The VAT increase is the first instalment in what amounts to the largest peace time tax hike in British history.Why George's ski trip was just the start of the slippery slope
"We're all in it togther"
Those at the bottom of the pile face cuts in housing benefit, disability living allowance, council tax benefit and other welfare payment s over the next year or two.
But the pain will also be felt across so-called "middle England".
In April workers will face higher national insurance contributions – an extra 1 per cent taken from their wages for most, a rise in income tax in all but name.
The Government will also deliver a much-needed boost to Lib Dem morale, and the party’s progressive credentials, with the starting threshold for income tax raised by £1,000 to about £7,500.
Then again, the Chancellor will make middle England – broadly defined – pay dearly for this, as the basic and higher rate tax thresholds will be reduced to compensate, on top of the NI rise: an additional 700,000 people will be dragged into the 40 per cent tax band.
Factor in changes to tax credits and benefits, especially child benefit, and the independent Institute for Fiscal Studies believes that the changes will cost average families – those who earn £23,000 a year after tax – about £500 a year by 2012.
For those households with teenagers receiving the educational maintenance allowance, abolished this year, the effect will be still greater ...
Soon will come an even stronger test. Pay rises are lagging far behind inflation ...
Independent 05 Jan 2011 Cutting the Deficit We're all in it together"VAT at 20%: A very deliberate choice
'Savage' cuts to youth spending could rob a generation of chances
Cuts leave elderly stuck in hospital
Robert Chote: Post Budget Briefing
And almost 2m are unable to go online at home, according to leading digital education charity, the E-Learning Foundation.A million UK children 'lack access to computers'
Does this pass the poverty-inequality test?
It also claims those from the poorest families are two-and-a-half-times less likely to have the internet at home than children from the richest homes.
The government would not comment on the findings.
The E-Learning Foundation ... has analysed the latest government spending survey.
It found that while computer access is growing in better-off households, those from low income families are being left behind ...
In November more than half of teachers who took part in a survey for the Times Education Supplement said pupils without access to internet or a computer at home were hampered in their learning ...
BBC NEWS 28 Dec 2010 Deprived Children Inequality Poverty or Inequality?More than 3m UK children have no internet access at home, warns charity
Pupils without internet 'disadvantaged in education'
Poorer pupils to be given free laptops
Fiscal squeeze will squash the poor
Child poverty? Going up over the next three years.
Poverty from working-age adults with children? Going up.
Poverty for working adults without children? You guessed it. Going up also.
And these – lest you get the wrong end of the stick – are not increases in relative poverty.
They are increases in absolute poverty: the number of people living on less than 60% of the national income adjusted for inflation.
And they are not nugatory increases either: by 2013-14 an additional 900,000 people will have slipped below the breadline ...
Guardian 20 Dec 2010
Cutting the Deficit Economic Democracy Should we care ... ? Thatcherite BritainLatvia provides no magic solution for indebted economies
Child and working-age poverty set to rise in next three years
NHS staff told to give up annual pay increments or 35,000 jobs will go
Coalition wields axe over Christmas as 100,000 jobs to go by spring
A brand of austerity about as progressive as Thatcher's
Victorian Contrasts
Spending cuts 'will see rise in absolute child poverty'
Institute of Fiscal Studies analysis shows that government programme will push 200,000 into penury ...
Neil O'Brien, director of the right-leaning Policy Exchange thinktank, said:
"The problem with what the IFS is saying is that the measure they use isn't an indicator of real poverty; it's a measure of inequality.
"It defines 'poverty' as being below 60% of the average income. This is a hangover from the Gordon Brown era.
"Real poverty isn't the same as inequality.
"The IFS's definition would mean that there are actually more people in poverty in Britain today than there are in Poland."
Guardian 16 Dec 2010 Raw's v Nozick Victorian ContrastsJoseph Rowntree Foundation
Child Poverty Action Group
Poverty in the United Kingdom
Poverty
IFS
Policy Exchange
Resolution Foundation
Lansley aims to tackle health of vulnerable
Health secretary plans health inclusion board to improve chronic medical problems among marginalised groups ...
Andrew Lansley is setting up a health inclusion board to tackle chronic health problems among marginalised groups, many of whom often do not visit GPs, hospitals or dentists.
He has recruited one of the UK's leading doctors, Prof Steve Field, ... to lead the new body of expert advisers.
Its members – doctors, nurses, charities and specialist in reducing health inequalities – will assess whether the NHS is doing enough to increase access to services for such groups and reduce the gaps between their quality of health and that of other members of the population.
Field said:
"Andrew Lansley wants to make a big difference in health inequalities and to make sure that the most disadvantaged in society get the healthcare they need and deserve. The board will champion the cause of people who are vulnerable and socially excluded, such as the homeless and street sex workers."
The move is part of a new approach to tackle health inequalities, which research suggests are as wide as during the Depression, and which did not improve under the last Labour government ...
"It's a scandal that life expectancy among homeless people is in the low 40s," said Field ...
Guardian 29 Nov 2010 NHS Rough Sleepers
Britain's 'Squeezed Middle' defined:
11 million facing a triple crunchThe Resolution Foundation ... has identified a group of over 11 million adults who seem to have fallen off the political radar ...
Compared with those below them the LMEs are more likely to have jobs to lose and mortgage payments to maintain while compared to higher earners they are more likely to face unemployment and underemployment, less likely to return to work quickly and much less likely to have access to safety nets in the form of savings, insurance and redundancy payments.
These are households typically with a gross income of under £30,000 for whom every penny counts ...
LMEs are facing what the report calls a 'triple crunch':
• An earnings crunch – driven by unemployment and cuts in working hours in the public sector and by weak labour market recovery in the private sector
• A cost of living crunch – driven by permanent global pressures on the cost of essential items such as food and fuel, by the forthcoming VAT increase, by increases in the costs of public transport, by the continued shortage of suitable housing supply and by the likely introduction of higher user-charges for a number of public services.
• A tax-benefit crunch – driven by withdrawal of various forms of financial support for working families, particularly tax credits ...
... LMEs are the major recipients of tax credits.
In 2008-09, 30 per cent of LME families received tax credit awards, compared with 25 per cent of benefit-reliant families and 10 per cent of higher earners.
They will be hit hardest when these credits are cut, cuts which in monetary terms will be bigger than the changes in either Housing Benefits or Child Benefit ...
openDemocracy 28 Nov 2010Resolution Foundation
Britain must close the great pay divide
UK wage inequality is approaching levels not seen since the end of the first world war.
Equality expert Danny Dorling argues a cap on bosses' pay is vital if Britain is to become a fairer place ...
A recent poll by Compass and the Joseph Rowntree trust showed that only 1% of people think that top executives should be paid as much as they are.
Another striking figure revealed that 64% believe that a chief executive should take home an annual salary of less than £500,000.
This contrasts sharply with the actual pay figures.
Research by Income Data Services found that the average FTSE 100 chief executive was paid £4.9m, a figure that had risen more than 50% in a year.
This equates to 200 times the average wage.
The previous year – between June 2008 and 2009 – the earnings of the FTSE 100 chief executives had fallen 1%, in the wake of the financial crash.
Examining this year's figures, it seems that restraint at the top was short-lived, and it's back to business as usual ...
Observer 28 Nov 2010 Economic DemocracyLloyds and RBS under pressure to disclose boardroom pay
Is Clegg abandoning liberalism?
'Social mobility is what characterises a fair society rather than a particular level of income equality. Inequalities become injustices when they are fixed; passed on, generation to generation....For old progressives, reducing snapshot income inequality is the ultimate goal. For new progressives, reducing the barrier to social mobility is.'... what is striking is just how far Clegg's attempt to define 'fairness' as social mobility rather than reduced income inequality breaks with the mainstream social liberal tradition.
Whatever Clegg's 'new progressivism' is, it isn't mainstream social liberalism ...
Rawls argues that the economic justice of a society is to be judged in part by how far it achieves 'fair equality of opportunity' ... (he) ... also famously argues that fair equality of opportunity by itself does not make a society just.
For even with this kind of meritocracy, people with poorer natural endowments will fare worse in terms of income and wealth than those more fortunate in the genetic lottery.
A just society must therefore seek to limit inequality of reward between jobs and offices as well as achieve a high degree of social mobility in competition for them ...
openDemocracy 23 Nov 2010 Nick Clegg - 'Fairness' Rawls v NozickDoes Clegg's philosophical pitch stack up?
Nick Clegg: Hugo Young lecture 2010
Gap between rich and poor pulls UK down in UN human development stakes
While the UK's [Human Development Index] of 0.849 meant it was ranked as a country with "very high human development", the score was only good enough for 26th place in a list headed by Norway, Australia and New Zealand.
Germany was 10th, France 14th, while crisis-stricken Greece, Spain and Ireland all scored more highly than Britain.
The UN said human development in the UK was below the average for the 30-plus countries that are members of the Organisation for Economic Cooperation and Development ...
The report looks at income, education and health to gauge progress and found that in the three decades from 1980 per capita incomes were up 86%, life expectancy rose by over six years to 79.8 years and the mean number of years of schooling increased by almost two years ...
For the first time this year, the UN introduced an equality-adjusted HDI in an attempt to measure the impact of differences in income, life expectancy and access to education across the population.
This found that the UK's 2010 HDI of 0.849 fell by 10% to 0.766 when inequality was taken into account, a bigger fall than in either Germany or France.
The Gini coefficient – a measure of income inequality – shows that the gap between rich and poor in the UK is one of the highest in the OECD.
Guardian 04 Nov 2010Third of Liverpool households are jobless
Human Development Index
Gini coefficient
MPs attack Labour inaction on health inequality
Margaret Hodge, the Labour chair of the committee, said that despite the doubling of the NHS budget and rising prosperity levels there had been "lots of reports and inaction about health inequality".
"New Labour came in in 1997 and announced it would put reducing health inequalities at the heart of tackling the root causes of ill-health.
"But it was unacceptable that health inequalities only became a NHS priority in 2006, and primary care trusts not required to report on it until 2007.
"It was too late." ...
The report says two-thirds of the poorest places in the country still had "lower levels of GP coverage than the national average of 60 GPs per 100,000 population".
In the north-east, the report said, this dropped as low at 25 per 100,000 ...
Guardian 02 Nov 2010 NHSHealth policy
'Stealth cuts will slash income of poor families'
Analysis carried out by the Resolution Foundation think tank found that a single mother on £20,645 with three children could be out of pocket by about £1,800 a year by 2012 as a result of cuts made by the coalition this year.
Two young parents with children aged three and five with a household income of £25,656 will lose £760 a year by 2012.
The figures cast further doubt on the Prime Minister's promise that "fairness" would be at the heart of all decisions made about cuts ...
Tory grassroots will also be aggrieved, as the analysis suggests families are effectively losing out to young couples with no children.
Changes made to Britain's personal tax system mean a couple aged 22 and 24 on an income of £18,289 will be better off in two year's time by £320 a year.
"The attention to date has been on the cuts to housing benefit and other changes affecting those on out-of-work benefits," said Gavin Kelly, chief executive of the Resolution Foundation.
"What has gone totally unnoticed is major changes to tax credits that by 2012 will hit working families hard."
Independent 30 Oct 2010 Cutting the DeficitIFS stands by judgment that spending cuts are regressive
IFS exposes fairness gap in spending review cuts
Spending review cuts hit poor hardest
Osborne's cuts are 'worst attack on equality for generations'
... new analysis suggests that 350,000 of the 500,000 public sector workers who will lose their jobs as a result will be women.
Tough, certainly. But fair? ...
Figures from the Office of National Statistics show that women make up 65 per cent of the six million public sector workers.
About half of all women in employment work for the state.
If the job losses were spread equally, 325,000 women would lose their posts.
But personnel experts said women were disproportionately represented in back-room administrative roles which are being targeted for redundancies.
In local government, where one in 10 jobs are expected to go as a result of the spending cuts, 75 per cent of the workforce is female.
Even in areas such as health and education, which are protected from the worst of the spending cuts, there are likely to be significant job losses in backroom roles.
The health service alone is hoping to make up to £20 billion of "efficiency savings" ...
Independent 22 Oct 2010 Cutting the deficit, shrink the state
Let's make CEOs justify their wages
The facts about income inequality in the UK are nothing less than mind-boggling.
The average income of a FTSE 100 chief executive, according to the most recent Guardian survey of executive pay, is over £3m per year, including bonuses and pension contributions.
This is more than 100 times median household income.
It is not uncommon for CEOs to run 200 or 300 times as much as the median pay of their employees or, in the case of Terry Leahy's final year at Tesco, for a CEO to be paid 500 times the average take-home pay of his colleagues.
Moreover, executive pay continues to march relentlessly upwards, unconnected to skill, judgment or underlying profitability.
While the FTSE lost a third of its value in the year to September 2009, executive pay rose 10% during the same period.
According to the Work Foundation, the ratio of average CEO pay to average UK earnings rose from 10:1 in 1980 to 75:1 in 2006 (and has continued to grow since).
In short, the gains of economic growth are becoming increasingly concentrated in a small number of hands, while the wages of ordinary people have stagnated ...
Guardian 19 Oct 2010 Wealth LogCorporate Governance
Executive Pay & Bonuses
Child poverty: study shows fifth of UK youngsters severely affected
Project charting health and education prospects for 14,000 UK children finds child poverty on the rise ...
The London University's Institute of Education researchers found that despite governments having spent billions to eliminate child poverty since 1999:
• Almost one-fifth of seven-year-olds live in severe poverty – homes where the total income, including benefits, is less than £254 a week. The UK average income for a family with one child is a £563 a week, say researchers.
• Almost three-quarters of children whose parents are of Pakistani or Bangladeshi origin live in poverty – homes where the total income for a family with one child is under £330 a week. This is largely because of high unemployment rates for mothers and fathers, the researchers say.
• Just over half (51%) of black seven-year-olds and just over a quarter of white seven-year-olds live in poverty, with three-fifths from these groups in single-parent families.
• Seven-year-olds are most likely to live in poverty in the north-east (40%) and least likely in the south-west (22%). The figure for London was 36%.
• Just under 7% of seven-year-olds living in poverty do not have two pairs of all-weather shoes, according to parents. Just under 50% do not get pocket money.
The number of children living in poverty is likely to be rising, said Professor Heather Joshi, the study's director.
"Our study captures how things were in 2008. This is not encouraging for child poverty today because worklessness is the most common indicator of poverty and our unemployment rate has gone up since then.
"Poor housing, low levels of qualifications among parents and low family income tend to be the key indicators of disadvantage." ...
Guardian 15 Oct 2010 Deprived Children Child Poverty_Dinner with Dave
Equality report slams divided Britain
The most comprehensive study ever conducted into inequality in Britain has revealed a country in which boys struggle academically, disabled children face shocking levels of bullying and progress towards pay equality for women has stalled.
How Fair is Britain?, a definitive 700-page report from the Equality and Human Rights Commission on discrimination and disadvantage in British society, charts inequalities from birth, through education, into the workplace and on to retirement.
Trevor Phillips, chairman of the EHRC, said the study revealed that while British attitudes towards issues of race, gender and sexuality are now "light years" ahead of previous generations, the reality on the ground has yet to fully catch up. In consequence, there are deep divisions in Britain's classrooms, different experiences of the criminal justice system and a stubbornly large pay gap between men and women ...
Phillips will also highlight how complicated the issue of equalities has become.
"Inequality and disadvantage don't come neatly packaged in parcels marked age, or disability, or gender, or race. They emerge often as a subset of a strand – not as a disability issue, but as a mental health issue; not as a generalised ethnic penalty, but as a result of being Pakistani; not a pay gap for working women, but a pay gap for working mothers," he will say.
The study will also reveal the deep injustices faced by young people of certain ethnicities by showing how much more likely they are to be stopped and searched by police.
And it will highlight a shocking disparity between the child mortality rates for black and white babies.
In a chapter on education seen exclusively by the Observer, the study highlights a growing gender gap at school that is seeing boys slip behind at the age of five, underperform at GCSE and enter university in lower numbers.
It also reaffirms concerns about class divides, showing once again that children born into disadvantaged families face a long, uphill struggle that too often ends in lower life chances.
And it reveals that four out of five children with special educational needs have been bullied ...
Guardian 10 Oct 2010
Despite financial uncertainty, overseas brands such as Forever 21 and Clas Ohlson still want a chance to hit Britain's high street ...Retail therapy: foreign chains glimpse window of opportunity in UK market
Like the man said: It's a wonderful world.
Forever 21's executive vice-president Larry Meyer spared no adjective as he confirmed details of its first two stores in Birmingham and London this week:
"Forever 21 is the most hotly awaited brand to hit the UK from America ... the concept perfectly suits the European consumer's insatiable appetite for trend-led fast fashion at value prices."
Although Britain is one of the world's most lucrative markets, with retail sales of £286bn last year, expensive shop rents and world-class local competition have kept international groups at bay.
Forever 21 appears undaunted by lessons from UK retail history and is not taking the same approach as other recent US entrants, such Banana Republic and Anthropologie ...
Instead it is bullish, describing the openings in Birmingham and Dublin as the "first phase of the rollout" with 550 staff recruited in the Britain and Ireland ...
Lorna Hall, retail editor at trend forecaster WGSN, says Forever 21 is considered the doyenne of "fast fashion" in the US, but it is entering a bear pit:
"The UK is the most competitive retail market in the world, it is the global platform for fast-fashion retail."
As a result she says there is a danger its clothes – described as "very feminine in a young girl way" – will not cut the mustard given the "edgier aesthetic" of Britain's teens and twenty-somethings ...
Guardian 01 Oct 2010 Consumer Culture Why money messes with your mind Young & Excluded
The national minimum wage has risen to £5.93 an hour from £5.80 and for the first time people aged 21 will benefit from the rate.Minimum wage up to £5.93 an hour
To earn the Minimum Income Standard of £ 14400 after tax, a single person on the
miniscule wage would have to work a 56 hour week assuming a 5-day week, and 50-week year.
Previously the full rate applied to employees aged 22 and older.
There are also corresponding increases for younger workers, with 16 and 17-year-olds seeing a rise from £3.57 an hour to £3.64.
For 18 to 20-year-olds the rate is increasing from £4.83 to £4.92 an hour, the new rules state ...
... the British Retail Consortium (BRC) has warned the government about further rises that could damage job creation.
It said next year's increase must be no more than 1.7%, as a larger rise would seriously impede retailers' ability to maintain and create jobs.
Stephen Robertson, of the BRC, said the government must strike the right balance between higher wages and more jobs.
"Trading conditions are tough, higher costs, such as next April's National Insurance increase will pile on even more pressure," he said.
"Even a small increase in 2011's minimum wage could choke off retailers' vital potential to create new jobs." ...
BBC NEWS 01 Oct 2010 Economic DemocracyLiving 'costs at least £14,400' for a single person
Given that education is meant to be the key that unlocks the barrier to social mobility and we have spent a fortune on our schools over the last couple of decades, why is the social gap no longer narrowing?What's wrong with our schools?
Or, to put it in nice simple language, why do rich, thick kids do better than poor, clever children?
If you take exception to either the language or the sentiment, do not blame me.
I am quoting the Education Secretary, Michael Gove, who also said that other countries are moving ahead faster than we are and it is getting worse ...
So what happens when the disadvantaged children go to school?
By the time they are 14, they are two years behind their more privileged peers and by the time they hit 16, they are massively less likely to go on to higher education, let alone the best universities.
In other words, the gap widens during the school years, rather than narrows ...
The social gap is not about the extremes - Wellington College at one end and Kirkby at the other. And the elite will always be with us.
No, the real battle is being fought on the centre ground - the territory dominated by what David Cameron calls the sharp-elbowed middle class.
People like him, he says, and his wife. People like me and, perhaps, people like you. People who feel they are already being squeezed in this age of austerity.
We have the advantage and we want to hold on to it.
It is not that we want to do down the most deprived; it is just that we want to do the best by our own children.
And if we end up hijacking the best schools for them, the politicians are no more likely to clip our wings and risk our displeasure at voting time than they are to shut down the independents ...
BBC NEWS 19 Sept 2010 Education for the Good Society Tory Education 'Reform'Unequal Opportunities
Aimhigher
With first-time buyers unable to get on the ladder, the property market is shuddering to a haltHouse prices have nowhere to go but down
pablito69Guardian 30 Aug 2010
30 Aug 2010, 1:18AM
And another thing that doesn't help is the current situation where an owner-occupier can get a mortgage for 2.19% and first time buyers are priced in at 5-6% or more...
The distributional effect of tax and benefit
reforms to be introduced between June 2010 and April 2010Executive Summary
The Chancellor claimed in his Budget speech that the June 2010 Budget was a 'progressive Budget'.
Initial analysis of this claim showed that this was not true if measures announced in the Budget were analysed in isolation, or if their effects were considered over the longer term.
Furthermore, HM Treasury analysis (as well as our own, in our post-Budget briefing) of the distributional effect of Budget measures did not include the effects of some benefit changes whose effects were difficult to allocate precisely to households.
These measures represent £4.1 billion of the £11 billion of welfare cuts announced in the emergency Budget.
In this paper we attempt to allocate the effects of these changes to housing benefit, Disability Living Allowance and tax credits to households.
We do this by making assumptions about the impact of changes to Disability Living Allowance and tax credits, and by using analysis published since the Budget by the Government on the impact of the changes to housing benefit.
Inevitably, though, these estimates will be less precise than those obtained directly from our tax and benefit microsimulation model.
Our analysis shows that the overall effect of the new reforms announced in the June 2010 Budget is regressive, whereas the tax and benefit reforms announced by the previous Government for introduction between June 2010 and April 2014 are progressive.
Low-income households of working age lose the most from the June 2010 Budget reforms because of the cuts to welfare spending.
Those who lose the least are households of working age without children in the upper half of the income distribution.
This is because they do not lose out from cuts in welfare spending and are the biggest beneficiaries from the increase in the income tax personal allowance.
The biggest change to welfare policy in the June 2010 Budget in fiscal terms was the decision to link benefits with the Consumer Price Index (CPI) rather than the Retail Prices Index (RPI) or Rossi index from April 2011.
1. This is very likely to mean less generous benefits in the years ahead.
The savings from linking to a lower index will compound over time.
The change is predicted to save the Government £1.2 billion in 2011, rising to £5.8 billion in 2014-15.
...
Conclusion
It is clear that the measures introduced in the June 2010 Budget are regressive overall.
Once we consider all reforms to be introduced by April 2014, the cash losses are smallest for the seventh, eighth and ninth income decile groups, and are very similar for all of the bottom seven expenditure decile groups.
The progressive nature of the pre-announced measures is not sufficient to offset this, so the overall package of tax and benefit reforms is also slightly regressive, at least within the bottom nine income decile groups.
The biggest losers from the June 2010 Budget are low income households of working age, while better off working-age households without children lose the least.
Low-income pensioners are less affected than other poor groups from the welfare cuts in the Budget, but richer pensioners lose more than richer households of working age from the Budget as they do not benefit from the increased personal allowance.
The biggest change to benefit policy in the June 2010 Budget in terms of the long-run saving to the government was the decision to link benefits with the Consumer Price Index (CPI) rather than the Retail Prices Index (RPI) or Rossi index from April 2011.
This is very likely to mean less generous benefits in the years ahead.
The Government argued that the CPI is a better measure of inflation than the indices to which benefits are currently linked because the way it is calculated allows for the fact consumers are able to protect themselves from price changes by substituting towards relatively cheaper good, and because the goods and services it covers better reflect the "inflation experience" of households receiving benefits.
We find the first of these arguments to be sound whereas the second is more questionable.
IFS 2010 Back to 1931 with George Osborne 'We are all in it together'What are the links between shame and poverty?
Emergency Budget ‘will hit poor hardest’
Poor families bear brunt of coalition's austerity drive
Child poverty 'will rise as cuts hit families'
Budget hits families and pensioners twice as hard
Budget hits the poorest hardest
Living 'costs at least £14,400' for a single person
More than one million people 'take out payday loans'
" ... some companies (are) charging interest rates of more than 2,500% a year ...
And why do people take out loans at 2,500%? First, because there are no usury laws; second because the greedy banks don't want to loan to the hoi polloi; and third, because credit unions have never received the encouragement they deserve from the state.Research by Consumer Focus suggests that 1.2 million people are now taking out a payday loan every year, borrowing a total of £1.2bn ...
... if the loans are rolled over, debts can quickly escalate.
Dressmaker Stephanie Derby from Finsbury Park in London took out a pay day loan after she fell behind on rent and bill payments.
She was already overdrawn and at her limit on her credit cards.
"I didn't feel I had any other option, I had just graduated and all my debts were mounting up, it really was a last resort," she said.
"I borrowed £400 hoping to pay it back a few weeks later but I was unable to.
"Each month it cost another £56 to renew the loan and after six months the initial loan of £400 ended up costing me nearly £800," she explained ...
BBC NEWS 14 Aug 2010 Pawns or Players?Try paying fair wages and tax
Repossession threat as Government reduces home owner support
It is only in mahogany-panelled boardrooms that things are looking up ...Bonuses are up – so the economy must be doing well, right?
We're all in it together?
Executive pay specialists Hewitt New Bridge Street have released their annual report on packages in the FTSE 100, which shows that although companies have been more restrained on basic salary awards, bonuses have risen.
Median pay for the highest paid directors in the FTSE 100 has risen from around £2.5m to £3m, and the typical bonus earned was about 120% of salary ...
The main problem with the bonus spiral ... is social.
It is divisive to have a super-class operating several cloud levels above the rest of society, being rewarded for activities that are not always obviously beneficial to society as a whole.
A couple of modest proposals: bonuses should be a fraction of salary, not a multiple, and FTSE 100 executives should sign up for Warren Buffett's charity drive.
Guardian 11 Aug 2010
Is capitalism the only game in town? Pawns or Players? Wealth LogCompany bosses enjoy £500,000 pay increases
Corporate pay Britain
'Fat cats' still have some slimming to do
How incentive bar was set so low that executives could hardly fail
Older workers 'trapped in long-term unemployment'
Youth unemployment for two years or more soars by 42pc
Youth unemployment rising in most regions
High cost of borrowing may be the legacy of the credit crunch
Interest rates may have fallen but households are finding the cost of borrowing is rising – and may remain high ...
The decade of easy money came to an abrupt halt in August 2007 but what has emerged since is a divided Britain in which young adults are paying the price of the credit crunch while their parents have landed a get-out-of-jail-free card.
Existing borrowers are enjoying the windfall of a lower Bank of England base rate, while new borrowers are either locked out of the market or face permanently higher loan costs ...
The long-term implications are worrying. Well-off parents will be able to access the equity in their homes and use the money to help their offspring put down a deposit on their first home. But the children of low-income families may find themselves permanently excluded.
"What's happening with deposits will tend to accelerate divides in society," adds [Ray Boulger, of mortgage brokers John Charcol] ...
Guardian 09 Aug 2010 Banking Commission Fractional Reserve Banking Is capitalism the only game in town?Cable fears banks are still 'structurally dangerous'
The rich want a better world? Try paying fair wages and tax
"Philanthrocapitalism", as it has been called, veers towards tackling symptoms of poverty and distress rather than underlying causes. Gates has done admirable work against TB, malaria and Aids, and begun work against diarrhoea and pneumonia, which are much bigger killers. He and his wife Melinda have started to talk about clean water supplies, inadequate housing, public health infrastructure and agricultural productivity. They are undoubtedly among the most sophisticated of the new philanthropists.
But it seems doubtful they will move into considering issues of, say, land ownership and distribution. The Gates Foundation wants to "give where we can effect the greatest change". But the greatest change is likely to come from transforming the economic system and the pattern of property ownership. Will Gates fund projects that undermine his own power and economic status?
There is another danger: that the poor are written out of their own story, that business tycoons, accustomed to getting their own way, do things to the poor, rather than with them ...
Guardian 05 Aug 2010 Economic Democracyphilanthrocapitalism
Life expectancy gap 'wider than in Great Depression'
The health inequality gap in Britain is greater than it was during the post-World War I slump and the Great Depression, a study suggests.
Despite the continued rise in life expectancy, it is well documented that the gap between richest and poorest has actually been widening in recent years.
Researchers from Sheffield and Bristol looked at early death rates since 1921 ...
The researchers analysed mortality data for England and Wales, obtained from the Office for National Statistics, and for Scotland, obtained from the General Register Office for Scotland.
Between 1999 to 2007, for every 100 deaths before the age of 65 in the richest 10th of areas, there were 212 in the poorest 10th.
This compared with 191 deaths in the poorest areas from 1921 to 1930 and 185 deaths from 1931 to 1939 ...
Lead researcher Professor Danny Dorling said the findings were a "stark reminder" of the challenge facing the nation.
"Health and wealth are directly linked and, unless we tackle the income gap, we could well see life expectancy actually starting to fall for the first time in the poorest areas." ...
BBC NEWS 23 July 2010Only the Poor Die Young
Jarvis staff set to lose £28m in back pay
More than 1,000 employees of the collapsed engineering company Jarvis stand to lose the £28m they are owed in back wages, holiday pay and other benefits, its administrator has warned. Deloitte said the "unhappy" fact was that unsecured creditors, such as former staff, were unlikely to receive any of the money they were entitled to ...
Observer 11 July 20102,000 jobs at risk as Jarvis collapses into administration
The co-option of “fairness” by the UK's new government has unnerved many on the left. Yet in reality, all sides have always drawn on the language of fairness. What is at stake is really the interpretation of the causes of inequality; a matter of economics. This article suggests how we should interpret the inequalities of modern society from a post-Keynesian perspective ...Productivity does not explain wage differentials
openDemocracy 07 July 2010
Minimum weekly budget:Living 'costs at least £14,400' for a single person
BBC NEWS 06 July 2010
- Single working age: £175.34
- Pensioner couple: £222.22
- Couple with two children: £402.83
- Lone parent with one child: £233.73
A minimum income standard for the UK in 2010
Britons on the breadline
Thousands of people could be forced to rely on food parcels because of benefit delays, as the Government's plan to slash the country's welfare bill is put into effect.
Charities that run foodbanks warned this weekend that the prospect of people having to rely on Third World-style food aid – despite Britain being among the richest nations in the world – is a real possibility for 1.5 million people who will be moved off incapacity benefit (IB).
The number of people who are turning to foodbanks as they can't afford to feed their families has soared, rising from 26,000 in 2008-09 to 41,000 in 2009-10 – 37 per cent of whom were referred to foodbanks because of delays with their benefits ...
Chris Mould, director of the Trussell Trust, said: "What worries us is the amount of people who come to us because their benefits status is being reassessed and they've had their benefits stopped; if hundreds of thousands of people are being reassessed, we fear there will be huge problems."
The Government recently announced that everyone on incapacity benefit will have to go through tests known as Work Capability Assessments to see if they are fit for work. The Department for Work and Pensions estimates that, of the 1.5 million people currently on IB, 750,000 will move on to jobseeker's allowance, 300,000 will move on to other benefits, and 450,000 will come off benefits entirely ...
Independent 04 July 2010Food Stamps USA
Trussell Trust
The government is considering plans to distribute food vouchers to people on the dole as part of a wider drive to empower charities to supplement the support provided by the welfare state.Ministers consider scheme to hand out food vouchers to unemployed
The line of travel is probably to replace benefits with food stamps.
Iain Duncan Smith, the work and pensions secretary, has given his provisional backing to JobCentre Plus staff handing out vouchers that can be exchanged for food parcels.
The parcels, which contain enough donated items to keep a family fed for six days, are administered from 65 food banks across the country run by the Trussell Trust, a Christian charity ...
The Trussell Trust, which fed 41,000 people last year, already relies upon front-line professionals such as a teachers, social worker and doctors to give the vouchers to people they encounter who do not have enough money to feed themselves.
Until two years ago, a few Jobcentre Plus offices also let their staff distribute vouchers on an ad hoc basis.
That practice, negotiated locally, was stopped by the Labour government in 2008, after a ruling that Jobcentre Plus advisers "must not act as an agent for handing out any form of support, such as food vouchers" on behalf of charities.
Labour ministers were thought to have been concerned that the Trussell Trust parcels would give the impression welfare payments were insufficient ...
Chris Mould, director of the Trussell Trust, said a growing proportion of the charity's clients were "on the edge" because they had been refused a crisis loan or had their benefits halted as officials reassessed their entitlements ...
Figures released by the DWP revealed that 37,000 people waited 17 days or more for their jobseeker's allowance last year, while 20,000 had to wait more than 22 days ...
Guardian 02 July 2010Food Stamps USA
Trussell Trust
The life expectancy gap between rich and poor people in England is widening, despite years of government and NHS action, a hard-hitting National Audit Office report reveals today.Poor in UK dying 10 years earlier than rich
Extensive efforts have failed to reduce the wide differential, which can still be 10 years or more depending on socio-economic background, says the public spending watchdog. While life expectancy has risen generally, it is increasing at a slower rate for England's poorest citizens.
In Blackpool, for example, men live for an average of 73.6 years, which is 10.7 fewer than men in Kensington and Chelsea in central London, who reach 84.3 years. Similarly, women in the Lancashire town typically die at 78.8 years – 10.1 years earlier than those in the London borough, who reach an average 89.9.
The gap in life expectancy between government-designated areas of high deprivation and the national average has continued to widen, so Labour's aim of reducing it by 10% will not be met, the NAO concludes ...
Guardian 02 July 2010 BlogLife expectancy gap 'is widening'
Britain faces drink, drugs and obesity health crisis
A sadistic attack on the jobless
People who have lost their jobs are shocked ... to discover they are expected to eat, pay their bills, clothe themselves and get around – including for job interviews – on just £64.45 a week if they are over 25.
For those under 25, weekly subsistence must be attained on just £51.85.
Osborne's announcement that the rate at which benefits rise will decrease, by linking them to the consumer price index (CPI) rather than, as currently, the retail prices index (RPI), was actually set out by the Treasury under the heading "Fairness".
On current figures, with the RPI at 5.1%, and the CPI at 3.4%, jobseeker's allowance was due to rise next year, to £67.87 a week for the over 25s, and a princely £53.77 for those under 25.
Instead, the figures will be, respectively, £67.22 and £53.25. The loss is 65p a week for the over-25s, and 52p per week for the under 25s.
Those pennies all add up, as the government itself understands, calculating that this flick of the scythe across the benefit system will save it £1.17bn in 2011-12, and almost £6bn by 2014-15.
Over a year, somebody unemployed over 25 will lose £33.80, while the under-25s will each be £27.04 worse off.
Before the election, I wrote that this poverty level of unemployment benefit, and the cruelty of a system that allows people to earn just £5 in part-time work before additional earnings reduce the benefit pound for pound, was a scandal no party was prepared to address.
Donald Hirsch, author of a Joseph Rowntree Foundation report on the minimum needed for an acceptable standard of living – £13,900 last year, he found, way above jobseeker's allowance penury – said: "Everybody knows you cannot survive on that level of benefit." ...
Guardian 27 June 2010A minimum income standard for Britain in 2009
Budget crises, health, and social welfare programmes
The recession of 2008 has had profound economic consequences for many countries.
How and when to reduce budget deficits was a major focus in the recent general election in the United Kingdom and continues to make headlines around the world.
The new government has already begun to make large cuts in public expenditure, even though the UK’s projected underlying debt, as a share of gross domestic product, is less than that of other industrialised countries, it has longer than many other countries before it is required to refinance loans (table 1), and the actual deficit in 2009-10 was considerably less than expected.
Leading economists have widely divergent views about whether the cuts will aid or hinder economic recovery, but have paid scant attention to the potential effects of reductions in health and social expenditure on population health/
We examine historical data for insights into how lower levels of public spending might affect health ...
Sir Michael Marmot’s recent review on health inequalities in the United Kingdom concluded that "Austerity need not lead to retrenchment in the welfare state.
Indeed, the opposite may be necessary."
The current economic difficulties could be viewed as an opportunity to reorganise provision of services to those in need, creating a broader set of services that reflect the increasingly complex needs of a society facing health challenges as varied as fast food and dementia.
It would be unfortunate if this opportunity were wasted.
If the first priority of a government is to protect the lives of its people, a statement often made in response to the perceived threat from terrorism, then it should take account of the implications of its economic policies for health.
BMJ 24 June 2010Cutting welfare budgets could cost lives
Ring-fence social care like the NHS
Outcry over plans not to extend free school meals
Network Rail bonuses 'daylight robbery'
Network Rail (NR) today announced six-figure bonuses for its top directors, sparking a storm of protest led by Transport Secretary Philip Hammond.
Last month, Mr Hammond wrote to NR urging restraint and pointing out the company's top management already enjoyed "handsome" annual salaries.
But today, NR said its top directors were getting bonuses totalling more than £2.25 million, including £641,000 for chief executive Iain Coucher whose annual salary is £613,000 ...
There was ... criticism from the Office of Rail Regulation (ORR) whose chief executive Bill Emery had branded NR's performance for 2009/10 "mixed" and who had also written to NR warning about the level of bonuses.
The ORR said it was now up to NR's remuneration committee - which had decided on the bonuses - to "fully justify how it has reached its decisions" ....
Independent 24 June 2010 A 'Greed is Good' Wealth Log
Budget will hit poor harder than rich
Noting that Britain was facing the "longest, deepest, sustained cuts in public spending since the second world war, Robert Chote, the IFS director, said:
"Osborne and Clegg have been keen to describe yesterday's measures as progressive in the sense that the rich will feel more pain than the poor. That is a debatable claim. The budget looks less progressive – indeed somewhat regressive – when you take out the effect of measures that were inherited from the previous government, when you look further into the future than 2012-13, and when you include some other measures that the Treasury has chosen not to model."
The IFS estimates that the squeeze on poorer families would increase in the second half of the parliament as welfare cuts kicked in and the two-year increase in child tax credit ended ...
The IFS found that the richest 10% would be 7.5% worse off by 2014-15 because of measures coming into force during the current parliament but that almost seven percentage points of that was due to Labour changes.
The poorest 10% were left almost untouched by Labour's plans but would see their incomes cut by more than 2.5% over the next five years.
With the IFS estimating that some government departments could face cuts, in real spending, of up to a third during this parliament, Chote added:
"Perhaps the most important omission in any distributional analysis of this sort is the impact of the looming cuts to public services, which are likely to hit poorer households significantly harder than richer households." ...
Guardian 23 June 2010
... 110 entrepreneurs have published an open letter to the chancellor condemning "a unilateral blanket increase in CGT, which would mean start-ups, talent, investment, jobs and tax revenues will head elsewhere over coming years".George Osborne facing budget backlash
Osborne 'punishing the virtuous' according to David Davis
According to Treasury calculations, a single percentage point rise in capital gains tax would raise just £10m this year, rising to £130m the following year.
The apparent hardening in the chancellor's language will raise many Conservatives' hackles, though a spokesman insisted Osborne had meant to say "avoidance" rather than "evasion" of the tax.
Senior political figures, including David Davis and John Redwood, have already expressed deep concerns over draconian action planned by Osborne.
Davis said: "These are the people, not the rich, who will pay the lion's share of the increased capital gains tax. When they reach retirement age they will not be able to defer selling their share portfolio, holiday cottage or buy-to-let flat. They will need the money. So if we are not very careful, we will be punishing the virtuous." ...
Guardian 21 June 2010
Backbenchers' revolt succeeds in watering down reforms to CGT
Cameron trying to face both ways - a coalition dilemma - he wants to both raise tax thresholds (LibDem) and avoid 'punishing savers' - code for keeping CGT low. Expect a fudge in the budget.A controversial rise in capital gains tax to pay for an increase in the income tax threshold will be announced in next week's Budget, David Cameron confirmed yesterday ...
"We are finding a lot of people turn income into capital in order to evade the tax system and we're losing over £1bn by that. So there's a problem we have to address," he told BBC Radio 2's Jeremy Vine show. "But I do not want to do anything that actually unfairly punishes savers – I don't want to go back to very high rates of marginal tax."
Independent 17 June 2010 InequalityGovernment warned over CGT rise
Osborne must be more radical
Employment Rate falls to 72.1 per cent
Or, as The Grauniad prefers to put it: Headline UK unemployment rate dropsThe employment rate for the three months to April 2010 was 72.1 per cent, down 0.1 on the quarter.
Correction: the number claiming Jobseeker’s Allowance dropped.
'Inactivity' went up.
There was a small increase of 5,000 in the number of people in employment compared with the previous quarter to reach 28.86 million.
The number of full-time workers fell by 56,000 over the quarter but the number of part-time workers increased by 61,000.
The number of employees and self-employed people working part-time because they could not find a full-time job increased by 45,000 on the quarter to reach 1.08 million, the highest figure since comparable records began in 1992.
The unemployment rate for the three months to April 2010 was 7.9 per cent, up 0.1 on the quarter.
The number of unemployed people increased by 23,000 over the quarter to reach 2.47 million.
The number of people unemployed for up to six months fell by 42,000, to reach 1.17 million.
However, the number of people unemployed for more than twelve months increased by 85,000 over the quarter to reach 772,000, the highest figure since the three months to April 1997.
There were 5.2 unemployed people per vacancy, up 0.1 on the quarter.
The number of people claiming Jobseeker’s Allowance (the claimant count) decreased by 30,900 between April and May 2010 to reach 1.48 million.
This is the first time the claimant count has been below 1.5 million since March 2009.
The number of claimants of up to six months duration fell by 20,400 on the month to reach 901,200 while the number of people claiming Jobseeker’s Allowance for over twelve months increased by 6,500 between April and May to reach 258,700.
The inactivity rate for the three months to April 2010 was 21.5 per cent, up 0.1 on the quarter.
The number of inactive people of working age increased by 29,000 over the quarter to reach a record high of 8.19 million.
This is the smallest quarterly increase in inactivity since the three months to October 2009.
Most categories of inactivity, including the number of students not in the labour market, fell over the quarter, but the number of people in the “long-term sick “category increased by 58,000 to reach 2.07 million.
The number of vacancies for the three months to May 2010 was 492,000, up 7,000 over the quarter.
All industrial sectors showed small movements in vacancies over the quarter.
The earnings annual growth rate for total pay (including bonuses) was 4.2 per cent for the three months to April 2010, down from 4.3 per cent for the three months to March.
The earnings annual growth rate for regular pay (excluding bonuses) was 1.9 per cent for the three months to April 2010, down from 2.0 per cent for the three months to March 2010.
ONS 16 June 2010 'Reserve Army'Headline UK unemployment rate drops
CPI fell in May
CBI calls for reduced taxes on rich and big spending cuts
Richard Lambert, the CBI's director-general urged the chancellor to bring the top rate of income tax back down from 50% to 40% ...
In its budget submission that drew accusations of special pleading from the TUC, the employers' organisation called on George Osborne to water down plans to raise revenue from the better-off through tougher CGT rules and by restricting tax relief on pensions. The CBI also said it wanted the chancellor to bring the top rate of income tax back down from 50% to 40% as quickly as possible.
Richard Lambert, the CBI's director-general said it was vital for the government to restore financial market confidence in the public finances by bringing Britain's record peacetime deficit rapidly under control.
The submission said there should be four pounds of spending cuts for every pound of tax increase, but said infrastructure spending should not be cut excessively.
Lambert set out a three-point plan for making savings in the public sector:Guardian 10 June 2010
- controlling workforce costs through curbs on pay and hiring;
- eliminating waste and duplication through sharing back-office functions, outsourcing and more efficient procurement;
- re-engineering public service delivery, including treating more patients at home ...
Household Income
Top to bottom income ratio four-to-oneIn 2008/09, original income, before taxes and benefits, of the top fifth of households in the UK was approximately 15 times greater than that for the bottom fifth (£73,800 per household per year compared with £5,000).
After redistribution through taxes and benefits, the ratio between the top and bottom fifths is reduced to four-to-one (average final income of £53,900 compared to £13,600).
Some types of households gain more than others from this redistribution.
Retired households pay less in tax than they receive in benefits and so gain overall.
Among non-retired households, single adult households with children also gain.
Most other non-retired households pay more in tax than they receive in benefits.
However, households with children do relatively better than households without children due to the cash benefits and benefits in kind (including health and education services) which are received by these households.
Cash benefits such as Pension Credit, Income Support, Incapacity Benefit, and the State Retirement Pension play the largest part in reducing income inequality. The majority of these go to households in the lower part of the income distribution. Cash benefits make up 56 per cent of gross income for the poorest fifth of households, 39 per cent for the second quintile, falling to 2 per cent for the top fifth of all households.
With the exception of Council Tax and Northern Ireland rates, all direct taxes are progressive; that is they take a larger proportion of income from those households with higher gross incomes.
In 2008/09, the top fifth of households paid 24 per cent of their gross income in direct tax while the bottom fifth paid 11 per cent.
Indirect taxes are regressive, taking a higher proportion of income from households with smaller incomes.
Since direct and indirect taxes have opposite effects on the level of inequality, the tax system as a whole has a much smaller effect on inequality than cash benefits.
Final income includes an adjustment for the receipt of benefits in kind from the state, such as health and education services.
Households with lower incomes tend to receive more benefits in kind from the state (£6,300 for the bottom fifth compared with £3,900 for the top fifth).
Retired households are the biggest users of health services provided by the state, while households with children are the biggest users of education services.
These two groups are more likely to be in the lower income groups.
ONS 10 June 2010 Rawls v Nozick
Labour's Frank Field to head poverty review
... the Review on Poverty and Life Chances will look at whether measures need to be reformed, how children's learning is affected by their home life and recommend action to reduce poverty for the least advantaged "consistent with the government's fiscal strategy".
He will work with officials from a number of government departments, including the Treasury and Home Office, as well as Work and Pensions.
Mr Field told the BBC he will look at new ways of measuring poverty and of measuring how effective public spending is in helping to tackle its root causes ...
BBC NEWS 05 June 2010 Benefits_Welfare 'Broken Britain'Victorian Contrasts
Welfare 'trapping' people in poverty
Competition for jobs takes heavy toll on starting pay
Starting salaries for workers taking new jobs fell by 3 per cent last month, despite the rising cost of living.
According to a report, the average salary for recruits was £31,871 in May, against £33,220 in April and £33,414 in December last year, as increased competition among applicants allowed employers to limit pay offers.
Wages are becoming more of a flashpoint between workers and employers as companies try to limit costs while inflation continues to rise. The Bank of England’s preferred measure of CPI inflation jumped to 3.7 per cent in April, up from 3.4 per cent in March, while the wider RPI measure, which includes housing costs and is seen by many as a better indicator of the cost of living, jumped to a near-20-year high of 5.3 per cent.
The data on new salaries in the Reed Job Index comes weeks after official figures showed that private sector pay, excluding bonuses, for new and existing workers rose by only 1.2 per cent in the first three months of the year as companies continued to freeze pay ...
Times 01 June 2010
Workers suffer from fall in income
Average wage rises have increased by just 0.1 per cent to 1.9 per cent, according to a respected monthly survey from Incomes Data Services (IDS).
The study compared the three month period to the end of February with the three month period to the end of March.
This average rise of 1.9 per cent is well below the rise in the cost of living, which hit 3.4 per cent during March according to the Consumer Prices Index, as the price of petrol jumped and food bills remained stubbornly high.
This suggests that in real terms workers are, in effect, suffering from a pay cut ...
A separate study from the think tank CEBR last week suggested that the average UK family was £2 a week worse off in March 2010 than a year ago, with just £153 of disposable income a week left after paying their key bills, because most people's costs are rising faster than any salary increases ...
VocaLink, a company that processes millions of workers' pay through the Pay As You Earn scheme, calculated annual pay increases fell from 1.5 per cent in March to 0.9 per cent in April, the lowest level it has recorded since it started its monthly survey in 2004 ...
Telegraph 06 May 2010
Social mobility in England 'lags behind other countries'
The study – commissioned by the Sutton Trust – suggested that pupils born into families with a history of underachievement were still much more likely to be resigned to low-paid jobs when they grew up.
Sir Peter Lampl, the charity’s chairman, said failure to improve social mobility risked pushing the UK to the “bottom of the class in education’s world order”.
"Education mobility points the way to the level of future social mobility in this country,” he said.
“While there are some signs of progress, we are still not serving the needs of the current crop of school pupils as well as we should and parental background remains a much more significant determiner of children's life chances in the UK than elsewhere.” ...
“A major obstacle to education, and consequently social mobility, is therefore the high levels of social segregation in English secondary schools.”
Researchers at Essex University analysed the test scores of thousands of children born in 1989/90 ... and compared them with results of equivalent exams by children born at a similar time in other nations.
The findings show that in England, 56 per cent of children of degree educated parents were in the top quarter of test results at the age of 14, compared with just nine per cent of youngsters whose parents left school without any O-levels – a gap of 47 percentage points.
This was twice the equivalent gap seen in Australia – 23 percentage points – and bigger than the 37 point gap in Germany and 43 point gap in the US ...
Telegraph 26 Apr 2010 Education for the Good SocietyParents' class is the key in England's exams system
Top comprehensives 'more exclusive than grammar schools'
'Communitarian Citizenship'
Neoliberalism and education
Fortunes of super-rich soar by a third
THE richest people in Britain have seen a record boom in wealth over the past year.
Their fortunes have soared by 30% even though much of the UK is struggling to recover from recession and the near-collapse of the banking system.
It is the largest rise in wealth since the list was first published 21 years ago.
Much of the increase is a result of the rebound in stock markets and property values after the government injected hundreds of billions of pounds into banks and the wider economy to stave off collapse ...
... the 1,000 richest people in the country increased their wealth by £77 billion last year, bringing their total wealth to £335.5 billion — equal to more than one-third of the national debt.
The number of billionaires has risen from 43 to 53, with nine seeing their wealth rise by £1 billion or more during the past 12 months ...
Times 25 Apr 2010
Invasion of the booty snatchers: how greed is spreading out from the City
"People are just the new domesticated livestock to be exploited"Blogger Halo572 has it right. It used to be said of the army that the squaddies were considered to be Class C stores: easily replaced. This is the, er, 'thinking' behind the mechanistic modelling of human beings to accept the grotesque disparities in wealth which, according to Lord Griffiths - vice-chairman of Goldman Sachs - is an essential pre-requisite to, er, "greater prosperity for all". Goldman Sachs is no stranger to the hubris that comes with globalised wealth, it's CEO having previously informed us that he and his colleagues are "doing God's work". Milton Friedman has, presumably, had a word with the Almighty since moving over to hobnob with Adam Smith, and all that Sermon on the Mount stuff has been quietly abandoned.Richard Lambert, the director general of the CBI, recently warned the small corporate elite being paid enormous sums that they seemed to "occupy a different galaxy from the rest of the community" and risked being treated like beings from another planet.
His words appear to have had little effect.
This year's season of annual meetings is shaping up to be a stormy one as executives defy the credit crunch with enormous rewards packages ...
Roger Bootle of Capital Economics says: "The pay culture of the City has affected expectations elsewhere. The whole climate is relevant here, because bad pay practices drive out the good ... Executive pay reflects a deeper underlying failure revealed by the banking crisis. The whole system of boards and non-executives has been a major failure. And scrutiny by shareholders hasn't worked." ...
In the decade to 2009, the average FTSE 100 chief executive has seen his rewards jump 125%, while the heads of smaller quoted firms have seen their pay increase by 80%, according to remuneration specialists.
This contrasts markedly with the experience of the rest of the population.
As Lambert pointed out, in 2000 the average chief executive earned 47 times as much as an average employee, but that ratio has now swelled to 81 times.
Figures from the Institute for Fiscal Studies show that, in the past decade, real income growth in almost all households was under 1% ...
Observer 18 Apr 2010 Corporate Sociopathy Wealth LogGoldman Sachs finds $5bn for pay and bonuses amid fraud investigation
BNP can't count on Barking breakthrough
The free market dogma has never been explained to voters in this country, most of whom are unaware of the con that has been perpetrated on them It's very convenient, therefore, that immigration takes the flak whilst conventiently - for Davos Man - it does it's prime job: keeping wages depressed, and employed people in fear of the P45. People can vote for the BNP if they wish, but there's no road away from the global con by scapegoating migrants. They're just victims of the IMF and WTO, like the rest of us.Nick Griffin has racialised housing issues but the area's problems aren't unique and BNP success can be rolled back ...
A key contest in this election is in Barking, between the BNP's Nick Griffin and Labour's Margaret Hodge.
On the face of it, all the ingredients for an electoral breakthrough by the BNP appear to be here: rising unemployment, housing problems, deep poverty, a growing proportion of immigrants and asylum seekers, and a local Labour party that has presided over decades of impoverishment.
The decline of industry in Barking and Dagenham, accelerated by Ford Dagenham's decision to cease car production in 2002, means the proportion of local people employed in manufacturing has fallen from 40% in the early 1990s to less than half that figure today.
Unemployment in the borough now stands at close to 10% and average incomes are the lowest in London. The borough has some of the lowest literacy and numeracy levels in the country and more than a third of its children are born into poverty ...
What is specific to Barking is the pace of change.
Its overall population, not just its proportion of ethnic minorities, is one of the fastest growing in the country.
This population competes for scarce resources. Council housing stock has fallen from 40,000 to 18,000 as a consequence of Margaret Thatcher's right-to-buy initiative in the 1980s, and the failure of Barking and Dagenham council to build any public housing for the past quarter of a century.
There are now more than 28,000 people on the local social housing waiting list ...
Guardian 16 April 2010 Global Labour Market Housing
The boss of Xstrata, Mick Davis, banked almost £29m for 2009, providing a potential embarrassment for the Conservatives as he is a high profile supporter of their campaign against the government's proposed increase in national insurance ...Bosses stir up executive pay row with mega salary packages
Meanwhile Matt Emmens, chairman of Shire Pharmaceuticals, the drugs group that abandoned the UK two years ago and moved its headquarters to Ireland for tax purposes, made £10.5m despite only being a non-executive director.
News of the bumper payouts comes hard on the heels of details of the salary and bonus awarded last year to the boss of Reckitt Benckiser, owner of Cillit Bang kitchen cleaner.
The publicity-shy Dutchman Bart Becht smashed all previous payout records by collecting more than £90m in cash and shares in one year, the equivalent of £2.85 every second.
That payout followed his collection of £36.8m in 2008 when he topped the Guardian's annual pay survey of FTSE 100 bosses.
Since 2005 he has collected more than £200m.
It also comes after the CBI director general, Richard Lambert, warned that bosses risked being regarded as "aliens" living in "a different galaxy from the rest of the community" because of the fast-widening gap between average pay and boardroom handouts.
"For the first time in history it has become possible for a manager – as opposed to an owner – of a large public company to become seriously rich," he told a business audience last month ...
Guardian 11 Apr 2010 Corporate SociopathyExecutive pay and bonuses
His remuneration included a base salary of £1.1m and a reduced cash bonus of £1.6m. The largest part of the remainder of the package came from Mr Chapman's exercising £15.5m of share options in September ...Gas chief pockets £28m after 26 per cent dip in profits
Independent 05 April 2010 Corporate Sociopathy
Key FindingsTown Hall Rich List 2010
• At least 1,250 council staff enjoyed remuneration of £100,000 or more in 2008-09. This is up from 1,099 in 2007-08, a 14 per cent increase.
• There were 166 earning over £150,000 in 2008-09. This is up from 135 in 2007-08.
• The average remuneration package for those on the Rich List was £125,745, or £2,418 a week.
• The average pay rise for the people on our list was 5 per cent. This is compared with a 2.7 per cent pay rise for a nurse and 2.3 per cent pay rise for a teacher.
• In 2008-09, 31 council staff earned more than the Gordon Brown, the Prime Minister. This is up from 19 people in 2007-08, a 63 percent increase. 219 received more money than cabinet ministers in 2008-09.
• Based on our responses, the county council with the most staff earning £100,000 or more is Kent with 27. The metropolitan district with the most is Liverpool with 22.
TaxPayers' Alliance 01 April 2010Rise in top council earners
The bumper pay deal awarded to Bob Diamond, one of the City's wealthiest bank chiefs, came despite attempts by the government to curb the amounts paid to high-flying bankers.Barclays president's £60m pay deal
The package is based on a £384,000 salary, but through a combination of perks including share bonuses, Mr Diamond – who was praised for waiving his bonus last year – could earn more than 150 times that amount.
Barclays's annual report yesterday revealed that Mr Diamond, the head of Barclays Capital, earned £26.8 million through selling his shares in Barclays Global Investors.
He was also given £6 million in Barclays shares, with the possibility of earning another £12m in shares over two years if performance related targets are hit.
Mr Diamond, 58, also made £15.6 million from two sets of bonuses he was awarded in 2005 under a long-term incentive scheme ...
Telegraph 20 Mar 2010Bob Diamond
The chances of a child from a poor family enjoying higher wages and better education than their parents is lower in Britain than in other western countries ...OECD: UK has worse social mobility record than other developed countries
Highlighting the UK's lack of social mobility, the Paris-based thinktank said the chances of a young person from a less well-off family enjoying higher wages or getting a higher level of education than their parents was "relatively low" ...
It added that there was a hefty wage premium associated with growing up in a better-educated household and a corresponding penalty for being raised in a less-educated family ...
In the UK, the OECD found that 50% of the economic advantage that high-earning fathers have over low-earning fathers is passed on to their sons.
By contrast, in Australia, Canada and the Nordic countries, less than 20% of the wage advantage was passed on ...mugclassGuardian 10 Mar 2010 Economic Democracy Education for the Good Society
10 Mar 2010, 1:58PM
In my town, if you live in one of the less well off area, your children will go to one of three schools, all of which have just received damning reports from Ofsted. For a bright child from a low income family there is no hope. You will be educated in a school with high truancy, high level of behavioural problems, high levels of disruptive behaviour, a high teacher turnover and frequent teaching by supply staff.
My husband and I were fortunate to benefit from the grammar school system, and although our families were both low income we went on to excellent universities and good careers.
Labour have managed to achieve great equality - the equality of ensuring that if you are from a poorer background, no-one will do well. They have achieved equality of failure.OECD
A Family Affair
Frustrated pupils 'bored by their factory schools'
UK low in social mobility league, says charity
• £10m bonus makes Stuart Gulliver best-paid executiveHSBC's highest-paid executive defends huge payouts
In which we learn of Mr Gulliver's deeply touching concern for the poor
• Bank reports 24% fall in pretax profits for 2009 to $7bn
• Michael Geoghegan give his payout to charity
Stuart Gulliver, whose £10m pay deal made him the highest paid banker at HSBC last year, defended the practice of big payouts today as Europe's largest bank reported a 24% fall in pretax profits ...
Gulliver said the bank helped to fund deals and create employment around the world. "The whole point is that globalisation has lifted a lot of people out of poverty," Gulliver said.
Being top of the pay league made him "uncomfortable", Gulliver said, borrowing a word used earlier by Geoghegan when he announced he was handing his £4m bonus to charity.
"It is uncomfortable for my wife and I to make public things that we have endeavoured to keep very private," said Geoghegan, whose wife, Jania, chairs the Education Africa charity, which is receiving part of the donation over the next three years.
The bank could not answer whether the charity would also benefit from Gift Aid, which allows charities to reclaim the basic rate of tax ...
Guardian 01 March 2010
Stephen Hester ... circus messiah
Stephen Hester is a man on a mission. Not the biggest restructuring of a bank ever undertaken. No, forget that. He wants Royal Bank of Scotland off the front pages – buried behind real news about adulterous footballers and bullying politicians. ...
Now that's a challenge. Especially with someone as loquacious as Hester in charge.
It all started so well ... then up popped Hester, talking about "tightropes" and "crosses to bear" like some circus messiah.
Most of our staff, he added, earn less than a bus driver (£20,400, for the record, according to the Office for National Statistics).
OK. But what about RBS's 16,800 investment bankers on an average of £175,000. Are they more socially useful than bus drivers, one wag asked.
"Are journalists socially useful?" Hester punched back.
Fair point. But the going rate for a hack is two bus drivers, not nine ...
Telegraph 25 Feb 2010
The Sutton Trust study looked at the results of a series of vocabulary tests carried out by 12,500 British children at the age of five.Language skills 'lag a year behind in poorest children'
It found those from the poorest homes were nearly a year behind in their results.
It also looked at the factors common to poorer children that might influence their development.
It found that just under half of those from the poorest fifth of families were born to younger mothers under 25 ...
The Sutton Trust study looked at the results of a series of vocabulary tests carried out by 12,500 British children at the age of five.
It found those from the poorest homes were nearly a year behind in their results ...
... just under half of children from the poorest homes were read to every day at the age of three, compared to 78% of children from the richest fifth of home.
The authors noted that the UK had invested 4.3% of GDP on early years education in 2006.
But they called for a more effective early years strategy that would prevent greater numbers of children from disadvantaged backgrounds "falling behind their more fortunate peers before school has even begun".
Sutton Trust chairman Sir Peter Lampl said the findings were both shocking and encouraging - revealing the stark educational disadvantage experienced by children from poorer homes before they reached school.
But it also showed the potential for good parenting to overcome some of the negative impacts that poverty could have on children's early development ...
BBC NEWS 15 Feb 2010 'NEETS'Sutton Trust
The poor not only die sooner, they also spend more of their lives with a disability, an "avoidable difference which is unacceptable and unfair", a government-ordered review into Britain's widening health inequalities said today.Healthy living is cut short by 17 years for poorest in Britain
Despite 10 years of the largest public spending increases on health since the creation of the NHS, and rising prosperity levels generally, people in England living in the poorest neighbourhoods will, on average, die seven years earlier than others living in the richest parts of Britain, the study finds.
Not only is life expectancy linked to social standing, but so is the time spent in good health: the average difference in "disability-free life expectancy" is now 17 years between those at the top and those at the bottom of the economic ladder, the report says.
The report, entitled Fair Society, Healthy Lives, says the government will fail to meet its promise to reduce the 10% mortality gap between deprived areas and the rest of the UK. For men in poor areas the gap has widened by 2%, and for women the figure is 11%.
Health inequality is now so pronounced that in the wealthiest area of London, a ward in Kensington and Chelsea, a man will now have a life expectancy of 88 years.
A few miles away in Tottenham Green, north London, one of the capital's poorer wards, male life expectancy is 71 years, a period less than that found in Ecuador, China and Belize, countries all poorer with no national health systems ...
Guardian 10 Feb 2010Birmingham city council to cut up to 2,000 jobs and close care homes
Efforts to help poor white boys catch up with their peers in the early years of school appear to have stalled.Poor white boys 'not catching up'
Official data on assessments at age five show three-quarters of the poorest white boys in England are still not achieving a good level of development ...
The tests cover areas such as communication, language and literacy, problem solving and numeracy as well as personal, social and emotional development ...
Looking at the breakdown of results by area, 39.3% of pupils in the most deprived 10% of areas achieved a good level of development compared with 66.5% in the least deprived 10% of areas.
The difference in achievement between the most and least deprived fell by two percentage points to 27.2 in 2009.
However, this still leaves the most advantaged nearly one and half times more likely to have a good level of development than those from the most disadvantaged areas.
The figures do show some improvements in poor white boys' performance on the previous year when 22.3% achieved the required level in the tests.
But they have not continued the improvement against the national average that occurred in 2007-8 ...
BBC NEWS 28 Jan 2010Underclass of pre-school children emerging
'NEETS'
Poor white boys do worst in tests
One in eight pupils 'wrong level'
Language skills 'lag a year behind in poorest children'
Demos
Sutton Trust
The gap between rich and poor in the UK is wider now than 40 years ago, a government-commissioned report says.Rich-poor divide 'wider than 40 years ago'
Ms Harman appears to be unware of the terms of the Washington Consensus.
"Deep-seated and systemic differences" remain between men and women and minority groups in pay and employment, the National Equality Panel found ...
The issues raised would need "sustained and focused action", Equalities Minister Harriet Harman said.
"But for the sake of the right of every individual to reach their full potential, for the sake of a strong and meritocratic economy and to achieve a peaceful and cohesive society, that is the challenge that must be met," she added ...
Parents of public school-educated sons can expect their children to be paid eight per cent more by their mid-20s than boys educated at state schools;
At school poor British white boys are well below the national average by the time they are seven, deteriorating further after they are 11.
Women are paid 21 per cent less than the national average, despite women into their 40s having better qualifications than men;
Britain has one of the most unequal societies in the world, with income inequality ahead of Ireland, Japan, Spain, Canada, Germany and France. Inequality is worse in England than Wales and Scotland;
A typical professional on the verge of retiring is worth nearly £1 million compared with just £59,000 for someone who is long-term unemployed.
Poverty rates are among the worst in Europe, with only Italy, Spain and Greece faring worse.
Average and below average White British children are less likely than those from minority ethnic groups to go on to higher education.
More than half of children educated at private schools, and more than 40 per cent of those with professional parents, go to the top Russell group of universities.
Two-thirds of those with professional parents receive firsts or upper seconds, but only half of those with unskilled parents.
Telegraph 27 Jan 2010
The panel pointed out that half of those who have worked in the top professions have net assets worth more than £900,000, while a 10th of those who have had unskilled jobs have property, savings and possessions worth less than £8,000 ...
BBC NEWS 27 Jan 2010GEO
Richest 10% are now 100 times better off than the poorest
Inequality in the UK: the data ...
'You're stigmatised if you live on a council estate'
Labour fails to understand 'inequality'
... the Labour deputy leader will unveil a new "inequality bible" which admits that the government has merely slowed the trend in rising inequality despite more than 12 years in office.Harriet Harman puts class at heart of election battle
The 420-page report, commissioned by the government, has been written by a panel chaired by Professor John Hills.
In her speech, Harman will say the report ... makes uncomfortable reading for Labour, and sets out home truths about the scale of the challenge ...
The findings of the report include:
• When three-year olds are assessed on a measure of their school readiness, those from the poorest 20% of the population on average score only half as well as those from the richest 20%.
• Children who are eligible for free school meals do significantly less well at school at every stage. At key stage 4, only 27% of them got good GCSE passes last year, compared with 54% of those who were not eligible for free meals.
• Only 4% of children receiving free school meals at age 15 went on to higher education, compared with 33% of those who were not eligible.
• Average life expectancy in the most affluent areas of the country is around 13 years longer than in the poorest areas. Men in the richest 20% of the population are four times more likely to be members of an occupational pension scheme, with the financial security that goes with it, than those from the poorest 20% ...
Harman ... will insist that the big choice at the next election will be which party people trust to ensure that as a society "we do not return to the days when inequality was spiralling and where a tiny minorty of the population got all the rewards" ...
Guardian 20 Jan 2010
The country's most senior doctors, lawyers and accountants will be told tomorrow that they must draw up plans showing how they will make their professions less elitist.Top professions must be less elitist
The move is part of a government attempt to increase social mobility and break down the pattern that has seen top jobs dominated by those from privileged backgrounds. Only 7% of the population receives a private education, but 75% of judges and 45% of top civil servants went to independent schools.
Ministers will also target universities, calling on them to pay more attention to "contextual information" about an applicant, such as their economic background or schooling, when deciding what grade offers to give them ...
Observer 17 Jan 2010 Inequality
Hopes rise for high street as John Lewis sales soar
Bankers spending their bonuses?
The John Lewis Partnership has sparked fresh hope of a consumer bounceback with a trading statement that sets its staff on course for bumper bonuses (see Commentary, facing page). The employee-owned retailer brought cheer to the high street and its employees with a surge in sales over the key Christmas period.
During peak trading, sales at its John Lewis department stores and Waitrose supermarkets rose strongly. Like-for-like figures have powered past levels seen in 2007, when the business’s 69,000 employees, or partners, earned a bonus of 20 per cent of their salaries.
At John Lewis, whose 29 stores are regarded as an important retail indicator, sales rose 15.8 per cent in total, or 12.7 per cent on a like-for-like basis, in the five weeks to January 2, against the same period last year. Still more encouragingly, takings are 10.4 per cent higher than in 2007, the year before the credit crisis battered sales.
Times 05 Jan 2009Recession? What Recession?!
Cleaners worth more to society than bankers, says thinktank
• Hospital cleaners create £10 for every £1 they earn
• RBS and Halifax losses erased 20 years of profits
...
The thinktank [NEF] said it had found a way to calculate how much someone should be paid in relation to the value they create through a series of measures including conventional economic returns, environmental impacts, and knock-on effects for jobs and wellbeing in society.
It said the report challenged the notion that high pay did not matter as long as poverty was eradicated. It argues that high pay is often generated by businesses that destroy other parts of the economy or fail to pay the full costs of their activities.
The report said tax accountants were the most destructive, laying waste to £47 of value for every £1 they created. Elite City bankers (earning £1m plus bonuses) destroy £7 of value for every £1 they create and advertising executives wreck £11 of value for every £1 they are paid.
On the other hand, the report judged that waste-recycling workers generated £12 for every £1 spent on their wages. Childcare workers create between £7 and £9.50 of value for every £1 of pay and hospital cleaners create more than £10 in value for every £1 they receive in pay ...
In the case of advertising executives, the NEF calculates the cost to society of over-consumption. While the industry creates jobs, it also has severe and costly negative effects. The authors quote the economist JK Galbraith who argued that advertising created socially and environmentally wasteful "wants" where needs have already been met.
"We have calculated the costs to society of obesity, anxiety-related mental health problems and indebtedness.
"Then there are the substantial environmental costs from climate change and resource depletion. It is estimated that in rich countries such as the UK, the level of consumption is three times as much as the planet's environmental resources can sustain." ...
Guardian 14 Dec 2009A Bit Rich
Britons may be £1.45trn in debt but they are worth £9trn, says ONS study
Average wealth per family comes in at £204,500, or £145,400 when private pensions are excluded.
But there are marked imbalances between the haves and the have-nots.
The wealthiest 10 per cent of households are 4.8 times richer than the bottom 50 per cent.
And while the wealthiest 20 per cent account for 62 per cent of Britain's total wealth, the least well-off half hold only 9 per cent.
At the bottom of the heap, the poorest 10 per cent of families are in debt in terms of both financial and property wealth.
Everyone has at least some physical wealth wrapped up in possessions. The average value is just shy of £30,000 – of which £25,000 is house contents.
But when it comes to purely financial wealth, the super-rich have it all sewn up.
The wealthiest 20 per cent account for 84 per cent of the UK's net financial wealth, while the poorest 50 per cent own just 1 per cent of the net wealth ...
Independent 11 Dec 2009It's time to give up the dream of home ownership
£2,400: the bill every family will pay to cut the deficit
Bankers angry over windfall tax on bonuses
Banking chiefs today reacted angrily to suggestions that a windfall tax on bonuses could be included in the Chancellor's Pre-Budget Repor
The British Bankers' Association (BBA) has warned that financial firms or key staff could abandon the City of London if Alistair Darling decides to go ahead with the one-off measure ...
The BBA said that the Government should "bear in mind the strategic importance of the City to the UK".
It said prior to the turmoil of recent years, the financial sector brought in around £7 billion a year in corporation tax and raised fears that banks and their staff could relocate away from the capital if penalties were felt to be too heavy.
BBA chief executive Angela Knight told the BBC that a super-tax on bonuses would send the wrong message to the world about the UK's position as a financial centre ...
Independent 07 December 2009
Poverty increased before the recession
Levels of poverty, unemployment and repossessions have all been on the rise since 2004, a report reveals.
An audit carried out by social research charity, the Joseph Rowntree Foundation, says the country needs to recover from "deep-seated" problems which were emerging before the economic downturn.
The foundation's data analysis found that 2004-05 marked a "key turning point", with poverty, unemployment and repossessions on the increase.
Poverty is at the same level as it was in 2000, with two million children in low-income households, unemployment at a 12-year high and repossessions at six times the level of 2004, the report says.
Julia Unwin, the foundation's chief executive, said: "The report highlights the scale of the challenge the Government faces if it is to reduce poverty significantly in Britain."
The study calls in to question the Government's record on tackling poverty.
Independent 03 December 2009Joseph Rowntree Foundation
The Poverty Site
Barclays bankers to get 150pc pay rise
Barclays is set to award its 22,000 investment bankers pay rises of up to 150pc in an effort to beat Government moves to clamp down on multi-million-pound bonuses ...
Barclays' decision to backdate the pay rise is likely to act as an effective cash bonus this year, as the bulk of performance pay will be made in stock and deferred for up to three years in accordance with the new guidelines.
Higher salaries and smaller bonuses are intrinsic to its new pay structure. Central to the policy will be an increase in the cap on salaries in BarCap from £120,000 to £300,000. The changes are likely to have the biggest effect on junior staff ...
Telegraph 03 December 2009RBS board may quit if £1.5bn bonus plan is vetoed
5,000 bankers to earn £1m this year
Left and Right square up for a battle over poverty
... a major forthcoming study, compiled by the Fabian Society and the Webb Memorial Trust, contains some uncomfortable conclusions ... for Mr Cameron and his Conservatives in that they call into question some of their most treasured tenets.
Chief among them is the idea that poverty can be reduced by less costly and more closely targeted – i.e. "smarter" – funding.
This is not so, it says; experience abroad shows that poverty reduction is in inverse proportion to the narrowness of targeting. Benefits that are widely drawn, it finds, foster a sense of mutual responsibility, which is reduced the more they focus on particular categories of people ...
Now, of course, this is a study that comes from the political left, and quite a bit to the left, not just of where the Conservatives are now, but of where New Labour was, led by Tony Blair, and now by Gordon Brown. So its critical tone could be dismissed as only to be expected.
Yet its broad conclusions ring true, as the effects are increasingly apparent all around us. They are: that inequality has started rising again, after a fall over the past 10 years; that, where poverty reduction is concerned, the public mood is considerably less sympathetic now to redistribution through the tax system, but especially through benefits; and that the next government will have to try something new, if the social state, and in particular the benefits system, are still to enjoy public support.
The authors of the report make clear that they favour something like the Nordic model, which is statist and expensive, but gives more people a stake in public spending. They also recommend a new social contract, under which benefit recipients would be required to do some socially useful work for their money ...
Independent 01 December 2009Britain faces return to Victorian levels of poverty
'Back to work' plan to push self-employment
Pressure builds for radical reform of tax system to tackle wealth inequality
A fierce debate within the government on how to tackle entrenched wealth inequality – possibly through a high pay commission or a tax on assets – is to be ignited by a report ordered by Harriet Harman, the Labour deputy leader and the minister responsible for equalities.
The report is due to be published in January. Early drafts seen by ministers say wealth inequality has deepened, with the rungs on the ladder having grown further apart, reducing social mobility. It is also expected to underline the degree to which access to pensions and housing play a crucial role in entrenching inequalities in wealth and income.
Harman sees the report, which has been commissioned from a team of academics chaired by Professor John Hills, as a political opportunity for Labour to frame a progressive debate on inequality before the election.
Downing Street and the Treasury would be opposed to a new wealth tax, but there may be pressure for a tougher capital gains tax on main homes, or widening council tax bands. It is also likely to lead to calls for wider employee share ownership and home ownership.
The Hills report will challenge the Tory policy of raising the threshold for inheritance tax to £1m and is likely to endorse tax credits as an effective way of redistributing incomes ...
Guardian 08 November 2009
Public must learn to 'tolerate the inequality' of bonuses, says Goldman Sachs vice-chairman
One of the City's leading figures has suggested that inequality created by bankers' huge salaries is a price worth paying for greater prosperity.
In remarks that will fuel the row around excessive pay, Lord Griffiths, vice-chairman of Goldman Sachs International and a former adviser to Margaret Thatcher, said banks should not be ashamed of rewarding their staff.
Speaking to an audience at St Paul's Cathedral in London about morality in the marketplace last night, Griffiths said the British public should "tolerate the inequality as a way to achieve greater prosperity for all".
He added that he knew what inequality felt like after spending his childhood in a mining town in Wales. Both his grandfathers were miners who had to retire from work through injury.
With public anger mounting at the forecast of bumper bonuses for bankers only a year after the industry was rescued by the taxpayer, he said bankers' bonuses should be seen as part of a longer-term investment in Britain's economy. "I believe that we should be thinking about the medium-term common good, not the short-term common good ...
We should not, therefore, be ashamed of offering compensation in an internationally competitive market which ensures the bank businesses here and employs British people," he said ...
Guardian 21 October 2009FSA to demand 'living wills' for banks
FSA: Force banks to hold more capital
FSA to block banks from big bonuses
Darling blasts Goldman Sachs over bonuses
UK regulator backs capital increase in banks
UK charity plea to City high-fliers
'Stark split' in education levels
The qualifications gap between the most and least educated areas in Britain is growing wider, says a lecturers' union.
Richmond Park in south-west London has the highest proportion of graduates, 64%, compared with the lowest, 10% in Hodge Hill, Birmingham.
"The current divide between the haves and have-nots is growing," says UCU general secretary Sally Hunt.
The lowest-achieving areas are found in industrial cities of England's North and Midlands, and parts of East Anglia ...
Getting a university degree remains a key indicator for the likelihood of getting a well-paid job - and a report by former minister Alan Milburn on social mobility called for greater efforts to widen access to higher education.
"Education holds the key to improving social mobility, tackling poverty and extending opportunity for all," said the UCU's Sally Hunt.
"Those with the greatest access to qualifications tend to be healthier, wealthier and more active citizens."
But she says that at present where you live will "largely determine your chance to educational success".
BBC NEWS 18 October 2009
Executive pay keeps rising, Guardian survey finds
Executives at Britain's top companies saw their basic salaries leap 10% last year, despite the onset of the worst global recession in decades, in which their companies lost almost a third of their value amid a record decline in the FTSE ...
Bonus payouts were lower, but the basic salary hikes were more than three times the 3.1% average pay rise for ordinary workers in the private sector.
The big rise in directors' basic pay – more than double the rate of inflation last year – came as many of their companies were imposing pay freezes on staff and starting huge redundancy programmes to slash costs ...
The average chief executive of a blue-chip company now earns a basic salary of £791,000. However, adding bonus payments, share awards and the value of perks ranging from cars and drivers to school fees and dental work, the average pay package rises dramatically ...
Guardian 14 September 2009Pay gap widens between executives and their staff
It was FTSE's worst year ever – but not for executive pay
Executive pay: Heads you win, tails you win
Executive pay 'up 10 per cent despite crash'
Top executives pocket huge bonuses
FTSE 100 chief executives still took home bonuses equal to 90 per cent of their basic pay, despite plummeting profits and dividends at top companies.
Research by the pay consultancy Hewitt New Bridge Street found that the median salary for a FTSE 100 chief executive was £800,000 last year, meaning the bonus would be £720,000 ...
David Tankel, principal consultant at Hewitt, suggest(s) that the recession has done as little to put a break on boardroom avarice as it has on the traditional type of those working on the trading floor.
One hundred public figures have joined a campaign for a High Pay Commission, which they want to act as a watchdog on high City pay packages. It includes figures such as the Labour MP John Cruddas and the Liberal Democrat Treasury spokesperson, Vince Cable.
The campaign, under the auspices of the centre-left Compass Group, calls for steps such as maximum wage ratios and bonus taxes ...
The Hewitt research pointed out that companies failing to act on shareholder concern about pay have been embarrassed.
Shell, the oil major, saw its remuneration report voted down by shareholders in May after tweaking its bonus pay plan so that executives would be paid despite failing to hit targets, in what was the most prominent show of dissent this year.
But such votes have been criticised because they continue to hold only advisory status and do not have to be acted upon ...
The research found that variable pay – made up of an annual bonus and long-term share-based incentives – accounts for about 60 per cent of a FTSE executive's pay, up from 45 per cent in 2003. Some 60 per cent is linked to long-term performance, compared to 50 per cent in 2003.
Independent 18 August 2009Should there be a commission into high pay
Hewitt New Bridge Street
Poor People Pay More Tax
A new report, A House Divided, by Charlie Elphicke for the Centre for Policy Studies, analyses data published today Wednesday 29 July by the ONS.
Elphicke shows that the poorest 5 million households in the UK are now paying more in tax and receiving less in benefits than they were before Labour came to power.
% of total taxes paid 1996-97 2007-08 Poorest households Richest households % of total benefits received 1996-97 2007-08 Poorest households Richest households
At the same time, 400,000 more children are living in official poverty than four years ago (i.e. children living in households with 60% of median earnings).
Centre for Policy Studies 30 July 2009
Rich and poor gap 'remains high'
The gap between the rich and poor in the UK remained at a high level in 2007-8, official statistics have shown.
The richest fifth of the population had an income, before tax and benefits, 16 times greater than the poorest fifth.
The widening inequality in disposable income seen during the previous three years has halted, the Office for National Statistics figures indicated.
During that period, salaries and investment income among higher earners rose faster than for the poorest.
The ONS said there had been a sharp rise in income inequality in the late 1980s. Despite the levelling off, this change had not been reversed.
"During the 1990s and 2000s, there were periods of both rising and falling inequality, but the level of inequality remained high by historical standards," the ONS report said.KEY STATISTICSThe statistics authority analysed the effect that taxes and benefits had on household income in the UK.
£72,600: Original household income for top fifth of UK population
16 times: Gap between richest fifth and poorest fifth of UK population before tax and benefits
£9,100: Increase in retired households' income following tax and benefits
Source: ONS
Those households in the top fifth bracket had an original income - gross income excluding taxes and benefits - of £72,600.
This was nearly 16 times bigger than the household original income for those in the bottom fifth of the population, at £4,700.
The effect of taxes and benefits narrowed the gap, down to a ratio of four to one.
Taking the tax and benefit system into account, the final household income for the top fifth fell to £52,400 a year, compared with the bottom fifth which saw income rise to £14,300.
Single parents gain from the benefits system. Before this is taken into account their household income was an average of £11,000 a year; afterwards it was £22,900.
Most other non-retired households paid more in tax than they received in benefits, although cash benefits meant that those with children benefited more than those without.
Pensioners also won from this redistribution, with their final household income rising by £9,100 to £22,200 after benefits have been added and tax deducted.
Those in the bottom two-fifths of income levels received 57% of cash benefits such as Income Support, Pension Credit, Child Benefit and Incapacity Benefit.
These benefits made up more than half (58%) of the income of the poorest fifth of the population and 2% of the richest fifth.
The richest members of society paid a bigger proportion in direct taxes, such as income tax, while the poorest pay a higher proportion of indirect taxes, such as VAT.
Health services and education provided by the state are known as benefits in kind. The ONS has calculated that the financial equivalent of these benefits was £7,500 for the poorest fifth of the population and £4,100 in the top fifth.
This benefits pensioners and households with children who were more likely to need to use these services.
The findings contrast a report in October last year by the Organisation for Economic Co-operation and Development (OECD) which concluded that the decline in inequality in Britain had been "remarkable" since the turn of the decade.
But the report said the UK still had one of the highest levels of income inequality in the developed world.
BBC NEWS 29 July 2009Poor People Pay More Tax
Costs hit low income households
The cost of living for those living on minimum household budgets is rising faster than inflation, the Joseph Rowntree Foundation has calculated.
It says that the costs for a single household on its low-income budget were up 5.3% this year, with rises of 5% for pensioners and couples with children.
The reason is that the poor spend more on fuel, food, and public transport, which have risen by 7% to 12%.
One in four households in the UK fall below Rowntree's minimun income levels.
The report warns that the benefits paid to working age people are well below minimum income standards ...MINIMUM WEEKLY INCOME STANDARDS 2009
Single person: £166.47
Pensioner couple: £211.30
Couple with 2 children: £388.51
Lone parent with one child: £220.88
source: Joseph Rowntree Trust (excludes housing costs and childcare)
BBC NEWS 30 June 2009Sharp contraction for UK economy
JRF: A minimum income standard for Britain in 2009
UK's housing needs new foundations
Talk that the housing market may be bottoming out after 18 months of falling prices may cheer the chattering classes of existing homeowners, but for young people it is no cause for celebration.
Jonny Scott, aged 24, from Winchester, says that one day he would like to buy a house or a flat but, despite a 20% drop in prices across the country, that still "seems millions of years away. I don't even see it as a possibility at the moment" ...
Research from the Chartered Institute of Housing out tomorrow will show that only a third of young people (18-to-24s) now aspire to own their own home. There has also been a big change in attitudes among the 25-to-34 age group; only 69% think home ownership is a good thing, down from 83% before the credit crunch struck.
CIH chief executive Sarah Webb says: "We've driven too many people into unsustainable owner-occupation and need to do a far better job of putting renting and owning on a level playing field. We need to get serious about the number of houses we are prepared to build and have to look at renting as a more attractive alternative to owning."
Evidence from the front line is that the stabilisation in the housing market is not driven by young people: the fall in prices so far has done little to help them gain a foothold on the housing ladder ...
Professor Steve Nickell, a former member of the Bank of England's monetary policy committee and now chairman of the National Housing Planning and Advice Unit, is puzzled that house prices seem to be bottoming out given that first-time buyer access to mortgages on reasonable terms is restricted by a still dysfunctional banking system ... (he) says that the long-running shortage of housing that the British property market suffers has not gone away just because prices have slumped.
"There is a shortage in the sense that not enough houses have been built to keep pace with the number of new households being formed," he adds. "And that has been the case since about 1998."
Britain's birth rate has been relatively strong, people are living longer and there is a steady flow of immigration, all of which puts upward pressure on demand.
Britain is estimated to need nearly a quarter of a million new homes a year just to keep up. This year, though, experts expect fewer than 100,000 to be built - the smallest number since the second world war - as a result of the market slump.
Nickell is worried that social housing waiting lists have risen to 700,000 households since the turn of the century:
"And it is continuing to rise very strongly. This is putting pressure on the private rented sector." ...
Lack of housebuilding means Britain looks destined to live with relatively high house prices lurching from boom to bust as they have done for decades ...
Observer 14 June 2009Land Tax, Fair Tax
Britain's estates are 'social concentration camps'
Millions of people have been condemned to live under "social apartheid" by 30 years of poor housing policies, a damning report on council estates will say this week.
The 107-page report, to be published on Friday, condemns successive governments for pushing poorer people into what it condemns as "social concentration camps" set away from private housing, jobs and shops.
Children born on such estates are more likely to end up unemployed, suffer mental health problems and die younger than their counterparts in private housing, says the study by the Fabian Society. Most damningly for the Government, it concludes that pledges by the then Prime Minister Tony Blair to end "no-go areas" and close of the gap between rich and poor have ended in failure.
The report, entitled In the Mix, finds that by concentrating council housing in estates set apart from the wider community, successive governments have produced a situation where living in social housing is not just a sign of poverty but a cause in itself.
It is blunt in assessing Britain's housing policy as "nothing short of disastrous" ...
The gulf between those left stranded on these estates and rich or even middle-income families is wider now than it was 30 years ago. In England and Wales, the average electoral ward is 16 per cent public housing, but in the poorest wards that figure rises to 70 per cent or more.
By splitting up those living in public and private housing, successive governments have fostered suspicion towards those who live on council estates. Research for the study found that a third of those polled felt people living on council estates had "nothing in common with them", and 60 per cent of those believed that mixed housing would be a bad idea.
It concludes that segregated estates have had a devastating effect on social mobility. "There is nothing inevitable about this correlation between housing and disadvantage. It has been caused by political and institutional processes – and such processes can be arrested and altered."
The Independent 03 May 2009
Tax rise for rich won't make society fair, says Mandelson
Did you actually want a fair society, Lord M?
Lord Mandelson warned Labour yesterday not to impose big taxes on the rich during the recession as he urged the party not to revert to the "politics of envy".
At a Fabian Society conference entitled Fairness Doesn't Happen by Chance, the business secretary described as "ugly" the view prevalent in some Labour circles that politicians can promote fairness by "dragging down" the wealthy ...
The Labour deputy leader, Harriet Harman, also insisted that the gap between rich and poor needed to be addressed, saying: "As we seek to build a fairer society in the future, there must be no return to the awful spectacle of directors of companies awarding themselves bonuses of hundreds of millions. No one seeks to defend that now and that sort of excess and greed has no place in the new social order of a fair and equal society." ...
The Guardian 19 January 2009
“Be Nice to the Countries That Lend You Money”
Think about the way we’ve been living the past 30 years. Thirty years ago, the leverage of the investment banks was like 4-to-1, 5-to-1. Today, it’s 30-to-1. This is not just a change of numbers. This is a change of fundamental thinking.
People, especially Americans, started believing that they can live on other people’s money. And more and more so. First other people’s money in your own country. And then the savings rate comes down, and you start living on other people’s money from outside. At first it was the Japanese. Now the Chinese and the Middle Easterners.
We—the Chinese, the Middle Easterners, the Japanese—we can see this too. Okay, we’d love to support you guys—if it’s sustainable. But if it’s not, why should we be doing this? After we are gone, you cannot just go to the moon to get more money. So, forget it. Let’s change the way of living.
The Atlantic December 2008
Energy firms 'profit from poor'
Energy suppliers make some of their biggest profits from their poorest customers, a watchdog has said.
Firms make about half a billion pounds a year in extra charges from prepayment meters, Consumer Focus estimates.
About 1,000 prepayment meters a day are being installed in households where people have got into debt over their energy bills ...
BBC NEWS 15 November 2008
Flawed evidence of social mobility
According to the government's spin, recent research demonstrates that social mobility is increasing (Social mobility on the rise at last, says report, November 3). The research did nothing of the kind, and indeed the researchers were quite careful about the implications of their findings. What they found was a weakening of the strength of the relationship between parental income and GCSE achievement at age 16 for children born in 1990, as compared with a cohort born in 1970.
The problem is that we cannot infer that this shift will have any implications for social mobility at all. Social mobility in this case is between generations. Traditional sociological interest has focused on movements in relation to occupation. What is needed is a focus on the relationship between parental income and assets and the income and assets of their children.
The most important shift over the last 40 years has been the massive decline in the proportion of the population engaged in skilled manual work. At the same time, the relative earnings of many occupations which require higher levels of education have declined, to the extent that occupations which could be accessed with five O-levels in the 1960s now require a degree.
The net effect is that it is increasingly difficult for children from middle-income households to achieve the relative, and even absolute, living standard of their parents. The harsh reality is that in the bad old days of the 11-plus there was more social mobility than there is now. The UK is, by western European standards, an unequal society and all the signs are that it is likely to remain so.
David Byrne
Professor of sociology and social policy, Durham University
Guardian 11 November 2008
Up. Up. Up. Child poverty, pensioner poverty, inequality
Gordon Brown's flagship anti-poverty campaign received a triple blow yesterday with news that a rise in both child and pensioner poverty had left Britain a more unequal country than when Labour came to power in 1997.
Britain's leading tax experts - the Institute for Fiscal Studies (IFS) - said that despite the billions of pounds spent on tax credits, Labour had yet to meet its 2005 benchmark of reducing child poverty by a quarter and that the prime minister would have to divert money from middle-class tax cuts to have an even chance of hitting the 2010 target.
Treasury sources admitted that finding the necessary £2.8bn - equivalent to the one-off package to end the 10p tax row - every year would prove challenging at a time when the state's finances are already deeply in the red.
David Phillips, researcher at the IFS, said: "Further increases in poverty and inequality will not be welcome news to the government, even though they should come as no surprise. We estimate that it would need to spend a further £2.8bn a year by 2010-11 to give itself a 50-50 chance of meeting its next child poverty target. But the chancellor will be under pressure to spend the same amount renewing last month's 'one off' income tax cut, most of which benefits families on middle incomes rather than the poor."
Data from the Department for Work and Pensions (DWP) showed that the strong economic growth early in Labour's third term failed to help the least well-off. On the day that Sir Callum McCarthy, chairman of the Financial Services Authority, said the City's watchdog would analyse pay structures of investment banks and potentially penalise those with schemes skewed towards excessive risk-taking, the DWP figures showed the incomes of the poorest 20% of households fell by 1.6% between 2005-06 and 2006-07 while those of the richest households rose by 0.8%.
Official figures show that the growing importance of the City to the economy has resulted in the slice of national income going to the richest fifth of households rising from 40.9% to 42.6% since 1997 while the share taken by the poorest families has dropped from 7.7% to 7.2% ...
Guardian 11 June 2008Ministers risk missing key Labour target
Thousands fall prey to surge in cost of living
UK's super-rich 'getting richer'
Labour is 'burying bad news' of poverty study
Living standards and inequality
Median equivalised disposable income in Great Britain in 2005–06 was £363 per week: half the population have higher incomes than this and half lower. This amount is considerably lower than the average (mean) income of £445 per week.
For the fourth year in a row, both mean and median income grew modestly compared with the growth during Labour’s first term: median income was 1.0% higher in 2005–06 than in 2004–05, and mean income 1.3% higher. These represent much smaller rises than the average annual rises since 1996–97, which have been 2.0% for median income and 2.3% for the mean. There is now clear evidence that the rapid growth in household disposable income experienced in the government’s first term came to a halt after 2001–02.
Income growth since 2004–05 has tended to be faster the higher are incomes: while median income grew by 1.0%, incomes amongst the poorest fifth of the UK fell by 0.4%, and incomes of the richest fifth rose by 1.5%, though it should be noted that none of these changes is significantly different from the others or from zero.
Many measures of income inequality rose slightly between 2004–05 and 2005–06. According to the most common measure, the Gini coefficient, income inequality in 2005–06 has reached its highest level since 2001–02, and is once again statistically significantly higher than that which the Labour government inherited. On the other hand, other measures of inequality that do not take into account incomes at the very top and very bottom of the income distribution, such as the 90:10 ratio, have fallen since 1996–97.
IFS 2007
