Wednesday, 1 February 2012

Bonuses, benefits and fairness?

My article in today's Cornish Guardian focussed on central government's hypocritical approach to bonuses and benefits. It was as belows:

It is an absolute disgrace that Stephen Hester, the Chief Executive of the Royal Bank of Scotland (RBS), has been awarded a bonus that is equivalent to the annual income of fifty Cornish workers on an average local wage.

Mr Hester receives an annual salary of £1.2 million with numerous other “benefits” for running RBS – 83% of which is owned by the state – while his bonus in share options has been estimated to be worth £963,000.

Prime Minister David Cameron and his deputy Nick Clegg have rightly been accused of a “disgraceful failure of leadership” for refusing to stop the payment of this near-million pound bonus and refusing to live up to their recent rhetoric against crony capitalism, big bonuses and executive pay.

The Chancellor George Osborne has even described the award as “unpalatable,” but he has declined to do anything about it.

I share the view of the vast majority that it is immoral for the super-rich to receive such extra payments. And this is especially so, when ordinary working people continue to face pay cuts or wage restraint, and suffer increasing job insecurity and a massive squeeze on their living standards.

But while the Government is refusing to tackle the bonus culture of the bankers, it is seeking to introduce a cap on benefits paid to poorer households.

It claims this initiative is based on "fairness" and designed to protect those low-paid workers who are paying taxes, but it has actually fostered a debate that has ended up scapegoating families on benefits.

I fully agree it is fundamentally wrong that people can be better off on benefits than in work. But I think that the Government is not addressing this issue in the right manner.

Take housing as an example. Over the last 15 years, the cost of housing has spiralled out of control, and more and more individuals / families are struggling to purchase homes or rent properties in the private sector.

The cost of housing is so high that many working families on low incomes still need housing benefit to help cover the cost of simply keeping a roof over their heads, with the benefit payments in effect going direct to the landlord.

Sadly, the Government is doing nothing to control the price of private sector rents and it is actually forcing Housing Associations to charge more for their rental properties.

The Coalition is dictating that rents of such new properties should be set at 80% of the (extremely inflated) private rents in their immediate locality and this has led to new “affordable” rents in places like St Agnes being over £600 for a three-bed house – much, much more than on nearby estates.

The consequences of such a policy will mean that local people find it even harder to afford housing, and the Government’s bill for housing benefit will inevitably go up.

It makes no sense at all. If the Government was truly committed to fairness, it would act to combat Britain’s bonus shenanigans, instead of increasing the housing costs of the less-well-off.

Following the completion of this article, Mr Hester declined to accept his bonus. But this was because of public pressure and had nothing to do with the Leaders of the Coalition.

1 comment:

Ross said...

Will MK be commenting on these shameful Councillors:

LibDems failing Cornwall once again.