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The Mayor's 'Good Work' standard must include fair pay and tax transparency

Several My Fair London activists worked together over the summer to respond to the Mayor's call for evidence on a proposed 'Good Work' standard for London employers. Drawing on evidence that narrower gaps between high and low paid staff are good for staff motivation, and that greater pay equity is good for productivity and innovation, we suggested that any employer being commended by the Mayor as a good London employer should as a minimum be transparent on what is paid to all its employees and have a relatively narrow gap between the highest and lowest paid workers.

In our 2016 manifesto to the Mayor we called for him to work towards a maximum ten to one ratio between highest to lowest paid as a target to aim for for London. We copy below our response to the Mayor.

The consultation is still open and you can send in ideas and comments until 18 September. Visit https://www.london.gov.uk/what-we-do/business-and-economy/making-london-best-city-world-work?source=vanityurl for more information.

My Fair London Response to Call for Evidence on the Mayor of London’s Good Work Standards

Introduction 

We are pleased to respond to the Mayor of London’s ‘Good Work Standards’ consultation paper. We have broken down our response into two sections; a general commentary on the main content followed by specific answers to questions posed in the paper. We would be delighted to meet with members of the Mayor’s team to discuss our response more fully or to contribute in whatever way we can to help him develop this programme. The Mayor’s commitment to “exemplary standards in pay and employment rights for workers” is very welcome. Overall we welcome the proposal for a ‘Good Work’ standard for London. In order to become a real beacon of good employment practices and change business practice across London the Good Work standard will need ongoing political support, and sustained investment.

General Comments

Overall we believe that the paper sets out an attractive and compelling vision of what a new compact for work might look like.  We strongly support efforts to persuade London businesses to become better employers. There is good evidence that extreme disparities in pay rates within companies are harmful in a variety of ways. High levels of economic inequality, and unjustifiably large rewards at the top of the income distribution are unfair, unnecessary and harmful to society in general and to businesses individually.  We would argue that any company that is rewarded with recognition as an ‘exemplary’ employer could not, by definition have wide pay ratios between its highest and lowest paid employees.

We believe that the planned Good Work Standards could be strengthened in the following ways: 

  • Page 2: There is mention of discrimination and disadvantage and the need to address a number of ways in which unfairness manifests itself. However wealth and income inequality is not explicitly mentioned and we believe that the case could be strengthened by making more explicit reference to the proven links between high levels of economic inequality and poor health, social and economic outcomes. (https://www.equalitytrust.org.uk/about-inequality/impacts)
  • Page 3: In terms of the goals of a Good Work Standard, in addition to the London Living Wage, excellent working conditions and fair treatment (including appropriate use of zero hours contracts), we suggest that explicit mention should be made of the need for issues such as tax avoidance (ie how good companies pay their fair share), publication of pay rates, pay differentials and or wage ratios, and transparent management of executive remuneration to be included as accreditation criteria for the best employers. Also in the list of ‘development goals’ we believe that contractual arrangements should be explicitly addressed as a separate bullet point in order to ensure that employees are provided with appropriate levels of employment security and certainty.

(On the remuneration/reward issues see the joint High Pay Centre/CIPD response to Government from February 2017 http://highpaycentre.org/files/CIPD_and_HPC_response_to_BEIS_Green_Paper_on_Corporate_Governance_%281%29.pdf)

  • Page 4: To this end we would suggest that the figure 1 model be amended to include two further bullets: ‘secure employment contracts’ and ‘published pay ratios’, in addition to the London Living Wage and Excellent Working Conditions bullets. We would also suggest that model could be broadened. Good Work results when the following conditions underpin it:
    • Good job design – jobs that provide meaningful and fulfilling employment opportunities
    • Engaged employees – employees who feel a sense of commitment and dedication towards the organization, their job and their colleagues
    • Enlightened leadership and management – who understand that engaged employees are a critical factor in economic and business success and who demonstrate the appropriate leadership styles and behaviors
    • An enabling culture – an organizational environment that encourages and stimulates everyone to give of their best

Further we would suggest that extremely high pay inequality in any company is incompatible with having ‘excellent working conditions’. Unfairness in terms of excessive rewards at the top will undermine other efforts to improve productivity, motivation and morale.

  • We don't know whether the Chartered Institute of Personnel Development (CIPD), IPA -Involve or the Engage for Success (E4S) movement are involved in the consultation process but we recommend that their views and expertise is sought in this regard. We can effect introductions if necessary.
  • There is no reference to the way in which technology will impact on job design and work – perhaps the Mayor of London could instigate a working group to study the effects of changes in technology in different sectors and identify what support is required in order to balance employment, business needs and social consequences.

 Answers to Specific Questions

 Q1: we would add goals regarding leadership / management quality and employee engagement measures. Also the negative links between bonus/ financial reward based business cultures and innovation and productivity. (See for example Kahneman, D., ‘Thinking Fast and Slow”, 2011 for exploration of the negative impacts of simplistic rewards on human behaviour and team functioning.)

Q2: public exposure / reputational risk for those organizations that do not meet the Good Work Standards, economic risk through failure to secure contracts. A ‘good work’ standard alone will have little impact on the major structural social and economic factors that have undermined social mobility – increased economic inequality being the most powerful factor.

Q3: Fair treatment would include transparency on pay rates within an organization, with pay rates published and pay ratios calculated and reported.

Q4: zero hours and short-term contracts, highly geared remuneration packages (ie low base pay, high variable pay by results), excessive, unjustified rewards for senior managers.

Q5: Professor Bruce Raynton’s research for the Engage for Success movement provides an excellent business case http://engageforsuccess.org/wp-content/uploads/2015/09/The-Evidence.pdf

Q6: recommend consulting CIPD or E4S for further evidence

Q7: short term financial targets, intransigent mind sets, lack of awareness of business benefits / risks, lack of knowledge and support about how to design and implement (particularly around management capability), for SMEs lack of capacity to commit and monitor against standards that are too onerous.

Q8: pay transparency, adoption of living wage, publication of pay ratios, adoption of engaging management practices, focusing on positive work cultures. It maybe difficult to create a single standard that all businesses, large and small, can meet.

Q9: demonstrate business case and competitive advantage that will result, greater access to labour market / talent ie ability to recruit the best people, potential financial ROI, raise the Standard’s profile, summarise the personal and wider negative social and economic costs of inequality (See for example ‘The enemy between us: The psychological and social costs of inequality’, European Journal of Social Psychology,  2017 (http://onlinelibrary.wiley.com/doi/10.1002/ejsp.2275/full).

Q10: public awards, ‘Kite mark’, London league tables, celebrate the best employers .

Q11: meeting GWS standards as criteria for public sector tenders, persuade other large public sector employers to adopt (NHS, education etc)

Q12: My Fair London would welcome the opportunity to participate in judging leading employers, and in celebrating the achievements of those employers creating fairer employment practices. We hope that this scheme develops into a widely recognized and sought after ‘fairness’ kite mark, similar to some of the most successful environment quality standards (FSC for example).

 

 

 

Inequality and the Grenfell Tower fire

Kensington and Chelsea has the largest gap between rich and poor of any local authority district in the country. MFL activist Tom McDonough visited the Lancaster West estate and talked to some of the people trying to help. Here he writes about the fire, the response to the fire, and inequality.

Bonfire of the voiceless

The blaze that killed at least 79 people in Grenfell Tower has drawn national attention to the evils of extreme inequality. Maybe it will also come to be seen as an era-defining moment when politicians and press were forced to reconsider their anti-poor policies and attitudes.

The immediate cause of the fire is reportedly a faulty Hot Point fridge on the fourth floor of the 24-storey tower block, but former residents of the building are in no doubt that the cause of the disaster was the hostility of K&C council and its contractors to them as low-income people. One resident even told a Guardian journalist that she thought the fire had been started deliberately ‘to get rid of us all.’ Gentrification, austerity, neo-liberalism and official indifference have been blamed by residents and commentators alike, in the aftermath of a disaster seen as political since the day it unfolded.

Attitudes that inequality creates

Inequality fosters a culture in which low income people are regarded as being of less value than other, wealthier people. This sets the context in which the concerns of the Grenfell Action Group were so steadfastly ignored in the months and years before the fire. The association repeatedly told the council that the tower block was a fire hazard but no remedial actions were taken. There is no indication that their concerns were taken seriously. In one of the Group’s blogs before the fire they wrote: “Unfortunately, the Grenfell Action Group have reached the conclusion that only an incident that results in serious loss of life of KCTMO residents will allow the external scrutiny to occur that will shine a light on the practices that characterise the malign governance of this non-functioning organisation.”

In ‘The Equality Effect’ Professor Danny Dorling argues that the dehumanisation of low-income groups is one of the consequences of inequality. “In the UK the poor are a different class, definitely ‘not like us’,” he writes, “economic inequality creates disdain for others and creates labels where people define themselves as not being part of the other groups.” 

It may seem extreme to suggest that just for being poor people might be demonised and denigrated in a supposedly civilised nation like the UK, but our newspapers, television programmes and politicians regularly spew out bile against our least affluent fellow citizens. The Tory party declared open season on out-of-work people in 2010: poor people had made ‘a lifestyle choice’ to be dependent on benefits, they were ‘feckless’ and deserved to be economically punished. George Osborne described jobless people as ‘idlers’ who preferred to stay at home with the blinds drawn, while ‘grafters’ set off for work in the early morning. One of the cruellest of all was Iain Duncan Smith’s claim, in his letter of resignation, that by taking away people’s benefits he was helping them to better themselves and find the motivation to climb out of poverty. TV programmes like ‘Benefits Street’ and ‘Dogs on the Dole’ seek out people frittering away their benefit payments and refusing to turn up to job interviews.

This cultural denigration of poor people sets some of the context within which individual decisions about social housing, fire regulations, the price of cladding, welfare payments and council budgets are made. The less that people are seen as equals the easier it is to ignore them and make decisions that hurt them.

Nathalie Hickson, a Lambeth resident who had travelled to Grenfell to show solidarity with the victims, told me: “From what I’ve seen they (Grenfell residents) were raising awareness about fire but they weren’t listened to. They knew there was a risk. It was the same with the Kerrin Point gas explosion. And then there’s Lakanal House in Southwark, where people lost their lives in a fire. How many lives have to be lost before they listen?”

Inequality also affects levels of trust in society. In ‘The Spirit Level’, Wilkinson and Pickett showed that the proportion of people who believe ‘most people can be trusted’ is six times higher in the most equal rich countries compared to the least equal ones. They point out that a devastating lack of trust seemed to underpin the American response to Hurricane Katrina.  After that disaster the New Orleans police focussed more on punishing local poor people, especially black people, than on trying to help them.

In Kensington the feeling of distrust between the Grenfell residents, K&C council and government in general is palpable. Residents say that the council never listened to them before the fire and left them to fend for themselves after it. Perhaps the starkest illustration of the disconnect between low-income residents of North Kensington and people in leading positions of authority were Theresa May’s two visits to the area in the days following the deadly blaze. In her first visit, May decided to not meet any local people at all, citing security concerns. Stung by subsequent criticism, the Prime Minister returned some days later, but made a hasty exit after angry locals vocalised their rage.

There is also chronic distrust of the media and the information being disseminated about the fire. Visitors to the various pop-up Grenfell shrines say they feel the authorities aren’t being honest about the numbers of people killed in the fire. At the main shrine on Bramley road, next to the Latymer Christian Church, one local man in a wheel-chair asked: “Where are all the survivors at? Just look at the flowers and cards here, there’s no way that’s for 79 people, more like 200 at least.” Another man, visiting from a different part of West London, suggested the fire was started on purpose. “One man had his bags all packed when they came to tell him about the fire. What does that tell you?” he said.

Neoliberalism

Since 1979 Britain and America have followed the path of neoliberalism: a robust private sector, populated with plucky entrepreneurs, fuels the economy while the state is pared back to the minimum. Low-income people, driven by the fear of poverty, either claw their way up or face deserved economic punishment. People get what their talent or hard work merits and the state should not intervene to level the playing field or run vital services. It can only be your own fault if you don’t do so well. For nearly 40 years this baseless ideology has encouraged attacks on regulation, cuts to spending on social protection, privatised services and generally undermined the state.

The links between these policies and the Grenfell tragedy are clear. At the most basic level when a building as large as Grenfell Tower burns out of control, plainly it is not the inhabitants fault. Cuts to the emergency services may have meant fewer fire fighters were available to battle the blaze.  Cuts will have meant fewer housing officers and safety inspectors doing their jobs prior to the fire. It seems plausible that the austerity mindset will have played a role in the decision to save a bit of money by cladding the building with cheaper and, as far as we know, more flammable material.

For decades Government has encouraged local councils to seek private investment in house building while cutting state spending on housing. The shortage of social housing in London is now so acute it that only a fortunate few get a council house. Others, unable to afford private rents or qualify for social housing, stay with family, squat in empty buildings, live like students in shared houses or abandon London altogether. Meanwhile, multimillion pound apartments, well beyond the means of average or low income earners, are springing up all over central London. Varying percentages (13% in 2014/15) of the new apartment blocks are ‘affordable’ housing, but in reality these homes are not affordable for people on low incomes, with rents set at up to 80% of the market rents. And shared ownership flats require deposits way above average salaries. In a sign of the times, some new apartment buildings even have separate ‘poor doors’ so rich residents don’t have to actually meet people on lower incomes.  The Grenfell Action Group has said that it believes cladding was added to the Tower merely to ‘pimp it up’ so it didn’t scar the landscape in its newly redeveloped neighbourhood. With housing then, as with welfare and council services, lower income people have been pushed to the margins under the regime of neoliberalism as  Government has cut spending and courted big business.

Only the most extreme free market ideologues would deny the state has any role at all to protect its citizens. But the pervasive culture of contempt for regulations and ‘red tape’ (‘health and safety gone mad’) must surely also have helped create to conditions for the Grenfell blaze? Ronnie King, secretary of the All Party Parliamentary Group on fire safety, said that urgent requests for action to tighten fire rules were stonewalled in the years prior to the disaster. Prime Minister Cameron called for a ‘bonfire of regulations.’ Inspectors trying to enforce standards in this environment will feel undermined, even where they haven’t themselves been privatized or the task ‘contracted out’.

The last of the ingredients of neoliberalism that looks likely to have contributed to the disaster is privatisation. Rather than liaising with elected councillors over their concerns about Grenfell Tower, residents had to deal with a private management company: Kensington and Chelsea Tenants Management Organisation (KCTMO). Residents have described with fury how this profit-seeking organisation didn’t listen to their concerns and could not be held to account in the same way council officials could.

Hope 

The Grenfell Tower fire is a tragedy of such magnitude that we must all hope that major changes will follow. It will be difficult from this moment on for anyone in authority to adopt a glib attitude to protecting the lives of the poor. The fire lays bare the many, connected failings of unfettered capitalism and marketised public services. The Grenfell community’s strength and unity in the aftermath of the tragedy and its willingness to challenge the authorities also offers hope that we may have reached a turning point. Maybe the response from the community shows us that people are deciding that ‘enough is enough’; that extreme inequality can be challenged and that ordinary people can be powerful advocates for change.

We’re on the mend, claims equality guru

My Fair London activist Tom McDonough reports on a recent lecture at the London School of Economics

Public opinion in Britain has turned against extreme inequality, marking the start of a period of change that will see us become a more equal and fairer country within a generation, Danny Dorling has said.

Speaking at the London School of Economics on May 18th, Dorling, the Oxford Professor of Human Geography argued that the negative effects of inequality in Britain were now so evident that the public and politicians alike were turning their backs on the ‘greed is good’ mantra of the 1980s and 90s.

“You can’t argue any more that if you just create the conditions for the rich to get richer, their wealth will trickle down and we’ll all be better off. We’ve been trying that for the last 30 years in this country and the results have been disastrous,” said Dorling.

Even the Tories, argues Dorling, have acknowledged the public’s appetite for greater fairness by aping the language of the centre and left in their 2017 manifesto and election campaign, using words such as ‘mainstream’ and ‘working people’ in between renditions of ‘strong and stable’.

“There’s been a real shift in moral attitudes. When people see someone now with a number plate that says ‘Rich1’ they pity him, they don’t think he’s done well like they used to. You don’t hear stories about bankers not far from here drinking £10,000 bottles of champagne anymore either,” he said.  

Subtle changes in economic data are also hinting that our wealthiest people are starting to feel a little coyer about their riches. The share of income of Britain’s richest one per cent dropped from 15.4% in 2007 to 12.7% by 2012, with the most likely explanation being that this elite group found new ways to hide their earnings. (Dorling, 2017, p35) This squirrelling away of funds may not represent any great change of heart among members of this group, but Dorling views it as evidence that our richest citizens are at least aware that their incomes are coming under new and vigorous scrutiny. Dorling points out that pay ratios are now published annually for civil servants by government department in the UK and that so far they have fallen as the pay of the person at the top of each UK ministry has been frozen while the median pay continues to rise very slightly. (Dorling, 2017, p256)

Meanwhile in the US the average pay gap between bosses and workers fell between 2014 and 2015, while during the same period the average pay of CEOs in the US’s top 500  companies fell from being 373 to 335 times higher than the average worker. (Dorling, 2017, p43)

There are signs of a shift elsewhere as well.  The richest one per cent in China and India have also recorded drops in their incomes, most probably for the same reasons as Britain’s top one per cent. On a global level too, there have been improvements. Branko Milanovic, the lead economist in the World Bank’s research department, showed that inequality fell between 1988 and 2008 as people in the second poorest and middle fifths of the global income distribution recorded increases in their income of between 20% and 75%. (Dorling, 2017, p31)

The improvements must of course be viewed in context. Many countries, including Britain and America, have been growing more and more unequal for the last 30 years or so. The best off fifth of the population in Britain earns 7.6 times more than the poorest fifth, while the equivalent figure for the US is 9.8 and for Israel it is 10.3. Less unequal countries like Sweden and Norway have a ratio of around 4:1. (Dorling, 2017, p23) Meanwhile the most affluent one per cent of people in the US take a 17.85% share of the country’s income while in Britain the figure is 12.7%. In more equal countries such as Sweden and Holland the richest one per cent receive 7.34% and 6.33%, respectively, of earnings in their countries. (Dorling, 2017, p34)

Why it matters

If Dorling is positive about the future he is scathing about the state we are in at present. His new book, The Equality Effect, describes the devastating impact of inequality on social and health outcomes and includes a slew of new data on the links between inequality and the environment. But it is Dorling’s forthright and sometimes quirky examples of the effects of inequality on people’s psyche and behaviour that are arguably more attention-grabbing.

Britain, the most unequal country in Europe, is held up by Dorling as a particularly good example of the damage done by inequality. Income differentials in the UK have been at such high levels for so long now that we have become an ‘abnormal’ nation, he says, in which people don’t regard the poorest as even being human.

“It’s hard to get through a day a very unequal country like ours if you see people at the bottom as human because you might begin to worry about how people are being treated,” he says.

This dehumanising effect of inequality reduces our sympathy levels and causes us to take tough stances towards minority groups such as immigrants, including refugees. Right wing parties, argues Dorling, generally gain more ground in more unequal countries, though France has bucked this trend to some degree. The logic appears to be that people who are treated with contempt, who have no hope of being socially mobile or enjoying job security or affordable housing, will feel a certain reluctance to share resources with others, especially outsiders.

Furthermore, people become used to being dominated and cease to expect positive changes, their energies focussing instead on feelings of resentment and rage. In such a climate, simple, dumbed down messages, like those delivered by the Brexit campaign and Trump, can find fertile breeding grounds.

In competitive, unequal countries like Britain and the US where the ‘winner’ versus ‘loser’ paradigm shapes our view of ourselves and others, people’s hunger for status makes them stressed and narcissistic, says Dorling.

“In a country like Britain we comfort-eat more because of stress and we’re easily duped into buying due to status anxiety,” he says.

The range of areas Dorling says are affected by inequality is long and sometimes surprising. We score poorly in tests on maths ability among young adults in Britain because our status-obsessed parents and teachers are more concerned with teaching children strategies for passing their SATS tests than with genuinely improving children’s ability in maths. Our tendency to hunker down in our own personal spaces and block out others also means British and American people are more likely to drive to work than to cycle or walk there, the social and environmental benefits of the latter modes of transport being far from uppermost in our minds. British are also, says Dorling, less likely to know or interact with our neighbours.

The examples Dorling gives may in some cases be quirky and interesting but the consequences of our inequality are dire. Data on life expectancy show that we are paying for it with our lives. Britain is the only country in Europe that has not recorded an increase in life expectancy since 2010 while the US has, incredibly, recorded a fall in life expectancy over the same period. Meanwhile Finland, Norway and Japan, among the most equal of nations, saw increases in life expectancy of one year between 2010 and 2015. (Dorling, 2017)

The future

Could Dorling’s optimistic outlook be right? Are we really becoming less tolerant of extremes in wealth and inequality? At first glance, the optimism seems hopelessly out-of-touch. The British people have offered little resistance over the last seven years to a Tory Government that has acted with zeal to widen the gap the between the haves and have nots. Since 2010 two Conservative Governments have launched attack after attack on our welfare state and social care system while simultaneously cutting tax rates for corporations and the rich and turning a blind eye to tax evasion by multinationals. In some instances the disregard for equality and fairness has been breathtaking. In 2012, fresh from culling the numbers of people who qualify for benefits, Osborne travelled to Brussels to argue that the EU should not pass a law placing a cap on bankers’ bonuses.

And these eye-wateringly unjust and damaging policies have met with little resistance. Bar the 2011 riots and a few marches, some of which have admittedly become a bit unruly, the British public has hardly reacted, on a street level, to the miseries being piled upon us. We have certainly not seen a repeat in recent years of the kind of robust fight-backs that were launched against mine closures in the 1980s and the poll tax in 1990.

Nor either have we used our votes to protest against our Government’s neo-liberal policies. We had an opportunity in 2015 to show our disapproval of inequality by electing a new Government but we chose instead to vote the Conservatives back in. In their post-election assessments, high ranking members of the Labour party lamented that their great mistake had been to shift ever so slightly to the left under Ed Miliband and that by doing so they had failed to promote aspiration. Harriet Harmen, in an interview with the Independent, said that Labour had shown too much concern for those on benefits and not enough for those who work hard and own nice cars. (Independent, 8th June 2015) With Labour pedalling the myth of meritocracy in this way, the future looked bleak indeed for anyone with concerns about inequality.

But then, completely against the run of play, pro-equality politician Jeremy Corbyn was voted in as Labour leader by rank and file members of the party in 2015. Since his victory Corbyn has been constantly derided by the media and ridiculed in Westminster, including by his own party. In 2016 he was forced to take part in another leadership contest, which he again won by a wide margin.  It’s clear that the right wing press doesn’t like Corbyn, but it’s become equally clear that large numbers of ordinary people do. Even if the recent pre-general election polls turn out to be only partially correct, they none-the-less show that Corbyn has significant backing among the electorate. Perhaps this support for Corbyn suggests that Dorling’s optimism is not be misplaced? Maybe, just maybe, the seeds of change have been planted and Britain is on course to become a fairer and more equal society within a generation.

Danny Dorling’s new book is called ‘The Equality Effect: improving life for everyone’. It was published in May 2017 by New Internationalist Books. https://newint.org/books/

Democracy undermined - power and inequality

My Fair London activist Andrew Roberts reports on a lecture by anthropologist Dr Dena Freeman at LSE on 21 March 2017

The dynamics of Democracy and Inequality in the context of Globalisation

In this lecture Dr Freeman examined the relationship between democracy and inequality, adding to a number of other explanations which have been given for the rise of inequality since the 1970s.

The work of Thomas Piketty has shown how inequality declined in the 20th century until the 1970s and then rose again.  Some academics argue that the decline was in fact anomalous and that rising inequality is part of the normal run of things in capitalism. But others cite economic and technological changes since the 1970s: for example, in the former category, globalisation and, in the latter, technological advancements that create inequalities between the skilled and unskilled.

Dr Freeman focused on the relationship between democracy and inequality.  She highlighted a puzzle: the idea that greater democracy should lead to greater equality, a venerable idea for which there is a solid theoretical foundation, doesn’t seem to have held good since the 1970s. 

Her explanation for this is that there has in fact been a process of de-democratisation at play. Examples include the handing over monetary policy to a central bank, the role of undemocratic organisations like the World Bank in constraining states’ economic policy, the power wielded by credit rating agencies; all these bodies have enforced a neoliberal economic agenda which, says Dr Freeman, operates in the interests of capital and not society as a whole.  

Londoners should be concerned by the issues of de-democratisation as they relate to inequality that are raised by Dr Freeman.  The gap between rich and poor is at its widest in the capital, and The Spirit Level has explained how damaging high levels of inequality are for society, with a high social cost.  If there is room for any optimism, it may be that Londoners’ ability to elect a mayor represents a countervailing force, as long as he is able to stand up to the anti-democratic interests of big business and global capital. My Fair London campaigns for the mayor to use his powers to act to reduce inequality and to speak out about the harm that inequality does to society.

There is a podcast of Dr Freeman's lecture on the link below:

http://www.lse.ac.uk/International-Inequalities/Videos-Podcasts/Inequalities-Seminar-Dynamics-of-Democracy-and-Inequality-in-the-context-of-Globalisation

House price rises drive inequality - LSE Prof Christian Hilber

My Fair London member Tom McDonough reports on a recent public lecture by Professor Christian Hilber from the London School of Economics. 

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How much do you earn? Sign The Equality Trust's petition for public reporting of top pay rates

The Equality Trust has launched a national petition calling on the Government to enact legislation requiring companies to publicly report the difference between the pay of an average employee and the senior directors and bosses. London is the most unequal part of the UK and one of the most unequal cities in the developed world. Getting simple transparency of different pay rates is a first step towards narrowing the gaps between rich and poor. There is good international evidence that rich people get embarrassed by their riches when they have to tell the rest of us just how much they have, and particularly when then have to explain to their more junior staff just what it is they do that is worth so very much more than other people.

Click here to go to the Equality Trust web site and sign the petition.

My Fair London will be working to persuade the Mayor of London and other London politicians to sign. If you have a moment there is a list of the elected members of the London Assembly here https://www.london.gov.uk/people/assembly

If you have time, please email your local London Assembly Member asking them to sign the petition themselves, and for them to ask the Mayor to sign it. Their email addresses all follow the standard firstname.lastname@london.gov.uk

And please send the link onto your friends, family, work colleagues, neighbours and people on social media.

Extreme inequality: extreme politics

Extreme inequality: extreme politics

The last couple of weeks have been pretty grim for those of us interested in reducing inequality in the world. Donald Trump’s victory is worrying and depressing, but the US election result also seems to confirm what rampant inequality can do, especially where a credible progressive response is absent.  In the US the gap between rich and poor is the highest it has been for at least 100 years. Working class and middle class Americans have seen their incomes stagnate or decline. A significant proportion of the US population clearly feels ‘left behind’. So the sight of a billionaire property developer presenting himself as the voice of ordinary Americans is astonishing, but his rhetoric – bringing back the jobs and making America great again was enough to edge him into the White House.

At the Centre for London annual conference last week US academic Benjamin Barber (President and Founder Global Parliament of Mayors project) said that Trump ‘was on the wrong side of history’, noting that urban areas in the US overwhelmingly voted for the Democrats, that the future is made in cities and that cities will work together to tackle the most pressing global problems: inequality and climate change, despite the new occupant of the White House. Although Mr Barber’s optimism was welcome many London delegates thought Trump, even if he proves to be a one term, incompetent reactionary, could make a lot of things a lot worse for a lot of people. And of course it's not only America where reactionary, populist political movements have won recently.

So for London we have no choice but to re-double our efforts to get our city to change course: towards a fairer future, to deal with the problems caused by extreme and excessive wealth and to build a fairer, more equitable society. If London can show the way then maybe we can offer some hope to our American cousins. Inequality is the defining social problem of our age and cities are where we will win or lose the struggle for greater equality.

My Fair London will continue to work for a fairer London however we can. Sign up as a supporter and help us set a new direction for London.

Inequality in London: autumn plans

During the Labour party conference Sadiq Khan wrote in the Evening Standard  that holding the office of Mayor of London meant he could “ensure that London’s growth is shared more equally, with a real living wage, plans to improve gender pay inequality and a laser-like focus on tackling inequality.”  It is refreshing to have a Mayor who regularly talks about inequality with such emphasis.

Last week Theresa May, our new Prime Minister, told us that ‘change is going to come’. Of course it’s almost beyond irony that a Conservative leader should choose to steal one of the rallying cries of the American Civil Rights movement, during a week where her colleagues repeatedly sought to blame or demonise migrants. However in her closing speech to the Conservative Party Conference the Prime Minister spoke repeatedly of fairness, of the gaps between old and young, between London and the rest of the UK, and most of all between the 1% and the rest. Despite her party's 40 year pursuit of the policies that led Britain to where we are today, Theresa May drew a line under that era and said that a strong state and a fair society were fundamental objectives for her administration, that business took too much, that she was concerned for the working class, and that a change was going to come.

At our September meeting we discussed where the politics of economic inequality has got to (and thanks to My Fair London activist Greg for stimulating such a rich discussion). Back in 2009, when ‘The Spirit Level” was published and we first came together, while the problem of gross and growing economic inequality was discussed, it was largely the preserve of left-leaning groups, academics and think tanks. Now we have a Conservative Prime Minister talking about the problems facing working class people and identifying inequality as a fundamental problem. And past global guardians of neo-liberal economic policy – the World Bank, the OECD, the IMF, not to mention the Bank of England – all publishing reports on the problem of economic inequality, the risks it poses to the economy and to the safe functioning of democracy itself. There is even widespread recognition that economic inequality is bad for productivity.

So the inequality debate has moved on and those of us who believe that a more equal society will be better for everyone seem to have won the argument: that inequality is bad, economically, socially, politically.  Now the area for debate and discussion is what to do about it.

So what is My Fair London doing? 

We have agreed that a fundamental priority for My Fair London continues to be to influence the Mayor of London. We need to do all that we can to encourage him to turn his words into actions. At the same time we have to recognise that although he is the Mayor his direct powers to achieve a really significant narrowing of inequality across the city are limited. In many ways his voice and advocacy for the cause of economic equality will be as important as any of the specific policy changes he can implement during his time at the Greater London Authority.

We have agreed to focus on a number of priorities over the next few months.

  • My Fair London colleagues are busy working on a new pamphlet that will summarise the economic debates, and set out the economic arguments for greater equality. We hope this will be the first in a series of short, themed pamphlets describing how inequality underpins so many of the problems facing London: the housing crisis, youth unemployment and intergenerational inequity, poverty and low pay, crime and social cohesion, environmental harm and climate change.

If you’d like to get involved in creating these mini-manifestos please get in touch.

  • We have had a warm initial response to our approach to Sadiq Khan’s office, and we expect an early meeting with his new Deputy Mayor for Social Cohesion, Matthew Ryder.

We’ll let you know when we have a meeting date with the Deputy Mayor, and we hope he will agree to come and speak to one of our meetings. Watch this space.

  • We will be preparing a summary of the key policies that we believe the Mayor and others should adopt to start to move London onto a path to greater equality - drawing on our own manifesto for the recent Mayoral elections, and the work of the My Fair London promoted London Fairness Commission. http://londonfairnesscommission.co.uk

Again, please get in touch if you would like to help with this task.

  • And we will be seeking to make common cause with other groups across London who recognise the links between economic inequality and other social, economic, political and environmental problems.
  • On this last theme, My Fair London is pleased to host a book launch and evening discussion on Wednesday 19th October.  Author Bob Hughes will present the core arguments in his new book, 'The Bleeding Edge: why technology turns toxic in an unequal world'. My Fair London activists have long felt there is an intrinsic link between the global environmental crisis and inequality. Bob's new book tries to explain just how these connections work. There are still a few places left. Reserve a place by booking a ticket here https://www.eventbrite.com/e/inequality-and-the-environment-at-the-bleeding-edge-tickets-28287588940
  • Finally, My Fair London has been asked to give evidence at a public session of the London Finance Commission, on Friday 21st October.  The Mayor has reconvened the Finance Commission specifically to help him better understand the potential consequences of Brexit for city finances, but he has also written into its terms of reference a fundamental concern for inequality. If you have any particular views on city taxation and revenue raising that you think are important for inequality, please get in touch with My Fair London chair, Alex Bax. And do come along to the meeting to show your concern.  There’s more information at https://www.london.gov.uk/what-we-do/business-and-economy/promoting-london/london-finance-commission

Come along, get involved, help us make London a fairer city for us all.

Localisation and post growth thinking - new economic models?

My Fair London activist Tom McDonough reports from 'Towards a localised future', a Saturday conference held at Friends Meeting House on 17th September, organised by Local Futures and Green House.

"One of the burdens of being a critic of neoliberalism and its concomitant inequality is the paucity of well-established alternative models for how our economies and societies should be organised. Over and again I hear people, including left-leaning people, lament the absence of viable substitutes for a consumption-driven, capitalist system. “It’s a rotten system but the only one we have” or “Well we tried communism and that didn’t work so what else is there?” are well worn lines of argument.

Post-Growth Localisation (PGL), the subject of a discussion held on 17th September at Friend’s House in Euston, offers one vision for how societies and economies could be run differently. Simplifying greatly, PGL posits that we need to end our obsession with economic growth and shift power from corporations to local communities. Its exponents do not believe that merely tinkering with our neoliberal framework by, for example, redistributing income and curbing individual energy consumption will ever resolve our social or economic woes.

Helena Norberg-Hodge, founder of Local Futures, told attendees that ‘Localisation’ entailed encouraging diversified production for domestic needs instead of specialised production for export. This shift would not eliminate international trade nor require a return to insular village life, but it would mean moving power from transnational corporations to nation states and democratically robust local communities.

 The scale and pace of economic activity would diminish as workers focused their energies on producing goods and services that people really needed rather than on churning out adverts and status-symbol goods that fuel a vicious cycle of insecurity, consumption and separation. Thus reorganised, people would have more face-to-face relationships, a closer connection with nature and an increased sense of personal and cultural identity. At the same time the reduced distances between producers and consumers would allow for a reduction in resource use and pollution while a bigger need for human labour would boost employment and lessen our reliance on energy-hungry technology. The model may sound utopian but it is in fact being implemented by communities and organisations all over the world, with the local food movement being at its heart. Besides food, localisation initiatives are focussing on small business networks, local banking and the ecovillage movement. In North America, for example, the Business Alliance for Local Living Economies, is bringing together small businesses to resist the pressures exerted by giant corporate giants.

‘Post growthism’ is arguably better known than ‘Localisation’ and would certainly be familiar to readers of Richard Wilkinson’s and Kate Pickett’s book ‘The Spirit Level’, which argues that wealthy developed nations no longer gain benefits from economic growth and need to concentrate on reducing inequality if their citizens are to enjoy improved health and wellbeing. This analysis is entirely harmonious with Post Growthism. At the 17 September event Rupert Read, a member of the Green House think tank and a prominent Green Party politician, argued that the economics of happiness cannot be achieved as long as nations remained enslaved to the un-argued, un-analysed growth argument. According to Read, our obsessive quest for economic growth is destroying our eco-system, shredding communities through competitive consumerism and feeding inequality by enriching only the wealthiest. Growthism allows Governments to generate more acceptance for inequality by creating the illusion that all people, from the richest to the poorest, can continue to enjoy improvements in living standards, provided that overall the economic cake keeps growing.

I liked the PGL concept, not least for its focus on soft outcomes like re-connecting with nature, being happy, forging stronger relationships with community members, being more active and reversing our tendency to lead ever more sedentary, desk-based, screen-lives. But is it the alternative model to neoliberal capitalism that we so badly need? While its radical proposals would certainly be regarded with scepticism by many, they could also be appealing to the increasing numbers of disenfranchised people, even including Brexiters and Trumpists. PGL is by no means xenophobic or nationalist, but it could offer positive solutions to those of us who are enraged by inequality, environmental destruction, corporate dominance and a sense of powerlessness. However the PGL movement, like other alternatives to the neoliberal economic model, will never achieve success as long as it is known only to isolated groups of academics and activists. The real challenge is to increase awareness among the public, both of the fatal flaws in the current economic system and of the alternatives that exist, no easy task given that the mainstream media is controlled by corporations and the myth of meritocracy holds sway in the minds of many. If there is to be any hope of change we need information campaigns, alternative media organisations and education programmes that stop perpetuating the idea that our economic and social status quo is the only option."

There is more information about Local Futures here.

 

Brexit and the collapse of trust

Brexit and the collapse of trust: another casualty of an unequal Britain

 For many people the UK referendum vote in favour of leaving the European Union has been shocking, depressing and even frightening. 17 million Britons felt so angry and disenchanted with the status quo that they were willing to vote against the European Union, a project itself rooted in the European continent’s collective desire after the Second World War to find ways to work together that didn’t involve killing each other.

Of course there are 17 million different sets of reasons that explain why 17 million people put a particular cross in a box to answer a simple question (about a most complicated issue). There has been so much already written about the Brexit result, about the population’s attitudes, about deceitful politicians with false promises. However it seems to me there are multiple and deep connections between what has happened, what to do about it, and economic inequality. One strand of this is a profound breakdown in public trust: in institutions, in society, even in evidence of what the world is actually like.   

Trust, especially public trust is complex and fragile.  At the personal level, trust in relationships takes a long time to win and can be easily lost. In mental health services it is well known that gaining trust from patients is vital for long-term recovery. Working with homeless people, I know that when someone’s life has been characterized by repeated extreme betrayals of trust, for example through sustained abuse in childhood, the long-term psychological consequences can be devastating, affecting peoples’ ability to form successful relationships throughout their lives.  It’s so hard to trust anyone when your experience is of repeated betrayal. Abuse, betrayal and visible unfairness undermine trust.

But the relationship works the other way too.  Where trust is already low, suspicion and fearfulness between people will be high. People respond to difficult circumstances by trying to protect themselves.  The collapse in trust in our society reflects long-term collective feelings of betrayal, of being misled, deceived and disrespected. Societies characterised by low levels of trust are frightening and depressing places in which to live. Human society depends on trust, trust in the value of money, in the doctor who looks after us, in school teachers who look after our children, simply in other drivers obeying the traffic lights.

Societies that are relatively more equal have higher levels of trust between people. More unequal societies have lower levels.  An interesting illustration of this effect is the amount of wealth different developed countries spend on guards, security and surveillance.  The more unequal your country, the more is spent on ‘protecting’ one person from another, often keeping us apart from each other (gated communities are just one example of this), and so further compounding a fall in trust between people . In very unequal societies it feels like someone may always be coming to get you or your stuff: you can’t trust the people around you.  Incidentally it seems to me that the children of the rich may be particularly harmed by these effects – how can you form real relationships when your peers might only be interested in your stuff and what they can get from you?

So what about Brexit? A couple of weeks before polling day I was struck by the results of a YouGov poll that asked who potential ‘leavers’ and ‘remainers’ said they would trust when thinking about the European Union vote. The question offered a list of possible sources of advice or information.  Among voters backing ‘remain’ there was a spread of views, with academics, people from international organisations, and economists all scoring positively, ahead of charities, businesses, and think-tanks. Only actors, sports-stars, politicians and journalists scored negatively.  They were on average not trusted by ‘remainers’ for advice on this important question. Not that surprising I guess. 

However among people intending to vote leave all the scores were negative. People grouped together by their intention to vote to leave the European Union generally trusted no-one in public life.  Some ‘remainers’ have suggested that people who voted to leave were at least ill-informed, if not foolish.  But maybe what the trust data tells us is that many, many people in Britain today are fearful, if not paranoid? They feel betrayed and misled and do not believe ‘experts’ or ‘commentators’.  Over 40 years our society has been dominated by an ideology that said that everyone must be out for themselves, the market is king, if you or your community fail, it can only be your fault.  The ‘leavers’ trusted nobody and ‘want their country back’. They hark back to a time when the gap between rich and poor was far narrower and levels of trust much higher. There’s a certain irony that Cameron and Osborne, harsh supporters of austerity economics and long-term protectors of our grossly unequal society, have themselves been undone by the extreme inequality, and resulting low levels of trust, over which they have most recently presided.

In ‘The Spirit Level’ Richard Wilkinson and Kate Picket observed just how strongly levels of trust correlate with levels of inequality in a society. The more unequal we are, the less trust we trust each other, the more equal the more chance we will benefit from the kindness of strangers. Among all the other Brexit analysis, the result seems to firmly illustrate this effect.

Politicians on the right, bankers, international financial institutions are all now talking about inequality. However inequality has become a problem not because of the behaviour of ordinary people, but because of the behaviour of the rich. Our politicians have allowed (and many have actually made it an aim of public policy) people at the top to take too much.  In Brexit, as in so many other parts of life, the harm done will most likely be felt most severely by the people with least. In or out of the European Union, to rebuild trust within our society, we of course need a more honest, even a more honourable public life, but much more fundamentally, and to create the conditions that will foster such changes in behaviour, we must narrow the gap between rich and poor. 

[Professor Richard Wilkinson presented some of the data on security and trust when he gave the Aidan Halligan memorial address at ‘Homeless and Inclusion Health 2016’, the fourth international symposium of the Faculty for Homeless and Inclusion Health.  Watch his presentation here http://www.homelessnessandhealth.co.uk/events/event-01/plenary-session-1-health-gap-causes-keynote/]