<![CDATA[Economics]]> <![CDATA[The London problem: has the capital become too dominant?]]> The referendum on Scottish independence is, at heart, not a vote about Scotland. It’s a vote about London. The choice facing Scots is whether they trust each other enough to sever the umbilical cord: London largesse, London-based decision-making, London hegemony. London divides the UK in a way that no other country in Europe is divided.

Indeed, London is a divided city in its own right: it is home to the greatest concentration of poverty in western Europe. At least two of its boroughs – Hackney and Tower Hamlets – are among the ten most deprived in England. And yet politicians such as Greg Clark, the minister for universities, science and cities, tell us that Londoners are 69 per cent more productive, in GDP generated per head, than citizens elsewhere in the UK.

It is worth dwelling on Clark’s figures (below), both for what they reveal and for what they hide. Clark used the figure of 69 per cent to try to demonstrate that London was not so different from other capital cities in terms of economic dominance. But he did not take into account the size of London’s population relative to the rest of the UK. London is small compared to, say, Seoul, or Tokyo; consequently its economic dominance is even more pronounced.

The only city that takes a greater share of national product than London is Moscow. Paris takes a large but slightly lower proportion and so, for well over half a century, the French have referred to “Paris et le désert français”. The English talk about their own division simply, and less dramatically, as the problem of “the north”. A plan is needed for the north, we are often told; but that is impossible if there is no plan for London.

There is nothing inevitable about living with high rates of national inequality. We are not in some imaginary global race where everywhere is becoming similarly unequal. At the lower end of Clark’s list is Vienna, whose citizens were apparently only 30 per cent more productive than the average Austrian; even more equitable is Stockholm, at 23 per cent; and Tokyo and Seoul, each with a rate below 15 per cent. Of course, almost all that extra London money flows into the pockets of the richest residents. The median Londoner is not much better off than the average citizen of the UK.

What exercises many Scots right now is that the rich Londoners they hear most from appear to believe that there is no alternative to these inequalities and that the rest of the UK may even benefit from the trickle-down of some of the wealth of an ever richer capital. Growing inequalities undermine the case that Scotland is “better together” with London and the idea that Scots might moderate the arrogance of London’s elite should they remain in the Union with England.

It is taking a long time for the English chatter to turn towards the realisation that the Scottish vote is a judgement on London – and on the desirability of being linked so closely to what can appear to be a selfish, often stupid and always dominating force. It is hard to think of a scenario that would shake London from its trajectory of growing inequality and drift towards being a tax haven for the world’s super-rich.

Of all the scenarios I can imagine, and each is unlikely to occur, it is Scotland voting Yes to independence that might most obviously dent the English capital’s prestige. How will Londoners explain why, if being attached in some way to London is so beneficial, the Scots chose to leave? What other event, more than such a rejection, would encourage the introspection needed among the English about where they are heading?

Other scenarios are easy to imagine but are more unpredictable in outcome, and not necessarily desirable in the short term. A run on sterling is seldom mentioned today, but sterling is a weak currency backed up by an indebted set of one small and three very small nations. A second banking crisis is far from impossible and would hurt London more than anywhere else on the planet. Or think of climate change bringing persistent rain, followed by the flood waters of the Thames meeting a particularly high spring tide coupled with a storm surge. You can begin to imagine some of the scenarios that the cabinet’s emergency Cobra committee might find a little tricky to deal with.

So what would a serious “London plan” be? What could offer a more sustainable future for the English capital and English regions, irrespective of the choice being made north of the border in September?

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Technically, a London plan already exists in the form of the Mayor of London’s Spatial Development Strategy. In many ways this is a laughable document; though mostly tedious, it serves to demonstrate that there is no plan. To save you the trouble of searching for the best jokes it’s worth knowing that paragraph 3.22 of the latest version (October 2013) states, on provision of housing, that: “The probability-based approach adopted in London to address this has already been tested and found to be robust.”

In truth, there hasn’t been a proper London plan for some time. The Centre for Research on Socio-Cultural Change (CRESC) studied regional trends in the UK under New Labour and came to the conclusion that London stood out in stark contrast: “There was no autonomous private-sector job creation in decaying regions like the North-East or West Midlands during this period; and precious little full-time job growth anywhere outside London. Between 1997 and 2010, London on its own accounted for 43 per cent of all extra full-time jobs created in the UK, and London is now the only region of the UK capable of creating new full-time private jobs. And, again frighteningly, there is no movement of surplus population from the periphery to the centre.”

The CRESC researchers explained that London grows through immigration from the rest of Europe. It does not soak up surplus labour from the rest of the UK but, instead, sees more people leave it to settle in the rest of the UK than those who come in. And it is not just for jobs that people are coming to London. It is now thought that in a good year for overseas recruitment London universities may admit more students from outside the UK than from places in the UK outside London. The more frequently people move across borders and the longer the distances they travel, the less closely tied the capital becomes to the rest of Britain.

By early this year, the trends identified by CRESC had become embedded with the help of the coalition government after the 2008 crash. The Centre for Cities reported that London had accounted for 80 per cent of private-sector job growth between 2010 and 2012. That was ten times more than for the second-fastest-growing city in that period, the UK’s second city of finance: Edinburgh. Whereas there had been public-sector job cuts in most cities, the national government was increasing the number of state-funded jobs in London by 66,300. By contrast, Edinburgh lost more than 3,000 jobs of this type over the same period.

The north-south divide widened more rapidly after 2010 and started to become a stable feature of many British maps. This is evident from the geographical patterns seen with so many trends, from the rise in shoplifting (see Figures 2 and 3 below) through to the proportion of people who had bought a home for the first time in 2007 and who were still in negative equity seven years later. In the early 1990s, negative equity was worse in London, not in the north.

As London moves away from the rest of Britain economically, other areas begin to drop off the map. Scotland is often missing from the most recent maps used by social scientists, because data is no longer collected in the same way there.

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What can be done about London’s economic dominance? The first thing might be to accept a few truths. The second is to act on that understanding. The third is to speculate on what might happen if we don’t act.

What happens when one does not plan? It is worth looking at the more laissez-faire attitude in some US cities. Look at the low-density sprawl and absolute car dependency of Los Angeles and the power blackouts of California. Look at poorly planned megacities in poorer parts of the world to see how bad crowding on pavements can become and how long a commute can get, and look to all the worst-planned cities for where ordinary people pay the most simply for the right to live and work in the city.

The truths we must accept in order to avoid this future are not unpleasant, but certainly many of us do not want to accept them. London is growing and poised to grow quickly. It is Europe’s only megacity, though in less than a century it has dropped in rank from the largest city in the world by population to 25th largest. Its nearest competitors for megacity status, Cairo, Istanbul and Moscow, lie on the edge of Europe and are not getting that much closer politically or demographically.

It is not so much the success of London’s financial industry that is causing its wealth and influence to grow as the curiosity and aspiration of a huge number of mostly young adults from around the world. These youngsters have set their heart on living and working in London, at least for a few years. Forty years ago it was the Irish, Welsh and above all the Scots who came to live in London in unusually high numbers.

From Danes or Frenchmen who believe their country is holding back their entrepreneurial zeal, through to the nouveaux riches of China and India looking for a luxury second home, and even refugees without papers who need somewhere to work for a pittance but have a chance, London is attractive to millions. London speaks the world’s second language and the first language of the internet. No matter who you are, you won’t stand out as odd in London. It has surpassed even New York and Singapore as the favour­ite global bolt-hole of the super-rich.

London will grow; the only question is by how much, and how well-planned that growth will be. Government rhetoric suggests that nationally we will soon be building 200,000 homes a year but will have zero net migration. Given recent trends, both claims insult the voters’ intelligence. Nor, together, are they tenable. There is one good reason to build houses and it is for the immigrants we should expect to come, those who have been coming for many years now and whose numbers were boosted by the financial crash. If emigration were greater than immigration in future years there would be very little need to build new houses. Soon, given the age structure, many more people will die each year than will be born in England, even if fertility rates do not fall further as they have done across the rest of Europe. Simply refurbishing the old stock would result in enough homes for all of “Generation Rent”. And so many would not have to rent if they did not allow their elected politicians to help landlords evade so much tax, and make it desirable to be a private landlord. England has enough homes for everyone living here but not enough to cover those whose likely arrival we should plan for.

The last time the UK had a recession and net inward migration was in the 1930s, an effect of the 1929 crash. It was then that we built many of London’s suburbs. Partly we built them as fewer people emigrated from England: there were fewer opportunities abroad during the Great Depression. We built them also because migration from even more depressed Scotland, Ireland and Wales, as well as immigration from further afield, was increasing demand. Today is similar, except people are travelling from further within Europe. Policymakers in the European Commission refer to this internal movement of people as “mobility” across the EU rather than migration, but it will be some time before such language from across the Channel permeates our thinking.

Without immigration, there is no sensible reason to build new homes rather than renovate old ones – unless we want to see our existing housing stock shared out even more unfairly. We need “Pocket homes” for singles and couples without children. We need to time our building of homes in London to fit in with expansion of public transport and cycle routes. We need to encourage the value put on walking so as not to increase our levels of air pollution, already the highest recorded in western Europe. (Some argue that levels are higher in central Paris.) But all this would require a decent plan. The free market does not co-ordinate spatially and temporally; it reacts rather than instigates.

Acting on the understanding that London is going to grow requires recognising where London’s real boundaries lie. Oxford and Cambridge are de facto outlying suburbs of the capital. Oxford’s soon-to-be-opened second mainline rail station will be just over an hour’s commute from central London. If we do not provide better housing closer to the centre of the capital, the effects will be felt a very long way out. London relies on far too much long-distance commuting, to the detriment of many people’s lives.

We must build high-density, high-quality housing that is affordable. The smoke and mirrors of those with a vested interest in house-price inflation and high rents makes this sound impossible. Given that so many people are willing to pay so much to live in London, couldn’t they all be housed there a little more cheaply, yet still have the actual costs of providing that housing more than adequately covered? They could – but not at rates of return that would allow the richest 1 per cent to carry on getting richer as quickly as they do now. London needs both rent regulation and enhanced housebuilding.

But where are we to build? Our greenbelts were designated at a time when we did not understand the extent of the floodplain. Existing greenbelt land needs to be swapped, acre for acre, for land that really should never be built on; land where we should expect more floods as rainfall becomes more erratic. We should protect ecologically valuable land that is under threat. All that should become true greenbelt, not uninspiring farmland. As London expands, it should build not only upwards, but also on some of the higher land on the edges – but only where there is an environmental argument to do so; and not in small, car-dependent towns further away from the centre of London.

At present, the policies set out by the coalition government’s “Ecosystem Markets Task Force” allow builders to offset the destruction of Sites of Special Scientific Interest by, for instance, planting a new oak wood if they build over an ancient one. This has to be stopped. Greenbelts don’t prevent urban sprawl; the sprawl just hops over them, increasing commuting times outside them and house prices inside. Good-quality, high-density living prevents sprawl.

Much of the building that will be needed for the new migrants who will come (and help reduce our national debt) should be within the present boundary of Greater London. Many people argue that there is little justification for giving planning permission for new buildings within London with fewer than five storeys. At these densities, enough people arrive to sustain local street life. Cafés and local shops are found across Barcelona, a city that is four times as dense as London in its heart. But London also needs wider pavements, more cycle lanes, more one-way streets with just a single lane for cars, and far fewer lorries and taxis trying to squeeze through its streets.

Far more imaginative policies than better traffic control can be thought up to make the capital more liveable. There is no need to try to pack every last national institution into London. Why not move parliament somewhere more affordable, to a place where MPs won’t need huge housing allowances to be able to live and work while distancing their lives from those of their constituents? But if parliament were to be relocated outside London, where would that be?

One obvious answer is the first stop from London on High Speed 2, Birmingham. Members of the House of Lords, such as Norman Tebbit, who complain that they couldn’t live anywhere near their workplace could easily find a home in Coventry, or nearby Sparkhill, with perhaps more homes built on brownfield sites there, relieving the pressure on London. The old buildings in the capital could be kept for ceremonial occasions and as tourist attractions, but there is no need to require our elected representatives to battle their way through to the neighbourhoods least representative of the lives of almost all of their constituents.

There is much else in London that does not need to be there. Much can move out to make way for the almost inevitable influx. (It is worth remembering here that there are at least two possibilities that would make that influx not inevitable. The first would be Britain leaving the EU and revoking the free movement of labour. The second would be an economic crash in London that was not part of a worldwide financial meltdown – due to a generally unforeseen run on sterling that required sharp hikes in interest rates. The effects of either would be similar.)

Finally, what might make for a better-planned future? We seldom consider the most liveable megacity in the world, the one with the lowest crime rate and highest life expectancies: Tokyo. What helped Tokyo become what it is today? Very equitable income distribution certainly helps, but that was not all. It was after the great property crash of 1992-93 that Tokyo’s planners were able to say, with some force, that following the money and doing what the market suggested did not result in the best overall outcome. Satisfying the wishes of innumerable pairs of buyers and sellers never results in an equilibrium. Only someone as mathematically unimaginative as an orthodox economist could believe that.

The great London residential property-value crash may be years away, but what is our plan for its aftermath, if indeed it happens? A Japanese colleague sent me data showing how the average price of residential land in Tokyo more than doubled in value in the year to 1987, stayed very high until 1990, but then fell back to 1986 prices by 1996 and has remained low ever since (see Figure 4, below). Life as they knew it did not end in Japan when the value of land in Tokyo plummeted. The following two decades weren’t actually “lost”. It just became easier and cheaper to live, and far more obviously necessary to plan.

Without a plan, life in cities becomes chaotic, prices surge, congestion rises and dissent grows to the point where parts of the state begin to calculate that it is in their interest to leave. Not planning for London to grow in a world that is ever more urbanised is planning to preserve a living museum, one with aspects of Dickensian-level inequality. Planning to allow almost anything the markets and overseas investors desire is planning for a Blade Runner-style future.

Between these two extremes lie many other possibilities. But if you were living in Scotland now would you trust the English elite to have the sense to consider them? 

Danny Dorling’s “All That Is Solid: the Great Housing Disaster” is published by Allen Lane (£20)

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<![CDATA[Where has the French Left gone?]]> Can a Socialist government committed to austerity measures still be called Socialist? This is one of the questions facing the French Left following President Francois Hollande’s recent decision to disband the government to expel voices critical of his new economic direction. The dissolution – the second in six months – has been described as a purge of dissident voices, with the replacement of, among others, the now former economic minister Arnaud Montebourg, an avowedly anti-austerity figure who takes a Krugman-esque line, by business-friendly former Rothschild banker Emmanuel Macron, who controversially questioned France’s sacrosanct 35 hour working week. Montebourg recently publicly blamed Hollande for choking the economy with spending cuts and has become the symbol for a movement of Leftist rebels, “les Frondeurs”, who argue that France should not be “aligning itself with the obsessions of the German right“.

Montebourg’s replacement is a confirmation that the government’s direction on economic matters would not be open to question. The dissolution comes after two previous reshuffles, the previous of which saw the appointment of Manuel Valls as Prime Minister in March, a move which was widely seen as an attempt to resituate the PS in the political centre, given Valls’ commitment to cutting public spending and reaching out to the business sector. The new cabinet reflects Hollande’s commitment to Valls’ vision and willingness to sacrifice the left of his party, for whom a central sticking point has been diverging visions on how to revive France’s flailing economy, with Hollande’s camp advocating cutting, against those who favour more borrowing.

The dissolution reflects the increasing pressure on Hollande to turn around a dire economic outlook. Despite two years in power, the government has failed to reverse growing unemployment and growth this year has been downgraded to 0.5 per cent. Hollande’s shifting strategy now involves integrating voices more conciliatory towards his centrist line, best exemplified by his new chief of staff, Jean-Pierre Jouyet, a former minister under center-right former President Nicolas Sarkozy.

President Hollande began his presidency with the strongest mandate for any left-wing government for 30 years, including a Socialist majority in the National Assembly. But his political wavering combined with personal scandals and his decision to dissolve the government three times, have left the public sceptical as to his abilities at a time where public confidence is at an all-time low. Polls indicate public approval ratings of just 17 per cent, and Hollande is now the bearer of the unenviable title of most unpopular president since polling records began. Whereas his Socialist predecessors all left their mark in the form of a significant social reforms (income support under Mitterrand, the 35 hour working week under Jospin, etc), it remains unclear what social contribution will mark Hollande’s legacy.

The same president who rode the anti-austerity wave to power and terrified the City with comments like “the finance sector is my enemy“ has been seen to be increasingly toeing the German line. Despite his promise to get tough with the finance sector, the appointment of a former Bank of America Merrill Lynch economist as new economic adviser says otherwise and the recent reshuffle has been seen as the replacement of Left-wing socialists with finance sector aficionados. For many within the party, this represents a betrayal of the very mandate Hollande had been elected to carry out.

Over the last week at the Socialist summer convention in La Rochelle, Prime Minister Valls has sought to portray himself as the purveyor of “Leftist realism” in the face of those accusing him and the government of kowtowing to austerity measures, repeating that the government “doesn’t practise austerity“ despite plans for further public spending cuts and tax breaks for businesses. But the balancing act which sees Hollande simultaneously try to appease the EU call for budget restraint while maintaining the support of the left wing of his party, has inevitably left him looking weak and ineffective. Even among Socialists, only 58 per cent have confidence in the government’s plan.

And despite a strong mandate, the Socialists have been unable to truly implement policies which reflect Leftist principles, instead, they’ve been restricted in that implementation by EU directives and arguably forced to rethink the very nature of Leftist economic policy. If Leftist politics is about rhetoric and not substance, given that the substance is decided elsewhere, the result can only ultimately be disillusionment with mainstream politics. This leaves “Flanby”, as President Hollande has been nicknamed, looking very wobbly, but it also plays into the nationalistic rhetoric of the FN, which rails against EU intrusions. Ultimately, a divided and incoherent Left leaves the way open for Marine Le Pen to target those workers traditionally more likely to lean Left. This is all the more worrying when one considers that a recent poll put her at the top of the next presidential race, and in light of the erosion of support for the radical Left party, where the charismatic Jean-Luc Mélenchon has recently stepped down.

The dilemma was succinctly summarised by Montebourg in an interview with Le Monde, in which he stated: “If we align ourselves with the most extreme orthodoxy of the German right, this will mean French people’s votes have no legitimacy and alternatives do not count.” The danger of further disillusionment with the main parties is the inevitable outcome.

For the French Left, there seems to be two competing visions. Either support a re-vamping of the Socialist party to fit the limitations of the EU framework and in so doing, ultimately alienate a core, ideologically motivated grassroots or call, as some of the radical Left have, for the setting of national objectives in defiance of the limitations imposed by Brussels (possibly as part of a movement for a Sixth Republic, as advocated by Radical Leftist Jean-Luc Melenchon). The third – and possibly more likely – option involves infighting within the Socialist party, which will likely paralyse the government. Could the narrow room for manoeuvre for political parties as imposed by the EU ultimately undermine national politics to the extent of buttressing radical parties? The rise of the Front National could be one indication of this. It remains to be seen whether the Left will succeed in offering a competing vision to Le Pen’s increasing monopoly of that protest vote. What is more certain is that the infighting within the main parties on both Left and Right could mean politics will increasingly be played out on the margins.

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<![CDATA[Indignation at stories of “rejected” disabled children masks the harm done by government cuts]]> The would-be mum of twins carried by a surrogate has “rejected” one of the babies because it was born with a disability, the Telegraph reported today.  The non-disabled boy was adopted as planned but his disabled twin sister, who has a severe muscular condition, has stayed with her birth mother after the adopting-mum refused to take her. (It’s unclear what the would-be father has done in all this. He either was never involved or the reporting has chosen to put responsibility solely on the woman.)

“She'd be a fucking dribbling cabbage! Who would want to adopt her?” the prospective mum allegedly told the surrogate; both of them British. “No one would want to adopt a disabled child'.”

Well, quite. I enjoy a bit of casual judgement as much as the next person and this woman seems a suitably terrible (wonderful) candidate. “A fucking dribbling cabbage.” Find her, bring back the stocks, and see how she likes scraps of cabbage as they’re thrown at her (probably hard) face.

Today’s is the latest in a growing line of “Won’t someone think of the disabled children?” stories – each depressing and tragic and greeted with customary indignation. The case of “Baby Gammy”, who was left with his Thai surrogate mother by an Australian couple because he had Down's Syndrome, gained international coverage. Even Richard Dawkins has got involved with his “best abort a foetus with Down's Syndrome and try again” tweets last week. Abort, don’t abort. Adopt, don’t adopt. It’s difficult to keep track of just what exactly women should be doing when they find out their child will be disabled, but the media and the public’s role is very clear: pass judgment whilst offering no constructive help whatsoever.

Women, as ever, are the ones on the receiving end of this judgement. The men – or 50 per cent of the genetic material – are presumably mute and locked in a cupboard somewhere. Women are who nature left to grow the child and whom society has chosen, long after nine months, to take the cultural brunt of them. We’re also largely the ones left to take on 24/7 caring responsibilities – an impact particularly heavy when the child has a disability. Almost three quarters of mums with disabled children are forced to give up their careers, or at best limit them, due to lack of affordable or suitable childcare for disabled children.  (Families with disabled children pay eight times more towards childcare costs than parents of non-disabled children.)

What are we doing for them? Other than offering judgement or praise, I mean – which, as yet, hasn’t been proven to care for a screaming child at 3am or pay the electricity bill.

As a country, we’re doing really well at hurting them. One in seven families with disabled children are going without meals and one in six can’t afford to heat their homes. For those where parents aren’t in work because of their caring responsibilities, things are inevitably even worse. This was before the full impact of benefit cuts hit. (Guess what things are like now.)

The social security and tax changes have had more of a negative effect on families that include at least one disabled person, particularly a child (and especially for those with already low-incomes). Poor families that have a disabled child – or adult – have lost what’s estimated to be five times as much proportionally as better-off non-disabled families. Let’s say that again. Our government’s response to the difficulty of raising a disabled child, particularly with low-income, has been to make it more difficult. It’s funny how little we hear about that. It’s as if headlines about lazy adoptive mothers are easier to get our moral heads around.

Stories like “Baby Gammy” or the British surrogate are welcome distractions from the bigger, deeper problems of parents and disabled children. They let us simultaneously cast judgement on a woman’s reproductive choices whilst convincing ourselves her individual prejudice and selfishness is in such contrast to the rest of society. Failing to look after a child with a disability? What kind of monster would do that? Our government – and the cash strapped councils sitting in every part of this country.  

Almost two thirds of English local authorities had reduced their expenditure on short breaks for families with a disabled child after two years of coalition government, according to disability charity Mencap (pdf). Play services to youth clubs, babysitters, overnight care and residential stays are disappearing – cast out as not a “legal necessity” and therefore just more luxuries we can do without.

Perhaps we could ask the parents currently looking after their disabled children if a bit of help is a luxury – if they have the money to drive to the next hospital appointment, the energy for getting up tonight without a break. I would but I’m busy finding old veg to throw at the latest useless adoptive mother.

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<![CDATA[Female professionals earn 35% less than male colleagues]]> Senior female managers earn 35 per cent less than their male counterparts, according to new figures. Women are now hit hardest by the gender pay gap in the second half of their careers.

Female professionals would have to work until they were almost 80 - that is, 14 extra years - in order to equal the lifetime earnings of a male equivalent in the same role.

The current gender pay gap stands at £9,069, according to the data, but the chasm widens between older men and women.

A mid-life pay crisis has emerged for professionals aged between 46 and 60, where the gender pay gap is at its widest at £16,680.

The gender pay gap is narrower, but still significant, for younger and more junior women, standing at 6 per cent for 20 to 25 year olds, and 8 per cent for 26 to 35 years olds.

The National Management Salary Survey, published by the Chartered Management Institute (CMI) and salary specialists XpertHR, surveyed more than 68,000 professional UK workers.

It revealed that a “bonus gap” has also grown between female and male bosses. The average bonus for a female director stands at £41,956, while for male directors the average pay-out is £53,010.

The differential between average male and female annual salary increases is also affected by age and seniority. Across all levels, the average salary increase stands at 2.3 per cent, but inequality increases at senior levels.

Female directors enjoy, on average, a basic salary increase of just 1.9 per cent, compared to 2.7 per cent for male directors. Including bonuses, on average a male director took home £204,373, while a female director was awarded £171,945.

Gender discrimination in pay packets was outlawed 44 years ago under the Equal Pay Act, but inequalities still persist.

Younger women edge ahead of men in salary terms under one metric. In three of the five most junior job levels, female annual pay awards are an average of 2.4 per cent, compared to 2.3 per cent for men’s.

Ann Francke, Chief Executive of CMI, said: Lower levels of pay for women managers cannot be justified, yet our extensive data shows the pay gap persists…

It’s not right that women would have to work until almost 80 for the same pay rewards as men. We have to stamp out cultures that excuse this as the result of time out for motherhood and tackle gender bias in pay policies that put too much emphasis on time served.”

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<![CDATA[Why is there Sunni Arab support for Isis in Iraq?]]> For Western military analysts and policy-makers trying to unravel the implosion of Iraq, a Marxist analysis of the situation is long overdue.

The appeal of Isis's extreme religious doctrine to Sunni Arab Iraqis has been well documented, but in fact it is the economic situation of many of those Sunni Arab civilians that lies at the root of their support for the insurgents.

As Isis has overrun great swathes of Iraq in the past two months, it has frequently received complicity, if not all-out support, from many Arab Sunnis (I focus here only on Arab Sunnis; Kurdish Sunnis have met Isis with profound hostility and resistance).

While US analysts believe that Isis comprises only around 10,000 fighters, it has swept with relative ease through the north and west of the country thanks to the Sunni-dominated communities that live there, which have extended a sympathetic reception to the insurgents.

On a superficial level, the attraction of Isis to Iraq's Sunni Arab underdogs is obvious: here is a group of the same sect of Islam that promises them preferential treatment in society and better opportunities than they could ever hope for under the current Shia-dominated leadership.

After all, the plight of the nation’s Sunnis, disenfranchised under Nouri al-Maliki’s Shia-dominated government, is well known.

The religious objectives laid out by Isis are also attractive to Iraqi Sunnis. The insurgents' extreme violence is framed as religious cleansing – wiping out the Shia imams and believers from the holy cities of Najaf and Karbala.

As the New York Times has noted: "Mass execution has been meshed with the use of religious symbolism by the insurgents".

And while Isis's insistence on adherence to extreme conservative conventions may appear harsh to outsiders, the clarity and simplicity of Sharia law is always going to appeal most to downtrodden and insecure communities, like Iraq's poorer Arab Sunnis, who tend to prefer robust law and order to instability.

In addition to the ideological appeal of Isis, the group's social constitution has been a boon in winning over rural Sunnis. There is, relatively speaking, a flat structure to Isis's social and religious make-up that appeals to a poor, agragian society in a way the hierarchical, class-based Sunni Islam of Saudi Arabia never would. 

Above all, however, it behoves to consider the specific economic circumstances in which many Iraqi Arab Sunnis have found themselves – roundly ignored by most analysts – in order to explain their inclination to embrace the militants.

Economic deprivation has plagued the Iraqi Sunnis, who are thought to comprise between 20 and 35 per cent of the population (accurate data is lacking), since the 2003 war.

Driven from power by Western forces after enjoying supremacy, and comprising the majority of Saddam's Ba'athist government (Saddam himself was a Sunni Arab from Tikrit), the Sunnis have been increasingly marginalised in the past ten years.

Shunned from the Shia-dominated security forces, Sunnis have little stake in the defense of the country. More than that, however, al-Maliki's refusal to incorporate the Awakening squads of Sunni fighters, who supported the deposition of Saddam and aided the West's invasion, into the mainstream security forces, has meant that most of these Sunni Arabs been faced with a limited choice: suffer unemployment, or join Isis.

While residual Sunni neighbourhoods remain in Baghdad, and the city of Mosul in the north is still a hub of metropolitan Sunnis, around half the country's Sunni Arabs are agragrian, rural-dwelling people.

Despite that, they have been hit hardest by the series of poor harvests and food shortages that Iraq has suffered in the past decade.

It is a bitter irony that Iraq, part of the fertile crescent in the Middle East that has been farmed for 8,000 years, and irrigated by not one, but two great Asian rivers, the Tigris and the Euphrates, has suffered severe agricultural decline.

Years of neglect and conflict advanced the contraction of the sector in the decades before the Iraq invasion, but agricultural productivity declined a devastating 90 per cent after the 2003 war.

According to reports, Iraqi agriculture is in crisis. The misery of rural Sunni communities that rely on agriculture for their income and subsistence, was compounded by six years of the driest winters on in Iraq from 2004 onwards.

Once a major exporter, Iraq is now reliant year-round on food imports. Many Sunnis have been working hard on the land, and yet struggling to eat, while perceiving metropolitan Shias in Baghdad and the east to be living in luxury.

The economic conditions of Iraq’s Sunni Arab population rendered them at prime risk of uprising.

Even the Iraqi Shia authorities implicitly acknowledge it. Earlier this week, officials were briefing the US press that Isis was successfully recruiting "mostly young men between the ages of 16 and 25 who are primarily poor, unemployed and lack an education".

What they meant were poor, young, underprivileged Sunnis – of whom there is an abundance in Iraq.

The economic deprivation suffered by many Sunni Iraqis is connected to, but distinct from, their marginalisation on the political stage.

Sunnis were already beginning to revolt against their Shia oppressors as far back as 2012. In December that year, tens of thousands of Sunnis took to the streets to protest their disenfranchisement.

Iraq has been riven by political and sectarian conflict for decades, but these considerations are liable to obscure related, but distinct, social and economic factors that are crucial in explaining why Isis has been able to overrun the Sunni-dominated parts of the country unresisted.

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<![CDATA[The Lib Dems' tax cut plans won't help the poorest]]> After yesterday’s news that wages have once again fallen in real-terms, it’s becoming increasingly clear that political parties cannot avoid the issue of low pay. This is particularly pressing given growing awareness and concerns over inequality, which has highlighted that pay at the top is not so shabby.

Today’s announcement from the Liberal Democrats that they would raise the income tax threshold to £12,500 is an example of this, presented as it is as a way to help people on low and middle incomes. Previous increases to the personal allowance have been a key coalition policy and touted as part of their anti-poverty strategy. But while this will help many households with middle incomes, it won’t help as many people on low incomes. In fact, some on high salaries will also see a tax cut. 

People on individual incomes up to £99,000 will be getting a £500 tax cut, while people working full-time on the minimum wage will be getting less than £400, and those earning less than £10,000 won’t benefit at all from this proposed change. The introduction of Universal Credit will mean that this change would have even less of an effect on low income households as 65 per cent of any gain they get would be lost as their Universal Credit is withdrawn. Analysis by the liberal think-tank Centre Forum has shown that an increase in the personal allowance would benefit households higher up the income distribution (the 6-9th decile benefit most) far more than it would the poorest third of households. 

Similarly, National Insurance (NI) has been looked at, with the Lib Dems again looking to raise the threshold to £12,500. The same analysis by Centre Forum shows that such changes would help the top 20 per cent of households more than the bottom 20 per cent. A far better way to make NI more progressive would be to raise the upper limit so that those at the top pay a greater share of tax.

The point that this policy misses, and most tax reforms miss, is that people on low incomes don’t pay much income tax. As the Equality Trust’s recent report on the tax system shows, for people with low incomes, VAT and council tax, even after taking into account council tax support, are each individually bigger than income tax. When politicians discuss tax they often discuss it interchangeably with income tax but this doesn't chime with how most people experience tax. Income tax only makes up the majority of tax for those in the top 10 per cent ... like those on an MP’s salary.

If politicians want to make the tax system fairer, benefit the low paid and reduce inequality it makes much more sense to reform council tax than it does to reform income tax. Income tax is the only fully progressive tax, where those at the top pay a greater proportion of their income than those at the bottom, and many don’t pay any income tax at all. Council tax, on the other hand is, as Paul Johnson of the IFS recently noted, is the only tax which is deliberately regressive in its design. Rather than cutting council tax support and tinkering with income tax, political parties need to urgently look at reforming regressive taxes. 

Tim Stacey is Policy and Campaigns Officer at The Equality Trust.

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<![CDATA[Falling wages show why the Tories aren't benefiting from the return of growth]]> When wages briefly drew level with inflation earlier this year, some claimed that the "cost-of-living-crisis" (in Labour's phrase) was over. The Tories argued that wages were a "lagging indicator" and that higher output would translate into higher salaries. As George Osborne remarked after the publication of the GDP figures in October 2013, "If Britain is growing then the finances of Britain’s families will start to grow." 

But today's earnings stats show that the reverse, dismayingly, is true. Total pay fell in nominal terms by 0.2 per cent between April and June, compared to inflation of  1.9 per cent. The fall is partly accounted for by last April's deferral of bonuses to benefit from the abolition of the 50p tax rate, which artificially boosted wage growth. But even if bonuses are stripped out, regular pay rose by just 0.6 per cent (1.3 per cent below inflation), the lowest figure since comparable records began in 2001 (although it is worth noting, as Duncan Weldon does, that real wages are not the same thing as living standards). 

The economic upside is the jobs boom. Unemployment fell by 132,000 to 2.08 million (6.4 per cent), the lowest level since the final quarter of 2008, while employment rose by 167,000 to 30.6 million (73.0 per cent), within touching distance of the record figure of 73.1 per cent achieved in February 2005.

But as Labour has long warned, far too many are in trapped in low-wage, low-skill jobs that don't pay them enough to achieve an adequate standard of living. Today's figures don't include the self-employed (responsible for almost half of the rise in employment over the last year) whose earnings have fallen at an even faster rate. 

On a political level, the figures help explain why the Tories have yet to receive the polling dividend that many expected from the recovery. While GDP is rising, wages are not, leaving many feeling no better off. Worryingly for the Conservatives, private polling by Labour shows that as growth accelerates, voters have become more concerned with issues such as living standards (on which Labour leads) and less concerned with issues such as the deficit (on which the Tories lead). With just nine months to go until the election, Osborne is running out of time to translate economic gains into political ones. 

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<![CDATA[Any financial loss to Britain mustn’t obscure the aim of sanctions on Russia]]> Barack Obama’s claim that “we have to see concrete actions, and not just words”, in an attempt to justify heightened economic sanctions on Russia, reveals a hidden optimism. The assumption being made is that the new sanctions will genuinely bring about material changes in the behaviour of Vladimir Putin’s shady regime.

The sanctions “have made a weak Russian economy even weaker,” claimed Obama. Maybe so, but this effect is not necessarily sufficient to bring success in altering Russia’s course of action. Moreover, there is the unpalatable potential for strongly adverse effects on the western economies themselves. That potential is now being realised. The US increased its economic sanctions on 16 July, and has done so again since. In the aftermath of the shooting down of flight MH17 on 17 July, the EU has joined it in imposing sanctions. The US’s sanctions began targeting particular Russian companies: two banks, two energy companies and eight arms ones. Four officials were also in the sights. The effect of these sanctions is to freeze assets, refuse financing and prevent the use of business links in the US.

This brings serious economic bite to bear against Russia. Since these are an example of “smart sanctions”, it is hoped they will avoid humanitarian damage, insofar as they are directed at specific members of Russia’s elite and not its people. Yet it is those same Russian citizens and companies with whom the west has the intimate, and mutually beneficial, business ties it uses for its own prosperity. This means that we must wield these particular sanctions as a double-edged sword.

For its part, the EU has also prevented Russian banks from accessing its capital markets. New contracts for military goods and oil-related equipment are also off limits. Yet as a backdrop to these moves lies Russia’s supply of energy to the EU. Thirty per cent of European energy is estimated to be imported from Russia, and the Baltic states, among others, are fully dependent on the nation for their supplies of gas. European companies with a stake in Russia are risking punitive action on their shareholdings and operations, as well as dreary prospects for the value of their shares at home.

This effect is not reserved for energy companies. Renault, the French automotive company, saw its shares fall by 4.5 per cent; BP is also set to suffer. It has a 20 per cent share in the oil group Rosneft, which is tied to the Kremlin. Today, Volkswagen and Siemens “voiced concerns,” and shares in Adidas have dropped by 15 per cent following its announcement of a profit warning. Britain is very vulnerable. The City of London is a global financial hub and Russian money is accustomed to flowing freely through it. The decrease in business for various overseas companies will result in further consequences for British banks. Now Anthony Bamford, chairman of JCB, has exerted his business influence, making his opinions known; he claimed that the sanctions seem "absurd" and "could put hundred of British jobs at risk".

To the credit of western nations, they have noted these effects, trading them off against the changes they wish to instil in Putin’s regime. The new Foreign Secretary Philip Hammond’s eloquent recognition of this fact came in his point that “you can’t make an omelette without breaking eggs”. The western nations are breaking all sorts of eggs. The meal in mind is their objective of forcing Russia to quell the anarchy it is funding in eastern Ukraine. It is a noble aim, spurred on by the flight crash. Such a flagrantly unnecessary loss of human life is a worthy cause for international action. If we can forget the duplicity involved when considering the situation in Gaza, western leaders have shown admirable resolve. The Russians had already been permitted too much room for diplomatic cant and propaganda.

But what of concerns voiced over the supposed impotence of western nations; over how, in reality, the losses we in the west will have to endure will not be worth it? Economic sanctions are the only occupants of the middle ground between diplomatic pressure and military action. The latter is unthinkable. Despite claims that Asia will be Russia’s loophole, and condemnation of the damage these sanctions will do to relations in the future, western governments do need to take a stand. When we are positioned at the bridge between an epoch of hostility and war, and a supposed “new world order”, failure to enforce standards of decency on the international stage produces nothing. Worse, in fact, it sets a much more dangerous precedent. The secession of land that has taken place in Ukraine was the first in a series of unacceptable actions from Putin, which must not continue. The US and EU must let that be shown, at the very least by defending the principles they supposedly support. Perhaps stronger sanctions still will prove necessary. We should be ready to deliver them.

Hope stems from an unlikely voice – Iran. In April, officials from Tehran claimed that the US has a capacity for “vicious” sanctions, as the nation has experienced. They advised the Kremlin to avoid being on the receiving end of such punishment. “The Americans essentially forced businesses to choose between doing business in dollars or dealing with Iran. That’s a no-brainer for most,” read the complaint. Should such humility eventually come from Putin’s regime, then progress would be made.

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<![CDATA[Cameron's crackdown on migrant benefits is too little, too late to help him]]> The Prime Minister’s announcement this week that he will slash the time period during which EU immigrants are entitled to benefits was welcomed by the Tory right and Eurosceptics of all tribes.

On Tuesday David Cameron announced plans to halve the period over which European migrants can claim benefits from six months to three, unless the migrants have “very clear job prospects”.

Other measures announced included tougher rules on universities which sponsor visas for international students to study in the UK and stipulations that recruiters must publicise all British jobs in the UK – in English – and not only tout them abroad.

The latest wave of reforms follow another crackdown on migrants last November, when the government declared plans to implement a three month “qualification period” before EU immigrants could begin to claim out-of-work benefits in the UK.

That announcement itself followed rule changes for migrants declared in May last year: a “right to reside” test applied to EU migrants to assess certain welfare benefits.

The reforms have been metered out in a slow, drip-like fashion. While the latest round was cheered in many quarters, this piecemeal series of concessions throws up troubling questions for the government.

The first concerns the scope of the changes. Are they significant enough to quieten restive anti-EU factions? While this week’s headline reform – halving the time period during which migrants can claim benefits – sounds impressive, it is, of course, subject to fine print.

And that reveals that it only covers job seekers’ allowance, child tax credit and child benefit, and applies only to new arrivals to Britain who have never worked here; those who have worked in Britain for six months automatically achieve “worker status”, which, according to EU rules, entitles them by law to certain social security and assistance. So the new rules will affect a relatively small proportion of EU migrants to the UK.

Many of the government’s headline-grabbing reforms appear similarly diminished when examined. The limited scope of these reforms pours fuel on the fire of the Eurosceptics’ argument that significant unilateral reform of EU rules is impossible. Given that reform at EU-level looks even equally difficult (appetite among other nations is weak), the future of Britain’s membership of the EU appears increasingly shaky.

The second question is perhaps more awkward for the government. Given rising public anger about, and an obsession in Westminster with, migrants’ access to benefits since 2010, why did the government not implement these, albeit limited, reforms earlier?

Unwillingness to be dragged into legal wranglings with the European Commission may have been a delaying factor. If so, that fear was founded: the Commission has already announced its intention to investigate the legality of the UK’s three-month limit for benefits this week.

Cameron has not ducked legal battles with the EU in the past, however. The Commission referred the UK to the European court of Justice last May over the “right to reside” test, for example. (In that instance, the Commission argued that the test was impermissible because it discriminated against non-British Europeans, since British citizens automatically passed the test.)

The question of why the government did not act earlier becomes even more confusing, when the right of EU nations’ governments to restrict, in certain ways, the entitlement of migrants to welfare seems enshrined in EU treaties already.

Amid the dense, highly technical stipulations of EU Directive 2004/38, for example, is Article 24, which states: “The host Member State shall not be obliged to confer entitlement to social assistance during the first three months of residence”.

Then, later: “It should be left to the host Member State to decide whether it will grant social assistance during the first three months of residence, or for a longer period in the case of job-seekers, to Union citizens other than those who are workers or self-employed persons”.

The long wait for reforms and their limited scope prompt the question: are these changes too little, too late to convince rightwing Conservatives, and the public at large, that genuine and significant reform of EU rules are possible in Britain?

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<![CDATA[Matalan have bowed to pressure over Rana Plaza, but the campaign goes on]]> When Rana Plaza collapsed, Mossammat Rebecca Khatun was inside. It was two more days before she was rescued. She survived but paid a heavy price. Her injuries robbed her of her right foot and her left leg. But the collapse of the cramped eight-storey building took far more. She lost five members of her family under the rouble; her mother's body was never found.

What happened that day was first and foremost a tragedy for all those affected. More than 1,100 lost their lives. More than two and a half thousand were injured. Lives destroyed, families ripped apart, entire communities bereaved.

But the collapse of Rana Plaza had a powerful meaning beyond those it directly affected. What happened at Rana Plaza was a brutal message to the world.

The disaster exposed to the world the appalling and unsafe conditions in which many Bangladeshi garment sector workers are employed.

A stark reminder that in the second decade of this century workers around the world are exploited every day. From Qatar to Cambodia, Bangladesh to the South China Sea, 21 million live in modern day slavery; millions more, like those at Rana Plaza, work for pennies a day in conditions that wouldn't meet the most basic health and safety conditions. And the garments they produce are the mainstay of many clothes shops on our own high streets.

Decent work for decent pay under decent conditions should be a right for all. But in Bangladesh more than 1,000 workers went to their deaths in a building that many of them feared was dangerous and knew to be creaking.

More than a year on, the survivors of this tragedy must rebuild their lives - but they can't do it alone.

That's why the UN's International Labour Organisation (ILO) has established a Trust Fund to cover payments to Rana Plaza victims and their families. The ILO initiative is largely funded through donations from international garment manufacturers, and the funding deadline for the Trust Fund is today.

Labour has been calling on all companies to play their part.

After initially refusing to contribute to the fund, overnight Matalan, the last major UK garment retailer with links to Rana Plaza not to contribute finally bowed to pressure - including petitioners from 38 degrees and a direct letter from the Shadow DFID team - and announced a donation to the fund.

Matalan should never have dragged their feet before paying into the Fund, but now we need full transparency.

Matalan - and other companies that profited from Rana Plaza - have a moral responsibility to pay their fair share. But as things stand, the Fund is significantly short of its target, meaning that the compensation payments will be more limited than it should be: in short it means the victims of this terrible tragedy will be wronged again.

British shoppers want to buy their clothes without fear that companies are unresponsive to worries about risks in their supply chain.

We also need co-ordination action in the future to see safer workplaces for all, no matter where they happen to live.

On coming to power, one of the first steps of the Tory-led government was to end UK financial support to the International Labour Organisation. As well as being wrong-headed, this move detracts from any moral authority to urge retailers to support the ILO-backed fund.

Equally importantly, it means Britain has abdicated its place in the vital work the ILO and others are doing to prevent a re-occurrence of a tragedy like Rana Plaza, through the Accord on Fire and Building Safety in Bangladesh.

This is a landmark agreement between retailers and trade unions to require safety inspections of Bangladeshi factories and to contribute financially towards repairs that are identified as necessary, as well as committing retailers to withdrawing contracts from factories that refuse to provide safe working conditions.

The remarkable power of consumer pressure, unleashed in the wake of Rana Plaza, has led to the majority of major UK fashion retailers signing up, but significant exceptions remain, including Gap.

To call for better conditions for workers worldwide is not an attack on cheap clothes on our high street - faced with stagnant wages here in Britain, hikes in clothes prices are the last thing our constituents need; nor is it a denigration of the role employment in the garment sector can play in developing countries like Bangladesh, providing reliable wages and lifting many out of poverty.

There is no reason why safe working conditions and decent wages cannot sit alongside good value clothes for British customers. The majority of retailers have recognised this and are taking action. Government and consumers need to be united in encouraging those few who drag their feet to change their course.

Modern slavery, forced labour and simple exploitation of vulnerable workers is nothing new. But what is new is an ever increasing power for the international community to do something about it. That's why international workers' rights will be a core component of DFID under Labour.

The global response to Rana Plaza must be much more than simply saying 'never again'. It should be real action to protect workers around the world; to insist on a decent day's work for decent pay, under decent conditions - everywhere.

Labour MP Jim Murphy is shadow Secretary of State for International Development and Labour MP Alison McGovern is a shadow minister in the department.

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<![CDATA[Life after crash: why have hard times made us harsher?]]> George Osborne caps some benefits, time-limits others and invites inflation to eat into them all for years ahead. It amounts to an assault on the welfare state defying all precedent. Despite the recovery, the effect is evident in London’s resurgent rough sleeping and the preponderance of food banks in market towns.

Where Margaret Thatcher hesitated to tread in the 1980s, the polls today suggest that the right is carrying all before it. Why? Because, as I argue in my book Hard Times, the Great Recession has shifted most voters’ calculation about where self-interest lies.

This may seem like a paradox. The collectivist postwar institutions now under attack were put in place in response to the Depression. Back then, fear of a storm that could lash anybody ensured that solidarity rose as the economy sank.

The pattern held into the late 20th century. As unemployment soared by a million between 1990 and 1993, working voters reasoned that “there but for the grace of God go we”. The British Social Attitudes survey found that the proportion suspecting that benefits were “too high and discouraged work” fell to less than a quarter. After Lehman Brothers imploded, in contrast, the belief that excessive benefits bred indolence spread; the view was endorsed by 61 per cent by 2009. Why have hard times got harsher? In essence because, after 35 years of rising inequality, the old understandings about shared risk have ceased to apply.

First, there is the spectacularly unequal incidence of redundancy. After 2008, already inflated unemployment rates for the unschooled, for ethnic minorities and dead-end towns increased more rapidly, often rising twice as fast.

In some disadvantaged subgroups, such as young black men, joblessness exceeded 50 per cent. Meanwhile, the luckier segments of society – white, middle-aged graduates, for instance – were almost immune.

Redundancies occur in every recession; the more distinctive hallmark of the recent downturn – and the current recovery – is unreliable and insecure jobs. These, too, are concentrated among the already disadvantaged and barely affect the middling majority.

The people of Middle England are further protected by property. It provides a substantial cushion against adversity for ordinary homeowners, whose path through the slump was eased by super-low interest rates that did little for renters.

Put it all together, and the chief victims of the recession emerge as almost preordained. The rest can be forgiven if they conclude that hard times hold few terrors. To be sure, most people’s pay packets have been squeezed, but a few years of getting by without a rise is no disaster if you were comfortable before. It does not trigger recourse to the safety net; indeed, the most reliable way to ease the pinch might be to vote for lower taxes even if that leads to lower benefits. Self-interest has a way of warping perceptions, and so this line of thinking slides into suspicions about those who do rely on the state.

The Great Recession has bequeathed Britain two political nations. Among those substantially hit by austerity, 62 per cent told YouGov last year that they rejected the coalition’s cuts as too hasty; among those not much affected, a similar majority of 65 per cent felt that the cutting should be maintained or stepped up. Britons directly affected by the downturn said the government was “too harsh towards people on benefits”; those unaffected said it was “too soft”.

The most vulnerable minority has grown more supportive of state assistance, while the rest have become more inclined to leave victims on their own. Given that the latter are in the majority, the overall drift is rightward.

Saving social security depends on appealing across the economic gulf that separates victims of the recession from the “squeezed but basically safe”, few of whom expect to need the safety net any time soon. A pitch rooted in naked self-interest is not going to work as it might have done in more equal times, but it does not follow that social security cannot be made legitimate to the majority.

New Labour’s tax credits channelled money towards cash-strapped families simply because they were poor, and thereby failed this test. Instead, we must shore up the foundations of economic shelters in working life. This entails, first, looking beyond state benefits, and regulating or nudging employers to do more for their vulnerable staff on security and pay. Second, it entails reinventing social insurance. It would be costly to find funds for, say, a higher rate of Jobseeker’s Allowance for those who have “paid a stamp” or contributed to the community in some other demonstrable way. But doing something explicitly extra for unarguably deserving victims could break us out of the Benefits Street discourse.

The squeezed but safe could coldly conclude that it would be better to go uninsured than pay premiums to cover others. But if they are assured that those being bailed out deserve it, opinion would surely shift. Faced with a welfare system that nobody bothers to explain or defend, those who don’t need help are bound to do the selfish calculation and vote for cuts. The left should take its cue from Franklin Roosevelt’s defence of a “legal, moral and political” right to contribution-based benefits. It might just find that most of us still understand that bad things can happen to good people.

Tom Clark is the author of “Hard Times: the Divisive Toll of the Economic Slump” (Yale University Press, £18.99)

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<![CDATA[Homeowners beware: Boris’s vision for the London economy]]> With speculation rife on the timing of interest rate rises, the Resolution Foundation’s paper yesterday on how indebted households will fare once the base rate goes up was timely. The report will make for a sobering read for Mark Carney and fellow inhabitants of the Old Lady. As many as two million mortgage payers could struggle once interest rates climb from 0.5 per cent to 3 per cent, the thinktank said. Without a state-backed plan to alleviate the pain for over-leveraged households, many will be forced to hand back the keys to their homes.

For Labour London Assembly members, this is a particularly hot topic. Last week, at the Assembly’s Economy Committee, I asked the Mayor’s Economic Adviser, Dr Gerard Lyons, what he meant when he disagreed with the Governor of the Bank of England’s assessment  that the Bank’s “new normal” rate level is likely to be 2.5 per cent. Lyons said “the level at which UK interest rates need to eventually peak should be high, not low…I would sooner have them at 5 per cent or 6 per cent than 2 per cent or 3 per cent.”

Lyons, a distinguished City economist by trade, may not have realised the political implications of his honestly expressed view. I immediately crunched the numbers, calculating how, given that the average price of a London property now stands at £492,000, a rate of 6 per cent would double the average London monthly mortgage payment from around £2,000 to £4,300 per month.

At Mayor’s Question Time, I asked Boris Johnson if he agreed with Lyons. Despite obfuscation, the Mayor eventually endorsed the Lyons view that a base rate of 5-6 per cent would be appropriate at the end of the economic cycle.

Doubling of mortgage repayments would spell disaster for those who bought homes on variable mortgages at low rates. Even a moderate rate rise would result in defaults and repossessions, set against the background of rising cost of living and stagnant wages.

The Resolution Foundation’s report highlights how the problem is exacerbated in London. Around a third of mortgaged households are predicted to be “highly geared” by 2018. The thinktank notes how this is “particularly worrying, as such households are least likely to have spare resources to fall back on in the event of an increase in mortgage costs”.

Boris Johnson argues that even if things became this severe, defaults and repossessions would cool the housing market and halt house price inflation – which would surely be welcomed. The Mayor knows full well this is simplistic. Having re-inflated the economy on the back of an asset bubble, such a tightening of monetary policy would not merely reduce upward pressure on house prices, but by diverting more household income to servicing debt, would reduce aggregate demand and undermine economic recovery.

Lyons and Johnson do not sit on the Monetary Policy Committee nor set interest rates, so does this matter? If you believe that Johnson is set on becoming Conservative leader (and probably taking Gerard Lyons with him), then yes, these views give a valuable insight into his economic outlook.

Boris Johnson is content to stand by and watch vulnerable London homeowners squeezed till the pips squeak so as to cool inflation in the wider economy. Those who remember struggling with mortgage repayments in the Thatcher-era of high interest rates will find this alarming.

The challenge for a 2015 Labour government will be to inject stability in the over-heated London housing market without wrecking the recovery in the wider economy. This is why Labour’s proposals to level the playing field with an active industrial strategy, investment in chronically-underfunded infrastructure, and further devolution to local government are an attractive offer to the electorate.

Andrew Dismore is Labour London Assembly member for Barnet and Camden and the party's parliamentary candidate for Hendon

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<![CDATA[Could the UK’s next big export be urban development? ]]> All over the world, cities are expanding and developing. And as they do so, interested parties such as city governments and property developers make countless decisions about how they’re designed, how they run and what they’re filled with.

All this decision-making contributes to what is now a growing, international industry; a hybrid of architecture, engineering and digital strategy. This, according to a new report by the Future Cities Catapult, will be worth £200bn globally by 2030.

The Future Cities Catapult is a government-backed project, focussed on making cities more forward-thinking and improving their services (no aerial bombardment is involved). And it argues that the UK could take home a healthy piece of the pie as the market expands.

Peter Madden, its chief executive, estimates that the sector in the UK is already worth over £16bn – mostly a combination of our architecture and civil engineering industries.

But Madden thinks it could be a lot bigger - the group believes that the UK is “best placed” to take advantage of this market globally.

To make its case, the report gives examples of UK-based urban initiatives which have taken off in other countries. These include Citymapper, which started off by releasing a route planner for London but has now expanded to other big cities; and Spacehive, a crowdfunding website for civic projects (basically Kickstarter, but for parks and outdoor pianos) which has spawned copycat sites all over the world.

Predictably, London accounts for a large chunk of our urban development industry: the capital is home to 34,000 technology businesses, 27 per cent of the country’s architects and lots of big civic bodies like TfL. But the authors argue that urban thinking and innovation is also thriving in other UK cities, too.

Glasgow was recently awarded a £24m grant to set up an open data platform and intelligent street lighting, featuring energy efficient LED bulbs and sensors to track footfall and pollution levels. Bristol, meanwhile, was awarded the title of 2015 European Green Capital by the European commission for its cuts in carbon emissions and investment in renewable energy. 

Climate change is actually a running theme of the report – if future city development is carried out with climate change in mind, goes the thinking, everyone will better off. Keith Clarke, a Future Cities Catapult board and former CEO of design and engineering consultancy WS Atkins, says:

The UK...is ideally positioned with its deep academic skills, institutional strength, engineering depth and its own world leading Climate Change Act, to not only adapt to climate change to ensure we stay closer to [a 2 degree temperature rise] than the horrendous scenario of 3 degrees plus.”

Stop it, we’re blushing.

Of course, local firms may be better placed to propose schemes that work for particular cities, and will be cheaper to hire than UK architects or analysts flown in for the job. But if UK firms do manage to corner a good-sized chunk of the “future cities” market, it can only be a good thing for our economy. Oh, and the rest of the world will benefit from our “deep academic skills” and “engineering depth”, of course. You’re welcome, everyone.

This is a preview of our new sister publication, CityMetric. We'll be launching its website soon – in the meantime, you can follow it on Twitter and Facebook.

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<![CDATA[Sex work is work: exploding the “sex trafficking” myth]]> I am lucky to have taken up my work as a dominatrix amid a revolution in our thinking about sex work. Writers like Laura Agustín and Melissa Gira Grant have taken apart our sexualised, othered image, and sex workers and allies proclaim loudly that sex work is work. Banal on its surface, that statement is profound in its implications. We all work for a multitude of reasons, good and bad, mundane and heart-wrenching. It is society that frames those reasons differently, based on gender, race, class, and nationality.

Like everyone, I’ve seen the reports of people from foreign lands, brought to the west and forced to do sex work. They are called trafficked women, and are often depicted at the point of a police raid, with flashing cameras shoved in their faces. At best, they’re shown as victims; at worst, as nuisances and criminals. I write today to stand with Agustin, Grant, and Maggie McNeill, who have so powerfully argued that this portrayal, and the very concept of “sex trafficking” that underpins it, is a myth. To say this is not to sideline the coerced; in dismantling this pernicious myth, we put their lived experiences front and centre. Coercion, force, and violence in sex work are very real, but they pertain generally to life as a member of the oppressed, not just to sex work. They must be fought across the world, and the concept of sex trafficking does not help in that fight. Instead, it obscures the fact that many types of workers, from carers to builders, suffer force, violence and exploitation. Insidiously, the trafficking myth also deprives sex workers of agency and identity, as it sexualises and fetishises our lives and bodies.

Our stories can look very different from sensationalised raid reports or racy tell-alls, even with familiar-sounding facts. Originally from Romania, Paula was sixteen when her boyfriend took her to London to work as a sex worker. It was not her idea, but she was in love, and as excited as any new immigrant. She was willing to give sex work, and England, a chance.  Her boyfriend became an abusive drunk and addict, and after nearly a year, she was done. He grounded her by snatching her passport. “I couldn’t go anywhere. . . if you don’t have papers, you don’t exist,” said Paula. She went back to work; when she befriended a pickpocket, he sent his confederates to recover her ID.

Having freed herself, Paula dumped her boyfriend and set up as an independent sex worker, choosing her own working flat and making it comfortable and secure. By 2012, she was well on her way to success, taking an English course and saving up to study nursing. She was a part of the neighbourhood; she had applied for a national insurance number. Then, on 3 September, she was raided.  “When the police came in, they started accusing me of being a pickpocket and a beggar, just because I am a Romanian,” she said. They barraged her with questions and upended her tidy flat in a search for drugs. Although she was entitled to be in the country as an EEA national, she was reported to immigration authorities, and ordered to present her proof at the police station.

On the same day Paula’s flat was raided, police stormed into a number of flats in Mayfair, tearing down notices and harassing sex workers, maids and receptionists. Women working legally were thrown out of their flats and threatened with arrest if they returned to work; no evidence of drugs, minors or trafficked sex workers was found. Paula operated for months under police suspicion, never knowing when police or immigration authorities would approach her – even at her home, where she kept her job a secret. Eventually, she was cleared, but the experience changed her; today, Paula supports and organises alongside her fellow sex workers at the English Collective of Prostitutes.

Her experience is typical. “We’ve always said that anti-trafficking legislation was aimed at stopping women crossing international borders,” says ECP spokeswoman Niki Adams. “Trafficking is used as an excuse and a justification for raids on premises and arrests of immigrant sex workers which are ultimately and actually just immigration raids. It’s a way of enforcing immigration controls in a very repressive and heavy-handed way, but with the veneer of an anti-trafficking initiative and the idea that you’re saving victims. It’s just a con,” she says.

If sex work is work, then sex workers are workers. We face – and fight – all of the intersecting, systemic oppressions faced by workers everywhere. While law enforcement and a well-funded rescue industry contribute to a worldwide attack on our rights, sex workers have long been in the forefront of militancy and organisation. Like workers everywhere, sex workers are best situated to improve safety and working standards. Around the millennium, as women disappeared in a Vancouver neighbourhood, activist Jamie Lee Hamilton established Grandma’s House, which provided food, condoms and safe rental rooms for sex workers. Women were still disappearing when Grandma’s House was raided and closed in August 2000, and Hamilton was charged with running a bawdy house. Serial killer Robert Pickton was not caught until 2002, and was convicted for the murders of 26 women; he told an undercover officer in prison that he had killed 49.

In the United States, authorities have recently closed and seized the assets of MyRedBook, an advertisement and forum site for sex workers and clients. Under the guise of fighting trafficking, prostitution and money laundering, they have shuttered a website with a long history of fostering sex worker solidarity. “It’s a huge loss from a community standpoint,” said Melissa Gira Grant, interviewed for a report published Tuesday. She recalled that the site, which started in the early 2000s, had had forums that were more active than the advertisements section. Much of the site was free to use; with its closure, sex workers with limited funds, arguably the most vulnerable, have lost an essential community resource. Law enforcement also regularly infiltrate and shut down online screening tools, routinely used in America, where clients upload proof of identity and sex workers can verify thems; dissuaded from using these tools, sex workers are left vulnerable to harm and arrest.

The raid on MyRedBook is part of a wider American crackdown on sex workers, whose result may, ironically, be more migration. “It’s almost like breast cancer awareness in its publicity right now,” says Kelly Michaels, an American specialist in tantric sex. Michaels tours to work when her children are with their father. For her, arrest could mean exposure and the loss of her children; touring can keep authorities from picking up the scent, but could equally put her at risk, as she is continually meeting new clients. “The main reason I tour is law enforcement. . .to keep myself a moving target. I would love to be able to book locally and not make myself vulnerable,” she says. For her, today’s media furore about trafficking has proved too much. After six years as a sex worker, and a bitter fight to wrest custody from a whore-shaming ex-husband, Michaels is retiring from sex work, and is making a documentary about her attempt to follow the advice of the rescue industry, supporting her family by other means.

Victor Hugo said that a writer is a world trapped in a person. The same is true of any of us. There is more to Paula’s story, or to Kelly’s, than a body and a job. Theirs are stories of personal success. They’re about the hope and apprehension of a new venture, the universality of domestic violence, and the ingenuity displayed in surviving it. They’re about the joy of building a business, and the fear of its destruction through causes outside of your control. They’re stories about finding your voice. Most of all, they are each a part of the broad, human story of uncertainty, change, and the sometimes bumpy road to building a new life. We may enter sex work out of optimism or out of desperation, and we may love our jobs or hate them. For most of us, our reasons, and our sentiments, fall somewhere in between, but all of us can fall prey to the state and the rescue industry. Capturing and labelling us, they decide our fates; they become the coercers, and can shatter lives. Let our society set them aside, together with the trafficking myth; let sex workers take the lead in debates about our lives and work. We are coming out of the shadows, and demanding our freedom to work, organise, and fight. With that freedom, sex workers ourselves will end coercion in our trade, and we will take our rightful place in the struggle to end it everywhere.

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<![CDATA[They're bulldozing a fifth of Detroit ]]> Bad news for fans of ruin porn: Detroit is hoping to rid itself of its unique collection of dilapidated buildings and elegantly rubbish-strewn abandoned lots, and all within the next five years.

In May, a group ominously titled the “Detroit Blight Removal Task Force” released a report claiming that around 22 per cent of the city’s properties were “blighted” – vacant, damaged or considered dangerous. They also found that, of the 84,000 properties owned by public entities, just over 5,000 were occupied by squatters, making the city of Detroit, the report’s authors noted, “a very large and inadvertent landlord”.

The task force’s proposed solution is to demolish it all over the next five years and start again. Unfortunately, the plan doesn’t extend to rebuilding the properties – it’ll be down to private companies and developers to buy up the land and rebuild.

First on the city’s agenda is removing empty family homes, a move that, paradoxically, is intended to stem the free-fall in the city’s population. In 1950, Detroit’s population stood at 1.85 million, but it’s fallen to 700,000 as residents leave for the suburbs or other cities in the face of the shrinking industry and rising crime.  Cleaning up the neighbourhoods, the thinking goes, will entice suburb-dwellers back to central Detroit.

All this will cost the city around $850m. In total, the plan will cost $2bn – around $3,000 per city resident. That’d be painful enough, even if the city hadn’t filed for bankruptcy in July 2013 with debts of around $20bn, giving it the dubious honour of being the largest US city ever to go broke.

To help take some of the pressure off, the Mayor’s office has also launched Building Detroit, a house auction site, intended to sell some of the blighted homes; the lucky buyers will then be responsible for fixing them up so the city government doesn’t have to. The programme has seen houses sold at anything from the bargain rate of $40,000, right down to the rock bottom price of $1,000. Mayor Mike Duggan has been doing his bit by waving the gavel on his Facebook page.  

This is a preview of our new sister publication, CityMetric. We'll be launching its website soon - in the meantime, you can follow it on Twitter and Facebook.

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