Osborne’s regime of pay freezes and wage cuts


IN his last budget speech before the general election, Tory chancellor, George Osborne, made the astounding claim that living standards will ‘grow strongly every year for the rest of the decade’, adding: ‘Now, the facts show households on average will be around £900 better off in 2015 than they were in 2010 – and immeasurably more secure for living in a country whose economy is not in crisis anymore, but is instead growing and creating jobs.’

Workers are well used by now to all the dodgy statistics trotted out by the Tories to try and convince the unwary that British capitalism is surging ahead to a full blown economic recovery.

They simply deny that all the so-called new jobs created are in fact part-time or zero hours contract jobs paying so little that those employed on them are forced to rely on benefits just to survive.

As for households being better off by £900 than they were in 2010, this flies in the face of every single analysis of the effects of the pay freeze introduced as part of the coalition’s austerity cuts.

The fact is that since 2010 British workers have endured the longest decline in pay rates since records began – far from being £900 a year better off, workers on average have suffered a cut in pay of £2,500 since 2010!

That workers are not fooled by all these Tory lies is revealed in a new survey carried out by the information provider Markit.

It surveyed 973 households in March and found that over 40% of workers expected that their pay in 2015 would be either frozen or cut.

The breakdown of this figure shows that more than a third expected a pay freeze while 7.5% were preparing for a pay cut.

Amongst public sector workers, who have borne the brunt of the Tory pay freeze, 45% expected no pay increase this year.

In the private sector 40% are unconvinced that wages will increase.

Tellingly, the further down the pay scale, fewer and fewer low paid workers believed that wages would do anything but remain static or be cut.

The fact remains that the only people to have seen any increase in their pay have been the bankers and the hedge fund operators who have been rolling around in all the free money (over £1 trillion) pumped out by the Bank of England in the form of Quantitative Easing.

Their pay and bonuses have certainly made them vastly more than £900 better off – £9 million would be closer to the mark.

Osborne did find one supporter for his fantastical claim, the governor of the Bank of England, Mark Carney, who is forecasting the strongest rise in real take-home pay for a decade.

Markit’s chief economist, Chris Williamson, was less than impressed with this forecast saying: ‘Like many others, the Bank of England is expecting a revival of pay growth to help support ongoing robust economic growth this year. This data suggests policymakers are likely to be disappointed.’

They will be more than disappointed – what this data reveals is that workers are not in the least fooled by all the spurious propaganda claims of recovery.

Their day to day existence, living with subsistence level pay at best and, for many, forced to rely on shrinking savings or by taking on huge amounts of debt just to survive, leaves no room for illusions about the future bankrupt British capitalism holds for the working class.

The coming general election is taking place in the midst of the biggest historic crisis of the world capitalist system.

The only possible way for capitalism to survive is for it to place the full burden of the economic collapse on the backs of workers and their families.

The working class is being driven to its own revolutionary conclusions – that its only future is in the overthrow of the capitalist system and advancing to a socialist society.

Only the WRP and YS fight for this revolutionary perspective – support our candidates in the general election and join us in this historic struggle. for the victory of the world socialist revolution.