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As Cuts Widen Britain's Wealth Gap...no, George, We're Not All In This Together

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http://www.mirror.co.uk/news/top-stories/2011/04/03/as-cuts-widen-britain-s-wealth-gap-no-george-we-re-not-all-in-this-together-115875-23037485/

As cuts widen Britain's wealth gap...no, George, we're not all in this together

SO now we know how George Osborne is planning to get rid of Britain's debt: by palming it off on to hard-up families.

While the Chancellor brags about cutting the deficit, British households will be nearly £20,000 FURTHER in debt at the next election.

New figures sneaked out in the small print of the Budget show that average household debt will soar from £58,000 to £77,309 in the next four years, as families take out loans to make up for Government cuts.

Nobel Prize-winning economist Paul Krugman says the rise is the inevitable result of the Government's drastic slash-and-burn policies.

He adds: "The only way the economy can avoid taking a hit from Government cuts is if private spending rises to fill the gap - and the only way that can happen is if people take on more debt."

And Tony Dolphin, the top economist at the Institute for Public Policy Research think tank, says: "This is the downside of the Chancellor's deficit reduction plan. As tax increases and public spending cuts squeeze households' disposable incomes, they will be forced to take on more and more debt in an attempt to maintain their living standards."

None of that will matter to the 23 millionaires sitting around the Cabinet table.

But for normal workers, bringing home an average of £22,000 a year, soaring debt will be devastating to their standard of living.

But as Mr Osborne signalled in his Budget last month, all he wants to do is CUT. Cut the deficit, cut corporation taxes and cut services.

Ed Balls, the shadow chancellor, says: "George Osborne says the only thing that matters is getting government borrowing down. But while he is cutting further and faster than any other major country in the world, borrowing by hard-pressed families is now forecast to rise every year.

"And to make things harder still, his VAT rise is looking like an own goal as it pushes up inflation, which is liable to mean higher interest rates for mortgages and household borrowing."

Despite already hitting the poorest hardest - the trust-fund millionaire Chancellor now wants to scrap Labour's 50p rate of tax which Labour brought in to make the richest 1%, who earn more than £150,000 a year, pay their fair share.

But families reeling from VAT hikes and welfare cuts should be used to it by now. For the past 30 years the gap between the richest and poorest has been growing.

Half of the UK population now own just 1% of the country's cash, while the wealthiest 20% own a massive 84% of Britain's wealth. And the highest earning 10% of households have a total wealth of nearly 100 times the bottom 10%.

The record under Tony Blair, himself educated at £25,000-a-year Fettes in Scotland, was not much better. Between 1998 and 2006, the bottom 20% of the population's weekly pay went up by just 5% - while pay for the top 20% went up more than twice as fast.

But it's not just cash - the rich can also expect to live longer...

People in Glasgow live on average to just 72.9 years - compared to 82.4 years in Kensington and Chelsea, where Cameron and Osborne live.

And no other country apart from Spain has such an unfair concentration of land ownership.

The latest figures show 69% of Britain's land is owned by 0.6% of the population. That means 58,000 families own 41 million acres. Even the UN says Britain is one of the most divided rich countries in the world.

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Now a new campaign has been launched to stop us sleepwalking into more entrenched inequality.

Co-operatives UK, which works to develop and unite co-operatives, hopes to get 100,000 signatures to cut the gap between rich and poor.

The group is calling on the Government to get business to share profits with staff, save lifeline services, such as village shops and pubs, and cut red tape to make it easy to start a co-operative.

"Inequality is like pollution," says Ed Mayo, secretary general of Co-operatives UK. "We all breathe it in and we all suffer. For too long we have been told that you have to be selfish to get by. Well, you don't and the success of co-ops shows how.

"With this petition, we want to focus on what really matters, which is the urgent action the UK needs to narrow the gap between rich and poor."

A recent influential book called The Spirit Level by Professor Richard Wilkinson, who writes for us below, found the more equal a society, the better it is live there.

The book, which has been praised by Labour leader Ed Miliband, reveals that countries with a smaller gap between rich and poor are happier, have less crime and live longer.

So come to your senses, Mr Osborne. Otherwise most of us in Britain will have even less to look forward to.

Opinion: Richard Wilkinson, Emeritus Professor of Social Epidemiology at the University of Nottingham Medical School and co-author of The Spirit Level

Inequality is one of the most powerful influences on our quality of life.

A wide range of health and social problems are much worse in countries with big income differences between rich and poor.

These include life expectancy, mental health, teenage pregnancies, violence, drugs, children's maths and literacy scores, as well as the proportion of the population locked up in prison.

This is because more unequal societies are more stressful.

Instead of people co-operating, there is more competition and more insecurity. For example, it is well established that violence is worse in more unequal societies where people are sensitive to how they're seen and judged.

That's because violence is triggered by people feeling disrespected, looked down on and suffering loss of face and humiliation.

These relationships are established from looking at evidence from the World Health Organisation, the UN and the World Bank.

And these outcomes are not just a little bit worse in more unequal societies, they are much, much worse.

For instance, rates of mental illness are three times as bad in Britain and the US compared with less unequal places such as the Scandinavian countries and Japan.

VIOLENCE

With things like teenage births or proportion of the population in prison, it can be as much as 10 times as bad.

The US is the most unequal society in the developed world, with the highest levels of violence, obesity and proportion of the population in prison. Next is Britain and Portugal.

The differences are so large because it's not just the poor who are affected by inequality.

The better-educated section of the population are shown to live longer if they are in a more equal society.

David Cameron's idea of a Big Society would be fine if he was rapidly reducing inequality. But actually you get the reverse effect if inequality is rising.

If you cut services, you get more inequality and need more services because you get more mental illness, drug problems, violence and teenage births.

In a speech he made a year ago, Cameron quoted our book and said by almost any measure more unequal societies have a lower quality of life.

His actions, however, will only serve to increase inequality.

Cameron's words should be put back into his mouth.

For more information, please visit www.equalitytrust.org.uk

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Yeah, let's just turn on the money tap and start printing even more to cover a lifestyle this nation thinks it deserves, but cannot afford. I'm sure the additional inflation will hit the richest much harder than the poorest.

Sarcasm aside, the fact is that the cuts are negligible, nothing like what is needed, less than 1% per year over the term of this government. So essentially we have some meagre cuts (that I admit will hit some people - though small, they are cuts after all), higher taxes, but generally little effect on the mammoth debt this country is in.

This country (as many others in the west) has a date with debt default and we are right on course, cuts or no cuts. Give it a few years and the population of this country are going to have a bit more to gripe about than a few youth centres shutting down.

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No, they don't have a point. Not at all. They're hopelessly wrong on causes, facts, and consequences.

Yes, there are super-rich people, and disproportionately many of them in the government (I guess that says something about our recent social/economic history). There are indeed gifts to the rich in the current government's policy, but they're a drop in the ocean compared to what happened in the years of HPI and the bank bailout. And come to think of it, I struggle to think of any gift to the rich introduced rather than inherited by the current government.

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Co-operatives UK, which works to develop and unite co-operatives, hopes to get 100,000 signatures to cut the gap between rich and poor.

The group is calling on the Government to get business to share profits with staff, save lifeline services, such as village shops and pubs, and cut red tape to make it easy to start a co-operative.

..the present Government is encouraging this style of enterprise ....John Lewis is the best example while the Cooperative Bank and shops are doing reasonably well ....just another lefty swing at Government from the Mirror (who else apart from the Guardian?)...Nulabour created the biggest divisions between rich and poor while in Government and it's a long way back after the devastation they left .. ....and have carried on since ousted....look at Blair....selling his soul to the alter of big money....Maguire's rag is now boring ...find something interesting to write about..... :rolleyes:

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Nobel Prize-winning economist Paul Krugman says the rise is the inevitable result of the Government's drastic slash-and-burn policies.

He adds: "The only way the economy can avoid taking a hit from Government cuts is if private spending rises to fill the gap - and the only way that can happen is if people take on more debt."

And Tony Dolphin, the top economist at the Institute for Public Policy Research think tank, says: "This is the downside of the Chancellor's deficit reduction plan. As tax increases and public spending cuts squeeze households' disposable incomes, they will be forced to take on more and more debt in an attempt to maintain their living standards."

No, it is not the only way*. They can spend less instead, by living within their means.

What they're basically saying is that instead of borrowing from their kids (i.e. public debt) to live beyond their means, they will have to borrow from their own future earnings. Either that or people start living within their means and stop borrowing to 'maintain their living standards' (lose the BMW, stop going out, fewer holidays, less new clothes etc).

I find it disgusting that people are so willing to spend their children's future, instead of tightening their own belts. Is it any wonder that there is a growing wealth gap, when the older generations keep loading up the debt on the young/unborn**?

If we can have a serious debate on the wealth gap, then I'm all for it. However, this wouldn't involve endless deficit spending, but would involve tax cuts for the young/poor, likely combined with tax increases for the older/richer. It's high time we stopped borrowing off the next generation - it is immoral and, arguably, against human rights.

* EDIT: Actually, he is right about the economy taking a hit though, but this is unavoidable - the government can't keep borrowing ever more to fund today, at the expense of tomorrow. Additionally, the rich won't notice it, but the poor will, which is why I agree with the point about the wealth gap being a problem. I just disagree with the solution of 'just keep borrowing more' - it's no solution at all.

** Of course, it's easy to win votes to spend on today's electorate, at the expense of those unable to vote yet, which is why they do it. Am I in a minority by thinking this is disgusting though?!

Edited by Traktion

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No, it is not the only way*. They can spend less instead, by living within their means.

+1

And Tony Dolphin, the top economist at the Institute for Public Policy Research think tank, says: "This is the downside of the Chancellor's deficit reduction plan. As tax increases and public spending cuts squeeze households' disposable incomes, they will be forced to take on more and more debt in an attempt to maintain their living standards."

So households are entitled to the living standards they enjoyed during the Blair/Brown debt fuelled boom? Unfortunately not. The western world needs to get used to the fact that living standards are falling, and will continue to fall for years as the "great stagnation" gathers pace.

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No they don't have a point.

It is entirely fair that a handful of families own almost all the land in the country after all they legitimately acquired it through murdering foreigners and/or rival families and being of superior stock to the peasants several hundred years ago. Yes you might have paid 40% of your inheritance to the public but you don't have the correct legal and tax advice.

Fair too that these same people can rent the land to farmers who then work to produce our food and pass on the cost of that rent to us peasants in food prices.

Fair too that the building land is owned by these people who can release slivers of it into the public so that you can spend 25 years of your productive lifetime paying hundreds of thousands of pounds for it.

All this talk of it being unfair, and of their being a better alternative for all, is just evil communism or something like that :)

Imagine that these rents imposed on society didn't exist - perhaps then you wouldn't have to work as much, or pay as much tax and could spend time doing stuff you actually enjoy. It would be terrible.

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Nobel Prize-winning economist Paul Krugman says the rise is the inevitable result of the Government's drastic slash-and-burn policies.

Logically, then, a policy of borrow-and-spend will inevitably result in a smaller wealth gap? It would seem that New Labour tried that and all evidence points to the exact opposite, i.e. the wealth gap actually increased. There's neither the evidence nor the logic that gov't spending alone will increase equality. I think wealth inequality is a critical issue that needs to be addressed, but this article is complete nonsense.

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No they don't have a point.

Oh dear.

If they'd talked of historical injustice as you do they'd have had a point.

But then they'd have lost the non-point of propaganda they appear to be trying to make when they so totally misplace the blame.

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Logically, then, a policy of borrow-and-spend will inevitably result in a smaller wealth gap? It would seem that New Labour tried that and all evidence points to the exact opposite, i.e. the wealth gap actually increased. There's neither the evidence nor the logic that gov't spending alone will increase equality. I think wealth inequality is a critical issue that needs to be addressed, but this article is complete nonsense.

I would conclude that Labour* invested poorly. If their investment had resulted in the wealth gap decreasing, the borrowing from the few, to invest for the many strategy could have worked. However, it didn't... the lenders/wealthy who loaned the government money clearly got a better deal than the majority who are now seeing the wealth gap widening. When you have so much power to indebt generations of people, you must be damn sure that you're not going to squander the money.

Does this come as a surprise to anyone though? Governments seem to play to the short term, pleasing voters of today with trinkets and toys, often claiming it as 'investment'.

Unfortunately, people (including well meaning monetary 'reformers') seem to think that the government is magical and can borrow in a different way to the rest of us - it can't. It may be the ultimate secure borrower in the land (as it can span debt over many generations, throw people in jail for not paying it back via taxes etc), but it is still just an entity emitting paper. This is the same as you, I or any company issuing bonds/borrowing. Worse still, as lending to the government is considered 'risk free', it can starve private sector entities of credit (as they are considered more risky). In short, the government has 'stimulated' the economy for decades with deficit spending and all it has done is invest it poorly and widen the wealth gap... it's very disappointing to say the least.

*EDIT: Any any other party who has been spending more than they taxed over the last few decades.

Edited by Traktion

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Logically, then, a policy of borrow-and-spend will inevitably result in a smaller wealth gap? It would seem that New Labour tried that and all evidence points to the exact opposite, i.e. the wealth gap actually increased. There's neither the evidence nor the logic that gov't spending alone will increase equality. I think wealth inequality is a critical issue that needs to be addressed, but this article is complete nonsense.

No it isn't!

It is NO coincidence there is another article running on HPC that Spain has 20% unemployment.

Portugal/Spain/UK have worst amount of wealth/land distribution!

The Elites of these lands have declared all out war on the populations & through their Govts pushed the populations too far in their land and wealth grabs! The countries are now collapsing.

This'll make you larf.

After poster Leicestersq annoyed me yet again I suddenly realised LEIC was the Initials of London East India Company ('ester' means BAD WINE or VINEGAR)

Belgrave an area of Leicester and Belgrave Hall are in the Golden Mile (coz a mile of Asian shops all sell GOLD there) BELGRAVIA connections!

So a quick Peek at the etymology of Belgrave and it turns up the biggest dung-hill you could EVER imagine!

Belgrav(e)ia - The settlement has been mentioned in Domesday Book as Merde-grave

However, after the Norman Conquest the first part of the name merde was taken to be Old French ‘dung’ or ‘shit’, hence the people changed it to Old French beu, bel ‘fair’, ‘lovely’, in order to remove that unpleasant association.

So Bel-gravia (secretly) means SHIT-GROVE or the Wooded place where one shits! Do bears shit in the woods?

You can also see where successive GOVT bullies for the uber-wealthy get their 'BEL' or "FAIR SOCIETY" word from - secretly you know for certain they are talking a 'pile of SHIT' to us

Just LARF @ all the CITY Millionaire 'asp-irants' attracted to their (BEL-GRAVIA) 'dung-hill'

Edited by erranta

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No, it is not the only way*. They can spend less instead, by living within their means.

What they're basically saying is that instead of borrowing from their kids (i.e. public debt) to live beyond their means, they will have to borrow from their own future earnings. Either that or people start living within their means and stop borrowing to 'maintain their living standards' (lose the BMW, stop going out, fewer holidays, less new clothes etc).

I find it disgusting that people are so willing to spend their children's future, instead of tightening their own belts. Is it any wonder that there is a growing wealth gap, when the older generations keep loading up the debt on the young/unborn**?

If we can have a serious debate on the wealth gap, then I'm all for it. However, this wouldn't involve endless deficit spending, but would involve tax cuts for the young/poor, likely combined with tax increases for the older/richer. It's high time we stopped borrowing off the next generation - it is immoral and, arguably, against human rights.

* EDIT: Actually, he is right about the economy taking a hit though, but this is unavoidable - the government can't keep borrowing ever more to fund today, at the expense of tomorrow. Additionally, the rich won't notice it, but the poor will, which is why I agree with the point about the wealth gap being a problem. I just disagree with the solution of 'just keep borrowing more' - it's no solution at all.

** Of course, it's easy to win votes to spend on today's electorate, at the expense of those unable to vote yet, which is why they do it. Am I in a minority by thinking this is disgusting though?!

+1, perfectly expressed

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I find it disgusting that people are so willing to spend their children's future, instead of tightening their own belts. Is it any wonder that there is a growing wealth gap, when the older generations keep loading up the debt on the young/unborn**?

Screw 'em. What have they ever done for us?

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+1, perfectly expressed

Don't just blame the easily led 'ignorant' proles.

What do you think PFI is?

Who invented it?

Was the population consulted first or involved in any discussion about it?

Why have successive Govts hidden this 'theft' from the population for decades?

PFI is hidden and invasive in every aspect of our country roads, skools, hospitals, etc - even the military services are 'at it'

Who authorised this THE-FT from future generations of taxpayers?

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I find it disgusting that people are so willing to spend their children's future, instead of tightening their own belts. Is it any wonder that there is a growing wealth gap, when the older generations keep loading up the debt on the young/unborn**?

Well said.

Nearly everybody I know has a huge capacity to spend a lot less without really effecting their quality of lives.

Might even improve it for some.

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Well said.

Nearly everybody I know has a huge capacity to spend a lot less without really effecting their quality of lives.

Might even improve it for some.

Problem, neatly encapsulated in one nifty phrase-

TIME TO RAISE THE RENTS!

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If people worked out how much they actually pay to subsidise the costs of land owners in this country they'd be amazed.

My house would cost about £50k to build and fully kit out if sat on land at agricultural prices.

Instead you pay £150k for the land it is on as well giving a total of £200,000.

To pay off the £200,000 you borrow credit from a bank and it costs you £400,000 over the next 30 years.

To take home £400,000 you need to earn around £700,000

Over the next 30 years you'll have lost £23,300 of your salary each and every year to buy my house.

If land were cheaper and borrowing was interest free you could have another about £620k to actually spend on enjoying life.

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If people worked out how much they actually pay to subsidise the costs of land owners in this country they'd be amazed.

My house would cost about £50k to build and fully kit out if sat on land at agricultural prices.

Instead you pay £150k for the land it is on as well giving a total of £200,000.

To pay off the £200,000 you borrow credit from a bank and it costs you £400,000 over the next 30 years.

To take home £400,000 you need to earn around £700,000

Over the next 30 years you'll have lost £23,300 of your salary each and every year to buy my house.

If land were cheaper and borrowing was interest free you could have another about £620k to actually spend on enjoying life.

Oh it's mucy worse than that - the £50k build costs includes all the payments everyone else in the chain has to make to the landholders.

Try more like £4k for the average house, minus the rentierism.

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If people worked out how much they actually pay to subsidise the costs of land owners in this country they'd be amazed.

My house would cost about £50k to build and fully kit out if sat on land at agricultural prices.

Instead you pay £150k for the land it is on as well giving a total of £200,000.

To pay off the £200,000 you borrow credit from a bank and it costs you £400,000 over the next 30 years.

To take home £400,000 you need to earn around £700,000

Over the next 30 years you'll have lost £23,300 of your salary each and every year to buy my house.

If land were cheaper and borrowing was interest free you could have another about £620k to actually spend on enjoying life.

You then get multi-millionaire Politicians berating the population for not having a Private Pension set up - so their City 'Chums' can steal a huge part of it in 'fees' & other rip-off charges over the term!

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The amazing thing is that despite the cuts now beginning to appear on the public's conciousness they are still not able to link the economic situation with fact that they are being made to pay for the actions of the few.

Never in human history have some many been made to pay for the actions of so few.

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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