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A system bent on self-destruction

So Steve Bundred, chairman of the Audit Commission, wants a public sector pay freeze, describing it is a “painless” way to make some of the spending cuts that, according to accepted wisdom, are required to balance the government’s books. His remarks not only demonstrate a breathtaking arrogance but a bankruptcy of thinking as the economic crisis deepens.

Bundred is a civil servant, appointed to run an unelected body whose job it is to drive “efficiency” (translate this as jobs cuts) and “value for money” (more of the same) mainly in local government. It is not within his remit to make or advocate public policy like he did in an interview with The Observer over the weekend. Any half decent government would have slapped him down/fired him by now.

Not New Labour, however. Bundred was flying a kite for the government, which chancellor Alistair Darling has picked up and is running with. Darling followed Bundred by declaring: “Public sector pay obviously has got to reflect prevailing conditions and, in particular, inflation has come way down.” He said the government would decide its pay policy “over the next few weeks”, hinting that a freeze was in the offing.

The Tories are beginning to fall in line, with today’s Daily Telegraph declaring: “Mr Bundred should be congratulated for kick-starting a discussion stalled by the cowardice of politicians. The public wants an urgent debate about how and where the inevitable spending axe will fall, and where taxes will hit. Now it has begun.”

What has actually started is a war on working people through unemployment, pay cuts and attacks on public services. A pay freeze is, in reality, a reduction in take home pay as prices for everyday commodities like food and fuel continue to rise. BT staff are being asked to take a massive 75% pay cut just to keep their jobs for a year, while British Airways workers are being urged to work for nothing for a month!

There is no question, however, of the sacrifices being shared out. Bundred, who has made a long journey from the early 1980s when he was a leading left-wing member of Ken Livingstone’s pioneering Greater London Council administration, will go on collecting his £230,000 a year salary. There is an allowance of up to 10% for “performance-related pay” top-ups, so he wouldn’t even notice a pay freeze.

The fact is that, even within the framework of capitalist economics, none of this will help restore the battered economy to some sort of normality. In fact, quite the reverse is true. The less purchasing power workers have, the fewer goods that are bought, the more jobs that are lost as a consequence, the deeper the overall crisis gets. This is ABC economics.

But capitalism knows no other way. If profits are to be sustained, and public spending balanced, then the main targets are pay, jobs and services. In that sense, it is a suicidal system, driven towards self-destruction at our expense.

There is another way, however. At present, the British state is the political extension of corporate and financial power. That is why the banks are bailed out while the state itself is bankrupted, and why corporation tax at 28% is the lowest of any of the developed capitalist economies. While economic and financial power remains in private and/or state hands, clearly we do not have the means to make the ruling classes pay for the crisis instead of ordinary people. Altering that state of affairs is what we have to turn our attention to.

Paul Feldman
Communications editor
6 July 2009

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