The Farepak scandal lays bare a gross inequality

November 16, 2006

Occasionally the stage curtain is twitched back to expose the way things are. The £40m Farepak collapse has just shone a spotlight into a dark corner behind the bright scenery of affluence and wealth.Here are families from the 30% who own nothing, scrimping and saving to provide a Christmas for children that feels like other people’s Christmases, as advertised on TV. The rest of the year, they have their noses pressed up against a consumer society they don’t belong to.They will never own a home like the 70% majority – though they can watch some 15 programmes a week celebrating property, from Location, Location, Location to Changing Rooms, garden make-overs, house hunting in the Dordogne and property speculation shows. If ever the have-nothings are themselves represented on the small screen, it’s usually as bad parents of hoodies or spectacularly dysfunctional families to be gawped at with sanctimonious disdain. Or there are the class-swap programmes, where usually bizarre examples of “working class” women are swapped with middle-class aspiring mothers.

Airbrushed out of the national picture are the great majority of have-nots, the cleaners, security guards, caterers, call-centre staff, care assistants, cashiers and all the lowest paid on whose cheap labour everything else depends. But now here they are, the Farepak victims – the thriftiest from among the one-in-three people who have no formal savings of any kind, no buffer against even minor disaster. If they had other savings, they would never have trusted their money with this bunch.

The director Nick Gilodi-Johnson, the son of Farepak’s owner, had an estimated share dividend from the parent company EHR of £445,000, on top of his pay, and stands to inherit £75m. If he’s as gutted as he says, the family has the money to repay savers.

So could the Farepak chairman, Sir Clive Thompson, who took £100,000 for this part-time job while earning £894,000 as deputy chairman of an investment company. As chair, he was a famous CBI hardman, denouncing the minimum wage. I interviewed him when he was earning £1.4m a year from Rentokil while his workers were on rock-bottom pay on outsourced contracts.

If ever there was a moment for Labour ministers to open the debate on gross inequality, Farepak is it. Instead, silence from them all – again.

The Farepak scandal lays bare a gross inequality | Columnists | Guardian Unlimited

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