David Craig, on June 12th, 2015I don’t know how the recession has affected you. It could be negatively. You might have lost your job or else know people who have. You might have seen prices rise much faster than your earnings. You might have found you get little to no interest on your savings. You, or people you know, may have felt themselves forced by low interest rates on savings to move money out of safe savings accounts into risky stock-market investments or unit trusts. You might have bought an annuity at pathetically low interest rates. You, your children or grandchildren may be getting milked by usurious university fees.
Or you might not even be aware of the effects of the recession as they’ll have affected you indirectly through fewer public services – police, doctors, hospitals, social services all being squeezed – due to lack of money as billions of your taxes were handed over to over-paid, over-bonused, incompetent, greedy bankers.
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Alternatively, you might have had a wonderful recession – your mortgage payments may have dropped sharply; your home may have shot up in value due to the housing crisis caused by 46,000 immigrants coming to Britain every single month for the last 15 years;�you might even have built up your own little buy-to-let empire to profit from the housing crisis; your shares may have risen if you bought any time during 2008 to 2015; or you might have got a better-paid job in the post-2012 recovery.
If you’re very rich indeed, you’d have had an excellent recession.
In 1990, you needed just �50 million to make it into the top two hundred in the Sunday Times Rich List. By 2008, you had to have �430 million to join this august group. By 2012, in spite of the recession, the entry level into the top two hundred had crept a little higher to �450 million.�And by 2015, you�d need closer to �550 million to be in the top two hundred.
Even the comfortably rich seem to have nonchalantly shrugged off the economic chaos engulfing the rest of us. In the last ten years, take-home packages of FTSE100 executives trebled from an average of �1.5 million to around �4.8 million. Yet in the same period, the value of most of the companies they managed declined.
And if you’re a politician, you’d have earned so much from thieving your expenses and doing second, third and fourth jobs on the side, while pretending to represent your constituents, that you’d be pretty stupid if you weren’t a multimillionaire.
In fact the rich, the super-rich, the mega rich and the hyper rich have never had it so good. The share of British national income taken by the top one per cent of earners was a little under twenty per cent just after the First World War. This fell to just above six per cent by the mid-1970s as the economy grew, more people became more prosperous and successive governments sought to reduce inequality by taxing the rich more and distributing more of national income to the deserving and undeserving less well-off. But over the last thirty years, the share of income taken by the top one per cent shot rapidly upwards. By the 2007 economic collapse it had reached 1918 levels. Since the crash, it has gone even higher:
If you want to find out if you’re amongst Britain’s super-rich, rich, comfortably off or struggling poor, the Institute for Fiscal Studies has an on-line tool you can use. All you need to input are your annual household income, your council tax and the number of people in your household. You don’t need to input your name or any personal details. Here’s the link if you want to have a look �http://www.ifs.org.uk/wheredoyoufitin/
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It’s the struggling middle, as always, who’ve come off worst. Ripped off post retirement by Equitable Life with an annuity which now pays out less than half what it did 18 years ago and in receipt of a miniscule Public Service pension which rises by around �5 gross p.a., I am one of the millions whose main source of retirement income is now the State pension. All this year’s rise in the latter has been taken away by increased income tax on my annuity, since people over 65 are not currently benefitting from annual increase in tax allowance. Such small savings as I now have are, because of derisory interest rates, worth far less in real terms than a decade ago. And despite all the manipulated figures which Government produces, we ordinary folk KNOW that prices for all essential items continue to rise. Essential services – water, phone, broadband, domestic fuel – rise relentlessly each year and there has been no discernible reduction in food prices where I live. I could go on, but we all know anyway. The rich get richer, despite cuts in benefits the idle and feckless seem able to afford their fags, booze and smart phones, and those of us who are of fixed abode, own that abode (which we shall have to sell in order to pay for long-term care in our final years) and are in receipt of regular income, however small, pay for the rest. Our children will have to work until almost 70 before drawing a pension and the brightest and best of our grandchildren, the doctors, dentists, scientists, mathematicians, of the future will be in hock to the State into middle-age in order to pay for the education which today’s politicians received free.
A quick look down the list of Britain’s richest people shows hardly anybody who could be called a wealth creator. There are exceptions such as James Dyson but most of them made their fortunes either by pushing money around or selling other people’s stuff.
So it is hard to justify such rewards on the basis that they provide a vital service to the rest of us and even harder to justify government intervention and rigging of the financial system that gaurantees any stupid decisions they may make do not become a problem…at least not for them.
At the other end of the scale, I don’t suppose members of the ever-expanding Benefits class are enjoying particularly fulfilling or rewarding lives even if some of them appear to afford luxuries the rest of us consider excessive.
All of which leaves the few left in the middle getting screwed ever more until we are all in the Benefits class or perhaps lucky enough to work for the government.