Tag: Lobbying

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 interdependence of the PR industry and neoliberal Conservative governments

The PR industry arose to promote and protect private interests in neoliberal economies

Public Relations (PR) and propaganda are key mechanisms by which power and influence are won (and lost). PR consultancies are also behind significant victories on behalf of big business, resulting in a tilted, biased market. PR emerged as a distinct discipline as a result of threats to the interests of business and government along with a ‘promotional culture’. 

Evidence indicates that PR arose rapidly in tandem with neoliberal policies. Those countries with the most marked privatisation and deregulation from the 1980s onwards – the US, the UK and Japan – had the largest PR industries. By contrast, countries such as France and Germany, which retained significant elements of consensus-based policies and state investment in industry, have much smaller PR industries. The global PR industry is dominated by a few big players, most of which are US or UK in origin and
ownership. 

Relative size of PR agencies in Europe, the US and Japan:

PR US Japan Eu

The expansion and power of Trans National Corporations (TNCs) relative to nation states has been a key spur to the development of communications conglomerates, which provide a full range of ‘promotional’ services and aspire to a global reach.  TNCs’ influence over the policy making process by entering an international market place has also led to a globalising of  the PR industry.

Multinational corporations, particularly in the US, and increasingly in the UK, look for global PR agencies who can operate adaptably and locally, wherever they are needed. 

The consensus in British politics was based on a compromise between organised labour and capital, which was founded on the post war 1945 settlement. This did secure real and significant democratic advances for ordinary citizens in the shape of the NHS, the welfare state, universal education, significant public ownership of utilities and heavy industry and, partly as a result, some amelioration of inequality in wealth distribution.

The end of the consensus in British politics during the New Right era ushered in more competitive politics in which traditions were displaced by a neoliberal tilt to the market in government policy. The crisis of the consensus shifted decisively with the 1979 election of Margaret Thatcher’s government which favoured the role and ‘right’ of employers to ‘manage’, with government rolling back state mediation.  

During the Thatcher era, changes in the communication strategies of the nationalised industries were crucial to the changed relationships between management and workers.  Controversial government actions and policies also led to a vast increase in PR spending by governments and by corporations in their attempts to influence government policy.

Fundamental to this is the relationship between PR, lobbying, and neoliberalism, (particularly the privatisation of national assets and the deregulation of business and service provision in state institutions). There are several parts to this relationship which are interrelated and in some respects, mutually reinforcing. These include:

Lobbying and preparation for deregulation,
• Spending on privatisation by government/nationalised industries,
• Spending by newly privatised companies,
• Spending on promotion by industries and professions following
deregulation,
• Increased spending on PR in the new business climate created by the
deregulation of the City. 

Conservative policies could not work without the PR industry and the PR industry would not have developed in the spectacular way it did without consecutive Conservative governments. The British privatisations of the 1980s were instrumental in the rapid  expansion of the PR industry. Once industries are privatised, PR, corporate identity consultants and advertising are needed to promote the private interests of the companies and as a part of their strategic armoury to create positive public images of them. By the 1990s, accountancy firms also routinely employed lobbying firms.

Lobbying increased deregulation which increased PR spending by encouraging financial institutions to market themselves, and by ‘selling’ the marketing. Nowadays there are no matters for business, government or private interest pressure groups that have not been first addressed by promotional professionals, which has made, in turn, further contribution to shaping economic-political life and profoundly reduced the quality of our democracy. 

PR consultancy and neoliberal ideology are intimately connected, the role of PR has facilitated an institutional corruption in British governance.

The rise of political branding and marketing, where the primary development involves the way political candidates, parties, government, lobbyists and groups have borrowed communication techniques from the private sector in the attempt to achieve
strategic objectives like gaining votes, driving public opinion or influencing legislation, is generally regarded to be an Americanisation of campaigning in the UK.

However, the identifiable practices like negative advertising, personalised politics, and high pre-election campaign expenditures are generally more about maintaining a neoliberal status quo, and these methods are a ‘whatever it takes’ approach that are subsequently exported in a pre-packaged box of persuasion techniques to other countries. Political identities are being constructed rather than given, policies are presented on showroom dummies, dressed up in techniques of persuasion. Yet there is evidence to suggest that overexposure to this kind of window dressing and made over political coverage has contributed towards widespread political alienation.

Image result for pr and democracy

The rise of political marketing with its techniques of ‘spin’, selling and persuasion may have somewhat undermined the credibility of political leaders and institutions,  with the elevation of style over content and image over substance, along with a concomitant  ‘brand and package’ pack mentality political journalism, ultimately leading to hardened public cynicism. We are after all, inhabiting a world dominated by PR operations that leave little place for objective reporting. Every message that the public receives is “sponsored” by someone trying to sell us something – be it a product, a service, a candidate, a government or a legislative act.

The content of the messages is calculated to generate superficial and shallow emotive responses rather than inspiring deliberative, rational and critical thinking. 

It wouldn’t be such a stretch to imagine that, in addition to the reductionist and glib sloganisation of politics, the normalised use of  emotive, negative and ‘attack’ Conservative political advertising may in fact demobilise the electorate, too.

The Conservatives in the ‘war room’ – a case study

The UK Policy Group is the UK branch of a notorious US political organisation – Definers Public Affairs – which has worked for Donald Trump’s administration and has aggressively targeted his critics. The company boasts: “What sets us apart is our focus on political-style research, war room media monitoring, political due diligence and rapid response communications.

“We help our clients navigate public affairs challenges, influence media narratives and make informed decisions to disrupt crowded markets.

“The global political, policy and corporate communications landscapes are evolving rapidly. Decision makers need high quality research to make informed decisions and need relevant content to drive the court of public opinion and provide context to shape decisions by policymakers.

“With affiliates in Washington, D.C., and Silicon Valley, UK Policy Group employs some of the best communicators, researchers and media analysts as part of our team.”

The Conservatives have outsourced their “research” to the UK Policy Group, privatising their dirt digging and smear campaigns. 

US lobbying firm Definers Public Affairs was founded by Mitt Romney’s 2012 presidential campaign manager, Matt Rhoades and former Republican National Committee research director Joe Pounder. Rhoades and Pounder are also directors of UK Policy Group.

Definers made headlines in December 2017 when it was paid US$120,000 in a no-bid contract by the United States Environmental Protection Agency (EPA) to build up dossiers of compromising information on “resistance figures”, opposed to the policy agenda of Scott Pruitt, and Donald Trump, the man who appointed him. Definers cancelled the contract in short order after its activities were exposed. 

UK Policy Group was originally called, and registered with Companies House as, ‘UK Rising’. Rhoades and Pounder are co-founders of America Rising, a political action committee (PAC), that specialises in helping [Republican] party candidates and Conservative groups find damaging information on political rivals. Both companies “craft convincing narratives and focused messaging”.

The expansion by Definers Public Affairs came at a time when US lobbying firms were eyeing UK expansion in anticipation of flood of Brexit-related work.

UK Policy Group’s website unambiguously states it works for ‘corporate clients’, however, not a single one of those running the company has a significant private sector background. In fact, each of the five individuals standing alongside Pounder and Rhoades is intimately connected with the Conservative Party.

Former government officials are advising this highly controversial company. The UK company’s vice president is Andrew Goodfellow, who was the Conservative Party’s director of policy and research. He specialised in ‘opposition’ research.

James Caldecourt was previously a Political Adviser in the Conservative Research Department, also specialising in ‘opposition’ research, and was part of George Osborne’s team while he served as Chancellor of the Exchequer 2010 — 2015. He has worked on several national election and referendum campaigns in political, policy and operational roles. Louis McMahon worked for two tears for two Conservative government ministers, and previously co-authored a criminal justice report for the Center for Social Justice think tank, founded by Conservative MP Iain Duncan Smith MP in 2004.

Ameet Gill, who was the former director of strategy Number 10 and founder of lobbying company Hanbury Strategy, is providing consultancy to the firm. Official documents reveal that David Cameron ’s former director of strategy, Gill, was given permission by parliamentary authorities to accept a contract advising the firm through his political strategy company Hanbury Strategy. Pelham Groom, a company director, was previously head of ‘media monitoring’ for the Conservative Party. Chris Brannigan, Theresa May’s former Director of Government Relations is also a member of the group’s advisory board. Rhiannon Glover is an analyst, formerly, the late duty press officer for the Conservative Party and researcher in the office of Nick Hurd.

The company is also partnered with Trygve Olson, of Viking Strategies, who advised the European People’s Party in the 2009 EU elections and worked as a consultant to the Republican Party in the US.

The company says: “We offer our clients an end-to-end system of research on issues and opponents, monitoring the news cycles, and shaping narratives via rapid rebuttal communications.

UKPG provides our clients with unparalleled campaign-style research as the foundation of driving informed decisions that allow them to shape public opinion, and impact outcomes.”

The company employs people to find damaging information on political rivals. Scrutinising the personal histories, online videos and posts of Labour Party candidates, the company collects dossiers of potential discrediting and smear material to be handed to the Conservative Party. It’s understood that the information is then handed to right-wing websites and newspapers to construct narratives and add a veneer of evidence to negative articles.

The company expansion by US-based company Definers Public Affairs came at a time when US lobbying firms were eyeing UK expansion “in anticipation of flood of Brexit-related work, using their capacity to influence the national news cycle’ and as a ‘master of opposition research”. 

Ian Lavery MP, Labour Party Chair, said: “I am disappointed but not surprised to hear that in an attempt to deflect from their total lack of direction and policy, the Tories are reduced to digging low and dragging British politics through the gutter, in the desperate hope that they may find some salacious morsel.

“This kind of base mudslinging has no place in British democratic debate, and deflects from the real issues facing people today. It is time that Theresa May stops spending money and effort on these tactics and focuses on policies to improve the lives of those who have suffered because of her government’s heartless policies.”

It may be argued that there are communications requirements of modern democracies. However, a representative democracy requires that political communication is dialogic – it flows in both directions between government and people. In fact that is a prerequisite. Instead we witness a manipulative neoliberal monologue from the current administration.

Neoliberal Conservative governments and the PR industry are very closely aligned, each profiting from the other. The condition of the spectacular growth of the PR and lobbying  industry was to facilitate and profit from the marked redistribution of wealth from the poorest citizens to the rich, establishing, elevating and securing the prioritisation of the private interests and power base of the 1% over and above – and at the expense of – public interests.

Image result for pr and democracy chomsky

 


 

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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