Monday 18 December 2006

Contrast the Government's Attitudes to City Bonuses and the Unemployed

Contrast two news stories over the last week.

On Thursday it was confirmed that City Christmas bonuses this year will come close to £9 billion, with the average payout for Goldman Sachs employees amounting to £320,000 and with 4,200 city workers gaining over £1 million each. This is an increase of 18.3% on last year.

Some church leaders have condemned the obscene scale of these bonuses but we have heard not a peep out of Government Ministers in response except from the Chancellor of the Exchequer who has recently warmly praised the City for its income earning success.

Contrast this with today's speech by Secretary of State John Hutton, which launched an attack on the unemployed following the publication of a leaked memo that revealed the Government is gearing up to remove all benefits from unemployed people who he claims "play the benefits system" and refuse offers of work.

I wonder how many of these unemployed were offered jobs in the city?

John Hutton's speech was clearly designed as part of the softening up of the media and MPs for the debate on the Welfare Reform Bill taking place when Parliament resumes in January.

This debate should be broadened to include the much more important and wider issue of inequality in our society and the role of taxation as well as welfare payments.

Prem Sikka and Austin Mitchell's recent booklet, "Pensions Crisis: A Failure of Public Policymaking," highlights the policies which have contributed to this increasing inequality.

Whilst John Hutton lectures the unemployed the Tax Justice Campaign discloses that tax avoidance by the rich is resulting in between £90 to £154 billion uncollected taxes widening the gap between rich and poor to the extent that we now live in a society which is more unequal than at any time over the last century.

According to the Government's own statistics, when New Labour was elected in 1997 the most wealthy 1% in our community owned 26% of the marketable wealth. In 2003 the wealthiest 1% owned 34%. The top 50% now owns 99% of the wealth.

Just to even up the situation a little I suggested a short while back a windfall tax on city Christmas bonuses of 10%. Of course the Treasury and Number 10 refused.

As grotesque inequality in our society continues to be ignored we are increasingly witnessing our country slowly but surely replicate the US model of extremes of high crime, alienation, poverty and political disengagement.

Labour in government could offer an alternative but only if we accept inequality is an issue to be addressed.