now on a six-to-one ratio or even higher?

Some people are rather better off. The chief executives of the FTSE 100 companies now take home on average more than £71,000 a week. Meanwhile, employees in their companies on the minimum wage take home £200 a week – 350 times less. Like other bosses before him who brought down their companies, Adam Applegarth was able to walk away from Northern Rock with a golden goodbye (£760,000 in his case), while hundreds of jobs could be lost in the north-East of England with little or no compensation.

Non-domicile tax refugees, many of them millionaires, are untroubled by the Inland Revenue because taxing the rich is a reminder of the bad old days. The Treasury has even retreated from the minimalist proposals on non-doms.

The fiasco over the abolition of the 10p tax band has still not been properly rectified. Alistair Darling’s compensation scheme, which still leaves 1.1 million of the 5.3 million losers worse off, comes to an end after one year. What is needed is not a bit more tax credit adjustment, but the re-introduction of the 10p tax rate with the £6.6 billion cost funded by redistribution from the richest 5 per cent in society with incomes over £150,000 whose wealth has quadrupled under this Government.

The enthusiasm for the private sector in all things has led to more problems. Through 1997-2002, the public accounts were in surplus. However, instead of the huge public rebuilding programme being financed cheaply via the Public Works Loan Board, the decision was made to hand over the construction and management of new hospitals, schools, roads and prisons to Private Finance Initiative schemes. This is a distinctly “unsound money” policy – top-slicing public expenditure for 30-50 years ahead, pushing a number of health trusts into bankruptcy and opening up re-financing scams offering even bigger profit rake-offs. And it has been pushed through with future liabilities for the public purse of more than £100 billion, even though many surveys have found that the PFI does not generally offer the best value for money.

The poorest in our society are probably more vulnerable now than at any time for a century and workers can still be arbitrarily dismissed in their first year of employment without any rights. Yet the Government continues to restrict trade union rights. Nor will it implement the European Union’s Charter of Fundamental Rights for all citizens, which all the other 26 EU member states have accepted without demur. The charter bans excessive working hours (British workers work longer hours per week than anyone else in Europe) and would allow secondary action in industrial disputes (which is not an issue anywhere else in Europe).

It’s not Gordon Brown’s leadership that’s the problem. It’s the policies that have alienated Labour’s core vote. Changing the leader will alter little unless the policies are altered in a manner to convince those voters Labour is now fully on their side.

Michael Meacher is Labour MP for Oldham West and Royton and a former environment minister

Tale of two Britains

Ellie Keen — Sun, 08 Jun 2008 22:05:26 +0000

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.

Blair/Brown ‘pretend society’ exposed

Ellie Keen — Mon, 02 Jun 2008 20:19:11 +0000

£35bn debts to avoid being seen to be working class

It all seems rather silly now, but it was not so long ago that many on the liberal left fully expected the Gordon Brown coronation to deliver a significant change of political direction rather than a mere, though welcome, change of style.

It was always a fantasy, of course, and Brown did not waste much time in disillusioning them. But what was the basis for the wishful thinking in the first place? In part it can be put down to Brown seeking to out-manoeuvre Blair with a series of ‘dog-whistles’ to the party faithful. These supposed ‘values’ were in turn given undue credibility as a result of a febrile media constantly delivering bulletins on the teeth-bared battle behind the scenes between the so-called Blairities and Brownities for control of the party, and, as too many allowed themselves to think, for the soul of it. After all, if the intense internecine warfare was not evidence of a deep ideological divide, what was it about? After the wretched dithering over the autumn election, the fêting of Thatcher, the delay in nationalising Northern Rock, the 10p debacle and much more, culminating in the tactics leading up to the Crewe & Nantwitch by-election, the mystery may have been resolved. New Labour’s strategy at Crewe is what caused the penny to drop.

First of all, here was a party that once grandly announced that it had ‘no problem with people getting filthy rich’ and had spent a decade and half of bowing at the altar of privilege now attempting to dupe voters by playing the class card. More than anything it is the little details that suggest the gig is up. For example it has been reported that voters had been woken up at 4am by callers pretending to be Tory canvassers. And four-by-four vehicles festooned with blue balloons according to an article in The Independent have been careering through council estates – more pretend Tory canvassers. Next minute they’re pointing the finger at the Tories for being soft on immigrants. A chorus of ‘You don’t know what you’re doing!’ would have mocked these clunking inconsistencies in the New Labour message in any football ground in the country. The sheer desperation, panic and by-any-means-necessary approach is not, however, matched by the ruthlessness characteristic of the Blair regime in terms of delivery. Instead, there is an absurdly amateur element that would have had Blair apparatchiks recoiling in horror. Which raises an interesting question. If, as is now almost universally accepted, the Brown v Blair tug of war never was ideologically based, why then were there ‘Brownites’ at all? What were they for? It is when you check out the Brown Cabinet, jam-packed as it is with sycophantic time-servers who could never have hoped to have made the cut in the Blair era, that it starts to make sense. There never was any genuine Brownite faction devoted either to leader or cause at all. What there was were individuals who, aware of the Blair-Brown pact, hitched themselves to Brown’s bandwagon out of nothing more than grinding personal ambition matched deep down with a cold-eyed estimate of their true abilities. In short, sub-prime ‘Blairites’ to a man/woman—and they all know it.

One senior Labour MP quoted in the London Evening Standard said, on the disastrous Crewe Nantwitch by-election campaign, “It has been juvenile and counter-productive. And if they think this has played badly in the North of England, that’s nothing to the way it looks to people in the South and London who thought class warfare was a thing of the past. Down here people do not hate those who are better off—they aspire to join them.”

Many indeed may well ‘aspire’ but jumping classes is an altogether different matter, as a recent survey shows. Millions of Britons are getting into debt to finance a lifestyle beyond their means simply because they want to give the appearance of being middle class.

An astonishing 15 million people have racked up debts of £35billion despite their income being below the national average, the survey found.

Six million wannabe middle class households bring in less than £15,000 a year and many rely on credit cards and bank loans to fund their spending.

The average income for working class people is £23,000 and £33,000 for the middle class.

But rent and mortgage payments are nearly the same at £366 for a working class household compared with £334 for the middle classes.

Those considered to be in the ‘upper middle class’ were found to earn more, with average earnings of almost £52,000 a year.

Richard Mason, director of moneysupermarket.com, which carried out the research, said: ‘It’s worrying to see that so many people are spending and borrowing beyond their means to try to keep up with the lifestyles of others.’

Rather optimistically, personal finance expert Sue Hayward said that it all showed ‘the class divide was shrinking’. Actually what it shows is that together with the ever-expanding wealth divide between rich and poor, the politically more significant class divide between working and middle classes is also keeping pace. More significant because in the real world, contrary to myth, it is the working class, not the middle class, that is really expanding. But if Ms Hayward is confused it is understandable. With his slogan ‘we’re all middle class now’ Blair seemed to promise a meritocracy. But as repeated surveys show, neo-liberalism did not and indeed could not deliver. Social mobility stalled or went in to reverse. So what we have instead is not a society based on solid achievement but on the appearance of achievement; a facsimile of a true meritocracy. And while ‘pretend canvassers’ might be risible, a pretend society, with all the attendant psychoses, will in the long run be the real Blair/Brown legacy that will prove altogether more damning.

The Future of the World - as seen from an airport

Ellie Keen — Fri, 30 May 2008 19:05:32 +0000

Airports are salty wounds, full of tight air and crimson stale tears and often, when sitting rigidly on an Africa-to- Europe flight, I can feel the passengers are wounds inside wounds: bundles of dry nerves in a bath of dry uncertainty.

Later on, from up in the sky, Heathrow airport will seem an obstinate lump of concrete and steel, a formidable excrescence: unwelcoming and even irritated at the arrival of yet another wave of “them”. Inside the austere hall of immigration control of Terminal 2, arriving passengers are separated into two groups, a fluid small queue at the far end for the citizens of the free world and another much bigger section for the rest: the people at the edge. And so they quietly join the human snake locked in a lengthy slow-moving march towards the gates of deliverance. You want to learn about social science? About global politics in the twenty-first century? About the “human predicament”? About the “end of history”?

Well: forget your Ivy league PhDs and your LSE Masters. Skip over your Foreign Affairs subscription and your well-meaning punctual attendance at literary festivals and come spend a day at the arrival gates of Heathrow airport. Try it, sit there and watch humanity in all its countless dimensions. Watch the sweaty frowns, the hopeful sighs, the expectant silences, the occasional glances towards the other world at the far end, that of the lucky ones hurrying past impatiently, showing their passports fleetingly to the smiling official like they were glorified bus passes. And who can blame them? Isn’t that what passports are meant to be? As clichés go ‘The World is a Global Village’ has at least the merit of being nearly true. Indeed, if you chose carefully where your world started and where it ended. If you picked a world that contained the good half of the Northern Hemisphere as well as some appropriate outposts, Australia and the Falklands for example. Then that world would, indeed, be one of breathlessly instant communication, dizzyingly cheap frictionless travel and where you would find an increasingly eclectic yet homogenous cultural diet of MTV-speak and industrialscale spiritual angst. That world would be a global village ….

I’m reminded of a moment last summer, as I sat on the terrace of my family home in a sun-drenched Algiers suburb, fifty pages into another half-hearted attempt to complete War and Peace. I wondered about how things would have turned out had two hundred thousand or so qualified engineers, researchers, professors and professionals not fled my country over the past twenty years. Would a North African Silicon Valley have emerged? Perhaps on the site of a dormant coastal village? A place buzzing with that most potent of mixes: blazing talent and raw ambition? Would that have helped make the planet a teeny bit fairer? Or at least less farcical than it is now? This thought-experiment is set to remain just that: an exercise in outlandish speculation. Half a century after the last wave of liberation movements, the Third World is still haemorrhaging crucial brain-power and the First World is still hungrily (yet not that gratefully) sucking it out. No one seems able or willing to stop this demonic one-way phenomena and the political bankruptcy of the elites in most African, Asian and Latin American countries, crippled by incompetence, mismanagement and good old fashioned greed, has certainly not helped.

At the airport, so many different faces have the same quiet fierceness about them: The Egyptian petroleum engineer with his beautiful daughter beside him singing to herself, oblivious to the life-changing episode she is partaking in, the Sri-Lankan computer scientist, with his neat short hair and his serious gaze, absentmindedly inspecting his knuckles, the Malaysian physicist, with his short-sleeved shirt and worried brows. All of them stand in line waiting, locked between the twin poles of the local oppression back home (whether political, social or economical) and the siren calls of overseas prosperity. The simple truth is that most of the time, job migration is not about choosing a different life: It’s about choosing life. Very often nowadays, photogenic experts line up at TV shows to proclaim the end of borders, the abolition of the nation-state and the brand new age of the international continuum. This humanist fantasy, to which even cynics subscribe tearfully now and then (when watching the football world cup final, for instance) is touching and commendable but a fantasy nonetheless. It may be passably comprehensible to a group of bohemian backpackers indulging in cheerful banter (in Esperanto?) in a Jazz-café on the French-Belgian border but has very little resonance for a destitute family in a Palestinian village for whom leaving their very house is too forbiddingly risky an enterprise.

Is a continuous unidirectional migration flow sustainable forever? Of course not. In fact, several patterns are already emerging: the service sector’s drive towards overseas outsourcing will initially increase, but eventually slow down as the gap in labour costs between the west and the rest closes up. Geography will continue its path towards irrelevance as the location of businesses, once mainly dictated by their physical proximity to suppliers and customers, is now based more on rental cost considerations. Time for a prediction: Over the next hundred years, things are set to proceed along one of two distinct tracks, and it’s all depending on our actions globally as a species.

The first avenue, unfortunately appearing to be the most likely, is for the increased worldwide competitiveness over scarcer resources to lead to an ever shrinking island of the prosperous few in the midst of the ever widening circle of the forgotten many. The world would become a global-scale version of a medieval kingdom. The second option, achievable but requiring altruism of which we haven’t shown ourselves capable yet, is for the economic system to move from its currently lop-sided shape to a stable and efficient set of mechanisms covering the entirety of the globe, rather than the current inconsistent pattern of halfmeasures and selectively-adhered-to international trade laws that we have now. As to what this implies for worker migration, it simply means that we should strive for a world where workers are able to move freely around the globe according to their own preferences and skills but – and this is the part that most miss or choose to ignore – that workers are not under undue pressure (whether internal or external) to adopt a particular choice. In other words, a doctor emigrating from Ethiopia to the US is not a glorious symbol of an idealised free movement of people if her choice to emigrate was the result of an absence of choice.

The freedom and ability to stay are as important as the freedom and ability to move and to go away. Democratic reform towards freer societies (but without the ugly interventionist connotations the word has been cloaked in by the media) is hence a crucial step towards genuine freedom of movement for people in the third world. So. What are we to do? Well, for a start, the third world economic and intellectual apparatus should be given a chance to grow organically. The brain drain has to stop and the sooner the better. Of course this is not going to be painless for the Euro-American (and other developed) economies but it would be wise and it would be fair. Indeed, a decreased migration of skilled workers would lead to more vibrant home economies and eventually to a significant increase in living standards in their countries. The closing gap in average employee remunerations between the west and the rest will itself slow down the migration cycle even further and cement a stable international job markets equilibrium. Those in the developed West who are supporting actions towards a fairer world should understand very clearly that change will come at a price: principally, a reduced level of their own affluence and material wealth – a price too many in the west have decided they can’t afford to pay. But considering the long term consequences of our current global levels of production and consumption, they will have to face the realisation that it’s a price they certainly cannot afford not to.

At the Heathrow Immigration desk a friend of mine was once asked by a benign-looking immigration official what her intentions were after finishing her Politics degree in Britain. “I will possibly do a postgraduate course” she replied neutrally and then, feebly “possibly look for a job here”. The immigration officer looked up for a few very heavy milliseconds and then stoically resumed his scribbling. He has seen her before, a trillion times, with a different name, colour and nationality but with that same weary stare and that same fire at the back of the eyes. She was allowed through. The world will grow as a whole or it won’t grow at all.

Hicham Yezza is editor of Ceasefire, and is currently residing in Colnbrook Immigration Centre having been arrested under the Terrorism Act 2000. For information on the campaign to free him, see Stop the Deportation of Hicham Yezza

The Money Delusion

Ellie Keen — Thu, 22 May 2008 20:27:02 +0000

We had thought that the collapse of Enron was a one-off financial hiccup and that otherwise our money system was safe and sound in the hands of the market. However, this doesn’t seem to be the case. The credit crunch and sub-prime mortgage lending crises have brought much misery to many in the US as well as in the UK. Prestigious and solid-looking banks such as Société Générale, Northern Rock and Bear Stearns have exposed the underlying weakness of our money system. These examples may be only the tip of the iceberg of the hidden instability of the money market.

In the wake of such financial turmoil one can only conclude that the world’s money system is in need of an overhaul. The system, which was created to facilitate economic transactions, is now creating economic tragedies. What was a measure of wealth has taken the place of wealth itself. What was a means to an end has now become an end.

Let us be clear. Money is not wealth. It is a delusion to think that money is wealth. True wealth is good land, healthy animals, flourishing forests, clean water, honest work, abundant creativity and human imagination. Money was designed to oil the wheels of economic interaction and to ensure that the workings of the marketplace were smooth and simple.

The purpose of money was and should be to serve the human community as well as the Earth community. However, it appears that the original purpose has now been reversed. Instead of money serving people and planet, now people and the planet are put into the service of money. Natural resources are converted into consumables to make money. Whether these consumer goods are necessary or not is irrelevant. As long as money is made, all and everything is justified; the money machine has to be kept in motion at all costs.

Of course, most of the money supply is controlled by the few; it may appear that there is never enough money to go round, but in fact there is plenty of money available to those who already have it. Yet, for the have-nots, there is always a great scarcity. For example, there is never a shortage of money for wars and weapons, but it is always in short supply for arts and education. There is not a lack of money for fashion, but never enough for food for the poor. No-one needs to ask where the money will come from to build huge buildings for banks, supermarkets, office blocks, shopping centres and luxury villas but there is never enough money to build houses for the poor.

Naturally, there is a hierarchy in money; some currencies are more valuable than others: the dollar dominates, the rouble is subordinate. If you have euros, pounds and yen you are privileged, but if you have only rupees, dinar and pesos you are powerless. You have to give 100 rupees to get £1! When you buy something with the dinar you need a hundred times more than you would in dollars and if you sell something you receive a hundred times less. If you work for a British bank in the UK, your earnings are likely to be a hundred times greater than if you do the same job for the same bank in India. This is why call-centres have sprung up in poorer countries.

If you produce Nike shoes in Bangladesh you are paid 100 times less than if you were producing the same pair of shoes in the US. Thus money is an instrument of injustice and exploitation, not merely a means of exchange.

Money favours power and power favours money. Modern ‘democracy’, in most countries, is the government of the rich for the rich and by the rich. It is estimated that this year’s US elections will cost $1billion; money speaks louder than policies or personalities.

As John F. Kennedy once said, “What is designed by humans can be changed by humans.” Money is not a god-given fixture: it was designed by us, therefore it can be changed by us. Unless we reform and redesign our money system the idea of sustainability, social justice and spiritual renewal will remain a mirage. Therefore the reform of the money system is an urgent imperative.

We will have to develop local currencies, parallel to centralised national and international currencies of the world. We will have to revive our gift economy to solve the problems of the money economy. This is the theme of the special feature on money in this issue of Resurgence. James Bruges, Colin Tudge, Peter Lang and Tarek El Diwany expose the money delusion and explore the alternatives. Let us hope that the environmental movement makes money reform an essential part of its work.

Left Behind, and Unhappier

Ellie Keen — Mon, 14 Apr 2008 22:20:57 +0000

Britain is in a social recession. Three decades of market-driven capitalism have damaged the social fabric of this country. While Labour evades the problem, Cameron’s rebranded Conservatives are making it a central plank of their politics. They’re staking out ground that once belonged to the left, taking the ideological offensive that will cost this government the next election.

The symptoms and pain of the social recession are often concealed inside our homes. We experience them as our own shameful and personal failings. One in six adults suffer from anxiety or a depressive condition. A quarter of men and a third of women suffer sleep problems. The charity, Mind describes stress in the workplace at almost “epidemic proportions”. Mental ill health accounts for a third of all working days lost. To make the problem worse, over 1.1 million people in Britain are dependent upon alcohol. The social recession has contributed to an alcohol culture of broken relationships, domestic violence against women, chronic illness, and street brawling.

Children have been particularly affected. The 2004 Nuffield study identified a sharp decline in adolescent mental health. In 2006, Unicef published a report that painted a bleak picture of British childhood. Its summary of six dimensions of child well-being places the UK at the bottom of the league. Since then the Children’s Society‘s Good Childhood Inquiry and Cambridge University’s review of Primary School education have confirmed many of the stresses in children’s lives.

Both Labour and Conservatives claim that our class-based society is giving way to a more individualistic, meritocratic culture. But, though there have clearly been changes, class remains a central part of our society. One in six leaves school unable to read, write or add up properly. One in four 16-17 year olds are not in education, employment or training. There is less social mobility. Health inequalities are entrenched. Success in education, and life chances in general, remain dependent on family background.

We have become a society of a small number of winners and many losers. Half the population share just 6 per cent of wealth, earning the median annual income of around £18,876 or less. In contrast the top 1 per cent – 470,000 people – earn an average annual income of £220,000 and between them own approximately 25% of marketable wealth.

The shame of failing in education, of being a loser in the race to success, of being invisible to those above, cuts a deep psychological wound. This kind of ongoing humiliation creates chronic anxiety which dramatically increases the risk of disease and premature death. Inequality not only damages the life chances of people living in poverty, it adversely effects the quality of life of everyone.

Alongside affluence, market-driven capitalism has created uncertainty and a decline in a sense of belonging. Cultural difference is the prism through which large sections of the population experience and react to their insecurity. Political conflict around race and religion attempt to construct boundaries of identity which will define a sense of belonging and entitlement. Cultural difference becomes a focus for people’s resentment, fear and hatred.

The liberal economic policies of successive British governments have not only failed to end the social recession, they have contributed to it. A politics up to the task must recognise that alongside greater equality and fairness, individuals have four basic needs: for safety, a sense of belonging, a feeling that we are worth being loved, and the experience of esteem and respect. It’s a politics still to be made.

The Evil of Gross Inequality

Ellie Keen — Wed, 02 Apr 2008 00:00:00 +0000

This is not an article about the recent Budget but about a social issue that is relevant for every Budget. It also has wider implications for economic policy. The issue is the gross inequality which exists in Britain in the distribution of wealth, income and opportunity.

What makes this issue of special relevance at the present time is that the inequality has been getting worse. The cost of living is rising at a faster rate than for many years. This has a disproportionate effect on pensioners, the unemployed, the disabled and millions of workers who have low paid jobs.

This recent and continuing rise in prices, accompanied by serious instability in stock exchanges, fluctuations in rates of currency exchange and in the loans market for property of all kinds, has not been caused by the British government, except that its support for the invasion of Iraq has certainly added to costs in many directions.

Periodic instability in the economy is an inherent characteristic of capitalism. It is an unplanned system motivated by the drive for ever greater private profit. As part of this motivation it seeks to hold down the purchasing power of very substantial numbers of workers.

Defective demand, resulting from lack of consumer purchasing power, can be offset for a limited time by demand stimulated by expectations of growth in new directions. The lack of planning, however, which is a characteristic of capitalism, leads eventually to periodic disruption. This disruption may be prompted at different times by a variety of apparently dissimilar events. Nevertheless periodic economic setbacks of varying intensity are an inevitable feature of capitalism. The pain is felt by millions of working people through unemployment or attacks on living standards or even through war caused by economic greed for markets, for areas of investment for future profit or for the control of raw materials or other supplies.

There are a number of causes of the current world-wide rise in prices. There is increased demand for oil, attributable in part to the industrial expansion of China and India, but aggravated by war in the Middle East. There is a rising demand for consumer goods, including grain and other farm produce, again stimulated by the developing world. The lifting of millions of people from poverty and periodic famine is not a ‘calamity’. It is a welcome development.

Climate change has also already begun to affect the output of certain primary goods. Drought in some areas, excessive rainfall in others, turbulent weather and flooding have all contributed to uncertainties in the means of life for millions of the world’s population.

The economy has also faltered seriously in the USA because of the scramble for private profit in the market for property loans. The financial disturbance has spread to many other capitalist countries, including Britain.

It is at the very heart of the tradition of the labour movement to seek to eradicate the evils of capitalism. Gross social inequality is one such evil.

There are still far too many children in Britain living in poverty. It is to the credit of the government that they have acknowledged this fact and through the payment of family tax credits have reduced the number in poverty. Nevertheless it seems likely that the target of poverty elimination will not be achieved by the target date. More action is needed.

In 1997 pensioners were promised that Labour would defend the basic state pension, without means-testing, and would ensure that it remained the foundation of pensions policy. It also pointed to the ‘unfair lottery of community care’ and accused the Conservatives of betraying a generation of older people who were promised care from the cradle to the grave.

Means-testing for supplements to the basic state pension is now a strong feature of the system and the link to earnings in annual pension increases, originally introduced by Labour, has not been restored. There are many elderly people, other than in Scotland, who still have to pay for care.

Since 1997 the very rich in Britain have become even richer, whether measured before or after tax. A recent report of the Institute of Public Policy Research pointed out that over the past 10 years the average earnings of British employees have gone up by 45 per cent but for the lead executives of the top 100 companies the rise had been six times as fast. The rise had not been 45 per cent but 288 per cent. The richest one per cent have seen their share of total income double from 6.5 per cent to 13 per cent.

Labour must address itself to the gross inequality that disfigures British society.

Fair Dues

Ellie Keen — Tue, 04 Mar 2008 09:05:18 +0000

Corporations are engaged in a relentless race-to-the-bottom. Companies boost their profits and executive remuneration by diluting or abandoning employee pension schemes and tax contributions.

The UK state pension is already one of the lowest in the western world and amount to just 17% of average earnings, compared to an average of 57% for the European Union. Nearly 30,000 pensioners die each winter because they cannot afford to heat their homes. In a United Nations study of child welfare in 21 major countries, the UK was ranked last. Yet companies and their advisers rarely reflect on their latest tax dodge and the social squalor that they create.

HSBC infrastructure, 3iInfrastructure and Babcock and Brown Partnerships are the latest examples of Private Finance Initiative (PFI) companies creating elaborate corporate offshore structures to avoid tax. No additional wealth or economic activity is created, but the financial engineering results in low taxes to enrich a few. In the age of reverse socialism, companies are happy for the taxpayers to finance the cost of policing, security, courts, trade consuls, subsidies, embassies and the environmental clean-up, as long as they can avoid the costs. Normal people continue to bear of cost of this corporate welfare programme.

Successive governments have done little to check the race-to-the-bottom. The UK is the world’s biggest sponsor of tax havens, often known as Crown Dependencies and Overseas Territories. Their secrecy, low regulation and low tax have made them a magnet for the tax avoidance and the rules avoidance industries. The UK is legally and morally responsible for their good governance, but has done little to improve regulation or public accountability. The Treasury select committee should examine the governance of these boltholes. Given the increasing role of UK-sponsored tax havens in global tax avoidance, a special select committee could be formed to examine their role.

The PFI companies are paid by the tax payer, but by locating their operations in tax havens, they have eroded the UK tax base. As a result, normal people have to bear a higher burden of taxes. Corporate affairs remain shrouded in secrecy. Local and central governments are the biggest spenders and should not award any public contract to companies located in tax havens. As full details of these entities are not publicly known, it is inappropriate to give them any public monies. The successful bidders for public contracts should guarantee that they would remain in the UK for the entire duration of the contract.

In a globalised world, companies are easily able to establish residence and control in tax havens. As companies are taxed on the basis of their residence and control, they are easily able to avoid taxes in the places where they generate profits. Thus the PFI companies make money in the UK, but avoid taxes by claiming to be resident elsewhere. The easiest way of tackling this is to change the basis of taxation and tax them according to their economic activity: that is, they should pay tax in the UK on the basis of the profits made in the UK. Such an approach often known as “apportionment formula (pdf)“ is already applied by states within the US and can be applied by EU member states to counter this erosion of tax authorities.

Public information and disclosure is another way of checking this relentless descent to the bottom. All companies bidding for significant public contracts should be required to explain the taxes that they have paid in the five preceding years. Indeed, company tax returns should be publicly available so that concerned citizens can see the tax avoidance schemes and alert the authorities.

All multinational companies should be required to adopt what is known as the country-by-country approach (pdf). Under this, they would be required to publish a table showing the jurisdictions from which they operate, together with income, profits, assets, liabilities, tax and employees in each. This would help to mobilise questions about corporate structures and tax avoidance. Thus we might see, for example, that News Corporation has lots of economic activity in the UK but pays little or no tax.

The tax avoidance industry and the corporate lust for higher profits, at almost any cost, are not easily going to be tamed, but these proposals could make a much-needed start.

Labour means business

JamieSW — Mon, 03 Mar 2008 12:04:31 +0000

After witnessing yet another theatrical but shallow slogging match at prime minister’s question time, I couldn’t help thinking there is something really surreal about the current political scene.

As the positions of the two main parties become increasingly intertwined, and the differences between the Blairite and Brownite variations of neoliberalism become increasingly difficult to detect, the debate about the political fundamentals has dwindled almost to invisibility. Never was ideology more needed, and never was it more lacking.

It isn’t as though there is little to debate. The free market Washington consensus, which has governed the global economy for the past quarter of a century, is in crisis as a result of the sub-prime market fiasco and the other excesses of two or more decades of deregulated markets. Yet neither in parliament nor in the media is there any serious debate about long-term reform.

The power structure in Britain has dramatically altered over the same period, with the growing centralisation of power around No 10 balanced by the downgrading of parliament and linked to the dominance (until now) of the City, big business and, increasingly, the media.

But nowhere is the loss of democratic accountability even discussed, let alone remedied.

And since the Iraq invasion, nearly five years ago, there has still not been a parliamentary debate with a vote on the causes, handling and aftermath of the war.

In the absence of discussion about the real big issues, politics has become a matter of narrow positioning, repositioning and counter-positioning between political elites around daily issues as they arise.

Of course, these issues have to be addressed, but addressed in terms of an overarching philosophy with which people can identify.

The Progress thinktank’s talk of “a future agenda that is post-Blair, but not anti-Blair; building on the achievements of the past decade, not running away from them”, is simply not fit for purpose.

Labour will only make a major and sustained recovery when it stands up for its natural supporters – potentially more than half the population – against the forces of the market, which always favour the wealthy over the powerless.

The new ultra-wealthy, epitomised by the £27m (£519,230 a week) paid to Bob Diamond, of Barclays Capital, are seen by many as greed incorporated when living in the same society as those on a minimum wage of £200 a week.

The ratio between top and bottom incomes, which was less than 50 to one only 30 years ago, has now risen to 2,600 to one. Labour voters expect their government to fight inequality, not side with it.

What Labour needs to do, to make its potential supporters believe they have a government on their side, is to change the power structure in the manifold different ways that will strengthen the hand of those who at present have little or no power.

This means implementing the Charter of Fundamental Rights, which the other 26 EU states have all accepted without demur. It means introducing the same employment protection rights as are enjoyed elsewhere throughout Europe, particularly for temporary and agency workers. And it must involve protecting individual freedoms from being eroded by cutbacks in legal aid, restrictions on jury trials, limits on the right to protest, and undue detention without charge.

Money is power, too, so raising the minimum wage, currently just £5.52 an hour, to at least £7 in the first instance would empower many with little opportunities.

And it means taking redistribution out of its taboo seclusion, and reclaiming a good chunk of the £25bn a year identified by the Institute of Fiscal Studies as tax avoided or evaded by large corporations or very rich individuals (including the hyper-rich non-doms who pay no tax at all) and using it to provide decent social care for the most vulnerable elderly.

Labour is also expected to ensure that the market is kept in its proper place and not allowed to subvert the public values that give protection and rights and meaning to citizenship.

The concept of “choice” in the health services and education has been largely a pretext to open them up to the private sector, without any firm evidence of better outcomes, and leads, bizarrely, to the Tories being rated in polls as better on health than Labour.

This aberration should be stopped now, if Labour’s reputation as the party of the universality, equity and accountability of public service is to be retrieved.

There are other reasons, too, for a major change of direction here. PFI has proved enormously wasteful, over-extended IT projects have cost billions and still failed, and consultants have enriched themselves at taxpayers’ expense out of all proportion to public benefit. Yet preventive health services, where both better health and much greater cost-effectiveness could be secured, remain hugely undersubscribed. A change here could bring enormous dividends.

Above all, electors want a Labour government to deal effectively with market failures and excesses. Why is Labour so timid and diffident about public ownership for Northern Rock when private ownership has so spectacularly imploded amid dodgy securitisation, sub-prime blunders, a credit crunch now threatening millions of families, extreme short-termism, and Babylonian excesses of greed?

Where privatisation has led to hospital infections and overcrowded trains, which people feel strongly about, they look to the state to act. They want a changed relationship with the market so that the private company brought in to upgrade London Underground, Metronet, cannot walk away leaving the public to pick up its £2bn debts. And they expect a Labour government to take on big business on their behalf where that is necessary: in the food industry, over unhealthy food and obesity, in the gaming industry, over casinos, in the drinks industry, over alcohol-fuelled violence and anti-social behaviour, and with the airlines, over climate change.

It will not be easy for any government to begin to move away from the privatisation and deregulation, the tenets of unfettered market neoliberalism that have governed western political economy for the last three decades, and to re-establish a more healthy relationship between the market and society. But the international crisis gathering now that money and power have so clearly overreached themselves offers a real chance. And the task of reinspiring the Labour project in the run-up to the next election may leave ministers little choice.

The re-creation of the Victorian class divide in education

JamieSW — Thu, 07 Feb 2008 17:51:49 +0000

The Guardian reported on 1st February that 85% of white boys from poor backgrounds leave school without attaining five good GCSE’s, that “White boys in disadvantaged areas are the lowest performing group of pupils in schools after the small population of Traveller children”, whereas “nearly half of their wealthier classmates in England hit the government’s target of five GCSE’s at grades A* to C, including English and Maths.”

This follows some recent remarks made by Dr Anthony Seldon, master of Wellington College in Berkshire and a prominent biographer of Tony Blair, that the private education sector has “emerged pre-eminent in the British education system” and was “perpetuating the apartheid which has so dogged education and national life in Britain since the Second World War”.

For Seldon, the independent education sector –which accounts for 7% of British children- “cream[s] off the best pupils, the best teachers, the best facilities, the best results and the best university places. If you throw in the 166 remaining grammar schools, which are predominantly middle class and private schools in all but name, the stranglehold is almost total.”

These statements linking educational achievement with social class have been expanded on by Professor Stephen Ball of London University’s Institute of Education in his recent book ‘The Education Debate’. Ball argues that Britain’s current education structure is increasingly coming to resemble that of the Victorian era. Then, the working class went to elementary schools, the middle class to grammar schools and the upper class to public schools, with the Church and philanthropists wielding significant influence over the system. The same situation is re-asserting itself now: community schools for the working class, faith schools for the middle-class and private and public schools for the top echelons of British society.

Ball states that “The class gap in participation rates in higher education is larger than ever before… We are seeing the recreation of almost all the elements of the Victorian class-divided education system”. In spite of much action by New Labour in the sphere of education, the class inequalities have not been erased because, in Ball’s view, “governments have only listened to the middle classes… throughout history, the middle class has been seen as a problem whose [educational] needs need to be responded to, while the working class has been seen simply as a social problem. Our education system has always provided the means for middle-class families to gain social advantage and to separate themselves off from ‘others’... Grammar schools, parental choice, ability grouping, faith schools, gifted and talented have all been a response to middle-class concerns”.

Sally Tomlinson of Oxford University concurred with Ball’s findings, stating that ‘high-quality education’ “has always been monopolised by higher socio-economic groups with some concessions to lower-class ‘gifted’ individuals”

This simply re-confirms the words of Sir Peter Lampl of the Sutton Trust that “The middle classes start with a huge advantage – an educational system that is socially selective. The richer you are, the better the school to which you send your children, whether private or state, specialist or non-specialist”. The government’s own research, and ministers, acknowledge the use of ‘covert selection’ by the leading state schools to produce “socially segregated intakes”.

In a recent profile of education in Bristol, which “has the highest concentration of independent school places outside of a small exclusive corner of north London that includes Hampstead and Highgate, and some of the poorest performing state schools”, one middle-class parent, when asked why she didn’t want her 11 year old son to go to a state school that served the St Paul’s area of Bristol –which saw riots in 1980- answered: “Snobbery. It’s awful snobbery, but I care who my son mixes with. I don’t think he could cope in a rougher school with bullies. He’s sensitive”.

The increase in educational inequality along class lines hasn’t happened in isolation: it is simply a product of how this country has been deliberately changed over the last thirty years. OFSTED’s 2000 report on educational inequality stated that, “There is a strong direct association between social class background and success in education: put simply, the higher a child’s social class, the greater are their attainments on average… This is one of the longest-established trends in British education but the association is not static. Indeed, there is evidence that the inequality of attainment between social classes has grown since the late 1980s”; and the Oxford economist A B Atkinson wrote in 2003 that “the major equalisation of the first three-quarters of the century in the UK has been reversed, taking the shares of the top income groups back to levels of inequality found fifty years ago”.

Educational achievement is largely a reflection of material and social advantage, and as the country has become more unequal, so have educational outcomes. This didn’t happen by accident: the raison d’etre of the neo-liberal project was – and is – to concentrate and redistribute wealth and power towards the top, and safeguard the position of capital.

The practical result of these changes have been that social mobility has declined in the UK to levels similar to those in the US, and substantially lower than in Canada and Scandinavia: the supposedly meritocratic, flexible neo-liberal countries are, it turns out, a good deal less meritocratic than the supposedly ossified, relatively egalitarian and social democratic countries.

The historic role of public education has largely been to prepare working class children for a life of wage slavery, drudgery and subordination. Recent political trends now mean that the chances of working class children escaping that fate are diminishing, whereas the offspring of the wealthy – no matter how dull – are, like their parents, as secure in their future as they have ever been.

A divided Britain

JamieSW — Tue, 01 Jan 2008 15:06:49 +0000

Gordon Brown has, apparently, learned no lessons from the downward trend of Labour over recent years or, more specifically, the slump in his own government’s fortunes over the past six months.

Alternatively, if he has learned lessons, they are the wrong lessons that will simply smooth the way for David Cameron to enter 10 Downing Street.

Simply declaiming a goal of “One Britain of security and opportunity for all the British people” is meaningless if even the dogs in the street can see that this does not mesh with reality.

There is no single united Britain of security and opportunity.

Britain is increasingly divided, economically and socially, and government policies have played their part in exacerbating division.

Working people’s pay is held down, as is the state pension, while the smart clubs of London’s City and West End are still replete with punters hooked on conspicuous consumption, spending more on a single round – in some cases, a single cocktail – than many low-paid workers earn in a year.

When factories close, workers go down the road with statutory redundancy pay, while, on the other hand, incompetent and self-seeking directors can walk away from financial disasters of their own making with seven-figure settlements.

Working people were used to being treated like this under the Tories. They expected something better with Labour – to no avail.

When Mr Brown talks of maintaining stability and low inflation and building on “our economic success,” most workers don’t know what he’s talking about.

“Low inflation” is the government code used to justify cuts in purchasing power and the fruits of economic success are concentrated on a small section of society, which wastes no time in exporting its profits overseas in search of even bigger profits.

The Prime Minister is not short of advice from close allies of Tony Blair, whose message is summed up by former minister Steven Byers.

According to Mr Byers, it won’t be enough to motivate Labour’s core electoral support.

“We also have to appeal to the promiscuous voter by demonstrating that we can be the party of aspiration and ambition as well as social justice and fairness,” he suggests.

What desert island have these people been living on?

Aspiring to be the “party of aspiration and ambition” is Blairite shorthand for looking after the better off and continuing to abandon Labour’s grass roots.

That approach has led to the party’s loss of up to 5 million votes since 1997.

Instead of sucking up to Mr Byers’s promiscuous voters, Labour would be better advised seeking to reconnect with its base, which has been scorned, treated as voting fodder and been told that it has nowhere else to go.

That means listening to trade unionists instead of to greedy, self-satisfied and undertaxed businessmen.

The Tories have launched yet another campaign against the trade unions’ political levy, but this means of political funding is transparent and democratic, not like the reliance on donations and loans from rich people, which has generated one scandal after another.

Unless Labour takes a decisive change of direction, it will not only continue to let down Britain’s working people but will throw away its grip on government.

Three Million Homes?

Tim Holmes — Tue, 27 Nov 2007 20:52:17 +0000

It sounds preposterous: three million new homes in England alone by 2020. My instinct is to fight this project. It threatens Britain’s countryside, the character of our towns, our water supplies and carbon targets. Today the Housing and Regeneration Bill, which will help to implement this building programme, has its second reading in the House of Commons(1). Where should we stand?

Is the housing crisis as acute as some people have claimed? Or has it been whipped up by the House Builders’ Federation, hoping to get their claws into the countryside? To find out whether these homes are really needed, I asked the charity Shelter to take me to meet some of the people it works with in London. I had no idea. I simply had no idea.

Wendy Castle moved into her flat in the Trellick Tower in west London when her eldest child was a baby. He’s now 16, and she has three others between 13 and 2. But her flat has only two bedrooms. She sleeps in one of them with her two youngest children. The room is completely filled by beds. On one side they are jammed against the window, which no longer shuts properly. On the other they are pressed against the heater, which can’t be used because of the fire risk. Her two oldest boys share an even smaller room.

She keeps her flat in a state of Japanese minimalism, but in the tiny living room the children were sitting on each other’s laps to watch the television. Like all the women I met that day, Wendy – tough as she has become – cried when she told me how this crowding was affecting her children. Her oldest boy is falling behind at school because “he physically does not have space to do his homework. He can’t do anything till the other kids go to bed.”

But the real shock came when she explained why she was stuck. Kensington and Chelsea, like several London boroughs, operates a points system, reflecting people’s level of deprivation(2). Every Monday morning it posts up the flats available for social tenants (those who pay less than the market rate). People with enough points can bid for them. Wendy has 40. She has been able to bid on only one occasion. Though her family is officially “severely overcrowded”, she came 87th out of 92. Eighty-six households, bidding for the same flat, were deemed to be in greater need than hers. “I’ve tried everything. But when I ring them they say ‘I don’t know why you bother – you ain’t got the points’.”

In a block across the road from the tower I visited Aisha and Abdul Omarzaiy. They have 280 points, but they have also been told they are wasting their time. Aisha and Abdul received asylum from Afghanistan in 1992. They were given this flat five months after they arrived and promised that after 6 months they’d be moved to a bigger place. They now have four children between 19 and 2, in a tiny two-bedroomed flat. (Remember this, next time someone claims that people granted asylum get priority(3)). The oldest boy and girl share a room, a desk and a homework rota. The youngest girl sleeps in bed with her mother. Abdul and the 10 year-old sleep on the living room floor. The 19 year-old has dyslexia and needs peace to concentrate: he is now re-sitting his A-levels for the second time. He can’t bring friends home, as there is nowhere for them to speak privately, and he’s embarrassed about sharing a room with his sister. Like Wendy, Aisha keeps the flat neat and sparse. But prison cells are more spacious.

Now suffering from severe depression, Aisha has lobbied the council and written to her MP. “When I had three children they told me I’d be moved straight away if had another one. I didn’t want another one. But after 7 years the fourth came along. They still won’t move us.” The council did offer a solution: to put the oldest boy in a hostel. “”They told us straight,” Abdul said. “They don’t have big properties. One comes in once a year and they give it to the highest priority.”

Kensington and Chelsea, as the diligent ward councillor Emma Dent Coad told me, has a poor record on social housing: a kind of economic cleansing seems to be taking place(4). But there are similar backlogs all over London. Shelter took me to meet Jacqueline Pennant, who lives with her children in a tiny maisonette in south Wandsworth. She has osteoarthritis and a hairline fracture in the spine, a prolapsed disc and sciatica in both legs. She should be confined to a wheelchair, but it won’t fit in the house. She dragged herself from one piece of furniture to the next, then up the narrow stairs, clutching at the bannisters, her face gnarled up in pain. I saw this in Britain, in November 2007.

Jacqueline and her three children have been in this two-bedroomed house for 13 years. In 1996, she thought she was about to be moved and packed her stuff into boxes. Eleven years later they are still shutting out the light as she waits like Miss Haversham for the date that never comes. Her oldest boy has severe attention deficit hyperactivity disorder and finds the crowding unbearable. The middle one is routinely hospitalised with asthma, exacerbated by sleeping in a tiny slot between his mother’s bed and the wall. In the kitchen you can touch both walls with your palms. “If I can’t use my wheelchair I don’t have a life,” Jacqueline told me. “The strain on my back has made my problems a lot worse. I’m so depressed and frustrated.”

This is a small sample, but it’s indicative of a quiet social catastrophe. Over half a million households are officially overcrowded(5), 85,000 are in temporary accomodation(6), 1.6m are on the social housing waiting list(7). Even before you consider the backlog, the newly-arising need for homes is projected to run at some 220,000 a year(8). Shelter’s surveys tell the same story over and over: children struggling with their schoolwork, parents crushed by depression and stress, families living in conditions familiar to Dickens and Engels.

Part of this crisis arises from the Labour government’s shocking failure to build social homes. Though she was the first to allow council houses to be sold, so undermining long-term provision, during Margaret Thatcher’s tenure social homes were built at an average rate of 46,600 a year(9). Under Blair, it fell to 17,300(10), while almost half a million council houses were sold off, at an average rate of 48,300 a year(11). In this respect at least, new Labour has been as Thatcherite as Thatcher.

It is true that much more could be done to mobilise empty houses(12), help elderly people to move into smaller flats and stamp out Britain’s ugliest inequality: second homes(13). It is disappointing to see how little of this there is in the bill. But even if all such measures were used, they would release perhaps half a million homes. I find myself, to my intense discomfort, supporting the preposterous housing target. There’s a legitimate debate to be had about where and how these homes are built. But – though it hooks in my green guts to admit it – built they must be.

www.monbiot.com

References:

1. http://www.publications.parliament.uk/pa/cm200708/cmbills/008/08008.i-v….

2. This system is called “Choice-Based Lettings”. See http://www.communities.gov.uk/housing/housingmanagementcare/choicebasedl…

3. The claim that people from ethnic minorities get preference is also false. The government points out that “Black and Minority Ethnic (BME) households are disproportionately found in overcrowded households. As the chart below shows, in London, nearly 30% of children in BME households and over 10% of children in white households live in overcrowded conditions.” Department for Communities and Local Government, July 2007. Homes for the future: more affordable, more sustainable, p58.
http://www.communities.gov.uk/documents/housing/pdf/439986

4. She cites government figures showing that only 27% of new homes built in Kensington and Chelsea are affordable (social or low cost market homes). In Hammersmith and Fulham, the best-performing borough, the proportion is 82%.

5. 526,000 in 2005-6. Department for Communities and Local Government, July 2007. Homes for the future: more affordable, more sustainable, p73.
http://www.communities.gov.uk/documents/housing/pdf/439986

6. 84,900 in Quarter 2, 2007. Shelter, October 2007. Shelter’s response to the CLG Green Paper – Homes for the future: more affordable, more sustainable, p12. http://england.shelter.org.uk/files/docs/33095/10-07%20Green%20Paper%20-...

7. Department for Communities and Local Government, July 2007. Homes for the future: more affordable, more sustainable, p20. http://www.communities.gov.uk/documents/housing/pdf/439986

8. ibid, p17.

9. DCLG, August 2007. Table 244. Housebuilding: permanent dwellings completed, by tenure, England, historical calendar year series. www.communities.gov.uk/documents/housing/xls/140912

10. ibid.

11. The annual figures can be seen here: DCLG and Office of National Statistics, December 2006. Housing Statistics 2006. Table 10.1, p128. http://www.communities.gov.uk/documents/housing/pdf/154124

12. Using government figures, Shelter says there were 676,000 empty properties in England in 2006.

13. There are 260,000 in England, according to DCLG, 2006. Housing Statistics Summary, Number 26. Survey of English Housing Provisional Results: 2005/06, p25.

A Divided Society

Ellie Keen — Sun, 30 Sep 2007 09:10:54 +0000

One of the fundamental criticisms of capitalism is that it produces enormous inequalities in income and wealth. These inequalities are not the product of effort personally made in the course of labour but of the division in the ownership of productive resources and the commercial and financial structure that is part of this pattern of ownership.

To put it more bluntly, the great majority depend for their income on the sale to an employer of their ability to work. A much smaller number depend for their income on the surplus they gain from the employment of others. The difference in rewards can be, and sometimes is, enormous.

This is not to assert that everyone falls into this stark division. There are some within our society who combine modest ownership with consistent personal effort. There are many shopkeepers, small traders and farmers who fall into this category. They, however, are not the recipients of huge incomes.

There are also some within the professions who enjoy a very comfortable income and life-style as a reward for their special knowledge and contribution. Similarly, there are some — of whom a small minority of professional footballers and the stars of screen and popular music are examples — who receive high incomes as a reward for their very unusual talent often accompanied by a short career.

In addition to those in society who are counted as ‘actively employed’ there are millions of others who are not in paid employment but who, nevertheless, make a very valued contribution to human welfare. Many combine more than one role. They go out to work and also work in the home, looking after a family or elderly or infirm relatives. Very few of the millions within these social categories have other than very modest incomes.

Finally, there are the pensioners, the unemployed and disabled people. The majority live on low incomes.

The stark fact about British society is that for many years now, including the years since 1997 when Labour was elected to office, the inequality of British society has not lessened. On the contrary, it has widened.

Only a few weeks ago it was widely reported that boardroom pay at Britain’s top companies soared by 37 per cent last year. Full-time directors received big increases in basic salaries, bonuses and benefits from share allocation and option schemes.

The average total pay of chief executives in these companies was said to be £2,875,000 per year. The percentage rate increase in their total pay was reported in The Guardian as approximately 11 times the rate of increase of average earnings for all employees and approximately 20 times the rate of inflation as measured by the consumer price index.

It was also widely reported that in the City of London alone, annual bonus payments amounted to more than £14 billion. These increases were higher than in previous years. But they follow a long-term trend during which the rewards going to the people at the very top of British industry, finance and commerce have been rising proportionately much faster than the pay of working people, small owners and pensioners.

This social contrast between the very rich and the rest of society is indefensible. When asked about the rise in income at the very top of society the Prime Minister, Gordon Brown, did not defend it but he did not condemn it. His reply, in substance, was that the ‘top people’ should exercise responsibility.

He offered this reply at a time when the government were denying the prison officers a very modest annual increase of 2.5 per cent recommended by an official pay review body. The government was insisting that this should be staged, the effect of which would be to reduce the annual increase to 1.9 per cent.

Pay review bodies, the members of whom are appointed by ministers, are normally set up where real collective bargaining is denied to the workforce — as, for example, the armed forces — or where the right to strike is forbidden by law. This latter provision applies to prison officers.

There is no justification for the government’s attitude to the recommendation made for the pay of prison officers. By no stretch of reason can it be argued that the recommended increase is unjustified. It is less than the average annual increase of other workers and it is very much less than the top people in British companies have given themselves this year. Why does a Labour government act in this way? It is wrong and the whole labour movement should say so.