Contrast the Government's Attitudes to City Bonuses and the Unemployed
Contrast two news stories over the last week.
On Thursday it was confirmed that City Christmas bonuses this year will come close to £9 billion, with the average payout for Goldman Sachs employees amounting to £320,000 and with 4,200 city workers gaining over £1 million each. This is an increase of 18.3% on last year.
Some church leaders have condemned the obscene scale of these bonuses but we have heard not a peep out of Government Ministers in response except from the Chancellor of the Exchequer who has recently warmly praised the City for its income earning success.
Contrast this with today's speech by Secretary of State John Hutton, which launched an attack on the unemployed following the publication of a leaked memo that revealed the Government is gearing up to remove all benefits from unemployed people who he claims "play the benefits system" and refuse offers of work.
I wonder how many of these unemployed were offered jobs in the city?
John Hutton's speech was clearly designed as part of the softening up of the media and MPs for the debate on the Welfare Reform Bill taking place when Parliament resumes in January.
This debate should be broadened to include the much more important and wider issue of inequality in our society and the role of taxation as well as welfare payments.
Prem Sikka and Austin Mitchell's recent booklet, "Pensions Crisis: A Failure of Public Policymaking," highlights the policies which have contributed to this increasing inequality.
Whilst John Hutton lectures the unemployed the Tax Justice Campaign discloses that tax avoidance by the rich is resulting in between £90 to £154 billion uncollected taxes widening the gap between rich and poor to the extent that we now live in a society which is more unequal than at any time over the last century.
According to the Government's own statistics, when New Labour was elected in 1997 the most wealthy 1% in our community owned 26% of the marketable wealth. In 2003 the wealthiest 1% owned 34%. The top 50% now owns 99% of the wealth.
Just to even up the situation a little I suggested a short while back a windfall tax on city Christmas bonuses of 10%. Of course the Treasury and Number 10 refused.
As grotesque inequality in our society continues to be ignored we are increasingly witnessing our country slowly but surely replicate the US model of extremes of high crime, alienation, poverty and political disengagement.
Labour in government could offer an alternative but only if we accept inequality is an issue to be addressed.
On Thursday it was confirmed that City Christmas bonuses this year will come close to £9 billion, with the average payout for Goldman Sachs employees amounting to £320,000 and with 4,200 city workers gaining over £1 million each. This is an increase of 18.3% on last year.
Some church leaders have condemned the obscene scale of these bonuses but we have heard not a peep out of Government Ministers in response except from the Chancellor of the Exchequer who has recently warmly praised the City for its income earning success.
Contrast this with today's speech by Secretary of State John Hutton, which launched an attack on the unemployed following the publication of a leaked memo that revealed the Government is gearing up to remove all benefits from unemployed people who he claims "play the benefits system" and refuse offers of work.
I wonder how many of these unemployed were offered jobs in the city?
John Hutton's speech was clearly designed as part of the softening up of the media and MPs for the debate on the Welfare Reform Bill taking place when Parliament resumes in January.
This debate should be broadened to include the much more important and wider issue of inequality in our society and the role of taxation as well as welfare payments.
Prem Sikka and Austin Mitchell's recent booklet, "Pensions Crisis: A Failure of Public Policymaking," highlights the policies which have contributed to this increasing inequality.
Whilst John Hutton lectures the unemployed the Tax Justice Campaign discloses that tax avoidance by the rich is resulting in between £90 to £154 billion uncollected taxes widening the gap between rich and poor to the extent that we now live in a society which is more unequal than at any time over the last century.
According to the Government's own statistics, when New Labour was elected in 1997 the most wealthy 1% in our community owned 26% of the marketable wealth. In 2003 the wealthiest 1% owned 34%. The top 50% now owns 99% of the wealth.
Just to even up the situation a little I suggested a short while back a windfall tax on city Christmas bonuses of 10%. Of course the Treasury and Number 10 refused.
As grotesque inequality in our society continues to be ignored we are increasingly witnessing our country slowly but surely replicate the US model of extremes of high crime, alienation, poverty and political disengagement.
Labour in government could offer an alternative but only if we accept inequality is an issue to be addressed.
posted by John at 5:28 PM
21 Comments:
It beggars belief that the city complains so much about the tax on pensions and yet they still can afford such bonuses. - It is on these payouts that our pensions are being frittered away.
I wouldn't be surprised if endowment letters will go out again this year advising mortgagees that there will still be a shortfall.
Yes, there should be a windfall tax and this could be used to finance some sort of Bond system to protect pensions' victims.
John Hutton's attack on the unemployed who "can work, won't work" is a disgrace. The reason many migrant workers from Eastern Europe are seemingly able to find jobs so easily is of course because they are ripped off by employers who don't pay the minimum wage.Is Hutton aiming to be the new Norman Tebbit?
Is Hutton aiming to be the new Norman Tebbit?
Is McDonnell aiming to be the new Chairman Mao?
John has once again highlighted some key issues surrounding income and wealth inequality in the UK.
I was wondering if John had any thoughts regarding the much ignored problem of rural poverty. As somebody who grew up in rural West Sussex, I think the urban middle class elite often forget the problems facing the rural poor.
Rural poverty is a very different poverty to urban inner city poverty. It is poverty which is largely unseen, means isolation for those involved and less opportunities to get out of the poverty trap they find themselves in.
John has once again highlighted some key issues surrounding income and wealth inequality in the UK.
I was wondering if John had any thoughts regarding the much ignored problem of rural poverty. As somebody who grew up in rural West Sussex, I think the urban middle class elite often forget the problems facing the rural poor.
Rural poverty is a very different poverty to urban inner city poverty. It is poverty which is largely unseen, means isolation for those involved and less opportunities to get out of the poverty trap they find themselves in.
John has once again highlighted some key issues surrounding income and wealth inequality in the UK.
I was wondering if John had any thoughts regarding the much ignored problem of rural poverty. As somebody who grew up in rural West Sussex, I think the urban middle class elite often forget the problems facing the rural poor.
Rural poverty is a very different poverty to urban inner city poverty. It is poverty which is largely unseen, means isolation for those involved and less opportunities to get out of the poverty trap they find themselves in.
On forcing the unemployed back to work: as with most of these pronouncements people need to look behind the soundbites. For example when I was claiming JSA several years ago one of the adviser's I saw at the jobcentre tried to get me to apply to return to work for a part of the civil service where I had been bullied and also legitimately signed off sick as the doctor advised that I shouldn't do such irregular shifts (whether bullied or not) as they were making me ill with severe migranes. Also as I had a case against the dept for the bullying in which it was my word against theirs as I hadn't been there long enough to take it to a tribunal unfortunately,(even though my union advised me that I had a good case), but the dept were not going to take me back to the same work in these circumstances were they? and it would have caused me extreme stress if they had. Maybe I just got a badly trained adviser there but I don't think this is the way to get the unemployed back to work! Incidentally the salary had been quite good as it had included a substantial shift allowance although I'd say it wasn't worth the damage the irregular shifts at the time could do to your health so it wasn't about the money.
I know that you can get rapid reclaim forms if you are on and off JSA working some hours for small amounts of money but when I had it and also dealt with people on it while working for an MP I found that the way the systemn was set up was that if for example a man was signed up for a short course of forklift training, which was pretty much certain to mean he would be very employable in this area afterwards and which should therfore definitely lead to a job in practice the JSA systemn would demand that should the man be employed for ONE DAY temping as say a labourer in the time before the course started he would then lose his right to do the course as he was deemed employed. As I said I think they're trying to eliminate the is sort of situation now with rapid reclaim, but you still have to sign off and reapply as a new claim which must put people who don't understand the systemn off.Maybe someone can update me if this has changed but I think there have been a lot of lost opportunities for people who could have trained or do have skills but who have been handicapped by these kind of mad situations. As for the New Deal well I don't qualify for it being too old for it and yet I can't afford childcare myself but don't get it paid (as I am married and so my partner's income is taken into account) so I can't go on one of their graduate training schemes should there be one in an area in which I have skills or potential, (as far as I know they're only in businessy areas anyway which isn't my area at all but it would be nic enot to be effectively excluded from them should I ever need to go on one).
I'd like to know the details of these so called offers of work that the unemployed are supposed to have refused.
I remember hearing some years ago that Gordon Brown was going to do a scheme to help people who didn't have a car but needed to borrow one to get to interviews or work as when it was explained to him that some people physically couldn't get to job interviews etc he did want to to help but I don't think that much has come of it nationwide or we'd know about it.
How about some free driving lessons (with childcare if necessary) Gordon?! Would probably work out cheaper as well (though you need to look at the long term gains to the economy of less unemployment in this way rather than the short term cost)than all this forcing square pegs into round holes.
With the teacher training situation they did start funding the course decently which is crucial in this area as the students tend increasingly to be mature returnees to study who can't just give up all their existing financial commitments, may have kids etc etc but I think the reason they've continued to have problemns recruiting people because the TTA adverts seem to me to be all about money. They try to mention general inspiration to teach but it rings a bit hollow next to all the boasts of the golden hellos you can get and I think that they are attracting people for the wrong reasons who don't really have a "vocation" to teach which would explain why they still have a high drop out rate.
The life coaching (or cosmic energy if you're Noel Edmonds) books around at the moment would tell you to follow your dream rather than going for the nearest safe, well paying job while carving out your career. There's something in this as we're never very good at things if our heart's aren't in it and although it may be necessary to take temporary jobs along the way we ought to be able to live in the kind of society where we will get to where we want to be in the end so we can't fail as tbe books would say (as if we do we just get right back up again and keep on trying until we succeed anyway). As can from the now phenomenal sucess of the "green", ethical/organic sort of companies that we're now all using (I hope!) which also are usually the sorts of companies who know that it will pay them (literally and figuratively) in the long run to treat their staff well we can discount the argument that we have to have raw capitalism based on exploitation have growth. The trouble is that the Blair/Brownites don't get this as they are still suffering from the massive financial hangover after the last recession before they came into power
Didn't that British man who was arrested over Enron live in a MANSION I'm sure I saw on tv recently? I think only he and his wife lived there, in any case not enough people to fill such a grand house, must have been bought with all his bonuses...
Is Hutton aiming to be the new Norman Tebbit?
No. I expect that the talk is tougher than what's being put into practice. New Labour are not totally bankrupt in terms of their morals and principals, but what they are is absolutely convinced that Britain is very right wing and the way to stay in power is to outflank the Tories on their right. "They talk tough but they vote soft" - a line you may have heard uttered a few times - it shows more about how Blair wishes to be perceived than it shows about Blair or the Tories' crime policies.
Is McDonnell aiming to be the new Chairman Mao?
No. Just because, uh, he's no closer to Mao than Howard to Pinochet. The biggest difference in both cases being that neither are murderers and torturers. But even the economic and social policies are no sort of perfect reflection. Um. Hard to criticise this point because it seems obviously wrong and has no supporting statements and arguments.
Some attacks to Conservative and Libdem policies would be welcomed too. They're the real opponents in the end, not the government.
I thought we were attacking conservative policies. ;-)
The Lib Dems and Conservatives are the enemy, but they're not in power. New Labour is behaving like a Tory Government in many respects, and needs to be condemned.
We're not in the run up to the election so John is right to focus on this. As much as I hate the Lib Dems both locally and nationally, I've not heard anything as right-wing from any Lib Dem on the unemployed.
Right 2 thoughts, as a labour Govnt we should be condemning companies giving out huge bonuses whilst not even paying their workers enough to live on I'm thinking Goldman Sachs and the T & G dispute. Wage equality must be an aim and an achievable reality of any labour Government.
Tho we need to start getting people off incapacity benefit and I totally agree in cutting the benefits of able bodied people who have been off work for more than 6 months. There are plenty of jobs out there and there is no exuse for not getting one. I don't like doing low paid jobs either but thats life, it sucks sometimes.
Also the more people we have in work and especially low paid jobs, the more we need to focus upon a trade union movement that delivers for its members and is rigidly focused on their needs.
But the logical thing would be to progress from a minimum wage to a living wage in stages. The more we pay people the more they are likely to stay in a job and the more likely they are to actively participate in the economy.
A soft socialist said: "There are plenty of jobs out there"
You just dismissed the economic cycle, structural unemployment, regional differences and personal situations, all of which can affect one's ability to find employment. Cutting benefits doesn't get people into work. It just makes people who depend on benefits that bit poorer - not what Labour is about.
Yes there should be an active labour market, with government support for the unemployed, job creation, encouragement to find work and so on, but saying there is "no excuse" for not having a job, effectively blaming the individual for their own misfortune (what sort of socialist, "soft" or otherwise, does that?) is no help at all.
I don't doubt there are people capable of finding work but unwilling to do so; I know a few myself. But I think they are the exception, and certainly not the people to base our policies around! Better a few people cheat the system than we throw innocent people into deeper poverty.
On the growing inequality in this country: some dear friends of ours have just spent several thousand pounds on a picture for their dining room from the Affordable Art fair in London. That's more than we qualify for in child tax credit in a year, yet all four of us have degrees and only one parent works in each family although both used to before having two children. I don't know what the difference in incomes is here as it's of course a taboo subject in this country but it must be a lot musn't it. As these are friends I know all about their working lives/previous working lives and I know for a fact that the one with the city job dosen't work any harder than anyone else, (he had to do a diary of his working day for a newsletter and he read it to us so I know this for a fact); it's just the industry he's in and his wife was in previously which happens to be highly paid. It's also a myth that city workers have to work long hours as this one dosen't though his wife did and wasn't able to go back to work if she wanted to as she would have had to have a day and a night nanny which alhtough she could afford it was really no way to live. There's a lot wrong with this country in the disparity between wages and also the stupid hours some people have to work which often come down to disorganisation of the company i.e. it's inefficient methods and the image it wants to portray of supposedly working harder than anyone else. We must bust this myth ad start closing the gap between rich and poor.
Can we please also have a cessation of all hospital parking charges when John is PM as I think it is morally wrong to charge people in their hour of need.... not to mention the practical problems of getting change etc etc.
I agree with the above speaker about not persecuting the many because of the few bad apples. As Tony Benn would say (and did to Ali G.....!) you have to start from a position of faith in human nature. Also see his book "Free Radical" - the bible for those of us who think ANOTHER WORLD IS POSSIBLE.
Don't forget to watch all the News reviews of the year that are on at this time and always put the performance of our leaders into interesting perspective, I don't think Blair is going to come off very well from what I've seen of the trailers for these.
A quote from "Pros and Cons - A Debater's handbook" by Trevor Sather, 1999 to finish off: "In Britain, both New Labour and Conservative are now committed to the virtues of private ownership and competition in a free market. (Just in case anyone was in any doubt). It then goes on to explain " The vulnerable sectors of society will always suffer from privatisation" and that "Public ownership ensures that health, education and the utilities are run with a conscience".
"Furthermore," the book continues "..there is a 'Third Way' that invites private investment into particular projects (e.g the overhaul of the fabric of the London Underground systemn,hospital and school meals) while retaining overall state control of fundamental services.
Even this is not what we are getting is it?
as they have now privatised more things than Thatcher.
Let's aim high and vote for someone who has the interest so the many not the few to use that naff phrase truly at heart and that's not Brown or Cruddas for that matter is it?
As for John supposedly fratermising with "trot" groups I don't think he would have let his party down by inviting MARGARET THATCHER to Downing Street if he had been the PM in 97 would he?!!
It's enough to make you want to lie down in a dark room!
Perhaps Gordon Ramsey could be drafted into the Labour party to explain that it's ok to be passionate about politics or cooking or whatever your interest in life is and if you aren't it is unlikely to work. It's ironic that there are all these programmes on which tell you how to follow your dreanm if it's starting a business, buying a property abroad or here and so on in great detail yet the big issues are kept off the agenda. There's a big revival of the film "Dirty Dancing" at the moment on the London stage but has anyone noticed that the heroine is planning to go and join the freedom rides (bus boycotts) (started by Rosa Parks et al) which were happening at that time so there's a political message in there and I remember being inspired by this when I sneaked in to see the original film at the cinema ( I was under age as it was a fifteen film) but I had learnt about the Freedom Rides in RE but hadn't realised at that age before studying it from a politcal or historiacal perspective that other non-local people and white liberals etc could join in the protests but then of course realised the huge potential of this sort of protest to actually change policy if everyone could join in.
It can take years but we need to keep banging away at this generation's protest's until troops are out of Iraq and at home the NHS and public sector cuts are revoked.
We need a leader in order to do this and who better than John?
NB Martin Luther King and any leasder was/will be part of the relevant groups and factions as they are needed to help formulate policy etc. There will always be criticisms/disagreements within these or from without but the bigger picture is the most important also as only one person can be the leader
(Unless one day we have a job share then true equality could have arrived!)
Well done and many thanks to the few leaders willing to ask about and address the issue of inequality. Senator Bernie Sanders of Vermont is perhaps the only such leader in the United States Congress raising similar questions to those raised by yourself, Sir. May you both have Happy, Warm, productive Holidays,
Shira
John Hutton has got some nerve!
Many of those who are long-term unemployed are former civil-servants like me; people who were deliberately undermined and "let go" in order to make it easier for the government to save money. First you get a bad staff report, then you get put on probation, and then (when you appeal to the Union) you get put on an endless series of disciplinary interviews designed to ware you down, making it much more likely that you will take the pittance which they offer you in return for many loyal years of service. And the fact that you refused to go quietly means you do not get a fair reference, and to put it bluntly:
NO REFERENCE = NO JOB!
Of course, Hutton is conveniently overlooking the fact that employers like to exercise their own judgement when deciding who they are going to add to their payroll, and young, pliant, enthusiastic migrants from a former communist state are much easier to employ than those of us who have already been rejected by the labour market!
As I said above I wasn't there long enough to take my case to a tribunal but I was told that the Home Office would only give me a basic reference i.e. how many days I'd worked etc but they said that was the same for everybody. I was bullied by an "open bully" i.e. the bossy aggressive type, as were many others in the office though he got away with it as the other boss who would be on shift with him (they worked in pairs) was completely passive but I think backed him up when the other senior managers were around. I stood up to this bully however and he backed off, but I was also bullied by a more senior inspector who stabbed you in the back silently which was much more sinister. Once I had the trouble with him (and to a certain extent my own line manager who I think just followed the herd )a whole lot of other people, mostly women and ethnic minorities came out of the woodwork to me and revealed that they also had had their careers ruined by this inspector who had given them a box 4 grade (effectively still on probation) and the irony was was that one of these was then selected to give me some extra training! What the inspector did was to override my boss's report and give me a box 5 i.e. sack me immediately but I had a case because he wasn't allowed to do this without prior warning. As I hadn't been there long enough for a tribunal it was my word against their's when it went to personel and I was let down by the Terminal director who backed his staff with extreme guilt written all over his face my PCS rep and I thought. They were also a bit less keen on those of us who had joined PCS and not the ISU (Immigration Service Union ) which is more of a travel club for cheap flights than a union as it's not affiliated to the TUC and is cosy with the management and never strikes etc. I didn't want to stay in this area long term and I decided that life was too short.
well said John. This is a scandal.
There's more on my view (and that of the Tax justice Network) at http://www.taxresearch.org.uk/Blog/2006/12/18/where-are-the-accountants-on-goldman-sachs/
Richard Murphy
http://www.taxresearch.org.uk/blog/.
just been told i've got a job after seven or eight months unemployed, but when i didnt know i'd got it and heard hutton's comment i thought great, i've been unemployed for seven or eight months and now i'm being told i've not been trying,and just in time for christmas too, i'm a member of the party and i know the score with new labour, but how must this be making people in worst circumstances than me feel? i still live at my mum and dads but a lot of folk wouldnt have that safety net if their other one of benefits was taken away
so many points to make 1) the so-called work the unemployes are supposed to take are often unsuitable for their circunstances or unworkable such as when they tried to get me to return to the Civil Serive as I blogged above; also they tried to get someone I know to work for the prison serice which was a) too far away for him to travel and b) unsuitable due to the fact that it would have constantly reminded him of a traumatic death within his family.
I remember that New Labour people used to talk of underemployment (i.e. workinh far below your skills and ability) which is also rampant in this country as well as unemployment but they don't mention it anymore. Of course people may have to take whatever work they can to keep the wolf from the door but in the longer term deserve to be able to develop at work and this would lead to a more stable economy than all this tempisation which must cost the earth on recruitment costs anyway as fulfilled people at work don't keep leaving.
I'll make the other points at a later date but just to say their hectoring and bullying tactics andbullying at work generally has got to stop as the pyschological effects are huge. In my case the wen ton long after I left the job where I was bullied and led to me leaving a voluntary job which I found ideal because I had convinced myself that I wasn't wanted long term and so I thought I'd jump before I was pushed.
now my late night blogging habit has been exposed I Athought I would stop napping in the early evening and blog a bit earlier!
The inequality John speaks of is immense; it's just that some people, probably mostly the so-called middle classes may not have noticed it yet. The current situation is getting more and more like the final years of Thatcherism isn't it - church leaders writing to newspapers denouncing the government's social policies as of course they are helping to pick up the slack with these such as sheltering asylum seekers etc; even the repossessions are starting again as the housing crisis deepens and as well as unemployement there is plently of underemployement and the Balirites don't seem to care - for example they suggested the Rover car workers got jobs in Tescos didn't they....Even if they want to they won't always be accepted for junior level jobs when they have been senior and taking a job at such a pay cut can mean they lose their homes etc wheras if you are on the dole for a qualifying period you can get your mortgage interst paid for example so it's not always the simplest solution that's best in practice. Shelf stacking might be ok for a bit to keep the wolf from the door but they would ideally be given a bit more time to find something which will keep up at least the skills they have developed as car workers which would benefit not just themselves but the entire community. Of course if someoen does not have a family or is not otherwise financially committed it is much easier and they can do extended periods of voluntary or lower paid work in order to retrain as they may be able to manage without their old full time salary for a while but there comes a point when this may not be the permanent solution but to be told that it is ny government Ministers is just insulting as well as breathtakingly naieve as people can be rejected for being overqualified as well as under for a start. Even if you don't mind taking a massive pay cut to do unskilled work and moving to cheaper housing etc it may be more difficulk to radically change your life to this extent with for example kids about to go to university as my Dad found when he was out of work after being a council Chief Surveyor for thirty odd years. At the time I was too young to understand properly and I thought he could apply for junior jobs; he did try in the end but to no avail (he became self-employed in the end).
I think although they work hard some job centre staff could be better trained to deal with qualified people - I was told I wouldn't get a job over 11,000 as a new graduate as that was more than my adviser earned but I had in fact already been offered a job at 12,000 basic plus shift allowance in the Civil Service whilst still at college but had decided not to take it due to the terrible shifts. After a summer of jobhunting I ended up taking the original job anyway as they were recruiting by then for the next intake as I hadn't found anything else after all and needed to pay for accomodation. My Dad also found the job centre service not set up for professionals and I've found the same during periods of unemployement since - they do have graduate trainign courses but only in businessy areas and I can't go on them anyway as they don't provide childcare. What my Dad had to do to become self employed was to take the Tories "enterprise allowance" to rent an office - it was £40 a week, the same as the dole at the time and you didn't get your dole as well, he just had to manage on a wing and a prayer and talk nicely to his bank and after a couple of years he did eventually start making a profit which is not surprising really as he did have lots of experience but he was lucky in that he'd been with his bank for thirty years as well and must have got better terms than a new person would. He was lucky in the end but we need to support people who are trying to change jobs and careers better; I used to work for Group 4 Security and one of the guards was an architect who just couldn't afford to keep going on his own and who had had to jack it in and he probably will stay there for the next decade until pension age unless something turns up.
We've also heard in the media in recent days that many people are pretending to be single when they're not on order to claim tax credits because of the way it's set up where if you have a partner you are treated as their dependant. It can also be a disincentive to do more than 16 hours a week as you may lose child care money then so it definitely needs some reform; as does the child support systemn as it seems that parents paid mostly on contracts/overtime etc as so many are due to all this privatisation are getting away with only declaring their net income and are being assessed as having less money than they actually take home which of course means the children themselves can go short.Inequality is actually massive in this country when you scratch the surface; there are conversely plenty of young single people who are so comfortably off they really don't know what to spend it on and think nothing of spending several thousand on a picture for their dining room for example from the so-called Affordable Art fair that was recently on in London!
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