This is actually a little terrifying.
Words I wrote 10 years ago this month are as appropriate now as they were then. See for yourself.
I was responding to Archbishop of York John Sentamu’s comments on chairing a year-long commission to investigate the need for a living wage (something that is still desperately-needed, even though the Tories have hijacked the term and applied it to something that doesn’t pay nearly enough):
In The Observer, he wrote: “The holes in millions of paycheques are being plugged by in-work support to the tune of £4 billion a year. But why aren’t those who are profiting from their workers paying up? Why is government having to subsidise businesses who don’t pay their employees enough to live on? It is a question we need to answer and act on – fast. The cost of living is rising but wages are not. In the rush for profit, and for high pay at the top, too many companies have forgotten the basic moral imperative that employees be paid enough to live on.”
the simple fact is that the cost of living is too high and – if they had to rely on wages alone – millions of working people, up and down the country, would be unable to pay their bills…
… leading us to a recent blog article by our old friend Michael Meacher MP. He points out that our privatised utility companies are forcing every one of us to pay – through the nose – for substandard services.
He wrote: “More than £100 a year of an average household [water] bill, that is about 30 per cent, goes on profit, compared with 9 per cent in the energy sector which is itself known for egregious profiteering.
The profit on water bills is now 35 per cent, we’re told. Energy profits are also huge, although the exact percentage is not easily available.
“In the last 10 years, water bills have risen by a massive 64 per cent, compared with an increase of just 28 per cent in average earnings. In the last three years alone, average earnings have fallen by 7 per cent while water bills have continued to rise remorselessly. There is no competition in the water industry and the only potential constraint is the industry regulator, but he has chosen to succumb to corporate lobbying in allowing water bills to continue to shoot upwards to feed fancy executive bonuses and big dividend handouts.”
And in all the 10 years since, it seems the regulator has yet to grow a backbone.
What were my conclusions? Get a load of this:
1. The privatisation of the national utilities – water, electricity, gas (and, some would say, telecommunications) – has failed in its stated aims, which were to democratise capitalism by making it possible for everybody to be a shareholder, to keep bills low, and to end government subsidies for these organisations. Instead, shares have been drawn into the hands of a very few rich investors, bills have risen far beyond wages, and government subsidies have either increased massively (rail) or companies have used the tax system to avoid paying the amount due on their profits (Thames Water and its ‘super sewer’).
2. Company bosses, keen to drive up their share prices in order to create larger dividends for their shareholders and higher salaries for themselves, have successfully held wages down in order to achieve this. As ‘neilcon’ pointed out, lower wages mean less spending on National Insurance, meaning that keeping the employee payout down by pennies per person leads to many pounds in increased revenue.
3. The government is unwilling to do anything about this because it wants to keep wages depressed as much as possible. This is the reason it has cracked down so hard on benefit payments – not because of fraud (which is minimal) but in order to create an urgent need among the unemployed to find work, and terror in those who have jobs that they could be replaced if they complain about the increasingly meagre pittance on which they are being told to survive.
What’s the answer? (I asked rhetorically.) Here are my thoughts:
The best place to start might be with the private utility companies. An ultimatum to put their houses in order and charge a reasonable amount, rather than extorting money out of a captive clientele, might produce results – especially if the alternative is re-nationalisation.
This might take the pressure off the smaller private companies by actually reducing the amount calculated as the living wage; with lower utility bills, the amount of money needed for a working person’s survival will also drop.
If the government and the utility companies got their sums right, this could mean the need to subsidise working people’s pay would be wiped out, meaning a large saving on the tax bill. Feed this through to working people in the form of a tax cut and, again, smaller private companies would benefit (along with everybody else, of course). An alternative of using the money to help pay off the deficit would be unhelpful – we need more, and healthier, businesses in this country, employing more people. Get that sorted and the deficit will come down in any case.
On a completely different tack, what about Landlord Subsidy (otherwise known as Housing Benefit)? Why not put a cap on rents, thereby ensuring that the government is not subsidising the rapidly-increasing pace of (some) landlords’ greed?
Unfortunately, this is not likely to happen under the current government – and it seems the Parliamentary Labour Party is to keen to become the Plastic Tory Party to take a stand; it will be up to its backbenchers and the party’s grassroots members to force a policy change.
… and isn’t the situation the same today? Sadly, Keir Starmer’s Labour purge means the Substitute Tory Party is unlikely to offer any help at all.
But a plan that acknowledges the mistakes of the past and aims to redress the shocking way that the supply of money has overbalanced to favour a tiny minority – to the detriment of the vast majority – would constitute the first steps on the way to a nation that can not only provide [a] living wage, but also help our struggling small businesses.
Was I right?
I reckon so.
And am I right now?
I reckon so.
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