Letters Guardian 10/06/2010
It is futile to attempt to address poverty (Frank Field to think the unthinkable for Cameron, 5 June) without looking at the ever-widening gap between the highest and lowest paid in the private sector. My own experience may be illustrative.
I earn under £17,000 a year working in an office in London. When I have paid my bills, rent and transport costs I have under £60 a week left – barely more than the dole. I am doing a virtually identical job to one I did five years ago. Then, I got £24,000, and my living expenses were 60% of what they are now. Many of my workmates who have children are eligible for tax credits because they cannot cope. I am thinking of checking to see if I am too. I am merely surviving on what I earn. My employer has given no pay rises to staff for two years because of the recession.
For the board, however, things are rather different. Our chief executive received a pay rise of over 60% last year, taking his salary to just over £300,000. He also recently exercised stock options which, if sold immediately, would net him around £600,000. The board has forced down pay for staff, relying on the taxpayer to help make up a living wage, then pocketed the difference.
Inflation is now rising fast and the benefits of work are being rapidly eroded. If Iain Duncan Smith and Frank Field want to make it worthwhile going to work, they should start by ensuring businesses can no longer force the taxpayer to subsidise them by paying tax credits. They should also do something to link the pay of the highest and the lowest in a company. That way, if directors want more money they will have to make greater profits and improve living conditions of staff. This will also cut the amount the government pays to support the working poor.
When a small group is holding the rest of the country to ransom, whether it is the union barons of the 1970s or the company directors of today, it has ceased to be part of the solution and has become part of the problem. Something, as they say, must be done.
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• The Child Poverty Act requires government to measure both relative and absolute poverty. It is deeply concerning that the government is considering adopting a definition of poverty that only describes absolute levels of income.
In rich nations, multiple indices of the health of a society correlate strongly with levels of inequality and poorly with mean income. Our ability to participate fully in society – to afford decent food, sport or leisure activities and so on – is dependent on how our earnings compare to those of the people we live among.
Increasing the income tax threshold to £10,000 is a £17bn tax cut that, by itself, will not help the poorest 3 million households. If this is paid for with an increase in VAT then inequality will rocket. Even if new measures of absolute poverty no longer capture this, the health of our communities will be badly damaged.