The Tories and low pay

Matthew Hancock MP’s article on ConservativeHome is worthy of a little thought and debate. It’s welcome to see a Tory MP talking about the idea of siding with the low paid, bearing in mind that so much of the point behind what their organisation does is detrimental to them.

The Tory Party has steeled itself and committed to a programme of austerity which goes beyond simple cuts. Like most Thatcherite policy, it appears to be based on one single premise: the recipe for regaining national competitiveness is to raise incentives to inequality, and more importantly to raise the rate of exploitation for workers.

What’s meant by the rate of exploitation? Essentially, more work at less ‘cost’, that is to say, less cost to capital. It does of course cost workers more (and arguably also costs more to the wider economy – a tangent I’ll avoid here).

This is part of the reason it’s interesting that Mr Hancock raises the spectre of low pay. One would naturally assume that low pay would in fact be a policy aim. The idea of making it easy to fire workers at the drop of a hat is a key plank of his party’s policy offer, and seems aimed at increasing productivity through the use of fear of punitive action, for example. Reductions to benefits also fit this programme in theory – the whole prospectus is based upon the idea that reducing benefits is more likely to force more people into low paid work (thus increasing the rate of competition in fighting for scraps among those souls at the bottom of the pay scale).

There was of course a time when Tories believed in a ‘One Nation’ ‘consensus capital’ model. Unions were consulted. Increasing pay at the bottom was seen as a good thing – boats rising with the tide of prosperity. They actually understood that fulfilling the desire of the poor to consume (and thus realistically aspire to a more comfortable, fulfilling and healthy lifestyle) was good for economic growth as a whole.

The new right – revolution within capitalist politics

When the shocks of the 1970s sealed the deal of profit declines through the 1960s, many Tories seemed to resort to a tacit acceptance of some of the main tenets of Marxism. Some hallmarks are:

1) Innovation will not be enough to drive the growth of the future. Companies have now reached a ceiling of maximum return (illustrating what Marx labelled as the tendency of the rate of profit to decline). Companies now require subsidy via cuts in taxation and cheap selloffs of national assets if there is to be a healthy private sector.

2) The other source of growth is more difficult to attain, but involves squeezing more out of workers for less in return – hence cuts to out of work benefits, destruction of the influence of unions, use of the reserve army of labour to hold wages stagnant, legislating to increase casualisation, precarity, and thereby what we might call ‘labour market flexiblity’ – or more cynically, ‘things which make it easier to pay us less’.

3) The biggest benefits of these kinds are more attainable at economies of scale for developed, finance capitalist ‘big business’ than for shopkeepers. Empower ‘big business’.

4) The combination of the elements above makes it necessary to break from the Conservative political tradition of ‘One Nation’ ‘consensus politics’, and therefore given the emergent contradictions driven by lower rises profits, capital must attack labour directly and poltically.

All of these are assumptions of Thatcherism, but also themselves based on the observations of Marxism, in the sense of the domestic economy at least. It might be worth adding a fifth point that everything directly productive must be outsourced to low wage economies under authoritarian regimes, e.g. China, and a sixth about the strategic objective of totally gutting social democracy / creating a hegemony of the New Right – both of which shore the whole thing up.

What does this mean about Tory views on low pay?

In short, everything. It leaves us asking questions about the likes of Mr Hancock and the ‘liberal conservative’ wing of the Tory Party. Where are they, politically?

In my view, what looked like a victory for the Heseltine / Clarke tradition of the Tory left in the election of David Cameron was nothing of the kind. It was actually the nail in their coffin. They have now been effectively been replaced with drys who dress as wets, backed up by an insurgent Tory right who see it as their job to seal this deal, and are a lot more perceptive than they make out. As they see it, the Tory Party as a whole has succeeded in gutting Labour – they are now on a mission to rid the Tory Party of its genuine left.

I suspect that part of Matthew Hancock’s motivation is in the utterly transparent ‘strivers v skivers’ wedge that Cameron aims to drive into Britain’s working class as a whole. The idea that Tories are pro-pay is a useful one, because it actually cements in place the proxy-attacks on it they are making by trying to replace workers with welfare claimants who will work for less, or if forced, completely gratis.

This is, of course, nonsense – which is exactly why it needs some diversionary rhetoric.

But secondly, maybe Hancock actually believes what he is writing?

Capitalism is always stronger when the link between effort and reward is stronger, at every level of the income scale. That’s why, in the past, I’ve railed against rewards for failure for the highest paid. Now we must deliver rewards for success for the lowest paid.

This is out-and-out Wilson style social-democratic reformism. It would have been just as at ease in the party of MacMillan or Eden. But the same rhetoric, in justifying the attack on welfare claimants, is part of what is helping to completely throttle that tradition.

Tories on the genuinely moderate wing of their increasingly extreme party are stuck in a confused mental eddy in wider history, and their number is tiny.

They want to move with what they seen as a One Nation style Cameron Conservatism, that actually means delivering better lives for the targets of austerity, whose impoverishment is necessary for austerity to work – the ‘nasty medicine’ that ‘the patient’ ‘must take’.

The offer of a Tory left including Cameron’s platform is completely false – an inherent lunacy. Cameron and the so called moderates of the Conservative Party owe so much more to its inverted-Marxist right than they do to its paternalist left.

If Tories like Hancock (or indeed Heseltine or Clarke) genuinely want a capitalism that raises living standards at the bottom, it would have been necessary to kick up a much bigger stink in a much more organised and factionalist fashion, a long time before now. His article, which is serious and worthy of consideration by conservatives, will amount to little more than a murmur. Sadly, it is a day at the office.

The part of the Tory Party which actually wants low-paid workers to do better speaks from history’s landfill. The worst part? They never even realise they are there.

Pay is stagnant. Living costs are up. Tory policies have exacerbated and encouraged this ongoing process. Usually, they have done so as a deliberate political objective – however nicely Cameron sells it all.

I won’t go into Labour here, but in my view only a well organised and modern workers movement can create a context for reform, now. It could do with allies in Parliament.