A Workers' Budget

Submitted by Janine on 20 March, 1998 - 10:58

For Gordon Brown, Tory public spending limits, pleasing the City, and retaining Tory tax cuts for the rich are the priorities; the rest of us must submit to "tough choices" to meet those priorities. A government truly accountable to the labour movement and committed to the welfare state would have spelled out different priorities in a "Budget speech" something like the following.

In a world of potential plenty, if anything must be rationed, it should be the extra luxuries of the rich, not the basics for comfort and dignity of the poor. We want a workers' Budget, not a bosses' Budget; a workers' government, not a bosses' government.

The way previous Budgets have been constructed, the profits, dividends, interest and high salaries of the rich come first. They were the index of economic success. High profits were the first aim and criterion of any policy. Then health care, education, pensions and the rest were provided for by siphoning a little gravy off the edge of the plate.

Our predecessors, Tony Blair's government, moved further in this direction by releasing the Bank of England from all elected control and giving financiers a free hand to set interest rates. But financiers and bankers always prefer to have interest rates high, profits high, share prices high, wages held back, dividends high, and, to that end, investment restrained and unemployment high. Under the private-profit system, reduced unemployment was "bad news" for the financial markets. So, jobs and wages were "rationed" to keep the financiers flush. We'll do the opposite - "ration" the financiers to secure jobs and wages.

The Tories' tax cuts for the rich made the top ten per cent £10 billion better off, while most of us, with VAT increases, council tax, and the rest, paid more tax than in 1979. Just reversing those tax cuts, and the successive corporation tax cuts which date back to Dennis Healey's time, would bring in a lot of money - what with clever tax avoidance, probably not the full £10 billion, but maybe £5 billion a year. So some emergency measures - £2 billion for the NHS, and similar amounts for education, pensions and creating decent jobs in public services - could be financed without seriously attacking the position of the rich. Or, at least, in theory they could. In practice I would have to impose severe government controls on the City to stop even very moderate measures provoking economic sabotage by a flight of capital. Thus I agree entirely with my friends and comrades who challenged Gordon Brown and Tony Blair to tax the rich!

But things have gone beyond that. I'm going for more than emergency stop gap measures. I must start by asking Parliament to vote emergency powers to take all the big banks, pension funds and insurance companies into public ownership, and control movements of money out of this country. It is the only way to stop the City financiers organising a "strike of capital" to thwart the democratic decisions of the electorate. The banking and finance unions will be authorised to check the books and stop wide-boys evading the law. We are going to ration the billionaires' ability to manipulate the wealth created by the working majority! The financial institutions own the big majority of shares in industrial and financial companies, but we should also nationalise land and the biggest industrial and commercial companies, as well as renationalising the utilities.

The money that our workers' government can readily lay hands on can be totted up as follows.

  • According to the latest National Accounts figures for 1996, companies had £73 billion in "undistributed income", that is, profits after dividends, interest and taxes. We do not want to take all the profits of small businesses, but we should be able to get control of £40 or £50 billion by our nationalisations.
  • £81 billion was paid to households in dividends and interest by companies, and £25 billion was paid out in various ways as interest on government debt - some to small savers, but, at a reasonable guess, at least £30 billion to the rich and the very well off. We will seize that and reallocate it for the common good.
  • We can cautiously estimate another £20 billion gained by confiscating excess salaries and "self-employed" income.
  • Total: £110 or £120 billion.

That's nowhere near the whole of what socialists call the surplus value produced by the working class. A lot of small business people and retired capitalists will still live off surplus value. Those who have previously been rich will still be well off. They will be "rationed" very gently and generously. But £110 billion is enough to make a start. Even if we allow maybe £70 billion for industrial investment and for cutting taxes on the poor like VAT, these modest measures to ration the luxuries and whims of the rich should be quite enough to yield the £40 billion a year needed to end rationing of essentials for the poor, to rebuild public services, and make decent jobs for all. £40 billion is only about 5% of national income - a small price for civilisation!

Add new comment

This website uses cookies, you can find out more and set your preferences here.
By continuing to use this website, you agree to our Privacy Policy and Terms & Conditions.