Chancellor Warns of Lost Wages Decade.
“The first lost decade since the 1860s”, these were the words of the Chancellor of the Exchequer, Mark Carney, in his last speech for 2016 at Liverpool’s John Moores University.
Much of the speech was perhaps a ‘dig’ at government counter arguing that it is not the Bank of England’s fault that many people feel disenfranchised with global growth and that it is up the Government to develop a sense of greater inclusion. He attacked global firms paying lower taxes and suggested that the Bank of England’s control of interest rates and financial stimulation was keeping Britain alive.
However, the main focus was that many people simply are not benefitting from increases in wealth across the planet. You only have to compare the wealth gap between the South East and the rest of the UK or indeed the prices of houses between London and the rest of the UK to see who has benefitted most from the UK being part of a global economy.
His speech yesterday focussed on exactly this and suggested that increasingly there is a risk of wages in real terms continuing to be lower for younger generations compared to parents or grandparents at the same age and the ability to acquire wealth e.g. through property is increasingly more difficult for younger generations. Resulting in Mr Carney suggesting a “lost decade”, i.e. most people will be no better off in 10 years than they are today.
We have to agree, corporate social responsibility is a big deal for all. Without changes to large companies, taxation of the same and usually only the “elites” benefitting, the rich will get richer and the poor will get poorer.
It is a unpalatable that global companies can move profits around the globe to avoid taxation where they made those profits.
It is unacceptable that high flyers should earn millions in bonuses whilst many of their employees are on tax credit benefits. Although, equally a person who has particular skills, works much longer hours, with specialist qualifications and experience wants to be rewarded and should not be penalised because some choose not to work part-time or not “better” themselves.
It is totally unacceptable that company profits can be distributed in the form of dividends when that same company has a huge black hole in its pension fund.
That said, how do you crack the capitalist conundrum? By making the UK a less attractive place to invest, why would bigger companies choose to base themselves in UK and create employment?
This is a headache for all nations, hence Mr Carney suggesting perhaps that globalisation does not work.