A Neoliberal Attack…


Religious people are far more likely to engage in conversation about religion with me, after I mention that I have studied Philosophy and take an interest in Theology. I think they presume I will agree with their thoughts and perhaps provide reasoning to their illogical beliefs. I think they imagine that one can only speak with conviction on matters of religion, if one is religious in an academic sense. The same is true of many walks of life, not least the public sector in England. Because Tory MPs are essentially a part of the public sector, they seem to believe they have the right to talk of all public sector workers, as if they’re the official spokespeople for the public sector.

On Question Time last week, John Redwood, Tory MP for Wokingham appeared delighted as he informed the audience that as a public sector worker, he would be working longer and putting more money into his pension pot as a result of his Government’s reforms, and he was proud of it. The reason John Redwood can seem so pleased with himself that he is accepting the changes to his pension and retirement age, is because on top of the £65,000 a year he earns as an MP, he also claimed a hell of a lot of money, that regular public sector workers could only dream of. Yet, Mr Redwood seems to think his claims were perfectly reasonable, as suggested on his own personal blog:

In 2007-8 I claimed a total of £105,917. This made me the 19th cheapest MP, claiming around £40,000 less than the average. One fifth of that claim was the mortgage interest costs, the Council Tax and service charge and maintenance on a bedsit flat in Pimlico. It is entirely used to enable me to work longer days in London when there is important Parliamentary business. During my ownership it has only been slept in by myself. I do not need it for any other purpose. The deposit and repayments of capital are of course paid for out of my taxed income.

– We should be thanking him, for claiming in one year, more than a teacher is likely to earn in five years. We should be happy that tax payers money is going to fund the “maintenance” on his Pimlico flat. We should be grateful that the money spent on his mortgage interest (tax payers money) will go to buying a flat he can then sell when he retires, making a handsome profit, and giving nothing back to the public, whilst his party continue to force harsh austerity. One does wonder what the purpose of his 2004/5 claim of £13,305 for his luxurious house in Berkshire (a £1,000,000 estate which he fully owns), including £168 and £112 for his lawn to be reseeded, and how that is “entirely used to enable me to work longer days in London when there is important Parliamentary business” was needed for, but nevertheless, i’m sure it’s just as noble as the necessity of “maintenance” claims on the MILLIONAIRE’S flat in London. Thank you John “Jesus Christ” Redwood. You are a hero.

A man in the audience pointed out that the Private Sector has forced through harsh pension reforms, and so the Public Sector should do the same and “modernise”. The audience were alive with cheer! But it got me thinking; why is it always the public sector that is made to look as though it is in the wrong, like a Soviet leftover, trailing behind the private sector. People seem happy to accept the notion that if the private sector is screwing people over, then so should the public sector! Why is no one arguing that the private sector should be actively forced to lift itself up to the level of the public sector? As far as I can discern, over the past twenty five years it has been an out of control short-term wealth obsessed private sector that has been so majestically out of control, that when the bubble finally cracked, the public sector had to take the hit.

Let’s look at examples of the private sector providing a “modernising” model that the public sector ought to apparently follow:

Lloyds TSB is currently 43.4% owned by the taxpayer. Yet, its new Chief Executive, Antonio Horta-Osorio received a signing on fee of £4.1mn in shares, £516,000 in money, and an annual salary of £1.6mn with a yearly bonus of £2.5mn.

A wonderful company named Trafigura, in 2010 leased a ship called the Probo Koala to a company called Compagnie Tommy, with the intent to dump toxic waste at a waste disposal sight in Amsterdam. The site raised their prices by 20 times that quoted, because the toxic waste was deemed to be far more dangerous that Compagnie Tommy and Trafigura first suggested. So, a new company set up on the Ivory Coast agreed to take the waste, for a very cheap sum. Trafigura did not investigate just why this new company was offering to take the waste for such a cheap price. After the waste was dumped, ten people died from poisoning, and over 100,000 became ill. Trafigura said they’d tested the waste, and it wasn’t toxic, and that they had no idea why so many people became ill. The Dutch tested the waste and found it contained two tonnes of Hydrogen Sulfide. A killer gas. Trafigura spent three years publicly denying the waste they dumped in a poverty stricken area of Africa, was not enough to kill people. Suddenly, Trafigura offered to pay a massive amount of compensation of Euro152,000,000 to the Ivory Coast (which didn’t go to the victims) with the instruction that on acceptance of the compensation, they couldn’t be prosecuted or causing death in the courts. The reason they did this, is because The Guardian obtained – through Wikileaks – private company emails from Trafigura in which they quite plainly accept, as early as 2006 before they’d even chosen the Ivory Coast to dump the waste, that the waste was indeed dangerous.

According to the Guardian, Diageo PLC, the company that makes Guiness, in 2009 paid as little as 2% tax on its profits, despite racking in £2bn in profits. Diageo pays its Chief Executive £3.6mn salary. To fill this gap, it takes 20,000 ordinary British households per year.

The term “Modernising” has come to mean subtle privatising of key services in recent years. An economic laissez faire that apparently promised to solve all of our problems. The outsourcing of cleaning from NHS to private companies with £94mn worth of contacts, led to such declining standards between ’83-’00, that an extra emergency £31mn was injected into cleaning in the NHS, with the a Patient Environment Action Team (PEAT), set up to visit hospitals to ensure standards were being met; the Private sector had failed. By 2000, only 20% of NHS Trusts had achieved an acceptable level of cleanliness.

The banks aren’t the only sector that have required government bail outs in recent history. In 2002, British Energy (privatised under the Tories) had to approach the government for a £410mn bail out to finance its debts.

News of the World. I believe this doesn’t need elaborating on.

Private sector bonuses and high CEO pay, is more harmful to you and I, than highly paid private sector bosses. When money accumulates in the hands of very few people within the private sector (we spend more in the private sector, than on taxes), the cost gets passed on to us. The Bush tax cuts, along with the deregulation of the financial sector didn’t go toward greater investment, it went to increasing the pay and bonuses of those at the top, and the cost was passed on to us, through the creation of a very easy credit system. We all know how that turned out.

British Airways, under the incompetent management of Willie Walsh faced massive fines (record breaking fine actually) for price fixing, long drawn out industrial disputes with the cabin crew which the media helped by describing the cabin crew as greedy, despite 2000 of their workmates being laid off, the company making huge losses, and Willie Walsh taking in a 6% inflation busting pay rise, taking it to £743,000 and £1.1mn in deferred share bonuses. Enough to keep at least ten people on at BA, who otherwise lost their job. The media will never paint the boss as the greedy incompetent bastard in this kind of dispute. It will always find a child at Heathrow, crying, because the cabin crew strike means he wont see his mummy this Christmas. The media do not tend to side with the unions, they never will, and so neither will the ill-informed public.

Do we need to even mention the banking system? A particularly ironic take on this whole new “private good public bad” era of austerity we are living in.

Thankfully we have the Government’s new corporate team, who will help him “stand up to business”. On the panel, inevitably, is Philip Green, Topshop mogul who owns Taveta Investments, which he put in his wife’s name, who happens to live in Monaco, thus avoiding £285mn in tax. He also paid his family £1.2bn, taken from a loan in the name of his company, thus cutting Corporation tax because the loan’s interest charges were offset against profit. Oh and he also uses sweatshops in Mauritius, whilst claiming his obscene bonuses are justified because he “takes risks”. Another on the panel, is Justin King, Chairman of Sainsbury’s. In his first year, he received free shares worth over £500,000, whilst axing the £120 christmas bonus for his staff. After his staff didn’t receive their christmas bonus, King awarded his wealthy finance director £357,000 worth of shares. King was also offered 1,000,000 free shares, if he met specific targets the year before. He didn’t meet the targets, the company’s profits fell 2.9% and yet he still took home 86% of the promised shares. He will be given the same year on year, on top of his £500,000+ a year salary.

We all know that the private sector has the potential to deliver fantastic opportunities, despite the fact that its raison d’etre is unjustifiable power and wealth in the hands of people who simply injected the first dose of capital required to kick start the specific business, as if that initial injection of capital somehow creates a universal, unbreakable law, like gravity, that requires the majority of the subsequent profit and the decisions required to move the business forward, be placed in the hands of the person who injected that capital. It’s a bit of a flawed and odd concept that people just tend to accept. But, it does create opportunity (though it doesn’t necessarily have to be the only way of creating opportunity). The downside, is unregulated greed. The public sector is a constant target of abuse from the source of that greed, and the politicians that the greed of the private sector can buy. Corportocracy at its finest and most dangerous.

Isn’t it about time a Politician had the balls to stand up and say the Private Sector over the past thirty years has spiraled disastrously out of control, and perhaps needs to be able to pay people a decent living wage, as opposed to bringing the public sector down to the unacceptable level of the private sector?

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One Response to A Neoliberal Attack…

  1. Mandrew says:

    Not to mention the ‘bloated’ £800,000 salary of Mark Thompson of the BBC compared to the teeny, tiny £1m per year that Paul Dacre of the Daily Mail somehow manages to get by on.

    Neoliberalism has become so accepted in mainstream Western culture that it is impossible to see an alternative. British people are used to being subservient to the whim of big business that they forget that the alternative gives them more power.

    And politicians are running petrified that if businesses actually have to pay what they are legally obliged to (*cough* Vodafone *cough*) then they will run to another country who will willfully turn a blind eye. Moreover, it’s seen as a failing by the public to go after business for that very reason, rather than to get businesses to pay fair tax. Sigh.

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