7 March 2008

Rip-off Britain?

The struggle between capital and labour over their shares of the national pie have become more overt recently. This is inevitable given that the environmental crisis has made it clear that the strategy of increasing the size of the pie has run up against the stops. In the Northern Rock fiasco the shareholders, who controlled around 1 per cent of the bank, attempted to extort money from the poor and middle-earners who pay taxes. The temporary nationalisation strategy represents a truce - since the ultimate decision about how much public subsidy will be given to the hedge funds is only delayed.

My recent visit to Portugal made clear the consequence in the transport sector of this commitment to business interests rather than people's interests - or a policy where the 'customer' (passenger) pays more of the costs of travel than the taxpayer, as the government prefers to phrase it. This is the explanation for a four-stop trip on the London tube costing £4 while a journey three times the length on the Paris Metro costs only E1.50. Meanwhile my trip from Irun to Lisbon, lasting 13 hours and including a bed and breakfast in the dining car, cost £99, while my 1.5-hour trip to London from Stroud was £108.

This is one of many examples of the way in which the poor subsidise the rich in a world where all the political parties have abandoned the interests of labour, or working people. Motorists are given huge subsidies in the form of free roads paid for from taxes which grow ever more regressive. Meanwhile bus and train companies are forced to fend for themselves - and pass the consequence on to passengers in the form of increasing prices and worsening service.

We see a similar picture in the world of energy - another key sector for price rises as oil supplies dwindle and competition for them increases. People who have run into arrears with electricity bills are put onto meters and then pay up to 45% more, subsiding the rich who can afford the cheap deals that come when you pay by direct debit. Save the Children identified that in most of the key consumption areas the poor are paying more than the rich.

The same applies in the debt/credit market, where small-time risk is penalised by high charges, whereas high-level risk is condoned. Years ago I wrote to my bank complaining that the £20 fine they had extracted for a £5 sally into the red was unreasonable. The letter justifying this extraction of money from the poor to be sent to the rich was signed by a 'Ms Swindell'. I intend to put this in a frame as a moral lesson.


  1. Don't buses use the same roads as the cars?

  2. Well, you're wrong about it being a way the poor subsidise the rich. I am 'rich' but dont have a car, so pay 4 quid, just like a poor person. I've pay an average of 15K more per year than in 1998 in taxes. I dont have kids, I'm not married, and I dont have any medical needs.

    I am ripped off as much as anyone. The fact I have more money does not make it acceptable to rip me off.

    Putting this into a labour vs capital framework is simply simplistic.