Should anybody have nine zeroes to their name? In the opening stages of the election campaign, Jeremy Corbyn launched a salvo against billionaires. A Labour government would go after super-rich people who exploit a “rigged system” to benefit themselves at the expense of the many, he warned in a speech last week.
Britain has more than 150 billionaires, who control assets worth £525bn. Yet with 14 million people in relative poverty, each one of these billionaires could be seen as a failure of government policy.
The crux of the Labour argument is whether such extreme wealth for so few people – 0.0002% of the population – can benefit society at large. Should anyone be allowed to grow filthy rich, as long as they pay their taxes? Has the wealth been earned fairly and gained legally?
To some, billionaires represent a gaggle of golden geese. They are symbols of the UK outgunning its economic rivals, acting as a welcoming port in a politically stormy world, with its arms open wide to the wealth creators.
The argument goes that the top 1% of earners account for 27% of income tax receipts and create jobs across the country. An example of this would be Britain’s third-richest man, Jim Ratcliffe, who is worth £18bn as head of Ineos – the petrochemicals group that employs 17,000 people. The politics of envy and class war would, some argue, drive wealth creators away, damage the exchequer and rob the country of innovations that only free-market capitalism might provide.
The Labour leader might have named Mike Ashley as an example of all that is wrong with billionaires in Britain, but after all the owner of the Sports Direct empire can claim he employs almost 30,000 people across the UK.
However, what ought to be questioned is the quality of the jobs that are created, and whether workers are fairly rewarded for their part in driving wealth creation. And where might the billionaires flee to, without access to the workforce and customer base that they rely on?
Even if they didn’t pay tax or spend a penny of their earnings, it would take an average UK worker more than 40,000 years to become a billionaire
Should those 30,000 people at Sports Direct have been rewarded more and Ashley less? Given the evidence uncovered by the Guardian of low pay and precarious employment conditions for Sports Direct workers, the answer ought to be obvious. Corbyn knows this. And so does the country at large.
Some of the super-rich might have won their status through their own efforts. But many were simply born into wealth – such as the Duke of Westminster, who is worth £10bn – or made their money through the avarice of rent-seeking.
No one can create wealth in a vacuum. Even to become a billionaire through entrepreneurial spirit requires the infrastructure of a nation: a skilled workforce, the rule of law, political stability, transport and communications systems and consumers to sell to.
The fact that there are more than 150 billionaires in Britain goes to the heart of how unequal the nation has become. Despite crippling austerity and the lowest real wages growth since the end of the Napoleonic wars, the ranks of the super-rich have more than doubled in the past decade. Despite the financial crisis, the nation is still home to the highest number of bankers paid more than €1m a year – 3,500 – of any EU nation.
Attacking the billionaire class is a smart move for Labour, allowing it to sidestep accusations that the party is anti-aspiration. Most people agree that at some level wealth starts to become repulsive. Growing fantastically rich may be an ambition for many, but it is reached by few. Billionaire status is out of the reach of almost everyone, including even successful entrepreneurs.
Even if they didn’t pay tax or spend a penny of their earnings, the time it would take a worker on the average UK salary – about £25,000 – to earn their way to billionaire status is more than 40,000 years – a period equivalent to the entire existence of Homo sapiens in Britain.
Boris Johnson has framed the election as parliament versus people. Labour would prefer the debate to be people versus the elite. With an argument about billionaires, Corbyn and Labour are on fertile ground.
RBS’s new chief must capitalise on its green potential
Alison Rose at Royal Bank of Scotland is the first woman to become chief executive of a Big Four bank in the UK but she’s different in another way. She is the first RBS boss since the crash of 2008-09 who is not taking on the top job at a time when the overwhelming priority is to clear up the mess created by that meltdown.
Stephen Hester, who joined RBS in November 2008, used to describe his job as defusing the biggest balance-sheet time bomb in history. Ross McEwan, who took over in 2013, had the mammoth task of settling with US authorities over mis-sold mortgage securities. He also had to sell the US’s Citizens Bank, repair the pension fund and manage the scandal of GRG, RBS’s small business restructuring unit.
RBS is not free of challenges, as the share price indicates: at 215p, it is still less than half the level seen when the bank was part-nationalised. But the sense of emergency has abated. Rose, a 27-year RBS veteran, has the relative luxury of being able to breathe and think differently.
She started OK on Friday. She spouted too many platitudes – RBS will be “purpose-led”, will “embrace the future” and wants to “champion customers” – but as a signalling exercise it was fine. The details were always scheduled for next February.
That’s when Rose will have to provide substance. Her most interesting remarks on day one were about tackling climate change and helping finance the UK’s transition to a lower-carbon economy. On that front, RBS is already ahead of many rivals – it won’t fund Arctic oil projects and has pledged to cut lending to firms profiting largely from coal.
But there is potential to go further. There is scope for RBS to reinvent itself as the bank that takes the climate emergency most seriously. Honeymoon periods for chief executives only last about a year. Rose should be radical from the off.
The case for fracking was never strong. A ban is the right decision
Political cynicism as a general election approaches, or a triumph for common sense? The government’s ban on fracking in the UK is probably a mixture of both. Either way, it is very welcome. Dogged anti-fracking activists should congratulate themselves on a supremely effective campaign of resistance.
The official trigger for the government’s U-turn was a report from the Oil and Gas Authority which concluded that it was not possible to rule out “unacceptable” consequences for people living near fracking sites. Ministers could still have opted to extend a policy of “proceed with caution” but have instead imposed a moratorium.
Therein lies the suspicion of naked political opportunism. The Tories are targeting seats in the north-west of England, where opposition to the UK’s only active fracking site, Preston New Road in Lancashire, has been intense. Prime minister Boris Johnson, who once described fracking as “glorious news for humanity”, can thus temper one local source of resentment.
Contrary to Johnson’s original thesis, fracking always looked like a dead-end in the UK. American shale firms can drill under wide open spaces; the UK is densely populated with citizens who resent earth tremors, even minor ones.
Nor did the industry’s big claims for shale as a transitional source of energy on the road to a lower-carbon future ever read convincingly. The fracking process is dirty and intensive – it involves pumping water, sand and chemicals underground at high pressure – and has been overtaken by events. The exciting energy story in the UK over the past half-decade has been offshore wind, where prices have plunged. It is more sensible to encourage windfarms, which the market will supply readily, than fiddle around with fracking’s uncertain economics. As for gas supply, imports look secure.
In short, the politics of fracking were terrible and the business case was weak. The end should have come a long time ago.
This content was originally published here.