Category: Inequality

A few billionaires own more wealth than 4.6 billion people, says report ahead of Davos

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Bootstraps

The age of endless growth in prosperity for everyone is now a distant memory of a rather more hopeful era. Despite what the government tells us, inequality is growing. This is damaging to the economy and to ordinary citizens who are struggling to get by on ever-diminishing incomes and ever-rising living costs. It’s highly unlikely that Brexit will help matters, too. 

Rising inequality coincided with a profound shift in economic policy throughout much of the developed nations of the world – from Keynesianism to neoliberalism. Political parties got elected from the end of the seventies by promising to cut tax rates, ‘free up’ markets, and reduce government intervention in the economy. The change was most pronounced in Britain and the United States, after Margaret Thatcher and Ronald Reagan took office. But it also occurred to varying degrees in Continental Europe, Canada, Australia, and Japan. 

Those countries with largest tax cuts also experienced the biggest increases in inequality, losses in public welfare and social cohesion. However, the advocates of neoliberalism hold a prevailing view that inequality  isn’t a bad thing because it ‘spurs’ people to work harder (‘competition’) and become more self-reliant and self-disciplined.

It’s worth noting that many people in poverty are increasingly likely to be in working families, which indicates that poverty isn’t caused by people being lazy, undisciplined and unmotivated. Yet neoliberal ideologues uphold the ‘scrounging’, ‘dependent’ , ‘entitled’ , ‘undeserving’ stereotype to justify growing inequality and increasing absolute poverty.

The myth of meritocracy is also used to justify inequality.  Boris Johnson and Charles Murray, among others, have argued that wealth is linked with having a higher IQ. However, roughly a third of rich people inherit their wealth, so that cannot be linked to their own personal qualities, talents or achievements.

There is also the problem with defining ‘skills’ and ‘talent’ worthy of merit. One person’s idea of talent is another person’s idea of Simon Cowell. 

The authors of a paper called Talent vs Luck: the role of randomness in success and failure, say: “The largely dominant meritocratic paradigm of highly competitive Western cultures is rooted on the belief that success is due mainly, if not exclusively, to personal qualities such as talent, intelligence, skills, efforts or risk taking. Sometimes, we are willing to admit that a certain degree of luck could also play a role in achieving significant material success.

But, as a matter of fact, it is rather common to underestimate the importance of external forces in individual successful stories.”

The authors conclude, rather depressingly that: “The maximum success never coincides with the maximum talent, and vice-versa.”

Although the researchers outline the role of luck and randomness in how some people become very wealthy, they have overlooked the role that neoliberal policies play in redistributing public wealth towards the already wealthy.

The team who undertook this study, led by Alessandro Pluchino, also concluded that an important factor in their model was an element of fortune and misfortune that can make or break the individuals’ success.

This is one good reason why we need a robust social security system. Because no-one is immune from periods of hardship and misfortune: an accident or illness, the loss of a job, and a range of other circumstances can leave us facing poverty. No-one ‘deserves’ to be hungry, homeless and poor.

The ‘Inequality Turn’ in the 1980s is one of the most distinctive aspects of contemporary political economy. It isn’t likely that people suddenly became less ‘deserving’ of a decent standard of living, given the radical change in economic ideology and subsequent shift in socio-economic organisation. It’s rather more likely that the political choices of neoliberal policy over that time have resulted in the growth of inequality.

The neoliberal shift has led to the world’s billionaires having more wealth than 4.6 billion people and the world’s richest 1% own more than double the wealth of 6.9 billion people. There are just 2,153 billionaires. 

Those are the latest figures on global inequality from a report released on Monday ahead of an annual meeting of global elites in the mountain resort of Davos-Klosters, Switzerland. The report by the international aid organisation Oxfam states that the number of billionaires has doubled in the last decade.

As at least some of the world’s 2,153 billionaires attend the World Economic Forum this week, others will be working to communicate another message: the complicity of the global elite in wealth inequality.

“Our broken economies are lining the pockets of billionaires and big business at the expense of ordinary men and women. No wonder people are starting to question whether billionaires should even exist,” said Amitabh Behar, the CEO of Oxfam India who will be present at Davos.

“[Inequality is at the] heart of fractures and social conflicts all over the world, and no one is fooled,” said Pauline Leclère, Oxfam France’s senior campaigner for tax justice and inequalities.

“Inequality is not someone’s ‘fate’. It is the result of social and fiscal policy that reduces the participation of the wealthy [through taxes] and weakens funding for public services.”

Leclère said this is the message that Oxfam will be trying to deliver at Davos.

The charity  has released its annual report ahead of the famous economic meeting to address mounting inequality since 2014. 

The 2008 financial crisis saw the rich get richer. In 2012, the top 10% of earners took home 50% of all income. That’s the highest percentage in the last 100 years, according to a studyby economists Emmanuel Saez and Thomas Piketty. 

If you want to know how that happened, you need to simply compare and contrast Conservative neoliberal policies: those aimed at wealthy people have tended to reward them with money, simply for having money, while the poorest citizens have been ‘incentivised’ to be less poor by being financially sanctioned.

This language of ‘incentives’ has been used to engineer a massive shift of public wealth from the poorest to the wealthiest. For example, the social security cuts to disabled people’s support happened at the same time as a generous tax cut to the UK’s wealthiest citizens. While the government imposed austerity on everyone else, they handed out £170,000 each per year to the millionaires in the form of a generous tax cut. 

According to government opinion and rationale, wealthy people require wealth to ‘incentivise’ them to be wealthy, whereas poor people require less money to somehow punish them out of their poverty. 

I don’t think the current government are in a position of power because of their coherence, honesty, talent and intelligence.

I think they are in government because of their ruthless pursuit of insulting the intelligence of others. And succeeding in doing so.

Boris Johnson making a tenuous and tedious link between IQ, talent, competition and the inevitability and essential nature of inequality.

Gender inequality

This year, Oxfam examined the gender divide as well, highlighting that men worldwide own 50% more wealth than women due to a “sexist and unfair economic system”.

The 22 richest men in the world have more wealth than all the women in Africa, according to the report.

Women are much more likely to work in sectors that are more insecure and less valued economically, Oxfam said.

They do more than 75% of unpaid care work and make up two-thirds of the “care workforce” in nursery and domestic jobs.

“Women and girls are among those who benefit least from today’s economic system,” said Behar.

Overall, their conclusions on inequality remain unchanged.

“Unfortunately, the organisation’s conclusion is the same. Inequality continues to rise in extreme proportions,” Leclère told Euronews, adding that inequality is bad for economies.

The director of the International Monetary Fund said at a conference in Washington DC last week that although inequality between countries was decreasing, inside many high-income countries, inequality is growing.

“The gap between rich and poor can’t be resolved without deliberate inequality-busting policies, and too few governments are committed to these,” said Behar.

Though members of civil society say they’re looking to receive concrete results from Davos, they know it’s an uphill battle.

Leclère says NGO members aren’t “fooled” by the events’ big, lofty political speeches. “We’re waiting for them to follow up with action.”

I can’t see that happening any time soon.

The remedy for an inclusive economy and society

77 years ago, the Beveridge Report identified five social evils: squalor, ignorance, want, idleness, and disease. We had thought we had eradicated these injustices from society for virtually everyone in the advanced economies with the development of social security, education, housing and health services combined with a growing and inclusive economy offering full employment.

What’s the point of a government of a wealthy nation if it cannot ensure citizens have food, fuel and shelter – fundamental survival requirements? And even worse, one that thinks it is somehow acceptable to punish citizens who need welfare support by withdrawing the means of meeting survival needs by sanctioning them for ‘non-compliance’.

How did we regress to become a state where absolute poverty is once again visible and widespread, and where inequality is everywhere? Absolute poverty is when people cannot meet the costs of basic survival needs, such as for food, shelter and heating. Inequality causes lower economic growth and reduces efficiency, as a lack of opportunity means that the most valuable asset in the economy – citizens – cannot reach their full potential, and so cannot fully contribute and benefit.  

Maslow

Maslow’s hierarchy of human needs

Breaking with the Keynesian model in Western Europe and North America in the early postwar decades, the UK and US returned to an earlier, ‘classical’ presumption that, left alone, markets arrive at ‘optimal’ economic equilibria and the state should therefore withdraw from ‘social steering’. The neoliberal era has not only seen the soaring away of top incomes at the expense of those in the lower reaches of the income hierarchy but has also itself been thrown into question by the financial crash of 2008, which no neoclassical economist anticipated.

What would help to reduce inequality?

A good starting point for the UK government would be ensuring:

  • quality, long term employment jobs and fair wages
  • housing everyone can afford
  • health care and support when people need it
  • education for the future
  • a progressive and redistributive tax and transfer system that promotes fairness
  • reversing the legislation that disempowered trade unions, leading to the decline of trade-union membership and collective-bargaining rights
  • secure income in retirement.

These measures would reverse some of the damage that successive neoliberal governments have done to the UK’s social safety nets, resulting in a shift away from democratic norms, citizen rights and the balance of power and wealth.

Professor Alston, an independent expert in human rights law, spent nearly two weeks travelling around Britain and Northern Ireland and received more than 300 written submissions for his report about inequality and poverty in the UK.

He concluded: “The bottom line is that much of the glue that has held British society together since the Second World War has been deliberately removed and replaced with a harsh and uncaring ethos.”

Alston is absolutely right. The Conservatives, from Thatcher onwards, have steadily dismantled the social gains of our post war democratic settlement: the NHS, social security, legal aid, social housing and trade unions have been under a vicious onslaught of oppressive Conservative policies for many decades. Our public services are being sold off. Privatisation is about a few people making a big profit, which invariably comes at the expense of the quality of services delivered. Companies making ‘efficiency savings’ by cutting costs, restricting services and hiring fewer and less qualified, less expensive staff.  The public ends up paying private contractors rather more than public providers, too.

The Australian professor, who is based at New York University, said government policies had led to the “systematic immiseration [economic impoverishment]” of a significant part of the UK population, meaning they had continually put people further into poverty.

“Some observers might conclude that the DWP had been tasked with “designing a digital and sanitised version of the 19th Century workhouse, made infamous by Charles Dickens”, he said.

The UN report cites independent experts saying that 14 million people in the UK – a fifth of the population – live in poverty, according to a new measure that takes into account costs such as housing and childcare.

Alston said the cause was the government’s “ideological” decision to dismantle the social safety net and focus on work as the solution to poverty. This is something that many of us have also observed over the past decade.

“UK standards of well-being have descended precipitately in a remarkably short period of time, as a result of deliberate policy choices made when many other options were available,” he said.

Alston raises a fundamental question – is the government, and the country, comfortable with the society that we’ve become?

He outlines the normalisation of food banks, rising levels of homelessness and child poverty, steep cuts to social security, healthcare and policing, and severe restrictions on legal aid. All of these political decisions make life considerably more difficult for millions of people. 

In Professor Alston’s view, these are the unequivocal consequences of deliberate, calculated political decisions. I agree. 

Despite the government’s focus on work and ‘record levels of employment’, and their glib promise of ‘making work pay’, about 60% of people in poverty are in families where someone works. 

Alston notes that this, along with welfare cuts, has created a “highly combustible situation that will have dire consequences” in an extended economic downturn.

Neoliberalism isn’t some mysterious ‘karmic’ economic system that rewards the clever, talented and just. It is a system that was designed by the ruthless and greedy to reward only the ruthless and greedy. It is incompatible with democracy, human rights and any notion of equality.

facade welfare

Read more: Davos 2020: everything you need to know about the World Economic Forum

Related

Welfare sanctions can’t possibly “incentivise” people to work

Work as a health outcome, making work pay and other Conservative myths and magical thinking

The poverty of responsibility and the politics of blame (Part one)

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More people, like you, are reading and supporting independent, investigative and in particular, public interest journalism, than ever before.

I don’t make any money from my research and writing, and want to ensure my work remains accessible to all.

I have engaged with the most critical issues of our time – the often devastating impact of almost a decade of Conservative policies, widespread inequality to the influence of big tech on our lives. At a time when factual information is a necessity, I believe that each of us, around the world, deserves access to accurate reporting with integrity and the norms of democracy at its heart. 

My editorial independence means I set my own agenda and present my own research and analyisis.  My work is absolutely free from commercial and political interference and not influenced one iota by billionaire media barons.  I have worked hard to give a voice to those less heard, I have explored where others turn away, and always rigorously challenge those in power, holding them to account.

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Why is the UK so unequal?

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The US and UK share an ideology of ‘free-market’ fundamentalism and competitive individualism. More widely called ‘neoliberalism’ these ideas were introduced, respectively, on both sides of the Atlantic by Ronald Reagan and Margaret Thatcher. 

Earlier this year, Angus Deaton, professor of economics at Princeton University and a Nobel laureate, launched a five-year review on the subject of inequality. Sir Angus, who is teaming up with the Institute for Fiscal Studies, with funding from the Nuffield Foundation, a charity, intends the review to be the “most comprehensive scientific analysis of inequalities yet attempted”, examining not just the gaps between the rich and poor, but also differences in health outcomes, political power and economic opportunities in British society and across the world.

It will attempt to answer which inequalities are beneficial, providing “incentives” for people to strive harder, and which should be stamped out because they are derived from luck or cronyism and, according to Sir Angus, “make a mockery of democracy”.

Personally, I have some major issues with the neoliberal language of “incentives.” In its crudest formulation this entails providing the conditions for the market sector to produce growth, and accepting that this will somehow result in inequality, and then relying on some vague mechanism of redistribution of some portion of this growth to help repair the inequality that has resulted from its production. Over the last decade, we have witnessed those ‘safety net’ mechanisms being dismantled, leaving a large proportion of society with dwindling resources, while a few people have become obscenely wealthy. The language of “incentives” implies that it is human behaviour and not market fundamentalism, that creates growing inequality.

But that isn’t true. Neoliberalism has failed the majority of citizens horribly, the evidence of which is stifling both the UK economy  and our potential as a society. There are a few beneficiaries, who, curiously enough, are working flat out to promote the failing system of economic and social organisation that was ushered in by the Thatcher administration, while viciously attacking any ideas that oppose their dogma and challenge their stack of vested interests.

The Deaton review starts from the premise that not all inequalities are bad. Deaton and the IFS also believe that inequalities based on luck or rigging the system are far worse than those based on the skills of individuals: “If working people are losing out because corporate governance is set up to favour shareholders over workers, or because the decline in unions has favoured capital over labour and is undermining the wages of workers at the expense of shareholders and corporate executives, then we need to change the rules,” Deaton said.

This assumption that cronyism and damaging activities of the rich have left others in poverty has raised hackles in some free-market circles. Ryan Bourne, economist at the Cato Institute, for example. He says the IFS should be careful not to assume wrongdoing just from data showing rising inequalities, and: “Income inequality, for example, can be increased through entrepreneurs making fortunes off hugely welfare-enhancing new products,” he said. Whether or not this is correct, many UK officials are concerned that the market economy is in danger of becoming rigged against ordinary people.”

Andrew Tyrie, chair of the Competition and Markets Authority, the competition watchdog, admitted earlier this year that the authorities had been “slow” to address shortcomings in competition and rip-offs and would in future “be doing and saying a lot more”.

I have a lot more to say on this topic, too.

I’m planning to produce a series of in depth articles on inequality and growing poverty in the UK. To introduce this series of works, I’ve invited a guest writer, Kenura Medagedara.

Here is Kenura’s article:

Despite having the fifth-largest economy in the world, the United Kingdom is a surprisingly unequal society. It has the fifth-highest income inequality in Europe. The top 20% highest earners earn six times more than the poorest 20%. The top 10% of wealthiest households own five times more wealth than the bottom 50%.

These statistics may not come as such a surprise to some of us. Unfortunately, Britain’s historic class divisions are showing signs of increasing. But why is Britain so unequal, especially compared to other wealthy nations? And what can we do about it? These are the questions I’ll be trying to answer in this article.

The problem of inequality

Before I discuss any of this, I should first explain why inequality is so dangerous. We all know that absolute poverty is bad, as it means that people can’t afford to survive. We also understand that undeserved wealth is problematic, as it gives some people an unfair advantage over others. Did you know, for instance, that the third-wealthiest landowner in Britain, Hugh Grosvenor, amassed his £9 billion fortune entirely through inheritance?

Like I said, most people can see the problems with these two issues. However, (as many of those on the right point out), these issues aren’t intrinsic to inequality. It is possible to conceive of an economy where inequality exists, but the poorest household still has its basic needs met, and measures like inheritance tax can somewhat prevent situations like the one described above. So what’s wrong with inequality?

One of the main problems is inequality of opportunity. In any society, there are a limited number of opportunities available. Big companies only have so many vacancies, top universities only have so many places. Even in a society where absolute poverty doesn’t exist, opportunities for social mobility will still be limited. And these opportunities tend to stay in the hands of the rich. There are a wide range of reasons for this, from subtle ones like poorer students facing more mental stress when applying to university than richer ones as the cost of them failing is significantly higher, to more obvious ones like wealthy people being able to afford additional courses and qualifications to make them more qualified for higher-paying jobs. Either way, economic inequality brings about very unfair circumstances.

Money in politics

Another problem is that of political power. In a democracy, everyone’s voice should be heard equally, through universal suffrage. However, money can significantly increase someone’s political power. For example, they can afford a party membership, giving their party more money to spend on advertising campaigns to win elections. They can also make donations to influence policy decisions. In these ways, the wealthy have an unfair say in politics over the economically disadvantaged. Technically, this could be remedied by certain policies, such as all political parties receiving the same amount of funding from the government, but this seems very implausible, so I’d argue that inequality remains the real issue here.

From a more pragmatic perspective, economic inequality actually hinders economic growth. A 2014 study by the OECD found that the UK’s failure to address inequality meant that its economic growth was six to nine percentage points lower than it could otherwise haven been. This is because, as previously mentioned, people from poorer backgrounds find it harder to get good education opportunities as the rich can use their wealth to give them an unfair advantage. As a result, the poor get low-skilled jobs contributing little to the economy, whilst the rich get high-skilled jobs with relatively little competition, and so are generally not as efficient as they should be. It turns out that reducing inequality actually benefits everyone.

Why is the UK so unequal?

Before we can combat inequality, we first need to understand what causes it. In the UK, one of the main causes is the housing market. Currently, only 64% of all households are owned, compared to 71% in 2003. And this is expected to get worse; the average wage in London is 16 times less than what would be needed for a deposit. A house is normally the most expensive asset someone will own. Britain’s situation has meant that the children of homeowners inherited vast sums of money, giving them a huge advantage over people who weren’t as lucky.

This has allowed them to afford their own property, and buy more assets to generate even more wealth. This makes the rich get exponentially richer, whilst the poor are forced to cope with higher rents due to increased housing demand, reducing their disposable income and effectively making them poorer. As a result, 10% of households own 44% of all wealth, while the poorest 50% of households own just 9%.

Education

But this isn’t the whole story; after all, the UK has a fairly average wealth distribution compared to other OECD nations. Another major source of inequality is the education system. Despite the fact that this is often touted as the ‘great equaliser’, only 21% of children eligible for free school meals go to university, compared to 85% of children from private schools. As a result, those from poorer backgrounds tend to get low-paying jobs, whilst the opposite is true for the wealthy. This ensures that the rich stay rich and the poor stay poor.

One major reason for this contrast is the price of nursery. The average price of full-time nursery in the UK is £242 per week, which is roughly 50% of the average household disposable income. Those on lower incomes will struggle to afford this compared to richer parents. This may explain why economically disadvantaged children even do much worse than their wealthier counterparts in primary school.

Solutions

To solve wealth inequality, the government must reform council tax. This is one of the main reasons why the housing market is in such bad shape. Firstly, this policy is regressive. According to a report by the Institute for Public Policy Research (IPPR), a household in band A property in London pays almost five times what a band H household would pay as a proportion of property value. Additionally, in 2013 the government simultaneously devolved council tax benefits and cut funding for it, forcing councils to start taxing those on the very lowest incomes. As a result, council tax has greatly contributed to economic inequality.

One possible solution is to exempt those on the lowest incomes from paying council tax. This will somewhat stop the tax from being regressive if poor households simply don’t have to pay it. Another, more long term, solution could be to scrap council tax entirely, and replace it with an annual flat rate tax. This would guarantee that the policy is progressive. According to City Metric, a 0.25% tax would raise the same revenue for London as the current system, but 80% of households will pay less.

To solve the gap in education, one possibility is to make nursery free. In a 2016 report on child well-being in rich countries, UNICEF called for high quality early education and care for children to reduce inequality in education. Making it free would certainly achieve this. In addition to this, British charity Teach First, who work to reduce educational inequality, claim that the government needs to increase the amount of teachers in schools in deprived areas. This will reduce class sizes, which plays a big role in the success of the pupils.

Conclusion

To conclude, economic equality is vital to achieve political equality and equality of opportunity, and also creates more economic growth. Two of the main causes of inequality in the UK are the housing market and the education system, both of which require serious reform if we’re to solve this issue.

Inequality is a very complex problem, and I’m not suggesting that this article has magically solved all of the issues that cause it. However, hopefully more discussion on this topic will eventually give us the answers.

If you enjoyed this article, you may want to check out Kenura’s blog for more analysis of British politics.

 

I don’t make any money from my work. But if you like, you can contribute by making a donation which helps me continue to research and write informative, insightful and independent articles, and to provide support to others going through disability  assessment and appeals. The smallest amount is much appreciated – thank you.

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The UK in 2019: Dickensian levels of poverty, malnutrition, scurvy and rickets

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 Tories and their tall stories

The government have claimed over the last few successive years that the numbers of people in work has reached ‘record levels’. The Conservatives claim that work has ‘many benefits’. One of those claims, for example, is that “work is a health outcome”. So we should reasonably expect that the general health of the population has improved since around 2015, when the claimed employment ‘boom’ began, if the government’s claim were true.

However, that has certainly not happened. In fact public health  has generally has got worse.  In 2014, the government tried to claim that a substantial drop in food sales was because of ‘market competition’, rather than the growth in absolute poverty. Public spending in food stores fell for the first time on record in July of that year, which put the the UK’s alleged recovery in doubt. Such a worrying, unprecedented record fall in food sales indicated then that many citizens evidently had not felt the benefit of the so-called recovery.

It remains the case that what the government is telling us is nothing like the lived experiences of many citizens. The claimed economic ‘benefits’ of a Conservative government are not reaching the majority of citizens. In fact many citizens have been pushed into absolute poverty, while the wealthiest citizens have enjoyed a substantial boost to their own disposable income. This shift in public funds is intentional, as the government’s policies have been fundamentally designed to move public wealth from the public domain to the private one.

Cameron’s one moment of truth was when he made a slip, declaring that the Conservatives were “raising more money for the rich”. The Conservatives only ever tell the truth in error, it seems.

Reported cases of malnutrition caused by food poverty have significantly risen

The number of people who are so malnourished they have to go to hospital has more than tripled in the last ten years, and is continuing to rise. In 2017,  8,417 patients were treated for malnutrition. By then, the cases of malnutrition had risen by approximately 400% compared to the number of cases during the global recession in 2008.

Of those admitted in 2017, 143 were under the age of nine and another 238 were aged between ten and 19. Shocking statistics also showed that the number of people in hospital with scurvy, a serious deficiency illness arising because of a lack of vitamin C, has doubled in the same period from 61 to 128 cases.

The shameful figures lay bare the true human cost of cuts in wages and social security in a context of ever-rising food prices and the general costs of living.

These rising figures for hospital admissions because of malnutrition in England by NHS Digital show just the tip of the ­iceberg, as GPs say they have been treating ­thousands more less serious cases of malnutrition, without referring them to our already over-burdened hospitals.

Last year, shadow health secretary Jonathan Ashworth said: “It’s absolutely shameful that malnutrition and scurvy admissions to hospital have risen so ­dramatically after eight years of Conservative rule.

“As the sixth largest economy in the world, surely we are better than this.

“But this is the consequence of eight years of cuts to public services, the cost of living rising and falling real wages hacking away at the social fabric of our society.

“Labour in government will lead an all-out assault on the unacceptable health ­inequalities facing our society.”

Dianne Jeffrey, Chairman of the Malnutrition Taskforce, said: “I find these figures incredibly concerning. We already know up to 1.3 million of our older friends, relatives and neighbours are malnourished or at risk.”

Increasingly, children are also at risk.

Additionally, the Lancashire Evening Post reports that doctors at hospitals in Preston and Chorley, Lancashire, have seen a sharp increase in malnutrition over the last three years. They say they are seeing patients with rickets and scurvy.  Patients were admitted to hospital with malnutrition around 70 times at the Lancashire Teaching Hospitals NHS Foundation Trust in the 12 months up to March 2018, according to NHS Digital data. 

This was an increase of around 75 per cent from the same period two years ago, when there were 40 recorded cases. The county’s NHS Foundation Trust also saw cases of rickets and scurvy during 2017-18.

Natalie Thomas, the community assistant at the Salvation Army which runs the food bank in Preston, says she is not shocked that hospitals in the county have seen people suffering from scurvy and rickets. “It’s scary, it really is but I’m really not all that shocked knowing what we see in here,” she said.

“It’s like we are going backwards in time. It’s quite believable with the amount of bags [of food] we are giving out at the moment.

“It’s not getting any better. Since July when Universal Credit came in we’ve been giving out approximately 1,000 bags of food a month. Since then we have not had any quieter months during the year because people are now getting monthly benefit payments rather than fortnightly payments.

“It’s not surprising for us. The Lancashire Teaching Hospitals NHS Foundation Trust is also collecting food for us.” 

Food banks rarely give out fresh fruit and vegetables, however, since they are perishable foods. Because of storage issues, the food bank in Preston does not hand out fresh fruit and vegetables on a regular basis.

Major Alex Cadogan said: “We are not medical professionals but in our food parcels we try and give out a healthy diet but we can only give what we are given. 

“When we are sometimes in receipt of fresh fruit and vegetables we distribute it as rapidly as we can. We do hand out tinned fruit and vegetables regularly.” 

Vitamin C is needed by humans every day to prevent scurvy, as the body cannot store it. It is a water soluble vitamin, and it is easily destroyed by canning processes and by over-cooking. It’s found most in a range of fresh fruit and vegetables. Vitamin D, which is fat soluble, can be stored in the body. It is found in milk, cheese, yogurt, egg yolks, oily fish such as tuna, salmon, sardines and mackerel. Lack of vitamin D causes rickets and other bone disorders. Lack of calcium and vitamin D can also affect the development of children’s teeth and cause osteoporosis later in life.

Hard Times

Scurvy and rickets were rife in Preston – and most other industrial towns and cities – during the Victoria era. And it was Preston’s heavy industry that formed the inspiration for one of Charles Dickens’ best-known books. The author, famed for his books about the impoverished working classes in Victorian England, spent three months in Preston. His time in the city is widely believed to have inspired his novel Hard Times, about people living in extreme poverty. 

These are the socioeconomic conditions that the Conservative government have recreated through their policies, which have reduced and stagnated wages and cut social security support radically, while the cost of living has dramatically increased, causing severe hardship for many families both in work and out. Meanwhile the very wealthy are rewarded with generous tax cuts from the public purse. 

Across England, the number of cases of malnutrition increased by a further 18 %, from 7,855 cases in 2015-16 to 9,307 cases in 2017-18. The Joseph Rowntree Foundation warned that over 1.5 million households across the country are regularly left struggling to afford basic survival essentials such as food.

Chris Goulden, from the organisation, said: “Living in poverty can severely restrict a family’s ability to put food on the table and lead a healthy life.

“The poorest fifth of households spend twice as much of their income on food and fuel compared with those in the richest fifth, meaning those on the lowest incomes are most vulnerable to price rises, inflation and the benefits squeeze.”

Public Health England recommends that people follow its Eatwell Guide to make sure they are eating a healthy, balanced diet. However, a 2018 report by independent think tank the Food Foundation found more than one in four households would need to spend more than a quarter of their disposable income after housing costs to meet the guide’s recommendations. For parents in the bottom 20 per cent of earners, the cost would be 42 per cent of their income.

The Food Foundation have warned that the figures were signs of a “broken food system”. Executive director Anna Taylor said: “Although cases of rickets, scurvy and malnutrition are caused by a complicated range of factors, they are not conditions that we should have to be talking about anymore in a country as wealthy as the UK.

“Nearly four million children in the UK live in households for whom a healthy diet is unaffordable. We need industry and government to take action now to ensure that everyone has access to enough nutritious food.”

A spokesperson from the Department of Work and Pensions claims there are now fewer households with low incomes.

“We know there’s more to do to ensure that every family has access to nutritious, healthy food”, she said.

“Malnutrition is a complex issue and most patients diagnosed in England have other serious health and social problems.

“For people that need extra support with their living costs we spend £90 billion a year on working-age benefits and will be spending £28 billion more by 2022 than we do now.”

However, while malnutrition may sometimes be caused by relatively rare illnesses that cause absorption problems in the stomach, the most common cause of malnutrition, scurvy and rickets is vitamin and mineral deficiency, which is due to a lack of access to adequate, fresh and varied food, due to absolute poverty.  This is why the number of reported cases of malnutrition is rising. 

Meanwhile charities, food banks and campaigners have continually warned that many households simply cannot afford a healthy diet, and have called for government action to increase access to nutritious food.

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Research shows austerity results in ‘social murder’

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Dr Chris Grover, who heads Lancaster University’s Sociology Department says that austerity can be understood as a form of structural violence – a violence that is built into society and is expressed in unequal power and unequal life chances, as it is deepens inequalities and injustices, and creates even more poverty.

The article, Violent proletarianisation: social murder, the reserve army of labour and social security ‘austerity’ in Britain, suggests that as a result of the violence of austerity working class people face harm to their physical and mental wellbeing, and, in some instances, are ‘socially murdered’.

Dr Grover calls on the Government for change and action. He cites the consequences of austerity in the social security system – severe cuts to benefits and the ‘ratcheting up’ of conditions attached to benefits as constituting ‘social murder.’ 

He refers to the process as ‘violent proletarianisation’ (the idea that violent austerity is aimed at forcing people to do [low] paid work, rather than being supported by social security).

“To address violent proletarianisation what is required is not the tweaking of existing policies but fundamental change that removes the economic need for people to work for the lowest wages that employers can get away with paying,” says Dr Grover, echoing what many of us have also observed and commented on.

Published on 19 December in the journal, Critical Social Policy, Dr Grover gives examples of where social security austerity has led to a range of harms:

  •  an additional six suicides for every 10,000 work capability assessments done; 
  •  increasing number of people Britain dying of malnutrition 
  •  increasing numbers of homeless people dying on the streets or in hostels

The article rationalises that austerity, the difficult economic conditions created by Government by cutting back on public spending, has brought cuts and damaging changes to social security policy meaning Britain has fallen victim to a brutal approach to forcing people to undertake low paid work.

This is something that many of us have also observed.

“The violence takes two forms,” says Dr Grover. “First it involves further economic hardship of already income-poor people.

“It causes social inequalities and injustices in the short term and, in the longer term.

“Second, the poverty that violent proletarianisation creates is both known and avoidable.”

Dr Grover adds that only by fundamentally rethinking current social security policy can change that protects the poorest people be made.

The article examines socioeconomic inequality and injustice, discussing the way it is used to force the commodification of labour power, and a consequential creation of ‘diswelfares ‘that are known and avoidable.

By keeping citizens poor, and without the means of meeting their most fundamental needs, the state creates a desperate reserve army of labour, which is open to exploitation by employers. Conditional welfare also coerces citizens into accepting any work available, regardless of how poor the conditions and wage levels are. There is no means of bargaining for job security, better working conditions or pay, since people claiming social security cannot refuse a job offer, without facing financial sanctions, and subsequently, destitution.

The author suggests that violent proletarianisation is a contradictory process, one that helps constitute the working class, but in a way that socially murders some of its reserve army [of labour] members.

Just as ‘the market’ allocates wealth and resources, it has also come to allocate life and death.

Grover takes his  inspiration from Friedrich Engels’s account of the social murder committed by British capitalists to assess the contemporary impact of conservative economic policy, which they define as policies designed to maximize the accumulation of profit while socialising the associated risks and costs. Conservative neoliberals claim that if their policy prescription is followed, it will produce broad-based economic benefits including more rapid growth, higher incomes, less illness, and, even, more democracy.

The Lancaster university research contrasts the myths of Conservative economic policy with the reality. What Conservative economic policy has actually accomplished is a redistribution of wealth and power away from the vast majority of the population to private companies and their owners. The effects of these policies on citizens and workers have been politically determined economic instability, unemployment, poverty and widening inequality, resulting in suffering, harm and a rise in premature mortalities.

Social murder is a phrase used by Engels in his 1845 work The Condition of the Working-Class in England whereby “the class which at present holds social and political control” (the bourgeoisie) “places hundreds of proletarians in such a position that they inevitably meet a too early and an unnatural death.”

Social murder was explicitly committed by the political and social elite against the poorest in society. Although Engels’ work was originally written with regard to the English city of Manchester in the Victorian era, the term has been used by other left-wing politicians such as John McDonnell in the 21st century to describe the impacts of Conservative economic policy (neoliberalism), as well as being linked with events such as the Grenfell Tower fire. The victims of Grenfell Tower didn’t just die. Austerity, outsourcing and deregulation killed them – just as the conditions of Victorian Manchester killed the poorest citizens then.

Engels said:  “When society places hundreds of proletarians in such a position that they inevitably meet a too early and an unnatural death, one which is quite as much a death by violence as that by the sword or bullet; its deed is murder just as surely as the deed of the single individual.” 

Over 170 years later, Britain remains a country that murders its poor. When four separate government ministers are warned that Grenfell and other high rises are a serious fire risk, then an inferno isn’t unfortunate. It is inevitable. It is social murder.

The acts that culminated in the deaths were licensed by those in public office, or private sector authority, who had decided the lives of poor people mattered less than the profits of the rich. This is a logic that’s still very evident today. 

The past decade of austerity has been one of political violence: of people losing their lifeline income for not being disabled ‘enough’, of families evicted from their homes for having more than two children or a bedroom that the state deems surplus to requirements.

These are tales of private suffering and immense misery, of a person or a household  plunged into stress, anxiety, depression or worse.

Aditya Chakrabortty concluded last year, in his well-observed article about the Grenfell tragedy: “Class warfare is passed off as book-keeping. Accountability is tossed aside for “commercial confidentiality”, while profiteering is dressed up as economic dynamism. One courtesy we should pay the victims of Grenfell is to drop the glossy-brochure euphemisms. Let’s get clear what happened to them: an act of social murder, straight out of Victorian times.”

—

You can read the research report in full, without the paywall, here: Violent proletarianisation: Social murder, the reserve army of labour and social security ‘austerity’ in Britain

 

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Studies find higher premature mortality rates are correlated with Conservative governments

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In 2014, public health experts from Durham University denounced the impact of Margaret Thatcher’s policies on the health and wellbeing of the British public in research which examined social inequality and injustice in the 1980s.

The study, which looked at over 70 existing research papers, concludes that as a result of unnecessary unemployment, welfare cuts and damaging housing policies, the former prime minister’s legacy includes the unnecessary and unjust premature death of many British citizens, together with a substantial and continuing burden of suffering and loss of well-being.

The research shows that there was a massive increase in income inequality under  the Thatcher government – the richest 0.01 per cent of society had 28 times the mean national average income in 1978 but 70 times the average in 1990, and UK poverty rates went up from 6.7 per cent in 1975 to 12 per cent in 1985.

Thatcher’s governments wilfully engineered an economic catastrophe across large parts of Britain by dismantling traditional industries such as coal and steel in order to undermine the power of working class organisations, say the researchers. They suggest this ultimately fed through into growing regional disparities in health standards and life expectancy, as well as greatly increased inequalities between the richest and poorest in society.

Co-author Professor Clare Bambra from the Wolfson Research Institute for Health and Wellbeing at Durham University, commented: “Our paper shows the importance of politics and of the decisions of governments and politicians in driving health inequalities and population health. Advancements in public health will be limited if governments continue to pursue neoliberal economic policies – such as the current welfare state cuts being carried out under the guise of austerity.”

Housing and welfare changes are also highlighted in the paper, with policies to sell off council housing such as Right to Buy and to reduce welfare payments resulting in further inequalities and causing “a mushrooming of homelessness due to a chronic shortage of affordable social housing.” Homeless households in England tripled during the 1980s from around 55,000 in 1980 to 165,000 in 1990.

And while the NHS was relatively untouched, the authors point to policy changes in healthcare such as outsourcing hospital cleaners, which removed “a friendly, reassuring presence” from hospital wards and has ultimately led to increases in hospital acquired infections. 

Co-author Professor David Hunter, from Durham University’s Centre for Public Policy and Health, said: “Taking its inspiration from Thatcher’s legacy, the coalition government has managed to achieve what Thatcher felt unable to, which is to open up the NHS to markets and competition.”

The study, carried out by the Universities of Liverpool, Durham, West of Scotland, Glasgow and Edinburgh, is published in the International Journal of Health Services.

The backwards future

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An increase in UK infant mortality over the past two years, after more than a century of a decline, is the starkest indicator of how, as a society, we are regressing, failing to support the physical and mental wellbeing of children and young people. In October, the frightening implications for individual families and the long-term pressures on the public sector were highlighted by the Royal College of Paediatrics and Child Health, which had published its projections of likely outcomes for child health up to 2030.

The study compares the UK with the EU15+, comprising 15 long-standing EU members plus Australia, Canada and Norway. It shows that by 2030 the UK infant mortality rate will be 80% higher than the EU15+, even if the country resumes its previous downward path. If we carry on as we are, the rate will be 140% higher. As always, the impact is greatest among the poorest citizens. To put this into persepctive, the United Nations’ estimates of infant mortality indicate that only around six other countries have had increases over the past two or three years. We are now comparable with countries such as Dominica, Grenada and Venezuela.

The brutal cuts to local government have increased the risks facing the most vulnerable. Child protection services are increasingly being driven to wait until a child is in crisis before intervening. This puts children in danger, increases family break-ups and drives up the long-term costs to public services as people struggle to cope in later life with the aftermath of avoidable trauma.

Problems associated with poverty are compounded as children grow. As many as 1,000 Sure Start children’s centres may have closed since 2010, stripping away early years support for children from the poorest homes. Remaining centres struggle to cope. 

Cuts in services addressing domestic violence and addiction put more children in danger. The repeal of child protection policies that the last Labour government brought in – Every Child Matters – has hardly helped, too. Michael Gove repealed the policy the day after he took office in 2010.

A more recent study, published in the medical journal Lancet Public Health, has revealed that people living in the most deprived regions of the country die up to ten years earlier than their wealthier counterparts.

According to the study, the life expectancy between rich and poor citizens has increased from six years in 2001 to eight years in 2016 for women, and from nine to ten years for men. The research was carried out by the Imperial College London.

The researchers say that stagnant wages and cuts to social security are among the main causes for the growing life expectancy gap, they warn that the their findings are a “deeply worrying indicator of the state of our nation’s health”.

The study also reveals that child mortality rates are higher among deprived communities, with the poorest children more than twice as likely to die before they reach adulthood, compared to children born into well-off families.

The researchers said people from the most deprived sections of society are at a far greater risk of developing diseases like heart disease, lung and digestive cancers, and respiratory conditions – despite the fact that most of these conditions are avoidable and treatable.

Professor Majid Ezzati, senior author of the research from Imperial’s School of Public Health, said: “Falling life expectancy in the poorest communities is a deeply worrying indicator of the state of our nation’s health, and shows that we are leaving the most vulnerable out of the collective gain.

“We currently have a perfect storm of factors that can impact on health, and that are leading to poor people dying younger.

“Working income has stagnated and benefits have been cut, forcing many working families to use foodbanks.

“The price of healthy foods like fresh fruit and vegetables has increased relative to unhealthy, processed food, putting them out of the reach of the poorest.

“The funding squeeze for health and cuts to local government services since 2010 have also had a significant impact on the most deprived communities, leading to treatable diseases such as cancer being diagnosed too late, or people dying sooner from conditions like dementia.”

Jonathan Ashworth MP, the Labour party’s Shadow Health and Social Care Secretary, said: “This is latest evidence of stark differences in life expectancy, which should act as an urgent wake up call for ministers ahead of the long term NHS plan.

“The shameful truth is women living in poorer areas die sooner and get sick quicker than women in more affluent areas.

“It’s why as well as ending austerity, Labour recently announced we’d target growing health inequalities and implement a specific women’s strategy in government to ensure the health and wellbeing needs of women are met.”

The ideologically prompted and systematic dismantling of public services has stalled our progress as a society, transforming it into a social Darwninist dystopia. The  inequalities in mortality between haves and have nots is proof that the government has abandoned and intentionally economically excluded growing numbers of citizens, causing harm, premature death, and leaving them in profound in distress and deprivation, while inequalities in wealth, inclusion, wellbeing and opportunity are being pushed even higher. 

If a parents neglect children child, intentionally leaving them without food, warmth and shelter, punishing them because of some unevidenced theory about ‘incentives’ and their attitude, behaviour and motivation, we would say that is abuse. When the state neglects children and treats them this way, we call it welfare ‘reform’. 

The public have paid into social security funds and other public services. It is citizen-funded provision FOR citizens when or if they need it. It is not the government’s moeny to take from ordinary people and hand out to millionaires.

Dying prematurely because you are poor is the most unfair outcome of all. As a society, we should all be concerned about the growing divergence in rich-poor life expectancy and the fact that this divergence is damaging citizens. It should also be a cause for substantial public concern that inequalities are being wilfully engineered and fuelled by the UK government.

 

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Nudge and neoliberalism

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I’ve been criticising nudge and the closely related discipline of behavioural economics for a few years, sometimes with an international audience (see, for example: The connection between Universal Credit, ordeals and experiments in electrocuting laboratory rats.)  Nudge has been increasingly seen by governments as a cheap and effective way of achieving social political goals in an era of austerity. 

I have several objections to the “behavioural turn”; some are to do with its impact on democracy, others are to do with its class contingency: poor people are disproportionately nudged, and without their consent. When I say ‘disproportionately’, I mean almost exclusively.

Over the last seven years, behavioural economics has been regarded as something of a technocratic fix for a failing and overarching socioeconomic system. However, it has more in common with PR, marketing and advertising than psychology or economics. It’s part of the ‘sales pitch’ for neoliberalism, which is already a sold out event.

Behavioural economics epitomizes an era in which politics is concerned chiefly with saving money and combating the symptoms rather than the causes of growing social inequality. Nudges may serve to make poverty infinitesimally more bearable for the government, who can say that they are ‘doing something’ to ‘solve’ poverty, but certainly not for the poorest people. When you zoom out, you see clearly that exactly nothing is being solved at all. At best, nudge is like persuading a person to learn how to swim in a clean and tidy swimming pool, and them throwing them back into a maelstrom out at sea.

The poorest citizens are targeted with punitive, heavily bureaucratic policies and an administrative authoritarianism, while wealthy people get the freedom to do as they please, and a rewarding form of state libertarian socialism, where the regulation book is ripped up. Unaccountable private companies design nudge strategies for profit, politicians and civil servants learn them and become board room, arm-chair psychologists, experimenting on ordinary citizens to find ways of not paying out for public services. All without the publics’ consent.

What could possibly go right? 

The government and their small army of behavioural economists argue that citizens’ characters, cognitive ‘limitations’ and ‘flawed’ decision making is the root cause of poverty and that is what creates inequality, so handing over money every year to poor people is akin to “treating the symptoms, but ignoring the disease.” Margaret Thatcher, the High Priestess of neoliberalism, once called poverty a “personality defect.” It stuck with the Tories.

However, this narrative is based on assumption and fails to take into account the possibility that people’s decisions, behaviours and circumstantial problems are not the cause but the consequences of poverty. Giving poor people more money might well just genuinely work wonders, because simply having too little is THE problem. 

Nudge is an authoritarian prop for a failing neoliberal ideology and policies. Most citizens don’t benefit from a system founded on accumulation by dispossession – a concept presented by David Harvey, which defines the neoliberal capitalist policies in many western nations, from the New Right Thatcher era to the present day, as resulting in the centralisation of wealth and power in the hands of a few, by dispossessing the public of their wealth, public services and land. And increasingly, their autonomy, as public perceptions and behaviours are being aligned with politically determined neoliberal ‘outcomes’. It’s a vicious cycle – a maelstrom. 

Nudge is politically ‘justified’ by a draconian, ideological framework of beliefs, partly based on Victorian meritocratic notions of ‘deserving’ and ‘undeserving’. One theme is that poor people lack the qualities or capacities to be economically competent, and simply make the ‘wrong’ choices. But in a system where everyone competes for resources (as well as a democratic voice, government attention and funding), not everyone is permitted to be wealthy. That is the nature of ‘competition’.  A handful of ‘winners’ and many more ‘losers’.

There is no such thing as ‘trickle down’ either. Wealthy people don’t generally share their wealth.

Lance Ulanoff expresses it this way:

Trickle Down Economics
Trickle Down Economic
Trickle Down Economi
Trickle Down Econom
Trickle Down Econo Trickle Down Econ
Trickle Down Eco Trickle Down Ec
Trickle Down E
Trickle Dow
Trickle Do
Trickle D
Trickl
Trick

Furthermore, being poor isn’t particularly lucrative, in fact poverty itself tends to be accumulative. Poor people are financially penalised and economically excluded. Poor citizens can’t get loans when they need them, unless they are prepared to pay eyewatering interest rates, of course. Pay as you go metered utilities – gas, electric and water, for example – tend to cost rather more than a monthly or quarterly direct debit. Poor people who get into debt with utility companies tend to be coerced into having payment meters fitted, as they are considered at ‘risk’ of defaulting on payments by big businesses.

It’s somehow become obscenely normal to charge poor people more money than wealthy people for the same services and utilities. I’ve yet to hear of a poor person who became less poor because they are being punished by having more money taken from them.

However, being wealthy is very lucrative; it’s the gift that keeps on giving. This discrimination has been dressed up carefully with a political narrative, using terms like “incentives”. For wealthy people, a reward of more money is apparently an ‘incentive’ to just keep on being wealthy. 

Poor people, however, seemingly require a different form of ‘incentivisation’. They need to be told that it’s ‘wrong’ to be poor, and that it is their own fault, rather than the consequence of a prejudiced and discriminatory government and their flawed, prejudiced and discriminatory policy designs. In a so-called meritocratic system, it follows that wealthy people ‘deserve’ their wealth – even though at least one third of them simply inherited it – and poor people deserve to be poor. If it wasn’t for the myth of meritocracy, inequality and burdening those in poverty with a sense of shame and personal failing would be considered abhorrent. However, neither neoliberalism nor it’s PR and strategic communications agent, behavioural economics, are drawn from the philosophical well of human kindness. They came to life in the degenerative, dry ruins of once civilised societies, marking a Fin de Siècle of  late capitalism.

The socioeconomic system of organisation – neoliberalism – eliminates the possibility that everyone can ‘win’, since neoliberalism is itself founded on competitive individualism, which permits only a few ‘winners’ and many more ‘losers’. The existence of absolute poverty in a wealthy country is ample evidence of a fatally flawed system, so the government uses a rhetoric of a myth – meritocracy – to justify the status quo, blaming citizens’ ‘behaviours’ and ‘attitudes’, rather than recognising the real problem and changing the system, which generates inequality from its very core.

So poor people are penalised for being poor by being ‘incentivised’ by punitive economic sanctions that entail losses from the little money they have. This is so appallingly cruel, because scarcity completely consumes people. It eats away at human potential and stifles possibilities. And removes choices.

The patronising ‘paternalism’ of a government that assumes it ‘knows what is best’ for people – punitive nudges delivered by a group of privileged, powerful and prejudiced elitists – is doomed to fail. The key reason is that being poor means having less choice to start off with. Poor people don’t act on available choices because they can’t. They have none. They are compelled to act on necessity.

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Maslow’s hierarchy of needs outlines that our most basic needs are biological, and meeting these needs is a necessity for survival. There isn’t a ‘choice’.

Taking money from poor people is simply cruel and barbaric. It reduces ‘choices’ and increases necessity and desperation.

If we can’t meet our fundamental needs, we can’t meet higher level psychosocial needs either – the ones that do entail choices about our lives. Poverty has got nothing to do with making “irrational choices” at a personal level. It’s got everything to do with being left with NO choices.

There is a world of difference between ‘choice’ and ‘necessity’. It is time the government and the technocratic behavioural economists busy propping up a failing system recognised and acknowledged this. People are poor because we have a system that diverts available resources away from them, hanging them out to dry. Until that fundamental fact is addressed, nothing will change.

It’s time for a serious and open political debate about inequality, the limits of nudge, democracy and the fundamental failure of neoliberalism. It’s time to stop blaming poor people for poverty and inequality.

Bootstraps

Related

The connection between Universal Credit, ordeals and experiments in electrocuting laboratory rats

 The government plan social experiments to “nudge” sick and disabled people into work

A critique of benefit sanctions:  the Minnesota Starvation Experiment and  Maslow’s Hierarchy of Needs

The benefit cap, phrenology and the new Conservative character divination

Stigmatising unemployment: the government has redefined it as a psychological disorder

The power of positive thinking is really political gaslighting

Cameron’s Nudge that knocked democracy down: mind the Mindspace

The just world fallacy

The still face paradigm, the just world fallacy, inequality and the decline of empathy

I don’t make any money from my work. But you can make a donation if you wish and help me continue to research and write informative, insightful and independent articles, and to provide support to others. The smallest amount is much appreciated – thank you.

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David Lammy on Oxford elitism and his responses to racist comment on social media

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David Lammy

Oxford University has published data about its undergraduate admissions for the first time. The figures showed a continuing inequality gap in offered opportunities to study based on race and economic status. 

The 850-year-old university published data that was intended to challenge the views that it endured as a place of white, wealth-driven privilege and elitism.

The statistics offer some very worrying insights into a clear lack of representative diversity among undergraduate admissions. In a breakdown of admissions to the 29 individual colleges that are the blocks of Oxford’s academic structure, eight — including some of the most prestigious — failed to admit a single black Briton in one or more of the years from 2015 to 2017.

Oxford University has had to apologise to David Lammy after retweeting a post labelling his legitimate criticism “bitter”.

The original tweet, sent by a student, was in response to the Labour MP saying Oxford was “a bastion of white, middle class, southern privilege”.

Lammy asked if the tweet represented the university’s official position – at which point a senior staff member apologised and took responsibility.

Cherwell, a student newspaper at Oxford, reported on Wednesday that the university had admitted more students in 2017 from a single London private school, than it had admitted black undergraduates from the rest of Britain. .

Lammy’s original remarks came as Oxford University data revealed that eight of its 29 colleges included in the report accepted fewer than three black applicants in the past three years.

The university has a total of 38 colleges and permanent private halls. The university said it was “not getting the right number of black people with the talent to apply”.

Director of undergraduate admissions, Dr Samina Khan, said she was “pushing hard” on outreach activity to make sure those students felt welcome.

The proportion of Oxford students identifying as black and minority ethnic was 18% in 2017, up from 14% in 2013. However, that figure still falls below the wider UK university average of 25%.

The most recent UK census showed 14% of the UK population identifies as black or minority ethnic. Data in the university’s report showed that, of the students that achieved three ‘A’ grades or higher in their A-levels nationwide, 20% identified as black and minority ethnic.

One college, Corpus Christi, which has around 350 students, admitted just one black student resident in the UK in its 2015-2017 intakes. Balliol college, which has around 680 students, admitted two black and minority ethnic students over the same period, despite receiving 46 applications.

The number of admissions from state schools, during the same period, rose by just 1%, from 57% to 58%. 

Oxford’s intake also displayed a substantial geographic imbalance between the north of Britain and the more affluent south. London and the South East made up 46.7% of UK applications between 2015 and 2017, (and 47.9% of students admitted) while the North East accounted for 2% (2.3% admitted).

“Oxford reflects the inequalities — socio-economic, ethnic and regional — that exist in British society,” Louise Richardson, the university’s vice chancellor, said in a foreword to the report.

“The picture that emergesis of a university which is changing: evolving fast for an institution of its age and standing, but perhaps too slowly to meet public expectations. It is a picture of progress on a great many fronts, but with work remaining to be done,” she added

In a section titled Key Points, the report focused on progress in admissions, including “more women admitted than men in 2017” and higher proportions of undergraduate admissions among groups that were traditionally disadvantaged.

According to the Cherwell article, “17 of the top 20 schools for Oxford admissions in 2017 are fee-paying, while the other three are prestigious grammar schools.” Additionally, the newspaper said, state-educated students tended to apply to the most oversubscribed subjects, lowering their prospects, while applicants from private schools tended to apply to less sought-after courses, such as classics or modern languages. 

Lammy, a former education minister who has campaigned against what he has called “social apartheid” at Oxford, said the latest figures showed that the university was “an institution defined by entrenched privilege that is the preserve of wealthy white students from London and the Southeast.”

Lammy previously accused the university of “social apartheid“, after a Freedom of Information (FoI) request by him revealed 10 out of 32 Oxford colleges did not award a place to any black British pupil with A-levels in 2015.

This prompted more than 100 MPs to write to Oxford and Cambridge urging the universities to recruit more students from disadvantaged and under-represented backgrounds.

Reacting to the latest figures, Lammy said the problem was “self-perpetuating”.

He added “If you’re on the 20th floor of a tower block estate and you’re getting straight A’s, you apply, go for a difficult interview.. you don’t get in, then none of the other kids apply the following year.”

Some of the responses on Twitter to Lammy’s reasonable and empirically evidenced comments are dismally and appallingly racist:

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Walker has since deleted his tweet, following Lammy’s neat shot response:

And then this oik piped up:

And the response:

A spokesperson for Lammy recently told the BBC: “David regularly receives abusive and malicious communications, often of a racist nature.

“All such letters are passed onto the police. As David has made clear, receiving racist abuse will not have any impact on his work.”

In April, the Labour MP posted an image of a letter he received after he criticised the government’s handling of the deportation of Windrush migrants.

The offensive note told  Lammy to “be grateful that we have taken you in as a black man” and suggested he “go back to your country”.

Lammy pointed out that he was born in Whittington Hospital in north London.

He shouldn’t have had to. It’s a disgrace in a so-called civilised society that anyone has to confront racist and abusive comments. The barrage of hate that Lammy and others are subjected to on a regular basis is in part a product of an increasingly divided and prejudiced society. One which the government has contributed to by role modelling prejudiced and discriminatory behaviours, which in turn signals permission for citizens to do the same.

As Lammy says: “At root the hostile environment is a policy rooted in pernicious cruelty designed to make life so difficult for people who are here legally that they simply give up and, as suggested by Theresa May’s vans, “go home”. (…) A minister falling on their sword is usually an attempt to draw a line under a scandal and encourage the media to move on.

“But the person sat in the hot seat at the Home Office makes no difference to the thousands of people suffering as a result of the hostile environment policy. An unjust law is no law at all. The Windrush generation will not get justice until it is the law that is changed, not just the home secretary.” 

Attitudes, behaviours and ideologies that foster division, inequality, prejudice  and discrimination must also change. 

That is unlikely to happen under a Conservative government

 

I don’t make any money from my work. I’m disabled through illness and on a very low income. But you can make a donation to help me continue to research and write free, informative, insightful and independent articles, and to provide support to others. The smallest amount is much appreciated – thank you.

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Sometimes satire is appropriate. Calling it ‘fake news’ isn’t

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My last article was a lampoon of a real vigilante group that was established to hunt out ‘fake’ beggars and homeless people, taking photos of them to use on posters that name and shame them. The group have already ‘outed’ one genuinely homeless person, and have drawn much criticism from the police, charities and councils for their ill-conceived aims and methods. 

The characters I portrayed have made up names like ‘Mr Vinnie Dicktive’ and so on. The reference to phrenology and character divination is also a sideswipe at the government, as is the reference to ‘no causal link between ‘the homeless and homelessness’, but it also serves to highlight the bigotry, hypocrisy and downright irrationality of the vigilante group.

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Some people have expressed concern that my satire may be mistaken for ‘fake news’. However, I expect that most people can recognise a parody of a group and distinguish it from ‘fake news’. I occasionally write satire because sometimes, the best thing to do when confronted with those who are nasty, irrational, prejudiced and ridiculous is to ridicule them. I’m certainly not going to apologise for that.

My friend, Hubert Huzzah, has this to say about satire and ‘fake news’:

1) Fake News is bought, paid for and advances against the interests of the people it is aimed at.

2) Satire is created by [and for] the people who Fake News is aimed at. 

For those who don’t know me, my occasional bouts of satire fall into the latter category.

However, what really angers and upsets me about some of the responses to the latest article is this. The article I wrote just previously to the satirical piece was absolutely heartbreaking. It was so harrowing to write that I wept while I wrote it. The article was about two ill and vulnerable homeless citizens who died in sub-zero temperatures last week. Ben had been discharged from hospital, forced to return to a tent as his only shelter from the elements, after being treated for pneumonia. Rob had throat cancer, and was sleeping behind the shutters of an Argos store.

People expressed their ‘shock and surprise’ that these two poor and ill homeless citizens hadn’t survived Siberian weather conditions. I felt that those comments reflected a general public numbness and detachment to the terrible circumstances of homeless people, which horrified, appalled and disgusted me. And also made me very angry.

There is something really horrifically wrong with a so-called civilised, democratic society in a very wealthy country that abandons sick and disabled people, leaving them with no effective shelter or money on the streets in sub-zero temperatures. And there must be something missing from people who then express ‘shock’ and ‘surprise’ that their fellow citizens have died in those conditions.

I was accused of having ‘bad taste’, by one person. I pointed out that I am not part of the vigilante group going around harassing and photographing homeless people and making posters that claim they are somehow faking their homelessness. This group says that they will not invade the privacy of other citizens, by ensuring they aren’t captured on any of the photos, indicating clearly that they think homeless people have less right to respect and privacy than others. The point of my satirical article was to highlight the ‘bad taste’ , spite and prejudice of the ‘Killing with Kindness’ campaign. If it made you feel uncomfortable, well good, it was intended to.

Remarkably, my satirical piece has drawn more attention, response and anger than the previous very serious article about real people, in very real and unforgiving circumstances within the context of inhumane political and public indifference to the plight of our poor fellow citizens in this country.

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Please don’t just walk on by, we are better than this

From the abstract to the concrete: urban design as a mechanism of behaviour change and social exclusion

Two very vulnerable homeless men left to die in sub-zero temperatures

People are faking their homelessness and poverty for money, says petty urban bourgeousie

 

 

I’m disabled through an illness called lupus. I don’t make any money from my work. However, I do what I can, when I can, and in my own way. You can support Politics and Insights and contribute by making a donation which will help me continue to research and write informative, insightful and independent articles, and to provide support to others. The smallest amount is much appreciated, and helps to keep my articles free and accessible to all – thank you. 

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Two very vulnerable homeless men left to die in sub-zero temperatures

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A homeless man died tragically, earlier this week while sleeping rough in freezing temperatures in Nottinghamshire. He was known as Ben to locals, and had been sleeping in a tent near Saint Swithun’s Church in Retford. He was found in the early hours of Tuesday morning, as freezing temperatures swept across the county due to the ‘Beast from the East’ storm.

Police confirmed that they were made aware of a ‘sudden death’ near to the church by the ambulance services at 8.40am on Tuesday (February 27).

One local resident in the area, Kenny Roach, said he knew Ben well and had previously helped him out with money and food. 

“He contacted me last week just before he came out of hospital – he had pneumonia,” he said.

Two local scout leaders, Hazel and Kenny Newstead said they both knew Ben well.

“We’re so shocked and saddened by this. He seemed to be a lovely, friendly chap,” said Hazel.

“He was living in a tent between a wall and the old church hall off Churchgate near our scout hut.

“He told us he was 53 and used to be a brickie – he even offered to re-do the brickwork on our building.

“We used to chat to Ben over the wall. He was happy here and didn’t want to go to a shelter in Worksop.”

Hazel said she and her husband had come across Ben a week or so ago, but understood that he was originally from the south and moved between Retford, Gainsborough and Worksop. His girlfriend had died tragically before he became homeless.

“He had a tent, sleeping bags and quilts, and we gave him tinned food because he said he had something to cook with. He used to hang his sleeping bags between the trees to air them,” Hazel said.

Roach added “He had had his stuff pinched so I arranged to meet up with him to give him some camping gear, money and food.

“He didn’t want something for nothing.

“Ben was quite comfortable where he was and didn’t want to go to Worksop. All he needed was a break. This is so sad.”

Worksop is just over 12 miles from Retford.

Roach said that Ben would search bins for items to sell in the town and would buy food with any proceeds he received. Roach had also offered him work with an upcoming project.

“He was a grafter,” Roach said. “But he just needed somebody to give him a break. He couldn’t get a job because he didn’t have a home, he couldn’t get a home because he didn’t have a job, and he couldn’t get benefits because he didn’t have a home. It’s a vicious, vicious circle. People need to cut them some slack.” 

Councillor Simon Greaves, leader of Bassetlaw District Council, said :

“We were all saddened to learn about this tragedy and had put provisions in place in an attempt to prevent something like this occurring.

“The Council has been providing a Severe Weather Night Shelter every night since Saturday, February 24 where anyone in Bassetlaw who is homeless can get out of the cold and into a warm and safe environment for the night.

“Severe Weather Night Shelters are set up when the outside temperature is set to drop below zero degrees centigrade for three consecutive nights.

“Outreach Workers from Framework, the Council, the Police and a number of other agencies are in regular contact with people who are sleeping rough and have made them aware of the shelter.

“While the shelter is based at Crown Place Community Centre in Worksop, free transport has been offered to people known to be homeless, regardless of where they are currently living. Some people have taken up this offer and have used the shelter. Regrettably other individuals have made a personal choice to decline this offer.

“We are aware of between 15 and 20 people known to be sleeping in Worksop and around five people in the Retford area who are known to be homeless. We will be keeping the shelter open until at least Sunday night, and possibly longer, depending on the weather. Up until Wednesday evening the Shelter has been used by a total of 11 people since it opened last weekend.

“In terms of long-term provision for Homelessness, the council continues to work with the individuals concerned and the relevant agencies to place people in the most appropriate accommodation as well as work to prevent people becoming homeless in the first place.”

A file will now be put together to hand to the coroner.

It’s not clear if anyone had approached Ben regarding shelter provision, bearing in mind that he has been in hospital with pneumonia little over a week before he died. 

Hazel Newstead said “He had only been here for about a week. He said he had come out of hospital on 14 February, where he’d been treated for pneumonia. Before that I think he had been in another church sleeping in the door way.”

She added: “I can’t help wondering whether I could have done more personally – I’m disabled and limited physically, but the guilt is there, as there didn’t seem to be anywhere else for him to go.

“He was bothering nobody where he was. Probably hardly anyone knew he was there.”

Bassetlaw District Council opened a severe weather night shelter over the weekend but residents of Retford said it was 10 miles outside the town, which means some rough sleepers were unwilling to go there.

Following Ben’s death, local residents have set up their own homeless shelter to provide more accessible beds, as some homeless people in the area didn’t want to go to Worksop.

I spoke to a former worker from Framework – the local homeless service provider – who had worked in the area for seven years. She said “ Funding has been cut by more than 70% for Framework’s services in Nottinghamshire. Prior to 2010, there was a countywide street outreach team, Winter Night Shelters opened from December to the middle of March, plus various services offering longer term hostel and move on accommodation and tenancy support once people were in their own homes. We predicted that people would die as a result of those services closing. I’m heartbroken and full of rage that it’s happened.”

It’s difficult to believe that a person who had pneumonia was discharged from hospital into below freezing weather conditions with no shelter but a tent and sleeping bag. Surprisingly, some local people say they were shocked that the poor man had died.

Another man homeless man was found dead behind the shutters of an empty shop following one of the coldest nights of the year. Police and paramedics were called to the former Argos building in Chelmsford. The man was know locally as ‘Rob O’Conner’ had been living behind the shutters, he was found dead at the scene.

Aaron Smith, 27, who has been homeless for a year, said he found Rob’s body.

“I was his only friend. We bed down together under the shutters,” he said.

“I was all he had. He was ill and had throat cancer.

“The bad weather didn’t help at all and it is picking us off one by one.

“When I found him he had one thin sleeping bag on.

“Everyone has him wrong.

“He was a lovely bloke but because he couldn’t speak properly people had him wrong. He had throat cancer

“He was a good and loyal friend.”

Following the news of the death, a sign placed next to the Halifax bank was left in tribute to the man.

A tribute to Rob, a homeless man who was suffering from throat cancer, found dead in Chelmsford (Image: Essex Live/BPM Media)

Brian McGovern, Who runs the Rucksack Project, said: “This is something that the council were warned about.

“I did approach the council when we had a cold spell about opening up fire stations for them to sleep in.” Rob Saggs, executive director of the homeless charity CHESS said: “It’s devastating to hear that somebody has died on our streets in Chelmsford.

“I’m just devastated and quite shocked. What’s really sad about it is that we have been running a winter project that somebody like this could have been accessing, where it’s warm and comfy. It’s horrendous.”

A spokesperson for Chelmsford City Council said: “CHESS have confirmed that the winter project has extended their service until the end of March. They have just 10 bed  spaces at a local Church which rough sleepers can access each night. Sanctus is open for rough to get hot food and drink throughout the day.”  

Shortly after Rob’s death, tributes came in for the man described as a “good and loyal friend”. 

Rob’s death comes after one of the coldest nights of the year when the temperature in the Essex city dipped to a low of -1.7C at 4am.

It’s reported that his death is not being treated as suspicious. It should, however, be treated as an absolutely shameful national disgrace. Rob had throat cancer and was sleeping rough. Behind the shutters of an Argos shop. No-one would choose to live and die like this. 

Ben was discharged from hospital following treatment for pneumonia just over a week before he died, to sleep in a tent.

There is something very wrong with a society that leaves ill people without adequate shelter in sub-zero temperatures. People are apparently so shocked that this is happening right under their noses. 

However, it’s far too late to be shocked after the event of someone’s death.

We seem to have become a nation that is blind to the suffering of some of our most vulnerable citizens, to the point where we somehow think they have some sort of immunity to exposure and sub-zero temperatures. Until it kills them. 

Over the last seven years we have witnessed the return of absolute poverty in the UK because of Conservative welfare policies, austerity, low wages and insecure work. Absolute poverty is when people can’t afford to meet one or more of their basic survival needs as they don’t have an adequate income to eat, keep warm or afford shelter.

Welfare was originally calculated to meet people’s basic needs and to ensure that citizens did not have to live in absolute poverty. We were a society that believed that everyone has a right to life. However, since the Conservative government’s welfare ‘reforms’, the amount of support people have does not alleviate hardship nor does it adequately ensure that people can meet their basic survival needs. Furthermore, the punitive welfare sanction regime often leaves people without any income at all.

In one of the wealthiest nations in the world, people are dying because they have no home and because there is not an adequate safety net in place to help them when they so desperately need it.

—

I wept while writing this.

—

 

You can help a homeless person by contacting Streetlink. (Click) When a rough sleeper is reported via the Streetlink app, or by phone – telephone number 0300-500 0914.

The details  you provide are sent to the local authority concerned, so they can help connect the person to local services and support. You will also receive an update on what action was taken so you’ll know if the situation was resolved. StreetLink aims to offer the public a means to act when they see someone sleeping rough, and is the first step someone can take to ensure rough sleepers are connected to the local services and support available to them.

Don’t walk on by. We are better than this

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I don’t make any money from my work, and as a disabled person, I have a limited income. But you can help by making a donation and enable me to continue to research and write informative, insightful and independent articles, and to provide support to others going through disability benefit assessment processes and appeals. The smallest amount is much appreciated – thank you.

I do have a roof over my head, however. If you know of someone who is homeless, I’d prefer that you help them first and foremost

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Neoliberalism and corruption: hidden in plain sight

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BHS was subject to “systematic plunder” by former owners and corporate raiders, Sir Philip Green, Dominic Chappell and their respective “hangers-on”, according to MPs. This led to the collapse of a company that once employed 11,000 people. There was little evidence found to support the reputation for retail business acumen for which Green was rewarded with a knighthood. 

Green had “systematically extracted hundreds of millions of pounds from BHS, paying very little tax and fantastically enriching himself and his family, leaving the company and its pension fund weakened to the point of the inevitable collapse of both.”

Green was found to hold prime responsibility for the pensions black hole after years of refusing to provide sufficient funding, despite pleas from the fund’s independent trustees.

A damning report  published in 2016, after weeks of evidence from former executives and advisers, says the “tragedy” of BHS was the “unacceptable face of capitalism” and raises questions about how the governance of private companies and their pension funds should be regulated. 

Ahead of a joint Business and Work and Pensions Select Committee meeting, Green called the inquiry “biased”, and stated that he “therefore required [its chair, Frank Field] to resign”. Field pointed out that the size of the pensions deficit is a fact, not a matter of opinion, and that Parliament and not Green decides who chairs Committees. 

Referring to the conduct of Green, Angela Eagle, the shadow business secretary, said: “In this situation it appears this owner extracted hundreds of millions of pounds from the business and walked away to his favourite tax haven, leaving the Pension Protection Scheme to pick up the bill.” 

The wider business culture illustrated by BHS’s collapse – ruinous loans from multinational financiers, the bullying of suppliers, complacency and quiescence from highly paid company directors such as Lord Grabiner – has gone largely unaddressed.

The wider framework of corruption

Earlier this month, faced with amendments in the House of Lords to its post-Brexit anti-money laundering Bill, the UK government continued to block and delay vital reforms to address the UK’s role in global corruption and money laundering. 

Another amendment, also backed by Lords, would require the Overseas Territories – which include some of the most notorious UK’s tax havens – to publicly reveal the true owners of the companies registered there. Revealing these true, beneficial owners, would tackle the secrecy that currently shelters and enables the criminal and corrupt.

The UK has already introduced a register of the beneficial owners of UK companies, and in December last year all EU countries agreed to do so too. This amendment would bring the Overseas Territories with financial centres, places like the British Virgin Islands and Cayman Islands, into line with the UK and the rest of the EU.

Rather than backing the amendment, which would bring these tax havens up to what David Cameron once described as the “gold standard”, the government yet again sought to block proposals to combat the UK tax haven’s central role in global corruption and money laundering.

Corruption is “the abuse of entrusted power for private gain.” Many people assume that corruption is something that happens mostly in developing democracies. 

McMafia is multi-million pound series by the BBC, based on the book of the same name by Misha Glenny, who is an Advisor to Global Witness. The show focuses on corruption as the common thread linking the corporate and the criminal.

It explores how lawyers, politicians and the intelligence agencies join forces with money launderers and international crime rings to move funds around the world from London.  Although the content is fictionalised and not based on any particular individual from real life, the themes it draws on are very real. The corrupt activities it seeks to expose is happening –  in the UK, as well as right across the world – and it is destroying the lives of millions of people.

For those of you who don’t believe that the UK has a problem with corruption, ask yourself this: Would there still be commercial banking sector in this country if it weren’t for corruption? Remember the high-profile scandals: Libor rigging, insider trading, mis-sold pensions, endowment mortgage fraud, the payment protection insurance scams, and so on. Then ask yourself whether conning and squeezing the public is simply an aberration or is it in fact an established and embedded business model. 

Where are the senior figures whose established practices, high risk-taking behaviours contributed significantly to triggering the global financial crisis – none of them have been held criminally liable or disqualified for reckless practices. There were no laws in place to regulate and restrain them. Cameron nonetheless continued with the ‘bonfire of red tape’, seeing regulation as a hindrance to “getting things done”. I wonder what sort of “things” he had in mind when he decided that public consultations, judicial review and impact assessments were yet more obstacles for “getting things done”. 

The UK’s unreformed political funding system permits the very rich to buy the success of political parties, and also, there’s the revolving door that permits vulture capitalists like Adrian Beecroft and corporate executives to draft the laws and re-write policies that affect their profits. There are politicians with vested interests in privatisation, some who find additional “outside” work that compromises their role as representatives of the public and presents conflicts with democracy.

Then there are the small matters of the Panama and Paradise Papers. The praetorian and mercenary outsourced delivery of the NHS, welfare, children and prison services by vulture capitalist private contractors, some of whom also administer controversial government policy, while shielding the government from scrutiny for the consequences.

There’s the phone-hacking scandal and the media bribing the police, there’s the price-fixing by energy companies, the Libor rigging scandal, and many other such cases.

Barclays Bank, JP Morgan, Swiss bank UBS, Royal Bank of Scotland and Deutsche Bank have all been fined by financial regulators for rigging practices, which are seen as market manipulation and corrosive to trust in the financial markets. 

Corruption has in fact become an everyday part of British national life, it is systemic within leading institutions.

A former Conservative minister ran HSBC while it was engaged in systematic tax evasion, money laundering for drugs gangs and the provision of services to Bangladeshi and Saudi banks linked to the financing of terrorists. However, rather than prosecuting the bank, the head of the UK’s tax office went to work for it when he retired.

We tend to see corruption as isolated incidents of pathology, rather than an endemic disease of the model of socioeconomic organisation.

Neoliberalism: the institutionalisation of self interest and normalisation of private gains at public expense

Neoliberalism is the ‘doctrine that market exchange is an ethic in itself, capable of acting as a guide for all human action’. (David Harvey, 2005.) A key set of ideas that fuelled the New Right’s neoliberal project are those of public choice theory. Various versions of public choice theory portray the whole idea of public service as itself corrupt. Public choice economists each make the same assumption – that although people acting in the political marketplace have some concern for others, their main motive, whether they are voters, politicians, lobbyists, or bureaucrats, is self-interest. 

A public sector that aims to serve the general public interest and not serve the private interests of individuals is problematic for neoliberal theorists, and among them are the radical libertarian right, who strongly support private property rights and defend market distribution of natural resources and private property. 

James Buchanan, (see: James McGill Buchanan. The man who served the plutocrats, wrecked countries and brought victory to the radical right ), one of the key theorists of public choice economics, discusses this issue specifically:

“There’s certainly no measurable concept that’s meaningful that could be called the public interest, because how do you weigh different interest of different groups and what they can get out of it? The public interest as a politician thinks it does not mean it exists. It’s what he thinks is good for the country. And if he’d come out say that that’s one thing, but behind this hypocrisy of calling something the public interest as if it exists. (See: The Trap (1/3): Fuck You Buddy! by Adam Curtis).

Within the neoliberal idiom, there is a fundamental inability to consider collective public interests. Buchanan says: 

“We’re safer if we have politicians who are a bit self-interested and greedy than if we have these [collectivist] zealots. The greatest danger of course is the zealot who thinks that he knows best or she knows best for the rest of us. As opposed to being for sale, so to speak.”

So the theory of public choice runs like this: bureaucrats are inevitably self-interested, but if they deviate towards an ideology of “public service” they are not self-interested enough. Public choice theory attempts to discredit all conceptions of the public or general interest and a central strategy seems to be the introduction of mechanisms promoting institutional corruption.

Furthermore, there is no direct political reward for fighting powerful interest groups in order to confer benefits on a public that may not be aware of the benefits or of who conferred them. The incentives for good political management in the public interest are therefore seen as weak. 

In contrast, interest groups are organised by people with very strong gains to be made from government action. They provide politicians with donations, campaign funds and campaigners. In return they receive the attention of politicians and very often gain support for their policy goals.

So because legislators have the power to tax and to extract resources in other coercive ways, and because it is assumed that voters monitor their behavior poorly, legislators behave in ways that are costly to citizens. More recently, there has been a growing public awareness, however, that ordinary citizens are paying a pro-rata share of a variety of catastrophically inefficient projects –  the political justification for austerity, for example, is one consequence of a deregulated finance sector and subsequent reckless behaviours of various self-interested actors – that clearly do not benefit more than a small proportion of the population. 

Public choice economics has shaped the neoliberal reforms to the civil service and public institutions, resulting in the slippery sloped internal market in the NHS, the dismantling of the welfare state and outsourcing of many other state functions, student fees in higher education, and the deregulation, bonfire-of-the-red-tape approach of the pro-market regulatory agencies of many other areas of public life, including the financial sector.

Sociologist David Miller, in Neoliberalism, Politics and Institutional Corruption: Against the ‘Institutional Malaise’ Hypothesis, says: “The process of opening the machinery of government to private interests required the influx of new ideas and practical ways of putting them into practice. As a result the neoliberal period saw the rise of a whole range of new policy intermediaries including management consultants, lobbyists, public relations advisers and think tanks. All work mainly for corporate interests, all have had material impacts on neoliberal reform, and all have as part of the same process expanded massively as a result.

“Lobbying and PR are omnipresent policy intermediaries. The PR industry grew, initially on the back of privatisation contracts. Lobbying and PR firms and their principals (mostly corporate actors) aim to dominate civil society, science, the media, politics and policy.

“[…] In the United Kingdom, the lobbying industry has – despite recurring controversy about its activities – been largely protected by government, which has refused to adequately require transparency from lobbyists and other influence peddlers.”

Right wing libertarians have a profound dislike of welfare states, they don’t like to pay tax and generally loathe public services, prioritising private property rights above all else. Individual liberty and personal responsibility are their mantras.

However, they do like the idea of enforced hierarchical power structures. David Cameron identified himself as a libertarian paternalist, implying a change in direction for his party. He also claimed the brand of red toryism, though this interpretation of ‘compassionate Conservatism’ was a rhetoric style only, rather than a change in policy direction. That has remained staunchly neoliberal. 

Noam Chomsky has criticised neoliberal ideology as being akin to “corporate fascism” because all methods of public control are removed from the economy, leaving it solely in the hands of authoritarian corporations.

Chomsky has also argued that the more radical forms of right-libertarianism are entirely theorectical and could never function in reality due to business’ reliance on government infrastructures and subsidies. Yet many right-libertarians claim big business is “a great victim of the state”, and with a straight face. 

Neoliberalism can be seen as a system of reforms that directly enables corruption and the unbridled pursuit of private rather that public interests. Neoliberalism also hides corruption in plain view, by the use of divisive narratives that justify greed, wealth and privilege on the one hand, and inequality, growing povertyon the other. This is based on flimsy and simplistic notions of meritocracy –  incongruent notions of “deserving” and “undeserving” lie at the heart of these narratives, along with prescribed, discrete, class-differentiated systems of “incentives” embedded in policies that ensure wealthy people are rewarded and poor people are punished have become normalised.

In David Milner’s words “corruption was deliberately introduced to serve particular (class) interests.”

Last year, The EU announced an investigation into a British government scheme that provides a loophole to help multinational companies pay less tax. The inquiry centres on a change to the UK’s “controlled foreign company” rules announced by the then chancellor, George Osborne, in 2011. The new rules were described by one expert at the time as a huge change, which meant companies could assume they were exempt from the anti-avoidance rules unless specifically caught. 

The rule change, which came into effect in 2013, means a multinational company resident in the UK can lower its tax bill by shifting some taxable income to an offshore corporation, known as a “controlled foreign company”. CFCs are offshore subsidiaries that multinationals use to move capital around their global operations.

Although CFCs are not illegal, the European commission believes that the UK breaks EU competition rules, by giving an unfair advantage to multinationals, compared with British companies without foreign subsidiaries. HMRC revealed last year that multinationals avoided paying £5.8bn in taxes in 2016, some 50% more than government forecasts. This figure, which was reported by the Financial Times, does not include treasury losses from changes to the CFC rules that are now being investigated by the European commission.

Hidden in plain sight

Recent research has uncovered around 85,000 properties across the UK that are “secretly owned” by companies incorporated in UK tax havens, including more than 10,000 alone in the London Borough of Westminster.

Campaigners are calling for a property register aimed at lifting the shroud of secrecy, to be put in place sooner than the date the Government has earmarked for its implementation, which isn’t until 2021.

Transparency International is a civil society organisation leading the fight against political corruption. In November last year, they published a report – Hiding in Plain Sight. It outlines Transparency International UK’s analysis of 52 cases of global corruption – amounting to £80 billion – and found hundreds of UK registered shell companies at the heart of these scandals. At the same time the UK’s system to prevent this abuse is failing.

The recent research found 766 companies registered in the UK that have been directly involved in laundering stolen money out of at least 13 countries. These companies are used as ‘layers’ to hide money that would otherwise appear suspicious, and have the added advantage of providing a respectability uniquely associated with being registered in the UK.

Transparency UK’s evidence has indicated that this is no accident. The UK is home to a network of Trust and Companies Service Providers (TCSP’s) that operate much like Appleby and Mossack Fonseca – companies at the heart of the Paradise and Panama Papers – who create these companies on behalf of their clients.

TCSPs register these companies to UK addresses, which are often nothing more than mailboxes. This has created ‘company factories’, where thousands of companies can be registered to unoccupied buildings with little to suggest any meaningful business occurs. We found half of the 766 questionable companies we identified were registered to only 8 separate addresses – in one instance a run-down building, next to a bank on Potters Bar High Street.

The recent Manafort indictment in the US also revealed that one of the companies alleged by the FBI to have been used to launder money was registered to a house in North London.

Duncan Hames, Director of Policy Transparency International UK, said:

“As fingers point to jurisdictions like Panama and Bermuda, it shames the UK that companies are being set up under our noses, with the sole purpose of laundering illicit wealth; money very often stolen from some of the poorest populations in the world, starving them of vital resources.”

“The UK is home to industrious company factories from which unscrupulous individuals provide the corrupt with the means to hide their ill-gotten gains. The UK should recognise it has its own Applebys and Mossack Fonsecas here on our doorstep.”

Weak Defences

With the UK as a destination of choice for those seeking to hide illicit wealth, the UK’s own defence mechanisms have proven to be woefully inadequate. Just six staff in Companies House are charged with policing 4 million companies, TCSPs have a poor track record of identifying and reporting money laundering with only 77 of the 400,000 suspicious activity reports filed last year coming from this sector.

Meanwhile TCSP’s can set up companies in the UK even if they are not registered or based here. This means they avoid being subject to UK regulation, and instead are bound by local laws, which are often unenforced or so weak as to be ineffective.

Duncan Hames said:

“Since the Panama Papers the UK has made some progress in targeting corrupt money but in a complicated and global system it’s often the case that as one area of weakness is addressed, more are discovered by those intent on channelling dirty money. Approaching Brexit it’s essential that the UK sends a clear signal that it won’t be a laundromat for corrupt individuals from around the world. It could start by ensuring it properly resources those who are meant to be our first line of defence, such as Companies House.”

Key Stats:

  •  766 UK companies involved in 52 corruption and money laundering cases worth up to £80 billion
    • Those 766 companies could have cost a total of just £15,000 to set up
    • One quarter of these are still active today
    • Half of these registered to just 8 different addresses
  • Just 6 staff in Companies House police the integrity of some 4 million UK companies
  • TCSP’s filed just 77 of the 400,000 suspicious activity reports last year, which are designed to flag possible money laundering.

Key recommendations:

  • Prohibit non-UK registered agents from setting up companies to avoid TCSPs with no presence here, circumventing UK anti-money laundering checks
  • Use financial incentives to encourage UK companies to hold a UK bank account, discouraging the use of offshore bank accounts
  • Provide Companies House with sufficient resources to identify suspicious activity
  • UK Government should seek to apply a “failure to prevent” approach to money-laundering, meaning TCSP’s are held more accountable for forming companies that are used to launder money
  • Overhaul the UK’s anti-money laundering system.

Existing legislation

The main legislation governing bribery and corruption in the UK is Labour’s Bribery Act, 2010. 

Initially scheduled to come into force in April 2010, this was changed to 1 July 2011, having been delayed twice following objections from, among others, the Confederation of British Industry. The Act repeals all previous statutory and common law provisions in relation to bribery, instead replacing them with the crimes of bribery, being bribed, the bribery of foreign public officials, and the failure of a commercial organisation to prevent bribery on its behalf.

The penalties for committing a crime under the Act are a maximum of 10 years’ imprisonment, along with an unlimited fine, and the potential for the confiscation of property under the Proceeds of Crime Act 2002, as well as the disqualification of directors under the Company Directors Disqualification Act 1986.

The Act has a near-universal jurisdiction, allowing for the prosecution of an individual or company with links to the United Kingdom, regardless of where the crime occurred. It was originally described as “the toughest anti-corruption legislation in the world” , however, some have raised concerns that the Act’s provisions may criminalise behaviour that is acceptable in the global market, and puts British business at a competitive disadvantage. 

Guidance on the Bribery Act, released by the Ministry of Justice, included wording that could exclude some foreign companies listed in London from prosecution. Foreign companies that have subsidiaries in the UK could also escape the Act’s power.

One of the key aspects of the Bribery Act was its ability to catch both UK and foreign companies engaging in bribery anywhere in the world. The condition for the act to apply to foreign companies was that they had a business presence in the UK. Through the guidance on the Act the Ministry of Justice created what many see as a loophole that could insulate some foreign companies from prosecution.

In April 2016, the UK government published its action plan on anti-money laundering and counter-terrorist finance, setting out steps to address such risks and resulting in the commissioning of the Criminal Finances Act 2017 (the “Act”), which received royal assent on 27 April 2017. The Act came into force on 30 September 2017.

However, despite it being widely anticipated that a new offence would be created – of corporate failure to prevent economic crime (which would have incorporated the failure to prevent fraud, money laundering and false accounting) – disappointingly, the Act has not included this offence. It does, however, include two new corporate criminal offences for the failure to prevent the facilitation of tax evasion, whether in the UK (Section 45) or abroad (Section 46). 

The Deferred Prosecution Agreement waters down the Bribery Act

In 2015, a landmark decision – the first Deferred Prosecution Agreement (DPA) was approved at the Royal Courts of Justice, by Lord Justice Leveson. The DPA was introduced as a means of alternative disposal following a criminal investigation into a corporate organisation back in February 2014, under the Crime and Courts Act 2013. It is only available to the Directors of the Crown Prosecution Service (CPS) and the Serious Fraud Office (SFO).

Under a DPA, proceedings are automatically suspended following charge, on the agreement that negotiated terms (which must be approved by the court) will be performed by the company. If the conditions are not complied with, then prosecution proceedings may be commenced. In order to enter a DPA the prosecutor must be satisfied that both the evidential test and the public interest test, as set out in the SFO DPA Code of Practice has been met.

The SFO reported that the DPA approved related to an SFO prosecution against Standard Bank Plc in relation to the alleged bribery of Tanzanian Government Members.  Standard Bank Plc were indicted under section 7 of the Bribery Act 2010, for alleged failures to prevent bribery. Money talks and criminals walk.

As part of the DPA, Standard Bank paid US$25.2 million in financial orders and US$7 million in compensation to the Government of Tanzania. The bank also agreed to pay the SFO’s reasonable costs of £330,000 in relation to the investigation and subsequent resolution of the DPA. The bank’s fines were reduced by a third, because it brought the matter to regulators, and the agreement requires the continued cooperation of Standard Bank Plc with the SFO.  They will be subject to an independent review of its existing anti-bribery and corruption controls, policies and procedures regarding compliance with the Bribery Act 2010 and other applicable anti-corruption laws.

David Green, the SFO director, said: “This landmark DPA will serve as a template for future agreements. The SFO contends that this was not a private plea “deal” or “bargain” between the prosecutor and the defendant company. The agreement offers a way in which a company can account for its alleged criminality to a criminal court.  It has no effect until a judge confirms in open court that the DPA is in the interests of justice and that its terms are fair, reasonable and proportionate. DPA’s are intended only to be used in exceptional circumstances and allow investigators and prosecutors to focus resources on those cases where a prosecution is required.” 

In 2016, ‘XYZ Ltd‘ became the SFO’s second DPA , which was concluded with the unnamed SME (Small and medium-sized enterprises), referred to only as XYZ Ltd due to ongoing proceedings. The company agreed to pay a total of £6.5m, including a financial penalty of £350,000 and disgorgement of profits of £6.2m of which a significant proportion was paid by the company’s US parent. 

The Rolls Royce DPA, was something of a surprising landmark in the SFO’s approach to dealing with the most serious bribery cases. The judge himself commented that the appropriateness of a DPA in a case of such “egregious criminality over decades” and involving vast sums in corrupt payments could be seen as surprising, begging the question as to whether there was any future for criminal prosecutions for bribery.

Other commentators accused the SFO of a failure of courage in offering a DPA instead of taking the case to trial.  Sir Brian Leveson QC, the president of the Queen’s bench division of the high court, said the case raised questions about whether it would ever be in the public interest to prosecute a company as big as Rolls-Royce.

“My reaction when first considering these papers was that if Rolls-Royce were not to be prosecuted in the context of such egregious criminality over decades, involving countries around the world, making truly vast corrupt payments and, consequentially, even greater profits, then it was difficult to see when any company would be prosecuted,” he wrote in his judgment.

The DPAs seem to be “the new normal” for bribery cases, but the SFO claim this is so only where the company demonstrates an exemplary response to rooting out ‘the problem’ and assisting the SFO in its investigation, which the judge in the Rolls Royce case acknowledged had been the case. (See UK Anti-Bribery Newsletter –
Spring 2017 from Travers Smith).

In the case of Rolls-Royce, Robert Barrington, the executive director of Transparency International, said the SFO had presented “a poor case” for the DPA, saying: “This gives the impression that Rolls-Royce is too big to prosecute.”

He added: “There was talk about pensioners and employees, but no mention of the victims of corruption. The poor case could have been offset by details about the prosecution of individuals, but there was nothing about that. If these are not the circumstances for a prosecution, then what are?”

It seems that now, even the law is also open to market forces. People and organisations that have clearly broken the law can simply pay to sanitise their corruption and launder their reputation.

In the UK market economy, everything is for sale, with the wealthiest citizens finding considerable discounts on moral obligations and behavioural ethicality. It’s become very easy to lose track of why some things simply shouldn’t be. The Conservative’s privatisation programme has proved to be a theme park for economic crime and party profit; firms and politicians collude to ensure we have the ‘best’ system that money can buy. 

We hear a lot from the right about how the market place extends liberty, but there is little discussion about the fundamental imbalance built into the system that has systematically disempowered many others who can’t afford to pay for their liberty. Or their legal fees and penalties. The market place is not neutral. It’s a place that where class discimination is rampant, traditional power relations are fortified and morally constrained behaviour is only ascribed to and required from the poorest citizens. All of this has profound implications for democracy. 

The wake of scandals to date, in which large corporations, politicians, and bureaucrats engage in criminal activity in order to profit personally, facilitate mergers and block competition; in which officials accept private payments to facilitate private interests, and for public services rendered, demonstrates only too well the extent to which corruption is driven by the very economic and political reforms that are claimed to decrease it.

 

Related

Conservatives for hire: cashing in on Brexit

The Link Between Money And Corruption Is More Insidious Than We Thought

HIDING IN PLAIN SIGHT: HOW UK COMPANIES ARE USED TO LAUNDER CORRUPT WEALTH

The Paradise Papers, austerity and the privatisation of wealth, human rights and democracy 

 

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