The Tory share of the vote is dwindling – why is Labour chasing it?

Tags

benefit, benefit cap, benefits, budget, ceiling, Conservative, Department, doorstep, dwindle, dwindling, DWP, Fabian Society, false, fraud, full-time, Iain Duncan Smith, inflation, Ipsos Mori, Labour, living wage, low, Media, Mike Sivier, mikesivier, misconception, observer, part-time, pay, Pensions, perception, plastic, polling organisation, Rachel Reeves, reduce, reducing, share, social security, soft, tax, tax credit, Tories, Tory, unemploy, universalism, vote, Vox Political, work, worker, Your Britain

“Who’s been sitting in MY chair?” Nick Clegg would be right to feel supplanted as Labour moves further rightwards, groping for Tory votes – that aren’t even there. [Picture: Reuters]

One of the things that really rankled about Rachel Reeves’ attempt at Tory talk in yesterday’s Observer was the (observable) fact that she didn’t need to.

Why try to out-Tory the Conservatives when their share of the vote has been going down at every election – among a proportion of active voters that is – itself – reducing?

So in 1955, they managed to snag 49.6 per cent of the votes. In 2010 this had dropped to 36.1 per cent. Turnout was 76.8 per cent in the first instance and 65.1 in the second. They got 38 per cent of all available votes in 1955 and 23.5 per cent in 2010.

Some could point out that Labour’s share in 2010 was only 29 per cent – around 18.8 per cent of all available votes – but this just proves the point. Neoliberal New Labour were very close to the Conservatives in outlook and policy and most people in the UK don’t want that.

But Rachel Reeves indicated that these policies would continue on her watch, and that’s why people reacted so strongly against the Observer interview.

Perhaps Labour should have done some research on this. Yes, the party has its ‘Your Britain’ website, for members to bring forward ideas – but I’ve been there and didn’t like it. It seemed needlessly complicated, with efforts made to get people discussing particular policy areas at particular times when it would have been better to let people just say what they want – when they want – and sort it out at the receiving end.

Besides – that’s just for members. How much research has Labour done on the doorstep? What do people who aren’t aligned to either main political party want? That is where Labour will get its votes.

Even pointing to research by the polling organisations doesn’t help here. Ipsos-MORI famously polled more than 2,500 people about the benefit cap earlier this year, and Iain Duncan Smith was delighted to announce that a significant majority of respondents were in favour.

It was left to this very blog to break the news that only 21 per cent of those respondents knew enough about the cap to give an educated opinion. It would be informative to know how many – of all the respondents, not just the 21 per cent – were actually affected by it.

All of this is a great shame that may worsen into a missed opportunity. There are some terrific ideas around at the moment and all Rachel Reeves – and Labour as a whole – has to do is look around for them.

The Fabian Society website carried an article entitled Welcome to DWP the other day, in which most current proposals for reform of the system were rejected – which is a telling indictment of the state of the nation in itself. The stated reasons were that they would reduce the incomes of poor families (no thank you, Labour! You’re not going to out-Tory the Tories!) or fatally undermine universalism.

But among the ideas that were there, it was suggested Labour needs to reform individual benefits before setting its planned upper ceiling on the benefits budget. To that, I would add that the ceiling needs to be described as a proportion of a Labour government’s overall budget – not limited to a particular sum of money. This is the only way to keep it fair as inflation increases costs and devalues the pounds in our pockets, year on year.

Reducing unemployment, involuntary part time work and low pay by getting people into full-time jobs on a living wage could cut billions off the benefit bill (and boost the tax take at the same time).

For right now, the article stated, La Reeves needs to work on Labour’s perception problem – the false image created for it by an unsympathetic mass media, that it is ‘soft’ on benefits. This is based on misconceptions; only a quarter of social security goes on working-age people without jobs, and benefit fraud is – as has been explained ad absurdum on this site – miniscule.

Before the recession, Labour had cut the number of people out of work and really made work pay (with tax credits – not necessarily a great way forward, but a start – and these could be eased out of service as pressure was exerted on employers to adopt living wages). The social security budget was falling, not increasing. That’s what Rachel Reeves needs to be saying. Labour’s policies were working. The public has been misinformed. A new Labour government could create a winning formula again.

It could happen – if Labour stops being the Party of Plastic Tories and starts being the Party of the Worker once again.

Are wages too low, or is the cost of living too high? Or both?

Tags

archbishop, big business, cap, companies, company, Conservative, cost, deficit, electricity, FT350, gas, housing benefit, John Sentamu, Labour, Landlord Subsidy, Liberal Democrat, living, living wage, Michael Meacher, Mike Sivier, mikesivier, national insurance, plastic, privatise, profit, rent, salaries, salary, service, subsidise, substandard, telecom, Tories, Tory, utility, Vox Political, wage, water, York

How pleasing it is to see the Archbishop of York agrees with the view, long-held by Vox Political, that British workers should be paid a living wage, and that the taxpayer should not be subsidising big business!

Archbishop John Sentamu is to chair a year-long commission investigating the need for a living wage. In The Observer, he wrote: “The holes in millions of paycheques are being plugged by in-work support to the tune of £4 billion a year. But why aren’t those who are profiting from their workers paying up? Why is government having to subsidise businesses who don’t pay their employees enough to live on? It is a question we need to answer and act on – fast. The cost of living is rising but wages are not. In the rush for profit, and for high pay at the top, too many companies have forgotten the basic moral imperative that employees be paid enough to live on.”

This is a sentiment that Vox Political wholly supports.

Needless to say, there are also detractors. A commenter known as ‘neilcon’ pointed out: “The high cost of running a small business in this country is one of the main reasons why the hourly rates are so low. If you employ someone at £8 you then have to pay a further 13 per cent to the government in employer’s National Insurance contributions for the privilege of employing someone; you have to supply that person with suitable equipment for their work.” The commenter reeled off a few other business-related expenses before going on to “the issue of the banks utterly refusing to lend to small businesses, the high cost of renting office premises, business rates on your office premises to the government, the high cost of VAT, together with clients trying to squeeze the final price as much as possible and the very late payments by bigger companies.

“The real cost to an employer of an £8 per hour wage is calculated at about £15 to the business.”

I can sympathise with this sentiment. It doesn’t let off the bosses of larger companies, who have huge salaries and no excuse (FT 350 companies, for example) but they might have a reasonable excuse for not raising pay, if smaller companies say they’ll go out of business if the higher cost is forced on them.

But the simple fact is that the cost of living is too high and – if they had to rely on wages alone – millions of working people, up and down the country, would be unable to pay their bills…

… leading us to a recent blog article by our old friend Michael Meacher MP. He points out that our privatised utility companies are forcing every one of us to pay – through the nose – for substandard services.

He wrote: “More than £100 a year of an average household [water] bill, that is about 30 per cent, goes on profit, compared with 9 per cent in the energy sector which is itself known for egregious profiteering.

“In the last 10 years, water bills have risen by a massive 64 per cent, compared with an increase of just 28 per cent in average earnings. In the last three years alone, average earnings have fallen by 7 per cent while water bills have continued to rise remorselessly. There is no competition in the water industry and the only potential constraint is the industry regulator, but he has chosen to succumb to corporate lobbying in allowing water bills to continue to shoot upwards to feed fancy executive bonuses and big dividend handouts.”

The last sentence tellingly brings us back to the huge profits taken by executives. It seems that a few things are going on:

1. The privatisation of the national utilities – water, electricity, gas (and, some would say, telecommunications) – has failed in its stated aims, which were to democratise capitalism by making it possible for everybody to be a shareholder, to keep bills low, and to end government subsidies for these organisations. Instead, shares have been drawn into the hands of a very few rich investors, bills have risen far beyond wages, and government subsidies have either increased massively (rail) or companies have used the tax system to avoid paying the amount due on their profits (Thames Water and its ‘super sewer’).

2. Company bosses, keen to drive up their share prices in order to create larger dividends for their shareholders and higher salaries for themselves, have successfully held wages down in order to achieve this. As ‘neilcon’ pointed out, lower wages mean less spending on National Insurance, meaning that keeping the employee payout down by pennies per person leads to many pounds in increased revenue.

3. The government is unwilling to do anything about this because it wants to keep wages depressed as much as possible. This is the reason it has cracked down so hard on benefit payments – not because of fraud (which is minimal) but in order to create an urgent need among the unemployed to find work, and terror in those who have jobs that they could be replaced if they complain about the increasingly meagre pittance on which they are being told to survive.

There are many subtle sub-consequences as well. You may wish to raise some of them in the ‘comments’ column.

What’s the answer?

This may come as a surprise, but the best place to start might be with the private utility companies. An ultimatum to put their houses in order and charge a reasonable amount, rather than extorting money out of a captive clientele, might produce results – especially if the alternative is re-nationalisation.

This might take the pressure off the smaller private companies by actually reducing the amount calculated as the living wage; with lower utility bills, the amount of money needed for a working person’s survival will also drop.

If the government and the utility companies got their sums right, this could mean the need to subsidise working people’s pay would be wiped out, meaning a large saving on the tax bill. Feed this through to working people in the form of a tax cut and, again, smaller private companies would benefit (along with everybody else, of course). An alternative of using the money to help pay off the deficit would be unhelpful – we need more, and healthier, businesses in this country, employing more people. Get that sorted and the deficit will come down in any case.

On a completely different tack, what about Landlord Subsidy (otherwise known as Housing Benefit)? Why not put a cap on rents, thereby ensuring that the government is not subsidising the rapidly-increasing pace of (some) landlords’ greed?

Unfortunately, this is not likely to happen under the current Conservative/Liberal Democrat Coalition government – and it seems the Parliamentary Labour Party is to keen to become the Plastic Tory Party to take a stand; it will be up to its backbenchers and the party’s grassroots members to force a policy change.

At the end of the day, wages might still have to rise, due to matters unforeseen in this article.

But a plan that acknowledges the mistakes of the past and aims to redress the shocking way that the supply of money has overbalanced to favour a tiny minority – to the detriment of the vast majority – would constitute the first steps on the way to a nation that can not only provide Archbishop Sentamu’s living wage, but also help our struggling small businesses.

(The first Vox Political collection, Strong Words and Hard Times, is now available and may be ordered from this website)