The Swiss village of Davos, which hosts the annual summit. Photo: Getty
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The global elite in Davos must give the world a pay rise

Speaking for the 99 per cent at the World Economic Forum.

George Osborne may be feeling quite pleased with himself when he gets up to address the World Economic Forum in Davos this week. The self-styled poster boy of post-crash recovery will no doubt boast of Britain's return to growth and rising employment. But one uncomfortable fact that he and other politicians here are unlikely to mention is the continuing slide in the share of global wealth going on wages.

I’m in Davos too, as part of a small delegation of trade union leaders from around the world. We may be in a minority here among the heads of state and titans of finance, but we speak for the majority of the world – the 99 per cent. And just as the TUC has argued that Britain needs a pay rise, we are arguing in Davos that the world needs a pay rise too.

The share of national income going to wages across industrialized countries has fallen from over 66 per cent in the early Eighties to around 61 per cent, according to the OECD. Globally, the decline is even sharper – from 62.5 per cent in 1980 to 54 per cent in 2010, according to the United Nations. What’s more, the falling share is distributed increasingly unequally. Rising pay inequalities at the same time as a falling wage share mean even less of the rewards of growth go to the working people who create them.

The loss for most people’s wages means a greater share globally is going to those who are already the wealthiest. It means the super richer are getting stupendously richer and the rest of us are being left behind. And it means that politicians who keep telling us they want to ‘reward hard work’ have been speaking hollow words.

The World Economic Forum itself has at least finally put deepening income inequality at the top of its list of global concerns. It says that poverty, environmental degradation, persistent unemployment, political instability, violence and conflict are all related to deepening income inequality. But are the members of the global elite gathered in their exclusive mountain retreat ready to take the action needed to reverse this trend?

It means rejecting a broken economic system that has made them very rich, but brought the rest of the world an avalanche of social problems and restricted economic growth. The evidence that inequality within countries is bad for growth has been presented in recent reports from both the IMF and the OECD.

The world economy is wage led, and if the wages for the 99 per cent increase then their greater spending power boosts growth. Giving more and more to the top one per cent does not have the same impact – except perhaps on the luxury yacht market or future industries like private space flights.

The collapse of oil prices, and the resulting low inflation, will no doubt give the economy an immediate boost at a convenient time for George Osborne. But while an adrenaline shot can get a sick patient out of bed for a while, it’s no cure.

Cheap oil is a sign of a weakening global economy, reflected in the decision this week by the IMF to downgrade its growth forecasts for the UK and global economies. Global demand is growing weak, and there’s a very real risk that low inflation is the calm before the storm.

The lasting cure that Britain and the world need is a new global business model that works for us all. And at the heart of it must be a return to stronger wage growth. This would create a sustained increase in demand. It would help create the conditions in which new businesses can be created and prosper. And it would reverse the deepening inequality that is blighting so many lives.

This can only be achieved if workers have a stronger voice. Collective bargaining must be extended, and we need stronger employment rights to reverse the trend of casualisation. A solid and secure economy will never be built on the shaky foundations of zero-hours contracts, agency workers, job insecurity, and a global race to the bottom for pay and conditions.

Corporations need to start paying the taxes they owe in the countries where they make their vast profits – and governments need to make them. This will help ensure countries have the revenue needed to invest in long-term growth.

And a financial transactions tax – now backed by the Democrats in the USA as well as eleven EU member states – would crack down on financial speculation. That could help shift the focus of financial institutions back to long-term investment in high-skilled and well-paid job creation in real industries, instead of casino capitalism.

Frances O’Grady is TUC General Secretary

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The Prevent strategy needs a rethink, not a rebrand

A bad policy by any other name is still a bad policy.

Yesterday the Home Affairs Select Committee published its report on radicalization in the UK. While the focus of the coverage has been on its claim that social media companies like Facebook, Twitter and YouTube are “consciously failing” to combat the promotion of terrorism and extremism, it also reported on Prevent. The report rightly engages with criticism of Prevent, acknowledging how it has affected the Muslim community and calling for it to become more transparent:

“The concerns about Prevent amongst the communities most affected by it must be addressed. Otherwise it will continue to be viewed with suspicion by many, and by some as “toxic”… The government must be more transparent about what it is doing on the Prevent strategy, including by publicising its engagement activities, and providing updates on outcomes, through an easily accessible online portal.”

While this acknowledgement is good news, it is hard to see how real change will occur. As I have written previously, as Prevent has become more entrenched in British society, it has also become more secretive. For example, in August 2013, I lodged FOI requests to designated Prevent priority areas, asking for the most up-to-date Prevent funding information, including what projects received funding and details of any project engaging specifically with far-right extremism. I lodged almost identical requests between 2008 and 2009, all of which were successful. All but one of the 2013 requests were denied.

This denial is significant. Before the 2011 review, the Prevent strategy distributed money to help local authorities fight violent extremism and in doing so identified priority areas based solely on demographics. Any local authority with a Muslim population of at least five per cent was automatically given Prevent funding. The 2011 review pledged to end this. It further promised to expand Prevent to include far-right extremism and stop its use in community cohesion projects. Through these FOI requests I was trying to find out whether or not the 2011 pledges had been met. But with the blanket denial of information, I was left in the dark.

It is telling that the report’s concerns with Prevent are not new and have in fact been highlighted in several reports by the same Home Affairs Select Committee, as well as numerous reports by NGOs. But nothing has changed. In fact, the only change proposed by the report is to give Prevent a new name: Engage. But the problem was never the name. Prevent relies on the premise that terrorism and extremism are inherently connected with Islam, and until this is changed, it will continue to be at best counter-productive, and at worst, deeply discriminatory.

In his evidence to the committee, David Anderson, the independent ombudsman of terrorism legislation, has called for an independent review of the Prevent strategy. This would be a start. However, more is required. What is needed is a radical new approach to counter-terrorism and counter-extremism, one that targets all forms of extremism and that does not stigmatise or stereotype those affected.

Such an approach has been pioneered in the Danish town of Aarhus. Faced with increased numbers of youngsters leaving Aarhus for Syria, police officers made it clear that those who had travelled to Syria were welcome to come home, where they would receive help with going back to school, finding a place to live and whatever else was necessary for them to find their way back to Danish society.  Known as the ‘Aarhus model’, this approach focuses on inclusion, mentorship and non-criminalisation. It is the opposite of Prevent, which has from its very start framed British Muslims as a particularly deviant suspect community.

We need to change the narrative of counter-terrorism in the UK, but a narrative is not changed by a new title. Just as a rose by any other name would smell as sweet, a bad policy by any other name is still a bad policy. While the Home Affairs Select Committee concern about Prevent is welcomed, real action is needed. This will involve actually engaging with the Muslim community, listening to their concerns and not dismissing them as misunderstandings. It will require serious investigation of the damages caused by new Prevent statutory duty, something which the report does acknowledge as a concern.  Finally, real action on Prevent in particular, but extremism in general, will require developing a wide-ranging counter-extremism strategy that directly engages with far-right extremism. This has been notably absent from today’s report, even though far-right extremism is on the rise. After all, far-right extremists make up half of all counter-radicalization referrals in Yorkshire, and 30 per cent of the caseload in the east Midlands.

It will also require changing the way we think about those who are radicalized. The Aarhus model proves that such a change is possible. Radicalization is indeed a real problem, one imagines it will be even more so considering the country’s flagship counter-radicalization strategy remains problematic and ineffective. In the end, Prevent may be renamed a thousand times, but unless real effort is put in actually changing the strategy, it will remain toxic. 

Dr Maria Norris works at London School of Economics and Political Science. She tweets as @MariaWNorris.