UK 2015: a million depend on foodbanks while another million soon to become $millionaires

The latest report on UK wealth has just discovered that there are 840,000 persons in the UK who are dollar millionaires (i.e. have assets of at least £660,000 excluding their main home) and that this number is expected to reach a million $millionaires within 3 years.   That’s the same year when averages wages are predicted, if they’re lucky, to get back to where they were in 2008, though actually with UK productivity flat, economic growth now fading and the budget deficit still stuck around £100bn and even beginning to rise, not fall, it may take another decade for wages to recover.   We are now in a heads-I-win, tails-you-lose bind where in a boom the super-rich shoot ahead and in a deep recession the super-rich still shoot ahead.   The total wealth of the UK’s existing $millionaires is already £2.3 trillions, a sum half as large again as Britain’s entire GDP or national income.
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Why doesn’t Labour take on the Tories over the economy?

It is bizarre that Osborne continues to preen himself that the economy is such a strong card for the Tories at the election when in fact every aspect of the UK’s economic performance is looking bad and getting worse.   Today it was reported that the growth rate in the final quarter of 2014 was down to 0.5%, and unmistakeable evidence that Osborne’s ‘recovery’ is fading out.   In the quarter before then growth was expected to be 0.9%, but turned out to be 0.7%; in this latest quarter it was expected to be 0.7%, but in the event fell back to 0.5%.   This is really bad news for Osborne since the trajectory is manifestly downwards and UK growth will be lucky to reach 1-1.5% next year.   Yet Osborne has the gall to claim that the growth for 2014 was the strongest since 2007, as though it wasn’t his own austerity policies that have produced stagnation for most of that time.   But Labour is letting him get away with it.
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Syriza’s lessons for Britain

It would be idle to pretend that Britain’s economic problems resemble those of Greece when the latter has suffered a 25% reduction in its national income and where three out of every five young adults are now out of work.   But there is one parallel between them which is shared by both countries, as well as several others in the EU, and that is increasing resistance to endless austerity.   Osbornomics has not produced a genuine or sustainable recovery, but rather an elongated austerity which offers not the faintest hope of escape within the foreseeable future.    Promises of clearing the structural budget deficit by 2019-20 are pure moonshine when the deficit is still hovering around a monstrous £100bn and actually starting to rise again this year.   If Osborne got his way with the £25bn further cuts, including £12bn in social benefits, which he has promised for the next Parliament, the one certainty is that the deficit problem won’t remotely be solved, but the anger will finally blow the roof off the whole of Osborne’s ‘back to the 1930s’ project.
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As Syriza win on anti-austerity platform in Greece, Labour MPs seek change in direction here

As Syriza wins a remarkable victory in Greece on a platform of ending austerity and greater state intervention in the economy, fifteen Labour MPs including myself have today expressed concerns about elements of Labour’s policy agenda, and proposed a change of course in three key areas. We have issued a statement calling for an alternative to austerity, for public ownership of the railways and for a return to collective bargaining and employment rights in the workplace.

Jobs and growth are vitally needed rather than prolonged austerity as the best means both to cut the deficit fastest and to give hope to our people. Public ownership is urgently needed to reverse failed privatisations, and the railways should lead the way to a new perspective of the crucial role of the public sector. And an enhanced role for the trade unions is strongly needed both to promote economic partnership in our workplaces and to reverse the extreme inequality now so badly disfiguring our society.
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The on-demand economy is an even greater threat than zero hours contracts

Much of the debate about the fast-growing on-demand economy has centred around Uber.   Uber drivers get paid only when they work and are responsible for their own pensions and health care.   Risks borne by companies are being pushed back on to individuals, and this has huge implications for the organisation of work, the potential insecurity for workers, and the nature of the social contract in a capitalist society.   Like many innovations, the on-demand economy began in the US, but the concept of connecting people with freelances is growing prodigiously.   Uber, founded in San Francisco in 2009, now operates in 53 countries, had sales last year exceeding $1bn, and now has a valuation of $40bn.   Altogether some 53 million US workers, a quarter of the labour force, already work as freelances.
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Nothing stands between Labour and election victory except its own timidity

This coming Monday the remaining stages of the Infrastructure Bill will be taken in Parliament, including votes on the launch of fracking in this country.   Cameron and Osborne have declared they are both ‘gung-ho’ to develop this technology to the fullest degree as fast as possible, though the resistance at Balcombe in E.Sussex and in Lancashire where the county council has refused drilling consent to Cuadrilla suggests that grass roots opposition may be a lot stronger than the Tories have reckoned for, including in hitherto true-blue areas.   The Labour Party’s response has been to draw up 14 new regulations – all of them perfectly reasonable in their own right – before fracking can be permitted to go ahead.   Sadly however what a majority in the country are looking to Labour for is not a tweaking of the conditions on which fracking should then be allowed to proceed, but simply a clear unambiguous verdict rejecting it.   The reasons to do so are overwhelming: it will aggravate climate change, there are clear environmental risks from experience elsewhere, it will prolong the life of fossil fuels when what we should be doing is accelerating their substitution by renewable energy.
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Is Hinkley C the turning point against nuclear power in Britain?

Despite the government’s constant assertion that funding is impossibly tight and that any departure for a rigid status quo by the Labour party is unaffordable, there seems to be no limit to government subsidies gushing into the doomed nuclear project at Hinkley in Somerset.   Last year the government offered the French energy company EDF the contract to build a third nuclear power station paid for by increases in electricity bills over 35 years and Treasury-backed loans.   Now confidence in the project is evaporating as it is increasingly realised that the same construction problems, delays and spiralling costs which have devastated EDF’s building similar nuclear plants at Olkiluoto in Finland and Flammanville in France will hit Hinkley C in the UK.   Centrica, which was supposed to be a joint partner with EDF, pulled out.   EDF then couldn’t sustain the project out of its own finances, so it went cap in hand to Chinese state-owned companies and to AREVA, a French state-owned company.   Then 2 months ago it was revealed that AREVA was going bankrupt.
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Tory jobs claims take a hammering

The Tories’ biggest economic claims (there are only two of them) are that they generated a recovery (after 18 months it’s already fading) and that they created a million private sector jobs.   The latter claim is now under fire from all sides.   First, it has just been rep;orted by the thinktank Centre for Cities that 11 of every 12 jobs created have been in southern England and only 1 in the rest of the country.   This gap between the best and worst pedrforming towns and cities has now widened so far that it has created a 2-tier economy of dynamism and decline.   Second, the vast majority of these jobs are insecure, low-paid, and often subject to zero hours contracts, while 40% of them are self-employment (often enforced as the only way to survive) on a pittance income.   But, third, new evidence casts a further disturbing light on any idea of a jobs renaissance.
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Establishment writes its own rules to evade embarrassment

The Chilcot Inquiry into the Iraq war (March-April 2003, nearly 12 years ago) was set up in 2009 and took public evidence from its last witness in 2011.   The announcement today that the report after 6 years on inquiry is being strung out until after the election this May is truly scandalous.   Cameron has tried to wash his hands of it by saying that he is not responsible and the inquiry is independent doesn’t wash.   He closed down the Gibson inquiry into alleged UK involvement in US rendition when it became clear that its revelations could be highly embarrassing to the UK authorities, so there is no question that he could set a time limit for the Chilcot inquiry if he really wanted to.  What makes it all the more scandalous is not that more time is needed to complete the report (it has been completed), but rather that those criticised in the report have been given the option of indefinitely delaying its publication as a result of being given prior access to what it says about them and then being allowed endlessly to prevaricate by haggling over every detail they don’t like.   On a matter that affects the whole nation and has left an abiding imprint of deep shame, this is outrageous.
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The economy should be Labour’s turf, not the Tories’

It is astonishing that the Tories have opted to fight the coming election on their economic record (maybe because fighting on any other issue would be even worse?) – and equally astonishing that Labour has made such a poor fist of retaliation.   The simple truth is, there is nothing at all about the Tory economic record since 2010 to be proud of.   Wages will not recover their pre-crash level for a decade (if then?), productivity continues in the doldrums, business investment  has never recovered (because the FTSE-100 companies, the real money men, have no confidence in the Osborne ‘recovery’), household debt is rising dangerously, and to cap it all  the deficit (the reduction of which is supposed to justify the austerity and impoverishment of the last 6 years) is now starting to rise again at about £100bn, not fall.   What is there to write home about a record like that?
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Obama imposing $300bn levy on banks & hyper-rich: how about UK?

It is remarkable that in the citadel of capitalism Obama has just unveiled a plan to impose a levy on the biggest banks and on the wealthiest families that is expected to raise $300bn, yet in Europe any such idea is taboo.   In the US the new tax is being crafted to affect only the richest 1%, with 80% of the impact falling on the richest 0.1%.   The levy will also set a fee of 0.07%on the liabilities of a hundred financial institutions with assets of $50bn, which would have the added benefit of deterring banks from taking on excessive leverage as well as reducing the risk of defaults.   Why isn’t such a skilfully targeted measure being considered here?  
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Tories revert to their age-old policy of stopping the poor breeding

Occasionally the mask slips and the truth becomes clear.   We had already been told that the Tories planned to limit child benefit to the first two children because it would save money.   Then IDS (Iain Duncan Smith) let the cat out of the bag: he said it would promote “behavioural change”.   This element in the Tory DNA – that the poor are over-dependent on benefits and should have their breeding excesses curtailed – has quite a history.   Keith Joseph made a pitch for the Tory leadership in 1974 with this appeal: “A high and rising proportion of children are being born to mothers least fitted to bring children into the world…Some are of low intelligence, most of low educational attainment….The balance of our human stock is threatened”.   The message hasn’t changed in the last 40 years – control the lower orders, suppress their breeding, check their spending, moralise against their life-styles.
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The dozy watchdogs who make vast profits but are immune from prosecution

When last year multinationals like Starbucks, Google and Amazon came under fire over tax avoidance, the focus naturally turned to the accountancy firms that enabled them to do it.  In particular after it was revealed in September that Tesco had over-stated its first-half profits by £250m, the spotlight fell on PricewaterhouseCooper (PwC), Tesco’s auditor for the last 31 years, to explain how it had given the retailer a clean bill of health despite highlighting in its last annual report that recognition of commercial income, where the profit overstatement occurred, was a disturbing area of concern.   This is an issue of deception for investors which could be described as corrupt, yet no hint of prosecution of the individual executives concerned has emerged in the ensuing 4 months, though an FCA investigation of the Tesco audit was announced last month, which may or may not yield sufficiently deterrent action.
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Accountants is part of the neoliberal shame that needs radical reform

The latest revelations from 28,000 pages of leaks by a former PricewaterhouseCoopers (PwC) employee based in Luxemburg – a mini-state known for secrecy, lax regulations and a government (under Jean-Claude Juncker, now president of the EU Commission) surreptitiously undermining tax stability for the rest of Europe – really say it all.   The leaked documents involve over 1,000 corporations and are available at the website  www.icij.org  .   They show that the Big Four accountancy firms, particularly PwC but also KPMG, Deloitte & Touche, and Ernst & Young, manufacture tax avoidance schemes on an industrial scale to help big multinationals escape taxes.   Profits are shifted through spurious royalty fees, intergroup loans, management fees, and intra-group transfer of pricing of goods and services.   The leaked documents show that the profits transferred to Luxemburg were taxed at less than 1%.   In effect these 4 huge firms are at the heart of the global tax avoidance industry.
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Election should be about vision of new economic order

It is ironic that the Tories, the enemies of ideology and avowed exponents of pragmatism, are starting this election with a much stronger ideological pitch than Labour, normally the proud presenter of an alternative vision.   Osborne has gone on the offensive immediately by advocating the balanced budgeting and small state goals of the 1920-30s aimed at shrinking the State and consolidating the power of capital over labour, but which would cripple growth exactly as it did a century ago and restore the Downton Abbey society of that period.   It is a hideous scenario and should be hammered to bits, but it does at least offer a scenario of the trajectory of Tory policy, were they to win.   For Labour , against that background, the incentive to offer the vision of the new economic order should be compulsive.
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