By Sacha Grear

An 11% wage rise for all public sector staff - 5.8 million workers - would cost £13bn according to the Institute for Fiscal Studies. The government would get around a third of this back in extra tax and National Insurance payments, so we are really looking at a cost of approximately £8.7bn (Richard Burgon MP). To put this in perspective the government bailout of Bulb Energy and its (private) takeover by Octopus Energy, reported in The Metro 22/12/22, will cost the taxpayer in the region of £6.5bn (The Office for Budget Responsibility).

The increase in public sector pay would need to be funded year on year. But as Richard Burgon MP wrote, “a small wealth tax on the very wealthiest households with assets over £10 million could [fund this] … or we could end the injustice where taxes on profits when selling assets are paid at lower rates than the income tax you pay on your wages. Addressing this by equalising Capital Gains Tax rates with income tax rates alone would raise £17 billion a year—more than enough.”

In short, the government, without bemoaning its affordability, is prepared to pour billions into propping up private capital - billions that will materialise as shareholder dividends - but is not prepared to pay public sector workers a decent wage.

TORY PRIORITIES 

Even these figures are only scratching the surface of Tory priorities. In November 2020, the then Prime Minister Boris Johnson announced: “Based on our assessment of the international situation and our foreign policy goals, I am increasing defence spending by £24.1 billion over the next four years. That is £16.5 billion more than our manifesto commitment”. The increase in the military budget did not draw any shouts of ‘unaffordable’ from either side of the House. Bear in mind that is the increase in military expenditure, not the total. In 2021 Britain’s annual military expenditure was £59.5bn. Ben Wallace MP, Minister for ‘Defence’, has announced government plans to increase this to £100bn per annum by 2030. A further £2.5bn was plucked from the ‘magic money tree’ (with which Theresa May mocked Corbyn’s Labour) in order to fan the flames of the proxy war in Ukraine, no questions asked.

‘Foreign policy goals’ then, principally to expand the interests of British capital investments abroad and if required, go to war with China - we are already circuitously at war with Russia - are being funded by sustained, deep cuts to social expenditure.

As if a demonstration of those policy goals were needed, the HMS Queen Elizabeth carrier strike group was sent to the South China Sea in July 2021. The Strike Group consisted of the HMS Queen Elizabeth aircraft carrier - the largest and most powerful surface vessel in the Royal Navy’s history - 8 other attack vessels, 32 aircraft, and 3700 personnel.

A genuine defence policy, with the sole objective of defending Britain from attack rather than promoting British global imperial interests, would cost a small fraction of the current budget, releasing multi-billions of pounds every year for investment in socially useful production and the socio-economic infrastructure. The government’s plan to double the current waste on military spending is obscene.

The government’s attack on public sector workers and Britain’s social infrastructure has nothing to do with ‘economic necessity’. It is a political choice. Its deceitful narrative - that public sector wage increases in line with inflation are “unaffordable” - was further exposed in a recent report by the Royal College of Nursing. The report details how awarding nurses a pay rise of 5% above inflation would be cheaper than recruiting new nurses from abroad or using agency staff to fill vacancies.

The cynical, ruthless treatment of NHS staff is not about cost. The Tory government strategy, drip fed over 12 years, is calculated to suppress wages, decimate the workforce and collapse public services to the point where the remaining skeletal infrastructure is potentially profitable and attractive to private takeovers. It is a giveaway of immense public wealth to corporate capital interests, similar to the ‘Academisation’ of state education when billions of pounds worth of local authority schools and their playing fields were gifted to Academy chains without a penny in compensation.

This is more than right-wing ideology about ‘reducing the state’. On the contrary, this is about increasing state intervention, lubricated with public funds, to patch up an economy that has been in enduring and deepening crisis since at least 2008. It reflects the essentially parasitical character of contemporary capitalism, which despite the fourth industrial revolution is losing the capacity to constantly reinvent itself and is, bit by bit, being reduced to asset-stripping the social infrastructure it had managed to build during its expansive heyday.

That infrastructure was deemed necessary by the Victorians and Edwardians to produce and reproduce a viable, modern workforce - through education, healthcare, social services, transport, energy and water supplies. The core of the expenditure - building schools, hospitals, roads, railways, the underground, sewers and waterworks - was afforded between 1870 - 1914 when the rising class of capitalists was exploiting its colonial Empire for many trillions of pounds - £45 trillion from India alone.

Then the post-World War II temporary settlement saw the Labour government of 1945-51 create the modern welfare state and the NHS, enact the 1944 Education Act, and nationalise coal, gas, electricity, the railways, iron and steel industries. Water and waste water services were virtually all publicly owned by the turn of the 20th century. They were privatised in 1989 by the Thatcher government.

DIFFERING CLASS FORTUNES 

The contemporary attack on wages and working conditions, in conjunction with privatisation, is projected as a cost of living crisis for workers, supposedly caused by the war in Ukraine and the Covid pandemic. But this is falsehood upon falsehood. Prices were outstripping wages long before Covid or the start of the war in Ukraine. The decline in public sector real wages began nearly two decades ago. The neoliberal attack on public services and workers‘ conditions dates back to Thatcher. The sanctions imposed on Russia have simply served to exacerbate a crisis that was already systemically embedded.

In reality the decline in wages and working conditions coincides with the rapid growth in profit margins. The rise in poverty and food banks is the flip-side of the exponential growth in the wealth and number of billionaires. These contrary class fortunes are causally and inseparably connected. Britain’s billionaires are increasing their wealth by £220 million every single day. Bankers’ bonuses are up 28%, and bosses’ pay at the largest 100 companies is up 23%. (Richard Burgon MP)

Globally, “every 30 hours, the pandemic spawned a new billionaire”, said Somesh Jha of  Al Jazeera. He also said, “According to the Bloomberg Billionaires Index, 131 billionaires more than doubled their net worth during the pandemic. The world’s richest person, Louis Vuitton chief Bernard Arnault, was worth $159bn on December 27, 2022, up by around $60bn compared with early 2020. Elon Musk, the planet’s second-wealthiest man, boasted a $139bn fortune — it was less than $50bn before the pandemic. And India’s Gautam Adani, third on the index, has seen his wealth increase more than tenfold in this period, from approximately $10bn at the start of 2020 to $110bn at the end of 2022.”

According to Knight Frank, estate agent, “ultra-high net worth” (UHNW) individuals, defined as having a fortune of more than $50 million, are now at a record number of 218,200. Credit Suisse add that the number of people in the UHNW bracket has increased by more than 50% in the past two years. (Avanti Populo, New Year’s Resolution)

A DELIBERATE STRATEGY 

What we are living through is not an unavoidable cost of living crisis. This is the unfolding of a deliberate strategy to intensify the upward redistribution of wealth, to compensate capital for an enduring, systemic crisis. Experienced as immiseration by the working class, and as tragedy and devastation by the global south, this is in truth a cost of profit crisis.

With the Tax Justice Network estimating that $21 trillion to $32 trillion in financial assets are sitting in offshore tax havens, the cost-of-profit crisis is resulting in grotesque stockpiles of wealth that, ultimately, will never be used. It gives perspective to the vomit-worthy allegation by the Minister for Health, Mr. Barclay, that trade unions have made a “conscious decision” to “inflict harm” on patients. This Orwellian double-think sits alongside his predecessor’s decision in 2020 to send Covid-positive patients back to Care Homes where they cross-infected residents, resulting in tens of thousands of fatalities.

Theorising about the ‘small state’ has not prevented the government from interfering directly in the Rail dispute, instructing rail companies not to agree a deal with the RMT, ASLEF and other unions. The government is subsidising the prolongation of the dispute by funding any company losses incurred as a result of strike action. While striking workers are losing income, company profits are being looked after by the state. The role of this Tory government in the conflict between labour and capital is transparent. It is the executive leadership of a ruling class committed to prolonging the systemic status quo, continuing the upward redistribution of wealth and to crushing organised working class resistance.

Class warriors, Prime Minister, Rishi Sunak’s first cabinet meeting. Photo by UK Prime Minister