Conservatives are clueless on poverty….

'I am totally sure Call Me Dave's pad is that way and not here...'

The school of thought that the Conservative Party, no matter how hard they try, simply will never ‘get’ poverty was today given a massive shot in the arm by the frankly illiterate words of Iain Duncan Smith. Remember people this comes on the same day that it has been revealed that Labour areas are getting hammered into the ground and paying the highest price for this governments austerity drive.

We will ignore the frankly just plain stupid argument that extra money makes the lives of poor people worse and look at another one. Apparently the solution to poverty is to push people into employment. Sounds plausible. Accept when you factor in this nugget from The Daily Telegraph:

the average worker is being hit by a 2.9 per cent cut in wages in real terms, the equivalent of a £651 being wiped off the purchasing power of their annual income.

This shows quite clearly that work isn’t the solution to your poverty problems. In fact, we have this governments barking economic policies to thank for that because they are sending prices through the roof while further depressing wages.  Duncan Smith launches a broadside against the last government;

“By inflating incomes through benefits and tax credits, the previous Government hailed early watershed victories claiming significant numbers of people had been ‘lifted’ out of poverty, by virtue of moving them above the poverty line.

Duncan Smith is rendered blind to the real problems by his ignorant and destructive politics.  Indeed, his argument is logically contradictory. By saying the solution is employment, he implies the problem is the ‘feckless and unemployed poor’. However, for example, Working Tax Credits, as Mr Duncan Smith should really know given his job, are an in-work benefit so how on earth could they have created the implied ‘benefit addiction’ amoung the allegedly ‘workshy’ and ‘feckless’ poor?

He simply can’t fathom that incomes for the many have not risen, let alone been ‘over inflated’, significantly at all, while debt levels have been steadily rising.  Changes to the benefit system initiated by the last Labour government (aimed not primarily at alleviating poverty but actually aimed at compensating the middle classes for their falling wages vis a vie those at the top) only delayed the inevitable cave-in.

Take a look at this graph and you begin to see the roots of the problem. In 1997, it shows how average homebuyer mortgages were only three times average earnings. During the ‘boom years’ however this gap (already big) spiralled upwards to a peak in 2007/8 where average homebuyer mortgages were a mind-bending seven times average earnings. What plugged the gap? Well the graph tells us quite clearly it wasn’t earnings so it must have been cheap and readily available credit. 

However, as the house of cards fell-in globally, the banks soon turned the tap firmly off and the rest as they say is history. If the middle-classes stopped receiving ‘trickle-down’ and became increasingly more dependant on credit then what does that mean happened to the poor? The answer is simple. During our tenure they remained where they were  and even saw a swelling in their ranks; it is figures such as these that shame Labour:

official figures blew apart the Government’s credibility on helping those struggling the most. They painted a bleak picture of worsening poverty in Britain even before the recession took root. The number of people living in poverty had climbed to 11 million by March 2008, a rise of 300,000 since 2006. The poorest have seen their incomes drop, with 200,000 working adults falling below the poverty line last year.

Still, these figures are small beer to what is coming; the ranks of the poor will be massively swelled as the credit and tax credit starved middle classes join them. On the plus side, capitalism’s cannibalisation of the middle classes is laying the ground for an unprecedented democratic union of all the popular classes against it.

The real problem we have is the sheer undemocratic distribution of incomes engendered by an undemocratic social system has become so top-heavy it has simply fallen over. One way to solve this temporarily would be to drastically increase average earnings while curtailing those at the top. However, soon enough inflation would undermine this approach and we would be confronted with an inflationary crisis. The only real long-term solution is a programme of economic democracy, control and ownership. One thing is for sure though, that wont come from Mr Duncan Smith and his class-warrior colleagues because they simply haven’t got the first clue what they are doing even within the narrow confines of capitalist logic. Scary to think these people head the ship of state isn’t it?

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About darrellgoodliffe

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14 responses to “Conservatives are clueless on poverty….”

  1. Gillig says :

    Let me have a go!
    Index link benefits and let inflation rip.
    Stop the government borrowing.Adjust public employees’ wages and stop deducting income tax. PM’s wages as ceiling.
    Merge tax and national insurance.
    Flat rate tax, starting at minimum wage.
    Scrap tax credits.
    No minimum wage in private sector.
    State to provide only a flat rate pension for everyone.
    Child benefit to one person for 2 children.
    Flat rate housing benefit, per person (includes children), not property.
    The best bit if you want the voters to trust Labour is stopping tax on public employees.

    Like

  2. darrellgoodliffe says :

    @Gillig,

    Benefits should be raised, yes.

    Dont agree with any restriction on the minimum wage and feel it should be a living wage.

    Dont support anything you say on housing or child benefit.

    Tax credits would be de facto abolished by a living wage so, with the proviso a living wage is introduced across public and private sector, I can agree to that.

    No to a flat rate tax.

    Not keen on mereging tax and NI either but could be persuaded on that one possibly.

    Like

  3. Liberal Neil says :

    “”the average worker is being hit by a 2.9 per cent cut in wages in real terms, the equivalent of a £651 being wiped off the purchasing power of their annual income.”

    This shows quite clearly that work isn’t the solution to your poverty problems.”

    It doesn’t show that at all. All it shows is that the average worker earns around £22.5K a year, which is well above the poverty line. It doesn’t tell you anything about whether work is the solution to poverty.

    “By saying the solution is employment, he implies the problem is the ‘feckless and unemployed poor’. ”

    No he doesn’t.

    Like

  4. darrellgoodliffe says :

    @Liberal,

    Yes it does because it and the existence of numerous in-work benefits shows that this income simply isnt adequote to get on and that these people will soon come crashing down below the poverty line.

    Errr yes he does. Later on in his little speech he goes on to talk about a drug-dealer and their family. How cliched and anymore obvious can you get? If he is saying ‘being in a job’ is what will solve these peoples poverty it kind-of implies they werent before dont you think?

    Like

  5. Gillig says :

    I notice you ignore; Adjust public employees’ wages and stop deducting income tax.
    It would mean labour couldnt fudge the employment figures with “jobs for the boys”.

    Like

  6. John Reid says :

    As council houses in hte 80’s were sold off dirt cheap, the average perosn only had to get a small mortgage tobut them, as such where the average house is so much more expensicve now it was the only way to get a mortgage in those days was a big one, for the record, its during a recession that there are more repossesions.

    Like

  7. darrellgoodliffe says :

    @Giilig,

    Adjust in what way?

    @John,

    Not sure what your point is, to be honest.

    Like

  8. Gillig says :

    Reduce them to reflect the new tax free status. Can you think of a sensible reason to give public employees money and then take it back?

    Like

  9. darrellgoodliffe says :

    @Gillig,

    No but I think on balance a universal tax system is better. Reducing wages would also be counter-intuitive to what I advocate.

    Like

  10. Gillig says :

    You just want to blur the line between public and private. It’s not reducing pay, just the farce of giving it and taking it back.
    The honest truth of who is paying for what, is something you would prefer to hide. Britain deserves an honest democratic government.

    Like

  11. Gillig says :

    I pay tax and the government use my money to pay for public services.
    Public service employees use the public services and their income is provided by my tax.
    How is that universal?

    Like

  12. darrellgoodliffe says :

    @Gillig,

    Because the same rate of taxation applies regardless of actual job but is measured against income. So, it doesnt matter which sector you earn your money in just what you earn….

    Like

  13. John Reid says :

    no real point, just saying the way it was.

    Like

  14. Gillig says :

    The public sector are not earning anything that private havn’t already paid for, they are just returning it to the government. It’s a fact, not an arguable point.
    If labour argued for dropping this tax roundabout, they would get less pressure to nationalise the infrastructure (water, power,transport, health, law etc.)
    Union deductions would be the only deductions on the payslip, hey, ho!

    Like

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