The economic situation

by Campbell Martin (from www.the3towns.com )

Let’s get one thing straight, we are not ‘all in this together’.

We, that is ‘us’, the ordinary, working-class people of the country, did not benefit from the obscene profits generated by bankers and financial speculators when they were having their ‘good times’ from gambling with our money, but suddenly ‘we’ are included when they can’t pay their debts and need a bail-out.

The massive debts accrued by the spivs and speculators of the City of London were cleared by the previous New Labour Government by borrowing billions-of-pounds against our names. We did not run-up the debts, but we paid them - and we could only afford to pay them by borrowing the money, which we will have to pay back, with interest.

Were you consulted at all about the action taken by the Labour Government? I know I wasn’t. No, none of ‘us’, the ordinary people, were consulted. We were just told it was necessary.

We were told by Gordon Brown and Alastair Darling that the debts of the Capitalist financial speculators had to be cleared or the banks would have collapsed. They told us that we came close to the nightmare scenario where cash-machines would have declined our cards and we would not have been able to access money in our accounts because the High Street banks would have been ‘bankrupt’.

That story is very similar to the garbage trotted out by pro-nuclear politicians. Their lie is that we need more nuclear power stations to ‘stop the lights going out like they did in California’.

Now, there are two points to be made regarding that scare story: firstly, when full life-cycle costs are taken into consideration, nuclear is the most expensive way of generating energy. It is so expensive that no company within the nuclear industry has any plans to build new stations in the UK. Of course, if the government - that is ‘us’, the ordinary people - were to pay the astronomical costs of building new nuclear stations, then private companies, like British Energy, would be happy to run them and skim-off their profit. That is, so long as the government - that’s right, ‘us’, the ordinary people - continue to pick-up the multi-million pound tab for cleaning up nuclear sites at the end of their life-spans, and dealing with the toxic waste the industry generates.

The second point about the threat of ‘the lights going out’, like they did in California, is that the cause of that particular electricity failure had nothing to do with a lack of supply, and everything to do with cost.

Like most things in the USA, electricity generation and supply is in the hands of private companies. In California the private companies that generate electricity hiked up their prices to such an extent that the private companies who supply the electricity to domestic users refused to buy ‘the product’. There was plenty of electricity, it was just that private companies were doing what they always do and were attempting to exploit a situation to maximise their profits at the expense of the ordinary people.

Despite the fact the Californian lights went out for no other reason than the greed of Capitalists running private companies, we are still sold the scare story that such an event could be repeated here if we don’t agree to pay for, and build, new nuclear power stations. Of course, if we were stupid enough to fall for that scare story, then the new power stations would be run for us by Capitalist private companies, who would look to maximise their profits at our expense.

The story about the Labour Government having to bail-out the spivs and speculators of the big financial institutions, in order to stop High Street banks closing and us not being able to withdraw a few pounds from the ‘hole in the wall’, is just as much garbage.

Banks could have been ‘saved’ by taking them into public ownership. In other words, they could have been ‘nationalised’. In doing this, the government could have made clear that what was being nationalised was the core functions of the banks - savers accounts, main-home mortgages, personal and business loans and so on. In addition, it could have been made clear that debts accrued from financial speculation on the part of the private banking companies would not be covered. Banks could have been ‘saved’ without the ordinary working class people of this country becoming responsible for the repayment of billions-of-pounds of debt amassed by a very few greedy Capitalists.

That could have happened, but it didn’t - and the reason it didn’t, is because all of the mainstream political parties in this country support the Capitalist system. We, the people, bailed them out, we paid their debts, and they have gone straight back to their old ways. The same people who caused the current economic crisis are still in place, they are still operating the Capitalist system, they are still taking home salaries that read like a Lottery winner’s cheque, and they are still paying themselves obscenely massive bonuses.

Last Tuesday, the first Budget of the Tory-Lib Dem coalition Government introduced a range of measures that will result in hundreds-of-thousands of job losses amongst the ordinary, working-class people of this country. We are in for savage cuts to public services. We will have to pay more tax, including VAT, which has been raised to 20-percent. VAT is a regressive tax, it hits the poorest hardest, so yet again it is the ordinary, working-class people who are footing the bill for Capitalist profligacy.

Capitalism caused the misery so many ordinary people are now enduring - and of which so many more will feel the force as the government’s austerity measures kick-in - and yet we are told there is no alternative. We are told Capitalism is the only game in town and we just have to brace ourselves, get on with things and wait for the next financial catastrophe - the history of Capitalism is littered with them.

However, that is not the case. There is a viable alternative, one where the interests of the ordinary people are put first, rather than those of a small ruling elite. That alternative is called Socialism.

Let’s briefly look at a few alternative measures that a Socialist government could have introduced:

Income Tax - £17.2bn could be raised by taxing all income over £100,000 per year at 50-percent, with a further £9.1bn raised by removing the caps and restrictions on NI contributions. Marginal increases in income tax would generate a total of £26.3bn per year in additional income for government. If combined with more stringent tax avoidance measures it would be possible to raise much more than this from those in society with the highest incomes.

Corporation Tax - this has been halved over the last 30 years from 56-percent to 28-percent. By taking it back to 56-percent, it would be possible to generate additional revenues of £42bn per year. An International Financial Transactions Tax to reduce currency speculation would bring in an estimated £4.2bn per year.

Tax Avoidance - Various estimates from HMRC, the Guardian, TUC and the Treasury have suggested that a concerted effort to reduce tax avoidance would secure around £20bn a year, while the Tax Justice Network has calculated that in recent years some £120bn of tax has been avoided. This is money that has effectively been fraudulently taken from the people by big business.

Reducing Public Spending - Measures could include cancelling the replacement for the Trident Nuclear Missile System, saving around £76bn, and immediately bringing home British forces serving abroad. Meanwhile, Ministry of Defence workers could be provided with alternative sources of employment that would serve the interests of the people here in Scotland, rather than supporting imperialist wars abroad. The Scottish Trades Union Congress has recently set out how such a strategy applied to the replacement of Trident would create far more jobs elsewhere in the economy. Then there is PPP/PFI spending, an issue close to our hearts here in North Ayrshire, with the local Council’s £380m project to build and maintain just four schools. Returning PPP/PFI projects to the public sector would save around £3.3bn per annum.

Welfare and Pensions - People should not have to ‘prove they are poor’ in order to receive benefits, as currently happens with means-testing. Benefits and Pensions should be part of a universal system, with progressive taxation recouping any payments made to those whose incomes from other sources mean they don’t need additional support.

Debt Repayment - A full programme of Socialist policies applied to Scotland’s current economic situation would generate a budget surplus of around £10bn, which could be used to repay debt.

It hasn’t been possible in an article like this to go into detail about how Socialism would create a fairer society, where the interests of the people are what motivates and drives government policies. However, a viable alternative to the Capitalist system that has caused the problems we now face is available. Of course, you won’t hear much about it. The Capitalists own the media and it isn’t in their interests for you to know about the alternative.

Incidentally, I have to be honest, the alternative budget proposals listed above were not my own. They form part of the reasoned policies brought forward by the Scottish Socialist Party in response to the ‘slash and burn’ Budget of the Tory-Lib Dem Government. In much of the Capitalist-owned media, if they mention the Scottish Socialist Party at all it is only to brand them as ‘the loony left’. In fact, the policies of the SSP are very reasonable and would benefit the vast majority of Scots. Meanwhile, the Capitalist lunatics are still in charge of the asylum.