The price of bailing out the banks was austerity and the austerity of a thousand cuts was supposed to pay for the bailout but, instead, debt is reducing much slower than projected. On the surface it looks like the Government is incompetent and does not know what it is doing and that the austerity suffered by millions in the cause of debt reduction has been a waste of time and effort.
The truth is far more frightening since Cameron, Osborne, Duncan-Smith and the whole rotten coterie are not economic illiterates. Far from it, they understand exactly what they are doing; it is just that they are rather coy about telling the public, especially during the election campaign. They do want to reduce sovereign debt substantially – but that can be done later, when they have reduced public expenditure and priced British workers into work, which is their real aim.
When this government’s policy is looked at holistically, it is apparent that there are three separate strands coming together to achieve this end. Firstly there is the cutting of a range of Social Security payments; secondly there is a continuing relaxation of employment law in favour of employers and, lastly, the exploitive use of immigrant labour, especially East European.
Now, the Government is planning the coup de grace with the new EU renegotiations, and subsequent referendum, leading to the exploited Eastern European labour being replaced by exploited British labour.
Most of the people affected by the cuts have paid their tax and national insurance all through their working lives. Many of those finding their social security benefits being cut are, perversely, still employed. They qualify for tax credits, costing the taxpayer £30 billion a year, as their wages are so low and often for housing benefit also, which costs the taxpayer another £24 billion a year!
The cost to the taxpayer of the housing mess brought about by numerous previous governments also includes tax relief on mortgage interest paid by Buy-to-Let (BTL) landlords. In 2006/07 this was £2 billion a year and by 2012/13 had risen to £14 billion1 and is still rising as the BTL market carries on increasing as more and more people see it as the only worthwhile pension scheme. The Government will not abolish tax relief, not least because some one third of MPs are BTL landlords!
The relaxation of employment regulation has been going on for many years and sub-contracting, which was a rarity for main stream jobs before 1979, is now the norm. Construction sites, road and rail maintenance, office services, office cleaning, road cleansing, waste collection etc are now routinely sub-contracted or contracted out. In one swoop the main contractor, often a government department or a local authority has rid themselves of any responsibility for the employment conditions of the people actually doing the work.
When jobs are contracted out or privatised, European legislation is supposed to protect workers, guaranteeing the continuation of their employment on the same terms and conditions. However, there are many ways for companies to circumvent the law, legally. One of the most popular is to review the grading structure soon after taking over – and surprise, surprise, offer staff a lower grade, a lower wage or redundancy!
As staff leave, new staff are employed on worse conditions, and the winner in the race to the bottom is the zero-hours contract and the latest estimates are that as many as 5 million employees have these contracts. People wait for a phone call or text to find out if they have a day’s work. This casualisation of labour is a return to the worst days of workers turning up at building sites, mines, docks or factories, and standing in a queue to be picked for a day’s work. Only now the misery of not getting a day’s work is out of the public eye, a misery that cannot even be shared with fellow workers and it makes joining a union or protesting or any form of collective action nearly impossible.
If wage rates and conditions of employment are continually reduced, then the Social Security bill will remain continually high and this is what is happening. The Government had forecast it would reduce Social Security spending by £19 billion in 2014/15 but this looks unlikely now with the actual reduction now being estimated at only £2.5 billion2.
Reducing Social Security payments, especially housing benefit, will increase poverty, the use of food banks and the number of people who cannot pay their rent and end up becoming homeless. The obvious solution is shared accommodation and a communal kitchen. Find a beadle, give the inmates some terrible work, as idleness is sinful, and we have the 21st century workhouse!!