George Osborne’s Budget was a cynical attempt to restyle the Tories as the party of the workers. He announced the introduction of a national Living Wage; starting at £7.20, the hourly rate would rise to £9 by 2020.
There are three immediate problems here.
First the £9 an hour is the same rate that the, now superseded, national minimum wage would have risen to by 2020!
Also, the national Living Wage will not, as Osborne, implied compensate for the Budget’s cuts in tax credits. Tax credits may be just an excuse for employers to pay poverty wages, as David Cameron said in justification, but a cut is a cut. No amount of hypocritical moaning about stingy bosses by wealthy Tories is going to put food on the table if you are one of the 13 million families that will lose out.
For the national Living Wage to compensate for tax credit cuts it would have to be £11.65 an hour.
Lastly many of the public sector employers who will now have to pay the new Living Wage rate (a hike from current minimum wage rate of £6.50) are wondering where the money is going to come from? Not the government!
Beyond the spin, this is no more nor less than beating down the poor, the young, the disabled and many other working-class people.
If you are under 25 you will not be eligible for the Living Wage and if you are under 21 you will not be automatically entitled to claim Housing Benefit to make up your lousy wages. If you are a student from a low income background you will lose your maintenance grant. If you are a disabled person who is not quite disabled enough you will lose money as you get downgraded to jobseeker’s allowance.
But the Tories are just getting started. They want to make £46 billion cuts to welfare in the next five years. The bottom line for them is that if you are relying on the benefits system you should feel really poor or as they put it, the system “should not support lifestyles and rents that are not available to taxpayers who pay for that system.”
Osborne’s message to the people he wants to make paupers? Limit your family to two children. If you are under 25, don’t expect to be housed, to be warm, to be safe. If you are disabled don’t expect to be independent like other people. If you are a child, tough luck if your parents are out of work.
Expect to see many more announcements and policy trailers for many more cuts. On Tuesday 14 July the press reported David Cameron was “open to the idea” of workers funding their own sick pay and unemployment benefit; to a move towards US-style insurance schemes with the state paying the barest minimum of benefits to people who cannot work or who are too low paid to “save up”.
If the labour movement does not rouse itself to fight these measures, we will see the final end of the welfare state.
We need to build on direct action and class struggle. Make solidarity with disability, housing and student activist groups; build on mass demonstrations against the Tories; campaign hard for Jeremy Corbyn in the Labour leadership contest; supports strikes against cuts in Bromley, Barking and elsewhere.
We need to oppose the Tories’ attacks with clear class struggle policies — tax the rich to pay for jobs, services, benefits, and housing. Expropriate the banks and put them into social ownership.
Harriet Harman, Labour’s interim leader, is in hot water for unilaterally deciding Labour needed to be seen to be backing Tory cuts to welfare. Labour, she said, should listen to the voters and become the party of the taxpayer and hard working families. She said Labour would not oppose the cap on housing benefit, nor the plan to stop families claiming tax credits for more than two children. But the poisonous anti-working-class nonsense backfired.
Three out of four of the candidates for Leader of the Labour Party, starting with Jeremy Corbyn, said Harman was wrong. Liz Kendall, who has distinguished herself by being indistinguishable from most Tories, was the only candidate to agree with Harman.
That reaction indicates that political debate has broken out inside the Labour Party! This was, for once, not a debate over presentation, style or how to “triangulate” with the Tories or UKIP on issues like immigration, but a real debate on policies that will affect millions of people. What’s happened here?
The entry of Jeremy Corbyn into the leadership contest, and his popularity among people who are new to Labour, or had become disillusioned with Labour, forced other candidates to follow his lead on the issue of benefit cuts, and to condemn the cuts.
Corbyn’s socialist politics are different to the socialist politics of Workers’ Liberty. Nonetheless that fact that he is the only one standing our clearly against “New Labour” consensus of cuts is pushing forward the terms of the campaign.
That is a good thing. A strong Corbyn vote will put pressure on Labour leaders (whoever they end up being) to oppose the Tories. It will be a vote to build that necessary wider battle against cuts, to defend trade union rights, and to make solidarity with migrants. Principled socialists should get behind the Corbyn campaign.