Chapter 71 A SAFE HAVEN

t was a little known fact that the UK government offered high worth Russians,

Chinese and other foreigners, investor visas. In exchange for the acquisition of

treasury bonds, or shares, worth one million pounds sterling or more in British

companies, foreigners were accorded permanent residence status in the UK.

It was a longstanding facility proposed by the British government to high worth

individuals, which was not overlooked by Kennedy when he pushed investment

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opportunities in London to those seeking an offshore safe haven for their wealth. It

was not however something totally unknown to rich foreigners, who were

increasingly using the system to set up home in the British capital. Each year,

hundreds of such investors arrived and all were potential buyers of prime

residential and commercial properties.

Wealthy Chinese and Russians wanted a place where their spoilt progeniture

could take advantage of the British higher education system, a place where their

wealth was safe in the event of personal or national calamity in their politically

fickle home countries.

China, where the vast majority of ordinary people enjoyed a higher standard of

living than their parents, was undermined by a fast growing problem of corruption,

dissent, health and environment, which led the rich to fear for their future in the

event of civil unrest or political change.

Any slowdown in the growth of the Chinese economy, which most developed

economies would have been considered phenomenal, could have serious political

implications for China’s leaders. Those same leaders had long benefited from their

links to business and had accumulated considerable personal wealth.

The country’s middle classes had grown significantly in number, however, many

Chinese still felt themselves at the mercy of a system that offered little protection

as the gulf between rich and poor grew. China had become a dangerously unequal

society, where migrant workers from the countryside and far off provinces had no

access to education and medical care in large cities, and others suffered as their

homes were expropriated for the benefit of the privileged classes.

Just as economic growth started to show signs of weakness, the abuse of power

by the ruling classes grew, as did the precarity of the country’s workers. This was

accentuated when a rising number of scandals related to political corruption were

brought into public view.

The Chinese writer Yu Hua noted: ‘China today is a land of huge disparities. It’s

like a street lined with gaudy pleasure palaces on one side and desolate ruins on the

other.’

China had taken the fast track compared to economic revolutions of the past, its

astonishingly rapid growth led to an unpredictable future. What would happen to

the jobs of the countless of millions Chinese employed in export oriented

industries, when robotics and new, cheap, abundant, energy resources in the US

made it more profitable to repatriate manufacturing? What were the long term

consequences of China’s one child family policy? Who would care for the

country’s aged?

Few Britons remembered or heard of Sir William Beveridge, even John Francis

would have had to scratch his head for a moment. The economist and social

reformer was appointed by Winston Churchill to set out a plan for Britain once the

war against Hitler had been won. His task was that of banishing the ills that had

dogged the British working class since the start of the industrial revolution: want,

disease, ignorance, squalor and idleness.

The document entitled ‘Report of the Inter-Departmental Committee on Social

Insurance and Allied Services’ was rendered to the prime minister at the end of

1942. The more succinctly called Beveridge Report, became the cornerstone of the

British welfare state. It offered the nation’s subjects cradle to grave protection,

banishing the poverty and misery of the Great Depression years, and in doing so

laid the foundations for post-war Britain and the economic miracle to come.

In spite of continued pockets of poverty, Beveridge’s plan succeeded beyond all

hope. However the burden of the cost rose continuously as the benefits proposed

grew. At the beginning of the third millennium the welfare system was costing the

UK over seven percent of its GDP and it seemed there was no way to stop this

increasing. The cost of running the system and its abuse threatened to undermine

Beveridge’s noble design.

In 1939, the poor and needy were those who lived on the breadline, in the

grinding poverty described by George Orwell, where many children suffered from

disease and malnutrition, where rickets, dental decay and anaemia were widespread

amongst the poor. In 2010, those ills had been largely conquered and forgotten.

There were few really needy families; need was abolished to the point, it was not

unusual to read of families complaining of the homes they were provided with,

receiving tens of thousands of thousand pounds in state benefits, enjoying large

flat-screen TVs, home computers, Nintendo PlayStations, digital cameras and

iPhones.

What had gone wrong? What had happened to working-class pride and

respectability? Beveridge would have turned in his grave. The work ethic of

created by industrialists and workers, perpetuated over more than a century, during

which those who refused work were called shirkers, came to an end under Harold

Wilson at the beginning of the seventies.

When the sub-prime crisis broke, the world, separated from the Allies’ victory

over Nazi Germany by three generations, had become a very different place. A

technological revolution had taken place and Western society had become truly

democratized. As for Britain its Empire had disappeared and the Commonwealth

had made its home in Britain.

Sir William Beveridge would not have believed his eyes, though perhaps Winston

Churchill, much more of a visionary, may not have been surprised. Whatever their

reaction both, creators of the welfare state, would have both been astonished at the

generosity of the system. They would have not been alone; many Britons believed

benefits should be slashed in a society where unemployment, encouraged by lavish

benefits for a minority, had become generational, creating a new class that had

never known income other than that provided by the state.

The stories that appeared regularly in the press were no exaggeration with

fraudsters claiming tens of thousands of pounds in benefits whilst holidaying in

exotic places, as far away as Australia, or even in the villas they owned in Spain.

The system was creaking under an unsustainable burden of misuse and

bureaucracy. In 1997, Blair had announced the limit of the public’s willingness to

fund an unreformed welfare system had been reached, promising the much needed

reforms.

Almost a decade later little had been done; social failure had become an

institution in itself. Britain’s benefit system was perhaps the most generous in the

world. Two and a half million people of working age were paid disability benefits,

many claiming they suffered from giddiness, depression, headaches and phobia.

Others were unemployable or unable to work because of obesity.