The amount of UK wealth controlled by the richest 10% in the population increased to 54.1% this year, a rise from 51.5% in 2000, according to the annual Credit Suisse global wealth report. Most of this rise has actually occurred since the financial crash since in 2007 their share of wealth was 52%. They have become wealthier because financial assets such as shares have risen strongly in value as investors sought higher returns with interest rates at all-time lows. Another factor was the pre-eminence of London with its soaring property prices and its position as the UK’s financial powerhouse unmatched by other European countries, including Germany. As a consequence Britain now has 44 $ billionaires, a 5-fold increase in just 14 years from 2000 when there were only 8. Similarly the number of people in Britain whose net worth (a market euphemism for often ill-gotten gains) is at least £30 million almost quadrupled to 4,660. If the value of equity in houses is included, Britain now has 2 million $ millionaires. (more…)
The Tory government’s decision to withdraw from the search and rescue missions in the Mediterranean where tens of thousands of refugees are fleeing their war-savaged homelands is an act of pitiless inhumanity. Already this year alone some 25,000 people have arrived in Italy, and similar numbers from Eritrea, with thousands more from Iraq, Nigeria and Somalia. The numbers who never got there and drowned on the way are not known, but they certainly run into thousands. To back out of this humanitarian mission is callous and despicable, especially when the motive is plainly to compete with Ukip in being hostile and harsh to migrants. It is made even worse when the Home Secretary hides behind the disingenuous pretext that saving lives only encourages more persons to risk this treacherous escape route. It is a shameful indictment to Britain’s reputation as a haven to the persecuted that the UK has resettled less than a tenth of the number of Syrians taken by Germany and Sweden and is now washing its hands of a fundamental humanitarian duty. (more…)
This is the text of my letter to the Guardian published this morning.
Ha-Joon Chang (in the Guardian on 20 October) is right that “the country is in desperate need of a counter narrative” to the Tory story on the economy. I believe it should go like this.
First, Labour did not leave behind an economic mess; the bankers did. Labour was not profligate: the biggest Labour deficit in the pre-crash years was 3.3% of GDP; the Thatcher-Major governments racked up deficits bigger than that in 10 of their 18 years. So who was the profligate? It’s a no-brainer.
Second, the Tories have claimed that the reason for enforced austerity is to pay down the deficit. Yet, after six years of falling wages, private investment flat, productivity on the floor, and fast-rising trade deficits, the deficit is £100bn, when Osborne promised in 2010 it would now be next to zero. To cap it all, the deficit will almost certainly rise this year because income from taxes has sharply fallen as wages are increasingly squeezed. Austerity is now a busted policy that has turned toxic. It should be dropped. (more…)
Almost every day brings fresh demands for public ownership, whether over energy infrastructure or transport (rail and water systems), banking, housing, pensions, let alone reversal of privatisation and outsourcing in health and education. That is certainly needed, but not a reversion to the Morrisonian brand of State corporatism. Instead it needs to be democratic and decentralised, involving not only the workforce but the participation of the public and civil society. At present, under the current market fundamentalist regime, real economic power is increasingly concentrated in very few hands. An elite of CEOs and top executives decide how companies operate, what strategies they choose, what markets they operate in or products they make, and how these are made and where. A key nexus of financial and political elites in the Treasury and City of London determine the setting of interest rates, levels of government investment and debt, and decisions about gilt and bond markets, and so on. the workers, the public and the wider society are simply shout out. Yet democracy isn’t just about electoral politics, it is about the accountability of power wherever it is exercised, and above all that includes the economy. (more…)
John Reid was right: the Home Office was “not fit for purpose”. We’ve now learnt it still isn’t. The NAO report into the huge Home Office muddle over deportation of foreign criminals is a textbook of persisting ineptitude which points the finger directly at the Home Secretary, Theresa May. It’s not as though she wasn’t warned. This issue brought down Charles Clarke in 2006 when it was revealed that on his watch the Home Office failed even to consider deportation of some of the 10,000 foreign prisoners who account for one-eighth of the inmates of jails in England and Wales. When Clarke was Home Secretary, his department released 1,013 foreign nationals without considering the option of deportation. When Clarke was sacked, Reid took over and the number deported doubled to over 5,600 in 2008-9. May followed, vowing to tackle the ‘scandal’ amid the usual Tory tabloid noise about the Human Rights Act preventing the removal of foreign criminals. May talked tough, but the latest revelations will go a long way to shredding her reputation for sound and competent control of the benighted Home Office.
The NAO report uncovered the disturbing fact that 1 in 6 foreign offenders living in the community (760 out of 4,200) has absconded, including 58 described as dangerous who have been missing since 2010 – an issue tragically brought to public attention by the murder of Alice Gross for which the main suspect was the Latvian killer Arnis Zalkalns. It also found that police were negligent in not conducting overseas criminal record checks on more than two-thirds of arrested foreign criminals. But the most staggering discovery was that the number of Home Office staff had been increased nearly 10-fold to deal with the problem, yet the number of foreign prisoners had increased since 2010 from 10,230 to 10,650. Even more lethally for May’s reputation the number removed from the UK actually fell for 5,600 to 5,100 last year.Cameron typically tried to blame this mess on human rights legislation. But the NAO report makes absolutely clear that no more than 100 out of 5,000 deportations a year 2%) are blocked over the right to family life. The overwhelming reasons were the failure of Home Office officials to fill in the necessary forms, failure to get the papers where they were needed, and failure even to book the plane tickets that were required. Even worse, the NAO report revealed a regular breakdown in communications between the Prison Service and the UK Border Agency – a failure that still appears to be continuing. Even when they do talk to each other, they apparently still get it wrong. The NAO found that when the Prison Service did tell the Home Office that a criminal had been jailed, the form either had the wrong date for earliest possible release or it was missing altogether. In days past all this would have been enough for the Minister responsible either to resign or be sacked. Even in these present times when nobody seems to be held accountable for anything, the incompetence displayed here is so egregious that May should either go or be forced out.
It is difficult to believe that some senior members of the EU Commission are not secret Ukippers. To demand that Britain hands over more than €2bn because its economy is doing relatively well compared with the rest of the Eurozone, which is doing appallingly badly, is beyond satire. The idea that Germany, where the Merkel doctrine of unwavering austerity has brought the eurozone low, should now receive a rebate at Britain’s expense of £780m is the kind of black comedy normally associated with farce. The UK contribution to the EU budget is already large at £8.6bn last year, and this surcharge would now make the UK by far the biggest top-up contributor. What adds salt into the wound is that this surcharge stems from the EU charging the way it calculates gross national income to include more hidden elements such as prostitution and illegal drugs! (more…)
The latest ONS Quarterly National Accounts tell a very significant story. For the media it was immediately a matter of Osborne likely not being able to provide a pre-election giveaway in a big new tax break to be announced in his Autumn Statement on 3 December. But that isn’t the real point at all. A far more significant issue is that it spells the end of Osborne’s case that austerity is necessary to cut the deficit. If the deficit starts to rise rather than fall, the case for continuing with austerity and perpetual spending cuts collapses. That is exactly where we now are, although no-one, including the Labour Party, is saying so. This is now the opportunity for Labour to say loud and clear that Osborne’s policy has hit the buffers and is now intellectually and politically bankrupt and that the alternative policy of expanding the economy, as opposed to endlessly contracting it, is now the only viable game in town. (more…)
The government’s Recall of MPs bill which was debated in the Commons yesterday, a flawed version of Zac Goldsmith’s private member’s bill, states that 10% of constituency members (about 8,000 persons) can trigger a ballot for a by-election if an MP has been given a jail sentence or if Parliament agrees a recall petition is appropriate on grounds of ‘serious wrongdoing’ – though what constitutes that is not spelt out. This is unacceptable for two reasons. First, the decision shouldn’t lie with Parliament, but with the electors. The government position is like saying ‘You can only make a complaint against the police if the police agree to accept it'; if that were the rule, there would be public outrage. Second, the Commons debate dodged the question of the main reason why in the worst cases MPs should be subject to recall. That is where MPs are patently failing to hold the government of the day to account, which is their raison d’etre for being elected there in the first place. (more…)
The evidence piles up that the private sector auditors of banks have manifestly failed in their duties. All the major banks received unqualified audit opinions from Dedloitte & Touche, PricewaterhouseCoopers, KPMG, and Ernst & Young. Private sector auditors have a history of silence and are immersed in too many conflicts of interest. The evidence is their silence at Barings and Bank of Credit and Commerce International (BCCI), as well as at other debacles. Accounting standards for banks are set by the International Accounting Standards Board, but astonishingly this is a private limited company in London funded by the Big 4 accounting firms who audit the banks and major corporations – a nice cushy cartel whereby the accountancy companies control by their funding the body that is supposed objectively to set their standards. The rules have enabled banks to publish opaque annual accounts, and vast amounts of assets and liabilities have not been shown on their balance sheets. (more…)
As Osborne has yet again pronounced, the Tory mantra repeated like a broken record is that spending cuts will continue throughout the next Parliament until the structural budget deficit is eliminated by 2019. Labour, to its shame, follows exactly the same line. Yet the ONS Quarterly National Accounts published by the government demonstrate that this objective is fantasy and on current policies will never happen. The reason for this is that the government deficit is only one component of the borrowing and lending by the 4 major sectors which takes place every year in the economy. The other 3 are all the businesses operating in the UK, all the households or consumers, and the UK’s trade transactions with foreigners. All the borrowing and lending done by all these 4 sectors has to sum to zero, because all borrowing has to be matched in accounting terms by exactly equivalent lending. The ONS National Accounts figures show all too clearly the key problems in cutting the deficit and why on current policies they’re insuperable. (more…)
Despite the recent howls from the City of London about the new criminal offence of reckless misconduct by senior bank executives, little or nothing has been done to curb the very real and big risks associated with derivatives which were at the heart of the financial crash 6 years ago. It is little understood that whilst banks have little interest in buying or selling commodities, they nevertheless spend vast sums speculating on the change in their prices. This not only drives up the price so that ordinary people have to pay more for electricity, gas, water, copper, wheat or whatever commodity they’re buying, but it also generates huge profits and losses. This institutionalised gambling by the banks was famously described by the investment sage Warren Buffett as ‘financial weapons of mass destruction’. This is because the economic exposure of banks to derivatives, that is the hard cash needed to settle the outcome of the bets, is always highly uncertain until the contracts mature which could be 10-15 years into the future. (more…)
Last Tuesday the share price of Chesapeake Energy, one of the leading US shale oil producers, fell 29% in a single day. With internationally traded Brent Crude now trading at below $88 a barrel, a 4-year low and down from $100 only a few weeks ago, and the US benachmark West Texas Intermediate at below $85, down from over $107 in June, the fabled miracle of US shale is facing a near-death experience. The oil consultancies estimate that US shale production will break even at $75 a barrel, so there is still some leeway for survival. But the impact of tensions over Ukraine and the gathering conflagration in the Middle East, plus above all the global market fears of secular stagnation kiboshing the world recovery from lengthy recession, are putting the market for unconventional energy production under strain as never before. (more…)
The gravy train rolls on reaching ever more sickening heights of greed, selfish gratification and disregard for the ever deeper miasma of poverty that disfigures our country. The latest figures show that the richest 10% of the UK population, who already owned 52% of UK wealth just before the 2008 crash, have become significantly richer since the crash because of the rise in value of financial assets, during a time when averages income have fallen 8% in real terms. Britain now has 2 million dollar millionaires, if the value of equity in houses is included, up by almost a third since last year. There are also now 44 billionaires in Britain, up from 8 in 2000. The individual excesses continue apace, only getting ever more outrageous. BG Group has just appointed a new chief executive, Helge Lund, previous boss of Norway’s Statoil company, with a £15m ‘golden hello’ and potential earnings of an additional £14m a year. At the other end of the scale are 70 former NHS care workers for the disabled in Doncaster who have taken so far 85 days’ strike action resisting the further crushing of wages and terms and conditions for the lowest paid. Their jobs were outsourced, holidays cut, and take-home pay cut by a third. Care UK which won the contract and ousted them is owned by private equity firm Bridgepoint Capital and its chairman John Nash was recently made a peer after donating a quarter of a million pounds to the Tory party. (more…)
MIPIM is the name of the sales fair to flog off Britain. This is the latest extravaganza of market fundamentalism which is now sweeping Britain. It is being pitched at this moment is a huge hall in London which brings together property developers, billionaire investors from all over the world and, incongruously, local council officials from over Britain. Their common interest, though from very different concerns, is public housing. The property developers want to make a mint from knocking it down and putting up luxury flats in its place. The investors are motivated by a juicy return on capital if they invest in a must-win bonanza. And the local councils – and here’s the rub – are there because they are broke and have no other means of raising serious money. The only people who aren’t there are the tenants of the public housing which is about to be demolished before their eyes. Their homes, which many have lived in for 30-40 years, are about to be turned into someone else’s speculative asset without their even being consulted, let alone given a chance to impose a veto on a process which literally destroys their livelihood. (more…)
Osborne’s own policies are shrinking tax revenues, yet he demands even bigger spending cuts to compensateOctober 15th, 2014
There are now unmistakeable signs that Osborne’s so-called economic recovery is fading, despite all the right-wing think tanks and pro-Tory media to talk it up. A survey of 7,000 businesses by the British Chambers of Commerce has just found that manufacturers have suffered a sharp slowdown in export orders, and even more significantly domestic sales and orders – the part of manufacturing that has been faring better due to household expenditure based on rising debt – are now also reported to be slowing. The third quarter growth figures also show the UK economy losing steam, down from ).9% in the second quarter to 0.7%. The TUC has just reported that not since 1865-7 has there been a comparable squeeze on earnings for British workers, with an 8% fall in real earnings between 2007-14, and the fall is still continuing with the latest figures this year showing annual wage growth of 0.7% against inflation at 1.5%, i.e. a further real wage fall of 0.8%. There is then a serious knock-on adverse effect in a reduced tax take for the government which is actually this year increasing the deficit (from the current £100bn to around £105bn) when Osborne’s whole object is ostensibly above all else to cut the deficit. His austerity programme is now beginning to eat itself. (more…)