Join the Socialist Party Join us today!

Printable version Printable version

Facebook   Twitter

Link to this page: http://www.socialistparty.org.uk/issue/951/25568

From The Socialist newspaper, 31 May 2017

Is Labour's manifesto 'costed'?

How can Corbyn's programme be implemented?

How will Corbyn and McDonnell be able to resist the enormous political and economic pressure they will come under to compromise their anti-austerity policies? photo rwendland/CC

How will Corbyn and McDonnell be able to resist the enormous political and economic pressure they will come under to compromise their anti-austerity policies? photo rwendland/CC   (Click to enlarge)

Alistair Tice, Socialist Party Yorkshire

Theresa May-hem attacks Jeremy Corbyn for his "nonsensical economic... mismanagement." This is a bit rich after Tory work and pensions secretary Damian Green admitted: "Our manifesto is not un-costed, we just haven't costed it yet"! Seven-times Tory treasury secretary David Gauke failed to say how they would fund the NHS!

But if the Tories get back in again, millions of pensioners will know the cost of the 'dementia tax', cuts in winter fuel allowance and the removal of the pensions 'triple lock' guarantee. 900,000 children from poorer families will know the cost of stopping free school dinners. And students will know the cost of thousands more pounds of debt due to tuition fee hikes.

Despite the human cost of the Tory "manifesto of chaos," Labour started the general election campaign up to 39 points behind in the polls on economic competence. Theresa May has posed the choice as her or Jeremy Corbyn and co who "want to take us back to the economic chaos of the past." Launching a new election poster, Tory chancellor Philip Hammond claimed there is a 58 billion black hole in Labour's manifesto. The Daily Mail headlined "Corbyn's class war manifesto would take tax burden to SEVENTY-YEAR [their capitals] high."

So it was politically necessary for Labour to show where the money will come from. And the manifesto costings do show that the money is there. Labour's public spending plans of an extra 48.6 billion a year would fund significant reforms and popular policies such as the abolition of university fees, universal childcare, NHS investment, free school dinners, restoration of the education maintenance allowance and scrapping the bedroom tax.

Taxes

These would be paid for in the main by reversing the Tory cuts to corporation tax, income tax rises on the top 5% of earners, a 'fat-cat' tax on excessive pay, clamping down on tax avoidance and a 'Robin Hood' tax on City transactions. Shadow Chancellor John McDonnell has made clear that no-one earning less than 80,000 a year will face any tax or National Insurance increases or VAT rises.

These modest tax increases on the rich and corporations' profits are predicted to bring in an extra 52.5 billion a year which would be more than enough to cover Labour's proposed spending promises. What scares the Tories and the capitalists is that Jeremy Corbyn's anti-austerity policies reverse the neoliberal consensus between the main parties that has existed for the last 20 years. In exposing the huge inequality in society they point the finger at the greedy bankers and bosses who are really responsible for the economic crisis.

Because, as the recent Sunday Times 2017 Rich List showed, there are vast amounts of wealth in Britain - but it's all with the top 1%. There are now 134 billionaires based in Britain. The richest 1,000 individuals and families have a total wealth of 658 billion, up by 14% on last year.

Google HQ, California, United States, photo Robbie Shade (Creative Commons)

Google HQ, California, United States, photo Robbie Shade (Creative Commons)   (Click to enlarge)

Many of the biggest companies like Google, Starbucks and Amazon don't even pay the very low taxes that they are supposed to. In Tax Research economist Richard Murphy's most recent report for PCS, the union which represents tax office staff, he estimates a 122 billion "tax gap" for 2013-14. This shortfall on the taxes that should be collected is made up of 85 billion illegal tax evasion, 19 billion tax avoidance and 18 billion uncollected taxes.

HM Revenue and Customs staffing levels have nearly halved in the last ten years making it even easier for big business and the super-rich to avoid paying taxes. And even when they are caught, they negotiate sweetheart deals worth a fraction of what they owe. So it is welcome that the Labour manifesto promises more powers and staff to pursue companies and individuals who avoid tax.

But will this be enough? Labour's figures calculate getting in only an extra 6.5 billion from tax avoidance, only a fraction of the "tax gap". In the manifesto, they say that they have built nearly 4 billion 'headroom' into their calculations to allow for "additional behavioural change and uncertainty". What this means is that John McDonnell knows that the 1% will do everything they can to not pay higher taxes, including off-shoring of companies to tax havens abroad.

Blair government

When Tony Blair was New Labour prime minister, he always argued against taxing the rich because they wouldn't pay it (apart from the fact that they were all his friends and he's become one of them).

Blair shared the economic theory of supply-side economist Arthur Laffer who argued that at a certain point higher taxes lead to reduced revenue due to 'behavioural change' such as tax avoidance. This is what the capitalist economists and Tory press are now screaming about Jeremy Corbyn's modest tax increases on the rich - that they won't pay them, so Labour's budget will be 20-30 billion short. According to them, the rich should pay less taxes to encourage them to pay at all - while the poor who can't afford to pay the bedroom tax or council tax are dragged through court and threatened with jail!

But it's not just behavioural change that a Corbyn-McDonnell government would face. The capitalists and money markets would resort to a new 'project fear' of economic threats and sabotage. This would not be new for Labour governments.

Harold Wilson, a Labour prime minister in the 1960s and 70s, revealed in his memoirs that in 1965 Lord Cromer, the governor of the Bank of England, demanded severe cuts in public spending and fundamental changes in Labour's election promises. In 1976, the currency markets led a run on the value of the pound which led Labour chancellor Denis Healey to agree public spending cuts in return for an IMF loan. In both cases, Wilson and Healey acquiesced to the capitalist threats and carried out orthodox capitalist policies, a forerunner to Thatcherism.

Newcastle Corbyn rally, June 2017, photo by Elaine Brunskill

Newcastle Corbyn rally, June 2017, photo by Elaine Brunskill   (Click to enlarge)

How will Corbyn and McDonnell be able to resist the enormous political and economic pressure they will come under to compromise their anti-austerity policies? This would come not just from the Tory press and media, but the entire capitalist class and state machine, and from the Blairite representatives of capitalism within the Parliamentary Labour Party.

Only two years ago, we saw how the left-wing Syriza government of Alexis Tsipras in Greece capitulated in the face of the Troika's "fiscal waterboarding" and has ended up carrying out huge spending cuts, undermining its working class support.

The Socialist Party advocates radical measures to resist the inevitable capitalist sabotage. The big banks and major financial institutions should be nationalised, consolidated into a national 'people's bank' and their assets put at the disposal of public investment, as well as providing cheap mortgages to homeowners and loans to small businesses.

Assets of the super-rich

More than that, a socialist government would freeze the assets of the super-rich and biggest companies to stop them taking their loot out of the country. This has even been done by capitalist governments when it suits them. For example, after the Western imperialist-friendly dictators in North Africa were overthrown in the Arab Spring in 2011, the Swiss government ordered its banks and financial institutions to freeze $1 billion of assets of Mubarak, Ben Ali and Gaddafi.

Workers and the trade unions in the finance sector, alongside the wider workers' movement, should be given the powers to oversee financial transactions to prevent tax evasion and avoidance, off-shoring and hiding of accounts. This has happened before as well.

When reactionary army officers attempted a coup in Portugal a year after the 1974 revolution, bank workers occupied the banks and physically prevented the bosses from removing incriminating documents or transferring funds abroad. They forced the government to nationalise the banks and then the insurance companies.

Through nationalisation of the banks and workers' control of the financial institutions, controls could be placed on financial transactions to prevent flights of capital as has taken place in Greece and is always threatened by capitalists faced with radical economic policies.

Such measures, by opening the capitalist accounts to democratic scrutiny, would enable a Corbyn-led government to show exactly what is possible, far beyond the set amount of money that Tory and Blairite governments tell us is available.

One area where Labour's manifesto policies are not costed is their proposal for renationalisation of utilities. John McDonnell has proposed a 250 billion capital borrowing programme, a 'national transformation fund,' for the buyout - compensation and bond-for-shares swap - to fund taking rail, mail, water and the national grid back into public ownership, as well as other infrastructure developments.

Asked to specify the cost of the nationalisations, Jeremy Corbyn answered: "We don't know what the share price would be at the time we do it." This strongly implies that in the case of Royal Mail, the water companies and the national grid, all shareholders would be fully compensated at the then market price.

Past Labour governments' state-capitalist nationalisations paid generous compensation to the former owners, which saddled those state industries with enormous debts from the start. The more money a Labour government has to raise from bonds and the money markets, the more they are at the mercy of the financial speculators.

While it is not a principle whether compensation is paid or not, the Socialist Party advocates that it should only be paid in the case of proven need.

In other words, not a penny to the fat-cats who have fleeced taxpayers' money for years, but protection for any small shareholders or workers' pensions funds which are financially dependent on their dividends.

Commuter trains are packed, unreliable and overpriced, photo Kurtis Garbutt (Creative Commons)

Commuter trains are packed, unreliable and overpriced, photo Kurtis Garbutt (Creative Commons)   (Click to enlarge)

Renationalisation

It's true that renationalising the rail companies will be cheap because Labour is proposing to take lines back into public ownership as each private contract expires. But that means that after five years of a Labour government 12 of the current 23 train operating companies of franchised passenger services would still be in private hands, one until 2030!

Likewise, Labour's energy industry proposals of nationalising the electricity and transmission networks and setting up regional public energy companies will still leave the 'big six' energy multinationals in private hands.

The danger is that, while proposing welcome and popular re-nationalisation policies, Labour's "radical and responsible" manifesto - in its efforts to be 'fiscally responsible' - ends up being half-way measures that will still leave these industries at the mercy of the private sector and the money markets.

The only way to make sure that the economy does not face an investment strike, stock market and currency speculation, or even more direct acts of capitalist destabilisation and sabotage, would be for a socialist government to not only nationalise the banks and public utilities, but to take all the biggest corporations into public ownership.

With the FTSE 100 top companies accounting for 81% of market capitalisation, nationalising just those would allow a socialist government to begin to manage the economy in a planned way under democratic workers' control and management - that really would be "for the many, not the few."

Why not click here to join the Socialist Party, or click here to donate to the Socialist Party.


In The Socialist 31 May 2017:


What we think

Mobilise for a mass movement after 8 June

How can Corbyn's programme be implemented?


Socialist Party news and analysis

After 8 June: build the socialist fightback

Workers warned BA boss of tech failure danger

Families to have 15,000 debt by 2020 - trade union action needed

Tories and Blairites in pockets of big business: kick them out!


Fighting Tory schools cuts

Struggle can beat Tories' outlandish 7% cuts to schools

Fighting Tory cuts to the schools budget


International socialist news and analysis

South Africa: burning anger


Workplace news and analysis

PCS conference: Confident delegates back fighting strategy and Jeremy Corbyn

Certification officer confirms that Unison did break the rules in general secretary election

Gains for left in Unison national executive election

Shortened GMB conference to hear pro-Corbyn and anti-austerity motions

Strike action to save Sheffield Jobcentre

Union stops finance for anti-Corbyn Labour MP

Manchester housing workers' strike solid

Bully bosses' zero-hour backdown

National Shop Stewards Network conference 2017


Tory attacks on mental health care

Fight the Tory cuts and changes that take mental health back to Bedlam


Socialist Party reports and campaigns

Don't wait! Join the Socialist Party to transform society

Electric atmosphere at Jeremy Corbyn rally in Glasgow

Why I joined: "To fight for an end to tuition fees and cuts"

Manchester socialists campaigning against war, racism, terrorism and austerity

Socialist Party hosts pro-Corbyn rally in Southampton

Student occupation at Chelsea College of Arts

North Bristol: angry march in defence of the NHS

Book launch meeting: showing the Socialist Party's active participation in events past and present

Women and austerity - scrap the 'rape clause'


Socialist readers' comments and reviews

June 1917: when workers in Britain first tried to form soviets

Heroic socialist fighters who sang as ship went down - new memorial

Corbyn's policies could help fight unhappiness for LGBT+ people

Obituary: Rhodri Morgan 1939-2017, architect of the 'Welsh Labour' brand

The Socialist inbox


 

Home   |   The Socialist 31 May 2017   |   Join the Socialist Party

Subscribe   |   Donate   |   Audio  |   PDF  |   ebook






Related links:

Jeremy Corbyn:

triangleSalford Socialist Party: Left parties, Greek tragedy and Jeremy Corbyn

triangleSustained mass movement needed to stop Tories wrecking our NHS

triangleTrade Unionist and Socialist Coalition conference

triangleSix months on - still no justice for Grenfell

triangleBrexit deal no solution to Tory rifts

Manifesto:

triangleAbolish tuition fees and student debt!

triangleThe media, May and the general election

triangleCorbyn in - Tories out

triangleCorbyn's alternative for young people

Labour:

triangleCarlisle debate: The way forward - Socialism or Social Democracy?

triangleCorbyn's Labour needs 100% anti-cuts strategy and fight for democracy

triangleWe must fight all council cuts!

Tax:

triangleCardiff West Socialist Party: How the Poll Tax was beaten

triangleThe Socialist Inbox

Taxes:

triangleTrump's tax plan: Robin Hood in reverse

Public ownership:

triangleRail: fares up, bosses' pay up - delays and cancellations up

Nationalisation:

triangle2018: more upheavals loom

Anti-austerity:

triangleOutrage against 'monster block' plan

Labour Party:

triangleTotnes MP uses coffin controversy to distract from brutal NHS cuts

General election:

triangleCabinet chaos as shambolic reshuffle underlines Theresa May's impotence

News and socialist analysis

News and socialist analysis

17/1/18

Labour

Corbyn's Labour needs 100% anti-cuts strategy and fight for democracy

17/1/18

Trump

Victory! Trump's UK visit cancelled by fear of protests

17/1/18

NHS

NHS crisis: under pressure from all angles - end cuts and sell-offs!

15/1/18

Carillion

Carillion crisis: demand action to save jobs and services

10/1/18

Tories

Cabinet chaos as shambolic reshuffle underlines Theresa May's impotence

10/1/18

NHS

Sustained mass movement needed to stop Tories wrecking our NHS

10/1/18

Education

Bigot Toby Young quits - now scrap the new uni regulator driving privatisation

10/1/18

Them & Us

Them & Us

10/1/18

Teachers

Teacher recruitment falls by a third - cut workload, not funding

3/1/18

Fire service

Fire service victory

3/1/18

Fares

Rail: fares up, bosses' pay up - delays and cancellations up

3/1/18

Higher Education

Mobilise against rip-off executive pay

3/1/18

Virgin

NHS in winter crisis as Branson creams off 1bn

3/1/18

Homes

Thousands live in tents and sheds - seize empty homes

3/1/18

Fat cats

Widening wealth gap, increase in poverty...make the fat cats pay

triangleMore News and socialist analysis articles...


Join the Socialist Party
Subscribe to Socialist Party publications
Donate to the Socialist Party

triangle22 Jan Women rally defiantly

triangle22 Jan Red Mary - a Force of Nature

triangle17 Jan Corbyn's Labour needs 100% anti-cuts strategy and fight for democracy

triangle17 Jan NHS crisis: under pressure from all angles - end cuts and sell-offs!

triangle17 Jan We must fight all council cuts!

triangle16 Jan Home care workers to strike

triangle15 Jan Carillion crisis: Demand action to save jobs and services

More ...

triangle23 Jan Bristol North Socialist Party: 'You can't have capitalism without racism' - was Malcolm X correct?

triangle23 Jan Cardiff West Socialist Party: How the Poll Tax was beaten

triangle24 Jan Caerphilly Socialist Party: The Carillion scandal

triangle24 Jan Cardiff Central Socialist Party: Carillion collapse - Watershed moment for public services

More ...

Socialist Party Facebook page
Socialist Party on Twitter
Visit us on Youtube

Archive

Archives:

January 2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

Legal

SP RSS feed RSS

Platform setting: = No platform choice

V2