1990s >> 1990 >> no-1029-may-1990

Sting in the Tail: Recipe for Profit

Recipe for Profit

Marks and Spencer, Britain’s biggest retailer, have given 24,000 sales staff a whopping pay rise of 26%!

They already pay at least 30% more on average than other stores, so what lies behind this seeming capitalist generosity?

M & S pay more because this keeps staff turnover down to 20% yearly while the figure for other stores is around double that.

The reason for the 26% pay rise is that M & S must compete for staff with other employers in a situation where fewer school-leavers are coming onto the labour market. Sainbury’s had just offered its junior staff rises of between 8.5 and 15% so M & S had to top that.

There is an old recipe for baking a rabbit pie which begins “First catch your rabbit”. M & S know that before they can declare their usual big fat profit they must first catch their workers.

Theory v. Practice

“Competition good, monopoly bad”, has been the constant refrain of this government.

They are all for competition because, they say, it promotes efficiency, gives consumers choice and keeps prices down while monopoly does the opposite.

Yet the government have been turning a blind eye to many takeovers which reduce competition. For example, British Airways’ swallowing of British Caledonian and GEC’s purchase of Ferranti’s radar business.

The government has simply recognised that the likes of BA and GEC have to compete worldwide with rivals which are even bigger than they are, so they must increase market share by eliminating competition or risk being swallowed up themselves.

So competition may be the government’s theory but the relentless trend towards monopoly is the practice.

Midlands Miracle

Ever-ready to supply its readers with spiritual insights The Independent has a Religious Affairs Correspondent and he has recently been reporting on miraculous events in the Midlands.

It would seem that there have been three reports of God’s name appearing in Arabic inside aubergines!

      Tasleem Moulvi, of Kingnewton Street, Leicester, told The Independent yesterday that her mother found two significant aubergines on Friday night when she sliced them open after visiting another one, exposed in Bakewell Street. One, sliced twice, shows the Arabic characters for Allah repeated three times; the other, she said, appeared to contain a verse from the Koran, though this had not yet been deciphered.

Cynics may be tempted to think that it was merely a “sell by” date that had leaked through but Ms Moulvis has no such doubts.

“It’s quite clear,” she said. “You don’t even have to have a magnifier. Everyone who has been round to see it and pay their respects has said it’s a message that it’s going to be the end of the world or whatever. It is a message to tell all the Muslims, and all the other faiths, that this is the true faith. No other religions have had this happen to them.”

Well come on all you devout Christians in the Leicester area. Are you going to take this lying down? Get out there and search through the greengrocer’s shelves. There is sure to be the odd banana or two that contains the Lord’s Prayer or the Sermon on the Mount.

Speak Out, Nigel

When Nigel Lawson was the Chancellor of the Exchequer he was fond of attacking “inflationary wage rises”.

Now that he has quit that role and is safely seated on the board at Barclays he can forget all that nonsense. Just as well really, for it would be embarrassing if he kept on espousing the myth that pay rises cause inflation.

You see, the Chairman of Barclays, Sir John Quinton’s salary has jumped to £332,920 — an increase of 25%; and that of an unnamed highest-paid director to £470,283 — an increase of 47%!

We await with interest Mr. Lawson’s next outburst on inflationary wage rises!

A Horror Story

In February this page dealt with the plight of Brazil’s Yanomami Indians whose lands have been invaded, with government approval, by hordes of gold miners who spread death and disease.

Now the miners are in retreat but not because of new-found government compassion for the Indians. This is due to the collapse of the price of gold following the anti-inflation programme of Brazil’s new government.

This fall in price — from 900 cruzeiros a gramme to 200 — means that “hundreds of thousands” of miners have been abandoned to their fate in the rain-forest.

The Guardian (31 March) reports that the flights which brought the miners’ food, medicine and supplies have been cut from 130 a day to 20, and 50,000 miners, many suffering from malaria, hepatitis and hunger, are trying to reach safety by any means they can.

This episode at least proves that Brazil’s government cannot now be accused of favouring the miners against the Indians: it regards them all with the same callous indifference.

Forthright Talk

Are you sick of politicians who lie, flannel and give “coded messages”? Then be grateful for Eric Forth, Industry Minister and ardent free-marketeer.

Forth told a CBI conference on Japanese investment in Britain:

     “It’s quite clear,” she said. “You don’t even have to have a magnifier. Everyone who has been round to see it and pay their respects has said it’s a message that it’s going to be the end of the world or whatever. It is a message to tell all the Muslims, and all the other faiths, that this is the true faith. No other religions have had this happen to them.”

So low wages and poor health and safety laws for workers are something to brag about, a tribute to Thatcher’s “economic miracle” of the last 11 years!

We should hail Eric Forth as something unique — a politician who spoke the truth in plain language even if it was due more to sheer arrogance than honesty.

Too Much Nonsense

The spurt in inflation has got the “experts” airing their pet theories again. On TV recently, such economic gurus as Peter Jay and Sir Keith Joseph have blamed inflation on “too much money chasing too few goods”. So competition between consumers for scarce goods is what causes prices to rise!

Anyone can test this absurd notion by walking into Dixons, Woolworths, Burtons etc., any day of the week. Will they see very few goods on display with harassed sales staff besieged by throngs of customers waving wads of money and clamouring to buy?

Of course not. What they will see is an abundance of goods with customers often outnumbered by sales staff; so the spectacle of “too much money chasing too few goods” simply doesn’t exist and we can reveal to the likes of Peter Jay and Sir Keith Joseph that it is deliberate depreciation of the currency by governments which causes inflation.

Scorpion