Tory Thieves and Liars make a ‘Living Wage’ a Pay Cut

richieby Richie Venton

It should come as no surprise, but Tory Chancellor George Osborne is not only a thief but a brazen liar.

He unleashed naked class war on the working class in his Emergency Budget on 8 July, whilst conjuring up a contrick that a master magician would eat his heart out for. The headline-grabbing talk of a ‘National Living Wage’ is a cynical attempt to throw dust in people’s eyes, to blind them to the Tories’ theft of incomes from low-paid workers, young people and parents with the audacity to have more than two children.

CLASS WAR UNLEASHED
A Budget that makes the bankers, billionaires and big business even more bloated in their opulence, by robbing the rest of us.
This Budget was a bloodcurdling awakening to anyone who thinks ‘class’ is an outdated, ante-diluvian concept: from behind all the recent bullshit about the Tories being ‘the party of working people’, One Nation Tories, leaps out a Budget that makes the bankers, billionaires and big business even more bloated in their opulence, by robbing the rest of us. It’s undiluted class war, disguised by confusing guff about ‘a National Living Wage’.

WINNERS…

Before dealing with the issue of wages, let’s glance at a few features of this first Tory Budget since 1996.

Every household has been forced to pay […] an average of £3,500 in subsidy for big corporations
First, some of the winners. Corporation Tax on big business was 28% in 2010, when Osborne first took up his rent-free residence in No 11 Downing Street. Now it’s set to plummet to 18%, the lowest business tax in any country in the western world. By contrast, for example, German corporations are taxed at 30%; those in France 33.3%; and 40% in the USA.

Even before this bounty to big business, analysts at the University of York have shown that in 2012-13 the government gifted big business £58.2bn in subsidies, grants and Corporation Tax benefits – whilst only getting in £41.3bn in Corporation Tax that year. Now Osborne’s openly capitalist government is set to give big business an obscene £93bn in such handouts. That means every household has been forced to pay – without so much as being asked their leave to do so – an average of £3,500 in subsidy for big corporations. And the winners include many Corporation Tax dodgers.

Another major set of winners are those in receipt of inherited properties worth £1m without having to fork out any Inheritance Tax. One figure quoted is that 26,000 such estates gain a giant £2.5bn. The Tory warmongers didn’t want to make their pals in the City of London feel left out in their handouts to the rich: contrary to the headlines, they’ll gain from the replacement of the bank levy by the less ‘punitive’ (?) 8% bank profits tax. And those profiting from war and death can sleep peacefully in the knowledge Osborne has agreed to jack up defence spending to the 2% of GDP demanded by NATO.

…LOSERS: workers, young people, the disabled and children

DSC_0093A small minority are winners, but they gain £billions. In contrast there are millions of losers – overwhelmingly the ‘hard-working families’ we hear such repeated, hypocritical prattling about from Tory (and Labour) politicians, especially pre-elections. Whilst handing out £93bn to big business, the Tories are stealing £35bn from working class people in benefits – especially in-work benefits.

Over 5.3 million public sector workers – half a million of them in Scotland – have suffered pay cuts since 2010. According to UNISON, a 3% pay rise in the past five years, whilst inflation rose by 17%. Now they are condemned to another four years of a 1% pay cap. That’s not a decade-long Pay Freeze, it’s a modern Ice Age for workers in the NHS, councils, education and the likes.

Disabled people deemed fit to work stand to lose £30 a week. Young people will have all their benefits withdrawn if they decline unpaid work. Grants for working class students are to be scrapped in favour of loans. Housing benefit is to be wiped out for people aged 18-21. Council and housing association tenants are to be given a miserly 1% cut to their rents, but if their household income is above £30,000 (and the official average wage per person last year was £27,200, don’t forget) they will have to pay the full market rent. Nearly all working age benefits are to be frozen until 2020, despite forecasts of rising inflation by then. The household benefit cap is to be slashed from £26,000 to £20,000.

OSBORNE OUTSTRIPS KING HEROD
Parents and carers must feed and clothe all of their children, not just the first two. This is denying millions of children their basic human rights.Tam Baillie - Children's Commissioner
In a measure that King Herod would have blushed and baulked at implementing, the multi-millionaire Gideon Osborne is to deny any additional housing benefit, Tax Credit or Universal Credit for any more than two children – this smacks of class hatred and a form of eugenics; only the rich are allowed to breed, it seems. The Children’s Commissioner, Tam Baillie, was moved to comment, “Parents and carers must feed and clothe all of their children, not just the first two. This is denying millions of children their basic human rights.”

An estimated seven million children face savage cuts to their families’ incomes from the overall Budget. One of the biggest cuts is that suffered by low-paid workers through Tax Credits, including Working Tax Credits. A horrendous £4.5bn is to be robbed off some of the poorest-paid this year alone.

OSBORNE STEALS OUR INCOMES – AND OUR LANGUAGE

But that’s where Osborne the ruthless thief becomes Osborne the shameless liar. To distract and confuse those outraged at his daylight robbery of the incomes of workers, students, disabled people, young people and parents, he perpetrates the monstrous lie that “Britain needs a pay rise and Britain is getting a pay rise”. Stealing not only our incomes, but also our language, he then plays dirty, disgraceful tricks with the term ‘Living Wage’.

 


 

To unmask his lies, it’s useful to recap a few simple facts – which even some who hate the Tories with justified loathing don’t always remember or make plain for all to see and understand.

A FEW VITAL FACTS ON THE MINIMUM AND LIVING WAGES

The current National Minimum Wage is £6.50 an hour – once you’re aged 21. It’s set to rise to £6.70 this October. And, crucially, it’s legally enforceable.

budget_cutsThe current Living Wage Foundation figure for a Living Wage is £7.85 an hour. It will be uprated in November. It’s a huge deal better than the legal National Minimum Wage, and therefore very welcome. But it has two crucial flaws.

The best known weakness is that it’s entirely voluntary and not legally enforceable; it is left to the whims and fancies of employers. Which helps to explain why a meagre 200 employers in Scotland have volunteered to sign up to be Accredited Living Wage Employers, most of them smaller employers, affecting only a tiny minority of workers. That is why the SSP has always fought for a legally enforced living minimum wage.

The second profound weakness of the current Living Wage is known by hardly anyone! It is an admission that £7.85 is not a genuine Living Wage at all. Let me explain: the figure calculated for the Living Wage Foundation is based on a very important assumption: it assumes the full uptake of all forms of in-work benefits, including Tax Credits and Housing Benefit (which are both being slashed in this political budget). Otherwise, its own authors admit, it would have to be far, far higher.

To give one example of this: if it wasn’t for the top-ups assumed in the Living Wage figure, today’s London Living Wage would not be £9.15 but almost exactly £12-an-hour.

GIDEON GIVETH, GIDEON TAKETH AWAY!

There’s the rub, the essence of the God almighty lie perpetrated by Osborne and the Tories. It’s a Biblical case of Gideon giveth, and Gideon taketh away!

Osborne manufactured media headlines – in a masterly distraction ploy from his slaughter of benefits and wages – by talking of ‘a National Living Wage’ of £7.20 by April 2016, with “an ambition of this rising to £9 by 2020”. None of the media seems to mention that weasel phrase “an ambition”.

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Recapping: £7.20 next April is a mere 50p up on the impending derisory National Minimum Wage. It is well below the current ‘Living Wage’ of £7.85, even before that is uprated this November. The final blow is that it disguises the theft of Tax Credits which will mean low-paid workers will lose, not gain, from Osborne’s sham ‘National Living Wage’.

To quote a few initial calculations by various economists in the wake of the Budget baloney about “Britain getting a pay rise”.

  • A couple, with two kids, both working full-time on the current £6.50 minimum wage would gain £1,560 in wages, but lose £2,200 in Tax Credits.
  • Two workers, both earning £9.25 an hour, with two kids, would be £850 a year worse off.
  • A family with two at work, currently earning £20,000, would have a fall in their income of £2,057 a year.
  • A single parent now earning a pathetic £10,000 would lose £1,455 of that under Osborne’s deceitful package.
DON’T DARE BE UNDER 25!

And those are just sample figures for workers who qualify for his grossly misnamed ‘National Living Wage’ by dint of being aged 25 or more! Over two million workers under the age of 25 are to be denied the Tories’ bountiful ‘increase’ – but will be hammered, like older workers, by cuts to Tax Credits.

Far from being a recipe for ‘a high wage economy’, this Budget is amongst other things a recipe for replacement of older workers by those under 25 as a source of dirt-cheap labour.

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£10 NOW! – FOR ALL AT 16

The SSP has never favoured a pathetically low, legal national minimum wage. Nor have we restricted our fight to support for a voluntary, unenforceable ‘Living Wage’ – especially one which is not actually a genuine living wage at all, since it depends on top-ups, which in turn come out of the pockets of workers’ taxes.

The Budget is enough to make anyone’s blood boil in anger at the bitter class war by the rich it represents. But it should also put fire in our bellies and steel in our resolve to fight back.Richie Venton
Since our formation, the SSP has demanded a decent living minimum wage, legally enforced, based on the formula of two-thirds male median earnings. I’ve expanded on this case in many previous articles. In 2015 figures that means we demand a national minimum wage of £10, here and now. And critically, the SSP’s demand has always been that this applies to all workers and apprentices aged 16 and over. Not the over-21s as applies now. Not the over-25s as Osborne plans. And not accompanied by cuts to in-work benefits. Having won the battle for decent pay, the need for top-up in-work benefits would vanish.

The fact is, a £10 minimum, right now in 2015, not five years hence, would constitute a genuine living income, and is the level required to remove reliance on state top-ups, which constitute a £30bn annual subsidy to bosses who pay their workers peanuts in pursuit of ever-higher profits.

The trade union movement and socialists need to cut through the crap perpetrated by the Tories on this issue, and mobilize workers in struggle for a living minimum wage of £10 now, for all over 16, with equal pay for women.

The Budget is enough to make anyone’s blood boil in anger at the bitter class war by the rich it represents. But it should also put fire in our bellies and steel in our resolve to fight back.

Head photo by 38 Degrees – CC BY-SA 2.0