The Coalition is creating serious problems and distracting you with phantoms

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Annual Survey, ASHE, Bank of England, BBC News, beauty, bedroom tax, benefit, benefit cap, BoE, breasts, bribe, Bulgaria, business, business rate, catastrophe, Child Benefit, claimant, Coalition, Conservative, council, council tax, CPI, Croatia, cure, cut, David Cameron, debt, defence, Democrat, deodorise, earning, earnings, economic, economy, false, falsify, fiddle, figure, fiscal, flood, frack, fund, George Eaton, George Osborne, government, Heathrow, hours, household, housing bubble, IFS, immigrant, Income Tax, individual, industry, inflation, Institute, interest rate, invent, Jill Filipovic, job, jobseeker, Jonathan Portes, Jonathan Wilson, Keith Vaz, Lib Dem, Liberal, low-paid, Matthew Hancock, Mike Sivier, mikesivier, National Institute, national insurance, New Statesman, NIESR, pay, Personal Allowance, politics, pretend, problem, reassessment, retail, rise, Romania, RPI, salary, sanction, self-employed, shale gas, Social Research, storm, Studies, swoob, tax credit, The Guardian, Tories, Tory, unemployment, uprating, upturn, Vox Political, wage, weather, Workfare

According to the beauty industry, women must now start deodorising under their breasts.

I kid you not – it was in The Guardian.

Columnist Jill Filipovic hit the nail on the head when she wrote: “I can already hear your objections: ‘But the area under my boobs doesn’t stink!’ or ‘What kind of marketing genius not only came up with the term “swoob,” but actually thought half the world’s population might be dumb enough to buy into it?’ or simply, ‘This is a dumb product aimed at inventing an insecurity and then claiming to cure it.’

“You would be correct on all three points.

“In fact, inventing problems with women’s bodies and then offering a cure – if you pay up – is the primary purpose of the multi-billion dollar beauty industry.”

The simple fact is that you don’t really need to worry about smells down there – a good old soapy flannel will cure any such problems.

That’s not the point, though. The aim is to get you thinking about it and devoting your energy to it, rather than to other matters.

Now let’s translate that to politics.

We already know that all the scaremongering about Romanian and Bulgarian immigrants storming the country from January 1 was a crock. That bastion of good statistics, The Now Show, told us last week that the total number of Bulgarian immigrants in the last couple of weeks was “around two dozen so far”, according to their ambassador. In the first three months after our borders were opened to Croatians, 174 turned up.

Yet the government wanted you to believe they would flood our immigration service in their millions, “taking benefits and yet simultaneously also taking all the jobs”.

My use of language such as “storming” and “flood” is not accidental. By far the more serious threat to the UK in the early days of 2014 was the weather – and, guess what, not only was the government unprepared for the ferocity of the storms that swept our islands, the Coalition was in fact in the process of cutting funding for flood defence.

This would have gone unnoticed if the weather had behaved itself, because we would all have been distracted by the single Romanian immigrant who was ensnared by Keith Vaz in a ring of TV cameras at Heathrow Airport.

Now the Tories are telling us that our take-home pay is finally on the rise for all but the top 10 per cent of earners, with the rest of us seeing our wages rise by at least 2.5 per cent.

The government made its claims (up) by taking into account only cuts to income tax and national insurance, using data leading up to April last year, according to the BBC News website.

This kind of nonsense is easily overcome – New Statesman published the above chart, showing the real effect of changes to weekly income for people in various income groups, and also provided the reason for the government’s mistake (if that’s what it was).

“The data used … takes no account of the large benefit cuts introduced by the coalition, such as the real-terms cut in child benefit, the uprating of benefits in line with CPI inflation rather than RPI, and the cuts to tax credits,” writes the Statesman‘s George Eaton.”

He also pointed out that other major cuts such as the bedroom tax, the benefit cap, and the 10 per cent cut in council tax support were introduced after April 2013 and were not included in the Coalition figures.

Once all tax and benefit changes are taken into account, the Institute for Fiscal Studies has shown that almost all families are worse off – and the Coalition also appears to have forgotten the five million low-paid workers who don’t earn enough to benefit from the increase in the personal allowance.

Skills and enterprise minister Matthew Hancock compounded the mistake in an exchange on Twitter with Jonathan Portes, director of the National Institute of Economic and Social Research (NIESR). Asked why his analysis “ignores more than four million people in work (the self-employed)”, Mr Hancock tweeted: “Analysis based on ONS ASHE survey of household earnings data”.

Wrong – as Mr Portes was quick to show: “Don’t you know the difference between household and individual earnings?”

Apparently not. ASHE (Annual Survey of Hours and Earnings) is a survey of employed individuals using their National Insurance numbers – not of households or the self-employed.

So the Coalition – and particularly the Tories – were trying to make us all feel good about the amount we earn.

That’s the distraction. What are we supposed to be ignoring?

Would it be David Cameron’s attempt to bribe councils into allowing shale gas companies to frack their land? Councils that back fracking will get to keep all the business rates collected from the schemes – rather than the usual 50 per cent.

He has also claimed that fracking can boost the economy and encourage businesses into the country, in a further bid to talk down dissent.

Or is it the growing threat of a rise in interest rates, which may be triggered when official unemployment figures – which have been fiddled by increased sanctions on jobseekers, rigged reassessments of benefit claimants, a new scheme to increase the number of people and time spent on Workfare, and the fake economic upturn created by George Osborne’s housing bubble – drop to seven per cent?

It seems possible that the government – especially the Tory part of it – would want to keep people from considering the implications of an interest rate rise that is based on false figures.

As Vox Political commenter Jonathan Wilson wrote yesterday: “If the BOE bases its decisions on incorrect manipulated data that presents a false ‘good news’ analysis then potentially it could do something based on it that would have catastrophic consequences.

“For example if its unemployment rate test is reached, and wages were going up by X per cent against a Y per cent inflation rate which predicted that an interest rate rise of Z per cent would have no general effect and not impact on house prices nor significantly increase repossessions (when X per cent is over-inflated by the top 1 per cent of earners, Y per cent is unrealistically low due to, say, the 50 quid green reduction and/or shops massively discounting to inflate purchases/turnover and not profit) and when it does, instead of tapping on the breaks lightly it slams the gears into reverse while still traveling forward… repossessions go up hugely, house prices suffer a major downward re-evaluation (due to tens of thousands of repossessions hitting the auction rooms) debt rates hit the roof, people stop buying white goods and make do with last year’s iPad/phone/tv/sofa, major retail goes tits up, Amazon goes to the wall, the delivery market and post collapses… etc etc.

“And all because the government fiddled the figures.”

Perhaps Mr Cameron doesn’t want us thinking about that when we could be deodorising our breasts instead.

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The great pensions rip-off

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BBC, benefit, benefits, bus pass, class, Coalition, cold weather payment, Conservative, contract, couple's, CPI, Democrat, earnings, final salary scheme, flat rate, government, guarantee, health, inflation, Lib Dem, Liberal, life expectancy, means test, Mike Sivier, mikesivier, minimum income guarantee, National Federation, national insurance, Occupational Pensioners, out, pension, pension credit, Pensions, people, politics, poverty, rate, savings, social security, tax, Tories, Tory, triple-lock, TV licence, Vince Cable, Vox Political, workplace

Someone’s raiding the pensions piggy-bank: Government changes mean the rich will be subsidised by the poor. [Picture: The Guardian]

We all know that pensioners have a charmed life under the current government – right? Pensions take up around half the £160 billion social security budget and there are other perks like the cold weather payment during the winter months, free bus passes and free TV licences – right?

They get a triple-lock inflation guarantee, under which the state pension rises according to the highest of CPI inflation, the rise in earnings or 2.5 per cent. They get Pension Credit (otherwise known as the Minimum Income Guarantee) to ensure they receive a weekly minimum of more than £140.

So no matter what happens to the rest of us, they’re in clover – right?

Not really.

Just taking those examples, Tory Liam Fox wants to cut the cold weather payment down to nothing, and the Liberal Democrat Vince Cable wants to means-test or tax pensions. The free TV licence will disappear if the rising clamour to privatise the BBC receives government blessing.

Then there’s the fact that the age at which we can start drawing our pensions is rising – from 65 (for men) and 60 (for women) in 2010 to 68 (for both) by 2046, which may seem a long way into the future but in fact affects people from 2016 onwards.

The government is bringing this in because people are living longer, and this may seem like a reasonable idea – until one takes into account the fact that life expectancy is hugely dependant not only on where you live but on your social class as well.

For example, in Kensington and Chelsea, average male life expectancy in 2010 was 85.1 years, and average female life expectancy was 89.8 years. In Glasgow at the same time, average male life expectancy was 71.6 years – 13.5 less than men in Kensington and Chelsea – and average female life expectancy was 78 years – 11.8 years lower than in Kensington and Chelsea.

Between 2004 and 2010 the gap in life expectancy between the two places increased by one year and 1.7 years for men and women respectively, indicating that health inequalities across the UK are increasing.

Social class also has a huge effect on life expectancy, with people in higher managerial and professional occupations likely to live 3.5 years longer than those in routine occupations.

But they all pay National Insurance contributions for the same period of time – 30 years – in order to qualify for the state pension. This means working class people living in social housing are likely to be paying towards the pensions of upper-middle class professionals in penthouses, as well as their own.

Now the government is introducing the flat-rate pension for people reaching the state pension age who have made 35 years’ National Insurance contributions. The payment will be £144 per week at today’s prices.

People who have built up large savings for their retirement will be considerably better-off because pensions will no longer be means-tested (Pension Credit will be phased out).

Existing pensioners will remain in the old system and are likely to be worse-off than those who qualify for the new pension.

People aged in their 20s at the moment may also be worse-off than under the current system (so, even with pensions, the Coalition government has found a way to attack the young).

And people who have not paid National Insurance for at least seven years in total will not qualify for the new single-tier state pension at all.

Workers who belong to contracted-out final salary schemes pay lower NI contributions at present, but these will rise after 2016. Public sector workers in such schemes will have to pay more.

The couple’s pension rate, which is lower than the individual rate, is being phased out. This means around 30,000 women due to retire in and around 2016 are expected to lose out, as they were relying on their husband’s NI record for a state pension income and will no longer be entitled to it.

We already knew all of that.

Now, the National Federation of Occupational Pensioners says the government is proposing changes to workplace pension schemes that will undermine benefits, increase pension poverty and widen the gap between the private sector and public sector schemes, according to Mature Times.

The proposed changes mean companies will be allowed to change their scheme rules to remove the inflation link for pensions, increase their pension age and get rid of other benefits such as pensions for spouses. This significant downgrade of pension provision means scheme members could reach retirement and then realise that the expected return from their pensions has been severely reduced.

Put it all together and the less wealthy are being subjected to another rip-off – this one delayed until retirement. Who knows how much energy bills will cost by then? How many of us will have rent to pay, or mortgage payments to complete? How much will the weekly groceries cost? Will the equivalent of £144 per week be enough, by then?

And – in the current cutthroat times – how many of us will survive to find out?

Sunny summer was good for the economy – shock! All YOU get is a tan

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austerity, bank, BBC, bonus, British Chambers of Commerce, Chloe Smith, Coalition, Conservative, cost of living, cut, David Cameron, David Kern, debt, deficit, Democrat, earnings, economy, G7, general election, George Osborne, government, income, inflation, Lib Dem, Liberal, living standard, Mike Sivier, mikesivier, millionaire, Olympic, people, politics, riot, spending, tax, Tories, Tory, tourism, Vox Political, work, YouGov

At risk of seeming to be ‘Disgusted of Tunbridge Wells’: Why, oh why, oh why is everybody making such a big fuss about the fact that the economy bounced back a little bit over the summer?

Did nobody think that, perhaps, the fact that it was more sunny than in recent years meant our tourism industry might get a much-needed shot in the arm – not least from run-down British people, desperate for relief from the constant, grinding monotony of the Conservative/Lib Dem Coa-lamity government’s austerity agenda?

Did they not recall that the holiday season is a traditional ‘lull’ period and that, therefore – unless unusual situations apply (as they have in previous years) – government spending should be less? What’s the relief to the public purse from not having any Olympic Games to stage this year? What’s the benefit of having no riots?

And, finally, for the vast majority of the British people, these figures are no reason to celebrate because they make no difference. The cost of living is going up while average real-terms earnings have plummetted. If we are seeing a recovery, it is a recovery for the rich alone.

As was always intended.

For the record, public sector borrowing for August was £13.2 billion – £1.2 billion lower than the amount recorded in August 2012. This puts the UK’s net national debt at £1.19 trillion – 74.6 per cent of Gross Domestic Product.

GDP itself grew by 0.7 per cent in the second quarter of 2013 (April-June), and tax revenues have been 2.8 per cent higher than in the same period of 2012. Total government spending has fallen by 2.2 per cent, led by a sharp drop in spending by individual departments.

You can read all this on the BBC News website and might find it pleasant enough, but then David Kern, chief economist at the British Chambers of Commerce had to ruin it by saying “Our ability to generate tax revenues will struggle to return to pre-recession levels, even when the pace of growth picks up. As a result, the government must continue to make cuts in current spending in order to reduce the deficit further.”

So he wants the madness to continue. I wonder… If his business was in trouble, would he cut investment in – say – advertising and then expect profits to improve? That would be madness. Every pound cut from public investment by the government results in a loss to the economy of £1.70-£2.20. It is the government’s own demand for austerity that is slowing the recovery!

And what does this mean for ordinary people?

It means that, after adjusting for inflation, average earnings are £1,350 per year lower than they were at the time of the 2010 General Election. The UK has suffered the biggest fall in income and living standards of any country in the G7. You are worse-off under the Conservatives and the Liberal Democrats!

By 2015, average wages are forecast to be £1,520 lower than in 2010 (based on figures from the House of Commons Library). This means working people will have lost an average of £6,660 in real terms while David Cameron has been Prime Minister – enough to support the average family’s weekly shop for one and a half years, at 2012 prices!

Inflation has been higher than in other G7 countries throughout David Cameron’s period in office, meaning that George Osborne’s claim that “rising global prices” have forced the cost-of-living increase is nonsense.

Claims like that of then-Treasury Minister Chloe Smith at the start of 2012 that lower inflation meant “the cost of living is coming down a little for families” were also rubbish – it was still increasing; just not quite as fast.

In fact, price rises have outstripped wage growth in every single month of the Coalition government – except April this year, when David Cameron cut taxes for millionaires and bank bonuses skyrocketed. Who benefited? The rich. Who lost out? The middle classes, workers, and the poor.

A YouGov survey of ordinary people has shown that 70 per cent do not believe the much-touted recent improvements in the economy have helped middle- and lower-income families. Only 10 per cent thought they had.

And 81 per cent had seen prices grow faster than household incomes, with just three per cent (and only one per cent of women) seeing income grow faster than prices.

It doesn’t matter what they say the economy is doing. You will continue to lose money as long as you have a government of millionaires, ruling in their own interests rather than the interests of the country.

It’s as simple as that.

Cameron’s benefits bungling could cost you your home

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average, benefit, benefits, cap, Coalition, Conservative, Conservative Party, Council Tax Benefit, council tax bill, council tax support scheme, David Cameron, debt, earnings, families, family, government, housing benefit, housing benefit cap, landlord, Localism Act, Mike Sivier, mikesivier, mortgage, National Housing Federation, Parliament, people, politics, rent, rent cap, salary, Tories, Tory, under-25, Vox Political, wages, welfare, Winter fuel allowance, working, working class Tory

When Mr Cameron’s housing benefits cap takes effect, along with the increased council tax bill for those on benefits, how long will it be before working-class Tories find their representatives have forced them out of their homes?

It’s the kind of ignorance that could kill off the Working-Class Tory.

We all knew David Cameron had his head in the clouds (or where the sun doesn’t shine) when he asked what hard-working people were meant to think when they see individual families getting up to £60,000 of housing benefit. I believe the Conservative Party has yet to provide proof of the claim.

The fact is that a huge amount of new housing benefit claimants are in work themselves – so Mr Cameron’s argument was utterly defeated before he had even uttered a word of it.

Today (Monday) the National Housing Federation has stated that a failure to build new houses has led to an 86 per cent rise in working people claiming housing benefit between May 2009-2012, as rents and mortgages have soared.

An extra 10,000 new claims are being made each month.

The solution is simple; I’ve pointed it out in this very blog, many times – cap rents.

Instead, Mr Cameron said he was capping housing benefit, meaning hard-working families will have to tighten their belts and cut back even further on their other outgoings, just to keep a roof over their heads. They might not be able to afford to heat their home as well as last year (I doubt a working family qualifies for the Winter fuel allowance). They might not be able to eat as well as they did last year, as food prices are rocketing. But don’t worry – their landlords will carry on doing just fine, thank you very much!

(Until the family’s earnings can’t be stretched any further and they are forced out and – because the rent is too high for anyone else, the property becomes vacant and derelict. Landlords: Isn’t it wiser to make rents affordable and at least have some regular income from your property?)

In his speech to the Conservative Party conference, Mr Cameron said: “Because of our welfare cap, no family will be getting more in benefits than the average family earns.”

But it seems the average family doesn’t earn enough to stay off benefits! So what, exactly, was Mr Cameron saying, there? That he’s putting the average British family into an ever-decreasing recursive benefit loop?

The worst nonsense was the choice he said we give our young people today:   “Choice one: Work hard. Go to college. Get a job. Live at home. Save up for a flat […] Or: Don’t get a job. Sign on. Don’t even need to produce a CV when you do sign on. Get housing benefit. Get a flat. And then don’t ever get a job or you’ll lose a load of housing benefit.”

Wrong, wrong, wrong. Since people with jobs are on housing benefit, we already know this was a pile of hooey, but we also know that he’s capping that benefit, so people with jobs are going to lose a load of housing benefit as well!

“And we’re going to look at ending automatic access to housing benefit for people under 25 too.” So, if you’re aged under 25, Mr Cameron is pulling the ground out from beneath your feet, before you’ve even got on your feet!

And let’s not forget the threat of the Localism Act, which will add to the council tax bill payable on your home. If you are in a working family that receives housing benefit, you will most likely be in receipt of council tax benefit as well, and this means even more money will have to come from your tight budget, as of next April.

So here’s my question, for anyone who still thinks they’re a working-class Tory: When all these cuts and new taxes have done their worst to you, and you’ve moved back to live with mum and dad (or gran and grandad) simply to have a (rather overcrowded) roof over your head, and the next election rolls around, are you really going to tell me that you think David Cameron’s Conservative Party is your best choice?

New benefit plan has no heroes – only zeroes

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average, benefit, benefits, budget, business, Coalition, Conservative, Conservative Party, cut, debt, deficit, earnings, economy, False Economy, fiscal, George Osborne, Gideon, government, hindrance, inflation, Liberal, Liberal Democrats, linking mechanism, Mike Sivier, mikesivier, Nasty Party, NatCen, Parliament, people, politics, poll, private sector, public sector, recession, regional pay, regional settlement, salaries, shop, supplier, survey, tax, taxes, Tories, Tory, unemployment, uprating, VAT, Vox Political, wages, welfare

Shall we play a game? This one’s called join-the-dots. I didn’t really like it when I was younger and I doubt that you will, after you see the picture we’ll be creating.

We’ll start here: The government wants to cut another £10 billion from the welfare budget – that’s the bit of public spending that keeps millions of people off the streets, if only on the breadline. The government could, alternatively, try stimulating the economy to make that money in taxes, but policy seems to be pushing hard the other way, as we’ll see shortly.

So: cuts are coming. How to perform them? Draw a line to where the government announces it wants to break the link between benefits and inflation, and link them to average earnings instead.

George Osborne thinks this is a good idea because inflation hit 5.2 per cent last September, much higher than rises in earnings – remember, the man who won’t do what his initials demand (GO) has kept public sector wages frozen for the last few years and private sector wages are also stagnant. As a result, Gideon has been paying out more than he thinks he should to people who, honestly, deserve a break from his miserly administration.

Now draw a line to the results of the NatCen survey that came out earlier this week, stating that people do not want to see more money being spent on welfare than is being spent already. This is the excuse that Mr Osborne wants to use – he can say there is polling evidence that puts significant numbers in support of an end to so-called benefits uprating. Never mind that only 3,000 people were asked or that none of the main parties ever intended to increase the proportion of government spending that goes on welfare; this is his justification and he’s sticking to it.

I wonder what will happen if wages start to rise faster than inflation? Will the Nasty Party write a new clause into the contract, that benefits should rise along with inflation or wages, depending on which is lower? Officials have already stated that they do not want a huge increase in benefits if wages start to climb sharply, so they are already working on ways to ‘fix’ the linking mechanism. Evil, isn’t it?

Never mind; the current plan uses wages, so now draw a line to this: The government still wants to introduce regional pay settlements for the public sector. The Tories – sorry, the Coalition – believe that national pay settlements inflate public sector wages in certain parts of the country far beyond what their private sector counterparts can manage. They also believe that forcing regional settlements on us will save them a fortune in salaries.

Think what this will achieve: The ghettoisation of much of the UK. With regional pay deals, people will have less money available for things other than necessities, meaning fewer trips to the shops (which have already suffered thanks to the idiotic VAT increase to 20 per cent, which cut a large chunk of growth out of the economy). What happens then? The shops shut and their suppliers go out of business too. More people end up on benefits and looking for work.

You see, this right-wing government does not accept the simple fact that welfare benefits help keep the economy stable. Yes, government spending increases as payments are made, but businesses keep their customers, the economy stays afloat and the country as a whole avoids a terminal spiral of decline.

Cutting welfare, thereby reducing the incomes of society’s poorest, creates fiscal hindrance. As billions of pounds (£10 billion in this case) are taken from the active economy, businesses lose customers and lay off staff.

In a recession, increased welfare spending benefits national income so that each pound is worth £1.60 when it has worked its way through shop tills and paycheques. When welfare is cut, this works in reverse, so cutting £10 billion from benefits will increase the UK’s recession by more than one per cent.

This means a longer recession, a larger deficit and more debt. (The above information courtesy of the False Economy website, which has produced a handy factsheet for you to download, keep, and show to anyone spouting Tory propoganda)

Now draw a line to: The government wants to cut more money from the welfare budget.

Look at what you’ve drawn. A big, fat zero.

This is what the government’s plan will achieve for the people, and economy, of Britain.

Benefits v bonuses – everybody’s a loser!

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allowances, benefits, benefits cap, Child Benefit, co-operatives, Coalition, Commons, Conservative, constituency, Disability Living Allowance, DLA, earnings, economy, FT350, government, health, homelessness, House of Commons, House of Lords, inflation, Labour, Liberal, living wage, Lords, Margot James MP, match-funding, Mike Sivier, mikesivier, MP, MPs, MPs' allowances, Parliament, people, politics, RBS, Royal Bank of Scotland, salaries, salary, Tories, Tory, wage, wages, workers' co-operatives

As I type these words, this has been a day of defeat for the government. Its bid to cap benefits at £26,000 – forcing some families to face the prospect of losing their homes – has been defeated by the Lords, while in the Commons, MPs totally failed to cap the spectacularly high amounts paid to (for example) bankers.

The link between the two is the average amount of pay earned by workers in the UK today. The government says this is £26,000, which Tory MP Margot James seems to think is a large amount of money. I wonder how she describes the current average salary for an MP like herself, which is £65,738, two-and-a-half times as much. In addition, MPs receive allowances to cover the costs of running an office and employing staff, having somewhere to live in London and in their constituency, and travelling between Parliament and their constituency – and we all know that no MP has ever – ever – abused those allowances, don’t we?

The fact is that on a day when the Royal Bank of Scotland has been asking the government to allow it to pay bonuses worth £500 million to staff who have put that firm into the red by £750 million in the last six months, £26,000 is not a high figure. It is a derisory figure. A pittance.

People on benefits, and those speaking for them, have argued that this figure will not be enough to keep many of them in their homes. That is why the Lords voted to exempt Child Benefit from those included in the cap – in order to offer children a stable environment in which to grow up.

The question arises: If it isn’t enough to keep families on benefits in their homes, how do working people who are earning less than this amount manage to make ends meet?

My own experience colours my answer to that: Very badly. When I was last in a full-time job, the salary did not cover all my outgoings and I had to give it up for that reason. Simple as that. Fortunately my partner finally succeeded in a years-long battle to claim Disability Living Allowance shortly afterwards and I became a carer – and we’re better off that way. That’s not an indictment of the welfare and benefits system; it’s an indictment of the way wages have been depressed below the rate of inflation for the last 30 years or so.

I’m told the firm lost business after I left. To me, that indicates a lapse of judgement in allowing me to go, and that bosses might have been better off if they had offered me a sum that would have allowed me to go on living comfortably, rather than worrying about a long, slow slide into debt (to the bank! where the bonuses happen).

I would rather be in a paying job than a carer. I don’t believe I’m betraying my partner, who needs the care, by saying that. But I don’t believe I can earn the amount we would need, in order to get a better quality of life, for her or both of us.

What’s the solution? Obvious, really: pay working people the living wage they deserve!

If the average wage was a reasonable amount (and I feel no need to bind anyone’s thinking here, so I won’t suggest one) then, firstly, the poor working man or woman would not feel so hard-done-by, with people on benefits pulling down as much as them or more yet having done no work for it, and bosses taking home obscene amounts generated by the efforts of other people.

Those on benefits would have less reason to feel victimised because the average amount at which their benefits will be pegged would be high enough for them to survive, and possibly even enough for them to think about how to get back into work and earn more money for themselves and their families (if they have them), rather than focusing solely on survival.

All this hinges on the bosses who, as we know, are extremely reluctant to share out the profits they haven’t earned for themselves. I have no sympathy for those on obscenely large salaries and bonus schemes – those in FT350 companies whose salaries have multiplied seven times in the last 20 years, while the firms’ performance has improved by only 23 per cent and the wages they pay their workers has risen by just 27 per cent (less than the rate of inflation). They can take a smaller slice of the cake and put up with it.

But what about the bosses of smaller firms who might be struggling to keep their heads above water? They might not be taking very much more than their workforce. What’s the solution for them?

To my way of thinking, they need to be competitive, and a demoralised workforce does not make a business competitive. Also, they need the tools to do their job properly and I can foresee a time when the economic situation will mean their equipment will be out of date.

Perhaps this is a time for the government – either local or national – to come forward with a match-funding scheme of some kind to keep these firms on their feet; but with one major condition. The companies should re-form into co-operatives, in which every worker has a stake in the profits. This would re-fire their enthusiasm and, hopefully, improve performance, leading to a knock-on increase in wages and bonuses that are not unearned drains on resources but based on real profit.

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