Simon Whelan | ukwatch.net

Britain’s rich get richer even as recession begins to bite

tim — Wed, 14 May 2008 23:24:01 +0000

The choice of headline to mark 20th aniversary of the Sunday Times Rich List will hardly have given the newspaper’s editor sleepness nights: “Rich Get Richer under New Labour.” The same headline would suffice for each of the past 10 years.

But this time the uninterupted growth of wealth amongst the already super-rich takes place amidst a period of extreme economic turbulence, during which the living standards of working people have fallen sharply. As Sunday Times journalist Philip Beresford’s opening gambit illustrates: “Even as the storm clouds gather, Britiain’s super-rich have never been richer.”

Not only are the super-rich utterly impervious to the extortionate recent rises in the cost of living, but their wealth grows whether economic conditions are favourable or not. While house prices in the UK have begun to fall, reports in the media detail how the rarified West London housing market of the international super-rich is insulated from such downward pressures and continues to climb—albeit at a slightly slower rate.

The accumulated wealth of those on the rich list has grown to £412.8 billion, an increase of almost £53 billion from last year. Growth has fallen by more than a quarter, from last year’s rate of 20 percent, to 14.7 percent. Of this year’s top 10, only three were born in Britain. Indian-born number one Lakshmi Mittal’s wealth grew by an astonishing 44 percent, mainly by virtue of swallowing up more international steel producing facilities through mergers. Such business manoevres usually result in consolidation and redundency notices for staff who find their jobs duplicated.

In his new book on international elites David Rothkopf observes, “The rise of nation states produced national ruling classes. It would be odd if the current integration of the world economy did not produce new global elites—business people and financiers who run global companies.”

Writing in his Observer column about Rothkopf’s new publication, Will Hutton noted how Prime Minister Gordon Brown has surrounded himself with former employees of Morgan Stanley and Goldman Sachs. Jonathan Powell, former premier Tony Blair’s chief of staff, has joined Morgan Stanley and Blair himself receives a large stipend from Goldman Sachs.

The Sunday Times then addresses itself to the relatively tragic fate of British-based billionaires. Whilst the international super-rich are, in the words of the Sunday Times, “getting richer quicker,” by contrast British-born billionaires with substantial UK investments suffered from the economic slowdown far more than their international counterparts. Falls were expected in fortunes reliant upon British retail, property and investment. British-born Sir Philip Green, who owns BHS and TopShop, saw his wealth decline by 10 percent—losing £570 million in one year. Richard Branson lost £400 million off a previous £2.7 billion due in no small measure to the drop in Virgin Media’s share value. Vincent Tchenguiz, a British investor and property dealer, suffered a 76 percent fall in his wealth.

Rupert Murdoch’s flagship newspaper complains (in what will be seen as a warning by the Brown government) that “whereas we used to lead the field with the near-20 percent growth rates, our 14.7 percent increase this year seems positvely pedestrian.” Rich list lead writer Beresford points to contemporary increase of 22.6 percent in the wealth of the world’s super-rich and of a staggering 26.6 percent increase amongst Europe’s super-rich over the last year.

Beresford then complains about the new single payment of £30,000 annual tax levied on those deemed to be non-domicile (not resident) in Britain—irrespective of their actual wealth—despite this being little more than loose change for those on its list. The UK’s non-domicile rule in fact still allows the international super-rich to make London their home without paying taxes on earnings from abroad. And they pay very little or nothing on their British-based profits.

But Beresford is worried about bigger things to come. He notes that the storm clouds are gathering and worries that the super-rich have become a “convenient target,” writing, “In times of economic uncertainty, the gulf between rich and poor is rarely ignored by those looking for a convenient scapegoat.” By way of defence, the Sunday Times hails the money donated by a few of the super-rich to charity.

The degree of wealth disparity in the UK is astounding and Beresford is not the only commentator to note the increasing hostility towards the super-rich. A couple of days after the publication of the list, Dominic Lawson opened his weekly column in the Independent newspaper by stating, “If there is a bloody Bolshevik revolution in this country, I think I can guess the inflamatory pamphlet which will be waved by the people putting the wealthy up against the walls and shooting them. It will not be the Communist Manifesto. It will be the Sunday Times Rich List.”

Though decrying what he described as the “politics of envy,” Lawson states that “The 2008 edition, published just a couple of days ago, was more eye poppingly voyeuristic than ever: 110 pages of non-stop salivation over fortunes which the rest of us could only dream about.”

He then notes that the Archbishop of Cantebury, Rowan Williams, was interviewed only days prior to the rich list publication, telling BBC interviewer John Humphreys, “The more you have a disproportion between what people are earning and what they are worth, the more we have astronomical sums with no clear rationale behind them, the less credibility the whole thing has.”

Williams added that the enormous disparities between the super-rich and ordinary working people brings about “a degree of envy and cynicism ... that leads people to feel alienated from the rest of society.”

Lawson’s derision is not directed against inequality, but at those like Williams who presume to draw attention to the elephant in the room. The Archbishop’s sin is to make the obvious connection between the gargantuan wealth accumulated at the one pole of society with the increasing immiseration and insecurity at the other. Willliams, writes Lawson, “is one of those who believes that over the past decade under New Labour the least well off have got poorer as the rich got richer, and that the latter fact is in some way responsible for the former.”

Lawson spends the rest of his column arguing that inequality, regardless of repeated academic research findings, is not really growing. And besides, he pleads, any attempt to redistribute wealth through taxation is self-defeating.

But such statements—the mantra of Thatcher, Blair and Brown—ring increasingly hollow. In the UK millions of working people live a life of perpetual financial insecurity and crippling debts. They suffer the daily ignonimy of waiting nervously for the latest bank or mortgage statement, or looking on as petrol gauges and pay-as-you go utility meters tick over. Newpapers, even the upmarket broadsheets, are full of advice for readers about how to tighten their belts, how to reduce debt and avoid bankruptcy or how to save money on household shopping and utility bills.

While house prices rose and credit was readily available, the Labour government and a supportive media was able to dazzle sufficicent numbers of people with the illusion of rising living standards. No longer. Gordon Brown has constructed an economy built on unsustainable levels of debt. Not for nothing did Guardian economics editor Larry Elliott call his book on Blair and Brown’s economic policies Fantasy Island. That some commentators are now worried by the vulgar worshiping of money represented by the Sunday Times Rich List is out of fear of the social and political struggles that will inevitably be provoked by the onset of recession.

Brown Government Promotes Patriotism and Militarism

Ellie Keen — Thu, 27 Mar 2008 21:25:45 +0000

Faced with intractable problems, the Labour government of Prime Minister Gordon Brown has embarked on an attempt to promote British patriotism and militarism.

Domestically, the government confronts growing social inequality and an impending economic crisis that threatens to devastate living standards, while overseas Britain is still mired down in Iraq and Afghanistan. Such military setbacks have in no way lessened the British bourgeoisie’s ambitions internationally. Competition for strategic resources has rather seen the government reiterate its support for military intervention overseas.

Such a policy requires the silencing or marginalisation of dissent. To this end, together with the armed forces and the media, the government has set about trying to manipulate and intimidate public opinion.

Immediately prior to the fifth anniversary of the invasion of Iraq, the British Army launched a £2 million recruitment drive. The military is faced with a 10 percent drop in troop numbers because of a chronic inability to retain trained soldiers that has been brought on by the unwillingness to serve in Iraq and Afghanistan. The army also retained the services of a public relations company some 18 months ago.

Chief recruiter Brigadier Andrew Jackson is responsible for the launch of the new “One of the best” recruitment campaign, supported by Rugby Union England international Jonny Wilkinson. This is the first interactive campaign for army recruitment, and the public are encouraged to express their support for British troops. Conscious of the widespread opposition to the Afghanistan and Iraq occupation, the army is playing on sympathy for soldiers over their poor wages and substandard housing and the chronic lack of protective equipment for combat to legitimise militarism.

The campaign was spearheaded by the media’s lauding Prince Harry as a hero for his brief spell of duty in Afghanistan. Earlier this week, it was announced that Princes Harry and William are to host a party to raise funds for soldiers wounded in Afghanistan and Iraq. The “Help for Heroes” appeal, backed by the right-wing Daily Mail, is to take place in London on May 7. The princes, serving army officers, are to be joined by former SAS soldier Andy McNab and head of the Army, General Sir Richard Dannatt. Open to wealthy celebrities and individuals, the party is to be held at a secret location and will feature a military display and marching band.

The event was announced at the same time that the government set aside plans for a further withdrawal of UK troops from Iraq due in May. Last year, Brown had pledged that UK forces would be cut from 4,100 to 2,500 by next month. This has been delayed indefinitely as British forces in the south of the country prepare for a major offensive against insurgents.

The last weeks also saw a concerted campaign of official outrage and indignation over the supposed harassment of military personnel at RAF Wittering, near Peterborough. Service personnel had been instructed not to wear their uniforms in public because of alleged verbal abuse. The Conservative MP for Peterborough, Stewart Jackson, has since admitted that “The police don’t have records of any serious problems. My understanding is that it’s a small number of incidents of verbal abuse.” But this did not stop Brown from making a statement to the press that soldiers should be able to display their uniforms with pride and that civilians must respect and defer to uniformed service people in public for their “sacrifices” and their “public service.” The palace also issued a statement of concern.

The media campaign around RAF Wittering dovetails with the upcoming report Brown commissioned to be presented by Quentin Davies, a former Tory defence spokesperson who defected to New Labour, reviewing ways in which to improve the public’s attitude towards the armed forces. It is understood the report will encourage British military personnel to wear their military attire at all times in public. The aim is to condition public opinion to the sight of combat-ready troops on the streets.

In addition, the report is expected to recommend that local councils should organise homecoming parades for units returning from Iraq and Afghanistan. Soldiers wounded in conflict should be awarded Purple Heart-style medals at public ceremonies wearing full military regalia and with a full military band, to recognise their sacrifice. Football clubs and other organisations should also give free entrance to the military when dressed for combat. Other suggestions emanating from within the establishment include an Armed Forces Day, backed by the former chief of defence staff, Lord Guthrie.

Another Brown-commissioned report on “Citizenship: Our Common Bond” has been unveiled by Lord Goldsmith. The former attorney general, who legally sanctioned Britain’s role in the US-led invasion of Iraq, focussed on inculcating patriotism amongst school children, with a proposal that they be required to pledge allegiance to the Queen.

The proposed pledge would involve declaring “true allegiance” to “Her Majesty,” continuing, “I will give my loyalty to the United Kingdom and respect its rights and freedoms. I will uphold its democratic values. I will observe its laws faithfully and fulfil my duties and obligations as a British citizen.”

Goldsmith’s report also proposes ending the right of Commonwealth citizens residing in the UK and Irish citizens not resident in Northern Ireland to vote in British general elections. Incentives are to be given to students and young people to do volunteer work on behalf of charities, which the government is increasingly pushing as a replacement for state provision.

Inequality at 40-Year High

eddie — Thu, 09 Aug 2007 17:14:18 +0000

Social inequality in Britain is at its greatest in 40 years, according to research by the Joseph Rowntree Foundation. The polarisation of wealth between a very rich elite and the (generally working) poor will see the disappearance of the middle class in the near future, the authors warn. One quarter of the British population now suffer from relative poverty in a country with the world’s fifth biggest economy.

The Rowntree Foundation report Poverty, Wealth and Place explores the social and geographical topography of British inequality by combining various census data from 1968 until 2005. The research also utilised comprehensive maps based on census and survey data illustrating the changes in wealth and poverty over the intervening period. Led by Danny Dorling, Professor of Human Geography at Sheffield University, a team of academic researchers conducted four surveys of poverty and four censuses.They gathered data on consumption and the assets of the rich in order to present social and geographical maps of thousands of British communities.

A further report released simultaneously by the Rowntree Foundation, Public Attitudes to Economic Inequality, reveals a growing tide of opposition to the growing disparities that characterise every facet of British life. A majority of the British public surveyed believed that the gap between the rich and poor was too wide. Indeed, over the last twenty years a “large and enduring” majority have felt that social inequality is unacceptable.

The foundation found that households in already wealthy areas have become disproportionately wealthier and the rich live in areas separated from the rest of society. The research also found that the richest in society have not grown greatly in number over the past quarter century, they have just become richer. As their wealth explodes the rich and super-rich circle their wagons in fewer and ever more exclusive housing developments.

What the Rowntree authors call rich, average and poor are less likely to live next door to one another than the already highly stratified residential patterns of the 1970s. The rich and super-rich now tend to live in the outer suburbs and rural areas of the South and South East England.

The poor are increasingly residing in Northern and Scottish inner cities. Half of the population of inner city areas are poor. The poor now constitute a full one quarter of British society. Four and a quarter million of Britain’s children grow up in poverty stricken households.

Only days after the release of the Rowntree research, Roger Bootle wrote in the latest edition of the Deloitte Economic Review about how this geographical disequilibrium comes about. London and the south-east, writes Bootle, are economically outstripping other regions, especially the former-industrial regions like the east Midlands, South Yorkshire, the north-east, Wales and Scotland. These regions have been disproportionately affected by the drastic decline of manufacturing’s share of the economy. Echoing the concerns of the Rowntree research, Bootle said that left alone these trends will mean “the haves” are likely to become “have mores” and the income gap between rich and poor will continue to stretch.

The Rowntree research highlights how residential areas that today are home to some of the richest in society like Amersham and Chesham in Buckinghamshire and the Mole Valley in Surrey had a socially mixed population twenty-five years ago. Back in 1980 a majority of these districts’ populations were, in the language of the researchers, neither rich nor poor. Today only a quarter of the people living in the area fall into this category, whereas at least a third residing in these areas today are now counted in the wealthiest social category. Their geographical seperation from the overwhelmingly majority of society is completed by their private schooling, health care, childcare and recreational activities.

The coalescence of the richest layers of society pushes out both working class households and what was once known as the middle class, who as the research spells out more and more share their social and economic circumstances with the traditionally identified working class.

While the super-rich live in enclaves shut off from the rest of society, the very poorest households are increasingly geographically less concentrated. The geographical dissipation of absolute poverty across the country signals the increasing vulnerability of all working people. Poverty can strike working class and middle class families alike through redundancy, illness or bankruptcy. Contrary to the image promoted by the government and media, the majority of British workers suffering poverty live in private housing not public.

The research reveals that the proportion of the British population suffering relative poverty has almost doubled since the late 1970s. More recently the proportion of the poor suffering absolute poverty has declined. However, in-work benefits like Tax Credits introduced by New Labour usually only lift the worker concerned up from absolute, to varying states of relative poverty. The low paid casualised workforce in Britain enjoy little security and suffer frequent periods where work is rare and the household is plunged straight back into deep poverty. Vulnerable members of communities like single parents and the unemployed often go without meals and have utility services cut off. Accordingly debt has ballooned over recent years. Among poor households debt relative to income is 20-25 percent higher than the population in general.

The research points out how British relative poverty rates declined from 1968 until the late 1970s, but have continued rising ever since. Poverty was rising during the Wilson/Callaghan Labour governments, but exploded under the Conservative government of Margaret Thatcher elected in 1979. The Thatcher government consciously enacted social and economic policies designed to impoverish the majority and benefit the rich. The rather modest redistribution enacted along Keynesian reformist lines by post-war governments of both Labour and Conservative stripe was reversed and has widened ever since. Inequality continued to rise under Tony Blair’s jurisdiction at approximately the same rate as under his heroine, Lady Thatcher.

During the 1990s relative poverty rose while those suffering absolute levels of deprivation fell from 14 percent to 11 percent of households. However, over the same period the wealth of the richest one percent of society rose as a proportion of national wealth from 17 percent to 24 percent. The wealth of Britain’s 1,000 richest individuals has quadrupled since the election of Labour in 1997 and jumped an incredible 20 percent in the last year.

The widening gap between the rich and poor means the number of what the research calls “average people” is decreasing. Writing in the Guardian, Dorling noted, “Given current trends,only a minority of people may soon live in “normal” households. The majority will either not be able to afford to live a normal life— to avoid debt and take a holiday, or, at the other end of the scale, they will be concerned about inheritance tax, buying their way out of state provision, and how many holidays they can take.”

One of the authors of the report, Ben Wheeler, Puts things bluntly: “The middle group is disappearing. The gap between rich and poor has grown bigger, and, on current trends, will continue to get wider.”

Wheeler also described the growth of relative levels of poverty with an increasing number of households unable to maintain socially-accepted measures of well being—unable to replace worn out shoes or a television set or perhaps unable to afford a holiday once a year.

The research confirms the predictions made by Marx and Engels that society would increasingly separate between the two great classes: the proletariat and the bourgeoisie. Inequality grows apace because the accumulation of grotesque amounts of wealth in a tiny number of hands is not achieved by entrepreneurial genius, as the media would have us believe, but by the further exploitation of the working class. A process that is rendering the middle class increasingly proletarianised.

The Rowntree Foundation are not the only ones concerned about the political implications of the growth of inequality. The Guardian recently ran a week-long series of editorials on inequality by intellectuals and regular columnists. Madeleine Bunting states that the issue of inequality has shifted only relatively recently from “the lonely preserve of the class warriors” to a situation today where the issue is at “the centreground of politics.”

Today’s so-called middle classes are less well off than their parents. The average house price in London is almost £300,000 and people can no longer live in the areas they would once have expected to. Professor Dorling believes that contemporary London society is a model for Britain’s future. He notes, “Over time it has become clear that there is less and less room in the south for those who are neither rich nor poor; they have either moved out or become poor.”

See Also:
Report documents over one million "severely poor" children in UK

[2 July 2007]
"Poverty rises in Britain as money poured into Iraq war":http://www.wsws.org/articles/2007/apr2007/pove-a02.shtml

[2 April 2007]
"Britain: Brown delivers a budget for the rich that penalizes the poor":http://www.wsws.org/articles/2007/mar2007/budg-m23.shtml

[23 March 2007]
"London: the rich get so much richer under Blair":http://www.wsws.org/articles/2007/mar2007/lond-m10.shtml

[10 March 2007]

A Wanton Cover-Up

Alex Doherty — Mon, 02 Apr 2007 12:22:31 +0000

On September 14, 2003, Baha Musa, a 26-year-old hotel receptionist and father of two, was detained along with several others in a raid by the Queens Lancashire Regiment in the Haitham Hotel in Basra. Over the course of the next 36 hours, Musa was humiliated, starved, robbed, forced to drink his own urine, choked and repeatedly pummeled by perhaps dozens of British soldiers. He died as a result of the sadistic abuse.

Last month, a six-month court martial ended with the acquittal of the soldiers charged in Musa’s death. This was despite the Ministry of Defence using a High Court judge and leading barristers quizzing more than 100 witnesses.

Obvious similarities exist between the systematic abuse perpertated at Abu Ghraib and Guantanamo Bay by American military forces and the circumstances under which Musa was killed by the British Army. As with Abu Ghraib, a notorious prison under Saddam Hussein, the site where Musa was murdered had served as a military facility used by the Baathist secret police.

Court testimony revealed that Musa and the other detainees were beaten so severly they lost conciousness and were left lying in their own excrement. The detainees were also subjected to racist verbal abuse by their captors.

The coroner revealed that Musa died from asphyxia. Among the 93 seperate injuries from the countless blows inflicted were a broken nose and three broken ribs.

The case of Baha Musa is but the latest in a series of trials over the abuse and murder of Iraqi civilians that ended with no one being held to account.

Ministry of Defence figures reveal that since the invasion of Iraq four years ago, a total of 221 investigations have been conducted into abuse allegations involving British troops. All but 23 of the cases were closed without further ado, with the military deciding there was no case to answer. Only six cases of deliberate abuse have made it to a court, and just one of these has led to a conviction.

The judge’s reasoning for acquiting the defendents in the Musa case have not been made public, but it was evident in the trial that those involved erected a wall of silence to hide their crimes.

The Observer newspaper revealed that during the trial, the judge explained that the beatings received by Musa intensified while he was guarded by soldiers other than those charged in the court martial. Those men have never been brought to trial, but they apppeared in court as witnesses.

Referring to the 26-hour period when Musa and the other deainees were guarded by soldiers other than those standing trial, the judge advocate, Mr. Justice McKinnon, informed proceedings that “the ill treatment of the detainees continued and intensified. Yet none of those soldiers has been charged with any offence simply because there is no evidence against them as a result of a more or less obvious closing of ranks.”

William Blanche, the lawyer for Corporal Donald Payne, remarked, “Others were involved in this case and have got away with it scot-free.” Corporal Payne pleaded guilty to the lesser charge of inhuman treatment of prisoners. He was cleared of manslaughter because it could not be proved that he inflicted the fatal blows.

Tim Owen QC, defence councel for Payne, referred during the trial to evidence concerning soldiers not tried who “laid into the detainees throughout their guard period,” and added that “other visitors to the detention facility joined in assaulting the detainees.”

Owen continued, “One of the puzzling features of the Crown’s approach to this case is why on the face of this evidence [a senior army figure known as soldier A] and his men are not on trial in this court martial.” Payne’s lawyers claimed in his defence that their client was following orders.

Owen’s remarks suggest a more senior commander and the men under his charge were responsible for the worst of the beatings that killed Musa. Their absence from the dock indicates a cover-up by senior figures within the military. As yet, it is impossible to determine if Corporal Payne was directly guilty of Musa’s death, or whether he is being made the fall guy for higher-ups.

The court martial was also handicapped by claims of collective amnesia by members of the Queens Lancashire Regiment. When questioned, 10 members of the regiment used varieties of “I don’t recall” on no less than 667 occasions.

Reports state that during three and a half hours of cross-examination, one witness told the court 201 times that he could not remember the events concerned, whilst another witness under oath used a similar phrase on average every 40 seconds over a period of more than 30 minutes. Over the course of more than 30 hours in court, the soldiers claimed they could not remember events on average 22 times per hour. Lawyers involved in the trial said they had never before witnessed such wanton deception.

Amnesty International spoke of a “legitimate apprehension that a cover-up has ensued in respect of this case.” As the Observer noted, possibly dozens of men contributed to the murder of Musa by treating his detainment as a blood sport and his suffering as a depraved form of entertainment. The British military is clearly more concerned with protecting more senior figures in the command structure and, just as importantly, concealing the fact that the torture of prisoners is by no means uncommon.

The trial revealed that captives detained under the flimsiest of pretexts were hooded and forced into stress positions for hours on end. Stress positions are banned under international law as a form of torture and were supposedly banned by the British Army in the 1970s.

The murder of Baha Musa is a lesson in the realities of the occupation of Iraq. Far from being the friendly and disciplined force still depicted in the British press, the British armed forces are carrying out the task for which they are ultimately trained: the ocupation of Iraq and, when needs be, violent suppression of the Iraqi people. The trial has demonstrated that the British occupation force enjoys a virtual carte blanche to torture and murder civilians.

British Child Soldiers

Alex Doherty — Thu, 08 Mar 2007 13:29:01 +0000

A recent written answer to a parliamentary question from the Liberal Democrats revealed that the British Army sent 15 soldiers under the age of 18 to fight in Iraq, contravening a United Nation’s protocol on children’s rights.

The UN Convention on the Rights of the Child, Article 38, (1989) insists: “State parties shall take all feasible measures to ensure that persons who have not attained the age of 15 years do not take a direct part in hostilities.” The optional protocol on the involvement of children in armed conflict to the Convention that came into force in 2002 stipulates that its state parties “shall take all feasible measures to ensure that persons below the age of 18 do not take a direct part in hostilities and that they are not compulsorily recruited into their armed forces.”

Prime Minister Tony Blair’s Labour government ratified the optional protocol against the deployment of those aged 18 and under to war on June 24, 2003. At almost the same time it was sending them to participate in the occupation of Iraq.

In response to the Liberal Democrats’ questioning, Defence Minister Adam Ingram admitted that Britain had deployed under-18s to Iraq over a two-year period between June 2003 and July 2005. Claiming that it was the result of a mistake, Ingram excused the government of any culpability by saying that most of these had been despatched to the war zone only shortly before their eighteenth birthdays. Those who saw combat, he said, were withdrawn after only weeks of combat action.

Blaming a shortage of available soldiers, Ingram was quoted by the BBC as stating, “Unfortunately, these processes are not fallible and the pressures on units prior to deployment have meant that there have been a small number of instances where soldiers have been inadvertently deployed to Iraq before their eighteenth birthday.”

The Ministry of Defence admitted that army commanders were put under pressure by successive deployments to Iraq and other war zones and consequently broke international rules.

Children can join the British army aged 16 if they have their parents’ consent and approximately 40 percent of its military forces have signed up when they were just 16 or 17 years old. Seventeen-year-old British army soldiers have also seen conflict in the Malvinas/Falklands War and in the first Gulf War.

The government’s admission that not only were under-age soldiers sent to fight an illegal war in Iraq, but at least four of the 15 were females, caused barely a ripple in the British media. Hardly any questioned the policy of the British army in recruiting children young enough to still attend school.

At just 16 years old, the UK armed forces have the lowest recruitment threshold in Europe and the largest number of those recruited aged below 18 years of age. It is the only country in Europe that deploys 17-year-olds into armed conflicts.

But widespread unpopularity over the Iraq war and the Blair government’s policy of aggressive military intervention overseas means that the army is struggling to retain its current numbers. The highly suspicious deaths of several young recruits at the army’s notorious Deepcut barracks and the fate of veterans from recent conflicts like the first Gulf conflict have also had a negative effect on the appeal of joining the armed services. In addition, recent furores concerning the wretched state of army accommodation, pay and conditions have exacerbated the recruitment crisis.

In 2006, 14,000 left the army and only 12,000 joined up. Teenagers make up the bulk of recent intake. Last year, 2,760 new recruits to the three armed services were 16 years old and a further 3,415 were aged 17. In contrast, just 980 recruits were aged 23 and just 160 aged 28.

The maximum recruitment age has been raised from 26 to 33 years old. The army has also undertaken a relatively successful recruitment drive in the former Commonwealth and other countries. This has yielded 6,000 new recruits, with a further 3,000 Gurkhas from Nepal.

As a result one in every ten British soldiers is a foreign national. But this has worried some senior figures, who are concerned it will affect morale and create divided loyalties. Because of this the army has begun focusing its attention on even younger British children, stepping up its recruitment drive in schools.

Figures released under the Freedom of Information Act revealed that Scottish school recruitment visits have increased more than tenfold. In 2003/2004 there were 14 visits to Scottish schools, but during 2005/2006 this rose exponentially to 153. Such figures are a damning indictment of Labour controlled councils, who must first give permission to the army to recruit within schools.

Writing in the New Statesman recently, Stephen Armstrong revealed how working class school pupils aged between 14 and 16 are being bussed regularly from poor urban areas to what the army calls an “encounter day” with the Duke of Lancaster Regiment. There the children do rifle drill and move model SA80s from shoulder to arms length and back with Officer Nick Froehling.

According to the report, rather than use the instruction “At ease,” the Officer uses the informal “Chill,” supposedly so as not to alienate those under his charge. The pupils also learn to use a climbing wall, negotiate an obstacle course and complete a one-mile run. Having successfully completed these tasks, the pupils receive a certificate signed by Lieutenant Colnel L.J. Pitt, commander of recruitment in the northwest region.

All three British armed forces aggressively recruit through advertising that portrays a career in the forces as akin to a student gap year. Future career prospects and leisure activities are emphasised, while the possibility of killing and being killed is glossed over. The certificate awarded to the school pupils comes with a glossy teen magazine called Camouflage, a DVD and assorted recruiting paraphernalia.

A recruitment process that begins when the child is just 14 is a measure of the pressure weighing upon the British armed forces. Juveniles offer a more vulnerable and uninformed demographic base from which to recruit. Two of the children who attended the event reported by the New Statesmen told the reporter they wished to join up.

Warrant Officer Chris Jones told the New Statesman that the current casual employment opportunities offered by the construction industry and the increasing numbers of children stopping on at school or college to study A levels is not helping the recruitment shortfall. Armstrong notes that while the army refuses to publish figures it remains clear that much of its intake comes from the most disadvantaged sections of the working class.

Colonel David Allfrey is the officer with responsibility for child recruitment through the Camouflage youth information scheme. He told the New Statesman how the armed forces had to work to hold the interest of children interested in joining up, but who were too young to do so. Since the Camouflage strategy was enacted in 2000 the army has processed 271,000 youngsters through their initial involvement with the magazine and associated marketing. Stephen Armstrong reports that no less than 18 percent of this year’s recruitment intake were Camouflage members, many of whom signed up when the army visited their schools.

Taxing the Poor

Alex Doherty — Mon, 25 Sep 2006 15:32:36 +0000

Research by the free market think tank, the Centre for Policy Studies (CPS), has revealed how the burden of taxation has fallen heaviest on the working class and the poor under Prime Minister Tony Blair.

The CPS research shows that the poorest households in Britain are now paying a higher share of taxes and simultaneously receiving a lower share of state benefits than before Labour took power in 1997. It finds that if the poorest fifth of British households paid the same share of total taxes and received the same share of total state benefits as they did in 1996-7, they would be at least £500 better off.

For a significant section of the population, making ends meet is an unending struggle. Charles Elphicke is a tax partner in a leading international law firm and author of the CPS study, entitled Robin Hood or Sheriff of Nottingham?: Winners and Losers from Tax and Benefit Reform Over the Last Ten Years. He states, Almost five million households have an average pre-tax and benefit income of just £4,280.

The extra taxation levied on the poorest fifth of British households since Blair came to power amounts to £56 per household. The total amount of benefit lost amounts to a further £475 for that section of society least able to afford it.

In the immediate post-war period the central tenet of Labours reformist programme was a progressively redistributive taxation system. This has been replaced by one that is regressive and targets the poor for taxation, both direct and indirect, in order to shift wealth towards the super-rich. That Chancellor Gordon Brown has been the key architect of this punitive system explodes the efforts to promote him as Blairs successor based on the claim that he is more traditionally social democratic.

Elphicke reveals how the poorest five million British households pay at least £1,000 in income and council tax on their meagre incomes. The poorest fifth of British households accounted for 6.9 percent of all taxes paid in the financial year 2004/2005the last tax year for which detailed figures are available. When Labour came to power in 1997 the tax burden upon the poorest fifth of families was 6.8 percent. During the same period the share of state benefits payouts to the poorest Britons dropped from 28.1 percent to todays figure of 27.1 percent.

The second poorest fifth of British society have fared little better. The average income of this section of working class households is just £11,000less than half the so-called average wage. This section of the working class, comprising semi-skilled workers and service sector employees, pay 10.1 percent of the nations taxes, whilst their share of benefits has fallen from 26.2 percent to 25.2 percenta loss of £427 per household. This is a staggering situation, with 40 percent of the population earning less than £11,000 and half earning less than £22,000.

The CPS is a pro-Tory body established by Margaret Thatcher and Sir Keith Joseph in 1974 to assist in the Conservative Partys policy of rolling back the welfare state. It is seeking to make hay at Labours expense, but is no means advocating a return to wealth redistribution.

On the contrary, the most privileged social layers are demanding that their own tax burden be further reduced. The highly paid journalists on the Times and Telegraph newspapers, for example, are promoting the fiction that the upper-middle-classes are paying above the rate of inflation on things like private school fees, council tax and energy costs. The super rich are also being unfairly penalised, they claim, because they spend more on luxury items like sports cars, mansions and other items whose prices are rising fastest.

Their arguments are based on the claim that the government has shifted from a retail price index (RPI) to a consumer price index (CPI) to measure inflation and set its tax and benefit levels. This excludes house prices, school fees, utility bills and such vital necessities as household servants, they complain.

Indicative of the type of bile directed against the working class is an article by Telegraph journalist and media adviser to the Conservative Party, George Trefgarne. He wrote, So, if you are young and, say, wear tracksuits, live on benefits in a council house, scoff processed food and play computer games, inflation has indeed been non-existent in the past few years. But for middle-class people, who, yes, drink freshly squeezed OJ, and who buy their home and who pay school fees and, of course, taxesor for older people who require expensive residential careprices have been shooting up. Perhaps the CPI should stand for the Chav Price Index.

In reality, the CPI does include house prices, utilities, school fees and servant costs and will also include university fees come the autumn. And whereas the government has switched to the CPI for calculations on inflation, it in fact still utilises the RPI when calculating taxes, benefits and pensions. The RPI includes luxury goods like champagne and private education fees, but these have actually risen at a slower rate than essentials like fuel and housing costs.

According to research carried out by John Hawksworth, chief economist at PricewaterhouseCoopers, it is the poorest section of the working class who have suffered most from the 29 percent increase in energy prices over the last year. This has disproportionately impacted on the poorest third of British households, which spend a greater proportion of their income on energy than the better-off.

Hawksworth has estimated the inflation rate suffered by ten income groups into which he divides the British population based on how they spend their money. Higher energy bills are the reason why since 2005 inflation has become more pronounced for the lowest four of his income groups. The poorest two deciles of British society actually pay higher rates of taxation than the richest 30 percent, mainly due to the proportion of the budgets of poorer families taken up by energy bills and, to a lesser extent, food costs.

Rich List Celebrates Unprecedented Wealth

Alex Doherty — Mon, 15 May 2006 20:59:13 +0000

The publication of this years annual Sunday Times Rich List records the enormous enrichment of a tiny layer at the very apex of British society. The rich are now so much wealthier than ever before that the Times raised the threshold for entry to the list by a further £10 million since 2005, to a record £60 million.

Back in 1989, when the newspaper began documenting the fortunes of the wealthy, £60 million guaranteed a place in the top 100. Today ten times that amount is required to achieve a similar placing.

Under the celebratory headline Wealth scales new peaks, Times journalist Philip Beresford explained that Britains super-rich are on a roll and that, for them, Life just gets better and better.

The combined wealth of Britains top 1,000 individuals now amounts to an incredible £300 billion. This represents a 20.6 percent increase over last year and one of the highest increases since the list began. Fuelled by a rising stock market, an over-inflated property price bubble, corporate takeovers and City bonuses, the already super-rich have enjoyed a bumper harvest over the last year.

The New Labour government of Prime Minister Tony Blair has played a key role in ensuring this bonanza. In 1997, the wealth of the top 1,000 stood just short of £100 billion. In the meantime it has tripled. Beresford himself noted that, The rich have got much richer under Labour than they ever did in percentage terms under a Tory government.

He continued, The rich have little to worry about from new Labour making life uncomfortable. Recent revelations about party loans and rich donors show that relations between the Blair government and the rich are among the cosiest on record.

And given the importance of the overseas billionaires in propping up luxury London and the southeast, dont expect any government tax crackdown on them.

For two years running the same individuals have led the list in first and second place. The Indian-born steel baron Lakshmi Mittal is the richest person living in Britain, with wealth of almost £15 billion. Mittal ranks at number three in the worlds richest people. Second place is the Russian-born oligarch Roman Abramovich with almost £11 billion.

Mittals wealth is indicative of wider tendencies associated with the globalisation of capitalist commodity production. Like many of the 106 industrialists on the list, he owns no production facilities within the UK. An exception is James Ratcliffe, who made his money buying up mothballed and prematurely retired chemical production facilities on the cheap.

Behind Mittal and Abramovich are a record number of 54 billionaires, up from 40 in last years list. The vast majority are not involved in genuine wealth creation as such, merely the transfer of existing wealth away from the mass of society into their own pockets.

The parasitic character of wealth accumulation today is epitomised by the growth of hedge fund billionaires. Some 43 on the list are described as hedge fund stars out of a total of 152 individuals involved in financial services.

The rise of internet gambling and especially poker sites floated on the London stock exchange has furnished the pockets of new entries into the list. Co-founders of Part Gaming Russell De Leon and his wife Ruth Parasol have accumulated at least £2 billion out of gambling. The Blair government recently gave permission for the building of a series of so-called Super Casinos in the UK. Academic research demonstrates how the profits of such establishments will be made from the exponential rise in gambling addiction amongst those least able to finance such pursuits.

The British property market also continues to provide major investment opportunities. Up from last years 198, 211 on the list derive their wealth from land ownership and/or property. The geographical concentration of the super-wealthy continues, with the number of multimillionaires residing in Britains south-east, particularly London, amounting to at least 52 percent of the 1,000 richest individuals. This is the highest figure the Sunday Times has recorded.

Contemporary residential mobility patterns in Londons most expensive districts offer an insight into the unprecedented amounts of money at work.

The head of the London-based residential sales for elite estate agents Knight Frank, Dick Ford, told the Guardian that ten years ago the palatial early Victorian villas in Kensington Palace Gardens were considered too expensive to sell.

Only an embassy or some kind of institution would take them. Now everybody wants them as private houses, he said.

Four super-rich billionaires, including Mittal, own private residences on the street. Mittal paid just over £57 million for the KPG address in 2004. The previous owner was Baron de Reuter, founder of Reuters news agency.

Another favourite London residence for the worlds super-rich is Bishops Avenue in East Finchley. A modest five bedroom house costs £3 million, but Toprak Mansion with 28,000 sq ft, known as Top Whack Mansion by estate agents, is on the market for £50 million. Mittal also owns a property called Summer Palace right next door. Neighbours include pornography magnet and owner of the tabloid Express newspaper Richard Desmond, who owns two properties on the street.

A significant and growing international contingent amongst the super-rich are attracted to Britain by lax taxation rules. The non-domiciled tax rule allows the super-rich to avoid paying any tax to the British treasury on wealth extracted overseas.

David Harvey of the Society of Trust and Estate Practitioners, a London-based association of tax lawyers and financial advisers to the super-rich, cannot speak highly enough of London. If youre looking to avoid tax legally, youre as well going to London as anything else.

Seb Dovey of London-based wealth management consultancy Scorpio Partnership said that while London could not yet compare with Switzerland as a banking centre, it does rank above any other European city. If youre an emerging rich person or multi-billionaire, he explained, London is the place to be. Those from the Middle East and India would use Switzerland as a bank deposit location, and their active money in play would be managed out of London.

Another study of the spending habits of Britains super-wealthy by Tulip Financial Research estimates that the thousand richest individuals in Britain have enjoyed a 79 percent increase in liquid assets over the last five years.

In contrast, 30 percent of the population have zero liquid assets. Millions of working people and their families live a hand-to-mouth existence and are increasingly reliant upon credit, loaned at extortionate interest rates, just to keep debt collectors from their door.

Privatising Public Housing

Thu, 17 Feb 2005 19:56:54 +0000

The Blair government is to exacerbate the already acute crisis in public housing by encouraging families to purchase shares in newly built so-called affordable housing and existing housing association properties.

The government unveiled its five-year plan for housing after a study by the Halifax Bank showed that first-time buyers could not afford to buy a home in 92 percent of UK towns.

Rather than a massive expansion of social housing to meet demand, however, the governments solution will make the current housing crisis even worse. Prime Minister Tony Blair said recently that his government intends to increase owner-occupation by 10 percent from the present 70 percent over the next decade. This would require a further 2.5 million households to become owner-occupiers.

Blair has argued that the impetus for what amounts to the privatisation of public housing is to increase social mobility, claiming that those without housing equity to draw upon are unable to move up the social ladder.

This argument is spurious, as it ignores the fact that the majority of the British population currently living in poverty are within the private housing sector, and that the inability of many people to afford a roof over their heads is the direct result of successive government efforts to drive down wages and conditions for the mass of the population, whilst providing a bonanza for the super-rich and financial speculators.

The governments latest proposals are a continuation of that same big business agenda. Writing in the Guardian newspaper, Labours general election coordinator, Alan Milburn, explained, Owning assets helps create a buffer for people in times of crisis. It encourages people to take more responsibility for themselves. There is a proud Labour movement tradition of self-help. It is time to reinvent it for todays world.

Twenty-five years ago, the Conservative government of Margaret Thatcher passed legislation allowing council house tenants to buy their homes; this resulted in 1.6 million homes taken out of the public sector. Such has been the chaos produced that some local authorities, especially in London, have had to resort to renting former council properties from the private sector in order to house homeless families under their jurisdiction. They are regularly forced to pay up to three times more on the market than what they themselves charge their local tenants for similar properties.

London alone currently has 60,000 households in temporary accommodation and almost half a million children living in overcrowded conditions. The stock of social housing in the capital fell by 50,000 between 1991 and 2002. It is estimated that 120,000 new and affordable homes are required each year to keep pace with demand.

Thatcher stopped short of allowing housing association tenants to purchase their homes, and for the last decade, the housing associations have been amongst the main providers for the poor and elderly, renting out some 1.45 million homes in England.

The Blair governments measures will reduce even this meagre safety net, as the emphasis is placed on encouraging owner-occupiers. In cahoots with the banks and building societies, Labour is proposing to sell first-time buyers a three-quarter share in homes retailing at £60,000.

Not only will this lead to a further contraction in available housing stock, but it will result in greater indebtedness for many workers and their familiesespecially as many economists are forecasting a crash in house prices by as much as 30 percent.

In the past four years, the combined value of British housing has soared to an unsustainable £3.1 trillion, up from £2.2 in 2001. In the mid-1990s, houses cost three-and-a-half times annual salaries; contemporary costs are six times greater. Consequently, the age of first-time buyers rose from 28 then to 34 in 2003.

The last time house prices fell precipitously in the early 1990s, tens of thousands of families were made homeless through repossession and others were left with homes worth less than what they paid for them.

The financial institutes involved in the governments proposals are certain of a good return, however. The new project is to be a public-private initiative, worth a potential £1 billion. Lenders will keep a 25 percent or more stake in the property, while the buyer takes out a conventional mortgage on the remainder. When the property is sold, the lenders retain a percentage of the sale to recoup their stake. The housing will be constructed on public landincluding 100 former National Health Service sitesheld by a government agency, and when the house is sold, the value of the land will go back to the agency.

The housing associations will be offered first refusal to buy back their former property if the owner subsequently moves. But, given Labours free-market ethos, this can only mean that the associations will have to pay the market price on the house. Any subsequent period of rapid house price inflation, therefore, could render it impossible for housing associations to retain their stock. Yet, the housing associationsmany of them charitiesrequire their assets in order to borrow more capital to build more rented properties.

A more likely outcome will be that the new homes will eventually transfer entirely to the private sector.

The governments scheme is a development from the erroneously named Key Worker scheme that arbitrarily discriminates against those not considered crucial to the operation of public services, such as police or nurses.

In a January 27 article entitled Just in time for the crash, the Economist questioned the wisdom of introducing a shared ownership scheme when the housing market is quite possibly on the verge of a collapse in prices. It wrote, The drive to get people into home ownership is as good a sell signal for the housing market as any forward indicator. If house prices enter a long period of decline or stagnation, poor people who take up the governments offer could find themselves in possession of a burden, not an asset.

The Woolwich Index of house prices clearly shows that when the housing market collapses, the steepest falls occur in one-bedroom flats of the type common in shared ownership. Working class occupiers are the least able to withstand financial problems because they have little in the way of savings, in no small part because buying their part-share has stretched their already limited finances. Increases in interest rates could also have a calamitous effect upon those attracted to the scheme.