Can anyone explain the logic of this please?

I too am perplexed by this situation grannyactivist. I have no idea why successive governments do this, but they do. Why businesses that are very successful and seem to report increased profits nearly every year, are allowed to get away with paying such low wages that their employees need to claim top up benefits eludes me. Perhaps someone can enlighten us as to why this is allowed to happen.

Baffling, isn’t it?

It's the same the whole world over, ain't it all a bloomin' shame? It's the rich what gets the pleasure, and the poor what gets the blame.

And it's really clever if you can get the poor to blame each other, so they take their eyes off the rich

It was ever thus and as you say Nannarose "the same the whole world over". Don't know the answer is.

Because its not actually designed to be fair. Its a “boys” club lining each others pockets

Congratulations on a most thought provoking post grannyactivist.
I’m off out to work in the garden and think about your points.

It’s almost as if the people profiting from these bailouts are more likely than the low paid to be political donors, isn’t it?

This, from the dreaded Guardian in 2o14, might have something to do with it

Does this sometimes feel like a country under enemy occupation? Do you wonder why the demands of so much of the electorate seldom translate into policy? Why parties of the left seem incapable of offering effective opposition to market fundamentalism, let alone proposing coherent alternatives? Do you wonder why those who want a kind and decent and just world, in which both human beings and other living creatures are protected, so often appear to be opposed by the entire political establishment?

www.theguardian.com/commentisfree/2014/dec/08/taming-corporate-power-key-political-issue-alternative

What about companies that are not profitable? Company profit levels vary from losses to very profitable but everyone is assuming that all public quoted companies are immensely profitable. They aren't.

Not every company gets a bail out when needed, only when the country and worldwide effects of their collapse is greater than the personal loss does the government step in.

Look at all the companies that have gone bust without government intervention. Philip Green's empire, Debenhams, all those small energy companies, and many more.

What about companies that are not profitable? Company profit levels vary from losses to very profitable but everyone is assuming that all public quoted companies are immensely profitable. They aren't.

Not every company gets a bail out when needed, only when the country and worldwide effects of their collapse is greater than the personal loss does the government step in.

Look at all the companies that have gone bust without government intervention. Philip Green's empire, Debenhams, all those small energy companies, and many more.

* Where is the justice in this? I hear so much (far too much in fact) about 'benefit scroungers', but never about shareholder scroungers, company scroungers, business scroungers etc. - and yet look at the sums involved in just these four examples. Why is it that people talk disparagingly of one, but rarely (never?) of the other?*

Divide and Rule. The Tories are fabulous at it. Remember David Cameron’s comments about how ‘hard working Britons’ getting up for work should look at the amount of bedroom curtains still closed as their benefit scrounging neighbours slept on ? Remember how disabled benefit claimants were vilified in the press and the media as scrounging fraudsters when in reality disability benefit fraud was actually minimal at something like 0.5% ?

IMHO the same thing is happening now with climate change. No one seems keen to tackle mass polluting countries, while we’re being hammered via our energy bills to pay for green initiatives which are for nought if we don’t get countries like China and India on board.

"What about companies that are not profitable? Company profit levels vary from losses to very profitable but everyone is assuming that all public quoted companies are immensely profitable. They aren't."

But why should taxpayers fund a company that isn't profitable?
Surely if a business is not making a profit it is just an unviable business.

"Remember David Cameron’s comments about how ‘hard working Britons’ getting up for work should look at the amount of bedroom curtains still closed as their benefit scrounging neighbours slept on ?"

I remember it well, my next door neighbour, a doctor home from night shift, was accused of this by a delivery driver when their curtains were closed in the daytime.

Remember how disabled benefit claimants were vilified in the press and the media as scrounging fraudsters when in reality disability benefit fraud was actually minimal at something like 0.5% ?

Sorry, that should have read 0.05%. Bloody autocorrect !!

Do you remember this?
www.theguardian.com/business/2017/aug/30/poundland-work-free-government-scheme-dwp
I don't know if it is still happening

This was still happening 4 years after a court case where a geology graduate and an HGV driver took the DWP to court for making them do unrelated work experience in order to receive benefits.
The graduate was already volunteering in a museum, I think, which was her choice of career.

Funny you should mention Philip Green, MOnica. He didn't look to have lost much through his company going bust. I'm not sure exactly what went on with BHS, but haven't the Pandora Papers disclosed a lot of very complex moves, involving shell companies and offshore ownership, by which company owners can, for example, load a company, which may well be a going concern, with debt and cause it to fail while reaping huge financial benefits for themselves?

I see there are concerns that Morrisons, having been sold to a Hedge Fund will suffer from asset stripping which could cause it to fail.

It's a really complex area, though. I don't begin to understand the half of it.

Ilovecheese

"What about companies that are not profitable? Company profit levels vary from losses to very profitable but everyone is assuming that all public quoted companies are immensely profitable. They aren't."

But why should taxpayers fund a company that isn't profitable?
Surely if a business is not making a profit it is just an unviable business.

But, sometimes the company isn't profitable because its had its value so stripped out by its owner/s to the extent that it can't pay its debts.

But wasn't the OP more about companies benefiting from the government picking up the tab for supplementing the poor wages they pay? Corporate welfare...

I see there are concerns that Morrisons, having been sold to a Hedge Fund will suffer from asset stripping which could cause it to fail
That's what happened to a chain of care homes if I remember correctly.

You might well wonder consider the Rail industry- it is privatised isn't it. But the government is still subsidising it Total rail industry income in 2019-20 was £20.1bn, a 5.3% increase from 2018-19. This consisted of £11.6bn from passengers (£10.4bn of fares and £1.2bn of other train operator income), £6.5bn from government funding and £2.0bn from other sources.
And that was before Covid, Substantial sums have been given to offset the disruption.

trisher

You might well wonder consider the Rail industry- it is privatised isn't it. But the government is still subsidising it Total rail industry income in 2019-20 was £20.1bn, a 5.3% increase from 2018-19. This consisted of £11.6bn from passengers (£10.4bn of fares and £1.2bn of other train operator income), £6.5bn from government funding and £2.0bn from other sources.
And that was before Covid, Substantial sums have been given to offset the disruption.

This was well researched by a team from Manchester University and their report published in 2013

www.bringbackbritishrail.org/reports/greattrainrobbery.pdf

Can I remind you that the East Coast main line is in public ownership at the moment (for the second time). And IIRR, wasn't another line taken into public ownership fairly recently. And the government of the day had to take back Rail Track quite a while ago after a serious of accidents.

But yes, privatisation was a big con.

No argument Maizie, but the thread is about goverment bail-outs, not dodgy deals by dodgy business men.

The question of these buy-outs by Private Equity companies (hedge funds are something else) are very worrying and of no good to anyone excpt the PE companies shareholders.

I think that could be controlled by limits on the extent that these companies can push the debts onto the acquired companies. Any borrowing done to purchase a company should remain on the purchasers balance sheet.

I heard this subject discussed on the radio and it was said that the reason we have so many of these PE buy-outs is because share prices are low in the UK compared with international share prices, so these companies can buy these companies relatively cheaply.

I stand corrected, MOnica Private Equity indeed.

I stand corrected, MOnica Private Equity indeed.

M0nica

What about companies that are not profitable? Company profit levels vary from losses to very profitable but everyone is assuming that all public quoted companies are immensely profitable. They aren't.

Not every company gets a bail out when needed, only when the country and worldwide effects of their collapse is greater than the personal loss does the government step in.

Look at all the companies that have gone bust without government intervention. Philip Green's empire, Debenhams, all those small energy companies, and many more.

The only reason why Green's empire was not profitable was because he withdrew huge sums and left the businesses underfunded. There were also problems recruiting management level staff because of his abrasive personality. I don't know whether he paid his staff the minimum wage. If he had they would also have been claiming top up benefits.