where has this country's wealth all gone?
our nation is blighted by economic misery and social exclusion
2.5 million people unemployed
1.5 million working part-time but would like a full-time job
youth unemployment heading towards one million
graduate unemployment around 20 per cent
13.2 million people living in poverty
including 2.8 million children and 1.8 million pensioners
the state pension the lowest in western europe
15 per cent of high street shops empty
and the government’s austerity measures set to deepen the misery
the stark reality of the world’s sixth largest economy
so where does all the wealth go?
gdp has grown from £621 billion in 1976 to £1,318 billion now
but has not been accompanied by equitable share for workers
in 1976 workers' salaries and wages accounted for 65 per cent of gdp
in the wake of mass privatisations,
the demise of skilled jobs in the manufacturing sector
and the weakening of trade unions
this share fell to 53% of GDP in 1996
after the introduction of the minimum wage
and expansion of the public sector
workers’ share rose
now it's falling again and stands at 55%
wage freezes and loss of pension rights are imminent
the government is reviewing employment laws
which will further shrink workers’ share
of the 200,000 new jobs created in the last year
only 3% are full-time
and many do not give employees rights to pension, sick pay or holidays
all this tells only part of the story
because corporate execs have taken the largest slice of the shrinking pie
between 1997 and 2008 under tory blair
income for the top 0.1 per cent of the population grew by 64%
while that of an average earner increased by just 7%
a typical FTSE 100 exec is on a pay package of £3.7 million
nearly 145 times more than the average worker
these trends have resulted in 50 per cent of the population
owning less than 1 per cent of the national wealth!
with a wealth of £4.2 billion sir fill-up green is the 13th richest person
many of his employees still receive the minimum wage
the state has not collected a higher share of the gdp in taxes
to allow it to redistribute wealth
in 1976-77, taxation took 43% of gdp
now it is 37%
this is one of the reasons behind the brutal public expenditure cuts
and loss of welfare rights
the public share of taxes has declined even though more people are in work,
there are more billionaires than ever before
and the corporate sector enjoyed record profits before the recession
corporations have been the biggest beneficiaries of government policies
as successive governments have shifted taxes away from capital
to labour, consumption and savings
hikes in VAT and NI contributions are a reminder of this major policy shift
income tax personal allowances have not kept up with inflation
successive governments have been engaged in a race to the bottom
and have appeased the corporate lobby by reducing corporate taxes
in 1982 the rate was 52% of taxable profits
by 2007 it fell to 30%
it is set to be reduced again to 23% by 2014
and corporations are demanding even lower taxes!
what abou the amounts they should be paying?
corporations & wealthy elites have become very adept at shifting incomes and profits by using opaque structures and schemes to avoid taxes
boots the chemist now has its headquarters in switzerland
to enable it to avoid british taxes
google dominates the internet and its revenues have soared to £6.35 billion
but the company is estimated to have paid only £8 million in corporate tax
the uk is home to a destructive global tax avoidance industry
headed by major accountancy firms kpmg, pricewaterhousecoopers et al
economic models suggest tax avoidance may be losing us £100 billion a year in tax
this has reduced the tax take, increased the national debt
and threatened hard-won welfare rights
this distribution of income and wealth will not help a sustainable economic recovery
ordinary people spend money on everyday things such as food, transport and clothing and generate a greater effect
compared to the concentration of wealth in relatively fewer hands
yet the uk trend has been in the wrong direction
there is no evidence that feeding fat cats percolates wealth downwards
the obsession with reducing corporate taxes has not been matched by any boom
in private sector investment and jobs
too many already make ends meet by borrowing
one of the factors behind the banking crisis
yet the government has learned nothing
rather than redistributing wealth or pursuing progressive taxation policies
it expects ordinary people to take on even more borrowing to stimulate demand
personal household debt is already £1.6 trillion
bigger than gdp and the largest per capita in europe
the government expects it to reach £2.1 trillion by 2015
there is so sign of a sustained attack on organised tax avoidance
or broadening of the tax base by considering financial transactions tax,
mansion tax, wealth tax, monopolies or land value tax
these are the economics of a madhouse
and the lunatics are running amok!
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