There was some good news in these disgraceful figures, of course. It was lower than the peak of 13.4 million in the mid-90s, and was lower than at any time during the 1990s. It would, however, be churlish to note that before Thatcher got in the figure was less than 10%. So we now live in a society that, perhaps, has started to move away from the bottom of the EU poverty league (which we shared four years ago with such advanced industrial nations as Portugal, Greece, Spain, Italy and Ireland). Wow.
With the Thatcherite "trickle-down" theory of poverty elimination now firmly at home in New Labour, it is worthwhile to note that inner London was the most unequal part of the country. Given that 29% of people in the richest fifth of the population and 32% in the poorest fifth live there, it seems hard to take the notion that inequality reduces poverty seriously (particularly when homelessness is also higher in the capital than elsewhere).
But why should New Labour waste money on working class people when it can invest billions invading small third world countries? We need to get our priorities right. We cannot have people like Saddam around, people who think nothing of wasting money on weapons and palaces while their fellow citizens live in poverty...
Given this, perhaps Blair abandoning his flagship pledge to "eradicate" child poverty by 2020 is not surprising. Like the Tories with unemployment, he simply rewrote the definition of low income. Now Blair aims for Britain to be merely "among the best in Europe" on child poverty. He has far to go. Denmark has the best record in the EU, with 5 per cent of its youngsters in families on less than 60 per cent of median household income, compared to 24 per cent in the UK. Rather than do better than the Danes, New Labour just moved the statistical goalposts by changing the definition of poverty. Impressive.
Labour, of course, tried to take the Thatcherite anti-taxation mantle. Thatcher did impose huge cuts in both income and corporate tax. Her first year in power saw the basic rate of income tax fall from 33% to 30%. The current rate is 22%. Yet the top rate has fallen even more sharply. Once, in 1974/5, it was 83% for the highest band. Then it fell to 60% in 1979/80 before, in 1988-89, becoming 40% (where it stayed). In that same year, the banding system for higher earners was abolished. The top rate applies for all incomes over £35,000. No distinction is made between "middle earners" and the extremely rich.
Similarly, corporation tax dropped to the lowest in the developed world. Given that UK bosses complain that increasing taxes would make them "uncompetitive" can we conclude they are not worth the high salaries they reward themselves? After all, if their profits margins are so low that even a slight increase in the lowest corporate tax rates in the developed world would wipe them out then they are really crap at exploiting their workers! Heads should roll...
But, of course, we should not take their self-serving and hypocritical pleas seriously. The fact is, while the rich pay less, the rest of us pay more. Indirect taxation was increased massively under Thatcher, pushing the tax burden onto the poor as much as the wealthy. And commentators seem surprised that most working people are up to their eyes in debt? Which is bad, of course, unless it is keeping the UK out of recession, then it is good. And who pays? We do, of course! Credit is a con, a device to get poor to pay interest on the money they need to borrow to have a living wage.
Another report by the "National Centre for Social Research" shows that Labour voters are becoming less tolerant towards the poor. Back in 1987, 73% of Labour voters were supportive of giving more money to the poor. Today, it is just 50%. Yet this perspective on welfare is based on faulty logic, according to the report. Many respondents are concerned about the amount of taxpayers' money being ploughed into unemployment benefit and single parent allowances - figures which are, in fact, relatively small. Unsurprisingly, these areas of welfare spending are the ones most attacked by the ideologies of Thatcherism and New Labour in the media. Welfare for corporations is less well known, unsurprisingly enough.
Young people reported feeling increasingly responsible for organising their own financial destinies, with around three quarters accepting they will depend on private pensions. However, almost 80% of people of all ages believe it is the Government's responsibility to provide a decent standard of living for the old. Obviously the opinions expressed note the difference between what is and what should be. A difference libertarians should be exploiting in favour of collective self-help.
The sad fact is private pensions will, in the main, fail their subscribers. We need only look at the recent debacles to know this (unsurprisingly when Pinochet privatised pensions in Chile he excluded the armed forces from the benefits of the free market). Yet the "practical" awareness that the state will not provide for their retirement owes much to Tony Blair delivering the same mantra as Margaret Thatcher about individuals' need to stand on their own two feet. Indeed, Blair is selling Thatcherite principles far better than the evil old bag herself managed.
Such a message can only be a mantra to those in power. After all, atomised individuals hardly present much of a threat. Unsurprisingly, therefore, the income gap between the rich and poor is the widest it has been since studies began. The poorest 10% has just 3% of the country's income while the richest 10% more 25%. This is strange. When a commodity is scare its price should increase and so we should expect to see a significant rise in wages. But there is none. The "lowest unemployment in thirty years" has not resulted in job security or the confidence to ask for improved wages and conditions. Which suggests that the job market is less than friendly and that the figures are as manipulated under Labour as they were under the Tories. Perhaps this is reflected in the lack of comment on New Labour's real economic miracle, namely the abolition of law of supply and demand in the labour market?
Fortunately, people are not in favour of such levels of social inequality. More than four in five of people surveyed said the gap between rich and poor was "too large." A popular solution to the wage gap was a dramatic lowering of salaries for higher income earners, rather than a large increase for lower earners. Obviously the recent spate of multimillion pound boardroom deals has had its effect. Yet even Labour supporters have been persuaded against the merits of income redistribution since Blair came to office. In 1996, 58 per cent of Labour supporters backed income redistribution; six years later that had dropped to 49 per cent.
Yet the income of the mega-rich comes from the relative poverty of the lower paid.
Which brings me to unions. According to a member of the Bank of England's Monetary Policy Committee, one in five workers has suffered a pay cut in the past 10 years. When inflation peaked at about 20 percent in the 1970s, only 1 in 20 workers suffered a drop in nominal pay. Looking at real wage growth, workers saw either a real drop in pay or an increase less than 0.1 percent in three of the five years leading up to 1999. Significantly, unionised workers did not suffer a pay cut in the six years up to 2000. Only a third of all workers are unionised, mostly in the public sector.
So it is a good job that Thatcher saved the average worker from exploitation by the unions otherwise they, to, would be subject to the tyranny of wage growth! Which shows the real nature of the "individualism" of the right. It benefits the powerful, the capitalist. Little wonder Proudhon argued that the law of supply and demand was a "deceitful law . . . suitable only for assuring the victory of the strong over the weak, of those who own property over those who own nothing." He knew that behind the "free contract" of capitalism, power and hierarchy lay. As he put it, "the manufacturer says to the labourer, 'You are as free to go elsewhere with your services as I am to receive them. I offer you so much.' . . . Who will yield? The weaker." Domination, oppression and exploitation flow from inequalities of economic power and the "power of invasion lies in superior strength."
We need only look at the US to see the self-defeating results of the Thatcherite and New Labour "individualism." As Proudhon succinctly put it, property is not only "theft," it is also "despotism". In the "land of the free," the basic right of freedom of association has been dramatically eroded. There the employer is king, literally and figuratively. They can refuse to negotiate for years with a union even after it is recognised, effectively negating their legal obligation to bargain. And while they cannot legally fire workers for striking, they can hire "permanent replacements" -- which is pretty much the same thing.
Across the employment spectrum, Human Rights Watch found that workers' rights to organise and bargain collectively were routinely denied. Whether it was computer programmers or minimum wage cleaners, workers were denied the right to associate with their fellows as they choose. Abandoning this basic right to freedom of association has had enormous economic and social consequences. It is surely no coincidence that the US, with one of the lowest rates of unionisation in the developed world, is the only high-income country without a national health insurance system. Or that Europeans, on average, enjoy five weeks of holiday while Americans have less than three? Or that American families, on average, work 247 more hours per year in 2000 than they did in 1989?
A study by a Cornell University professor Kate Bronfenbrenner, found that when faced with employees who want to join a union, 92 percent of private employers force workers to attend closed-door meetings to hear anti-union propaganda; 78 percent require that supervisors deliver anti-union messages to workers they oversee; and 75 percent hire outside consultants to run anti-union campaigns. Half of employers threaten to shut down if employees unionise and that in a quarter of organising campaigns, employers illegally fire workers because they want to form a union. She also discovered why these tactics are so common -- they are effective. They increase employee insecurity and apply downward pressure on real wages and benefits.
The decline of organised labour -- from 30 percent of workers in the 1960s to 13 percent today -- has contributed greatly to the most massive upward redistribution of income in American history. The majority of the U.S. labour force has barely seen any of the enormous productivity gains of the last thirty years reflected in their wages. This is in sharp contrast to the period between 1946 and 1973, when productivity gains were broadly shared and the median wage rose by nearly 80 percent. The United States is each year becoming more like Latin America in its economic and social division into haves and have-nots. Looks like the UK is well on its way to this utopia of capitalism.
There is hope. A recent Peter Hart poll found that 47 percent of non-union workers -- about 50 million people -- would opt for a union in their workplace if they could. Tens of thousands of US workers are fired each year for joining or attempting to organise a union, in violation of U.S. law. But the penalties for employers are so slight that they have what Human Rights Watch calls "a culture of near impunity."
The right to freedom of association is a fundamental human right, and it is an embarrassment that our society and legal system do not recognise this right for workers. But what can you expect from capitalism? It is, rhetoric aside, not interested in freedom, only property. The facts are clear. Workers and bosses do not have interests in common. Only when we organise together and practice solidarity and direct action can we improve our conditions and, more importantly, start to see that it does not have to be like this. Only a global labour movement that knows this stands a chance in our neo-liberal world.
Time we started to discuss how we can create such a movement and how we relate to the workers in existing trade unions and the unorganised. We have a taste of what to expect if we don't!