Tuesday 24 September 2013

George Osborne's "all in this together" fallacy

The "All in this together" fallacy is one of the most brazenly untruthful propaganda narratives in a shocking litany of utterly deceitful Tory public misdirection strategies. 

The Chancellor of the Exchequer is the man behind this absurd "all in this together" narrative, designed to deceive the gullible into thinking that everyone is making sacrifices in "Austerity Britain". 

In 2009 George Osborne used the expression "we're all in this together" at the Tory Party Conference to justify his plans to launch savage attacks on public sector wages, and despite near constant criticism of the phrase in the intervening years, he regurgitated it as "we are all still in this together" during his speech to the 2012 Tory party conference.

The problem is of course, is that, from an evidence based point of view, "all in it together" is transparently counter-factual nonsense. There are many, many examples to illustrate the fact that we are not "all in this together". In this article I'll go through just a few of them.

Perhaps the most high profile illustration that we are not all in this together came in April 2013 when the Tory led coalition launched a "Bedroom Tax" scheme designed to further impoverish hundreds of thousands of the most vulnerable families in the UK, and in the very same week handed an average £100,000 a year tax cut to the 13,000 British income millionaires.

Another glaring illustration of the fact that we're not all in it together can be seen in the fact that George Osborne has enforced below inflation 1% pay raises on public sector workers for three consecutive years, yet there is one small group of public sector workers that have been made exempt from this real terms pay cut. That group is George Osborne and his fellow MPs who will get an 11% pay rise, worth £10,000 a year. If we were actually "all in this together" then surely MPs would be treated like any other public sector worker and be made to endure year after year of below inflation pay increases like the rest?

Another example can be seen in the wildly different attitudes to unpaid work. In April 2013 Iain Duncan Smith botched together a ridiculous piece of retroactive legislation in order to undermine an Appeal Court ruling that his mandatory unpaid labour
("Workfare") schemes for the unemployed were unlawful and undemocratic.

With direct support from the Liberal-Democrats and de facto support from the Labour
so-called opposition (who were whipped into abstaining on the vote) the Tory led coalition managed to rush this atrocious piece of legislation through parliament in a matter of hours, meaning that they could continue compelling the unemployed to do unpaid work for corporate interests, all paid for at the taxpayers' expense.

Now contrast this with the Liberal Democrat stance on unpaid "internships". The Lib-Dems want to end the practice of giving unpaid internships to youngsters from affluent backgrounds. Meaning that if you are poor and desperate, you will be forced to give up your labour rights and work for no wages for major corporations by legislation passed with Liberal Democrat votes. However if you are lucky enough to come from a wealthy family that can cover your living costs while you work for no wage for a major corporation, national newspaper or major political party, the Liberal Democrats will claim that they are determined to protect you from this kind of exploitation (despite using unpaid interns themselves!).

The most compelling evidence that we are not all in this together can be found when we look at wages. If we were "all in this together", one would expect every sector of society to have endured similarly low increases in their salaries. However the evidence shows us that the opposite is happening. Since the Tories came to power the highest earners have been getting richer at a faster rate than ever, whilst the vast majority of people have seen their wages fall in real terms month, after month, after month.

It should be headline news that the average wage has failed to keep pace with inflation every single month since the Tories came to power (except for one single month - April 2013, when the average wage was dramatically skewed upwards by the £billions in corporate remuneration deferred until after the 50p tax cut came into effect), but the mainstream media are almost totally disinterested in telling the British people that they are being terribly ripped off.

In 2010 the average salary rose just 0.3%, whilst inflation was measured at 3.3%. In 2011 the average wage rose 1.4%, whilst inflation was measured at 4.5%. In 2012 wages fell in real terms once again, with the average wage increasing by just 1.4%, whilst inflation was measured at 2.8%.

If we take these figures cumulatively, the average wage has increased by just 3.1% since Labour's last full year in office, whilst prices have risen by a supposed 10.1% (I say "supposed" because it is absolutely clear that inflation is a lot higher than the official figures claim). Even if the extremely conservative inflation figures are accepted at face value, this means that the average British family had 7% of their income eroded away by inflation between January 2010 and December 2012.

Now lets contrast the fortunes of the extremely wealthy. One particularly wealthy group is the corporate executive class. In 2010 executives at the FTSE 100 companies enjoyed average pay raises of 33%, in 2011 they took home record breaking average salary hikes of 49%, and in 2012 the trend of enormous, inflation busting pay hikes continued with average pay increases of 27% for the corporate executive class. [for sources to back these statistics see this article on Wage Repression]

Taken cumulatively, these figures demonstrate that the average corporate executive has more than doubled their salary since the Tories came to power. In fact they are now taking home 251% of what they made during Labour's last full year in office.

In real terms (adjusted for the effect of inflation), the salary of the average worker has fallen by 7%, whilst the salary of the average corporate executive has increased by 141%. Does this seem like everyone is "all in this together" to you? 

In light of these facts. How is it possible for anyone to believe the Tory "all in this together" propaganda narrative?
Even though economic demand has been stagnant for years, and the economy still hasn't recovered to pre-crisis levels, it isn't difficult to explain where all the extra cash is coming from to allow these corporate executives to gorge themselves on inflation busting pay hikes every year. 

Since George Osborne became chancellor he has cut the rate of corporation tax from 28% to 24% (with an announcement in the 2013 budget that it will be further slashed to just 20%), but instead of investing this tax giveaway in creating jobs or improving company infrastructure, the major corporations have used this flow of extra cash to generate shareholder profits (creating the artificial stock market boom) and to fuel the ludicrous inflation of corporate remuneration.

Where has George Osborne found the money necessary to hand out such massive corporate tax breaks? The answer is that he hasn't. He's giving these lavish tax handouts despite running up more additional debt in the last three years than Labour ran up in 13 years in office (which included, lets not forget, the biggest financial sector meltdown since 1929).

Whilst George Osborne has been using the national debt, and the budget deficit as excuses for public sector pay freezes, savage attacks on the welfare state and drastic cuts in public services (police, fire services, local government, libraries, the justice system, the NHS ...) he has simultaneously been lavishing tax cuts upon the corporate classes. 

If we can't afford to keep public sector workers salaries from in line with inflation, if we can't afford a humane welfare system and we can't afford things like libraries, bobbies on the beat and local A&E services, how on earth can we afford such lavish corporation tax cuts?

Just think about it for a minute. By 2015 Britain's major corporations will have had their rate of tax cut from 28% to 20% (a 40% tax cut), and the salaries of their corporate directors (if the ludicrous inflation of executive salaries continues as it has), will have more than quadrupled (461%) by the end of 2014.

Ask yourself this: Have you had a 20% tax cut since the Tories came to power, with another 20% tax cut in the pipeline? Has your salary more than doubled since the Tories came to power? and does it look set to near enough double again by Christmas 2014? Or are you one of the millions of people that are still paying massive chunks of their salary in regressive taxes (such as Council Tax, fuel duty and VAT) and have seen prices for basic necessities soar way above the rate at which your salary is increasing?

Are you one of the favoured minority that is getting richer at a faster rate than ever in "Austerity Britain"? Or are you one of the suffering majority?

Whichever group you find yourself in, surely you're not credulous enough to take George Osborne's ludicrously counter-factual "all in it together" propaganda at face value are you?

 Another Angry Voice  is a "Pay As You Feel" website. You can have access to all of my work for free, or you can choose to make a small donation to help me keep writing. The choice is entirely yours.

More articles from
What is ... Wage Repression?
  What is ... a justification narrative?
What is ... Confirmation Bias?
What is ... regressive taxation?
Who is to blame for the economic crisis?
The "making Work Pay" fallacy
What is ... Marginal Propensity to Consume?
What do Tory donors get for their cash?


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