Barclays and the sack race 2

Last year Barclays bank made a large profit and celebrated by sacking thousands of staff (see Barclays and the sack race).

This year Barclays made even more profit - and so to celebrate will sack even more staff. Barclays adjusted pre-tax profits were £5.2 billion for 2013, that's £165 every second in profit. In a month that's £430 million.

The sack race

Barclays also announced that it will be sacking up to 12,000 people (including 7,000 in the UK). So assuming every employee to be sacked is on the average UK full-time wage of £26,500, Barclays could afford to keep every single one of them on for a year (including NI and pension contributions) from less than one month's profits.

As we said last year, no company should be able to make redundancies as long as it was profitable. After all, why should a company making profits be allowed to sack the workforce that produced those profits - simply to try to make higher profits for shareholders and to give ever larger bonuses to casino bankers?

Bonuses

But take a look at where the money is going. Before profits are calculated, Barclays will £2.38 billion in bonuses to its investment bankers - the socially useless parasites of late capitalism - a 10% increase on last year.

Instead of paying those bonuses (on top of above average wages) that £2.38 billion could pay for a golden goodbye of £200,000 to each of the 12,000 staff being sacked.

The Barclays model

But it won't. Barclays' the epitome of a nihilistic cannibal capitalism, that strips jobs, pay and dignity away from the many to give riches to the few. This is the gratuitous redistribution of wealth from poor to rich.

It also means customers will get worse service - those sacked staff will translate into few cashiers, fewer staff in call centres and possibly the closing of some high street branches.

• See also Ripped-Off UK looks for radical solutions

March for a real alternative

Figures published on the eve of the Budget shed more light on an unrelenting global crisis that pays little or no attention to chancellor Osborne, or to his shadow-boxing 'critics' at the Trades Union Congress.

Ever since the TUC announced its March for the Alternative way back in October, it has been promoting the slogan – “Jobs, Growth, Justice”. In practice, it's no alternative at all.

To back up its central plea for growth, the TUC has been arguing that spending cuts announced last October and being implemented around the country by Labour and Tory councils alike, are just not necessary. They are simply part of a conspiracy by the government to favour the bankers who are really the culprits and should be made to pay the cost of the yawning deficit.

This simplistic, muddle-headed 'analysis' has, unfortunately, been picked up and broadcast onwards by people engaged in the most radical of actions. As one student in a college occupation said: “There are real alternatives to the problems facing higher education funding ... what we are seeing are ideological political choices, not necessities… It is the public sector, including students and lecturers, who are being made to pay, not the overzealous banking system who caused many problems that the country is now dealing with.”

At the heart of it all is a global crisis of capitalism, however, not just a bunch of crazed bankers who got out of hand. This can’t be sorted by pumping more money into the economy and can make even matters worse, as figures from the Office for National Statistics show. The injection of massive doses of credit to shock the stopped heart of global capital back to life after 2008 has at best put the economy back on the accelerating inflationary path it has been following for more than 10 years, whilst gross domestic product – the key measure of growth – has failed to recover.

The Consumer Prices Index annual rate of inflation has risen to 4.4%, while a more realistic index shows a rate of price increases of 5.5%. All the essentials are soaring: clothing, footwear, food and fuel. Diesel prices have passed 140 pence per litre at the pump in some areas. Clearly much worse is to come as events in the Middle East unfold.

The combined effect of the crisis and actions by governments has been to reduce the incomes of households in the UK. The real income of those in the middle of the income distribution will be 1.6% lower in 2011 than it was in 2008, wiping out all the gains made in the previous 50 years. Pensioner households saw their average income fall even further, by 2.4%. As Stephanie Flanders, the BBC’s economics editor has it, for most people “the recovery has been more painful so far than the recession”.

All the analysts agree on one thing: Osborne has little room for manoeuvre. So we’re likely to see plans to revive the Wild West-style low tax, low regulation, low-wage economy of enterprise zone of the 1980s. It's desperate stuff from a cornered government that, however, knows it faces little official opposition in Parliament or from the TUC.

This isn’t a peculiarly British phenomenon that can be fixed with more credit, or even by changing the government. The TUC’s policies of more taxes and higher public spending wilfully fail to address the real issue: the meltdown at the core of the economic system of production for profit, aka capitalism, for which there are no quick fixes. Avoiding the challenge of an alternative not-for-profit model of ecologically-sustainable production for need, simply strengthens the hand of Osborne and company.

See you in Hyde Park?

Gerry Gold
Economics editor
www.aworldtowin.net