Tag Archives: PricewaterhouseCoopers

If banks want regulation costs cut, they should be more trustworthy

With people like this in charge of banks – and then going on to important roles in Conservative-led governments, can either the banks or the government be trusted to do what’s right for UK citizens?

Banks and other financial organisations want the Conservative government to slash the cost of complying with new regulations, according to the Confederation of British Industry. Doesn’t your heart just bleed for them?

Thse are the organisations that sucked the UK into the global financial crisis and allowed the Conservatives to form a government after the 2010 election (they didn’t win it) with a false claim that Labour overspent.

Now they want the regulations that prevent them from causing another crisis to be eased.

Considering the banks’ record, it would be madness to do so. Let’s see how long it takes the Tories to comply.

According to The Guardian, “As the City recovers from the financial crisis, companies are lobbying for an end to criticism of the banking industry and an easing of rules designed to prevent another crisis.

“They argue the sector is a big employer and that the City’s position as a financial centre is important for the UK’s economy.”

Finance is indeed a big employer, here in the UK – but only because Conservative-led governments since 2010 have utterly failed to build up any other industry while continuing to pander to the banks.

Meanwhile, the taxpayer has been supporting banks heavily, with 4.21 per cent of government spending – that’s £41 billion per year – being supplied to these very profitable institutions for no very good reason.

And they’re complaining about the cost of regulations!

It gets better. The regulations against which they are complaining include:

The ring-fence required by 2019 to separate retail and investment banking, so that bad investments cannot affect the safety of depositors’ money.
The introduction of criminal liability for senior executives whose reckless behaviour causes their company to fail.

That’s right – bank bosses are angry that the government is actually trying to stop them from penalising ordinary account holders for their gambling losses, and upset that they might have to pay a debt to society if their decisions harm the viability of their firms.

Clearly these bankers have not learned their lesson and want to inflict further debt upon the taxpayer while making off like the bandits they are.

According to The Guardian, “HSBC has taken the lead for the banks by threatening to leave the UK if it decides the cost of remaining is too great. Britain’s biggest bank listed ringfencing and the [bank] levy, which HSBC says affects it disproportionately, as important considerations.”

This is the bank that, earlier this year, was implicated in one of the biggest organised tax avoidance schemes to be uncovered in the UK in recent times.

It is important to note that the survey was compiled with accounting firm PwC, which has been singled out by HM Revenue and Customs as having created hugely lucrative schemes to help companies and the hugely wealthy to avoid paying their taxes.

Shouldn’t the government’s response be: “F*** off, then – but pay your back taxes first”?

The last thing the government should do is give in to these demands, and taxpayers across the country should write in to George Osborne, warning him against any such move.

There is no reason to trust the banks with any more responsibility than the bare minimum. They simply haven’t earned our trust back yet.

If the banks want more freedom, they should be told to bloody well earn it.

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Capita – another nail in the coffin of government outsourcing

How much more corruption must the British taxpayer underwrite?

The latest private firm to face allegations that it took huge amounts of public money and used it corruptly is Capita.

That’s right – the outsourcing giant whose government contracts include taking over the Work Capability Assessment from discredited Atos in some parts of the UK, is facing an investigation into allegations that it used a major government contract to short-change small companies, resulting in some going out of business.

Capita took a minimum 20 per cent cut of the value of all contracts to administer a £250 million civil service training scheme, in a project hailed as a model of how to open up the public sector to small businesses and provide better value to the taxpayer.

But 12 companies involved in the scheme have now teamed up to demand that the Cabinet Office and the National Audit Office launch an investigation into Capita.

If it is found guilty, the company will join a roll-call of shame that includes PricewaterhouseCoopers (helping clients avoid tax while advising the Treasury on its policy to tackle tax avoidance), G4S (failure to provide security for London 2012, criminal tagging fraud), Serco (criminal tagging fraud) and A4e, if anybody can remember that far back.

To its shame, it seems the Coalition Government is still employing all of these companies.

Lucy Powell MP, Labour’s Shadow Minister for the Cabinet Office, said allegations against Capita included claims that firms had gone out of business due to late payments and government departments had been charged more for services than they were under previous arrangements.

“David Cameron promised the Government would pay small business suppliers within five days, yet his failure to act continues to damage our economy,” she said.

“Labour will shine a light on government outsourcing by ensuring firms delivering Government contracts comply with freedom of information requests.

“We will also back small businesses struggling under the Tories by cutting and then freezing business rates.

“And we have put forward a clear plan to tackle the scandal of late payment, ensuring late payers automatically pay interest to their suppliers, and outlawing bad payment practices such as firms being asked to pay for the right to be a supplier.”

That all seems good – and bolsters Labour’s claim to be good for business – but…

In order to make good on its FoI promise, Labour will have to strengthen the law to prevent contractor firms ducking requests in the same way that – for example – the Department for Work and Pensions is currently ducking demands to reveal the number of benefit claimants who have died since November 2011 – the DWP says it already has plans to publish the information, but on an unspecified date that keeps getting pushed further and further into the future.

Any business rate freeze must take notice of local conditions to ensure that no part of the UK is disadvantaged. At the moment there’s a postcode lottery, with businesses based in the most lucrative areas gaining an instant advantage. A blanket freeze would maintain that advantage, rather than levelling the field.

Also late payment controls must be robust enough to prevent firms from finding loopholes in order to delay.

In other words, while the broad strokes are good, the devil’s in the detail.

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It’s time to stand up for the whistleblowers

Hervé Falciani, the HSBC whistleblower – currently on the run from the Swiss authorities.

We owe a great debt to the whistleblowers – people who alert us to the misdeeds of the major corporations and public organisations whose decisions affect our everday lives.

Acting entirely altruistically – with no thought for personal gain – these people warn us about the cheats who squat at the top of the economic food chain, doing everything they can to screw the system.

The whistleblowers deserve congratulation and promotion, while the cheats should be removed from their positions, prosecuted, and ordered to pay substantial sums of money as penalty for their actions.

And what do we do? The exact opposite. We prosecute the whistleblowers and elevate the cheats.

Look at Hervé Falciani, the former HSBC systems engineer who revealed that the bank was helping clients avoid paying tax. According to Tax Research UK, he has been on the run from Swiss authorities because he broke Swiss bank secrecy laws to reveal the information, and is living under protection.

Antoine Deltour, who blew the whistle PricewaterhouseCoopers’ lucrative tax avoidance sideline, is now being prosecuted in Luxembourg at the behest of that firm.

Meanwhile, Stephen Green, who chaired HSBC at the time of its offences, was ennobled and made a Conservative minister, while PwC continues to advice the Tory government on its policies to tackle – yes – tax avoidance.

It’s a backwards culture that can only benefit the criminals, and it’s time for legislation to reverse the situation.

Is any political party brave enough to do the honourable thing?

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The perils of pandering to PricewaterhouseCoopers

Margaret Hodge: A principled stand against corruption of politics by corporate influence.

This is something that broke while Yr Obdt Srvt was still recovering from a recent illness, but is still worth covering because Labour really needs to understand the danger of association.

Margaret Hodge, Labour’s chair of the Commons Public Accounts Committee, broke ranks to warn the Shadow Cabinet against accepting – shall we call it – “help” from accounting firms like PricewaterhouseCoopers on Friday. She said it was “inappropriate” and she was right to do so.

It’s the political equivalent of accepting “help” from the Mafia – you end up in their pocket, owing them favours.

According to the BBC, Labour MPs including Ed Balls (Shadow Chancellor) and Chukka Umunna (Shadow Business Secretary), along with Rachel Reeves (Shadow Work and Pensions Secretary) have received more than £540,000 in research assistance from the firm in the past 18 months alone.

PwC is one of the ‘Big Four’ accountancy firms – the others are Ernst & Young, KPMG and Deloitte – who also advise the Conservative-run Treasury on tax policy. It should not be beyond anybody’s wit to see there’s a clear conflict of interest if the firm is advising both Labour and the Tories on tax policy.

Furthermore, PwC – if not all the others as well – is known to advise businesses on ways they can legally avoid paying tax. This means that, while working for the government, they are actively campaigning to hinder its effectiveness at collecting revenue that is due to it and using that money for the good of the UK as a whole.

Labour’s official line is that “PwC have provided long standing support to all three major political parties on a non-party basis, as happened for the Conservatives and Lib Dems before the last election. Given the complexity of government and that opposition parties do not have significant access to civil servants, the support provided by organisations such as these helps ensure that there is better scrutiny of government policy.”

PwC said its staff provided “limited and fully disclosed technical support to the main political parties” but added: “We do not develop policy on their behalf.” Staff on secondment might make “observations on the improvement of legislation or proposed legislation”, the firm added in a statement.

Isn’t this exactly the problem? Staff make “observations”, and before we know it, all our political parties are carrying out PwC policy instead of their own.

If Labour was serious about getting the advice it needed, then it would be employing advisers who have nothing to do with any of the other political parties. That’s the way it has to be. Anything else courts betrayal of the public.

Then there would be no opportunity for these firms to create embarrassment when their activities “promoting tax avoidance” on an industrial scale were revealed by the Public Accounts Committee

PwC said it disagreed with the Public Accounts Committee report (it would, wouldn’t it?) and denied claims by Mrs Hodge that the firm had misled her committee when its executives gave evidence in January 2013. Who do you believe?

Mrs Hodge herself told BBC Radio 4’s The World At One: “You have to be very, very careful when you’re in opposition whom you take money from”.

Absolutely correct.

This is why Vox Political supports the removal of all private company advisors from government. The private sector has no place in decisions about public services.

That is why we have a Civil Service.

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NHS privatisation: Are there ANY ‘qualified providers’?

Qualify v. To give eligibility.

It seems there are very few, if any ‘qualified providers’ from the private sector currently working in the English National Health Service, according to the latest issue of Private Eye (#1382, p38).

It states: “When the government decided to flog off large chunks of the NHS, it insisted that private providers must ‘qualify and register’ before being allowed to offer NHS-funded services.

“But the NHS regulator Monitor never carried out the promised ‘assurance process’ to test whether providers were suitable or not. It confirmed that it held no register of ‘any qualified providers’ and a spokesman even said it would ‘love to know where there is a list’.

“Monitor only licenses organisations that hold NHS contracts worth more than £10 million a year. This leaves the vast majority of smaller ‘alternative’ providers and non-profit businesses unchecked.

“NHS England doesn’t check them either. Not only does it not hold any list, but it has also stopped providing support to local clinical commissioning groups to enable them to check the credentials of companies that are bidding for contracts. It has closed its online ‘Any Qualified Provider Resource Centre’, along with the Supply2Health website which at least listed contracts and current providers.

“All that can be found after a determined trawl through the Care Quality Commission website is a cobbled-together list of 41 mainly small-care providers, many of which have not been inspected, leaving the issue of whether they are ‘qualified’ open to question.

“Responsibility for deciding who ‘qualifies’ to carry out NHS work falls therefore not on those who are supposed to scrutinise and regulate NHS services but on local health purchasers. As the Health and Social Care Act doesn’t define what ‘qualified’ means, health ministers have neatly opened up a postcode lottery in healthcare when certain companies may be accepted as qualified by some local commissioning groups, but not others.”

In fact, it’s worse even than that.

Clinical Commissioning Groups (CCGs) were sold to the public on the premise that they would be composed of doctors – mainly GPs. But the CCGs’ own management teams are in fact steered by private sector consultants – McKinsey, Ernst & Young, PricewaterhouseCoopers, Capita, you know the names because they belong to all the usual suspects (see NHS SOS, Jacky Davis & Raymond Tallis (editors), pp24-25). Some of these organisations provide their own healthcare services, creating an opportunity for corruption that makes utter nonsense of the assurance ‘no decision about me, without me’ made by Andrew Lansley when he was pushing the Health and Social Care Act through Parliament.

So, if you live in England and you are told you need a health service that is only offered by a private provider – you demand to see proof that they are qualified to run the service. Who checked them? To what standard? Don’t be fobbed off with an assurance that the CCG has given them the thumbs-up – ask what organisation advised the CCG. Get to the bottom of the matter.

You might find that your ‘qualified provider’ doesn’t have any qualifications at all.

And then who’s liable if your treatment goes wrong?

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POLL: Is it time for Rachel Reeves to go?

Rachel Reeves: Is she a closet Tory who has gone too far?

Rachel Reeves: One mistake too many?

Today Vox Political pointed out that Labour’s Rachel Reeves has hired an advisor from PricewaterhouseCoopers (PwC), a foreign-owned company that is already advising the Conservative and Liberal Democrat Coalition government, and actually writing laws on tax while helping companies and the very rich to avoid paying it.

It seems clear that she is, as we put it, sleeping with the enemy and it seems likely that this relationship would continue if Labour were to form a government next year – aiding PwC in its aim of being in control, no matter which political party is supported by the people.

Do British people want to live in a corporatocracy like that?

It seems that, if Rachel Reeves has her way, your vote really will count for nothing (who’d have thought she’d be an agent of Lynton Crosby’s ‘They’re all the same’ agenda?) and the corporate bosses will run the country for their own gain and to our detriment.

Alternatively, is it time she received her marching orders and was shipped off to the backbenches, along with her corporate adviser?

Is it time we told Labour that we don’t want to elect another party of corporate lapdogs?

Should we tell Ed Miliband we want him to make his own decisions, untainted by the interests of big businesses that have no intention of helping the poor?

He won’t know unless we tell him.

What do you think?

[polldaddy poll=8445855]

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Rachel Reeves is sleeping with the enemy

—Putting her foot in it again: Rachel Reeves has a history of stupid decisions. Now she has employed one of the UK’s leading tax avoidance advisors to help her, when we need to END tax avoidance in order to improve the benefits bill.

This is very disturbing, from the new Private Eye (1379):

“Rachel Reeves, Labour’s shadow work and pensions secretary, is the latest Opposition member to accept help from PricewaterhouseCoopers (PwC).

“The management consultant is supplying an analyst to support Reeves from October to January… This suggests that, although Labour has made a lot of noise about the government’s work with unpopular contractors like Atos and A4e, the People’s Party intends to stick with this commercial approach to welfare should it find itself back in power next year.

“PwC is already involved in advising the government on ‘commissioning’ welfare services; and last year Tory employment minister Mark Hoban asked it to help strengthen ‘quality assurance’ in the fitness-to-work tests carried out by Atos [PwC is Hoban’s former employer, implying an inappropriate relationship from the get-go]. This didn’t seem to work, as Atos quit the contract this year after much criticism.

“Reeves’ timing is unfortunate, to say the least. PwC is currently heavily implicated in the latest scandal of big corporations avoiding tax through Luxembourg. Most of the leaked documents show PwC was helping arrange all those tax-free tricks.”

PwC is, along with the rest of the ‘Big Four’ accountancy firms – Deloitte, KPMG and Ernst & Young – of course, well-known to Vox Political. Along with the others, it has been invited to actually write government legislation on behalf of the Tories and Liberal Democrats – specifically UK law on tax avoidance – while running many tax avoidance schemes.

In a previous article, Vox Political wrote: “The Department for Work and Pensions has employed many private firms; this is the reason that department is haemorrhaging money. There are the work programme provider firms who, as has been revealed in previous blog entries, provide absolutely no useful training and are less likely to find anyone a job than if they carried on by themselves; there are the IT firms currently working on Universal Credit, about which Secretary of State Iain Duncan Smith lied to Parliament when he said he was having to write off £34 million of expenditure – the true figure was later revealed to be closer to £161 million, almost five times as much; there are Atos and Capita, and probably other firms that have been hired to carry out so-called ‘work capability assessments’ of people claiming sickness, incapacity and disability benefits, according to a plan that intentionally ignores factual medical evidence and places emphasis on a bogus, tick-box test designed to find ways to cut off their support; and there is Unum Insurance, the criminal American corporation that designed that test, in order to push British workers into buying its bogus insurance policies that work on exactly the same principle – this is theft on a grand scale.”

This blog has warned that the bosses of companies like Unum, Atos and KPMG (and by extension, PwC) were planning to ensure that they would have government contracts, no matter which political party was in office. In effect, Vox Political warned, they would be unelected kings because whatever you decided at the ballot box, they would be in charge.

In another article, Vox Political pointed out that money paid to these companies does not benefit the British economy but goes abroad to their foreign headquarters or parent companies. PwC is part-American-owned.

In October last year, this blog stated that if Rachel Reeves had promised to be as tough on tax dodgers, in her previous job as shadow chief secretary to the treasury, as she promised to be on welfare in her first speech as shadow work and pensions secretary, Labour might have a lot more credibility.

The article said that ensuring we get the money that is currently going unpaid by tax dodgers – who are facilitated by firms like PwC – would ease the benefit bill as it would take up a smaller proportion of the national tax take. And now she is taking advice from PwC.

Maybe someone at PwC read the article and decided to take preventative action.

It seems clear that if Labour has any involvement with this company – or allows it to continue working behind the scenes on government business – it will not be in the public interest, and in fact is highly likely to harm the public good.

So we must ask:

Rachel Reeves, what the blue blazes do you think you are doing?

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Public money is being thrown away on government-contracted scroungers

It turns out that some people really do get to lie around all day, doing nothing apart from watching the money rolling in.

Bloody scroungers.

I’m sorry to swear – and you know I’m not usually rude – but these Work Programme provider companies really get my goat.

The revelation that companies such as Ingeus, A4e and Working Links were getting undeserved ‘incentive’ money (see also the BBC’s article), rather than being paid by results as has been claimed loudly and repeatedly by Tory ministers and backbenchers, is nothing new to Vox Political – we first pointed out the problem in November 2012, more than 18 months ago.

You see, not only has this been going on ever since the Coalition government established welfare-to-work in its current form –

Not only have government ministers and backbenchers been lying to you about the payouts given to the profit-driven privately-owned provider companies –

Not only have these companies been sucking down on your hard-earned taxpayer cash as though they had done something to earn it –

But the people they were supposed to be helping – people who have been forced into ever-greater poverty by the benefit uprating cap, arbitrary and unfair benefit sanctions, the bedroom tax, the £26,000 cap on benefits for families, the imposition of council tax on even the poorest households (in England at least), the stress of continual reassessment (if they are ESA claimants in the work-related activity group), the humiliation of having to visit food banks and who knows what else…

The people who are desperate to get any kind of paying job, despite the fact that zero-hours contracts could make them worse-off than unemployment, due to the effect on in-work benefits, despite the fact that those in-work benefits are also being squeezed hard, and despite the fact that there are at least five jobseekers for every job that becomes available…

These are the people that government ministers, backbenchers and the right-wing press keep victimising with their endless attacks on “skivers”, “scroungers”, the “feckless”, the “idle” and the “lazy”!

If I was unemployed and my MP had been caught slagging me off while praising these good-for-nothing so-called work programme ‘providers’, I would make it my business to bring them before the public, lock them into some medieval stocks and pelt them with rotten vegetables. Public humiliation is the least they should get for this continual insult to common decency.

But wait! There’s more.

It turns out that, not only are these work programme providers a bunch of lazy good-for-nothing parasites, but many of them are also a bunch of foreigners who’ve come to the UK to take our jobs!

Ingeus is Australian. G4S is part-Danish. Maximus is American.

It seems that all the politically-fuelled and media-driven anger against immigration into the UK from the rest of the European Union and beyond may be designed to distract us all from the fact that foreign firms are immigrating here to take government jobs that should be yours, and to steal your tax money.

Nobody can say they’ve earned it, after all.

But let us not be unfair. It would be wrong to concentrate on welfare-to-work providers when all of government is riddled with foreign interlopers.

Look at the Treasury, where the ‘Big Four’ accountancy firms have been re-writing tax law to suit their tax-avoiding corporate clients for the last few years. They are Deloitte (American), PriceWaterhouseCoopers (part-American), Ernst & Young (part-American) and KPMG (Dutch).

And then there is the huge, criminal, foreign firm that has been advising the Department for Work and Pensions on ways to privatise the welfare state since the mid-1990s – a firm so controversial that there is currently a moratorium on the mention of its name in the national mainstream media. It is an American insurance giant called Unum.

The best that can be said of these five corporations is that – at least to the best of our knowledge – they do work for a living.

… In their own interest – not yours.

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The great wage con is keeping you poor

Is anyone else sick of employers bleating that the minimum wage is hindering their business?

They must think we’re all stupid.

A few of them were on the BBC’s Any Answers on Saturday, saying the minimum wage keeps pay down, and that people can’t afford to go to work – especially if they live in London – because their housing costs are paid by benefits. This is nonsense.

The minimum wage is exactly what it claims to be – a minimum. And if people aren’t getting up to work for it because benefits give them more, we can see that it is not enough.

But let’s take this further: We all know that Landlord Subsidy is being restricted – especially in London, where landlords charge more than in the rest of the country. This means that people on low incomes in rented homes will be unable to pay the bills and will be forced to move somewhere cheaper (if they can find it), as intended by our extreme right-wing government.

Where are all these minimum-wage employers going to find their minimum-wage workers then?

Even that isn’t the limit of it, though. We know from such sources as the summer’s excellent Dispatches documentary on Channel 4 that employers have found ways around the minimum wage.

They have taken people on as self-employed contractors who are paid a flat rate for a day’s work – no matter how long that work takes – and being self-employed, these people pay their own taxes and National Insurance, and get no time off for holidays or if they are ill.
They have taken on workers on part-time contracts, meaning reduced or non-existent holiday and sick pay entitlements – and then boosted up their hours to full-time levels with fake ‘overtime’ offers.
They have employed workers on zero-hours contracts, meaning they can demand an employee’s presence at any time and make them work for as long – or short – a period as required. Again, there are no tax administration obligations, NI, sickness or holiday benefits.

The result is very nice for a government of liars such as the current Westminster administration, because it seems they have managed to increase employment (in fact the last figures showed unemployment is greater than at the end of the Labour administration in 2010, but by such a small amount that it’s not worth mentioning).

Production, on the other hand, has remained flat. If more people are in work, it should have increased.

That is how we know we are looking at a con.

If more people are in work but production hasn’t gone up, we must question the incentive for this increased employment. It has already been mentioned: The lack of holiday and sick pay entitlement, National Insurance and tax admin obligations. The larger the employer, the larger the saving – but this doesn’t mean small firms aren’t feeling the benefit.

The minimum wage worker’s income is topped up by benefits – but the government is cutting these back. Landlord Subsidy in London won’t be enough for people on the kind of contracts described here to stay in their homes, and this means a consequent job loss if they have to move out of the area.

Tax credits are being removed; child benefit restricted. Universal Credit (if it ever works) will operate in real-time, adjusting benefits to ensure that low-paid workers remain in an income trap for as long as their wages remain below a certain level.

Employers reap the benefits. But even they are being conned, because this can’t last forever.

Imagine a Britain without in-work benefits but where the living wage has not been introduced nationwide (this will be a reality in a few years, under a Coalition or Conservative government). Workers on the self-employed, part-time or zero-hours contracts described here will not earn enough to survive.

Private debt will increase exponentially, leading to increased mental illness as the stress of trying to cope takes its toll on the workforce. Physical illness will increase as people cut back on heating in their homes and food in their fridges and larders. Result: malnourishment and disease.

What happens then? It’s hard to say. It may be that employers will take on increasing numbers of cheap foreign workers – but there is already resentment at the influx of immigrants from the European Union and this could lead to civil unrest.

It seems likely that the largest firms will leave these shores. If we compare them to huge parasites – and we can – then the host will have been drained almost dry and it will be time to move on and find another to treat the same way. These are the companies who have reaped huge rewards from tax avoidance, aided by the ‘Big Four’ accountancy firms – KPMG, Deloitte, PricewaterhouseCoopers and Ernst & Young – who have been writing – into British law – ways for them to get out of paying their share.

The smaller employers might keep going for a while or collapse; it depends how much their bosses save up for the inevitable crash. Deficit financing of their business will support them for a while but, if they don’t have any ideas, they’ll go under.

All because a few very greedy people just won’t pay a reasonable amount for a hard day’s work.

They get on the media, telling us they can’t afford higher wages. In that case, why are they even in business? If they need a workforce of a certain size, but cannot pay a living wage, then they simply should not bother. All they are doing, in the long run, is contributing to a monumental confidence trick that will cause immense harm to the economy and the nation’s health.

Of course, the UK did not always have in-work benefits. People used to be paid enough to make ends meet. We should be asking why that changed and who benefits. A return to that situation would benefit the country enormously – but it isn’t going to happen on the minimum wage, and it isn’t going to happen on zero-hours contracts.

It’s time to name these firms and ask bosses who employ on these terms why those contracts are necessary and why they feel justified in the damage they are causing.

And while we’re at it, it’s time to ask our MPs why they tolerate it, too.

Labour’s Living Wage tax break exposes the Tories’ ‘making work pay’ lie

Ed Miliband’s Living Wage gamble: It’s a stop-gap solution while a Labour government works on re-balancing the economy, but will small businesses go for it? [Picture: BBC]

Just one day after the TUC leader said the Coalition has broken the historic link between economic growth and rising household incomes, Labour has proposed a way to restore it.

Since the recovery began, earlier this year, Vox Political has been pointing out its lack of impact on the poorest households in the UK – readily evidenced by the rise and rise of food banks across the country. This is because any profits are being funnelled up to those individuals who are already earning the most and – thanks to our bizarrely-slanted tax (avoidance) system – into tax havens.

According to the BBC, Frances O’Grady told a conference yesterday that “households are being excluded from the benefits of growth. Unless this changes, the recovery will be meaningless to the vast majority of people across Britain.

She said the government was “desperately short of solutions”.

A Treasury spokesperson said the government’s economic plan (wait a minute! The government has an economic plan? When did they come up with that?) was “the only sustainable way to raise living standards” despite all the evidence to the contrary.

This person also said the government’s plan was “slowly but surely working”, even though the economic recovery has nothing to do with any government action.

But today Ed Miliband, the Labour leader, unveiled a plan that made nonsense of the Tory mantra that the government is making work pay because, instead of cutting benefits to make it seem more desirable to have a wage (even though the amount earned is still a pittance), it will actually add cash to working people’s pay packets.

There is a drawback, in that it means a Labour government will offer businesses a 12-month tax break if they agree to pay employees the Living Wage. A tax break is legalised tax avoidance, and we really have enough of that going on already, thanks to the efforts of the Big Four tax avoidance accountancy firms – KPMG, Deloitte, PricewaterhouseCoopers and Ernst & Young – who happen also to write UK tax law for George Osborne (because he doesn’t know how).

But it’s only for a year while the Living Wage gets bedded in. It’s a stop-gap solution to lift workers out of poverty while Labour introduces long-term plans to re-balance an economy that has already been seriously damaged by three and a half years of crazy Conservative ideological pummelling. Who can predict the harm after a full Parliamentary term?

And the Living Wage is becoming even more desperately-needed in the UK than ever, after a study showed the number of workers earning less than its £8.55 per hour (in London) and £7.45 per hour (elsewhere) increased by eight per cent in the last year (from 4.8 million to 5.2 million).

Mr Miliband’s proposal means private firms would be able to claim back about one-third of the cost of raising their staff members’ wages to the Living Wage. This would be good for the government as it would save money on benefit bills and tax revenues would rise.

But costs to businesses would increase. While these could be absorbed by larger companies, smaller firms might struggle to stay afloat.

It is possible, though, that the wage rise would reinvigorate previously-downtrodden workers (as Vox Political has suggested in the past), giving them a sense that they are valued and a reason to invest their energy in the company’s success.

Vox Political

politics for the people

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