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Our Final Crisis is Near

Rob Griffiths

LAST month, The Guardian published its annual survey of executive incomes at the 100 biggest companies on Britain’s stock exchange.

Company directors saw their basic salaries, bonuses and share awards increase by 37 per cent last year. This followed rises in previous years of 28, 16 and 13 per cent. The average "full-time" director now receives £1.2 million a year.

Between them, the 1,389 directors of the FTSE 100 companies enjoyed packages totalling £1,013 billion, which, as The Guardian pointed out, is enough to build 15 new hospitals or employ 50,000 new nurses.

On the same day, August 29, the Financial Times reported the findings of a National Audit Office report that 220 of Britain’s 700 largest companies had paid no corporation tax on their profits last year. Another 210 corporations paid less than £10 million.

The total corporation tax paid by the 700 was £24.4 billion, two-thirds of which came from banking, insurance, oil and gas.

In fact, British banking and oil profits alone reached £63 billion in 2006.

The following day, Prime Minister Gordon Brown told Britain’s public-sector workers that the fight against inflation depended on them accepting a cut in their real level of pay.

The immediate occasion for his pronouncement was the prison officers’ strike against the government’s decision to stagger their 2.5 per cent pay increase over two stages, effectively reducing it to 1.9 per cent.

The 2.5 per cent increase for most public-sector workers is less than inflation - 2.3 per cent last year - and lags behind the general level of wage increases, which stood at 4 per cent in 2006.

So it’s lectures and anti-union laws for low-paid workers, while the City fat cats gorge themselves with the cream, the honeyed words of new Labour ministers ringing in their ears.

We should not be surprised. As Chancellor for 10 years, Gordon Brown did everything in his power to make Britain the "supercasino" of monopoly capitalism, where everything is open for business and up for sale.

Where the Tories signed fewer than 100 private finance initiative deals with big business worth less than £3 billion, Brown has saddled the next generation or two of taxpayers with more than 600 schemes plus another 200 in the pipeline.

PFI payments over the next 13 years will amount to more than £100 billion before inflation for projects valued at £55 billion - with another 12 to 20 years still to pay.

His decision in 2003 to introduce "taper relief" on capital gains tax was designed to make Britain the world centre for private equity buyout merchants.

Having their income classified as a capital gain with taper relief tax at 10 per cent means that private equity multimillionaires pay less tax than their office cleaners.

Some cut their capital gains tax rate further to 5 or 6 per cent by tax dodges involving management fees and "carried-over interest." Most avoid paying any kind of tax on their income altogether by registering as "non-domiciled" tax residents in Britain, stashing their wealth in offshore bank accounts.

Chancellor Brown also hacked corporation tax down to 30 per cent, compared with 41 per cent in the US and Japan, 40 per cent in Germany and 33 per cent in France.

With the OECD officially classifying Britain as a "tax haven" for big business and the super-rich, it is no wonder that foreign capital continues to flood in here where the pickings are enormous.

Large sections of British industry have now been bought up by venture capitalists who have no long-term stake in Britain’s economy or society.

Overseas capital now accounts for 39 per cent of company shares on the London stock exchange, up from 28 per cent when Brown took over as Chancellor in 1997 and from 4 per cent when Thatcher was elected in 1979.

Like the Tory former prime minister whom he admires so much, Brown loves to proclaim his heartfelt "Britishness" and demands that we do likewise. At the same time, he grovels to monopoly capitalists whose "patriotism" revolves around their bank account.

Brown’s Britain is also the place where 1 per cent of the population owns one-third of all the personal wealth - up from one-quarter when Brown moved into 11 Downing Street - and the richest one-tenth own nearly three-quarters (71 per cent).

Three-quarters of the population, including most Morning Star readers, own 15 per cent of Britain’s wealth, down from 19 per cent in 1997, while the poorer half have just 1 per cent - down from 6 per cent.

Over the same period, personal debt, fuelled by borrowing against house price inflation, has rocketed from £500 billion to £1,335 billion.

This, together with the government’s debt to PFI contractors, has provided the basis for the demand-led economic "miracle" credited to Brown as Chancellor.

The TUC and the labour movement therefore has to face reality. Prime Minister Brown is no more a friend of trade unions and the low-paid than was Chancellor Brown.

If socialism is the "language of priorities," as Aneurin Bevan once put it, the priorities of Prime Minister Brown are privatisation, a police state and preparing for war.

Under Brown’s plans, Britain will have ID cards, 60 days internment without trial, US Star Wars bases and a new generation of nuclear weapons before we finally abolish child poverty and unequal pay for women.

The other unavoidable reality is that the Labour Party is the vehicle for this deeply reactionary programme.

The government has been embarrassed by Labour conference decisions on council housing, foundation hospitals and solidarity industrial action, although this has had no effect on its policies. But even these minor irritations will be impossible if Brown’s proposals in "extending and renewing party democracy" are adopted.

As a briefing paper being circulated by a leading official in Unite T&G concludes, "the proposals represent an attempt to destroy the Labour Party as a democratic political organisation based on the labour movement."

This would mean "the end of serious choice in elections. The working class would be, to all intents and purposes, disenfranchised. We would be back to the situation we faced when the party was first founded."

The final crisis approaches for the whole trade union movement and the non-sectarian left. Are we to have a mass party of labour in Britain?

If the labour movement cannot or will not reclaim the Labour Party from the privatisers, the warmongers and the Thatcher fans, it will have to re-establish one.

Does our movement have the leadership and vision to fulfil such a historic responsibility?

Rob Griffiths is the general secretary of the Communist Party of Britain. This article was published in the Morning Star, 9 September 2007.