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On Tax Credit Although the Family Allowance Campaign has been taken up enthusiastically by womens groups around the country, the womens' movement has still not really come to grips with analysing the whole Tax Credit System in terms of the strategy of the government and the political implications that flow from this. The article in the last Socialist Woman, whilst putting the discussion on the widest political basis was full of misconceptions about the nature of campaigns, legislation, revolutionary and reformist demands, and did not really contain any ideas for our way forward. While not attempting to make a full analysis of the Tax Credit System etc., I hope in explaining some of the misconceptions made by Nellie Gate, to throw up other ideas about current policy of the government as regards to tax etc. and the importance it has for the working class. Purpose of Tax Credit System When discussing the political implications of the tax credit system, it must be seen as part of the whole strategy of the government against inflation and its attempts to alter the balance of class forces. In order to halt the decline of profits it is necessary to decisively defeat the working class. In order to isolate the less well paid workers from the more militant sectors, Heath is arguing that wage increases which go mainly to higher paid workers do nothing to help low paid workers who do not have the same bargaining power. According to Heath, this in fact worsens their position because high wage increases cause inflation which hits hardest at the lowest paid. In this way he hopes to win over the lower paid. Heath's strategy can be summed up in two parts 1) Introduction of legislation and other measures to curb working class militants. 2) Bash militants — offer crumbs to lower paid in face of rapid inflation in order to convince them that the Heath government is acting in their interest.
What are these 'crumbs"?
NOT wage increases for the lower paid, i e national minimum wage, as that would make inroads into the employers' profits, BUT tax credits, family incomes supplements and housing rebates.
Where does this tax come from?
Most taxes are drawn from the incomes of workers. therefore higher paid workers are subsidising lower paid workers. In fact they are having to be responsible for the inability of capitalism to provide even bare minimum living standards for sections of the working class. It is in this way we must look at the Tax Credit system. The introduction of the tax credit system serves the interests of the ruling class not just because it's a rationalisation of labour and a streamlining in administration though clearly this is an important factor (the Green Paper para 7 says 'the proposals for TCS as outlined in this Green Paper would enable an eventual saving of some 1015,000 civil servants to be made. It is hoped that these reductions in staff can be achieved to a larger extent through the procss of natural wastage").
But the TCS also represents the current strategy of the government towards low paid workers: the attempt by the government to pose as the provider?) of the lower
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paid family against inflation caused by militant trade unionists. This will take the form of benefits to the lower paid. Family allowances, at the moment a non-means tested right will be replaced by a wages-tied means tested benefit from the TCS. The Housing Finance Act as well as putting rent prices back on to the open market means that the rent of the lower paid workers will be subsidised by that of higher paid workers. The Family Incomes Supplement used at the moment to supplement families with an income of El 5 or less may be increased if necessary. The bourgeois press are approaching this line enthusiastically. The Sun's main headline on Friday, 7th July reads Heaths Helping Hand-out' and talks about the increased aid in the forms of family incomes supplement for lower paid families. The Guardian, 7th July says *the clear signs last night were that ministers had agreed at yesterday's cabinet meeting to grit their teeth and soldier on with stage 3 counter inflation talks with the TUC and the CBI in the hope that interim action would not become necessary before the end of stage 2 in Autumn.
If they are forced to give an increase, family incomes supplement is the quickest, cheapest and simplest method of protecting the poor. This means that although the government is hoping some form of agreement will be reached by the TUC and the CBI because of rapid inflation which could result in militancy from the lower paid it may be forced to act, Then it will do this in the form of more handouts by means-tested benefits to the lower paid. Tax credits will be tied to wages, this means that people not earning will not receive credit. Unsupported mothers, strikers wives and families among many will have their family allowances, which they now receive as a right replaced by a benefit which may be withdrawn at any time. Obviously this has important implications. The sa me system which says the housewife must now be completely dependent on her husband, also tries under the new TCS to force unsupported mothers to seek dependence on some man. As regards strikers" wives and families, they will now become completely dependent on social security. This is all part of an attack on militants to remove their only source of survival during a strike. Apart from the intimidation it causes to potential strikers, it also has the potentially reactionary aspect of reinforcing the division berween a striker and his wife, between the point of production and the home. The psychological value of removing family allowance will have the effect that HIS ACTION at work will determine what happens to HER MONEY.
Nellie Gate takes up the point of organising in the home as follows:- the attack on our housing conditions and living standards in the home represent attacks where we are least organised. That is why the government and big industrialists have suggested this because they think they can get away with it! If our wages and living standards are being taxed in the home where we are most vulnerable, then it is here that we must organise."
Of course we must organise wherever attacks are made and this means in almost every area of our life. But this does not mean we completely by-pass the trade union movement. It is essential that the working class organise not simply at the point of production but also in the community around questions of housing, nursery and launderette facilities, prices ete. But the organised labour movement must begin to take the responsibility for fighting back in all areas of essential life and in other aspects of the class struggle, particularly from the point of production. Organisation at the point of production has far more essential weight quite simple because there profits are affected - and that is what counts/ Of course there are legitimate forms of struggle such as rent strikes, occupations, ete., - but if we actually examine the rent strikes against the Housing Finance Act not one of them was successful. What can tenants de if the police move in and take off the militants. Compare their relative helplessness to the