TWO days ago my state pension went up in lockstep with the inflation figures for last year.

Useful, if not really keeping pace with the basket of price rises that devalues the average pension, but, raised in line with the Tories’ electorally effective “triple lock,” it is an effective marker of the ways in which the weekly income of working people and pensioners loses its value.

But it is not a bloody “benefit” — at least in the reworked meaning of that word. I paid for it with National Insurance deductions from my wages over decades. The proof is brought home with the carefully annotated reminder that my state pension is a bit higher than otherwise might be the case when I paid Barbara Castle’s enhanced State Earnings-Related Pension (Serps) contribution.

This scheme started in 1968. Serps offered workers who paid the full National Insurance contributions a pension of 25 per cent of earnings on retirement. Still well below the norm for comparable developed countries.

Twenty years later, Margaret Thatcher introduced the pernicious “contracting-out” scheme which encouraged workers to divert some of their National Insurance contributions into a private pension scheme incentivised by a reduction in their Serps contributions.

The profit-taking scam that is the private pensions industry, vastly encouraged by the neoliberal governments from Thatcher to today, is shrouded in mystification. But even the innumerate know it is a risky enterprise, as evidenced by the stock market shivers during the coronavirus pandemic.

The fragile security of everyone in a pension scheme underwritten by the continued stability of the capitalist system is illustrated by the BHS scandal when former racing driver and bankrupt Dominic Chappell bought the ailing retail chain off its billionaire owner Sir Philip Green for £1.

Predictably this speculative manoeuvre failed and, brought up before the beak by the Pensions Regulator, our valiant merchant adventurer offered in mitigation a variation of the spiel every dodgy businessman makes when it all falls apart: “I’m not Phillip Green, sitting on a £100 million yacht in the south of France, who just wrote a cheque for £350m to make the problem go away.”

Buried in that pathetic exchange is the reality that the rich are rich enough not to need a pension plan and they have absolutely no regard for the level of the state pension and even less for the contributory basis on which our attenuated National Insurance scheme was once based.

The reworked meaning of the term “benefit” is a measure of how much the poisonous ideology of neoliberalism has degraded the language itself.

Where once in this context “benefit” meant the virtuous consequences of the prudent management of a universal scheme based on collective action and presumed equality, it is now freighted with negative connotations.

The post-war era of more or less full employment meant a universal social security system funded by contributions from earnings was a relatively low-risk operation for the state with the added ideological bonus that it underpinned reformist ideas and class collaboration.

But the ever-deepening economic crises of late capitalism and deindustrialisation have undermined job security and the weakened bargaining position of workers — added to by anti-union laws — shifted a larger portion of the workforce into low-paid, super-exploited and precarious work.

It is in these conditions that capitalist ideology focuses on the so-called “moral risk” that benefits supposedly encourage. Thus the billionaire press and TV present a whole host of negative associations. On Benefits Street there live only “scroungers,” “skivers” and the “work-shy.” Not unpaid carers, the ill, disabled, distressed, deskilled and worn out.

The increasingly restrictive and regressive social security regime is a direct instrument of the state acting to shift further the balance of class power in favour of the bosses.

Over recent decades the social security system has been wilfully weakened. In 2021 the New Economics Foundation revealed that the poorest fifth of households — in or out of work — were £750 a year (6 per cent) worse off than they would have been in 2010.

This was no blip. The poorest demographic in Britain’s working class has suffered a £4,500 raid on the family finances since the start of the coronavirus crisis. Findings by the National Institute of Economic and Social Research show that the price rises outstripping pay levels means that the standard of living for half the poorest households in Britain is 20 per cent lower than in 2019-20.

The further down the income scale, the more family spending is concentrated on the basics — energy (increasingly unaffordable due to the effect on global gas prices arising from the sanctions imposed on Russia); rising food prices and the double whammy of Treasury-imposed interest rate rises and the knock-on in rents.

The overall picture for the poorest one in 10 families is an income drop of 18 per cent below the 2019-20 levels.

Rishi Sunak’s sunshine rhetoric celebrates inflation falling to 4 per cent from the earlier high of 10 per cent. For the richest man in Parliament, a 4 per cent increase or a 10 per cent increase in prices is equally meaningless. For working people, it spells both spell privation and poverty.

The government’s tax-cutting rhetoric is targeted at people who resent paying taxes. While this tranche of deluded public opinion is fairly widely distributed throughout the class structure, tax-cutting policies have particular resonance among those who are self-employed and small businesspeople.

The key part of the Tory electoral support — a demographic that sees itself set apart from the common herd; who aspire to send their children to private school; rely on private health insurance by choice rather than necessity; are able to accumulate property and accumulate wealth other than through paid employment and do not anticipate relying either on the benefit system or the state pension, are carefully nurtured.

Of course, there are very many people who are unlikely to gain admittance to this privileged and cosseted company but there are always those who see themselves as temporarily embarrassed aspirant middle class rather than downwardly mobile wage slaves.

The National Insurance system grew to maturity with the post-war Labour government. This is where the notion of benefits acquired a generally positive meaning.

For the first time millions of British citizens — in return for a weekly contribution — were able to benefit from a guaranteed subsistence income in the face of domestic disaster, unemployment and bad health, as well as access to the newly formed NHS, a rising school age and the burgeoning council house sector.

In the decades that have followed, the proportion of income derived from worker’s National Insurance contributions — payments that fund the total benefit system — has declined, and an increased proportion of the costs are met from general taxation of which consumption taxes like VAT have a uniform and therefore unequal effect on rich and poor alike.

The distinction between income tax and National Insurance contributions has been deliberately blurred to undermine the contributory principle and the notion of social solidarity that the system originally embodied.

Thus the National Insurance cut that was introduced earlier this month was presented by chancellor Jeremy Hunt as a tax cut. This was smoke and mirrors. Far from being a generally positive change for the lowest earners, workers need to be earning over £26,000 a year to get much benefit (government figures show the median average wage across all industry sectors in Britain is around £28,000).

National Insurance contributions — paid by everyone earning over £12,570 a year — confer the right to a state pension or unemployment support. Jeremy Hunt cut them from 10 per cent to 8 per cent.

With a 10 per cent rise in the minimum wage, Hunt’s con-trick lies in the failure to raise the earnings level at which tax is levied. This so-called “fiscal drag” means workers who previously retained a bigger proportion of their relatively low earnings are now captured by the PAYE system or are now made to pay a larger sum.

The Institute for Fiscal Studies calculates that every £1 workers gain from the National Insurance cut is offset by £1.30 gathered in higher taxes.

The bigger con-trick is, of course, the profits system itself. If workers ended their weekly philanthropy, the gift of their unpaid wages to the employing class, then the full social wage — free education, childcare, affordable housing and fully funded universal healthcare — all become possible.

Nick Wright blogs at 21centurymanifesto.wordpress.com.