The rewards for failure and success in unequal Britain
By Michael Faulkner – March 22, 2009
Two unrelated stories have featured prominently in the news
over the past week or so. They concern two people who have achieved public
prominence by perceived failure in their professions which has had far-reaching
consequences for society as a whole. They both held responsible positions,
commanding public trust and requiring serious judgement on their part. It could
be argued that in different ways the professional judgement and actions of
these people had a bearing on the maintenance of social and economic stability
and cohesion. They have both been fired from their jobs. One, Sir Fred Goodwin,
was Chief Executive of the Royal Bank of Scotland. The other, Sharon Shoesmith,
was Director of Social Services for the London Borough of Haringey. It is
instructive to compare the treatment they have received from the government and
the media.
Goodwin’s ruthless drive to expand the RBS through hostile
take-overs and reckless risk-taking, earned him the nickname “Fred the Shred”.
Like so many of his fellow banksters he took his bank to the brink of ruin and
played a major part in bringing about the melt-down of the financial system. He
also oversaw a devious tax-evasion exercise – only now coming to light -
by concealing these activities through use of off-shore “tax havens” in the
Cayman Islands and elsewhere. About £25bn was involved in such schemes, which,
according to one report have cost the UK and US treasuries about £500m in lost
revenue. The RBS is now 70% owned by the British taxpayer. Goodwin has been
retired at the taxpayer’s expense with a pension of £700.000 a year. The
government shows no sign of attempting to claw any of this back, which is
hardly surprising as, until the onset of the crisis laid bare the scale of his
gross behaviour, he was New Labour’s favourite Olympian. He obviously saw
nothing wrong with what he was doing and he sees nothing wrong with it now.
Such “risk-taking” and corporate tax evasion had the blessing of Gordon Brown,
both as Chancellor of the Exchequer and prime minister. Despite widespread
public disgust and anger at the excesses of Goodwin and his ilk, he will be
allowed to enjoy the fruits of his failure in peaceful retirement at the age of
48.
Not so Sharon Shoesmith. Her professional career, which has
also been brought to an end by forced retirement, was pursued at a rather less
elevated level in the London Borough of Haringey, where she was Director of
Social Services. Haringey is one of the most socially deprived boroughs in
London. With a high incidence of child poverty and family breakdown its social
workers have very heavy caseloads. Several years ago a high profile case of
child abuse, resulting in the death of a young girl at the hands of her carers,
led to an investigation which highlighted serious deficiencies in the borough’s
child protection arrangements. Tragically, throughout Britain, as elsewhere in
Europe, many children die each year as a result of abuse by parents or carers.
Occasionally such deaths lead to frenzied accusations in the tabloid press
against social workers who are accused of dereliction of duty of care for
children at risk. Sometimes, as in the case of Sharon Shoesmith, the tabloid
press demands a scapegoat. A few months ago three people, including the child’s
mother, were convicted of killing an eighteen month old boy after subjecting
him to months of physical abuse. Although the child was on the “at risk”
register, the abuse apparently went undetected until it was too late. The high
level of publicity given to this case was due to the fact that it occurred in
Haringey. Shoesmith, whose response in a television interview after the event,
did not amount to a mea culpa, was pilloried by the tabloids who demanded her
head. Following a hasty and inadequate enquiry, the government’s Children’s
Secretary, Ed Balls, dismissed her from office without compensation or right to
pension. He decreed that in this case there should be no “compensation or pay-offs.”
It beggars belief that Balls and his cabinet colleagues fail
to see the glaring discrepancy in their treatment of these two cases. While
no-one seriously suggests that those responsible for protecting children at
risk should not be held accountable when abuse and worse occurs, it is only too
clearly evident that social service departments in boroughs like Haringey are
stretched to breaking point. Social workers have been subjected to a regime of
central government direction. They are swamped by an avalanche of paper-work,
form-filling and target setting which has resulted in them spending 70% of
their time in front of computers rather than with the children and parents who
are their vulnerable clients. They are poorly paid and desperately overworked.
The same conditions prevail throughout the public sector, in the education
service and the health service. We grew used to the refrain from government
that the best talents would not be attracted to banking and finance unless they
were rewarded with inflated salaries and obscene bonuses. We see where that has
led.
Where are the rewards for success for the overworked nurses,
teachers and social workers who have been drawn to their professions by
dedication to public service. Where are their bonuses? How is success rewarded for those who
care for the sick, protect vulnerable children and do all they can to educate
them? In Britain such professionals are too frequently regarded by those in
power as little better than recipients of endless diktats from on high that
constrain them to bureaucratic drudgery. No wonder that there is a crisis of
recruitment to social work and teaching.
Inequality in Britain
The New Labour project launched by Blair, Brown, Mandelson
and others in the mid-1990s broke decisively with the old Labour Party’s social
democratic tradition. Nowhere was this more evident than in their rejection of
the party’s long-held commitment to reducing social inequality. In effect, New
Labour succumbed to the neo-liberal belief that an unrestrained free market
with a lightly regulated financial sector would boost wealth creation at the
top and, through a “trickle-down” effect, would lift people out of poverty at
the bottom. The result, after twelve years of New Labour government is that
inequality is 40% higher now than it was in 1974.
In a study of social inequality in 22 of the world’s most
developed capitalist economies (The Spirit Level: Why More Equal Societies
Almost Always Do Better, by R. Wilkinson and K. Pickett) Britain is in 20th place,
behind only Portugal and the USA, making it one of the most unequal societies
in the developed world in terms of income distribution. The income gap is measured by comparing the richest
fifth of the population with the poorest fifth. At the top of the league is the U.S. where the richest fifth
are 8.2 times richer than the poorest fifth. In Britain the comparable figure is 7.2. Interestingly, the
country with the lowest differential is Japan where the richest fifth are 3.4
times richer than the poorest fifth.
The study shows that the widening income gap in Britain
after 1979 (the year that Margaret Thatcher took office) has been the sharpest
in the developed world. Significantly, between 1974 and 1978 (the years of the
much derided Wilson/Callaghan Labour government) inequality was actually
reduced by 5%. The dramatic rise (by 33%) occurred between 1979 and 1996,
during Tory administrations committed to the neo-liberal policies which
extolled the unfettered “free market”, to which, according to Thatcher, there
was no alternative. But, most damningly, the trend of deepening inequality
continued under New Labour, to the point where, in 2006 it was 40% higher than
in 1974.
The bare statistics of income distribution are damning
enough. Far worse is the evidence about the impact of income inequality on
almost every aspect of society across social classes. On every indicator the consequences of social inequality in
Britain are dire. This country imprisons a higher percentage of its population
than any other in Europe. With 23% of its population obese, Britain is second
only to Greece and the U.S. in the world league of developed countries for
obesity. With 31 births per 1000 to women aged 15 – 19 years, Britain
tops the European league for teenage births. The runner-up is Portugal with 21
per 1000, but, globally, the U.S. is far ahead with 52 per 1000. There are
similar correlations for mental illness. Once again, with 23% of the population
suffering some form of mental illness Britain’s record is worse than any other
European country. In all these respects the consequences of income inequality
show that Britain has a very close affinity with the United States - a “special
relationship” perhaps.
In 1929, at a time when an earlier Labour government faced
the whirlwind of the of the Great
Depression, the Fabian socialist theorist R.H.Tawney concluded a famous lecture
entitled “Equality” with these words about an economic system that had broken
down. That system, he said:
“…takes as its premise that every group and individual shall
be free to grab what they can get and hold what they can grab. Those methods of
organizing the affairs of mankind may be admired or detested, but two facts are
incontestable. In the past they worked, though with endless waste and ill will;
they now work no longer. The result is the anarchy, international and economic,
which threatens to overwhelm us. A government may temporarily secure the
support of a majority of the nation by success in diverting attention from the
nightmare. No movement or party will deserve that support, unless it can offer
some reasonable hope of attacking with courage the causes which produce it.” 