Tory manifesto: Keep them out of government!

The Tories unveiled their manifesto yesterday. Peel away the 'back of the envelope' people power puff, and what remains? The same Tory policies we'd all expected:

Redistribution of wealth . . . to the rich:

• Raising the inheritance tax threshold to £1m will cost the Exchequer hundreds of millions in lost revenue from relatively wealthy people. It is a regressive tax cut that benefits only a wealthy few
• Likewise cutting the proposed rise in national insurance, described as ("Labour plans to raise the Employees’ National Insurance Contributions (NICs) for everyone earning over £20,000 by 1 per cent") neatly obscures the fact that there is also a 1% increase for employers, which the Tories will also cut. While, due to the ceiling at around £35,000, NI is a regressive tax - cutting employers' contributions is redistributing wealth to business
• The manifesto also promises "we will cut the headline rate of corporation tax to 25p". Bear in mind when John Major left office after 18 years of Tory rule it was 33%, and Labour has cut that to 28%. This is a massive redistribution of wealth to big business
• Raising the stamp duty threshold to £250,000 is a tax cut for those buying their own home, but the manifesto says nothing about the 1.8 million families on council house waiting lists

Elsewhere there's the promise to freeze public sector pay in 2011, and "address the growing disparity between public sector pensions and private sector pensions" - which I'm guessing doesn't mean improving private sector pensions . . .

They also promise to cut the bulk of the deficit over a Parliament (i.e. going further than Labour). So, like Labour, it's cuts, cuts, cuts - but with some more redistribution to the rich and powerful sprinkled on top.

Labour Manifesto: A future fair for all?

Lord Mandelson promised it would be a "pro-business" manifesto, and described it yesterday as a "Blair-plus" manifesto. It certainly looked that way with promises to cut £6 billion of regulation on business by 2015 and keep business taxes "competitive".

Considering New Labour has already cut corporation tax from 33% to 28%, which over 13 years has cost the Exchequer £50 billion in lost revenue, it makes it galling that business is bleating about an extra 1% of national insurance.

The Manifesto refers to "the recession created by the financial crisis" but it seems to be mainly public sector workers who will be paying for it. The manifesto refers to "tough choices" (i.e. cuts) on public services, and commits to £15bn efficiency savings (i.e. cuts) in 2010-11, and a further £11bn by 2012-13.

There will also be a 1% cap on public sector pay in 2011-12 and 2012-13. Bearing in mind inflation is currently 3.5%, public sector workers are being promised a real terms pay cut for another two years.

The manifesto also promises a £20 billion programme of asset sales (i.e. privatisation) by 2020.

There will also be more outsourcing in the running of services, with "greater support for third-sector organisations in competing for public-sector contracts" and "if the local school is underperforming it will be taken over" (hinting at more City Academies).

There is of course the same rhetoric about protecting frontline services, but the "tougher than Thatcher" cuts that Darling talked about, and the scale of cuts to halve the deficit, are still hidden it seems . . .

There were however some good things in the manifesto: the National Minimum Wage will rise at least in line with average earnings in the future, which is very welcome given that the last 3 years it has risen below inflation.

Also the Government will implement the living wage (£7.60 per hour) across all government departments - which will be good news for National Gallery workers who have recently been on strike.

The manifesto also promises to keep the Royal Mail in the public sector, re-link pensions to earnings, and double paternity leave to four weeks.

The only mention of the tax gap comes under section on 'global future': "Further action will be taken to strengthen developing countries’ tax systems, reduce tax evasion, improve reporting, and crack down on tax havens."

Tax evasion, avoidance and non-collection costs over £120bn here in UK – now that really could tackle the deficit and be 'fair for all'

Uncertainty grips the markets

The value of the pound fell in response to the official launch of the election campaign as foreign exchange markets reacted to the distinct possibility that it could produce weeks of wrangling over which leader or leaders and which party or parties are left in charge of the British economy.

It’s not that dealers are consciously “sending a message” to the electorate or even the candidates, though that is how their actions are translated into news reports for public consumption and interpreted by the contending parties. Market traders are directing their attention to the single-minded pursuit of profit.

It is their perception of the actual and likely trajectory of political change that affects and responds to actual and predicted movements in the relative price of currencies on international markets. The same logic determines the price at which government bonds change hands, and the interest rates attached to them.

As the period of profit derived from the growth of globalising corporations waned in the 1990s, world economic expansion became increasingly dependent on credit to fund both the production and consumption sides of the equation.

This coincided with the coming to power in Britain of New Labour. Gordon Brown was its Chancellor for most of the period, single-mindedly working to build relationships with the heads of the global financial institutions by turning the City of London into the world’s most attractive place for them to do business.

And the business was credit. Britain became a central hub for financial transactions. As time passed, the balloons of fantasy finance needed to keep the global capitalist economy from shrinking were inflated to unsustainable pressure.

When all that collapsed, Brown was to the fore, leading the world in shoring it up again through the invention and deployment of new, ever more fantastic sources of credit. Britain’s personal, corporate and government combined debt in relation to its annual output exploded, surpassing every other country.

But now it is payback time. Investors who bought government bonds with credit given to them by those very same governments want to see some return on “their” capital. The concern is that the debts have grown so high that they can’t be serviced, let alone repaid. Just like the default on sub-prime mortgages that triggered the collapse in 2007. Only on a much grander scale.

Payback will require governments to inflict unprecedented pain on their electorates. Investors, speculators and market traders will only put their money into places where governments show the greatest determination to extract the value needed to service their debts. An indeterminate election on May 6 is not what the markets want and it shows itself in currency gyrations.

Even where there seems to be agreement to slash state budgets, popular resistance is throwing governments off balance. The Greek government is already wavering in its determination to impose the recently-agreed austerity programme on its restive population. Iceland is in a political limbo following the overwhelming rejection of the terms of the repayment of its debts to the British and Dutch governments.

The conflict between the masters of the global economy and their political pawns on the one side and the mass of the population on the other is certain to mount. Strikes are growing in frequency and intensity throughout Europe, whatever legal obstacles are put in their way by the state.

Britain’s general election will not settle any of these questions because they reflect the deep divisions and insoluble contradictions at the heart of capitalism itself. New systems of democracy that put people in ownership and control of society’s resources are posed as the only practical way out of this impasse.

Gerry Gold
Economics editor
www.aworldtowin.net
7 April 2010

Know Your Enemy

With the General Election to be called for 6th May, the dividing lines are becoming increasingly clear.

Business is clearly backing the Tories to deliver the attacks it wants. The traditional Tory allies are backing their people again, with an attack on the moderate increase in National Insurance over the bank hoiday weekend. It was the usual suspects: the BCC, CBI and a ragtag of non-dom, billionaire executives who avoid tax as if as of right, and then complain about the tax burden.

Just as the Sun decided it would back the Tories, when they were leagues ahead in the opinion polls, big business likes to back winners.

As LEAP has pointed out, New Labour has embraced the neoliberal economic orthodoxy in its 13 years. Even now, it is not talking about making the rich pay.

However, Labour has increased the top rate of tax to 50% and is proposing to raise NI (a progressive tax). The fact that the Tories are unashamedly lining up with the bosses against even these moderate measures - and with the Murdoch press - has not served them well in the latest opinion poll in today's Guardian, with their lead reduced to just 4 points.

Does this show that Tory support for big business is damaging them (down to 37%)? If so, it should tell New Labour that being Labour might be popular. If Labour is to win it needs a decisive break and to start putting people before its rapidly deserting wealthy friends.

Government in shock move to cut emissions

In a shock move today, New Labour promised not only to make a commitment to significant reductions in greenhouse gas emissions a central plank of their election campaign but also to withdraw subsidies and tax breaks from fossil fuel corporations and transfer them instead to developing renewables.

“It’s a no-brainer,” said energy and climate change minister Ed Miliband. “The planet is under threat – people are facing actual death as a result of climate change, human society will not be able to survive the disruption and misery – what else can we do but act, and act now.”

Miliband promised to make Britain an example for the world, including working for a new climate change agreement that focused on justice not only between countries, but within them as well. He admitted that the “energy” part of his brief had for too long relied on the fossil fuel, nuclear and power marketing corporations to deliver the reliable and sustainable supply people need.

“It hasn’t worked, though, has it? They have taken the profits and failed even to build enough storage for gas to get us through a cold winter. They don’t care if the price goes up – they just pass it on to the consumer. The time has come to take things into our own hands.”

As well as promising to take the energy generation and supply industry back into public ownership in short order, Miliband announced support for a new generation of local energy initiatives including:

* Combined heat and power plants (CHP) to provide electricity, heating and cooling. This will enable waste heat from one building to be used in another that needs it, rather than going to waste.

* Anaerobic digesters transforming the community’s waste, to create bio-gas to fuel the CHPs.

* Combining decentralised CHP with solar thermal panels for providing hot water and photovoltaic arrays, plus using the storage capacity of the ground itself to make the whole community a clean, de-carbonised power station.

* Rural and coastal communities forming community owned not-for-profit energy generating co-operatives to benefit directly from the harnessing of wind, wave or tidal power from within their communities for exporting to urban communities.

* Formation of not-for-profit co-operatives of architects, construction workers, suppliers and product makers, creating all new buildings with energy efficiency as the main driver, not pushed to the margins.

* A crash programme of insulating all existing homes, and firms to achieve agreed standards of insulation and energy efficiency for offices and factories. The firms would participate fully in the energy strategy for their district.

Commenting on the proposals Conservative shadow environment secretary Peter Ainsworth said: “Nationalisation? That’s a bit old hat isn’t it? We’re going to put the energy corporations into the hands of the workers, and establish energy trusts where consumers and suppliers can work together to create a sustainable energy future.”

As he spoke, Miliband was seen to be holding a small, buff-coloured book. When asked what he was reading, he told reporters: “The most revolutionary concept of a sustainable future I’ve ever read. Trust me, you ain’t seen nothing yet.”

Penny Cole
Environment editor
A World to Win
April 1, 2010

A World to Win | Blogs | Something's got to give

A World to Win Blogs Something's got to give

An X Factor spin to the election battle

Jeremy Corbyn MP, writing in the Morning Star

Monday night's Channel 4 debate between Alistair Darling, Vincent Cable and George Osborne was portrayed as an X Factor competition with the threesome all allowed to give their own broadly similar analysis to the situation facing this country.

An instant opinion poll after the event awarded a 36 per cent victory to Professor of Hindsight Cable with Darling and Osborne tying for second place on 32 per cent.

Rather surprising this, in view of Osborne's peculiar decision to announce that the Conservative government would remove the National Insurance increase and would thus offer up £5.6 billion of "efficiency savings."

Apparently the Tories think they are marching into power on the slogan of efficiency savings, but I would recommend that every public worker be seriously concerned about this because it sounds to me and many more like cuts by another name.

Where all three agreed was that there has to be a repayment of the £167bn deficit and the question was more on the timetable for repayment rather than the principles behind it or of the sort of economy that we should have in the future.

The Tories, as we well know, are a party representing the interests of the very rich and the purpose of Labour ought to be to represent the organised working class and radical people of this country.

For all his analysis of the way the banking crisis came about, Cable essentially offers broadly market solutions to the problem and claims the Lib Dems are neither representatives of the Tory rich or militant "trade unions." Interestingly, the Lib Dems equate a similarity of power and interest between the incredibly rich backers of the Tory Party and trade unions who represent people in work.

This would suggest a complete lack of understanding of the role or rights of trade unions in our society.

The three big industrial disputes at the present time - the BA cabin staff strike, the civil servants' dispute over severance pay arrangements, and the rail workers' defence of signal and safety workers' jobs and conditions.

Even if successful none of these disputes will make any member of any union better off, but they will save jobs and protect conditions.

And all of these actions are defensive. If anyone has any doubts as to what happens when the bankers are allowed to impose a solution on the economic crisis, they only have to look at the latest twists and turns in Greece.

The once highly popular PASOK government in Athens is seeking to obey the diktats of the world's bankers and the European Bank, thus creating more unemployment and a deeper recession.

In turn this will further increase the jobless rate in one of Europe's poorer countries.

The alliance of the European leaders enforcing these measures on Greece and now on Portugal are the result of the creation of an independent central bank dedicated to "market stability," not social justice.

The Morning Star reported the publication for discussion of the People's Agenda by the Labour Representation Committee, which boldly poses the question in whose interests our economy has to be run.

The pamphlet stresses that despite the increases in pensions, welfare benefits and child allowances the low taxation rate among the richest means that inequality in Britain is probably the highest in Europe.

In its proposals for an incoming government, the point is strongly made that contracting out of public services, marketising education and league tables for schools have forced public services to focus more on cost-cutting than quality.

The pamphlet quite rightly calls for a massive house-building programme and while the government's recognition of the role of council housing in the past two years is welcome - as is the change in local authority finance - a massive problem of those living in overcrowded accommodation remains.

This results in underachieving children and many who have no chance of council housing being forced to live in very expensive private rented accommodation.

It is time to control this absurd market and prevent the exploitation of the vulnerable through extortionate rents.

The People's Agenda also makes demands for a decent minimum wage, the repeal of anti-trade union laws and the public ownership of crucial industries.

After the election the incoming government will inherit an unprecedented opportunity in the public ownership of most of the banking system.

This should be brought under public control and not left in the hands of a holding company whose sole function is to dispose of the shares at the first opportunity.

Labour was founded by the trade unions and socialists in Britain at the start of the 20th century and its very survival depends on the support of that same coalition.

To win the election, this coalition must be mobilised. Afterwards, the crisis of free market and bankers' Britain must be dealt with by ending the obscenity of inequality and replacing it with the goal of equal opportunities and social justice.