Poverty and inequality

Tax the rich at 75%? At least!

François Hollande, candidate of the Socialist Party in the French presidential election coming up on 22 April and 6 May, has called for 75% tax on incomes above a million euros. Supporters of incumbent president Nicolas Sarkozy have expressed outrage and muttered about “confiscation”, but polls show 61% of voters backing the policy and only 29% against. At present the highest marginal income-tax rate in France is 41% (on pay above 70,830 euros: similar to the 40% highest rate in Britain, on pay above £34,371, before the 50% band for pay above £150,000 was introduced in April 2010). In fact...

A trillion for the banks, more cuts for us

Quietly, without any of the stomping that accompanied Greece's “bail-out”, the European Central Bank has lent European banks more than a trillion euros at ultra-low interest rates, in two tranches, one in December and one in February. This is equivalent to an outright subsidy to the banks of maybe €120 billion over the coming three years. Banks borrowing cash cheaply from the ECB, at one per cent interest a year, can then use the same cash to buy Italian or Spanish government bonds at about 5% interest a year. So long as Italy and Spain don’t go bust, the banks make a net gain of 4% a year. 4%...

Bankers' loot: too big to tolerate

Bonus payouts in banking and finance totalled £14 billion in 2011. If such amounts were redirected to social spending, they would be way more than enough to reverse all the Government’s social cuts. Benefit cuts to 2015: £18 billion. Cuts in education and local services: £16 billion. This year the bonus total will be a bit smaller. It could hardly not be, even on the most shameless capitalist criteria, since banks did poorly in 2011. Prime minister David Cameron is bidding to “call a truce” and “call off banker-bashing”. The startling thing, though, is that the top bankers are still shameless...

Seize the bankers' loot!

Bonus payouts in banking and finance totalled £14 billion in 2011. Most of these bonuses go to a top few. The government-owned Royal Bank of Scotland paid out £1 billion in 2011, when it had made a thumping loss, and plans to pay out £0.5 billion this year. Having persuaded top RBS boss Simon Hester to waive his £1 million bonus, prime minister David Cameron now says he “will not micro-manage” the bonuses paid to other RBS chiefs this year, some of them much higher than Hester's million. He hopes the fuss will have died down by the time other banks announce their bonuses. If those amounts were...

They say there's no money. We say tax the rich!

Since the start of the Thatcher government, in 1979, the rich have been getting spectacularly richer in Britain (as in many other countries), and the gap between rich and poor has been increasing. The gap has continued to increase in the economic downturn since 2008. All the main political parties say that cuts in social spending and a squeeze on wages and benefits are necessary — even if they argue about the extent and the speed — because, as Ed Miliband puts it, “we are not going to have lots of money to spend”. In fact there is lots of money to spend. The question is, who has it, and what...

Workers lose out as bosses rake it in

While workers face wage freezes or real-terms pay cuts, those who top the market food chain are enjoying ever-bigger payouts. Bosses of the FTSE 100 companies saw their pay rise by an average of 49% in the last financial year. According to a report from Income Data Services the bulk of the increase is down to a sharp rise in bonuses, which leapt from an average of £737,624 in 2010 to £906,044 this year. Workers’ real wages meanwhile dropped by 2.7%, according to the Daily Telegraph (13 July 2011). Free market capitalism is to blame; economist Nouriel Roubini said: “[it is] a deeper truth that...

More children will live in poverty

The proportion of children living in poverty — defined as below 60 per cent of median income — will rise from 19.3 per cent in 2010-1 to over 24 per cent by 2020. According to new research by the Institute for Fiscal Studies, that is the certain result of changes in welfare benefits and cuts in real wages which are already underway. The Child Poverty Act 2010, which the Tories did not then oppose, sets a legally-binding target to cut the percentage of children in poverty below 10% by 2020. The Financial Times (11 October) reports Government officials shrugging this off with comments that...

Poverty pay in Cameron's Britain

Nearly 10% of care workers are paid illegally low wages, new research by academics at King’s College London has found. Researchers estimate that up to 200,000 workers in that sector alone are paid below the minimum wage – a figure five times higher than official government estimates which claimed that less than 30,000 workers were paid below the statutory minimum. Even the top minimum wage rate of £6.08 is not enough to live on. The KCL study comes alongside news from food charity Fareshare that its donations had increased by over 5,000 a day since 2010. The picture is a tragic but crystal...

Higher Child Benefit for "better parents"?

A report by a think tank linked to the Lib Dems has suggested that parents who pass a parenting test should be paid more in Child Benefit. Those who can show they have completed a "five-a-day" programme - reading with their child for 15 minutes, playing for 10 minutes, talking with the television off for 20 minutes, giving praise and providing a nutritious diet - should it suggests receive extra money on top of their Child Benefit. CentreForum which produced the report describes itself as "an independent, liberal think tank" but in reality has close links to Lib Dem members of the Government...

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