Reinventing the Welfare State. Ursula Huws

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СКАЧАТЬ on buying goods and services from external suppliers, amounting to a third of all public sector expenditure.⁴ Many of the companies that benefit from these government contracts pay little or no tax. Virgin Care Services, for example – which made £8 million profit from NHS contracts with a turnover of £200 million in 2017 – paid no corporation tax on these profits for the second year running.⁵

      And what about tax credits, the antecedent of the Universal Credit currently being rolled out? These were introduced by the New Labour government in the 1990s with the aim of reducing poverty while avoiding disincentives to work, taking the form of a top-up to low wages to bring household incomes up to an agreed threshold for certain categories of worker, such as lone parents. It was estimated that by 2015 expenditure on these credits, which had originally cost £1.1 billion annually, had reached £30 billion per annum.⁶ Since tax credits are paid as a top-up to low earnings they must, so the narrative goes, end up in the pockets of the poorest workers. But why are these workers’ earnings so low? It is, surely, because their employers are paying them so little that they cannot survive without the top up. Which means that the subsidy is going, not to the underpaid workers, but to the cheapskate employers who refuse to pay them a subsistence income. In other words it is a direct subsidy from the state to the employers that pay low wages. To add insult to injury, many of these employers pay little or no tax on their profits. Amazon, for example, which in 2019 employed 27,500 people in the UK, paid only £220 million in direct taxes in the UK, despite its total revenues from doing business in the country amounting to £10 billion.⁷ The previous year it was reported that Starbucks, another large employer in the UK, paid effectively only 2.8 per cent UK tax.⁸

      A TWENTY-FIRST CENTURY WORKHOUSE WITHOUT WALLS

      In this upside-down welfare state, in which the poor are subsidising the rich, what is the experience of being in need? The Beveridgean welfare state did not hold with idleness, but did seem to aim to provide some dignity and choice to welfare recipients for whom benefits were supposed to be an entitlement, not something to beg for, as they had been in the dark pre-war period. So deeply engrained is the notion of social progress, that few British people would imagine comparisons could be drawn between the twenty-first-century welfare state and the Victorian workhouse, where families were broken up and the poor forced to do menial labour in return for food and shelter. Yet, viewed objectively, the welfare state today has many more features in common with its nineteenth-century predecessor than with the comparatively humane mid-twentieth-century model than we should be comfortable with. Gone is the idea that unemployed people, having paid contributions into a national insurance scheme, have an unconditional right to their benefits for a specified period. Instead, as ‘jobseekers’, they are forced by savage sanctions (withdrawals of benefit) regimes into accepting whatever work is available, however low paid, or, if no such work is available, into unpaid ‘work experience’ – the twenty-first-century equivalent of picking oakum or breaking stones (with the welfare system, as we have seen, providing their employers with a hidden subsidy for the use of this labour). Once sanctioned, many are rendered destitute: forced to sleep on the street or use food banks to survive. Perhaps the main difference is that the Victorian workhouse would at least have provided them with a bowl of gruel, a dry bed and a roof over their heads.

      The statistics are shocking. According to the Trussell Trust, the number of emergency food parcels delivered to people in crisis by food banks reached a record 823,145 in the six months between April and September 2019, a 23 per cent increase on the previous year. Among the recipients, ‘one in five have no money coming in at all in the month before being referred for emergency food’ and ‘94 per cent of people at food banks are destitute’.⁹ The number of rough sleepers also reached a record high. Research commissioned by the Greater London Authority found 8,855 people sleeping rough in London between April 2018 and March 2019, of whom 62 per cent were sleeping rough for the first time.¹⁰ In 2018, the Department for Work and Pensions admitted that between April 2013 and April 2018 over 21,000 people died while waiting for benefits.¹¹ Meanwhile, it was estimated that the number of children from working households growing up in poverty rose by 38 per cent from 2010 to 2018 – from an estimated one in five households to one in four.¹²

      THE GLOBAL DIVISION OF LABOUR HAS FRACTURED SOLIDARITIES BETWEEN ORGANISED WORKERS AND THE ‘RESERVE ARMY’

      Meanwhile, what has happened to the fragile solidarity between organised labour and the precarious reserve army of labour whose interests are constantly pitched against each other by employers trying to get work done at the cheapest possible price? As already noted, in the post-war period there were specific circumstances that enabled such solidarity, rooted partly in shared experiences and culture and partly in proximity, which meant that the same workers might move in and out of the reserve army, or see other family members do so. Institutional mechanisms existed for developing broad common demands and negotiating them at a national level. But the neoliberal policies introduced in the intervening period have driven deep wedges between workers, helped by technological change. Since the fall of the Berlin Wall in 1989, few parts of the planet have remained beyond the scope of transnational corporations. The reserve army is now, by and large, made up of strangers.

      A global reserve army has been created, rapidly expanding, equipped with a basic knowledge of at least one world language, generic technological skills and a smartphone, able to be summoned at short notice to carry out one of the increasingly standardised tasks required in the twenty-first-century economy. This reserve army can be accessed in two distinct, but overlapping, ways: by moving jobs offshore to low-wage countries, or by using migrant workers in the domestic economy. In either case, a disciplinary effect is exercised over better-paid, organised workers. Whether you are told that your job could be sent to India or China, or outsourced to a company that employs migrant workers, the impact is essentially the same: you are less likely to hold out for demands for improvement to your wages and working conditions. And you are also less likely to know the workers who could replace you, to have mechanisms to appeal to their solidarity, or to empathise with their situation.

      It is a rational response, in such a situation, to demand that the union dues you pay are spent on protecting the wages and conditions of the paid-up members and resisting any attempt to dilute the workforce. If you have lost faith in the ability of social democratic parties to represent your interests, it is also, unfortunately, a rational response to turn your anger against those unknown foreign workers who are undercutting you, and enter the embrace of xenophobic populist parties offering the promise of a return to the certainties of the past. This might explain much of the appeal of Brexit, Trump, Le Pen, the Freedom Party of Austria and the Alternative for Germany Party, although it says a great deal for the trade unions across Europe that, on the whole, they have been able to resist such divisiveness and continue to campaign against racism among their members.

      To pose the problem in this way runs the risk of understating the complexity of the situation. The lack of solidarity between indigenous workers and foreign-based or foreign-born workers cannot be reduced simply to racism, although racism may often play a role in it. Once the mechanisms that were created, and reinforced, by solidarity between organised workers and the reserve army have been shattered, the resulting fracturing of the working class affects people of all origins. Many of the households in poverty, the users of food banks and the people sleeping rough on our streets are white people of British origin who have been failed by the social safety net. The global division of labour must therefore be seen as one precipitating factor among several that has brought us to this pass.

      DEMONISATION OF ‘SCROUNGERS’, IMMIGRANTS AND OVERSEAS WORKERS

      By these and other means, welfare systems have evolved into a disguised means of redistributing from labour to capital, not from capital to labour. And this reversal has been disguised in such a way that the blame for it is displaced along multiple dimensions. Most obviously it is displaced onto welfare claimants, seen as ‘scroungers’ СКАЧАТЬ