‘The UK has severe issues of abilities and low productiveness, however they require insurance policies. The idiotic worker-bashing feedback by Liz Truss make headlines however supply no evaluation of the issues or sturdy options.’
Prem Sikka is an Emeritus Professor of Accounting on the College of Essex and the College of Sheffield, a Labour member of the Home of Lords, and Contributing Editor at Left Foot Ahead.
The UK’s ruling Conservative Get together doesn’t settle for duty for any of its disastrous insurance policies. The lengthy record consists of botched Brexit which has created shortages of products, providers and labour, the very best charge of inflation for 40 years, the very best tax burden for 70 years, the largest fall in residing requirements because the Fifties, the largest fall in actual wages for 100 years and the worst financial development prospects in G20 international locations. It all the time blames others.
That mind-set is revealed by a leaked audio recording by which Liz Truss, frontrunner to be the following Conservative Get together chief and successfully the Prime Minister, blames employees for financial woes. In her phrases, British employees want “extra graft” and so they lack the “talent and utility” of international rivals. She added that “In the event you have a look at productiveness, it’s very, very completely different in London from the remainder of the nation” and superior the view that employees outdoors London and South East of England are much less productive.
In 2012 a e-book that she co-authored stated that the “British are among the many worst idlers on the planet. We work among the many lowest hours, we retire early and our productiveness is poor”. This contempt for employees is a forewarning of additional anti employees’ rights laws. The criticisms additionally lack empirical proof.
Empirical proof is that British staff work the longest hours in Europe. Just a few months in the past, ministers had been clapping docs, nurses and healthcare employees for working lengthy hours to cope with the coronavirus pandemic. Academics, police, firefighters, railways, safety and different employees labored lengthy hours in the course of the lockdown to forestall the economic system from collapsing while the Prime Minister and the Chancellor partied.
The state pension age or the retirement age for British employees, women and men, is at present 66 years and anticipated to rise to 67 by 2028. In France, it’s 62 years. British retirees obtain one of many lowest state pensions within the industrialised world. With suspension of the triple-lock, it’s equal to about 21% of common earnings.
Productiveness per particular person is notoriously troublesome to calculate. In any case, it’s intertwined with funding, expertise and high quality of infrastructure. British trade has lengthy been cursed with short-termism. Capital markets demand fast returns within the type of share buybacks and dividends. Because the Financial institution of England’s Chief Economist put it, “In 1970, main UK firms paid out about £10 of every £100 of earnings in dividends, however by 2015 the quantity was between £60 and £70, typically accompanied by a squeeze on labour and funding”.
Amongst developed international locations, main UK firms pay out the highest proportion of earnings in dividends. Many, similar to Carillion, resorted to borrowing to pay dividends. Inevitably, funding suffers. The UK funding is productive belongings has averaged at round 18.7% of GDP, decrease than Bangladesh, Belarus, Brazil, Cambodia, China, India and most EU international locations. Low funding leads to low productiveness and abilities. Successive governments have did not sort out short-termism.
With the comparative demise of shipbuilding, mining, auto, aeroplanes and different industries, successive governments have chosen to let manufacturing wither. Since 1970, manufacturing’s share of UK financial output (when it comes to Gross Worth Added) has declined from 27% to 9.7% in 2021. As manufacturing was closely situated outdoors London, these areas misplaced 1000’s of expert and semi-skilled jobs. The federal government has not provided any coherent plans for reskilling individuals or constructing a brand new industrial base.
For a long-time the British state accepted the price of educating and coaching the work power, notably that of college schooling. In 1998, all that modified and the price of schooling and coaching shifted to people within the type of tuition charges. Graduates in England sometimes have a debt of £45,800 for a 3 12 months undergraduate diploma and this exhausts their capability to bear additional prices of schooling and coaching. Moderately than investing in amenities to coach docs and nurses in good numbers, the federal government steals them from poorer nations. No effort has been made to handle this abilities hole.
As wealth is concentrated in London and the South East of England, the inhabitants reveals larger schooling and abilities ranges. However that doesn’t imply that these abilities are essentially used for socially fascinating functions. The finance trade staff are comparatively properly paid. The lure of excessive monetary rewards attracts graduates, which in flip deprives different industries of expert labour. Nevertheless, the bloated finance trade has miss-sold quite a few monetary merchandise, and is engaged in cash laundering, tax avoidance, curiosity and trade charge rigging and frauds. It receives subsidies, tax concessions and bailouts (banks, London Capital and Finance), which have a unfavourable results on the remainder of society. One examine estimated that between 1995 and 2015 the finance trade made a unfavourable contribution of £4,500bn to the UK economic system, a far cry from the plaudits dished out by Liz Truss.
The UK has severe issues of abilities and low productiveness, however they require insurance policies. The idiotic worker-bashing feedback by Liz Truss make headlines however supply no evaluation of the issues or sturdy options.
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