——————————————————- April 2013 —————————————————————-

Will Hutton wrote about the relationship between wealth, inequality and trust in The Guardian, saying ‘To have riches, however obtained…is the only game in town’.

As rumours gathered pace that the Government are considering scrapping the minimum wage, The Independent argued that if the Government really wants to ‘make work pay’ it should focus on ensuring the minimum wage is enforced. Meanwhile The Telegraph’s Jeremy Warner provided the economic case for increasing the minimum wage.

Skills Minister Matthew Hancock MP gave a speech at a Resolution Foundation event on how the Conservatives are “best placed to tackle low pay”.

Alan Milburn, the Government’s own advisor, criticised the Coalition’s approach to measuring child poverty and defended the relative child poverty measure.

The Association of Teachers and Lecturers passed a resolution to oppose the Government’s plans to scrap the national pay structure and introduce performance related pay.

UKIP proposed introducing a flat 25% rate of income tax with a personal allowance of £13,000.

An Observer editorial highlighted concerns that, with prices rising twice as fast as wages, the Budget 2013 threatened to “cut the poor adrift”.

With comments from Kate Pickett, The Times revealed the neighbourhoods in Britain with the biggest wealth gap.

The TUC reported that, with the cost of living ‘away from home’ at £1,000 per month in London, internships in the city are now unavailable to young people who do not come from affluent backgrounds. Meanwhile Demos’ David Goodhart asked whether too much stress on social mobility has demeaned ordinary jobs, and finds out how low-skilled work can be made to seem more attractive on BBC Radio 4.

It was revealed that food stamps will compensate for the Social Fund in many local authorities.

Thousands of Londoners face the growing threat of food poverty, according to figures from the Trussell Trust.

A group of highly regarded academics submitted a letter to The Guardian warning that the poorest tenth of households will lose 38% of their income in real terms as a result of Government reforms.

James Plunkett explained what the OBR’s Economic and Fiscal Outlook report means for our wages.

An Oxfam GB blog wondered how to make sure people working on low incomes actually benefit from being taken out of income tax.

The Daily Express ran with the headline ‘Poor households bear brunt of £16m payouts to gas bosses as we freeze’.

B&Q staff secured at least a Living Wage for their lowest-paid staff, meanwhile the BBC will include a ‘Living Wage clause’ in all invitations to tender taken up by contractors providing catering, cleaning and property management services.

Professor Richard Frank told Barack Obama, ‘It is poverty policy that matters in mental health’.

Brian Groom of The Financial Times explored whether falling real wages are having a negative impact on productivity.

After Iain Duncan Smith proclaimed he could live on £53 per week, Mark Pack’s analysis showed that the richer you are, the more likely you are to think you could do it.

The Daily Mail reported that bosses’ pay has gone up 16% while workers get 1% rise.

The Financial Times reported that in 2018 the public sector’s share of the workforce will fall to its lowest level since the welfare state’s inception in the 1940s. This does not bode well for income equality given that pay disparities are much greater in the private sector.

The Independent’s James Moore looked at efforts to clamp down on the perks and pay-offs many executives receive.

The Financial Times investigated reports that very high wages in the private sector keep talent away from the public sector.

Despite the company receiving a £30million fine last year, the Prudential’s CEO landed a bonus of £7million. Standard Life’s CEO earned £5million last year while the CEO of outsourcing firm Capita took home around £8.5million. Meanwhile Anthony Salz’s report on Barclay’s warned that the bank must lower warped pay levels to end ‘entitlement culture’ and improve transparency.

At the height of AGM season UK companies have sharply reduced their use of incentive pay plans that require shareholder approval in order to take effect, according to analysis by Manifest. Simon Bowers summarises the ‘likely flashpoints’ in executive pay.

BG Group’s top executives gave up their bonuses after a plunge in share prices at the end of last year.

The Times warned that around £5bn of high earners’ money may be moved into the new financial year to avoid the 50p tax rate.

Standard Life caused ripples by voting against BP’s remuneration report at its AGM and MPs demanded an inquiry into the payments received by failed HBOS.

And finally, a survey claimed that the UK is now divided into seven social classes. Where do you fit in?

—————————————————— March 2013 ————————————————————–

Ed Miliband offered “a choice between two different visions of our economy. The Conservative vision of a race to the bottom in wages and skills, rewarding those at the very top but leaving everyone else squeezed as never before. Or the One Nation Labour vision.”

Danny Alexander announced that companies will have to sign a declaration that they have not fallen foul of wide-ranging tax avoidance rules in the past 10 years before bidding for government contracts worth £2m or more.

Obama called for the minimum wage to be increased to $9 saying “For businesses across the country, it would mean customers with more money in their pockets. And a whole lot of folks out there would probably need less help from government. In fact, working folks shouldn’t have to wait year after year for the minimum wage to go up while CEO pay has never been higher. So here’s an idea that Governor Romney and I actually agreed on last year – let’s tie the minimum wage to the cost of living, so that it finally becomes a wage you can live on.”

As AGM season kicked of BP chief Bob Dudley was awarded £2.6m annual bonus; despite a profits slump and Lloyds’ CEO is set to receive £1.4million bonus despite their £500m annual loss; Volkswagensought to head off a debate about boardroom pay by limiting bonuses for its top executives; Man Group scrapped bonuses for its top executives; 19 Santander staff were paid over £1million last year. John Lewis revealed all their staff will receive a 17% bonus this year – up on last year’s bonus, and equivalent to nine weeks’ pay.

Meanwhile Barclays were criticised for announcing £38.5million worth of bonuses to its staff on Budget day.

Living Wage

-          Barking & Dagenham council introduced a minimum wage of £9 p/hour for direct workforce and agency staff – the highest minimum wage for a council.

-          Salford Council staff said the Living Wage has been “life changing”.

Senior academics warned that altering the official definition of child poverty risks deliberately downplaying the importance of money.

The EU moved to cap bankers’ bonuses at twice their salary and to subject banks to a strict transparency regime, but saw resistance from the UK Government and a Swiss referendum voted in favour of tough controls on rewards for senior managers.

A legal decision in the European court of justice could protect staff rights to collective terms even after they’ve left a council

Almost two-thirds of London bankers think they were underpaid last year and half believe they have been treated unfairly.

The Financial Times reported research which showed that migration has a very slight impact on wage levels.

Simon Walker, director-general of the Institute of Directors, said the behaviour of some banks was “harming the whole of British business by focusing only on their own short-term self-interest”.

PWC said most people gained little from personal allowance changes because other, more regressive taxes rose instead.

The ONS said real incomes will fall as wages remain stagnant and inflation rises.

Finally, The Equality Trust launched the A41 Photography project. Explore the consequences of inequality through photography. It will be showing from 27 February to 6 May at The Public in West Bromwich.

——————————————————– February 2013 —————————————————————-

Ed Miliband used his speech at the 2013 Fabian Society Conference to promote the living wage.

Christine Lagardehad encouraging words at the World Economic Forum, “Now all of us have a better understanding that a more equal distribution of income allows for more economic stability, more sustained economic growth, and healthier societies with stronger bonds of cohesion and trust.”

One Society hosted an event with Bright Blue at which Skills Minister Matt Hancock said the Conservatives must become the “party of the low-paid”.

The Times revealed that, despite a forecast loss for Lloyds banking group, their CEO Antonio Horta-Osorio is set for a bonus of up to £4million. Meanwhile The Guardian reported that the top 1,500 bank staff in the UK earned an average of £1million each in 2011. Goldman Sachs bonuses will still average £250,000 eachbut Barclay’s boss Jenkins waived his £2.75million bonus.

According to an IPSA survey, MPs would like to see their pay increase by an average of 32%. Zoe Williams and Rupert Myers argued for and against.

An official US report found that Americans are ‘sicker and die younger’ than peers in comparable countries and suggested that income inequality may be a contributing factor.

Two councils went the extra mile with the Living Wage this month: Aberdeen City Council introduced a Living Wage and pledged to make a back-dated payment to its staff; while Brent Council are looking into requiring contractors to pay the Living Wage.

The Government published its National Minimum Wage Compliance and Enforcement report.

Ferdinand Mountwrote in the Evening Standard that the Living Wage can help lift wages at the bottom and prevent the state from having to top up low pay. Amol Rajan, said the Living Wage is an idea whose time has come for the Tories.

We blogged about how the introduction of a Living Wage must be met with a desire to tackle top pay too.

The Joseph Rowntree Foundation teamed up with the BBC to produce three films on income inequality. Meanwhile, new movie Inequality for All received some rave reviews.

A fantastic infographic from Oxfam showed just how much £5.2billion of dodged tax could pay for to alleviate poverty in the UK.

——————————————————– January 2013 —————————————————————-

The National Assembly for Wales introduced Living Wage for externally contracted staff saying “The Assembly Commission is of the view that a Living Wage should be a basic human right”.

Nick Clegg said that everyone has the right to campaign for fair pay after it emerged that a Westminster cleaner lost £400 a month after asking for a Living Wage.

Teresa Pearce MP tabled a Westminster Hall debate on the Living Wage in which some MPs supported the idea while others called for the minimum wage to be scrapped.

Ed Balls said that Osborne had set out a false choice between strivers in work and shirkers out of work and on benefit, saying 60% of families hit by the tax and benefit changes set out in the chancellor’s autumn statement last week were in work.

A great new infographic from Danny Dorling and Benjamin Henning maps the super-rich in the UK.

There are signs that the Cabinet Office and Ministry of Justice may follow the Department for Work and Pensions in introducing a living wage.

High pay in the media was highlighted by excessive pay outs to BBC staff.

The Independent’s John Rentoul argued that the rich are in fact bearing the greatest burden of the cuts. His argument was rejected by Stewart Lansley and the New Statesman also questioned the figures.

As energy prices rise, British Gas CEO Phil Bentley is set for a £13million pay off – enough to pay an average family’s gas bill for almost ten thousand years. Meanwhile in the US it emerged that the MacDonalds CEO earned 580 times the lowest wage.

Seamus Milne argued that our economic model is failing to deliver jobs and decent wages while Owen Jones argued that this Government are making the poor poorer.

Laurent, Schlumberger, a prominent figure in the French protestant church made waves with an article in which he denounced the “violence” income inequality has caused.

Finally, as Nick Clegg and David Cameron “re-launch” the Coalition, revisit our Half Term Report on the Coalition Government and Income Inequality.

——————————————————-December 2012 ————————————————————–

Eric Pickles announced measures to make it easier to dismiss “highly paid but incompetent” council bosses.

Living Wage:

•          Councils who agreed to pay their staff a Living Wage this month included Derby, Edinburgh City Council, Carlisle Council and Wigan Council.
•          There are also hopes that Canary Wharf would become the UK’s first ‘Living Wage Zone’, meanwhile the Catholic Church committed to Living Wage.
•          Cllr Stephen Knight says it is time for Liberal Democrats to embrace the Living Wage.

Ed Balls said that the dichotomy of ‘strivers’ in work and ‘shirkers’ out of work and on benefit was a false one. 60 per cent of families hit by the tax and benefit changes set out in the chancellor’s autumn statement last week were in work, he said.

Larissa Hansford blogged about One Society’s ‘Half Term Report’ in the Huffington Post and the New Statesman

Graham Hogg explained how councils can lead the way on fair pay and why it’s time for an ‘equal pay kitemark’.

The Times reported that an unexpected rise in inflation could see low-income households feel a cut in real wages of up to 15 per cent from 2008 to 2020.

CPAG’s Alison Garnham commented on why changing the way in which we measure child poverty is a distraction from the real problem.

An Equality Trust infographic featured in the Daily Mail’s article about how 80 per cent of Britain’s ‘elite’ went to fee-paying schools.

Xstrata chairman Sir John Bond will resign once a merger with Glencore is completed after shareholders voted against his proposed £140million retention pay.

Vince Cable promoted ‘better alignment of pay and performance’ and backed a review of executive pay as the Government responded to the Kay Review.

Robert Skidelsky explained why income inequality is killing capitalism in the Guardian.

Joseph Rowntree Foundation’s Julia Unwin said that tackling poverty and inequality must be at the heart of any plan for economic growth in the North of England.

Economists are now describing the UK labour market as an ‘hourglass’ shape, where jobs are being created at the top and bottom of the skills scale, while those in the middle tier are losing out.

The Mirror reports that identical NHS jobs are paying 50 per cent less in the North than the South of England.

Robin Chater, Secretary-General of the Federation of European Employers, says low wages are keeping UK unemployment levels down.

The Bank of England’s Andy Haldane said bankers’ wages are still too high.

Jim McCormick wrote in The Scotsman newspaper about an up-coming Joseph Rowntree Foundation report that will show the odds of escaping poverty when moving into work are only a little better than 50:50.

…and finally, the Guardian published a ‘Wages Map of Britain’. How does your area compare?

——————————————————-  November 2012  ————————————————————-

The Trussell Trust announced that a record number of people received emergency food from UK food banks in the last six months

Nick Clegg: speaking to BBC R5 listeners “I start from a very simple principle that when we’re all having to make sacrifices… you ask people at the top and then you work down. You don’t ask people at the bottom and then work up.”

Paul Tucker, the Bank of England’s deputy governor called for a new review into bankers’ pay, arguing that bonuses should be paid in subordinated debt.

The Financial Times’ Sam Brittan says falling real wage levels are pricing workers into jobs and keeping unemployment low.

Research by the FT showed workers in their twenties now have a worse standard of living than those in their eighties.

Living Wage Week:

• KPMG said around five million people in the UK are currently paid less than the Living Wage.

• Ed Miliband suggested his party would name and shame employers who paid below the Living Wage.

• Boris Johnson said central government should adopt the Living Wage for its lowest paid staff.

• More councils are adopting or looking to adopt living wage including York, Sheffield, Cambridge(who will urge local firms to pay LW) Lambeth and Oxford. Meanwhile over half of Scottish councils now pay Living Wage.

• Finally, Citizens UK and the Living Wage Foundation release a full list of all accredited Living Wage employers.

Yahoo has appointed a Google executive as its next chief operating officer, paying him a pay package worth about $58m (£36m) over four years. Meanwhile Rebekah Brooks’ News International received a severance deal worth about £7m.

Two interns received payouts of more than £2,250 after demanding to be given a wage for over seven months’ work

Nicola Sturgeon, Scotland’s deputy first minister has announced a £33m welfare fund to help the country’s most vulnerable people

The Kay review advised the scrapping of executive cash bonuses and publishing of quarterly results.

The European Parliament pushed tough proposals that would introduce a fixed ratio between bankers’ pay and bonuses. It appears concessions may be made.

Caerphilly Council implemented a living wage. The measure will “cost” £500,000 per year – money gained from under-spends and savings elsewhere.

Shareholders protest Aveva paydeal but Vodafone investors backed a pay increase for one of the UK’s best paid CEOs. Barclays handed almost £9m to Jerry del Missier, the banker who left following the Libor scandal.

Over 150 Whitehall custodial staff delivered letters to eight cabinet ministers asking for a London living wage.

Dairy Farmers blockaded supermarkets in protest against the low cut they get of profits from milk, and the low pay resulting from it. The margin supermarkets took on a pint of milk was 2p on a 30p pint 10 years ago, it’s now up to 10p.

Barclays appoint new Chairman David Walker. He has a track record of criticising excessive to pay.  

There was high-profile debate about the extent to which social mobility can be increased if income inequality is not reduced:

Kate Pickett and Richard Wilkinson argued Nick Clegg cannot ignore income inequality if he is serious about social mobility (date), and Ed Miliband said in a speech that “I firmly believe that inequality and social mobility are linked. But we have a Government that refuses to see it” (21May).

Nick Clegg responded by saying “reducing inequality is a good and laudable aim. But unfortunately it’s not the straightforward route to social mobility that its proponents suggest” (22 May). However, Clegg’s analysis and evidence were strongly disputed by a number of academic experts, one of which (Gary Solon) claimed to have been ‘misquoted and misrepresented’; another (Miles Corak) reacted with further analysis and policy recommendations. Later, Alan Milburn wrote in the New Statesman that “The more child poverty you have, the less social mobility you’re going to get.”

UNICEF’s Child Poverty Report Card 2012 showed that even though the UK missed its own targets to reduce child poverty to 1.7 million children in 2010, it UK still had one of the largest reductions in child poverty after Government intervention. A Centre for Social Justice (CSJ) report Rethinking Child Poverty argued that the current measure for child poverty is inadequate (and argued against the relative poverty measure). UNICEF and the CSJ debated the issue on BBC Radio 4. The Children’s Society welcomed the reduction in child poverty up to 2009 but warned of a slide backwards. Similarly, the Archbishop of York wrote in the Yorkshire Post about the importance of tackling poverty and social inequality – it is not a choice between the two.

Top pay remained a major news story, with controversy over pay at companies including Gulf Keystone, Xstrata and Glencore. However, some such as Nils Pratley doubted that the “shareholder spring” represents significant sustainable change, and PIRC data showed that investors did not challenge banks over top pay in 2011.

It appears likely that Vince Cable will scrap his plan for annual binding investor vote on executive pay in favour of a triennial vote, while the EU will push for binding investor pay votes.