We Are Many, They Are Fools

October 6, 2015

The Guardian reports that Jeremy Hunt has been speaking in defence of the Tory cuts to working tax credits to a fringe meeting at the Party Conference in Manchester.

No doubt dealing with a tough audience, Hunt lectured that “We have to proceed with these tax credit changes because they are a very important cultural signal. My wife is Chinese. We want this to be one of the most successful countries in the world in 20, 30, 40 years’ time. There’s a pretty difficult question that we have to answer, which is essentially: are we going to be a country which is prepared to work hard in the way that Asian economies are prepared to work hard, in the way that Americans are prepared to work hard? And that is about creating a culture where work is at the heart of our success.”

He then reached the core of his theories on how the poor think in modern Britain:

“It matters if you are earning….yourself, because if you are earning it yourself you are independent and that is the first step towards self-respect. If that £16,500 is either a high proportion or entirely through the benefit system you are trapped. It is about pathways to work, pathways to independence … It is about creating a pathway to independence, self-respect and dignity.”

Hunt later defended his comments, arguing that “There was never a suggestion that people don’t work hard enough, only that we need to remove the barriers to a high-wage, low-dependency economy, which the national living wage is designed to do.”

Of course, there wasn’t a suggestion that people don’t work hard enough. It was baldly stated, without any suggestions required. It was also accompanied by the statement that poor people are pathologised by accepting in-work benefits.

There are plenty of things to say about Hunt’s words, but it’s worth recapping the context of huge cuts to working tax credits.

The cuts to tax credits tabled by the Tories are huge, and they will have a massive impact upon the life chances of millions of people. The BBC reports that the introduction of working tax credits helped to sharply decrease the percentage of children living in poverty in Britain from 35% to 19% between 1998 and 2012. They have been instrumental in allowing parents to juggle part time work and raising their children.

The Tories are gradually chipping away at who is eligible for these credits, reducing the earnings threshold before the credits start to decline from £6,420 to £3,850 per year. According to the IFS, this wil cost 3 million households over £1,000 per year, and the cuts will not be compensated by scheduled rises in the minimum wage. The IFS’ director Paul Johnson says that “Unequivocally, tax credit recipients in work will be made worse off by the measures in the budget on average.”

Hunt wants British workers to behave more like Chinese and Americans (as if the two workforces mentioned are in any way comparable). Presumably this means working longer hours for less pay (but more “dignity”). Tell that to the Foxconn workers in China who have been leaping to their deaths rather than assemble iPhones 99 hours a day.
Or tell it  to the fast food workers in the US who have been courageously fighting for higher wages. Tell it also to the hundreds of thousands of employees of Wal-Mart who rely on federally funded tax credits to survive. According to one study, the supermarket giant subsidises its corporate earnings with some $6.2 billion in tax credits every year.

The assumption is that the more poor people are paid, the lazier they become. This is radically disonant with the way that Tories think about very rich people. In their case, the more they are paid, the more incentivised they become, and the harder they work. A better illustration of class reality in modern Britain could hardly be drawn.

The assumption is also that national economic success is best promoted by making cleaners, factory workers, teaching assistants, supermarket shelf stackers, warehouse workers, delivery drivers – you name it – work harder and harder for less and less money. This is not just brutally immoral, it is also voodoo economics.

When people are paid more, the people paying them have a choice. They can either enforce radical cut backs in staffing and wages to limit costs, or they can invest in measures that allow their workers to work more effectively.

The problem is that for employers to act in this way, there need to be safeguards against the other option – a good old neoliberal slash and burn campaign. Trade unions, legislation, socially accepted norms regarding dignity at work and workers control – those sort of things.

The argument that tax credits lead to laziness is also pure balderdash. The Working Families Tax Credit was introduced to promote work and ease people off benefits, in the context of a relatively low-pay economy, and it hasn’t led to a reduction of working hours in the UK.

And it doesn’t matter how many hours you work in a job, the dignity dividend will be negligible if you feel that it is completely pointless, as around 40 percent of Brits do.

Jeremy Hunt has let the Tory mask slip (not for the first time). He comes from a party whose members probably feel that Little Britain was a masterpiece of social realism; where all poor people are crypto-shirkers, ready to back-slide and sabotage national prosperity at any given moment. They envisage a world where work is dismal, incessant but somehow ennobling and dignified.  Where any receipt of state benefits is fatal to self-respect.

Needless to say, this is not how they view the moral existence of the rich. State assistance for them is ennobling. If that assistance involved shovelling billions of pounds into the maws of bankers, propping up robber barons with their woeful railway firms, privatising every last public body and handing it to coteries of spivs, artfully engineering tax loopholes with the assistance of the big accountancy firms, failing to regulate the city properly, building high speed railways to nowhere, handing out tax breaks and loan guarantees like sweets – gradually ratcheting up the pay of MPs- all of it would be poison for a low wage worker. But for the rich – well, you can’t be dignified without a little state support.

This kind of bullshit needs to be vigorously opposed with a politics that articulates the actual needs of workers – the kind that is emerging from the Peoples Assembly and the protesters in Manchester.

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