Unsustainable Burdens
The term 'unsustainable' has been used recently in respect of three groups of people in the UK who are not getting on very well in the dystopia of the autonomous individual - the ones who are expected not to need the support of a social democratic state which, for reasons that will become obvious, is being wound-down in the interests of low taxes and higher profits.
The case of Southern Cross care homes illustrates the problem. [SCHC]
Since public sector care homes cost too much too run, they have been handed over to the private sector who - miraculously - can not only run them more cheaply, but can also make a profit!
Southern Cross saw an opportunity to make a quick buck when boom had not yet turned to bust.
They sold the care homes and rented them back, to enhance shareholder value. Something you couldn't do in the boring old public sector. [DL]
Sadly, boom did turn to bust, and SCHC found themselves stuck with an agreement to pay extra rent every year at a time when local councils started passing on Eric Pickles' squeeze on spending. [GMB]
(The squeeze didn't apply to Mr Pickles himself, btw. [JXJ])
To cut a long story short, SCHC have been in negotiation with their landlords, and - much to Health Minister Paul Burstow's relief - have got themselves four months in which to find a solution to their difficulties.
Mr Burstow told the House of Commons:... the government was monitoring the situation but this was a "commercial sector problem".
[BBC]It's not difficult to imagine Mr Burstow washing his hands while he speaks. The care of the elderly is now a 'commercial sector problem'.
How's the commercial sector managing to cope?Southern Cross ... is cutting 3,000 staff and attempting to impose a new contract of employment on workers, many of whom already work 12-hour shifts and are paid little more than the minimum wage of £5.90 an hour.
Southern Cross's proposals ... include staff being temporarily laid off if the company deems there is insufficient work, pay and hours being cut or increased by 20% each way, employees carrying out duties other than caring (such as cleaning and cooking) and in some cases agreeing to opt out of the European working time directive that limits the amount they can work to 48 hours a week.
The plans also propose that carers should be prepared to work in different homes "within a reasonable area" ...
One carer from Yorkshire ... said:" ... They will be moving us around like agency staff. If I go to a home which is further away it will take longer and they are not going to pay for my petrol."[Gdn]
Another carer claimed Southern Cross had refused to call in agency workers when staff called in sick, which meant on some occasions just two carers were left looking after 50 residents ...Doubtless there will be no loss of sleep on the Tory benches over the plight of someone else's grandparents, someone else's deprived child, someone else's problems with disability. [Plight]
However, something which might disturb their slumbers comes from the would-be comedians at Moody's ratings agency, the ones that failed to spot the credit crunch building up because they were paid for their ratings by the very people who were causing the crash. [HMSR]
(You don't write reports damaging to the people who butter your bread, do you?!)
Moody's latest intervention goes like this:Moody's, the credit ratings agency, has an interesting take on the banking reforms unveiled by the Chancellor this week.
While the aim of George Osborne's ring-fencing proposals is to make the banking sector safer, Moody's says it will actually be more likely to downgrade the ratings it gives leading banks if the reformsproceed as expected.
Its argument is that once the banks have implemented ring-fencing, anything beyond the wall built around retail operations will no longer benefit from an implicit Government guarantee of support.
The non-ring-fenced assets would include the banks' corporate bonds, which Moody's and its fellow credit rating agencies would then deem to be more risky.
[Ind]It will be interesting to learn of the government's response to this blackmail in due course. Like Southern Cross, this is also a 'commercial sector problem', but one which will impinge on George Orborne's plans to 'ring fence' the retail arm of banking, plans which are already argued to be too weak. [Gdn] [Ind]
Unlike private sector care homes, however, banks are held to play a key role in the economy as drivers of growth and therefore warrant the extra-special care and attention which governments - of all colours - lavish upon them. [Gdn]
One country decided on an altogether different policy:The European Union and the International Monetary Fund ... should learn from Iceland’s example. As they negotiate a rescue for Portugal, they should realize that taxpayers cannot bear the entire cost of the banks’ misdeeds.
The government of Iceland wasn’t intentionally daring or smarter than others. It couldn’t afford to bail out its banks, so it let them fail.
It transferred domestic deposits and loans, at a discount, into new banks, with some $2 billion in money from taxpayers.
And it left the banks’ foreign assets and foreign debts behind. Some foreign creditors could get as little as 27 cents on the euro ...
(Iceland) is pulling through. The I.M.F. expects it to grow 2.5 percent this year. Unemployment is falling ... [NYT]Also not under consideration is the possbility that there might be other systems of banking which don't need taxpayers to shell out billions every so often to reward them for their greed and stupidity.
If the banks are to stay in the private sector then a return to Glass Steagall should be non-negotiable.
However, alongside that proposals such as Richard Murphy's Network Banking well worked out alternative is important, as are the proposals which Positive Money put to the Banking Commission
Finally, and in consideration of the needs of deprived children, the very poor, the very old, and the disabled, it is not enough to socialise banking, it's also essential that tax revenues are sufficient to significantly ameliorate their problems.
Since the urge to offer business a light tax regime seems important to neoliberal politicians and commentators, alternative forms of taxation - along with the closing of tax havens - most of them remnants of the empire on which the sun never set, btw - are imperative.Close down the UK's tax havens
Closing down the tax havens
Systemic Fiscal Reform
Tax havens - a secret scandal
Tax property, not people
Tax Research UK
Why Are We Reluctant To Tax Wealth?
The Plight of the Marginalised in a Neoliberal Economy - Some further reports
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Children in care far from home 'at risk'
Children in care need better support
Cost of care in old age rises to average of £50,000
Council cuts 'put more pressure on the NHS'
Disabled people 'to lose £9bn from cuts'
EMA axe 'will hit students' ability to reach class'
Inflexible and stressful work 'harming families'
Many children's centres 'under threat of closure'
Mother asks to put disabled daughter into care
Parents of disabled children speak out
'Savage' cuts to youth spending
Social care 'facing funding gap of over £1bn'
Speech problems 'hamper children's reading'
Youth unemployment hits record high