Monday 4 October 2021

Rishi Sunak's Big Boot

Just over a year ago, Rishi Sunak waited on tables for his infamous Eat Out to Help Out photo opp. This initiative, ostensibly designed to keep the hospitality industry on life support incubated Covid infections over that summer, setting the stage for an unwelcome second wave as Autumn set in. Today, his Conservative Party conference speech was less immediately harmful, serving up dishes of Toryist boilerplate instead of lashings of potentially fatal disease, but the damage hidden in his meanderings about debt, the public finances, and the holy mission to cut taxes spell ruination and low pay for millions. Pretty much the same as every other Tory chancellor for the last decade.

These sorts of speeches fall into two kinds, depending when they take place in the electoral cycle and what's going on in wider politics. Last year, Sunak promised vigorous state intervention to clear the cobwebs of Coronavirus from the economy. But this far out from an election and with Covid licked (as far as the Tories are concerned) this is one of the 'safe' years where the star turn can doesn't have to work hard and can get away with concentrating on telling the Tories how well the Tories are doing. And so the supply problems in the shops and at the pumps are batted away with a bland 'global problem' explanation. The Pandora Papers and their unveiling of another bout of industrial scale tax cheating by the super rich merited nary a mention. We can't well have bad news sullying Sunak's mojo. Don't get so negative, man.

But Sunak knows he can't deny reality. He can look forward to his family's billions growing more over the year ahead, but the problems posed by the end of the Job Retention Scheme, the cuts to Universal Credit, rising energy prices, the increasing grocery bill, and the National Insurance rise to come are real and have to be addressed. Albeit in the most Tory way imaginable. With the kind of cynicism normally monopolised by his boss, he said,
You’re a young family. You work hard saving a bit each month. But it’s tough. You have ambitions for your careers… for your children. You want to give them the best more than you had. Now you tell me: Is the answer to their hopes and dreams just to increase their benefits? Is the answer to tell that young family the economic system is rigged against you and the only way you stand a chance is to lean ever more on the state?
An interesting way of framing a direct cut to the livelihoods of the country's poorest by the Cabinet's richest. Sunak's alternative to maintaining social security payments at a marginally less meagre level is the rhetoric of can-do. A patronising pat on the back and faith in the Conservative plan is what the Tories offer. A plan that has been outlined many times before but still has nothing to show for it, this political vapourware promises good jobs, secure jobs, and high-paying jobs. This is the test, Sunak says, the Tories should be judged by. Okay, I'll bite. Wage growth is well up on last year, according to the latest ONS release, but only because hundreds of thousands of low paying jobs have vanished. Which means as the economy recovers, we'll see average wage deflation. We won't have to wait long to see what Sunak does to slither out of that one.

Disentangling this a little bit more, Sunak's puff and nonsense is covering for the brutal recomposition of the workforce. As noted last year, the pandemic came at just the right time for Britain's bosses. Their access to EU labour, particularly seasonal work, in conjunction with the weakness of the labour movement helped hold down the wages floor. With European workers relatively excluded by Brexit, rather than put up wages to their "natural" level to incentivise movement into these underpaying sectors, the Covid crisis destroyed a couple of million jobs. The contraction of income, the fast return to social security conditionality, and the removal of the UC "uplift" pulled the rug out from under the bargaining position of this country's workers. With pauperism and destitution staring workers in the face, the Tories are hoping the "unskilled" labour shortages in care, retail, and agricultural work will be filled in short order without added cost to the wage bill of their business backers. Hence the determination to wind up furlough on time, and drive UC down to its abysmal pre-Covid level: to make sure this "adjustment" happens as quickly as possible.

Beneath the high falutin' optimism and the semi-plagiarised Bill Gates speeches culled from 1995, the guff about skills, levelling up, the vision of Britain as the most entrepreneurial place on the planet is code for driving down living standards and forcing through a readjustment of the labour market. In other words, a retrenchment of the class relations and class interests the Tories defend at our people's expense. Sunak might smile, he might make deprecating jokes about being a short arse, but the boot he wants to plant on our collective necks is no smaller than that of his predecessors.

Image Credit


Blissex said...

«this political vapourware promises good jobs, secure jobs, and high-paying jobs.»

It is may be empty words, but as empty words go that sounds a lot better than New Labour's empty words about giving as tools for success courses on “applying for a mortgage and understanding employment and rental contracts”. :-(

«With European workers relatively excluded by Brexit»

Yet total net immigration has been strong since the 2016 referendum, reaching levels not seen since the 2004 peak, because immigration from the third world has increased by more than EU immigration has fallen:
* Between 2016 and 2019, long-term international immigration, emigration and net migration had remained broadly stable. However, in year ending December 2019 and year ending March 2020 (the latest data available), there was an increase in immigration and net migration.
* Migration has continued to be the main driver of the UK's population growth since the 1990s.
[...] Long-term international migration data for the year ending March 2020 show that migrants continued to add to the UK population. An estimated 313,000 more people moved to the UK with an intention to stay 12 months or more than left in the year ending March 2020 (net migration). This is lower than the previous peak level of 331,000 in the year ending March 2015, however, levels have remained broadly stable since the end of 2016.

I guess that because of transport costs the fall in EU immigration may have reduced the floating numbers of temp/seasonal workers, but otherwise there is no reason to think that brexit has caused a labour shortage.

BCFG said...

You can only smile as the Tories, of all people, tell us the low wage economy is no longer fit for purpose! This is a sublime way to misdirect the issues!

There are no uppity unions to blame this time (thanks centrists), so instead they infer the current issues are the result of giving low paid workers a living wage, which they haven't even got! Cos that is what Brexit was all about, right!

As I said before, decency is the icing on the venality.

Kamo said...

Phil, the bit you haven't reconciled (and I'm not sure you really can in a credible way), is that low wages are linked to low productivity, and the availability of cheap labour has been the crutch that props up the low productivity model. Much, but not all, that job destruction came in the low productivity sectors like retail and hospitality. There's a lot of what economists call 'friction' right now, due to these huge changes, but I don't think a productivity led increase in wages would ever have been possible without some massive shocks. I didn't want Brexit or the pandemic, but there is a generational opportunity to push beyond the low productivity model once the rawness dies down.