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The million pound benefit cap

I did realise that Asda sold shedloads of baked beans and breakfast cereal, but until this morning I did not know that the UK wing of Wal-Mart had moved into the market for economic indicators as well.

But thanks to Retail Week, I am now aware of something called the Asda Income Tracker, which measures discretionary spending after all the big bills are paid.

The combined effects of inflation and unemployment means that the average UK family is 7.2% worse off than a year ago, somehow getting by on just £160 a week. There are big regional variations within that figure; in Northern Ireland families have to last that long on an astonishingly low £74.

So when Mervyn King, governor of the Bank of England, speaks of ‘the longest period over which real wages have failed to rise since the 1920s’, he is being disingenuous. Real wages are not just stagnating, they are falling sharply.

As recently as the 1970s, the inevitable result of such a decline in standards of living would have been an upsurge in industrial militancy, with trade union negotiators slapping in claims that covered the cost of living and then some, and backing up the demands with industrial action.

Given the changes in both the composition and consciousness of the working class, the mood is instead more one of grim resignation rather than anger. Yet much Coalition policy can be seen as driven by an attempt to mitigate the so far silent resentment.

The takeaway from government attempts to bring in a benefit cap is surely a reassurance to those in work that those out of work will be even worse off than they are.

Meanwhile, David Cameron seems determined to make an example of Royal Bank of Scotland chief executive Simon Hester. UKFI, the body that holds the taxpayer’s 83% stake in RBS, will this week tell the remuneration committee that his bonus should be limited to £1m.

Considering that Hester has presided over a 48% fall in the group’s share price over the last year, and has just put 4,000 employees on the dole, one wonders what is the justification for a gratuitous six figure handout.

This gesture looks like little more than a publicity stunt. Nothing has been said that indicates that RBS global markets chief John Hourican will not pick up the £4m he is due on his 2009 share options.

Nobody should be fooled by the million pound benefit cap for Hester, or by Vincent Cable’s toothless proposals for the reform of executive pay. The practical impact of such measures will be minimal.

The simple point for socialists is that in class terms, the rate of surplus value is relentlessly being driven up, with only tokenistic attempts to rein in one or two beneficiaries of that trend, purely for public relations purposes. That is what rightwing governments are for.

2 Comments

  1. edward plumridge says:

    Please make sure that your articles are numerate – a 6 figure sum is £ 100,000 not a million pounds

    1. Jon Lansman says:

      I think, Tony, that since £999,999 is also a 6 figure sum, “one million pounds” might reasonably be taken as the upper limit of 6 figure sums.

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