1920s >> 1927 >> no-277-september-1927

What the Labour Party wants

In the Labour Press Service (August 3rd) is a critical summary of the activities of the Government during the past parliamentary session. The Conservatives are condemned, and we are given the chief Labour proposals which, because they were “aimed at helping the working classes” were “overwhelmingly rejected by the Government and their Tory supporters.”

We need not waste much time over the record of the Conservative Government. They were elected by voters—mainly members of the working class—who want Capitalism and who prefer it to be administered by the Conservative Party. The Conservatives have, naturally, looked after the interests of their own section of the propertied class, and if this has not been approved by those who voted for them, the latter will presumably register their dissatisfaction at the next election.

Now for the Labour Party’s case against the Government:—

“What is the record of the session as it affects the workers ? Firstly, their wages have gone down by nearly a quarter of a million pounds a week. Secondly, scores of thousands of them, having been deprived of their unemployment benefit, have been driven either to the workhouse or to the Relieving Officer. Thirdly, the Government grants in aid of relief work have been cut down by one half, and thousands of willing would-be workers have consequently been turned on to the streets. Fourthly, relations with Russia have been broken off, and many orders for British factories have thereby been jeopardised. Fifthly, the balance of £12,000,000 which stood to the credit of the road fund has been grabbed by the Chancellor of the Exchequer, and many millions of pounds’ worth of employment on road-making has had to be cancelled. Sixthly, several new taxes have been imposed upon the workers—notably on crockery, tobacco and matches—and all the food taxes have been re-imposed.”

This is a formidable-looking list, and to it have to be added the Trade Union Bill, and one or two other non-financial measures.

The Labour Party in the House opposed all of these, and claims credit for the fact that when they were in office wages went up instead of down. Had they remained in office another year they would have abolished entirely the “iniquitous” sugar tax, and reduced the tax on tea.

Now let us examine the value of the aims the Labour Party has set before itself, itself.

First, there is the increase of wages during the Labour Government’s term of office, contrasted with the decline this year. The Labour Government began in January, 1924, and ended in October, covering eight completed months from February to September. During those months the average of the Board of Trade cost of living indices was 73 per cent. (approx.) above the 1914 level, as compared with 72 1/3 per cent. (approx.) for the same months of 1923. As a result of this slight rise in prices, wages tended to rise, the nett increase being about £500,000 per week.

The average cost of living index for the 6 months from February to July, 1926, was approximately 70 per cent. above the 1914 level; and for the 6 months ended July, 1927, approximately 67 per cent. In consequence of this fall in prices since 1926, wages have fallen by about £250,000 per week. We see, therefore, that this particular claim made by the Labour Party is an empty one. The purchasing power of the workers’ wages was not appreciably different under the two Governments; and in view of the fact that neither of them made any change in the economic organisation of the country, this is as we would expect. The change of Government had no more effect on wages than it had on the weather.

With regard to point number (2) regarding unemployment pay, it is interesting to recall that, under the Labour Government, owing to a tightening up of the administration, many thousands of unemployed workers were deprived of out-of-work pay.

As grants in aid of relief work for the year 1926 amounted to about £6,500,000 (Labour Year Book, p. 88) it would appear from point (3) that the Government has cut down that expenditure by about £3,250,000.

The Conservatives for political reasons broke off diplomatic relations with Russia; the Labour Party would resume them. From the Road Fund, £12,000,000 which might have provided a certain amount of employment on road repairs, has been allocated for other purposes. Sixthly, new taxes have been imposed on crockery, tobacco and matches amounting to a total of about £4,000,000 (Labour Bulletin, May, 1927).

The sugar tax amounts to less than £20 million and the tea tax less than £6 million. These the Labour Government would reduce or abolish. Adding together the various items mentioned, we find a grand total of £45 million which is the kernel of the dispute between Labour and Conservatives. It is assumed by the Labour Party that taxes are a burden on the workers and that they would gain from tax reduction. In fact, this is quite untrue. Even if we assume (which is not always or necessarily the case) that prices fall as taxes are reduced, the workers do not gain thereby, because wages fall correspondingly. In the Ministry of Labour Gazette (July) figures are published showing the movement of prices and wages from 1920 to 1927. Taking March in each year the following gives a rough comparison of the “average percentage increase in weekly full-time wages” and the “average percentage increase in cost of living”— both based on the 1914 level:—

Wages Prices
1920 130-135 130
1921 160-170 141
1922 100-105 86
1923 70 76
1924 70 78
1925 75 79
1926 75 72
1927 75 71

As will be seen from this, during the first year wages and prices were both about 130 per cent. above the 1914 level. In 1921 and 1922 wages were ahead; in 1923, 1924 and 1925 prices were ahead; and in the last two years wages were slightly above the price level again. On the whole, wages followed prices fairly closely. The purchasing power of the workers remained almost constant. Remission of taxes, if it caused lower prices, would benefit not the workers but their employers, if prices remained the same, the manufacturers would benefit. If this were not so the employers and the manufacturers of the articles affected would not constantly be agitating for lowered taxes. Taxes are a burden on the propertied class. The struggle is an internal one, each group of capitalists trying to “pass it on” to another group. This is the non-working class issue on which the Labour Party concentrates its attention.

But let us put aside for the moment the question as to who pays the taxes. Let us suppose that this sum of £45 million is, as the Labour Party says, a burden on the workers. Still, the Labour Party deserve condemnation. They seek the support of the workers to fight out the question of this £45 million. It is the chief plank of the more permanent part of their programme. On it they fight tenaciously, but on the question which matters they are forever silent. The amount of unearned income, calculated for the purpose of the income tax is about £1,200 millions per year (The National Income, 1924, Bowley & Stamp, p. 47). The Labour Party will put up a strenuous fight for £45 millions, but have nothing to say about the £1,200 millions. They strain at the gnat and swallow the camel. The expenditure on unemployment pay and Poor Law Relief is less than £80 millions a year all told, yet in face of this £1,200 millions pocketed by non-wealth producers, the Labour Party can only charge the Conservatives with failure to spend a few millions on the unemployed.

The Socialist case is fundamentally different from that of the Labour Party, We point to the fact that out of the wealth annually produced by the workers a large proportion is retained and consumed by the employing class merely because they are property owners. Professor Clay states (“Manchester Guardian,” Feb. 19, 1925) that 94.5 per cent. of the population receive only 56 per cent, of the national income. This is due to the fact that the means of wealth production are privately owned. The same authority declares (“Daily News,” Aug. 2, 1927) that 76 per cent. of the population own only 7 per cent. of the capital of the country, while 6 per cent. own 81 per cent. of the capital. The workers are poor because of the existence of a wealthy class living by owning property. Our aim is to dispossess that class. The aim of the Labour Party is to dicker about a paltry £45 million. If every one of the points mentioned here were to be put into operation by a Labour Government, the workers would still be wage-earners, producing wealth for the propertied class. They would still be poor in the presence of the power to produce wealth in abundance. The choice for the workers is between Socialism and Capitalism. If they choose Capitalism, it matters little whether it is administered by Liberals, Conservatives or the Labour Party.
(Socialist Standard, September 1927)

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