Claw back the wealth!

Submitted by Matthew on 3 July, 2017 - 12:01 Author: Editorial

Under pressure to do a deal with Northern Ireland’s Democratic Unionist Party, the Tories have found £1 billion extra for public services in Northern Ireland, the equivalent pro rata to £29 billion in England. They have also sneaked through a huge pay rise for the Queen, from £43 million in 2016 to £82 million in 2019. On 28 June they voted down Labour’s proposal to lift the public sector pay limit.
More pressure — strikes, demonstrations, rallies — can make them budge on that, too.

Many Tory MPs openly call for the limit to be raised, and, before reaffirming that the limit “has not changed”, Tory spokespeople said: “We’ve heard the message at the election... decisions will be taken [in the autumn]”.

Since the 2008 crash, profit rates have revived nicely. Top pay has zoomed again. The High Pay Centre’s latest report, in August 2016, found that average pay for a top company (FTSE 100) CEO rose to £5.50 million in 2015, 33% up on the 2010 average of £4.1 million. The ratio of FTSE 100 CEO pay to the median full-time worker across the whole UK economy was 183:1 in 2014, up on 160:1 in 2010.

This year’s Sunday Times Rich List reported that it has been “boom time for billionaires”. 2017’s “500 richest individuals and families are now wealthier than the entire top 1,000 were in 2016...

“Those who saw their fortunes soar were mainly those making money out of the City, those holding huge property portfolios, or people who were involved in manufacturing”.

At the same time, real wages are still below their pre-crash levels. They rose a bit in 2015 and 2016, for the first time since the crash, but are now falling again. The latest figures, for April, showed prices up 2.9% on a year before, and wages up only 1.7%. The worst-hit have been the lower-paid — often suffering also from big cuts in working-age state benefits — and younger workers. Since 2008, young people’s wages have fallen 16 per cent, taking their pay to below 1997 levels.

The official Social Mobility Commission, reporting on 28 June, found: • between 1997 and 2017 incomes of the bottom fifth of households rose by just over £10 per week; for the top fifth, over £300 • by 2014 the wealthiest 10% of households owned 45% of all household wealth • the poorest fifth now spend 31% of household income on housing costs, up from 24% in 2003 • child poverty has risen since 2011 • public spending on education is now falling • schools with the highest proportion of free-school-meals (poor) children have twice as many unqualified teachers, higher rates of teachers leaving, higher proportions of newly qualified teachers amongst the entrants, and at secondary level fewer hours taught by subject specialists.

The system is geared to recycle class inequalities from generation to generation. The 8 June general election, in which Labour proposed to tax the rich and well-off by an extra £50 billion and put that into restoring public services and free education, plus a £10 minimum wage and increased workers’ rights, showed a revolt against this gruesome spiral of inequality and a will to claw back the wealth produced by the working class and annexed by the plutocrats.

The annual British Social Attitudes survey, published on 28 June, confirms that Labour’s left turn both reflects and increases a shift in attitudes. If the question was posed as “should the government tax more and spend more?”, even without saying whom the taxes should target, the Thatcher years saw rising support for public spending. Under Blair and Brown, that first levelled off, then fell, from 2002, and remained low as the Tories told us that only cuts could prevent economic catastrophe.

Only 29% now agree cuts are need to help “the economy”, while 43% did so in 1996. 48% now say the government should increase taxes and spend more, a higher proportion than for over a decade. The system of entrenched and spiralling class inequality, which seemed as “strong and stable” as Theresa May could wish it only weeks ago, is now losing its grip.

Protests in Parliament — Labour should withdraw all the ordinary cooperation which enables governments to run smoothly — combined with a fresh effort by the trade unions in the workplaces and on the streets, can pull it apart. No pay freeze, no programme of cuts, can now be regarded as inevitable and immovable. Force the Tories out!

On 26 June, after over two weeks of negotiations, the Tories and the DUP signed a deal to give Theresa May’s beleaguered government a small but working majority in the House of Commons. The “confidence and supply deal”, which falls short of a formal coalition agreement, comes at a financial and political price for May.

As well as £1 billion of new funding, Northern Ireland will be allowed more flexibility in the use of £500 million of previously announced funding. Politically, even though it does not touch on social issues, the deal associates the Tories in the public mind with the toxic social and religious conservatism of the DUP. The text of the deal reads that: “The DUP agrees to support the government on all motions of confidence; and on the Queen’s speech; the Budget; finance bills; money bills, supply and appropriation legislation and estimates … the DUP also agrees to support the government on legislation pertaining to the UK’s exit from the EU and legislation pertaining to national security.”

This means that the government’s key priority, Brexit legislation, is likely to have a parliamentary majority, though there is still much scope for campaigning around its details. Much will depend on what Labour now does, as well as internal dynamics within the Tory party between rival factions.

There was no explicit guarantee of a soft border in Ireland, though this could make its way in to any final details. This is hinted it by the clause recognising “the importance of the agriculture sector to Northern Ireland [which would be disrupted by a hard border] and the opportunities for growth that exist.”

Predictably, the Tories have dropped some of their more unpopular policies: “Both parties have agreed that there will be no change to the pension triple lock and the universal nature of the winter fuel payment.” The deal also says that: “Support on other matters will be agreed on a case-by-case basis.”

This means that on any other issues, the DUP could well demand more concessions as a condition of their support. Irish republicans will be concerned about some of the language of the agreement, notably that “the Conservative Party will never be neutral in expressing its support for the Union.”

This is reinforced the promise to extend the Armed Forces Covenant to Northern Ireland, giving preferential treatment to veterans and their families. devolution The DUP, for its part, “recognises the need for early restoration of inclusive and stable devolved government in Northern Ireland and affirms its commitment to agreeing the formation of an Executive.” Negotiations at Stormont are due to come to an end on Thursday, as we go to press. In many ways, they only begun in earnest after the text of the Tory-DUP agreement was released, as there was no way republicans could sign up to any arrangement with the DUP before first knowing what the unionists had agreed with the British government.

The money agreed as part of the deal is to be spent on health (£300 million), health education (£50 million), infrastructure (£400 million), broadband (£150 million), and deprived communities (£100 million) in Northern Ireland. The right to vary VAT and Air Passenger Duty tax has been agreed pending further consultation, along with a commitment to work toward devolving corporation-tax-varying powers to Stormont. The Tories’ much-mocked rejoinder to Labour’s spending commitments, that there is “no magic money tree”, now looks even more ridiculous in light of May’s £1 billion deal to buy DUP voters. The “money tree” grew rather quickly when it was needed to keep the Tories in office.

The deal has predictably been attacked by politicians in Wales and Scotland, with Welsh First Minister Carwyn Jones arguing that it “kills the idea of fair funding” and the SNP’s leader at Westminster, Ian Blackford, complaining that Scotland should get “its fair share”. There is very real need for increased public spending in Northern Ireland, as there is in all parts of the UK. Socialists should argue against any feelings of resentment towards voters in Northern Ireland, and resist any attempt to divide workers on the basis of nationality. What the DUP’s deal really proves is that the Tories’ claims that there is “no money” for investment in public services and infrastructure is a lie.

The labour movement should now press its demand for increased funding for all areas, on the basis of need, by taxing the rich and big business.