Sunday 3 March 2013

Tory priorities: Serve the rich, smash the poor

To anyone that cares to think things through, it is absolutely clear that the Tory party are the party of the establishment. This is not to say that the Lib-Dems and Neo-Labour aren't also part of the establishment (they most certainly are) but that the Conservative party have a near unblemished track record of serving the interests of the wealthy establishment elite, ahead of the interests of the ordinary people of the United Kingdom.

It is possible to point to countless examples of the Tory party working to defend the interests of the wealthy establishment elite (landowners, nobility, rentiers, corporations, bankers...) ahead of the interests of the general public. Some of the most famous examples include the mass privatisation of taxpayer owned and funded infrastructure into the control of private interests (utilities companies, railways, state education, the NHS); serving corporate interests by attacking trade unionism and the interests of the millions of ordinary workers that they represent; and the abolition of security of tenure, giving landlords the power to evict tenants at short notice, no matter how long they have lived in the property and paid their rent properly.

The behavior of the Tory led coalition government over two issues clearly demonstrate their determination to put the interests of the wealthy establishment elite above the interests of ordinary working people.

In January 2013, with Lib-Dem support, (and muted opposition from Labour) the Conservatives managed to push through a 1% cap on increases in virtually all benefits payments. This cap came against a backdrop of much higher rates of inflation. Monthly inflation had averaged 3.17% for the last 12 months on record (Feb 12 - Jan 13).

In order to ram this scheme through parliament the Tories and their cheerleaders in the right-wing press devised a simplistic justification narrative aimed at appealing to the sense of injustice (one of the most powerful emotions). Their narrative went along the lines of "it is only fair that the idle unemployed should get less than working people, who have endured years of low pay rises". There's so much wrong with this narrative I could have written a whole article about it, but for the sake of brevity I'll stick to two main criticisms.

The vast majority of people that will be affected by this 1% benefits cap will actually be the working poor, who will have their working tax credits, child tax credits, child benefit, statutory sick pay, maternity pay, paternity pay, income support and housing benefits capped at a below inflation increase (real terms cuts). Therefore the majority of people that will suffer, are the people that the Tories and the right-wing press claim to be supporting with these measures; ordinary working people.

The next problem is that the Conservative party and the wealthy corporate interests they shamelessly serve are the ones that are actually responsible for this prolonged decline in wages in relation to the rate of inflation. 

During their entire term in office the monthly average wage rise has never once exceeded the rate of inflation due to their deliberate policy of wage repression. It is absolutely no wonder that the economy is suffering given that the cost of living has risen in relation to wages every single month since the Tory led coalition came to power.

As the real terms incomes of millions of people are reduced, so to is their spending power, creating a fall in economic demand.

When this fall in consumer spending power is combined with the fall in demand created by George Osborne's catastrophic austerity experiment, the resulting decline in aggregate demand is quite obviously responsible for the stagnation of the UK economy.

In the last full year for which statistics are available (Nov 11 - Oct 12) wages rose by an average 1.48% (against the same month in the previous year), whilst inflation rose by an average of 3.54% (on the same month in the previous year) over the same period. This means that the average worker suffered an average 2% real terms pay cut over the 12 month period. What is the Tory solution to this shocking situation? To cap the benefits of the lowest paid workers at 1% so that if the trend continues (as it has throughout their entire administration) low paid workers will suffer even greater real terms losses of income over the coming year!

Thus, the Tories used the plight of ordinary working people to impose a draconian crackdown on assistance to millions of underpaid working people.

The second issue came to widespread public attention in February 2012 when the European Union agreed to cap bankers' bonuses at 100% of their salary. The Tories opposed this policy all the way through the process, and David Cameron has vowed to continue fighting it, in order to protect the interests of the bankers in the City of London.

It is quite remarkable that in January David Cameron would fight so hard to impose a 1% cap on the benefits paid to millions of low income workers and to the most vulnerable people in society and then just one month later vow to fight just as hard to protect the interests of the very people that caused the economic crisis in the first place, by fighting for them to retain the ability to claim more than 100% of their salary in bonuses.

To put the obscenity of bankers' bonuses in perspective I'll use a case that hit the news at exactly the same time Cameron was vowing to protect bankers' bonuses:

Lloyds Banking Group, which is 43% owned by the taxpayer (after a huge government bailout) lost £570 million in 2012. The Chief Executive of this taxpayer subsidised bank is Antonio Horta-Osório, who has a reference salary of £1.22 million. His reward for steering Lloyds to a £570 million loss? A bonus of £1.5 million (123% of his salary). Under the new EU laws, the Chief Executive of a loss-making, taxpayer subsidised bank would be restricted to 100% of their salary in bonuses. In Horta-Osório's case, he would have only been allowed a measly £1.22 million bonus on top of his £1.22 million salary in exchange for leading his taxpayer subsidised bank to a £570 million loss! David Cameron and the Tories feel that this kind of cap on bonuses is unfair and that Horta-Osorio is well worth the extra £280,000, and they'll fight the rest of Europe to ensure that bankers like him continue to get paid multiples of their basic salary in bonuses.

That David Cameron and his party would fight so hard to inflict even greater poverty on millions of low income workers and the most vulnerable people in society with their benefits cap and then fight with the same vigour and determination to protect the financial interests of multi-millionaires like Antonio Horta-Osorio by opposing the EU bankers' bonus cap shows exactly where their priorities lie.

This contrast between their determination to cap the incomes of Britain's lowest paid workers whilst belligerently opposing any kind of cap on the incomes of Britain's wealthiest workers is far from the only example of the Tory mentality. Another example can be seen in the fact that in 2013 (according to their own research) their new Universal Credit scheme will impoverish 1.7 million low-earners, whilst the 13,000 or so people that earn in excess of £1 million a year will be handed an average £100,000 tax reduction by the Tory led government from April.

The fact that the Tory party serve the interests of the wealthy has never been clearer. They seem absolutely intent on making the poor and ordinary pay the cost of the financial sector meltdown through austerity, whilst fighting to increase the wealth and to protect the interests of the super wealthy minority, many of whom were the ones that actually caused the economic crisis in the first place.

The worst thing about the obviousness with which the Tories "take from the poor, to give to the rich" is that without the votes of millions of low income and middle class people, they would never even get the opportunity to do it. It is shameful that so many people in the UK are so gullible that they'll vote against their own interests in this way.

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1 comment:

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