Tag Archives: inequality

An economist trashes Liz Truss on her policies

Liz Truss and money: she doesn’t understand it and her fiscal policy reflects that.

The Liz Truss Tory administration’s focus on growth is a public relations stunt, it seems, from what an Oxford professor of macroeconomics has to say about it.

Simon Wren-Lewis, who write’s the Mainly Macro blog, has published a harsh critique of Truss’s plan for 2.5 per cent growth.

He says the concentration on building the economy represents a PR departure from previous Tory governments that have let it shrink – but none of her proposed tactics will achieve this strategy goal.

In particular, policies that promote inequality (tax cuts, lifting the cap on bankers’ bonuses, refusing to impose a windfall tax on energy producers) may be based on a notion that greater inequality encourages growth – but this is not true; the evidence suggests no such association or the exact opposite.

Higher inequality, in fact, reduces growth. In contrast, there is a wealth of evidence to show that lower inequality might promote it. Furthermore, fiscal measures that favour the rich were tried by George Osborne and did nothing to stop, but may even have assisted, the last 12 years of UK economic decline.

Truss’s other big idea is to cut back on regulation. This is nonsense because of Brexit, which has increased red tape exponentially.

And we have a perfect example of how de-regulation hinders growth in her plan to review (read: scrap) anti-obesity measures. As Professor Wren-Lewis states,

it is clear that more obese people implies a greater burden on the NHS, requiring either higher taxes to fund it or a reduction in social welfare as other care is rationed.

Also the reduction of regulations to keep our beaches clean of sewage means more people taking holidays abroad and fewer overseas tourists coming to the UK.

Even the 2.5 per cent growth target is wrong, according to Prof Wren-Lewis; GDP per head is what assists social welfare, not GDP as a whole, so the target is for the wrong thing. It is an empty gesture – like sacking the Treasury’s permanent secretary for no reason other than to show things have changed.

The verdict is that

this decade or more of economic decline will not end by cutting taxes, deregulation, making exporting harder, and increasing inequality.

Either Truss is lying to us while trying to create an extremely short-term bounce that might win an election for her – or she is monumentally stupid. Which do you think it is?

Source: mainly macro: Going for growth?

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Poor income growth and inequality mean UK families face ‘terminal decline’ in living standards

Champagne for some: rising income inequality and stagnant growth for poor families mean most of the UK is teetering on the brink of financial disaster – and our politicians have been to blame since 1992.

Income growth for poor households has suffered “complete collapse” over the past 20 years.

Income inequality has run rampant under successive governments since 1992, with five of the most unequal years taking place since 2013-14.

Add these together and our failed politicians have left the UK’s families “brutally exposed” to the cost of living crisis.

That is the finding of a new report by the Resolution Foundation:

Real typical household disposable income growth for working age families fell to 0.7% a year in the 15 years leading up to the Covid-19 pandemic.

Non-pensioner family earnings rose 2.3% per year, or 25% per decade, between 1961 and 2004-05. Average income growth dropped to 0.7% between 2004-05 and 2019-20.

Too many families today have low discretionary incomes, little or no private savings (one-quarter have less than a month’s buffer), and an inadequate social security safety net (basic unemployment support is now down to just 13 per cent of average pay, its lowest level on record).

The lowest fifth of the population had no greater earnings on the eve of the pandemic than in 2004-05, despite GDP per person expanding by 12% during this period.

On the eve of the pandemic, social and private leased households’ incomes were 37% and 24% below average. Single parents had 35% lower salaries, while children under 5 had 20% lower incomes.

Couples without children (33% higher), mortgagors (27% higher), those 55-60 (19% higher), and those in the South East of England had salaries well above the general median (12 per cent higher).

The research says salary is driving Britain’s falling living standards. Typical salaries remain the same as they were before the financial crisis, reflecting a salary loss of £9,200 per year.

Adam Corlett, Principal Economist at the Resolution Foundation, said a solution needed to be found quickly: “To do that, we must address our failure to raise pay and productivity levels, strengthen our social safety net, reduce housing costs and build on what we’ve done well – such as boosting employment for lower-income households.”

Read more: Poor income growth and inequality has left British families ‘brutally exposed’ to the cost of living crisis

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#BorisJohnson’s lies: he says your income has rocketed, so why can’t you afford to live?

This was perhaps the most offensive lie Boris Johnson told in Prime Minister’s Questions on January 5, 2022.

He said income inequality in the UK has fallen.

In a country where poverty is “steadily increasing”, according to the Office for National Statistics, while billionaires have boosted their own income massively, this is an insult to the millions of us who are struggling to make ends meet.

When one adds in the fact that he lied about child poverty – it is increasing, not decreasing – the insult is overwhelming.

Here’s the video evidence:

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The Tories are cheating us out of our pensions – and our retirements

Arguments used by the Conservative government to justify increasing the age at which we may draw our pensions are increasingly false, it seems.

Fellow social media journalist David Hencke has all the information on his website.

He says the Tory claim is that as life expectancies continue to rise, it will be impossible for the pension fund to pay out for everybody unless the pensionable age rises too.

There’s just one problem:

Ministers always quote figures up to 2011… [the] last year of any big rise in longevity which had risen for decades.

Since then the rise has flattened – in one year it actually fell – and last year was the first in five years that showed a small rise. Next year the ONS is warning will be the first year they will have figures of the effects of Covid-19 – and the hint is that longevity will fall because of the disproportionate deaths among pensioners.

Worse still:

When you compare the UK to many other developed countries both men and women have lost out big time in the longevity stakes. The countries that make up the UK (with the exception of Northern Ireland) are all near the bottom of the table.

So while we all are being expected to wait longer for our pension in the UK, our extra weeks of life expectancy fall well below many comparable developed countries. We are being cheated – or at least not given the full facts – by our political leaders. So don’t believe any facile claims we have a world beating system for pensioners. Far from it.

The increased longevity argument was used strongly by the Department for Work and Pensions in its court battle to avoid paying compensation to 3.8 million women whose pension age rose from 60 to 66 – but who were not given enough warning to make proper preparations for it.

But our people aren’t living as much longer as people in other countries. What are those nations doing about pensions? And how are they doing it?

It seems clear that Mr Hencke is right and we are being cheated.

I wonder what we can do about it, if DWP representatives are prepared to perjure themselves in court to preserve a lie.

Source: The chances of living longer are getting shorter – new Office of National Statistics figures show only small rise in longevity | Westminster Confidential

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‘Inequality is essential’: Boris Johnson says crank up the cruelty in order to compete effectively

Boris Johnson: All smiles and ‘thumbs up’ now – but if he gets back into 10 Downing Street he has promised to crank up the cruelty against ordinary people like you.

This nasty piece of … work … thinks he’s going to be your next prime minister.

This speech, published by the excellent Rachael Swindon, shows Boris Johnson explaining why he should never be put in charge of a national government.

He would increase inequality – increase the cruelty against people of low intelligence or who lack the means to improve their situation – partly to spur a “spirit of envy” that he thinks is necessary for progress but in fact is more likely to increase crime and partly to give rich people a smug feeling of value if they give charity to the poor souls they have ground beneath their jewelled heels.

The clip cuts off before he finishes speaking but by the time you get to that point, you’ll probably have had enough:

‘Steel Snowflake’, below, draws the proper conclusion:

That’s right, isn’t it.

We see from this clip – that Mr Johnson never wanted you to view – that he has no intention at all of relieving the plight of the poor and vulnerable; in fact he will make it worse.

Bear in mind that this is not hearsay or propaganda. Play the clip again and you can hear it from Mr Johnson’s own mouth.

If you don’t want this evil creature to ruin your life for you, there’s only one choice: Vote Labour on December 12.

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WASPI women stage noisy walkout of Commons after minister denies them pensions help

WASPI protesters (these were in Norfolk) [Image: Eastern Daily Press.]

Proceedings in Parliament became a little noisier than usual yesterday – and for a good reason:

I’ll let Labour’s Laura Pidcock explain:

Mr Opperman had just refused to provide any transitional help for women who are facing an increase in the age at which they will be paid the state pension.

Changes to the state pension age for women were introduced in Acts of Parliament in 1995 and 2011 and mean that, by 2020, 2.6 million women will have to wait until they are 66 before receiving their pension.

Mr Opperman, Parliamentary Under-Secretary of State for Work and Pensions, said: “People living and staying healthier for longer is to be welcomed, but the Government must not ignore the fact that it also brings enormous financial and demographic pressures. The key choice that a Government face when seeking to control state pension spend is to increase the state pension age or pay lower pensions, with an inevitable impact on pensioner poverty. The only alternative is to ask the working generation to pay an ever larger share of their income to support pensioners.

“In July 2017 the Government published their first review of the state pension age, which set out a coherent strategy targeted at strengthening and sustaining the UK state pension system for many decades to come. It accepts the key recommendation of John Cridland’s independent review which was to increase the state pension age from 67 to 68 between 2037 and 2039.

“The review is clear about increasing life expectancy and the challenges it poses. People are living longer. Almost 6,000 people in the UK turned 100 in 2016, compared with 3,000 in 2002. By 2035 there will be more than twice as many people over 100 as there are now.”

It was while he was saying these words that the WASPI (Women Against State Pension Inequality) representatives in the public gallery stood up and, at first, turned their backs on Mr Opperman, before shouting “Shame on you!” and staging a mass walkout.

This Writer can sympathise. Not only was Mr Opperman quoting inaccurate statistics about longevity – people have started living shorter lives since the Conservatives came to office – but he was also wrong about an increase in the amount working-age people would be asked to spend on pensions – the National Insurance fund for Great Britain was in surplus by nearly £21 billion in October last year, while the Northern Ireland fund was half a billion pounds in surplus, and there is no reason to believe that the transitional arrangements being requested would put that fund into deficit.

One particularly strong argument in favour of transitional arrangements is the fact that the women who are being affected were not given sufficient warning of the change and will suffer considerable financial difficulty as a result.

So the WASPI women were right; Mr Opperman should be ashamed.

The debate served a useful purpose – the Commons agreed to call on the Government to publish proposals to provide a non-means tested bridging solution for all women born on or after April 6, 1950, who are affected by changes to the State Pension age in the 1995 and 2011 Pension Acts.

No doubt the miserly Tories will refuse the request – they would rather provide useless tax breaks to bankers, after all – but their response will undoubtedly provide another nail in the coffin of the arrogant and incompetent minority Conservative government.


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Poverty is the enemy of good mental health. Why do Tories increase it?

Epidemiologist Richard Wilkinson. He ‘found that poverty and social inequality have direct and indirect effects on the social, mental and physical wellbeing of an individual,’ writes Maureen Tilford [Image: Linda Nylind for the Guardian].

It’s a classic example of failed Tory thinking.

They say they want the NHS to work properly, within the budgets set out for it – but then they worse conditions in society, forcing more people to seek medical help.

In this case, more people are seeking help with mental illnesses because of poverty that has been forced on them by stupid Tory austerity policies.

Only yesterday, This Site published an article on medical experts’ plans to record social issues including poverty as contributing factors to mental illness.

Now, people have been writing in to The Guardian to support political action against poverty – precisely to stop it affecting mental health.

Here’s Dr Maureen Tilford:

As far back as 1963, research by Langer and Michael found that psychiatric conditions not only occur at higher rates in the poorest areas, but also cluster together, usually in disintegrating inner-city communities. Money is not a guarantor of mental health, nor does its absence necessarily lead to mental illness. However, it is generally conceded that poverty can be both a determinant and a consequence of poor mental health.

More recently, the epidemiologist Richard Wilkinson found that poverty and social inequality have direct and indirect effects on the social, mental and physical wellbeing of an individual. It is clear that poverty and inequality are closely linked and that income inequality produces psychosocial stress.

The wealth gap in the UK is greater than at any time since the first world war and continues to grow. Unless this is addressed at a most senior level in government, the demand on the police will continue, not to mention the suffering of all those callers. This cannot be viewed as a purely health service issue. Allowing the wealth gap to spiral out of control is having serious adverse effects on the UK population on many levels.

And Reverend Paul Nicolson of Taxpayers Against Poverty has this to say:

Prevention of mental illness, and hunger created by low income and debt, requires an increase in taxation and unemployment benefits which many of us would be willing to accept. Central government is making households destitute by shredding unemployment incomes and then stopping them with the benefit sanction, allowing zero-hours contracts and by rolling out the universal credit. Local government then taxes the benefits and sends in the bailiffs to collect the inevitable arrears, adding court costs and huge bailiffs’ fees.

It takes a very rare degree of resilience for mental health to withstand three powerful government departments shelling out threats of bailiffs, prison, eviction and homelessness against a single debtor, who is often struggling to put food on the table for dependent relatives. As Psychologists Against Austerity have reported, such abuses of power are creating humiliation, shame, fear, distrust, instability, insecurity, isolation and loneliness in trapped and powerless citizens.

Source: Poverty is at the heart of mental health crisis | Letters | Society | The Guardian


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Links between benefits and mental ill-health could be recorded by doctors in new plan

[Image: Getty/iStock].

The link between disability benefit assessments, mental health problems and increases in suicide rates could be made explicit in a new plan announced in medical journal The Lancet.

Kate Allsopp and Peter Kinderman have called for mental health professionals to record psychosocial codes in official NHS records, to show whether a patient is suffering from the effects of social inequality, poverty or trauma.

Links between the Work Capability Assessment (WCA) and an increase in suicides, mental health problems, and prescription of antidepressants are specifically mentioned, following on from a study covered by This Site here.

The proposal in The Lancet states [boldings mine]:

It is well known that poverty and social inequity are major determinants of our mental health, and the United Nations Special Rapporteur characterises mental health care not as a crisis of individual conditions, but as a crisis of social obstacles, which hinders individual rights.

It is important, therefore, that the circumstances that have given rise to distress should be formally recorded alongside the distress itself. Psychosocial codes… incorporate descriptive information regarding adverse life experiences and living environments, but are almost never used or reported in clinical practice or academic publications.

These quasi-diagnostic codes document neglect, abandonment, and other maltreatment… homelessness, poverty, discrimination, and negative life events in childhood, including trauma… problems related to family upbringing, and housing and economic problems.

Broadening routine data capture within UK National Health Service records could establish more inclusive, social, systemic, and psychologically comprehensive patterns of difficulties, which could target information regarding established social determinants of mental health problems, such as inequality, poverty, and trauma.

Imagine if it were as serious to fail to document extreme poverty as it would be for a clinician to fail to identify severe depression.

We do not expect that clinicians should resolve such difficulties; it is not the job of mental health professionals to end poverty.

Nevertheless, proper recording of psychosocial… codes in the context of psychiatric diagnoses is imperative because of the close relationship between the two.

The UK government programme of reassessing disability benefits… using the Work Capability Assessment has been associated with an increase in suicides, mental health problems, and prescription of antidepressants.

Transitions into poverty (relevant to codes [on] inadequate housing… lack of adequate food… extreme poverty; and… low income) have been associated with increased odds of children developing socioemotional behavioural difficulties, and individuals who have had an institutional upbringing… are approximately 11 times more likely to experience paranoia compared with those with a less disrupted early history.

As clinicians, we might be better able to serve our clients if we can use such data capture to apply more effective pressure on the political system and drive wider system reform.

Source: A proposal to introduce formal recording of psychosocial adversities associated with mental health using ICD-10 codes – The Lancet Psychiatry


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How to upset super-rich exploiters: The maximum wage

Small change: That’s all employees can hope to get while company executives retain sole power to determine pay.

It seems to This Writer that Jeremy Corbyn has struck a nerve, here.

All he had to do was mention the possibility that Labour might introduce rules limiting executive pay in relation to that of the lowest-paid employee and a storm of protest arose – from the high-paid, the privileged, and the ‘entitled’.

It is exactly as This Site stated a couple of days ago – and as Shadow Business Secretary Clive Lewis has pointed out in an article in the Mirror.

“It’s a strange country indeed where the fact that top bosses earn more in two and half days than most people earn all year causes less outrage than a proposal to limit pay at the top. I suggest looking more closely at who was causing the uproar,” he wrote, echoing my own words.

He pointed out that claims that everybody benefits when the rich get richer are nonsense: “The wealth isn’t trickling down, it’s flooding up”.

Higher pay rates mean CEO’s are causing instability by leaving after only short tenures: “They are cashing in rather than aiding the long-term growth of the company.”

There is no point in ‘naming and shaming’ companies whose bosses take huge salaries and incentives while employees have to claim in-work benefits to survive, because: “You can’t shame the shameless.”

Publication of Directors’ pay was originally intended to shame companies into restraining pay, but has had the opposite effect, encouraging companies to compete with each other on pay. And those that might want to act find they can’t – because they would be paying less than the going rate, attracting nobody.

So it is the duty of government to act in the name of the majority.

Perhaps the only serious criticism of the plan to limit firstly the pay of private companies carrying out contracted-out work for the government, so that bosses earn a maximum of 20 times their lowest-paid employees, is that the traditional way of rebalancing inequality is via tax.

Why can’t taxation be used to address the issue, as Joseph Harker asked in The Guardian?

The simple answer is that it can – but not on its own.

If rich executives were taxed extra, solely to fund in-work benefits for the poor, they would bitch like hell that their money was being stolen and given away as handouts for the undeserving.

It would be a lie, but it’s one they like to use.

The Tories also like to claim that the higher-paid would simply find ways to avoid paying tax if the rate was higher than it is now – which is why they have been merrily cutting back the amount that they and their rich friends contribute.

No – pay needs to be re-balanced so that working people receive the amount they deserve.

Has anybody ever explained what company executives do that is so deserving of – what is it now? – 180 times as much remuneration as the people who actually generate their firm’s profits? Anyone?

Taxation is appropriate, as Mr Lewis writes – but only in conjunction with fair pay ratios. A higher tax rate for people earning obscene amounts could only be seen as fair if it is combined with tax breaks for firms that offer fair pay. It has been suggested that such businesses could even be rewarded with a British Standards ‘kite mark’.

So the idea of a maximum pay level, set at a certain multiple of minimum pay at any given firm, is sound.

Suspicion should not be heaped on Jeremy Corbyn, Clive Lewis and Labour for suggesting it.

It is not an unrealistic idea, as many have claimed – in fact several other countries have already implemented it, but your bosses probably didn’t want you to know that. Take a look at this Skwawkbox article for details.

Instead, let us place blame for the current situation where it is due – on the corporate mouthpieces who try to suppress any action that may hinder their rampant, naked greed.

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If we examine who is complaining about Corbyn’s maximum wage idea, we’ll know why

Jeremy Corbyn said a maximum wage was needed ‘if we want to live in a more egalitarian society and fund our public services’ [Image: Stefan Rousseau/PA].

Isn’t it interesting how the media have latched onto what is actually a well-known Jeremy Corbyn preference, and tried to make it seem loony?

Mr Corbyn has been saying he wants legislation to describe a maximum wage for the highest earners, at least since he became leader of the Labour Party in 2015.

Suddenly it is big news, and his own earnings of £138,000 a year were plastered all over our TV screens during the morning reports – a lot when compared to yours or mine, perhaps, but a paltry sum next to those of the company execs who earned more than all of us, including Mr Corbyn, by the end of last week.

Some boardroom suits take home around £5 million every year; some take more. Meanwhile they force employees onto starvation wages that mean they have to claim from the benefit system to survive. Do you think that is reasonable? Because I don’t.

Reporters pressed Mr Corbyn to explain what he thought the maximum wage should be – but this is a diversionary tactic to make it seem silly, and completely misses the point.

Why should a maximum wage be a set figure? Surely it should depend on a company’s turnover and the amount the lowest-paid employees receive, shouldn’t it?

And what about those of us who aren’t part of a company but earn every penny we make by our own efforts?

What about movie stars? A particular name on a film poster can make a huge difference to its takings, and that can depend on the pay packet they receive. If everybody involved will get more as a result of their involvement, why not offer them the big bucks?

Other commentators have already suggested a ratio between the lowest-earning members of a business and those at the top. But it would be unfair to pluck arbitrary figures out of the air.

Logically, an organisation would need to be set up, if one did not exist already (the High Pay Centre, anyone?) to arrive at a logical set of terms for maximum pay.

Demanding figures from a politician in the middle of an off-the-cuff interview is unrealistic.

That’s why they do it, of course.

Jeremy Corbyn has called for a maximum wage for the highest earners, saying he fears Brexit will see the UK become a “grossly unequal, bargain basement economy”.

The Labour leader would not give specific figures, but said radical action was needed to address inequality. “I would like there to be some kind of high earnings cap, quite honestly,” he told BBC Radio 4’s Today programme on Tuesday.

When asked at what level the cap should be set, he replied: “I can’t put a figure on it and I don’t want to at the moment. The point I’m trying to make is that we have the worst levels of income disparity of most of the OECD countries.

“It is getting worse. And corporate taxation is a part of it. If we want to live in a more egalitarian society, and fund our public services, we cannot go on creating worse levels of inequality.”

Corbyn, who earns about £138,000 a year, later told Sky News he anticipated any maximum wage would be “somewhat higher than that”.

Source: Jeremy Corbyn calls for maximum wage law | Politics | The Guardian

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