End poverty! Tax the rich!

Submitted by cathy n on 24 March, 2015 - 8:35 Author: Jill Mountford

Just in time for the General Election, Britain’s employment rate reached a record-high, with 73% of working age people in work. The bosses’ government gloated over the news. But these figures belie the fact that 5.2 million people in work also live in poverty, they are 60% of all poor and the numbers of people living in poverty have doubled since 1983. Not so great news then.

The reality of poverty in Britain has been forensically studied by Stewart Lansley and Joanna Mack over thirty years, and the facts and stories of hardship are put together in their book, Breadline Britain, the rise of mass poverty.
The story, in short is this. Many are working long hours to live below the breadline, to go without meals and to live in fear of putting the heating on when needed. Others, desperate to work longer hours, are trapped in low-paid part-time work. Worse still, the lives of millions of our children are stymied and crushed, refused two or more of the basic necessities.
Millions of children go to school hungry, cold and stressed; excluded from opportunities and experiences that other kids around them have.

They have no computer on which to do their homework or no space in which to do it. They are excluded from school trips and outings; miss out on educational and leisure activities.
Many grow up in an atmosphere where worrying about paying bills is a major preoccupation for the grown ups around them and hope and aspiration are in desperately short supply.

20 million in total, adults and children, now live in poverty. 3.6 million children are part of that count. There are twice as many people today, compared to 1983, excluded from the living standards accepted as the norm by the majority of people. With more benefit cuts planned as part of the Universal Credit reform, the situation will get worse.
Lansley and Mack, academics with their feet firmly planted in the world around them, set out back in 1983 to examine the extent and effects of poverty under a Thatcher government. They raised the alarm then.
Since that time they have conducted three more studies — in 1990, 1999 and 2012 —each showing a progressive increase in relative poverty for millions of people.

Dissatisfied with standard ways of measuring relative poverty, they consulted the public on what they considered were the basic things needed in life, to live above the breadline. They calculated that not having two or more of these necessities should define living in poverty.

Their research is qualitative, not confined to analysing statistical data, but also conducting thousands of interviews with people living on the edge. It is these personal stories that paint the appalling picture of wasted human energies; people living constantly with worry and stress, not having enough to eat, living in homes that are damp and cold, with their physical and mental health affected. In many ways this is life on the fringes of society, unable to participate in many activities that most of us consider the norm.

Yet in the last 30 years wealth has grown tremendously. There has been no “trickle down” of wealth. Rather, defying the laws of gravity though not of capitalism, there has been a “trickle up”. The rich have got richer because the poor have got poorer. This is not a matter, as the government and their lackeys in the media would have us believe, of self-inflicted lifestyle choices or of the largesse of a far-too-rewarding benefit system. (In fact the share of national income spent on benefits in Britain is below the European average.)

Lansley and Mack show the connection between the growth in poverty and Thatcher’s project and its legacy, the “trickle up”.

In 1979 the top fifth richest people in Britain paid 37.6% of their income in tax and the poorest fifth paid 30.5%. By 2011 the poorest fifth paid 36.6%, more than all other groups, and the top fifth paid 35.5%. An abundance of personal and corporate tax avoidance schemes have been introduced for the rich to exploit. Modest estimates reckon these schemes add up to at least ÂŁ25 billion a year in lost tax revenue. Add to this figure 180,000 people living in Britain as non-domiciles and therefore paying no taxes on their vast wealth. (This is a left-over welfare benefit for the rich from the days of the Empire). Will Hutton has calculated the abolition of this benefit would generate around ÂŁ18 billion a year for the Treasury.

Lansley and Mack remind us that Thatcher set out to eradicate poverty, but not the experience, just the word. She banned ministers and civil servants from using it, in order to create a culture of blaming the poor, individualising the problem and claiming poverty is encouraged by an over-generous welfare benefit system.

While Blair and New Labour introduced “unambiguous” policy to eradicate child poverty, they relied on topping up welfare benefit, mainly through tax credits, and not on real wage rises and taxing the rich. These were ideological choices made by New Labour; shifts in income were rolled back after the 2008 crash and so they failed to close the gap between the rich and the poor.

Recently the Tories have even denounced charities such as Save the Children and Oxfam for highlighting poverty in Britain. The Daily Mail, on behalf of the Tories, declared it was obscene to imply British children were as needy as African children.

Yet Tressell Trust have increased their number of food banks from just twenty eight in 2009 to over 400 in 2014. The charity supported more than 800,000 people in 2013/14, one third of them children.

The Coalition government’s choice to make “austerity” cuts, justified by the need to clear the national debt, is ideologically driven. Cuts in public sector services and jobs and welfare benefits cuts targeted at the most vulnerable (e.g. disabled and sick people) have been forced through on an unprecedented scale.

Since 2008 job insecurity has become a dominant feature of millions of people’s lives. They are unable to make medium and long-term plans, living in fear of unemployment and living with low pay in a hostile jobs market. Housing costs have risen while the quality of rented housing has deteriorated. Fuel costs have doubled and food prices increased significantly. Low income households spend proportionally more of their incomes on fuel and basic food than others, and proportionally more on VAT .

All this insecurity and inequality means that those living on or just above the breadline are all the more vulnerable to sinking below it.

For those living on benefits, the cuts and changes and punitive sanctions imposed on them have been enormous. The poor have been punished for the bosses’ crisis. The Centre for Welfare Reform in Sheffield estimates that the average amount lost from the combined impact of all the cuts is £467 per person, per year. For those living in poverty it is £2,195 per person, per year. For disabled people the average is £4,410 per person per year, rising to an average of £8,832 for people with severe disabilities.

Fear, stress levels and feelings of powerlessness are increasing among people who already feel excluded and isolated in our communities. The number of households living with debts has risen to 21%, and those having to borrow regularly just to pay basic bills has gone up.

Forecasts from both the Institute of Fiscal Studies and the Social Mobility and Child Poverty Commission predict that relative income child poverty will increase by five per centage points between 2010/11 and 2020. That is, four million children will be living in poverty by 2020.

But this is a forecast, a prediction, not a cast iron law.

Right now the ideology of the right, neo-liberalism, is dominant among the main political parties. There is barely a fag paper between the main parties when it comes to cuts in welfare spending and restricting wage rises. The rich are positively encouraged to get richer at the expense of the poor; and the poor are forced to become poorer through low-pay, insecure work, cuts in welfare benefits and grossly unfair taxation.

But it does not have to be this way. Disability rights campaigners and others have shown the way on fighting attacks on benefits, it’s the labour movement which is lagging behind.

The 1945 welfare state was a major victory for the working class and the culmination of 150 years of class struggle. However, working class rights and gains have been eroded year on year for the past 30 years. The labour movement needs to regain its sense history, purpose and its confidence to fight for the working class.
With a clear set of demands and some united action from the trade unions we could win better wages, secure work and benefits for those in need. We can organise and push back the capitalist class who at the moment are confidently walking all over us.

It’s not a cliché or an outdated idea to say without our hands and brains not a single wheel can turn. The working class has the potential power to confidently demand and win what our class needs. Lansley and Mack, in their conclusion, offer a variety of radical solutions to some of the problems that make people poor, but ultimately they are for tinkering with the system. If we can win demands around better, fairer wages and fair benefits for those in need, we can go on to push further, harder.

We can make the booms and slumps of capitalism, where the poor pay the highest price, where the children of the poor learn to be under-confident and under-achieve, a thing of the past.

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