Mind the gap! Time to sideline the Global EconomyPosted: October 30, 2011
The news reports this last week on directors’ pay showed just how separate from the rest of us the largest companies have become. The incomes of the directors of the UK’s 100 largest companies rose 49% in 2010-11 to an average £2.7 million. The chief executives of those companies had average incomes of £3.86 million, 43% more than the previous year, according to the pay specialists Incomes Data Services.
Her Majesty’s Revenue & Customs used to publish statistics on the incomes of ordinary taxpayers, but their latest data is for 2007-08, when the median annual pre-tax income for men and women taxpayers in the UK was £18,500, according to table 3.2 in HMRC’s series on personal incomes . For men, the amount was £21,500 and for women, £15,300. Remember, these are the incomes of people with incomes high enough to be assessed for tax. There were 32.5 million taxpayers in the UK in 2007-08, but the whole population then was 61.393 million, of whom 10.753 million were under 15 and 4.776 million were 75-plus, leaving 45.864 million between 15 and 74.
Workers’ incomes have barely risen since 2008, and unemployment has increased. The income disparities between the chiefs who move in the Global Elite circuit, and the rest of the population, even in a relatively prosperous nation like the UK, are so huge as to be immoral, in my view. An income of £2.7 million is 145.9 times more than £18,500. £2.7 million is 213.5 times more than 40 hours a week, 52 weeks a year, at the national minimum wage (for workers aged 21+) of £6.08 per hour.
The financial elite are becoming conceptually detached from nation states, indeed they form a new state above and beyond the borders of the countries where the rest of us live. Countries increasingly are reserves of labour, while capital flows at the behest of super-rich ‘investors’ to wherever they think they can make a quick return. Governments feel obliged to present their populations more as candidate labour forces than as empowered citizens, and so we see bureaucratic controls all around us. The Filling of Forms at the behest of the national Bureaucracy occupies quite a lot of my time. As the administrator of a small limited company, there are PAYE returns, corporation tax returns, and the information for the individual tax returns of the directors. Thank goodness for the PAYE service offered by the accountancy firm which tries to keep us on the straight and narrow. The switch from paper to online returns has already resulted in us receiving an estimated bill for thousands of £s of VAT. I had actually paid our VAT bill but had forgotten to do the return online. After 20 years of paper returns, the paper habit is hard to break.
In these days of rolling contracts and acres of small print, I have to write down the specific dates on which contracts can be terminated without penalty. BT’s small print is so small that I have to use a magnifying glass. Are companies like BT unaware that we all have to work until we are older, and that as we age small print becomes the enemy of our eyes? The vision problems of ageing customers in the UK are probably not important to an international company like BT, which looks at the whole world as its market.
Our little company has to accept the bureaucracy, rules and limitations imposed on us by others because we are small, and small is not beautiful in the eyes of global companies or of governments. So much more efficient, on the basis of £s and pence, for a company or a government to deal with one large entity rather than with a thousand small ones!
Bureaucratic controls have become an important element in our government’s quest to present us the people as diligent and docile servants of the global economy. The flow of forms will continue until and unless we decide to demote the Global Economy, and associated terms such as UK plc, from their pedestal towering above other priorities like kindness to each other and to the natural world in which we all live.
Meanwhile, back to the Filling of Forms.