Budget 2015: The strong do what they can

Budget 2015: The strong do what they can


It is not a good time to be sick, disabled, young, low paid or a single parent in Britain. The new Tory government wasted no time in utilising its shock election win and the mandate they achieved for severe cuts and continued austerity. The election gave the Labour Party and the Liberal Democrats an abject lesson in building a political narrative. The Conservatives managed to win the argument that austerity was necessary and that spending beyond your means as a state is economic and moral delinquency. The Labour Party failed to oppose the austerity narrative and supported some of the worst measures introduced in the last parliament.

Responding to the continuation of the 1% pay freeze for public sector workers for another four years Labour’s Shadow Chancellor Chris Leslie called the move “sadly necessary”, which is interesting when you consider corporation tax has again been reduced by 1% to 20%. It has been reduced from 28% since 2010. It is not a huge decrease in this budget but is part of a long term strategy when you consider the last time the Conservatives held office they reduced corporation tax from 52% to 33%.The intervening Labour government continued decreasing the rate but at a slower pace. For public sector workers the continued pay freeze means that wages won’t go as far and the freeze is in effect a pay cut. This is on top of job cuts, attacks on pensions and the never-ending restructures and reorganisations.

There was, on the face of it, a bit of good news, though. The minimum wage is to be raised incrementally to £9 per hour by 2020. A full pound more than what Ed Miliband promised in the run up to the election. This sent the Conservative benches into uncontrolled cheers and the Labour front bench scrabbling around for something to say. What the Conservatives managed to do by building a popular narrative around austerity and rewarding work is push the political centre further and further right with Labour following in their wake and awkwardly aping Cameron and Osborne. Labour MP’s like Rachel Reeves, Liz Kendall and Chris Leslie seem to be under the impression that where Conservatives lead they must follow if they are to be credible. Take the benefits cap of £20,000 per family: even by the government’s own research it will put in excess of 40,000 children into poverty. The response of Chris Leslie and the Labour front bench is that the cap is necessary. This means that thousands more children will have a worse start in life and you can see how far the identikit New Labour leaders have fallen even below the Blairite promises of seeking to end child poverty. Whatever one may think about the last Labour government it opened hundreds of Sure Start centres and had some understanding of the way child poverty impacted on social, personal and cognitive development. The rush to ape the Conservatives by those who occupy the opposition benches is thoughtless and a testament to Osborne and the Conservative’s ability to leave Labour in disarray and directionless.

Whilst Labour is getting politically wrong footed and humiliated those who it relies on for mass support are on the receiving end of real economic and social blows. Sticking with child poverty, the Social Mobility and Child Poverty Commission reported last year that one in five children is in absolute poverty. The commission chair was NHS privateer and former Blairite Labour minister Alan Milburn and even he could recognise the irreparable damage being done by cuts.

So, as has been widely reported, the increase in the minimum wage simply does not offset the loss of income caused by the £12 billion raid on social security payments. Over 13 million families will be poorer, of which 3 million will lose around £1000 a year. Of course, the attacks will affect the working class hardest and women will bare the biggest burden. Labour leader hopeful Yvette Cooper pointed out that of the £9.6 billion taken from families in taxation and social security cuts £7 billion will be shouldered by women.

If you’re under 25 then the safety net that has become rather threadbare over the last decade is now just a black hole. The minimum wage hike trumpeted by Osborne and the right-wing media does not apply those under 25. Going to university can be a good idea for both the individual and, you would think, society at large. However, if you’re from the poorest families then the grant that many students rely on has been converted into a loan. This means a standard three-year undergraduate degree now comes with a price tag of around £51,600. After interest, students will end up paying much more. In reality, this is unsustainable and, whilst Osborne has his eyes set on the Conservative leadership contest in two years time and on the 2020 general election, the issue of student debt will loom large in a decade or two as graduates will fail to repay their loans. Already the nonsense thrown together in the 2010 Browne Report that lifted the cap on tuition fees and promised a “sustainable” funding arrangement is slowly falling apart. Last year the cross-party Higher Education Commission reported to parliament that 73% of students starting on the post-2012 regime will never repay the entirety of their loans. By 2044 this will mean a £330 billion liability for the state to underwrite. Surely this can only increase as wages are suppressed further and grants are replaced with loans.

Outside of education young people will lose access to support, be forced into mandatory work placements and Mickey Mouse apprenticeships. Automatic access to housing benefit for those aged between 18 and 21 will cease. The severe end of such a policy is that those who are in an abusive home environment face another obstacle to escape. Even if they do, refuges that primarily support women and children have suffered severe cuts by councils led by all parties. In 2008 the Home Affairs Select Committee called for a national, joined-up strategy for women and children facing abuse and in need of support. At the time Refuge’s Head of Policy wrote:

“Almost one third of all local authorities have no domestic violence services for women and children in their area.  Yet this is despite the recommendation of the 1975 Select Committee on Violence in Marriage, 33 years ago, which identified that there should be at least one refuge space per 10,000 head of the population.”

Cuts in funding for refuges and benefits for young people and women can only further close off escape routes.

Wages, work and discipline

Few commentators in the mainstream media now talk about ‘austerity’, as it has become the new normal. The right have successfully implanted the idea that national finances are like personal finances in that you shouldn’t spend beyond your means. Where the money comes from to pay the bills is a political judgement. For the Conservative government that burden falls to the poorest in society who are either out of, or in low-paid, work. What this amounts to is an assault on the social wage.

Work has been further entrenched as an activity beyond the home. Raising children, caring for the sick or just simple social reproduction is something for individuals to consider, not society at large. Apart from the rich the biggest winners from the budget are those without children or caring responsibilities in relatively stable work. The left and the broader labour and women’s movements need to re-assert that work in the home is essential to the functioning of society and the bedrock of capitalist stability and expansion. We need to be clear that capital depends on the unpaid labour of millions of workers, who are mostly women, and therefore they should not be left in poverty and humiliated.

The budget also further entrenches the ongoing use of debt to discipline the working class. Whereas mortgages and hire purchases were utilised in previous generations, young workers are being subjected to punishing loans to get a decent education or a concoction of low pay and high rents, which can lead to the accumulation of credit card debt, to fund basic needs. In 2013, the Debt Advisory Committee reported 18% of young adults paid for food on a credit card. Having the constant fear of having your home and belongings seized tend to make people keep their heads down and accept attacks on pay and conditions. Such attacks that increase anxiety and insecurity have been used to head off substantial resistance. This month alone Unison members in Higher Education voted by 72% to accept a pay offer that for many amount to a pay cut in real terms. Whilst the bureaucracy is complacent and conservative vast swathes of trade union membership is browbeaten, lacking the confidence and security to assert their interests.

The Conservatives have been very astute in targeting those who are politically disenfranchised. Young workers, the disabled, the unemployed and poorer families bear the brunt of the assault. Throughout the next parliament they will continue with the narrative that they are bashing the shirkers and those who have never paid into the system and therefore deserve to have support withdrawn. At the same time they can say to those who are politically engaged, such as pensioners and high and median earners, that they have delivered higher wages, increased personal tax allowances and protected pensions. It is these kind of promises linked with the austerity narrative that brought the Conservatives victory at the election.

We face an exceptionally tough political environment where the arguments for cuts, punishing those out of work and undermining the social wage enjoys substantial support. Where such measures do not have substantial support they are widely accepted as necessary. The Labour leadership accept much of the Conservative austerity narrative and the trade union leadership offers scant resistance and often accept that there must be cuts. Our side, the broad labour movement, has produced some spectacular demonstrations over the last five years and many thousands attend rallies on austerity and cuts. We have had some strikes and the student movement of 2010 had a bit more bite than the government had expected. However, we still lack a coherent alternative, both in terms of a political programme and narrative but also organisationally. Whilst we have the People’s Assembly, Left Unity and the Trade Unionist and Socialist Coalition we have not made a breakthrough.

If the last five years have taught us anything it is that it is not enough just to say ‘no’. We need to present a credible alternative to capitalism, not just to austerity. It is essential that we explain and win arguments around things like social reproduction, debt and education but within the framework of a political project that seeks to replace capitalism with communism.

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