Business, Finance and Politics are 'Out of Touch' with People ...

Politicians are starting to 'feel the heat' and some are starting to see where the 'wind is blowing' ... Ed Miliband's article from the Observer newspaper today ... published below in full:

"This is a frightening time for Britain: unemployment at record levels, inflation going up, living standards squeezed; a European crisis, lurching from Athens to Brussels to Cannes, adding to the sense that the economy is on the brink; a government sitting on the sidelines, unwilling or unable to help.

That is the backdrop for the protests at St Paul's and hundreds of similar demonstrations in cities across the world. Some are swift to dismiss them for putting forward what is a long list of diverse and often impractical proposals.

Certainly, few people struggling to makes ends meet and worried about what the future holds for their children will have either the time or the inclination to camp outside a cathedral. And many people will not agree with the demands or like the methods of the protesters. But they still present a challenge: to the church and to business – and also to politics. The challenge is that they reflect a crisis of concern for millions of people about the biggest issue of our time: the gap between their values and the way our country is run.

The role of politicians is not to protest, but to find answers. I am determined that mainstream politics, and the Labour party in particular, speaks to that crisis and rises to the challenge.

Many of those who earn the most, exercise great power, enjoy enormous privilege – in the City and elsewhere – do so with values that are out of kilter with almost everyone else. The warning lights on the dashboard are flashing. And only the most reckless will ignore or, still worse, dismiss the danger signals.

The problem – as I said in my Labour conference speech at the end of September – is a system of irresponsible, predatory capitalism based on the short term, rather than productive, responsible behaviour which benefits business and most people in the long term.

Just think about the last couple of weeks: the energy companies making record profits per customer, and the top directors getting a 50% pay rise while everyone else feels their living standards squeezed. Banks not heeding the lessons of the financial crisis: still dishing out big bonuses and still not lending to the entrepreneurs our economy needs.

You do not have to be in a tent to feel angry. People feel let down by aspects of business, finance and politics which seem in touch with the richest 1% – but badly out of touch with the reality facing the other 99%. They wonder if things can be different — and whether politics can make a difference.

There is much about what David Cameron and George Osborne are doing with which I disagree. But our problems go deeper than any one government. "Take what you can." "In it for yourself." "The fast buck." Most people never embraced these values but we were told they would help us, and Britain, to succeed. But too many thought they could do whatever they wanted, and pay themselves whatever they wanted. And some became so powerful or so big, they believed no one would dare challenge them.

When people at the top show such irresponsibility, it should be not be a surprise to find it elsewhere in society too. We must make big changes in the way our country works. And that is why the choices we make now to address people's immediate worries should also pave the way to a better economy, society and country in the long term.

We want the deficit to be reduced. A Labour government would be making measured spending cuts and tax rises. But any family would find it impossible to pay off a mortgage or a credit card bill if no one in that household is earning an income. That is the immediate problem in our economy. With unemployment at a 17-year high, there are not enough people in work to help pay down the deficit. Nowhere is this more true than for young people.

It makes no sense to allow one in five of them to languish out of work. I was talking with members of what could be a "lost generation" in London the other day who, after being out of work for nearly a year, told me there was no hope for them. We must give them hope, not offer more of the same.

The Tories are discussing how to make it easier for firms to fire people. We are developing policies so they can hire people. We would start by creating thousands of new jobs paid for by a tax on the bank bonuses. It is about rewarding the right values, not the wrong values, in our economy. Young people wanting to go to university fear being burdened down with debts of £50,000 when they leave. It makes no sense and it does not reward aspiration and hard work. So, instead of proceeding with tax cuts for the banks as the government plans to do, we should use that money to cut the maximum tuition fee from £9,000 to £6,000.

And we should apply the right values in the rest of our economy. Our welfare system needs change to reflect not just the compassion of our country, but also the values of hard work, contribution and getting something out when you put something in.

Rather than wringing our hands about electricity bills, we would break up the rigged market of the energy cartel so that new competitors can drive prices down. And let us tell the top CEOs that, if they are unwilling to justify their rewards to an employee on the committee that decides salary packages, they will not get it. These choices are all affordable and can all be made now to help get Britain working again for most people. But they also pave the way for a better economy and a more responsible capitalism in future.

Business as usual is not an option. In every generation, there comes a moment when the existing way of doing things is challenged. It happened in 1945. It happened in 1979 and again in 1997. This is another of those moments because the deeper issues raised by the current crisis are too important to be left shivering on the steps of St Paul's. We cannot leave it to the protesters to lead this debate.

But we can only win this debate with a movement which stretches beyond politics. That is why in the months and years ahead Labour is determined to construct and to lead a coalition which includes business and civil society to make the case for a responsible economy, fairer society and a more just world".

Morals vs Money ... the 'battle' has begun ...

The Archbishop of Canterbury and the Church have stepped further into the frame and are preparing for 'battle' ...

Following the Occupy Movement setting up their protest camp outside St Paul's, more senior figures, led by the Archbishop of Canterbury, have stepped up their attack on the City, speaking of a financial sector which sets a moral tone for a society which had become "scandalously unfair", and drawing attention to the human cost of financial injustice, as well as the need to reset the debate about financial institutions firmly within the context of a bigger story about what human life is for.

They include:

• Dr John Sentamu, The Archbishop of York, has launched an attack on executive pay, saying that FTSE-100 company chief executives were doing a disservice to society with their remuneration, saying "It is hard to imagine a more powerful way of telling someone that they are of little value than to pay them one-third of 1% of your salary ... and among the ill effects of very large income differences between rich and poor are that they weaken community life and make societies less cohesive."

• Ken Costa, a former bank chairman (of investment bank Lazard International) and the Church’s newly appointed leader of an initiative/commission to build links with the City and build bridges between the anti-capitalist protesters and the City (appointed by Dr Richard Chartres, the Bishop of London, following his 'u-turn'). Mr Costa has already said: "It will look at how the market has managed to slip its moral moorings, and explore pragmatic ways of uniting the financial and the ethical." 

• Dr Giles Fraser, the cleric who quit as canon chancellor of St Paul’s, said there was “financial injustice” that had to be addressed. He resigned from the Chapter of St Paul's as clerics fell out over how to deal with the Occupy London protesters camped outside, and has added that the Church should highlight the human cost of financial injustice, but warned its leaders against "proposing specific answer to complex economic problems."  

"Rather, it's the calling of the Church to draw attention to the human cost of financial injustice, and to reset the debate about our financial institutions firmly within the context of a bigger story about what human life is for," he said.

The cathedral executed a u-turn after the intervention of Dr Williams, who sided with the anti-capitalist protesters camped outside the cathedral, and as a result the Corporation of London has now had to suspend its legal action.

Dr Williams, has also called for specific action, calling for the introduction of a financial transaction tax (sometimes referred to as a 'Robin Hood' tax), and started to intervene after becoming increasingly dismayed at the stance taken by Richard Chartres, the Bishop of London, who backed the legal action to have them removed. 

There is still quiet concern at the Cathedral that the stance now being taken by senior clerics and the Church will put off City donors ... who significantly fund St Paul's Cathedral ... which goes a long way to explaining the initial desire of some (such as the Bishop of London initially) to start legal action to remove the protestors ... 

The 'battle' has indeed begun ... Morals vs Money ... and it's not going to be easy ... as even some in the church have clearly initially struggled with this!

From a historical perspective, by not allowing protestors to protest in 'The City' or outside the Stock Exchange, and with the Occupy Movement subsequently choosing to camp out at St Paul's Cathedral instead (which is next to the Stock Exchange), little could they have known that this would spark into action one of largest movements in the world, and see the Church step into the frame to back their cause ... a ground-swell within the Church is clearly developing and gaining a renewed sense of vigor ...

PS Ed Miliband has finally stepped forward again today by writing an article ...

Global Capitalism vs Christianity - has a 'battle' begun?

By demanding that the worst excesses of global capitalism be reined in, the Holy See echoed the message of protesters encamped outside St Paul's Cathedral in London, the indignados of Spain and the Occupy Wall Street movement in the US.

In a forthright statement, the Vatican's Pontifical Council for Justice and Peace called for an end to rampant speculation, the redistribution of wealth, greater ethics and the establishment of a "central world bank" to which national banks would have to cede power.

Such an authority would have "universal jurisdiction" over governments' economic strategies. Existing financial situations such as the World Bank and International Monetary Fund were outdated and no longer able to deal with the scale of the global financial crisis, which had exposed "selfishness, greed and the hoarding of goods on a grand scale".

The global financial system was riddled with injustice and failure to address that would lead to "growing hostility and even violence", which would undermine democracy. Wealthy countries should not be allowed to wield "excessive power" over poorer nations, the Vatican said. Cardinal Peter Turkson, the head of the pontifical council, said banks needed to question whether they were "serving the interests of humanity" in the way they operated. 

The proposal calls for a new tax on international financial transactions, but the battle for the future of humanity (based upon robust values/ethics) has only just begun and is becoming more vocal from Christians ... and is joining forces with others (e.g. the Occupy Movement).

However the 'battle' is not going to be easy or without 'casualties', as some church leaders are clearly not happy about this ... for instance the Revd Canon Giles Fraser resigned yesterday after having sided with anti-capitalist protestors camped outside St Paul's cathedral. The cathedral was losing £20k a day in lost takings (e.g. it charges £20 just for entry) and was coming under increasing pressure from local authorities ... clearly some in their senior ranks felt this financial loss (and unwanted attention) was just too much to bear ... hypocrisy indeed!

In a sign of the deeper splits within the clergy, a report that Canon Fraser had been due to publish, which was damning of the lack of ethics amongst bankers, had been shelved by the cathedral amid concerns that it would escalate the row by appearing to add weight to the protesters' cause.

Double dip ... here we come!

Further evidence today that we are heading for a double-dip recession ... 

1. Two of the nine Bank of England Monetary Policy Committee (MPC) members have effectively now admitted it ... with one now saying there is a 50-50 chance the economy will contract in the final three months of the year. They are trying to 'rescue us', or should I say 'cover the recession up', with a further £75bn of quantitative easing (printing money) ... and they hinted a further extension of this is likely in the coming months. The problem with this approach is that the money simply ends up in banks (who caused the problem in the first place) for them to speculate with (rather than lend out to businesses) and it also pushes up prices/inflation (nb the idea that the stock market is 'rallying' is a big con ... it simply follows the effective devaluation of the pound).

2. Sentiment among the British public has dwindled to recession levels as fears mount over the outlook for the economy and household finances. GfK NOP's consumer confidence index fell to -32 in October from -30 in September. It has only breached that level on two occasions since the survey began in 1974 - March 1990, and June 2008. At both points the UK was heading into recession.

But don't worry ... the Chancellor and the Government now have something else to 'pin the blame on' ...  not themselves ... or any of their policies/inaction ... but the crisis in Europe* ... how convenient ... and timely!

* After all the rhetoric from Cameron and the Government about listening to the voice of the people (and giving them a referendum on Europe), it's interesting that they imposed a 'three line whip' to force MP's to vote against a proposal aimed at giving ordinary people an opportunity to have their say over Europe ... whilst they continue to use taxpayers money to prop Europe up! Hypocrisy indeed.

Proof we are definitely not 'all in this together' - Directors pay jumps 49% in one year!

At a time when high inflation, high unemployment, and low wage growth are weighing down on UK household budgets a report has been published demonstrating how we are definitely NOT "all in this together".

With pay freezes being imposed on the vast majority, the 'cosy club' of people sitting in boardrooms, and who also sit on renumeration committees, are rewarding themselves handsomely ... 

Today an IDS report confirmed that FTSE 100 directors have seen their pay increase by a staggering 49% in just one year ... and this is a very large percentage increase on an already very large salary! 

The problem is that the vast majority of people sitting in boardrooms and on renumeration committees are also directors themselves ... so these people are effectively live in an 'incestuous world' where they all vote to push up boardroom pay and give each other a big pay rise ... however good/bad their company is doing!

Average FTSE 100 director pay is now up to £2.7m, including fixed pay, benefits, bonuses, value of long-term incentive plans and gains made on the exercise of any share options cashed in during the year.

Britain's economy may be struggling to return to pre-recession levels of output, but the same cannot be said of FTSE 100 directors' remuneration," said Steve Tatton, editor of the IDS report.

IDS said: "At a time when employees are experiencing real wage cuts and risk losing their livelihoods, it may be difficult for FTSE 100 companies to justify the significant increase in earnings awarded to their directors ... the pay gap between the boardroom and the shop floor does not yet show any signs of closing."

Which is a complete understatement ... the gap is actually widening rapidly and at an increasing rate ... not just in percentage terms ... but in terms of actual value too (pay rise of £0 compared to a pay rise of over £1m)!

The Unite union has called executive pay "obscene" and has called for shareholders to be given more power to hold directors accountable. The union's general secretary, Len McCluskey said: "The Government should strongly consider giving shareholders greater legal powers to question and curb these excessive remuneration packages".

""Institutional shareholders need to exercise much greater scrutiny and control of directors' pay and bonuses ... it's obscene and it shows that the City has learnt nothing during the financial troubles of the last four years."

Brendan Barber, the TUC's general secretary, said: "Top directors have used tough business conditions to impose real wage cuts, which have hit people's living standards and the wider economy, but have shown no such restraint with their own pay ... Reform should start with employee representation on remuneration committees, which would give directors a much-needed sense of reality."

Deborah Hargreaves, chair of the High Pay Commission, also said "We have got a closed shop here and someone needs to break it open."

In a recent speech Ed Miliband also said this must be challenged ... let's see if he speaks up about this again and does something about it now ... or let's see if he chooses to quietly walk away from the challenge after finishing yet another attention grabbing and crowd-pleasing speech! 

It's a shame so many people are either ignorant or apathetic ... and also have such short term memories!