Wednesday, 4 February 2015

Business model in need of change

What a shame that the likes of Tony Blair and tax avoiding Peter Mandelson don`t concentrate on helping rid us of this callous coalition of austerity-obsessed Tories and duplicitous Lib Dems, instead of criticising Miliband for not being sufficiently pro-business. It beggars belief that so much of our current business model is allowed to continue largely unchallenged and unregulated, and even when Miliband did show true leadership qualities, and give his party a boost in the polls by attacking what he rightly called "predator capitalism", Blairite criticism continued. 
     The fact is that most people in this country are fed up with the antics of profit-at-all-costs British business, and disgusted when they see politicians cosying-up with multi-millionaire, capitalist fat cats, who not only maximise their own massive pay by cutting their workers` jobs and wages, but display extreme arrogance, shamelessness and, of course, a refusal to accept that taxation is necessary for a civilised society, where all pay their fair share. They even refuse to acknowledge the debt their companies owe to the taxpayers` funding of their workers education and health, not to mention the benefits corporations get from the security and transport facilities paid for by the Treasury.

     How typical of this wealth-obsessed society of ours that, when a company like Tesco has what the media calls a "collapse in profitability", the previous CEO blames, in his words, the "failure of leadership" under his successor.  Also nothing to do with Leahy, of course, was the huge reputation Tesco gained for its use of aggressive tactics in acquiring land and/or planning permission, its apparent lack of concern for the thousands of local small companies it put out of business, its bullying of farmers and suppliers, shareholder revolts over the obscene levels of executive pay, and the company`s failure to pay a living wage to its employees. Then there`s the small matter of how Leahy, for the majority of his tenure, did not have the stiff competition of discount supermarkets waging a price war against his company.
     But, of course, as the Star told us last week, Leahy is far from being alone in his arrogance and blamelessness.(Morning Star,28/01/15) Having forced most of the workforce to become "self-employed contractors", founder of the Better Capital investment firm that owns City Link, Jon Moulton, not only refused to take any responsibility for the small contractor companies` staffing costs, but also denied Better Capital ever intended to provide further funding. Happy to see taxpayers picking up the bill for up to £4m in statutory redundancy payments, Moulton, naturally, and his firm, are based in Guernsey, thereby avoiding paying taxes to the British treasury.
     Such arrogance and hubris clearly underscore our business system today,and explain, too, the glaring inequality in society; the problems of pay which is so low it leads to tax receipts falling, and increased reliance on in-work benefits, and the increased poverty caused by zero-hours contracts have much to do with this business model, where the size of the obscene bonuses for the top jobs rely on increasing profits. As they know, the easiest way to do this is to lower labour costs, regardless of the pain it causes. Commentators like the Guardian`s Polly Toynbee have suggested "restoring power to unions" as a solution, but why not go further and follow the German example of co-determination, which involves workers` representatives in the running of companies, including the determining of pay levels? It`s certainly a way to avoid the situation like we have today in this country where excessive pay, with CEOs in the FTSE 100 earning 143 times the average amount paid to their workers, is far too commonplace. It is rather disingenuous of the director-general of the CBI, John Cridland, to be saying that the business community understood it had a "responsibility to help people earn more". Yet more arrogance!  Are we not expected to know that he oversees businesses which are refusing to invest the £500bn they possess in the economy, and that in his end-of-year report, Cridland said his hopes for the EU included less "lifestyle regulation such as the working time directive", which translates into bosses having  free rein to increase the length of the working day. What a pity he doesn`t concentrate on emphasising how all companies should be paying at least the living wage to all employees, or ending their tax avoidance policies, currently costing the country around £40bn a year. They already pay a corporation tax 5% lower than in any of the G7 countries, and eighteen points lower than in the United States.
           Then there are the bankers! Banking`s reputation is deservedly at an all time low: profit the prime motive, scams devised to trick customers and rig interest and exchange rates, highest pay to those employed in the least socially valuable aspect of the business, with obscene bonuses and payment their reward, lowest pay possible to those responsible for the daily running of the company and scant regard paid to trade unions and workers` rights, increased "efficiency" equating to thousands of job cuts, and, of course, yet again, maximum effort utilised to ensure as little of the profit goes to the government in the form of taxation. Such  "irresponsible capitalism" may lead to many declarations by CEOs intent on transforming the culture, but "ethics" remain way behind profits in the pecking order, even lower than customer satisfaction. Indeed, one such practitioner of bad practice has been forced to admit, if its recent advertising campaign is evidence to judge it by, that its role as football league sponsor is more likely to win new customers rather than its damaged reputation as custodian of savings. Despite such practices of "predator capitalism", the public is constantly, and has been since the 2010 election, inundated with propaganda about "private" being superior to "public", and that this business model is the one to follow! What was it again, which caused the economic crash in the first place? Owen Jones recently quoted a Bloomberg editorial which said that behind every "irresponsible borrower" is an "irresponsible lender", and we all know who the latter are!
          State education, whilst imperfect in many ways, was enjoying examination success, with  results in many schools even rivalling, sometimes surpassing, those of the private sector; universities were accessible to pupils from all levels of society, because the A-level examinations were structured, with coursework, modules and resit availability, all designed to maximise potential and opportunity.Yet changes came, not only with widespread assessment "reforms", but also with the organisation of schools mirroring "big business" of all things, with pay for the headteacher four or five times the level awarded for classroom expertise, union rights and pensions reduced, and the totally inappropriate Performance Related Pay mooted for state education. At university level, more of the failed banking business model; even in times of government enforced austerity, vice-chancellors receive massive boosts to pay, whilst their institutions` student intakes are falling, lecturers` rates frozen, and student fees trebled. Yet the people whose work ensures university life continues as normal, the cleaners,cooks and such-like, are exploited to such an extent, industrial action is often their only option.
      Even the BBC, once the world leader in television and radio programming, lauded for its outside broadcasts and universally acclaimed for its creativity, is now subjected to similar business methods, cost-cutting whilst simultaneously over-paying at the top, over-generous golden handshakes, muddled management structures, and largely unimaginative in its output.
     So no, Blairites, we do not want a Labour party in hock to big business and in cahoots with fat cat tax avoiders, but one which pledges to change the country`s business model into one respecting the rights of workers and trade unions. As the Greek election showed us, people do not want to be ruled by politicians intent on maintaining the status quo, or even on tinkering at the edges, but by those advocating wholesale change.

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