On 26 March the coalition government voted through a law to “cap” welfare benefits for future years. Most Labour MPs voted for the “cap”. Only 13 rebelled.
We should instead “cap” the huge pay-outs being made to the rich.
Inequality in Britain has been rising since 1979, and is now soaring. Real wages, on average, are still going down, despite all the talk of economic recovery.
The average household will have lost £760 a year by 2014-5 from the welfare cuts already made by the coalition government. Poorer households lose more than the average, and households with disabled people lose most of all.
At the same time, bankers’ bonuses increased by an average of 29%, worldwide, between 2013 and 2014. Pay for the average boss of a top-hundred (FTSE 100) company was up to £4.3 million in 2012, an increase of 10 per cent on the previous year. In 2010-11, FTSE 100 bosses took an average pay rise of 12%.
But the government sees the economic threat as one of the poorest getting too much, not the billionaires getting too much. Its new law aims to guarantee that if there is economic difficulty, then the burden falls first on the worse-off, regulated by the “cap”.
Or, if economic output booms, then the gains go to the rich, and the worse-off are debarred by the “cap” from recouping some of what we have lost since 2010.
The Labour leaders’ excuse is that the “cap” excludes some benefits — Jobseeker’s Allowance, housing benefit for the unemployed, and the state pension — and anyway could be adjusted by an incoming Labour government.
But they accept the principle: in boom times, the rich should scoop the gains; in slump times, the state should spend as much as it takes to protect the rich, but protection for the worse-off should be “capped”.
That is how New Labour did things in the financial crash in 2008. The government laid out fully £1100 billion (in purchases of bankrupt concerns, in loans, and in guarantees) to bail out the banks, while it continued the cuts in benefits for the disabled which the coalition government has speeded up.
As Karl Marx put it in Capital: “The production of surplus-value is the chief end and aim of capitalist production... [in capitalist terms] a nation’s wealth should be measured, not by the absolute quantity produced, but by the relative magnitude of the surplus-produce”. In capitalist terms, “the ‘wealth of the nation’ (i.e., the formation of capital, and the reckless exploitation and impoverishing of the mass of the people) figures as the ultima Thule [ideal] of all statecraft”.
A boom, and high profits, will open opportunities for workers to win higher wages. But that is secondary and consequential, and dependent on how well-organised workers are to take those opportunities.
The benefit “cap” is in line with capitalist principles, and shows up the brutality of those principles.
The labour movement should instead go for a “cap” on pay-outs to the rich. The only way that “cap” could be enforced effectively is by taking the big industries under public ownership and democratic control.
Call Labour MPs to account
These are the 13 Labour MPs who voted against the benefit cap. If your Labour MP, or a Labour MP whom your union sponsors, is not on the list, propose a motion to call them to account!
Diane Abbott, Ronnie Campbell, Katy Clark, Michael Connarty, Jeremy Corbyn, Kelvin Hopkins, Glenda Jackson, John McDonnell, George Mudie, Linda Riordan, Dennis Skinner, Tom Watson, Mike Wood.