Keeping a roof over ones head

House prices are now six times the salary of the average Scot, according to new government figures revealed yesterday.
The statistics show that the average house price of £137,192 is running out of reach of the £22,261 median salary.

First-time buyers with little or no savings are being faced with debilitating interest rates as the industry recoils, and many young people can't buy without parents' help. The pressure on those with low incomes was highlighted by one case where a couple with a joint income of £26,000 were paying £700 a month in mortgage repayments.

Don Fleming, of the Mortgage Advice Network said in one instance a lender was offered a 95% mortgage and as soon as the papers were signed a further 30% loan was offered as a top-up because the person was then classed as a property owner. He said: "Lenders were calling it flexibility, but what they mean is they are pulling the wool over society's eyes. Government should have stepped in to stop people receiving large unsecured loans."

The Gap Widens ( 4 )

And From the BBC

The rapidly rising incomes of the richest 10% of the population are the major factor contributing to growing inequality in Britain.
According to the Institute for Fiscal Studies (IFS), an independent think tank, the incomes of the top 10% have risen faster than those of the population as a whole since Labour came to power in 1997. And that increase has been particularly concentrated at the very top of the income distribution - among the half million individuals in the top 1% of the income scale.

Between the 1996-97 tax year and 2004-05, the income of the richest 1% grew at an annual rate of 3.1%, compared to 2.3% for the population as a whole, and the income of the top 0.1% grew by 4.4%. The stock market boom has boosted the income of the rich
The growth was particularly strong in the Labour's first term, where the income of the super-rich grew by 8% per year. The IFS suggests that the rising stock market between 2005 and 2007 may have further boosted the income of the rich - a view confirmed by the 20% increase in the wealth of those in the Sunday Times rich list in 2007.

In contrast, those at the bottom of the income distribution - and especially the poorest 15% of households - saw their income go up at below-average rates, and in some cases even fell.

"It seems there are two interesting phenomena, at either end of the income scale, that are driving trends in overall income inequality" said IFS's Mike Brewer

Overall, the gap between the bottom 10% and the top 10% has widened. The top 10% of individuals in the UK now receive 40% of all personal income, while the bottom 90% receive 60%. The top 0.1% get 4.3% of all income - the highest figure in the UK since the 1930s, and three times as much as they received as a share of income in 1979.

The report says that "income inequality is at its highest level since the late 1940s".

The average income of the top tenth, of £49,950, was double the average income of all taxpayers (£24,769) and triple that of all households (£15,000), one-third of whom pay no tax.
To get into the top 1%, an individual needed an income of £100,000, and to get into the top 0.1%, £350,000. The average income of £155,000, while the top 0.1% of taxpayers had an average income of £780,000.

WHO ARE THE VERY RICH?
Male: 90%
Middle-aged: 80%
Live in London/SE: 70%
Work in finance, property, accountancy, law: 60%
Average income: £785,000
Source: IFS, top 0.1% of GB taxpayers, 2004/5

Poor health

Women from deprived backgrounds are treated differently and have a lower breast cancer survival rate than more affluent women , says a study

The charity Cancer Research UK studied nearly 13,000 patients from England's Northern and Yorkshire health regions. It found deprived women were less likely to be diagnosed in the early stages of disease, when treatment is most likely to be effective. They were also less likely to have surgery or radiotherapy.

The British Journal of Cancer study found that among the most affluent group, 40% had lumpectomies, which allow breast conservation, rather than full mastectomies to remove the breast. However, the figure among the most deprived group was just 31%.

They said that more women from deprived areas were likely to favour a mastectomy because it is a one-off treatment, whereas lumpectomy requires a course of radiotherapy, and therefore regular trips to a clinic, which can be difficult and costly.

The study also found that more than 22% of women from deprived backgrounds did not receive surgery, compared with just over 13% of more affluent women. Part of the reason for this disparity was due to late presentation, but the researchers also found women from deprived backgrounds were also more likely to have other health problems which made them unfit for surgery, or to turn down the option.

A slightly higher proportion of affluent women were seen within 14 days of referral by their doctor than women from more deprived areas. Women in deprived areas were less likely to be given radiotherapy and, on average, had a lower rate of five-year survival.

Dr Rosemary Gillespie, of the charity Breast Cancer Care, said: "The persistence of inequalities in treatment and outcomes highlights that key messages about breast health and screening are still not reaching those in deprived communities who need them."

Minimum Wages - Maximum Exploitation

Thousands of workers are being short-changed by firms who refuse to pay the national minimum wage, the TUC found .

Around 150,000 staff are being denied rate of £5.52 an hour for adults and £4.60 for 18 to 21-year-olds, it says. Those in restaurants, hotels, cleaning, hairdressing and childcare were said to be the most likely to be underpaid.
TUC general secretary Brendan Barber said: "There should be no hiding place for bosses who are deliberately cheating their workers out of the minimum wage."

Socialist Courier will go further and say all wages and wage labour is theft . That it is slavery . Within capitalism , the fight to improve wages is indispensible but workers should take the next step - campaign to abolish wages .

The property ladder

Research by the Bank of Scotland, found that young people faced a financial struggle to own property, with the average price paid by first-time buyers soaring 113% from £57,929 in 2002 to £123,213 this year. With the threshold set at £125,000, many first-time buyers paying more than the average price of £123,213 will have to find an extra 1% of their property price on stamp duty.
The average property is now out of reach of first-time buyers in 95% of places, according to the fifth annual First Time Buyer Review. Edinburgh and Helensburgh are the least affordable places for first-time buyers and properties there are 8.2 and 7.5 times the average income of a first-time buyer household. The deposit required by first-time buyers has soared 238% since 2002 and the average amount put down for a first property in Scotland is £25,951 - 95% of an average full-time worker's salary. Five years ago it was only 35% of an average worker's full-time earnings.

"It is beyond the reach of people who are earning between £12,000 and £16,000 a year to save up for that kind of deposit. " Peter Kelly, director of the Poverty Alliance said. "People are putting themselves in more risky positions and it will be people who are on the low end of the income scale who will pay the price for that."

Housing charity Shelter Scotland said that an additional 30,000 affordable rented homes, not including general housebuilding, were needed by 2011. It said that more than 200,000 people were on waiting lists and 9000 households were in temporary accommodation in March this year.

For a socialist take on housing read Building Profits Versus Building Houses

And for a more recent article on the house property price bubble read here

Nor should we think of the lack of shelter as just a Scottish problem , of course .

A man, believed to be in his sixties, was found dead on a wooden pallet in the Place de la Concorde in the heart of Paris victims of homelessness and the cold . Another man, 62, was found dead in his car in Vanves, just west of the capital. The deaths have provoked new quarrels over the alleged failure of successive governments to provide lodgings for France's alleged 200,000 homeless people. One pressure group, Les Morts de la Rue (the dead on the street), claimed that at least 200 people, between 18 and 80, had died prematurely while sleeping rough in France in the past 12 months.

Jean-Paul Bolufer, the head of the private office of the Housing minister, Christine Boutin , said last month that it was "scandalous" that some relatively wealthy people lived in subsidised, publicly owned housing while others lived on the streets. a newspaper revealed that he was paying 1,200 Euros (£870) a month rent – a quarter of the market price – for a 190 square metre apartment in an upmarket area of the Left Bank. There were at "least 200,000" other well-off people living in subsidised flats in Paris, he said.

The Price of Learning

The principal of Glasgow University accepted a £23,000 pay rise in the past year - an increase of more than five times the rate of inflation. The 11% increase brings Sir Muir Russell's salary and pensions benefits to some £234,000 a year at a time when the rest of the university's staff have been given increases of just 4%. Last year's university accounts show the level of Sir Muir's remuneration package jumped from £184,000 in 2004-05 to £211,000 in the last financial year - a 15% rise. As part of his pension arrangements from his career in the civil service, Sir Muir, 59, will pocket a one-off payment of £215,000 when he turns 60.
He can also expect to have an annual pension of £65,000 waiting for him at age 65.

The latest increase is likely to make Sir Muir one of the highest-paid principals in the country, depending on the increases enjoyed by other university leaders which have not yet been revealed. Last year, the highest-paid principals in Scotland were Professor Duncan Rice from Aberdeen University (£215,000), Dr Brian Lang from St Andrews (£209,000), and Sir Alan Langlands from Dundee (£202,000).

"There is a growing feeling that universities are being turned into businesses in which the collegiality on which their past successes have depended is abandoned and senior managers are paid inflated salaries to get as much as possible out of their junior employees for as little reward as possible." - Terry Brotherstone, who is president of the lecturers' union UCU Scotland

The Super-Star Super-Rich

A report by the BBC on those super rich super-stars .

England captain Bobby Moore lifted the World Cup in 1966 he earned £100 a week. Today's England captain, John Terry, holds the same position, but reportedly earns over £130,000 a week. David Beckham earned over £11 million from endorsements alone last year.

Then there are humble cooks like Gordon Ramsay , wealth of nearly £70 million , James Oliver , almost £60 million .

Superstars are boosting the luxury goods market, with worldwide sales in the sector topping £75 billion last year. Its all Aston Martins and private jets .

Naturally , the apologists of this insane distribution of riches claim that there are the benefits of the "trickle-down effect " but other commentators are more observant .

"Although these are people who will clearly have significant interests here in the UK and invest here in the UK, they're also looking to place their money around the world," said Mr Charrington , head of Citi's UK private banking arm , adding that the super-rich are looking for opportunities in China, India and Latin America "whether that be in private equity or hedge fund businesses. "

The BBC Money Programme produced a few interesting facts . 1% of the British population controls nearly 25% of the wealth. The top 10% in the UK having nearly 7 times the disposable income of the bottom 10%, up from only 3 times in the mid 1970s.( In the US, for example, 1% of the population control almost 40% of wealth and 20% of income.)

The lowering of the top rate of UK income tax from 98% to 40% in that time, with businessmen and women now able to turn income into capital gains paying a special low rate of 10%, has also widened the gap between after tax pay of high and low earners. For many foreign-born super stars, London is a tax haven, with non-domicile status meaning that they don’t have to pay UK tax at all – apart from council tax.

NHS - We are not all equal

The NHS is failing to deliver in poor areas, a study of general practices in the west of Scotland has found. Patients had a greater number of psychological problems, more long-term illnesses and a wider variety of chronic health problems. Consultations were shorter than in affluent areas and doctors reported being under greater stress.

The research compared consultations in typical practices, serving both affluent and poor populations.

"The NHS should be seen at its best in helping the neediest patients, but ... that is not the case... Despite a decade of political rhetoric about addressing inequalities in health care the NHS has still not squared up to this problem."

All at sea

"I want to create my own monument," the 60-year-old Italian entrepreneur says as he gazes across the sprawling ship building yard . Mr Vitelli has chosen a relatively modest yacht; a 103 feet long Azimut sports yacht, with a list price of 7 million euros ($10m or £5m). Modest, that is, compared with some of the other yachts sold by Azimut-Benetti Group. As one of the world's biggest players in the fast-growing market for hyper-luxurious motor-yachts, its multi-storey crafts can cost as much as $50m (£25m) and stretch from 24 metres to 85 metres in length.

Some of the world's wealthiest people will travel here to commission their own life monuments . In the year to September, the group built 800m-euros worth of yachts for the world's super-rich. And with an order book worth more than 1.5 billion euros, at a time when the global yacht market is growing steadily at some 10-15% per year.

In order to get the super-rich's attention, Azimut-Benetti's well-heeled customers are also occasionally invited to lavish events, such as this summer's yachting gala, complete with concerts and live shows.
"We don't charge," Mr Vitelli says, though the company tends to get its money's worth. "Generally, they leave a cheque for a new boat,"

All we at Socialist Courier can say is - "Come in Number 5. Your time is up "

Yuppie Blues

They were the generation with "loadsa money" .

But now the former 1980s yuppies are struggling to live within their means in middle age.

Almost half of the Young Urban Professionals of 20 years ago are finding it tough financially,

"Despite the champagne lifestyle and optimism of the time, our research reveals that many former high flyers have ended up no better off than the average mid-life family. They are just as worried about meeting the monthly bills, the cost of bringing up their kids and how they will fund their old age." - said the communications director at Liverpool Victoria friendly society

The Gravy Train

The highest-earning 300 bosses in the public sector saw their salaries increase by 12.8 per cent last year, raising their average to £237,564. Seventeen of the top bosses earned more than £500,000, according to the Taxpayer's Alliance second annual Public Sector Rich List.

The pay rises, more than three times the national average . The top 10 earn an average salary of £799,000 – more than 40 times the basic pay of a nurse or soldier.

Top of the league is Adam Crozier, chief executive of the Royal Mail. The only person on the list with a seven-figure salary. Strike-breaker Crozier has presided over the cancellation of the second mail delivery and an increase in the price of stamps. He saw his pay package swell by 21 per cent last year, taking his salary to £1,256,000. The report shows that it equates to earning £1,000 every 1 hour and 27 minutes and he had the gall and audacity to say that the ordinary postal worker was over-paid

More Pay For the Bosses

We previously reported how directors pay increases are much higher than their workers wage rises and today's Herald produces new figures that once again confirms that the rich always reward themselves more than those that produce the wealth .

Chief executives enjoyed an average 16% rise in total remuneration in 2007 - a marked acceleration over the prior year's 9% increase - according to accounting giant KPMG's .Moreover, other executive directors on company boards saw their base salaries increase at a similar rate, although finance directors are seeing bigger increases in pay. KPMG noted that the rate of increase in directors' pay is far higher than the national average .

The median total remuneration for FTSE-100 chief executives in 2007 - including new hires as well as promotions - increased to £2.6 million, compared with £2.3 million last year.

Whereas today's Independent is reporting of the story is that The bonanza in boardroom pay has become even more spectacular, according to the latest figures from the accountancy firm KPMG. The typical chief executiveof a FTSE 100 company has seen their total remuneration rise by 12 per cent in the past year, to reach over £2.6m. That's four times the rate of increase in average earnings, leaving the business elite on pay over 100 times what most of their employees earn.

Britain's top corporate earner is probably still Bob Diamond of Barclays Capital, who took home £22.9 million last year, including a performance-related bonus of £10.4 million.

Bart Becht, chief executive of Reckitt Benckiser, the man behind Mr Sheen, on £22 million; Giles Thorley, head of Punch Taverns, making ends meet on £11 million; . Mr Thorley's package is equivalent to 1,147 of his staff's pay.

Taken together, the directors of FTSE 100 companies collectively earned £515 million lastyear – exceeding the GDP of the likes of Eritrea and the Seychelles.

More pay for company directors

It is reported that the typical salary increase of executive directors was 7 per cent last year, well above the UK average of 3.7 per cent.

Potential bonuses were an average 130 per cent of salary, up from 115 per cent the year before - but the actual bonus payout rocketed from 75 per cent to 94 per cent.

"Increases for executive directors are still significantly ahead of those received by the general workforce" the report by accountancy firm Deloitte said.

The inequalities of the UK

From The Independent :-

Britain may appear to be a richer country than a decade ago but the gap between the rich and poor has reached levels not seen for more than 40 years. The highest earners are being dubbed "the new Victorians" as they take an ever-greater slice of the wealth pie, leaving mere employees and white-collar workers sharing the crumbs.

Government statistics show that the richest 10 % of the population control 53 % of the wealth of the country, with the 1 % jet-set elite controlling no less than 21 % .

In the City, fat-cat pay awards, with top executives earning 100 times more than their employees, are merely the most obvious examples of where the balance has become skewed. The kingpins of Britain's opaque private equity and hedge funds are earning considerably more while simultaneously paying "less tax than a cleaner", according to Nicholas Ferguson, chairman of private-equity and fund management group SVG Capital. In the UK, Peter Taylor, chief executive of Duke Street Capital, has admitted that the tax paid by private equity companies such as his is "unnecessarily low". The number of billionaires born, living or making their money in the UK has trebled in the past four years, and the number of millionaires is expected to quadruple to 1.7 million by 2020. Sir Ronald Cohen, one of the UK's richest men, founder of private equity group Apax, whose non-domiciled status has caused controversy, has said the wealth gap could lead to rioting in the streets.

In the US a report from the Institute for Policy Studies last week showed that the average chief executive of a Fortune 500 company now earns 364 times the pay of a typical US worker, while four hedge fund and private equity bosses took home more than $1bn (£500m) in the past year. The investment guru Warren Buffett, the third richest man in the world, has criticised the US tax system that allows him to pay less tax than his secretary.

The Joseph Rowntree Foundation, the social policy research organisation, says that society is becoming polarised. Its latest report states that "wealthy households in already wealthy areas are becoming disproportionately richer compared with society as a whole."

The level of social mobility in the UK – the ease with which the next generation can expect to become more affluent than their parents – is among the lowest of any developed nation.

The trickle-down theory

The Crystal nightclub in London's West End made the news recently when one businessmen spent £105,000 in one night. The club's general manager says it is becoming more common for bills to reach these eye-watering figures. Many of Crystal's party-goers can be found in their suits and at their desks inside the glass skyscrapers of Canary Wharf. But is it actually good for London? "Yes," says Howard Wheeldon, a city analyst with BGC Partners based in Canary Wharf, "there's a massive trickle-down effect."


In the shadow of Canary Wharf's towers, a charity called Toynbee Hall is holding an open day for under-privileged East End kids. The children here - often from Somali or Bengali families - are among the poorest in the country.

Toynbee Hall's director, believes there is not much evidence of the "trickle-down effect" for them. I ask him if the rich and poor in the area ever mix. He tells me to go and sit in the designer shopping mall underneath Canary Wharf. "No matter how long sit there, you never see anybody from the Bengali community..."

"These are two worlds that occupy the same space, but never actually intersect."

The very rich and the very poor living together in the centre of the capital. Side by side - yet still in their own very separate worlds. The trickle-down theory is a euphemism for being pissed on by the rich .

Scotland's Slaves

Some migrant workers in Scotland are being treated like "modern day slaves", according to campaigners being reported by the BBC . Promises of good accommodation and pay quickly disappear when they arrive in Scotland.

Two Polish workers told BBC Scotland that after two weeks of labour they actually owed the farmer money.

The Prague Post reports that the life many migrant workers find in Scotland is not what they had envisioned. They are frequently abused and coerced into accepting illegal working conditions, said Beth Herzfeld of Anti-Slavery International.

The most common form of abuse is debt-bondage. This is the illegal practice of paying an employer up-front for work, rent and food . Sometimes said, it takes workers six weeks to repay these debts, and then they are fired. This is a common “trick” employers use to leech money from vulnerable workers explains Paul Millar , the Czech honorary consul in Scotland .

According to Herzfeld, debt-bondage is one of the tactics used to traffic people. Trafficking is when someone is taken to, or freely goes, from one place to another by means of deception, coercion or violence. Often, as in the case of many Czech workers in Scotland, their passports are confiscated, they have a debt to repay and, being unsure of their legal right to work, they are controlled by threats.

Dangerous housing and miserable pay are often the hallmarks of foreign workers’ lives in Scotland, according to Ian Tusker, assistant secretary of the Scottish Trade Union Congress .
“You could work all day for a pittance, basically... " Tusker said.

See a related article , Borders Crossed , in this month's Socialist Standard

Fancy a drink ?

The businessman's night out with friends started quietly enough with a £25 bottle of wine. It ended a few hours later with a bar bill for £105,805.
In between, the businessman and his circle of friends, which had swelled by closing time, had polished off 80 bottles of champagne, including a six-litre methuselah of Cristal worth £30,000 and a £9,600, three-litre jeroboam . The bill for champagne alone came to more than £80,000. One bottle of vodka cost £1,400.

The celebration took place at Crystal in Marylebone, central London, a nightclub launched with the help of Prince William and Prince Harry's friend Jacobi Anstruther-Gough-Calthorpe.
A favourite with the horsey set, its founding members include Lady Victoria Hervey and Tara Palmer-Tomkinson.

Consumed: one methuselah of Cristal (£30,000); two jeroboams of Cristal (£9,600), 36 bottles of Cristal (£12,960); six magnums of Dom Perignon (£4,200); 12 bottles of Dom Perignon Rose (£4,200); 15 bottles of Dom Perignon 1999 (£3,600), three magnums of Dom Perignon 1995 (£2,700) and four bottles of Cristal Rose (£2,400) and a nightcap of vodka, a Belvedere Methuselah, the equivalent of eight bottles.

I wonder if it was all tax deductable .

More on class divisions

The gap between rich and poor in the UK is as wide as it has been for forty years, the Joseph Rowntree Foundation has said in a report. Full report here

Since 1970, area rates of poverty and wealth in Britain have changed significantly. Britain is moving back towards levels of inequality in wealth and poverty last seen more than 40 years ago. Over the last 15 years, more households have become poor, but fewer are very poor. Even though there was less extreme poverty, the overall number of 'breadline poor' households increased – households where people live below the standard poverty line. This number has consistently been above 17 per cent, peaking at 27 per cent in 2001 . Already-wealthy areas have tended to become disproportionately wealthier.

There is evidence of increasing polarisation, where rich and poor now live further apart. In areas of some cities over half of all households are now breadline poor. Both poor and wealthy households have become more and more geographically segregated from the rest of society. 'Average' households (neither poor nor wealthy) have been diminishing in number and gradually disappearing from London and the south east. Poor, rich and average households became less and less likely to live next door to one another between 1970 and 2000. As both the poor and wealthy have become more and more clustered in different areas

While in another BBC report , the Centreforum research paper , Tackling Educational Inequality , wants the funds (£2.4 billion) schools in England get to teach pupils from disadvantaged homes to be doubled .

It said low attainment too often stemmed from children's backgrounds, not their abilities.

"Britain is a bastion of educational inequality," said Paul Marshall, chairman of Centreforum, an independent liberal think tank. "The die is cast at an early age and rather than recast the die, the English educational system tends steadily to reinforce the advantages of birth."

The Poor - Poor Health Report

Socialist Courier has reported previously on the link between poverty and health and we make no apologies of continuing to highlight the problem that the poorer we are , the more we are at risk health-wise and that the establishment political parties have failed to resolve this state of affairs no matter how many reforms or campaigns . The politicians pay lip-service to change but nothing really changes .

The Sunday Herald reports that the gap in standards of health between people in the richest and most deprived areas of Scotland has grown rather than diminished in the past two decades. A new study has revealed how disparities in wellbeing among different sectors of society have improved little since the 1980s.

Although male life expectancy increased overall during the 20-year period, the gap between the richest and poorest widened from five years to seven and a half years during that time.

In addition, there was a doubling of the gap in heart disease hospitalisation rates between the most and least deprived areas.

In the early 1980s, the percentage of low-birthweight babies being born to mothers in poor areas was 6.7%, which was 2.9% more than those in the least deprived category. But by the late 1990s, the difference had grown to a 3.4% gap.

Professor Phil Hanlon, public health expert at Glasgow University, pointed out that differences in the health of the rich and the poor had existed for hundreds of years. But he added it was disappointing that government efforts in the past 15 years in Scotland had not succeeded in closing the gap.

Peter Kelly, director of the Poverty Alliance said "These poorer health outcomes are not solely the responsibility of individual action and behaviours, but are the outcome of larger social processes,"