by Robert Griffiths writing in the issue of Unity! published for delegates at the Labour Party conference
BRITAIN’S FINANCIAL deficit soared in August to £12bn, the biggest for three years. Yet there has been no collapse in the bond, stock or currency markets.
That’s because the central objective of ruling class and Tory strategy is not to eliminate the deficit – but to boost the profits of Britain’s monopoly corporations and expand their profit base.
Hence the focus on privatisation, not least in the education and health services, as well as policies to slash public spending, cut business taxes, restrict trade union rights, increase the state retirement age, reduce pension rights and increase the power of transnational corporations through trade and investment treaties such as TTIP.
This strategy is supported by the EU Commission, the European Central Bank and the IMF.
The alternative should begin with reversing the austerity programme. Higher state pensions and benefits, greater funding for public services and real investment in infrastructure – especially in council 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 similar schemes would lead to lower costs for building and managing public sector projects. But most extra government spending should be funded by progressive taxation and the proceeds of economic growth itself.
A ‘Robin Hood’ tax on City financial transactions could raise £20bn a year – ten times more than the Chancellor’s paltry bank levy. Cuts in corporation tax should be reversed and ‘windfall’ taxes imposed on monopoly super-profits.
While a return to top income tax rates of 50 or even 60 and 70 per cent would raise some extra revenue, a 1 per cent Wealth Tax on the richest tenth of the population would raise £42bn year – more than half the government’s spending deficit alone.
A robust mechanism for the redistribution of wealth between the nations and regions is 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.
Planning agreements with companies receiving state aid should set levels of job creation, pay, equalities, pensions, training and trade union representation, with extra incentives for R&D investment. Priority should be given to local private, cooperative and municipal enterprise, rather than bribing transnational firms.
A National Investment Bank could direct some of the huge cash surpluses owned by non-financial companies (around £27bn according to the Bank of England) into productive industry.
Central government policies should restructure 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 and kept 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.
A left government with such a left wing programme would provoke enormous opposition. The basic treaties and institutions of the EU would be used to try to block it at every significant turn.
An alternative political strategy would therefore be required which embraces the struggle for state power, for the revolutionary transition to socialism as a more democratic and productive kind of society.
Robert Griffiths is general secretary of the Communist Party and a contributor to 21centurymanifesto
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