Reposted from the Guardian – by Polly Toynbee
Once a year you can gaze at the secret world of the great panjandrums, unaccountable, rarely exposed to interview or inquisition. Yesterday it was the Barclays board, avatars of avarice overseeing rewards beyond any conceivable fair share – a 10% rise in bonuses despite a 32% fall in profits. They outraged their small shareholders and even ruffled some of their mighty institutional investors – though of course the City financiers voted it all through, including up to 200% bonuses for the next three years.
In polls, most voters, including Ukippers and Tories, are disgusted by what one shareholder called “management greed”. But these untouchables stick two fingers up to the spirit of new EU bonuses rules, far beyond the reach of mere democracy. Why not, since George Osborne has gone to court against the EU to assert bankers’ rights to pay themselves whatever they like? An elderly Asian woman, reading that 481 Barclays staff are paid in excess of £1m, asked “Who needs more than a million to live on?” If only TV cameras would gawp at the rich the way they gawp at the poor.
Untouched by a pleading letter from Vince Cable, the business secretary begging them to “make peace with the public“, the board was certainly unmoved by the Robin Hood and Action Aid anti-tax avoidance protesters outside. Is chief executive Antony Jenkins embarrassed, even a bit, by a £4m share allocation on top of a £1.1m salary? A few hours of mild public shame is probably a price worth paying. The remuneration committee chair fought back crossly: they have to pay these sums because everyone else does, but “only the most discerning will appreciate this”. To his rhetorical, “Do you think we would pay anyone more than we need to?”, a chorus of “Yes!” came up from the hall.
All things are relative: the chief executive’s £5.1m jostles alongside other FTSE jackpot winners. But the same chancellor who fights the EU to protect that relativity attacks the official poverty line being set relative to median earnings. So let’s stick to absolutes: £5.1m is absolutely disgusting; so is £71 a week unemployment pay for food, clothing, toiletries, gas, electricity, council tax and buses to the jobcentre. Relative to middle incomes, jobseeker’s allowance has lost a third in value since the late 1970s.
Barclays’ bonuses are simply another emblem signifying no change, business as usual, nothing learned, no precautions for the future. Pulling out of recession, it’s full steam back on to the old trajectory: ever greater inequality, more wealth sucked up to the top 5%, and the top one per cent’s share soaring again. That leaves perpetually worsening prospects for the 20%-30% stuck in a cycle of no/low employment, insecure temping and zero-hours contracts, seldom earning enough to get by and with no ladder up. Block your ears whenever you hear politicians preach social mobility: there is no chance of improving opportunities for those born poor until fewer people are poor. Instead their number will grow, as charts from the Institute For Fiscal Studies show.
The story of the recession, the damage done and its permanent scars is told in Hard Times by Tom Clark, Guardian leader writer and former economist at the IFS and the Department for Work and Pensions. In charts and numbers alongside heartbreaking human stories, he paints a portrait of an already deeply divided society riven further between those hit by the slump and those barely noticing it. If unemployment mercifully rose less than expected, its backwash cast a million more into precarious underpaid work, permanently. One example: automatic car washes were once the future, but labour is now so cheap that “American-style” hand car washes run more profitably on humans than machines.
This forensic social analysis reveals how in the recession the big society shrivelled as fewer people volunteered or helped a neighbour, and trust fell in the most stricken towns. Forget Cameron’s wellbeing index: anxiety, family rows and men committing suicide rose in the hardest hit areas, with no sign of social solidarity as the poor are turned against one another, accusing each other of getting better benefits. It was political choice in how to cut the deficit that put most burden on those with least. The coalition initially made great virtue of charts showing the broadest shoulders taking the burden; these days they are relegated to an annex of the budget book, recognising that they are no longer believed.
Clark’s powerful analysis illuminates the social history of recessions, as each one strikes down the same people and places over and over again, enriching the same few as quantitative easing did this time. Something else emerges from the book: there is indeed a large squeezed middle whose living standards and expectations for themselves and their children have taken a hard blow. Holidays, meals out, school trips are forgone as ordinary families lose a quarter of the benefits that used to cushion them. Even a small interest rate rise will send a million more into deep trouble.
What are the politics of this? First, Labour must resoundingly rubbish all averages: an average is a man with his head in the oven and his feet in the freezer who is pronounced on average just fine as he drops dead. The great majority will still feel pinched for years to come, relative to what they had, despite “average” pay figures that include bank bonuses.
Second, once shown this trajectory towards ever rising social separation and an ever more squeezed hour-glass middle, the prospect alarms most people whatever they usually vote. Across all parties 80% think the gap between rich and poor too wide. That may not easily translate into redistributional sentiment beyond soaking the rich, but no one wants a ladderless society. What this book reminds us is that long before the bust there was no boom for the majority: for most people median pay stopped rising around 2000. Only the tyranny of averages masked the warped distribution of income in Labour’s years. But at least that was mitigated by tax credits that went well above average households and whose current withdrawal hurts middling families.
Most people are all in this together – except the few so well protected by the Cameron government. There is common purpose to be found against tax-avoiding freeloading companies, profiteering from rock bottom pay because they can, taking Barclays-type salaries because they can. Good jobs, new homes and a living wage are themes to reach the heart of recession-pinched people whose living standards may not rise before the next bust – which itself may not be far off.