Tag Archives: wealth

Why isn’t inequality a central issue in this election?

Inequality ought to figure much more sharply in this election than it has done so far.   The reasons are obvious – the grotesque injustice in the widening gap between the top 1% (and more particularly the top 0.1% and most of all the top 0.01%) and the rest of us, the way that austerity has been manipulated to hit the poorest far harder than the rich, the brazen myth that markets generate a trickle-down that enriches all when in fact they have driven a flooding-up of wealth to the top, the scandal of massive tax avoidance by the super-rich as one of them once declared that “only little people pay taxes”, and the unfairness of remuneration systems guaranteeing huge bonuses and lucrative long-term incentive plans to many of the miscreants who caused the crash and numerous financial scandals in the first place.    But there’s another reason why inequality should now be centre-stage in this election: it causes slower, not faster, growth.
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Ian Duncan Smith’s policy: starve the poor into committing crime

The papers are full-on when members or ex-members of the government make a fool of themselves behaving badly when they can’t get their way – Andrew Mitchell foul-mouthing a policeman with the toxic ‘plebs’ allegedly added in because he couldn’t ride his bike through the No.10 gates, and David Mellor ranting at a black cab driver over the best route home to his £8m pad near Tower Bridge.   But what really matters about members of the government is not their silly misbehaviour, it’s they way they’re crucifying millions of people even to the point where they’re denying them food and shelter.   On this, with a few honourable exceptions, the media are largely silent on the grounds presumably that they don’t matter because they’re not famous.   A million people have been sanctioned by government ministers over this last year, which means that they are deprived of all their benefit for often petty infringements (e.g. being 5 minutes late for a job interview) and hence have no money for at least 4 weeks and sometimes 3 months, forcing them to steal to survive.
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The new G20 tax avoidance rules need to be aimed at the banks & super-rich as well as corporations

The latest OECD draft rules to regulate massive corporate tax avoidance are a real advance so long as the 44 countries concerned (90% of the world’s economy) stick to their resolve, push these measures through and resist the enormous lobbying that they can expect from a determined corporate push-back.   But the past record on that is not good, and in particular Osborne is already threatening to break ranks in a manner totally discordant with all the other participants.   The new regulations should at last stop companies exploiting differences between tax regimes to achieve artificial tax avoidance on an industrial scale via what are called hybrid mismatch structures.   Other draft rules will require multinationals to give tax authorities a country-by-country detailed breakdown of their activities and earnings, so that they will no longer be able to carry out their operations in high-tax countries but then artificially register their profits for tax in low or virtually no tax countries.
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“The Scottish referendum isn’t primarily about Scotland: it’s about London”

This is a shrewd observation by Prof. Danny Dorling, especially in the later stages of the referendum as Salmond repeatedly pinpoints the sheer dominance and ultra-wealth of London as a prime reason why Scots should vote for independence.   It sucks the lifeblood out of the rest of the country, and so far from the rebalancing of the economy getting under way and wealth and commerce being redistributed the stranglehold of London is continually reinforced because that is where the most profitable investments can be made.   Its growth feeds on itself.   It has been estimated by IPPR that transport spending per head in London is a staggering 500 times more than in N.E. England.   London remains at the centre of ballooning British inequality: while Britain has 9 of the 10 poorest areas anywhere in northern Europe, it also boasts inner London as the single richest region anywhere in the EU.   Against that background Salmond’s simple question ‘Do you still want to be ruled from London, squeezing the energy out of the whole country and particularly Scotland?’ is such a devastating one.   As George Monbiot has said memorably in the Guardian, would you choose to stay with a government that “spies on its own citizens, uses the planet as its dustbin, governs on behalf of a transnational elite that owes loyalty to no nation, cedes public services to corporations, and forces terminally ill people to work?”


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Labour should champion a wealth tax which would be extremely popular

It is worth remembering that the most popular item in Francois Hollande’s manifesto which propelled him to the French presidency was imposing a high rate of tax on the very richest in the country.   Admittedly his popularity has nose-dived since then, but that is for totally different reasons to do with France’s economic straitjacket within the Eurozone.   Taxing the small category of excessively rich people still remains popular in France, as it is in the UK.   A recent YouGov poll found that 74% in the UK favoured it, with only 10% against, and actually the the rich were slightly more in favour than the poorest groups.   Vince Cable on behalf of the LibDems has been pushing the idea of a mansion tax on properties worth more than £2 millions, but Labour has yet to indicate its support either for that or, preferably, a wider tax on the generality of wealth.
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Osborne says housing shortage will last for another decade – he should try living that long in B&B

It’s difficult to portray the contempt with which the Tories view the victims of this acute squeeze on housing.   A large majority of the electorate believe the bedroom tax is wrong and unjust, yet when a UN special investigator on housing called on it to be withdrawn, a Tory housing minister excoriated it as a ‘Marxist diatribe’.   But if the Tories are so obsessed with the idea that in the housing scarcity they’ve created themselves through their economic policies, every available area of accommodation must be utilised, why do they ignore large areas of London (and also other cities) which the super-rich have bought up as an asset and then left to decay unoccupied by them and unlet?   Why force poor people to move because they cannot afford the bedroom tax, even though there’s a huge shortage of single-bed accommodation for them to move into, but then at the same time allow 15% of new-build homes in Greater London to be snapped up by foreign buyers, rising to 70% in the city centre, who then leave their properties vacant?   In one and the same city a third of the mansions in the most expensive stretch of Bishops Avenue ‘billionaires row’ in north London lie idle, while over the last 3 years the number of families forced to move into bed and breakfast has tripled.
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Here’s another plan: how about no cuts for the poor but £25bn cuts for the super-rich?

It is totally unnecessary and gratuitously damaging to demand wholesale elimination of the structural deficit within a very short fixed period (Osborne’s 2018), and patently wrong if it badly weakens the economy.   The deficit is currently just over 7% of GDP, and before the crash when the economy was growing strongly at nearly 3% the deficit had come down to 2.6% of GDP by 2006-7.   To force the deficit down to 0% within the next 4-5 years if it substantially cuts output, growth and incomes to an extent which is later irrecoverable is frankly irresponsible, if not actually insane – or to put it in more subdued tones, fanatically dogmatic.   Of course Osborne is not clinically insane, merely politically obsessed in his manic conviction to shrivel the State and the public sector to the maximum degree even if it means wrecking the economy in the process.   It is not too strong I think to describe such hysterical lopsidedness as a form of political madness.
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The Autumn Statement tomorrow will push privatisation even further when the record is already deplorable

The public’s demand for re-nationalisation is steadily growing, partly because the record of privatised companies has been so poor, partly because the excuse of globalisation is now seen not to betoken greater efficiency but rather funnelling increasing assets to the very rich and undermining job security for workers, and partly the big new outsourcing companies have so blatantly abandoned the national interest in pursuit of gross profiteering.   The Big Six energy companies have become a byword for greed and exploitation.   The water companies have indulged in a bonanza for directors and shareholders, but have set aside wholly inadequate sums for necessary investment and Thames Water is even refusing to pay for the £4bn necessary new London super-sewer and demanding that the taxpayer should instead, i.e. privatising the profits but still repatriating the cost to the public sector.   The banks have repeatedly been found guilty of rigging interest rate benchmarks (Libor, Euribor, forex market), mis-selling faulty or irrelevant financial products on an industrial scale, money-laundering, massive tax avoidance across the globe, closing down viable businesses in order to profit from the proceeds (RBS) – every misfeasance you can think of except meeting the loan requirements of UK industry.
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Labour attack on Tory pay cuts would resonate even more if MPs took same pay cuts until national income rises

Labour’s at least half right to explode the Tory economy bubble by exclaiming: Recovery?   What recovery?   OK for bankers’ bonuses, OK for City private equity, OK for investors’ share indices, OK for Treasury austerity enthusiasts.   Yes, fine for the top 1% – that’s 300,000 individuals out of the UK’s 40 million adults.   But what about the other 99% whose average income in real terms has fallen 5.5% since the 2008-9 crash?   That’s a reduction of £1,250 a year for the average family.   Worse, it’s not all over.   Some of the most draconian measures in Osborne’s entire package are back-end-loaded, i.e. they will hit families hardest in 2014-18.   Unemployment is still stuck around 2.5 million, and youth unemployment among 18-24 year olds is still rising at over 19%.   Even of those in work, a significant number are now part-time workers so that the number of whole-time-equivalent employed persons is actually steadily falling.   There are now over 900,000 persons who have been out of work for more than a year.  And while inflation has marginally crept down to 2.7% on the latest figures, that is still more than twice the rise in pay which is still pegged back at 1.1% a year.   Some recovery.
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