Britain’s press are fighting a class war, defending the elite they belong to

It’s not just Rupert Murdoch and his crooks. All the corporate barons who corrupted our political system must be unmasked

guardian.co.uk, Monday 12 December 2011 20.30 GMT

Illustration by Daniel Pudles

Illustration by Daniel Pudles

Have we ever been so badly served by the press? We face multiple crises – economic, environmental, democratic – but most newspapers represent them neither clearly nor fairly. The industry that should reveal and expose instead tries to contain and baffle, to foil questions and shut down dissent.

The men who own the corporate press are fighting a class war, seeking, even now, to defend the 1% to which they belong against its challengers. But because they control much of the conversation, we seldom see it in these terms. Our press re-frames major issues so effectively, it often recruits its readers to mobilise against their own interests.

Crime and antisocial behaviour are represented as the predations of the poor on each other, or on the middle and upper classes. “Blonde millionaire’s wife raped in luxury home by asylum-seeking benefits cheat” is the transcendental form of a thousand tabloid headlines, alongside “Pippa Middleton’s bottom gets £1m makeover from top designer”. Though benefit fraud deprives the exchequer of £1.1bn a year while tax avoidance and evasion deprive it of between £40bn and £120bn, the tabloids relentlessly pursue the petty crooks, while leaving the capos alone.

On Monday the rightwing papers applauded government plans to cut benefits for people in social housing who have more rooms than they need. The “growing scandal of under-occupation”, the Mail observed, contributes to the housing crisis, depriving larger families of the homes they need. The Express told us that “it is only right that decisions such as this must be taken”. But what about the private sector, where there’s a much higher rate of under-occupation, especially among the wealthy? When this column suggested that these under-used homes should be taxed, the corporate press went berserk. Only the poorest should carry the cost of resolving our housing crisis.

Not a day passes in which rightwing papers fail to call for stiffer regulation of protesters, problem families, petty criminals or antisocial teenagers. And every day they call for laxer regulation of business: cutting the “red tape” that prevents companies and banks from using the planet as their dustbin, killing workers or tanking the economy.

The newspapers’ own criminal behaviour, more of which is being exposed before the Leveson inquiry as I write, looks to me like the almost inevitable result of a culture that appears to believe that the law, like taxes and regulation, is for little people. While portraying the underclass as a threat to “our” way of life, the corporate papers ask us to celebrate the lives of the economic elite. Saturday’s Telegraph devoted most of a page to a puff piece flogging the charming jumpers being sold by a Santa Sebag-Montefiore (nee Palmer-Tomkinson) from her “white stucco Kensington House”. She works – if that’s the right word for it – with someone she met at Klosters, where she and her family “ski with the Prince of Wales and Princes William and Harry”. So far they have managed to sell 40 of these jumpers, which somehow justifies an enormous photo and 1,400 breathless words.

I mention this sycophantic drivel not because it is exceptional but because it is typical. A friend who used to work as a freelance photographer for the Telegraph stopped when he discovered that most of those he was sent to photograph were the well-heeled friends and relatives of people on the paper. Journalism is embedded in the world it should be challenging and confronting.

These papers recognise the existence of an oppressive elite, but they frame it purely in political terms. The political elite becomes oppressive when it tries to curb the powers and freedoms of the economic elite. Take this revealing conjunction in the Daily Mail’s leading article on Saturday: “David Cameron yesterday finally said no to the European elite – vetoing plans for a treaty that included an EU-wide tax on financial transactions.” In other words, Cameron said yes to the British elite. But it cannot be explained in those terms without exposing where power really lies, which is the antithesis of what the rightwing papers seek to achieve.

As the theologian Walter Wink shows, challenging a dominant system requires a three-part process: naming the powers, unmasking the powers, engaging the powers. Their white noise of distraction and obfuscation is the means by which the newspapers prevent this process from beginning. They mislead us about the sources of our oppression, misrepresent our democratic choices, demonise those who try to challenge the 1%.

Compare the Daily Mail’s treatment of the Occupy London protesters, confronting the banks, to its coverage of the camp set up by people of the charming village of Meriden, confronting some gypsies. “Desecration, defecation and class A drugs” was the headline on the Mail’s feature article about Occupy London. Published on the day on which the City of London began its attempts to evict the protesters, it deployed every conceivable means of vilifying them and justifying their expulsion.

The Mail’s Meriden story, on the other hand, was headlined: “Adding insult to injury: now villagers who have protested against an illegal travellers’ camp for 586 days are told: YOU are facing eviction.” The story emphasised the villagers’ calm fortitude and the justice of their cause. Presumably they don’t defecate either.

 

Press barons have been waging this class war for almost a century, and it has hobbled progressive politics throughout that time. But the closed circle of embedded journalism is now so tight that it has almost created an alternative reality.

Ten days ago, for example, the Spectator ran a cover story that could not have been crazier had it been headlined: “Yes, Father Christmas does exist, but he’s been kidnapped by lizards”. A serial promoter of mumbo-jumbo called Nils-Axel Morner, who claims he has paranormal dowsing abilities and that an iron-age cemetery in Sweden is in fact the Hong Kong of the ancient Greeks, was given 1,800 words to show that sea levels are not rising. Citing “evidence” that was anecdotal, irrelevant or simply wrong, explaining that it was all a massive conspiracy, Morner ignored or dismissed a vast wealth of solid data from satellites and tide gauges.

The Spectator kindly gave me space to write a response last week, but it strikes me that a story like this could not have been published five years ago. It first required a long process of normalisation, in which evident falsehoods are repeated until they are widely believed to be true. The climate talks in Durban were slotted by the papers into the same narrative, in which climate scientists and the BBC conspire to shut down the economy and send us back to the stone age. (And they have the blazing cheek to call us scaremongers.)

It’s not just Murdoch and his network of sleazy crooks: our political system has been corrupted by the entire corporate media. Defending ourselves from the economic elite means naming and unmasking the power of the press.

• A fully referenced version of this article can be found on George Monbiot’s website

Britain is ruled by the banks, for the banks

Is David Cameron’s kid-glove treatment of the City remotely justified, when it neither pays its way nor lends effectively?

guardian.co.ukMonday 12 December 2011 20.00 GMT

The City, London

The City, London . . . Britain’s finance sector contributes less to the country than manufacturing. Photograph: Andy Rain/EPA

The national interest. It’s a phrase we’ve heard a lot recently. David Cameron promised to defend it before flying off last week to Brussels. Eurosceptic backbenchers urged him to fight for it. And when the summit turned into a trial separation, and the prime minister walked out at 4am, the rightwing newspapers took up the refrain: he was fighting for Britain. In the eye-burningly early hours of Friday morning, exhausted and at a loss to explain a row he plainly hadn’t expected, Cameron tried again: “I had to pursue very doggedly what was in the British national interest.”

As political justifications go, the national interest is an oddly ceremonial one. Like the dusty liqueur uncapped for a family gathering, MPs bring it out only for the big occasions. And when they do, what they mean is: forget all the usual fluff about ethics and ideas; this is important.

You heard the phrase last May, as the Lib Dems explained why they were forming a coalition with the Tories. More seriously, Blair used it as Britain invaded Iraq.

But here Cameron wasn’t talking about foreign policy; nor about who governs the country. The national interest he saw as threatened by Europe is concentrated in a few expensive parts of London, in an industry that would surely come bottom in any occupational popularity contest (yes, lower even than journalists): investment banking.

In its haste to depict events as Little Britain v Big Europe, the Tory press hasn’t dwelt on the inconvenient details of last week’s fight. But it was only after the prime minister failed to secure protection for the City from new financial regulation mooted by the EU that he told Nicolas Sarkozy to get on his vélo.

On one issue in particular, Cameron had a good case: Britain wants banks to put more money aside for a rainy day than the EU is considering. Elsewhere, he just looked unreasonable – what exactly is wrong with having international banking supervision? One reason for the euro crisis was that its members have 17 national bank watchdogs and barely anyone looking across borders.

Step back from what even EU officials were calling “arcane” details, though, and the big principle is this: the prime minister effectively stuck relations with the rest of Europe in the deep freeze in order to protect one sector of the economy.

In my recollection, no British minister in recent times has termed one industry as being of “national interest”. “Vital” or “key”? Why, such words are the very currency of the MP’s address to a trade association. But on the big phrase, I asked the Guardian’s librarians to check the archives from 1997 onwards. They came back empty-handed.

Cameron is merely expressing more openly something Labour frontbenchers also believe: that the City is pretty much the last engine functioning in Britain’s misfiring economy. Indeed, one of the Labour lines of attack against Cameron this weekend has been that he has left the City more open to regulation.

A few weeks ago, the shadow chancellor Ed Balls warned against any further taxes on financial trading within Europe. However, he said, he would urge a “Robin Hood tax with the widest international agreement”. In other words, Balls will give his fullest support to something that has no chance of happening.

This is the same kind of political subservience towards the City, observed by the Financial Services Authority (FSA) in its report into the collapse of RBS. According to the watchdog, a major reason why Fred Goodwin wasn’t checked as he drove RBS off a cliff was because of “a sustained political emphasis on the need for the FSA to be ‘light touch’ in its approach and mindful of London’s competitive position”. Had regulatorsbeen harder on the bankers, “it is almost certain that their proposals would have been met by extensive complaints that the FSA was pursuing a heavy-handed, gold-plating approach which would harm London’s competitiveness”.

As all British taxpayers know by now, securing the “competitiveness” of RBS has wound up costing us around £45bn.

So what is it that justifies the kid-glove treatment of the finance sector? Switch on the news and you normally hear some minister or lobbyist (come on down, Angela Knight of the British Bankers’ Association) talking about the vital contribution banking makes to employment. Our tax revenue. Or the role banks ideally play in directing money to needy businesses.

These claims are repeated so often that they rarely get even the briefest patdown from interviewers, let alone backbench MPs or economists. Yet they are largely bogus, as explained in a new book called After the Great Complacence, produced by academics at Manchester University’s Centre for Research on Socio-Cultural Change (Cresc). Indeed, on nearly any important measure, finance actually contributes less to Britain than manufacturing.

Take jobs. The finance sector employs 1m people in Britain. Chuck in the lawyers, the PRs and the smaller fry that swim in its wake and you are up to a grand total of 1.5m. And most of these people are not the investment bankers for whom Cameron went to war in Brussels. At the big British banks such as RBS and HBOS, 80% of the staff work in the retail business. Even if Sarkozy were to shroud Canary Wharf in a giant tricolore, those staff would still be needed to staff the branches and man the call centres. Even in its current state of emaciation, manufacturing employs 2m people.

What about taxes? Lobbyists like to point out that banks are usually the biggest payers of corporation tax, but usually omit to mention that corporation tax isn’t that big a money-spinner. For their part, even leftwingers will usually assume that the bankers effectively paid for the tax credits, hospitals and schools we enjoyed under Labour.

It’s not true. The Cresc team totted up the taxes paid by the finance sector between 2002 and 2008, the six years in which the City was having an almighty boom: at £193bn, it’s still only getting on for half the £378bn paid by manufacturing. It would be more accurate to say that the widget-makers of the Midlands paid for Tony Blair’s welfarism. But that would be a much less picturesque description.

Even in the best of times, the finance sector hasn’t paid anything like as much to the state as the state has had to pay for them since the great crash. According to the IMF, British taxpayers have shelled out £289bn in “direct upfront financing” to prop up the banks since 2008. Add in the various government loans and underwriting, and taxpayers are on the hook for £1.19tn. Seen that way the City looks less like a goose that lays golden eggs, and more like an unruly pigeon that leaves one hell of a mess for others to clear up.

Ah, but what about lending? After all, this is why we have banks in the first place: to channel money to productive industries. The Cresc team looked at Bank of England figures on bank and building society loans and found that at the height of the bubble in 2007, around 40% or more of all bank and building society lending was on residential or commercial property. Another 25% of all bank lending went to financial intermediaries. In other words, about two-thirds of all bank lending in 2007 went to pumping up the bubble.

This doesn’t look like a hard-working part of an economy humming along: it’s nothing less than epic capitalist onanism.

If the statistics don’t support the arguments for the City’s pre-eminence, the public don’t either. In 1983, 90% of the public agreed that banks in Britain were well run, according to the British Social Attitudes survey. By 2009, that had plunged to 19%.

In other words, both the evidence and the voters are against investment bankers. So why do the politicians cling on to them?

Part of the answer is financial. Bankers used the boom to buy themselves influence – so that, according to the Bureau of Investigative Journalism, the City now provides half of all Tory party funds. That is up from just 25% only five years ago.

Another part must be cultural. Running this government are two sons of bankers. Cameron’s father was a stockbroker, Clegg’s is still chairman of United Trust Bank (and famously helped his son get some work experience). For its part, Labour spent so long outsourcing all economic thinking to Gordon Brown and Ed Balls that it has long lost the ability to argue against the orthodoxy of giving the City what it wants.

In a poorer country, the cosiness of relations between bankers and politicians would be scrutinised by an official from the World Bank and disdainfully pronounced as pure cronyism. In Britain, we need to come up with a new word for this type of dysfunctional capitalism – where banks neither lend nor pay their way in taxes, yet retain a stranglehold on policy-making. We could try bankocracy: ruled by the banks, for the banks.

What are the results of bankocracy? It means that the main figures arguing for a Robin Hood tax are the Archbishop of Canterbury Rowan Williams and Bill Nighy. It means that opposition to the rule of banks isn’t found in Westminster, but in tents outside St Paul’s or among a few grizzled academics and NGO-hands – with no political vehicle to carry them. Meanwhile, the politicians declare that the national interest of Britain can be defined by what suits one square mile of it.

Osborne set to borrow billions more than Darling was projected to

We know from this morning’s unemployment figures that the government’s austerity programme is hurting – and it’s hurting the young and unemployed the most. But is it working?

David Cameron and Nick Clegg asserted in the Coalition Agreement (pdf) that tackling public sector debt was the government’s ‘most urgent task’. It has been revealed this morning that across the finance industry, the verdict is failure.

The Treasury has collated 14 independent forecasters’ predictions (pdf, p.18) for net government borrowing over the next four years.

Their collected view is that chancellor George Osborne will borrow billions more than the Office of Budget Responsibility predicted he would in June 2010 (pdf, Table C7, p.90) – or that the OBR said Alistair Darling (pdf, Table 4.5, p.38) would have if Labour had been re-elected.

Graph-of-borrowing-projections-2010-2015

Here are the raw figures:

Table-of-borrowing-projections-2010-2015

At worst, the government’s swinging cuts have stopped the recovery in its tracks, leading to borrowing far above and beyond what they predicted their supposedly profligate rivals intended. At best, with the European and global economy facing such turmoil, the facts have significantly changed since the general election of May 2010.

The current strategy has failed. It’s time for serious change.

http://www.leftfootforward.org/2011/11/george-osborne-set-to-borrow-billions-more-than-alistair-darling-was-projected-to/

We’re all in this together…..

Latest survey of boardroom pay finds average compensation went up by 49% to £2.7m The Guardian, Friday 28 October 2011 Chief executives’ pay rose on average by 43.5%, finance directors’ by 34.1%, and all other directors by 66.5%, according to the latest IDS survey. Photograph: Photodisc Total earnings for directors of FTSE 100 companies increased […]

FTSE directors’ pension pots average record £3.9m

TUC PensionsWatch shows top pensions rise along with big jump in FTSE chiefs’ pay as real wages for workers decline

The directors of the largest 100 British companies are in line for average annual pension payments of £224,000 each, according to a survey today.

The report shows 362 top directors have built up final salary pensions worth £568m and the average pension pot transfer value is at a record high – £3.91m compared with £3.8m last year. Directors also retire earlier than their staff. The most common age is 60, while for ordinary scheme members it is 65 and expected to rise.

The highest earning pensioner among current FTSE 100 directors will be the former chief executive of oil group Royal Dutch Shell, who is entitled to £1.2m a year from his company scheme. Jeroen van der Veer, who stepped down from the top job in 2009 but remains on the board, has amassed a pension pot worth £21.6m, the TUC has revealed in its 9th annual PensionsWatch report.

Just before his retirement, Van der Veer declared that pay had little impact on performance, saying: “If I had been paid 50% more, I would not have done it better. If I had been paid 50% less then I would not have done it worse.”

The details of FTSE directors’ pensions comes days after another survey showed that chief executives at the top 100 companies saw pay and bonus packages jump by an average of £1.3m to almost £4.5m last year, the biggest leap in nine years.

According to a study commissioned by the High Pay Commission, the average pay deal for a FTSE 100 boss soared from £3.09m to £4.45m as business leaders were able to enjoy record windfalls from share-based incentive schemes, thanks to a sharp bounce in the stock market.

The benefits reaped from the stock market bubble by FTSE 100 executives have not been mirrored on the shop floor. Annual wage rises stood at 2.2% for the final three months of 2010. Factoring in the rising cost of living – the retail price index stood at 4.8% last December – that means most workers in Britain saw a significant decline in their real incomes.

The TUC survey shows a growing number of bosses receive cash instead of, or in addition to, company pension scheme contributions. Pearson’s long-standing chief executive, Marjorie Scardino, banked the largest cash payment, of £620,700 – nearly 76% of her salary – while Peter Clarke, chief executive of hedge fund Man Group, pocketed £532,000 – 94% of his salary.

Stephen Hester, chief executive of state-controlled Royal Bank of Scotland, received the third largest cash payment, collecting £420,000, or 35% of his salary.

Companies with defined contribution schemes – less advantageous than the final salary schemes gradually being phased out – make much larger contributions to directors’ pensions as a proportion of salary than they do for the average employee.

Directors surveyed enjoyed average company contributions of 22% of their salaries. The average for all employees is 6.7%, while many companies set default contributions even lower, at 3%, according to the Association of Consulting Actuaries.

TUC general secretary Brendan Barber said: “This survey highlights the real pension scandal in Britain today. Public sector workers are rightly furious about being told that their pensions of just a few thousand pounds are ‘gold-plated’ and unaffordable by the same business leaders who stay silent on the multimillion-pound pensions that many enjoy themselves.”

Barber added: “It’s hardly a surprise that these lavish rewards are signed off when directors sit on each other’s company remuneration committees. This culture of mutual backslapping must be tackled by giving ordinary staff members a voice on remuneration committees.”

Barber called on the government to force companies to disclose directors’ pension arrangements so that they could be scrutinised by staff and shareholders.

With more directors opting for cash payments, the TUC says pensions secrecy is increasing. In some cases, retirement cash is listed under other “emoluments”, making such payments harder to detect. “This may result in the number of directors being covered in any review of executive retirement provision shrinking,” according to the report.

Directors still receive 23 times more than the average worker, a figure which has stayed fairly constant since the survey began in 2003. Members of company and public sector schemes receive an average annual pot of £9,568, while the average public sector pension is £6,497.

Darren Philp, policy director for the National Association of Pension Funds, said: “More transparency is needed around boardroom pensions. It is also worrying that directors’ pensions are not usually linked to performance. This could mean bosses are rewarded in their retirement despite failure in the job. Pensions must not become a back-door to boosting pay.”

http://www.guardian.co.uk/business/2011/sep/07/ftse-directors-pensions-worth-millions