£1 A WEEK - THAT'S WHAT IT'S WORTH AMID ALL THE FUSS about Denis Healey's Rudget, one thing is quite clear: the actions - or lack of themof the Labour Government are viciou- On averuge, by contrast the price of sly hitting low paid families in Britain.
The situation is so bad at present that the real increase in the cost of li low paid is further underplayed by ving of low paid families is systemati. the exclusion of the richest and the official figures. The tax und social sec. Survey. But it is the poorest who sufurity situation is so bad that when low fer the highest rates of inflation paid workers win an increase in mohcy wages it may actually lead to a fall in their real Income.
'COST OF LIVING' FIDDLE Even the official cost of living fig ures, which the Labour Government has never challenged, show the present rate of intlation running at 20% This hits particularly hard at the 3 million men and 4 million women who, according to the latest earnings survey, carn below the t30 a week supplementary benetits level for a two child family. What is not so gencrally realised, however, is that the official figures on inflation greatly underestimate the effect of inflation on working class living standards. Above all, they underestimate the effect on the low paid, A recent investigation into Poor Families and Inflazion by the Child Poverty Action Group worked out That low incolne families spent 44 per tion whatever of moving to any such cent of their budget on food and 25 percent on housing. But according to the afficial Family Expenditure per cent on housing.
areas that prices were rising fastest.
Between January 1970 and January 1974 the official Retail Price Index showed rises in food prices of ol per cent, in fuel and light of over 30 per cent, and in housing of 50 per cent durable bousehoid goods like washing machines and cookers rose by only 29 per cent.
The real impact of inflation on the cally concealed by the Government's poorest from the Family Expenditure especially the old and disabled, and harassed mothers who have to use the corner shops rather than supermarkets and out-of-town hyper-markets, and thus miss out on the cost-saving of bulk buying.
Not only does the Retail Price Index contain fur coats and jewellery: but it also lumps together mincemeat and oysters in the same category Similarly public and private transport are not separated, and rents and mortpapes are put together.
In Italy and France the fiddling of the price index is so blatant that even functionaries of the various institutes of statistics have denounced it themselves. In Belgium the trude unions have often campaigned against the "top hat index', which included that item in an index on which increases to compensate for inflation were to be calculated.
The only way to stop such goings on is for the establishment of a price index drawn up by the trade unions. wilich can monitor prices for the use of the workers movement in calculating the true rise in the workers' cost of living. Healey, precisely because he knows the effect of this, has no intenindex.
THE POVERTY TRAP While the fiddled cost of living act of inflation on low pay, a second Until very recently, it was in these hidden attack is the effects on the low paid of the tax and social security policies which Labour has maintained. These form the vicious circle of the One pound a week-that's what the social contract is worth! At least that's the swe of the pay increase that Leslie Sillitoe, National Secretary of the Curamic and Allied Trades Union, tried to sell under the guise of the con-trick to a mass meeting of thousands of pottery workers in Stoke-an-Trent on 7 April Not supasingly the offer met wid derision even from this traditionally nonmilitant group of workers Pollery workers are one of the lowest paid groups of industrial workers with a wape level some L20 below the national average.
The first part of the poverty trip is the way in which taxation works. As inflation soars moncy wapes go up, but without real income rising ar all. However taxation is carried out on money and not real income. The result is that, for example, money ineoine may go up by E? without real income poing up at all, but taxation a carried out un though real income had increased by f3. The result is that the standard of living at which people begin to pay tax continually falls:
In fact the value of the tax "threshold has dropped consistently in real terms since the mid 1960s When it was raised by the Labour Government in April 1974 it was still [1.69 lower in real terms for families with two three and four children than in 1972. In this situation a low income family raising its money carings to keep pace with intation can easily find it. self worse off after a pay increase spread over the coming year, By rejecting the proposed settlement and refusing to be intimidated by Sillitoe's talk of the social contract, pottery workers have taken an important step forward in the fight against low pay. The Onion executive must now go back and resume negotiations on the Basis of the original "Masch Notice" claim Unfortunate, while calling for a "suhstantial increase, this did not specify Low pay hits the aged and the children of the poor Than before The Economi of 12-18 April estimates that 50,000 poor familics (probably nearly a quarter of a million people) now uctually lose money witlt every 41 they carn, since they have to pay 33p in tax on it and Lose more than 67p of means tested henefits through it' Health and Social Security estimated that 450,000 families would be subject to a potential marginal tax rate of more than 50p in the pound (Hansard, 10.6.74) Of these families 249,000 were receiving less than 130 .. weck in wages. The tax threshold is now bejew the level of income at which families become eligible for Family Income Supplement. prodicing the absurd situation where famil les officially delined as poor are paying high rates of tax.
THE MEAL SNATCHER case anyone escapes the taxation a particular figure The following clear demands should be put to the employers Tederation: -a E20 increase oo basic satos lo bring the pottery warkers up to the anticont average wage: extension of the tueshold agreement and its transformation into a sliding scale of wages which will give mutomatio protection of real wapes against every increase in the cost of living. teeth, there is yet one more attack As money incomes rise in response to inflation, many families lose their elupbuity to Family Income Supplem ent. in bur this means that they lose the right to free school meals, free prescriptions. free dental and eye treatment, and free wellare milk for In Augast 1974 the Department of young children and expectant moth ers. Hit the sick, the children, and the pregnant that is what the Sucial Con-trick tolerates.
The way to end this situation is very simple. All taxation on working Class wages should be abolished, free schoul meals should be available to ail, all health charges should be cholished, and a sliding scale of wages and benefits, calculated on a working ible through a planned socialist econ pod of the profit system.
The employers federation will no doubt tease to want sucslanta! increases on the grounds that they would he outside the guidelines of the social contract Thisis when the roal fight will start. The only way rorward for porters workers against lou pay is dough the decisis smashing of the social contract.
Jason Hill Geoff Loveless
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Survey for 1973, average households pent 24.4 per cent on food and 13.5 index conceals much of the real imp-
class cost of living index, should be implemented. All this is casily poss
omy. Instead Healey will continue to Finally in the poverty trap, just in sacrifice the low paid to the great