by Robert Griffiths writing in the Communist Party’s daily issued to delegates at the 2015 Trades Union Congress
A RECENT TUC analysis confirms that this has been the slowest and shallowest recovery of the eight biggest recessions in almost two centuries of British capitalism.
The prospects for even this minimal recovery to continue is well-nigh impossible when, in order to sustain investment and competitiveness, the strategy of the British ruling class is to rely on relatively low wages, kept down by unemployment and anti-union laws, together with inward investment and slightly increased government infrastructure spending, funded from privatisation sales
Public spending cuts, privatisation and lower corporation tax on company profits are also favourite elements in a strategy which has its central goal the expansion of capital’s profit base – and the restoration of the rate of profit itself.
This is the context in which to understand the renewed drive to maintain austerity, cut business taxes, restrict trade union rights, impose even greater labour flexibility, increase the state retirement age, cut pension rights, expand privatisation and increase the power of transnational corporations through international trade and investment agreements such as TTIP.
This is the strategy of British state-monopoly capitalism, the European Union Commission, the European Central Bank and the IMF.
The first priority of any strategy must be to halt the austerity programme. Government spending should be increased, not cut further.
Higher state pensions and benefits, greater funding for public services and real investment in infrastructure – especially in council and social housing, transport and R&D – would boost demand and prepare the ground for economic modernisation.
A short term rise in state borrowing to replace PFI and other ‘private-public’ finance schemes, would quickly lead to lower costs for building and managing public sector projects. But most extra government spending should come from progressive taxation and the proceeds of economic growth itself.
For example, up to £20bn a year could be raised by a ‘Robin Hood’ tax on City financial transactions – 10 times more than the Chancellor’s paltry bank levy. Cuts in corporation tax should be reversed, at least for large and very profitable enterprises. ‘Windfall’ taxes on super-profits could be imposed on some retail and other monopolies.
While a return to top income tax rates of 50 or even 60 and 70 per cent would raise some extra revenue, a Wealth Tax on assets would be much more lucrative.
Given the huge disparity in wealth distribution across Britain’s regions and nations, based ultimately on class, a robust mechanism for geographical redistribution would be essential.
Powerful, properly funded local training and development agencies should be established, preferably under the control of directly elected English regional assemblies and the Scottish and Welsh parliaments.
Central government policies should begin restructuring the British economy away from property and financial services and towards manufacturing, construction, new technology and high quality public services.
Control of interest rates should be repatriated from the Bank of England to ensure that they remain low in order to favour exports and investment borrowing.
Vital sectors of the economy such as energy, public transport and finance will have to be taken into public ownership in order to ensure that investment and environmental targets are established and met.
Such a left wing programme would come up against enormous forces of political reaction should a left government seek to implement it. Undoubtedly, the basic treaties and institutions of the EU would be used to try to block it at every significant turn.
So an alternative economic and political strategy would be required which embraces the struggle for state power and the revolutionary transition to socialism as a new, higher and more productive society.
Robert Griffiths is general secretary of the Communist Party and a contributor to 21centurymanifesto
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