Record bonuses of £14bn have been paid out in the City of London. The combined salary of FTSE bosses topped the £1bn mark and one third of busin-esses in the UK do not pay any corporation tax. Our top earners have never had it so good.
Meanwhile, at the other end of the spectrum, prison officers have been on strike after rejecting a feeble 2.5 per cent pay rise, and nurses in Barnsley walked out over plans to change their job descriptions. And your chances of getting a letter delivered on time amid industrial action by Royal Mail staff are slim. Public sector pay rises have to be kept down, says Gordon Brown, to prevent inflationary pressure mounting.
But the gap between the rich and the rest has never been so great or so divisive to society. There is a great reluctance on the part of politicians to impose greater taxes on the wealthy; for Labour, this is partly to do with the party leadership being paranoid about alienating business interests, lest there are accusations that it is reverting to socialist type. And frankly, there are far too many old Etonians on the Tory front bench for her Majesty's Opposition to kick up a fuss.
However, the main reason there is now a backlash against those fortunate enough to get paid a king's ransom has little to do with the predicament of public sector workers. Rather, the moral indignation is coming from a middle class that is feeling the pinch itself. The wealth gap that is important in this debate is the one between the middle classes and the super rich. No longer does a salary two or three times the national average guarantee the chance to buy a nice house or a decent pension.
Statistically, Britain may be doing well on a macroeconomic level, but take a look at where the wealth is flowing.
New figures from the Office for National Statistics, due out in October, will show that more and more of the country's assets are finding their way into the hands of a super-elite caste in society. Good news if you are part of that 1 per cent of the population, not so good for everyone else.
Meanwhile, stamp duty on small share trades, taxation on pension funds and a flat rate of inheritance tax penalise the little guy. The mega-wealthy take advantage of tax loopholes, such as the one governing non-domiciled residents, and pay even less tax than they should on paper. But that does not stop ministers coming up with tired old clichés about how the rich should not be resented for being successful. Well if the masses got the favourable tax treatment enjoyed by billionaires, then maybe they would stop complaining.
Russian raid on Arsenal
So another Russian billionaire wants to buy one of the crown jewels of English football. Steel tycoon Alisher Usmanov has snapped up a 14.58 per cent stake in Arsenal and made it clear he wants to buy the club. The board of the north London side may resist his overtures (they have all pledged not to sell their shares until next year), but at the end of the day, Mr Usmanov and his fortune are likely to win out. We do not yet know whether he will mimic his close friend at Chelsea, Roman Abramovich, and spend the GDP of a mid-sized African country to bring in the most overpriced players, or whether he will run the club as a proper business.
It is a puzzle to many observers why overseas businessmen see Premier League teams as such good investments. Football is a risky enterprise, isn't it? Well actually, not as risky as you might think for the biggest teams. The likes of Manchester United, Liverpool, Chelsea and Arsenal can depend on full stadiums every week and TV revenues that are set for three years at a time. A certain level of income is guaranteed, not least because the "big four" of the Premier League have finished in the top four spots for several years. The top flight of English football is watched by fans on all continents of the planet and in financial terms it can now be regarded as the most successful league of any sport in the world.
New owners of Premier League teams, who see their clubs as businesses, don't necessarily need an annual profit from their investment. Rather, they are gambling on long-term appreciation in the value of the asset. Taking that into account, it makes the money going into football look a little less silly.
Bad timing for Barclays
If there was ever a bad time for Barclays to trip over its own shoelaces, last week was it.
Looking decidedly second favourite in the two-horse race with RBS to buy ABN Amro, the bank said it had been forced to borrow £1.6bn from the Bank of England after a "technical error" meant it was unable to close its positions at the end of the trading day through a clearing system called Crest.
No need to panic, Barclays said. We are swimming in cash really, etc etc.
Yes well, maybe, but jittery markets still sent the company's shares lower. As Barclays is trying to buy ABN with mainly paper, the timing could not be worse. If the bank has any more little mishaps in the next month or so, it will start to look incredibly accident prone.Reuse content