The rich and the poor
21 years ago the Church of England produced its Faith in the City report attacking Thatcher for failing to help the poor. Its latest report, Faithful Cities, comes to the conclusion that nothing much has changed under New Labour. Supporters of the AGS know that the gap between the poor and the rich has continued to grow under Blair. This is a direct result of capital's inherent capacity to concentrate itself. The conclusion has to be limitations on capital, a conclusion the Church of England has fought to avoid in both reports.
Blair -- and Brown -- have always worked closely with and for the interests of big business. It has been mainly businessmen who have been "rewarded" with place in the House of Lords, and it was no accident that Blair chose the CBI to announce his support for nuclear power. This exposed the so-called "consultation" on the issue. One example of closeness to big business was shown in his refusal to reveal his dealings with the US-Australian media tycoon Rupert Murdoch. Repeated inquiries under the Freedom of Information Act were turned down on the grounds that the Prime Minister had to have the ability to have free and frank discussions. This ability to be able to talk in private to the Prime Minister is only available to the very rich.
Besides Blair's well-published drive to involve more businesses in Education, in preparation for its eventual privatisation, he is preparing to do the same for the NHS. The reorganisation of the Primary Care Trusts has given New Labour the chance to eliminate any vestiges of local democratic control. Each trust will be run by a board of seven managers and seven government-appointed business people. Nurses and doctors are forbidden to apply.
Over the last few weeks over £45 billion was wiped off London share prices. This was part of a global meltdown in share prices. The main driving force for the collapse appears to be the huge and growing balance of payments crisis in the US. This is currently underwritten by the Chinese and the Middle East oil countries. However they have become increasingly uneasy about their money. This unease has increased because of restrictions imposed by the US over where they can invest their money. So they have begun to hedge their bets. And in return US investors have withdrawn from risky markets such as India and Russia, so increasing the world wide spiral downwards.
However, the people who have really suffered are the not the fat-cat owners and business people but the smaller investors and those who have money invested for their pension funds. There is clear evidence in the UK that shares were unloaded by the rich before the present massive drop in prices occurred. UK company directors sold £566 million of shares over the last quarter and only bought £207 million worth. Later the rich will move back into the market. However anyone who thinks they can use the stock exchange to save for their old age should beware.
Another example of the increasing practice of managers ripping off the owners of a company has arisen with Cable & Wireless. Their "Chairman" is planning to give £220 million of the shareholders' money to 62 top managers. They are all managers, as the company does practically no original research despite being in a high information technology area. They are planning to make the money to pay themselves by restructuring the company. You would think after what happened to ICI this would be seen as a scam.
How the rich get rich
I remember how my old dear departed friend Arnie Ziff (owner of Town Centre Securities and Stylo Shoes) reacted to appearing in the Sunday Times richest people in Britain list. He denied he had so much money and then took steps to try to ensure he never appeared there again. His son Michael seems less successful in avoiding publicity. The Daily Telegraph reported his pay rose by 150% last year. It now stands at £1.3 million a year including extra pension contributions of £800,000.
A wonderful biography by Nigel Watson called Arnold Ziff: The Making of a Great Yorkshireman has just been published. It is worth buying just for the photographs. There is also an interesting chapter on how Arnie gained control of the site for his first big property development: the Merrion Centre in Leeds. He obtained a long lease from Leeds City Council for a relatively low payment. It was a bargain. However the book doesn't reveal the full extent of Arnie's business acumen. He managed to get the Council to lease some of the office space in the Centre. Unlike the lease on the land, the Council signed a contract which increased its payments considerably over the years.
Over 50 people attended a meeting at Leeds University to set up a group to investigate who runs Leeds. One of the key interactions that will be studied will be that between capital and democracy inside the city. The history of Arnie's rise to riches should provide provide key insights into who runs the city.
Ming the Merciless
The uninspirational leader of the Liberal Democrats has decided to take his nickname literally by joining in Blair's attacks on civil liberties and asylum seekers. This is a reaction to his party's falling poll ratings and to attacks by New Labour. During the local elections the Blairites distributed a national leaflet attacking the Liberal Democrats for being soft on law and order. This leaflet was so right-wing, the AGS in Leeds considered ordering some in order to provoke a backlash. Ming has just caved in to a near-BNP propaganda drive.
