Unity@ TUC
New Series Number 1 September 2013 Published by the Communist Party
FOR DEMOCRACY IN FURTHER AND HIGHER EDUCATION BY MARTIN LEVY
AUSTERITY WORKS ...FOR THE RICH BY
ROBERT GRIFFITHS
ew Labour ex-minister Liam Byrne regrets having left a note to his incoming Tory successor at the Treasury in 2010. It read: ‘Dear chief secretary, I’m afraid there is no money. Kind regards – and good luck! Liam’. The Tories have made the most of it ever since, pretending that Britain is near bankrupt and crushed by government debt, which is why massive public spending cuts are necessary. Incredibly, a Labour shadow cabinet which still contains buffoons like Byrne has largely swallowed this nonsense. Never have so many lies been told so often, by so few and then swallowed by so many. In reality, the last Labour government raised public spending as a share of total spending in the British economy just a little, from 38 per cent to just under 41 per cent by the eve of the financial crisis in 2007. The latter is less than in any year of the Thatcher governments of the 1980s. It was the bank bailout and the growing costs of unemployment and poverty after 2007 that drove public spending up to around 47 per cent of GDP by the time David Cameron’s coalition took office. In other words, it was a major crisis in the capitalist system that caused by far the biggest rise in public spending. Now the Tory-LibDem regime aims to slash it to below 40 per cent by the end of 2017. They claim this is necessary in order to cut the government’s annual budget deficit and its accumulated National Debt. Another pack of lies. At present, the National Debt stands at 77 per cent of GDP and rising. Toryled government plans will do no more than bring it back down to that level in four years' time! Britain’s national debt was that size or bigger for half of the 20th century. We didn’t go bankrupt as a result. The sky didn’t fall in. Today, as Osborne fails to hit his debt reduction targets and the discredited rating agencies chop Britain’s credit rating, there is no crisis for Treasury
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bonds or sterling in the financial markets. Why not? Because the City financial gangsters – who insisted on this unelected coalition taking office in the first place – know what is really behind the government’s austerity drive. It’s about further cutting taxes for big business and the rich and removing the main obstacles to wholesale privatisation of all public services that can be turned to a profit, beginning with the Royal Mail and the NHS.
of full employment. Exchange controls were lifted, allowing capital to flood overseas for the next three decades. More and more industrial investment became concentrated in the arms industry rather than civilian technology. Then, to cap it all, the City was deregulated in the 1986 ‘Big Bang’ which gave free reign to US monopolies, the crooks and gamblers to inflate the financial sector to bursting point.
‘NEVER HAVE SO MANY LIES BEEN TOLD SO OFTEN, BY SO FEW AND THEN SWALLOWED BY SO MANY’
THE NEW LABOUR TORIES Financial services grew twice as fast as overall GDP under the last Labour government until the banking crisis began in 2007. This was the period when Chancellor Gordon Brown was telling the bankers and speculators in his annual Mansion House speech things like, ‘I want us to do even more to encourage the risk takers’. Corporation Tax on big business profits began to fall to some of the lowest levels in the developed capitalist world, below even those in the US and Germany. The City came to account for 9 per cent of economic output, a far higher proportion than in Germany (4 per cent) and France (5 per cent), even leap-frogging over the US (8 per cent). Of course, much of the City’s ‘output’ is parasitical and socially useless. Both new and old Labour failed to slow British manufacturing’s long declining share of the British economy, from 29 per cent in 1970 to just 10 per cent by the 2010 General Election defeat. Although public spending on education, health and transport grew during the Blair and Borwn years, much of the extra cash enriched the private sector through rail subsidies and new schemes such as PFI.
So public servants have seen around 400,000 jobs scrapped, their wages frozen, their pension rights downsized and attacks on their trade union organisation. State benefits are being cut without mercy even for the unemployed and people with disabilities (including 7,000 former Remploy workers). Almost a million more people were plunged into poverty last year, a third of them children. Meanwhile, the super-rich are enjoying a tax cut and hundreds of our biggest companies pay little or no tax on their abundant profits. Far from being bankrupt, the richest 10 per cent of Britain’s population own £4,500 billion in declared personal wealth (44 per cent of the total) and around £10,000 billion in industrial and financial assets overseas. TORY ROT How has Britain become a more unequal and less productive society, with an economy still dominated by financial speculation that produces little of real value? The rot set in during the Thatcher and Major years when steel, coal and shipbuilding were massacred and the remnants privatised. This helped reestablish a permanent ‘reserve army of labour’ after the freak post-war period
THE BLUE AND ORANGE TORIES In the past year or so, manufacturing has picked up a little since the worst of the banking crisis. But his has been hampered by the loss of buying power as state benefits are cut and wages have fallen by 8 per cent over the past five years. Export markets are still shrinking in
the eurozone and decades of British under-investment have limited new sales in north America and Asia, including China. Certainly, there is no evidence that much of the £375 billion handed to the banks and bond markets in ‘quantitative easing’ has found its way into productive industry, including house-building. So Britain continues to hover on the brink of a triple-dip recession, although the crisis remains real for the three million unemployed, including almost a quarter of young people without jobs, training or a college place. That crisis will continue as long as the Conservative, LibDem and New Labour Tories can get away with plans to cut public spending by £569 billion by 2018. A PEOPLE’S PROGRAMME The kind of policies outlined in the Communist Party’s left-wing programme and in the People’s Charter would create jobs, rebuild industry, enhance our public services, promote social justice and plan for society’s sustainable energy and transport needs. MEASURES TO END AUSTERITY ● Slap a two per cent Wealth Tax on the super-rich, thus raising £90 billion a year – equal to twice this year’s public spending cuts. ● Reverse the recent cuts in corporation tax for the biggest companies and increase the top rate of income tax to 60 per cent. ● Impose a windfall tax on energy, retail and banking monopoly profits and a financial transaction tax on the City bankers and speculators. ● End the tax haven status of all territories under British jurisdiction ● Reverse the spending and benefit cuts and invest in health, education, housing, public transport and the environment. ● Control gas, electricity and water prices and take all the utilities and public transport back into public ownership. ● Nationalise the banks and direct funds into manufacturing, small businesses, cooperatives and housing. ★ ROBERT GRIFFITHS IS GENERAL SECRETARY OF THE COMMUNIST PARTY
JUST A MONTH ago Amazon boss Jeff Bezos bought the Washington Post newspaper for $250 million. Apart from the fact that all that money has come from the superexploitation of Amazon employees, does that matter to us? It’s what he didn’t buy that is arguably more important. The Washington Post company is still in existence, although its name will change. But it has sold its flagship brand because it is making a lot more money from other subsidiaries, and principally from Kaplan Inc, its for-profit education company. From relative modest origins, Kaplan has grown by aggressive marketing into a transnational corporation principally in higher education, and including some subsidiaries in Britain. In the USA, it has faced charges of defrauding the government of hundreds of millions of dollars, by paying incentives to recruiters of students, and by lying to achieve accreditation. Many Kaplan students have been left with no qualifications and with massive tuition fee debts that they will never pay off. It is this market in further and higher education that the ConDem government in Britain wants to open up. Already some of the larger FE colleges are becoming corporate groups, taking over smaller colleges and private training organisations – a prelude to full privatisation. The government has also eased the entry of private, private equity and for-profit companies into higher education. Just last month, BPP University College of Professional Studies, in London, became the second for-profit institution in Britain to be granted the title of university with degree-awarding powers. If this sounds a bit analogous to the way that private companies are muscling into academy schools, then it’s not surprising. The government is intent on privatising the whole public education system. The process is tantamount to a massive transfer of funds to the private sector, from the public purse and from students in both FE and HE. These private companies pay their workers less and offer worse terms and conditions than in public sector institutions, which in turn are putting pressure on their own staff as a result of the increased competition. Education, throughout all sectors, is about the empowerment of individuals. What is coming, if we don’t act to prevent it, is disempowerment – a narrow vocationalism with the ethos of the market, and with students as consumers who will pay throughout their lives. continued overleaf