John Riddell: Democracy in Lenin's Comintern

How did Communist parties handle issues of internal discipline and democracy in Lenin’s time? The recent intense discussion within the British Socialist Workers’ Party (SWP) and beyond has heard claims that the SWP rests on the traditions of democratic centralism inherited from the Bolsheviks.

John Riddell: Democracy in Lenin's Comintern

Richard Atkinson: Death and the Bedroom Tax

Some extended thoughts about Stephanie Bottrill, the woman who committed suicide because of the bedroom tax.

Richard Atkinson: Death and the Bedroom Tax

Dave Renton: Who Was Blair Peach?

Today marks the 35th anniversary of the killing of Blair Peach by the police. David Renton looks back at Blair Peach’s life as a poet, trade unionist and committed antifascist

Dave Renton: Who Was Blair Peach?

Bunny La Roche: Nasty Little Nigel gets a rude welcome to Kent

Bunny La Roche of RS21 on Nigel Farage's visit to Kent

Bunny La Roche: Nasty Little Nigel gets a rude welcome to Kent

Financial Appeal

We're up and running! An appeal for funds to kickstart the IS Network

Financial Appeal

Some arguments about the UK government's welfare reform programme - They are not, exactly, aiming to abolish the welfare state

 

5. They are not, exactly, aiming to abolish the welfare state…

British capitalism has done well out of the welfare state. It kept the social peace after the war and was largely paid for by the working class who used it through National Insurance contributions and consumption taxes. Its expansion, which really began in the 1980s, has opened up new possibilities. In-work benefits have funded the expansion of low paid and part time employment. Housing Benefit - about a quarter of all working age benefit expenditure - has been turned into a hidden subsidy underlying the huge expansion of the private rented sector and its new class of rentier capitalists. A new, multibillion pound, industry has developed on the back of government contracts for welfare provision. And all the while the growth of indirect taxation, like VAT, has universalised the cost, spreading it right across the population.

People on benefits pay tax, quite a lot of it. The contrary impression is created by a discourse on taxation that is as skewed and misinformed as that on benefits. Income tax, the only tax the government, and other spokespeople for ‘taxpayers’ like to mention, makes up only around 25% of all tax income. The true position is that around half of all tax receipts are accounted for by indirect, consumption, taxes and duties. These taxes are regressive; the lower your income the higher the proportion that goes on indirect taxation - because poor people necessarily spend all their income on immediate, taxable items while the rich can invest and save. Because of the combined effects of taxation and benefits the scale of the net transfers of income towards the poorest people is much smaller than is supposed or apparent. Work by Simon Duffy of the Centre for Welfare Reform has established that, as of 2009, people whose income fell in the lowest 10% of the population received a total transfer (roughly: benefits less tax paid) amounting to just £1,500 a year. The same people used much less than average of the services (education, NHS etc) provided by taxation so that, after allocating this cost saving, their net use of the welfare state in all its forms was negative. The maximum tax actually paid, by contrast, by the 10% on the highest incomes, net of benefits and services received, was about 27% - a remarkably good deal for the rich, given that these figures do not even touch on inequalities of property and wealth.

They are not going simply to abolish something so useful for them. They are going to reconstruct it to meet capital’s needs. British capital, increasingly unable to find profitable openings in the production of commodities or the supply of services, needs access to all the revenues of the state, needs to have every transaction opened to it. Old style privatisations, where whole corporations were transferred from public to private sector, turned out to be not enough (capitalists still had to produce something in return for their new preserves). Better to tap straight into government income streams and auction off the rights of access. The Roman Empire had a crude form of the same idea with its tax farming. Absolutism introduced the sale of state offices. Under the modern version each and every state function can be let out to the highest bidder, avoiding any formal transfer of sovereignty or responsibility while allowing private capital a cut in every transaction, everywhere. That overall costs are inflated wildly in this process is of concern only if one believes that government is concerned with efficiency and economy: they are not; they are concerned with profits. The resulting extra expense after all is met by taxes and the deficiencies in service are of concern only to those who use them, not to our rulers.

Hence the reduction of the NHS to a brand, hollowed out and depleted, but not formally abolished. Hence the, still far from complete, spread of private contractors in welfare. Hence the entry of private finance into social housing and the resulting rent inflation. A welfare state of sorts will still exist in the future of capitalism but it will not be one socialists should lay claim to.