Archive | October, 2014

Low wages equals low growth

22 Oct

I was interested to hear a report on the BBC News that George Osbourne, Chancellor of the Exchequer, (finance minister) will fail to make his target of reducing the borrowing requirement. It is increasing instead. One of the chief reasons for this is that so many people are so badly paid that they do not pay tax. In fact they require benefits in order to support themselves and their families. This is a double whammy for the treasury at a time when the fall in unemployment  numbers has been loudly trumpeted.

I have already described these employment figures as meaningless. The base line has been moved so often it is impossible to get an idea of the true figure. What is certain is that many of these new jobs pay very badly. The national minimum wage has not changed for many years, and is largely unenforced. Many of the jobs are part time on the minimum wage or involve ‘zero hours’ contracts. Worst of all are exclusive zero hours contracts, where no work is guaranteed, but you are not allowed to have other ‘jobs’. With such jobs you cannot get loans at decent rates, including mortgages.

Living costs are rising, so wages buy less. There is a slump in the High Street as many people have no spare cash to spend in shops. This depresses the entire economy. The value of labour is too low and the power too weighted towards the bad employers, allowing for real abuses to occur. Until wages rise and people have money to spend the economy will not recover.

Meanwhile, while the government fiddles the figures, the trust in politics and politicians is at an all-time low. Among working class white men there a huge surge in support for UKIP, almost solely on the myth that the party is somehow outside of the mainstream. This rise of a populist right wing party with links to neo-nazis is very worrying.

There is a long held belief that we are all in the same boat, and that when the water rises we all rise. Not so. Many people have already been thrown out of the boat and are economically drowning. Britain is the only G7 country where the gap between rich and poor has increased since 2000. We have food banks operating and many people are well below the poverty line in a supposedly rich country.

In the USA Warren Buffett was rankled by conservative implications that the President’s attempts to follow the “Buffett Rule” and raise taxes for the extremely wealthy to meet the rest of the nation was “class warfare.” He pointed out that, were it a war, it was pretty unfair since his side, the ultra rich, has the “nuclear bomb.”. In the UK things are worse. Class war has been declared, the rich have hijacked the boat we are all supposed to float in, and the government fiddles the figures while the state burns.

Support the campaign for real jobs.


Campaign for Real Jobs

16 Oct

The latest government figures indicate that unemployment is now under 6%, at just under 2 million. The trouble with these figures is that the rules by which the figures are calculated have changed significantly, many times, over the course of the parliament. Trying to work out the true comparison from four and a half years ago to today is almost impossible. It is like trying to compare apples to bananas.

One significant change was that that of a definition of a job. Almost any form of occupation, even that which is hardly paid at all, or is wholly unpaid, is counted as a job. Many “jobs” are part time, short-term contracts or zero hours contracts. Worst of all are exclusive zero hours contracts, where  the employee is paid by the hour but not guaranteed any work or wage, while still not being allowed to seek other employment.

Meanwhile the cost of living has risen while wages have stagnated.  At the same time, Britain is the only country in the G7 group where the gap between rich and poor has significantly grown during the 21st century. The Prime Minister’s solution to our economic ills is to reduce spending on welfare while reducing taxation for the richest.

I might believe the existence of real jobs if they had some link to a living wage. This is currently estimated at £14,400 p.a. for a single person. The legal minimum wage for persons 21 years and over is £6.50 per hour, a figure which has remained the same throughout this parliament.  This wage does not allow for having dependents.

What I suggest is that a job should be based on this rather inadequate figure, and that a part time job of 50% of a full time wage should be regarded as half a job. For all part time jobs the percentage of a full time job should be used on the statistics. As for zero hour contracts, they should also be regarded as half a job, unless proved to be otherwise.  I do not possess the figures, the computer models or the analytical skills to produce my own statistics, but surely someone does.

Until these figures can be produced the statistics provided by the government are wholly worthless and unbelievable. There are lies, damned lies, statistics and government statistics. It is time to start a campaign for Real Jobs.

Rising inequality in the UK

14 Oct

According to the Credit Suisse global wealth report, the richest 1% of the world’s population are getting wealthier, owning more than 48% of global wealth, according to a report published on Tuesday which warned growing inequality could be a trigger for recession.

The report, which calculates that total global wealth has grown to a new record – $263tn, more than twice the $117tn calculated for 2000 – found that the UK was the only country in the G7 to have recorded rising inequality in the 21st century.

Warren Buffet has pointed out, “Through the tax code, there has been class warfare waged, and my class has won.”

So a billionaire has admitted that there is class warfare, that it was declared by the rich against the poor and that they have won. So be it. The resistance starts here.

There are more of us than them. We have a democracy and can vote in a government which is prepared to redress the balance. In principal, that is.

To start with, it must be admitted that the Conservative Party represent the wealthy. David Cameron boasted of it in his keynote speech at the recent conference. They also tell an old lie. This one goes: rich people create wealth and jobs. The lie is retold every few years, and it is so easily refuted it is almost embarrassing. Rich people hold their money abroad, have homes abroad and pay little tax in Britain. They mostly either inherited the money or push money around electronically or gamble with other people’s money. The last two groups caused the crash which has so affected the poor, and never suffered. Instead they are just getting richer while the poor get poorer.

The previous government of the  Labour Party, or New Labour, were as much under the thumb of the financial services sector as the Tories are, they just benefitted less personally (well, mostly). If Ed Milliband wants my vote he had better start sounding like a socialist. And he must be prepared to act like one if he manages to get elected.

The Liberal Democrats have too many broken promises from the last election to be believed about anything.

As for the United Kingdom Independence Party, well, where do I start? They are led by the egregious Nigel Farage. He is a man who pretends to be a political rebel, albeit with the support of the second largest circulation national newspaper and several rich backers. Farage did not go to Eton, as most of our senior leaders did, but to Dulwich College, a second rank public school. It produced Raymond Chandler and P G Woodehouse, but they do make mistakes. Farage used to earn a living as a commodity broker until he went broke. So he is as much a scion of the establishment as anyone else, and one who is so incompetent in business that he failed in a business which is like printing blank cheques. Do I want him in charge of the country? Er…. NO!

We still have old class distinctions in this country. We do, after all, still have a monarchy and an aristocracy. This class warfare was declared by the rich against the poor, from sheer unadulterated greed. What we need is the greatest happiness of the greatest number. Having money doesn’t necessarily make you happy, but at least you can be miserable in comfort.

All the boasts of new jobs created over the last few years show one thing. The vast majority of new jobs are part time, short contract or, worst of all, exclusive zero hours contracts. The entire economy is suffering because too few people have too little to spend. As stated previously, the rich largely spend their money abroad. What we need are proper jobs with proper wages. Jobs that allow people to get decent housing, decent food and sufficient warmth.

It is easy enough to deflect attention away from the real causes of our problems. Blame immigrants; blame the EU, blame the European Convention on Human Rights. But don’t blame the Eton/Oxford/Bullingham Club establishment who are the problem and not the solution. Working class white people are suffering and it is easy to appeal to their worst side. UKIP are being successful on a negative ticket, and the Conservative Party is falling over itself to make concessions to the bigots, racists and Little Englanders. The rise of UKIP seems to mirror the rise of Fascism in Italy in the 1920s. It must not succeed. It must be defeated by telling it like it is. The lies must be exposed, and the underlying racism must be exposed. Britain used to be a great country. If UKIP manage to get a share of power we will become a banana republic.

Traction Engine in Westhope

13 Oct

Outside the house, yesterday. Neighbour, Chris on his friend’s Foden Traction Engine. It does 8 miles to the hundredweight of steam coal. Originally sent out to Tasmania it later moved to Melbourne and was repatriated back to Britain ten years ago. That’s how long it took to rebuild it.


Let’s go federal

8 Oct

The United Kingdom of Great Britain and Northern Ireland is a parliamentary democracy. It may not be a perfect system, but all the other systems seem to involve shooting people. It could be improved, however.  Currently the parliament at Westminster creates laws and directs policy. The laws have to be signed by Her Majesty the Queen, but her role is a largely ceremonial. Every five years (or sooner in some circumstances) those entitled to vote and who can be bothered to do so, elect a local Member of Parliament. The party with the largest number of MPs forms the government. The present administration is a coalition dominated by the Conservative Party, and propped up by the Liberal Democratic Party. There are a few months before the next election has to be held, and the parties are jockeying for position.

Scotland has considerable independent political rights, Wales rather less so. I was in Wales when the result of the Scottish referendum on full independence came through. The majority voted to stay in the union, but the Welsh news was stuffed with stories about further powers to the Welsh Assembly. I recently read a newspaper article which suggested that there should be a measure of independence for the North of England.

If you live in England, but outside of the London / South East region it quickly becomes clear that London dominates almost everything. Due to the policies of Margaret Thatcher’s governments of the nineteen eighties, most manufacturing industry was destroyed, with the promise that new jobs would be created in the service sector, especially in financial services. London is a major world centre for pushing notional money around. The problem is that in this activity is almost entirely based in London.

As a result of this success almost all new development goes into London because it has a rising population, possibly because of all the new development! It seems impossible to have any major funding projects not linked to London. The financial services sector is so important to the economy that no government dare challenge its demands for a favourable tax regime and other benefits. As a result of this, property prices in London are sky high and it is probably the most expensive city to live in on the face of the Earth.

But what of the rest of England? Well, things have improved in some ways, slightly, over the last four and a half years, but house prices have stagnated, industrial production has a few bright points but is fairly flat overall. What is more, the cost of living has risen much faster than average wages. Working people are poorer than they used to be. Oddly enough, the rich are getting rapidly richer.

Just having the North of England having some independence is a bit silly, as there are other regions. So what I am suggesting is that we reform the old Anglo-Saxon major kingdoms of Northumbria, Mercia and Wessex, and possible Anglia. These could have their own assemblies and budgets for development.  This would be a federal system, like in Germany.

I suggest this because discontent with the Westminster parliament is not restricted to Scotland and Wales, but is becoming more vociferous in the English regions. I value our democracy, but it needs to represent all the people in the country, not just Londoners. Also, it avoids the rise of nationalism that so worries me. Let me know what you think.

Eating the Owl

1 Oct

The 2nd stanza of the poem ‘Tis the Voice of the Lobster from Alice’s Adventures in Wonderland:

I passed by his garden, and marked, with one eye,
How the Owl and the Panther were sharing a pie:
The Panther took pie-crust, and gravy, and meat,
While the Owl had the dish as its share of the treat.
When the pie was all finished, the Owl, as a boon,
Was kindly permitted to pocket the spoon;
While the Panther received knife and fork with a growl,
And concluded the banquet by —

Alice’s recitation is suddenly interrupted by the Mock Turtle, who finds the poem “the most confusing thing I ever heard.” It is generally assumed that the last words of the poem could be supplied as “— eating the Owl”.

Eating the Owl – the new thriller by Jon Wakeham