The New Worker
The Weekly paper of the New Communist Party of Britain
Week commencing 25th April 2008
Birmingham workers have had enough
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BROWN CAVES IN
by Daphne Liddle
PRIME MINISTER Gordon Brown last Wednesday caved into pressure
and agreed a package of measures to compensate low income people who
will lose out when the lowest 10 pence rate of taxation is withdrawn –
after saying for weeks that nothing could be done.
He was facing a parliamentary defeat next Monday after rebel
backbencher Frank Field had gathered support from 46 Labour MPs to back
an amendment to the current Finance Bill. The amendment would have
compensated the five million who would be worse off when the 10 pence
tax band is withdrawn.
The withdrawal of the 10 pence tax band passed through Parliament
last year, almost unnoticed, as part of the 2007 Budget – Gordon
Brown’s last before becoming Prime Minister.
Parliament cannot undo that now until the next Budget but Brown
has promised to assess the loss to pensioners aged 60 to 64 and low
paid people with no children and find a way to compensate them through
higher winter fuel allowance, tax credits and raising the minimum wage
that will be back-dated to the beginning of this financial year.
Brown said there were better ways of helping these people than
having a 10 pence starting rate for everyone.
Tory leader David Cameron mocked Brown for “weakness, dithering and
indecision”, even though he had been calling on Brown to compensate the
10 pence tax losers.
“Are you making these changes because you thought you would lose
the vote next week,” said Cameron.
Brown was quick to reply that Cameron’s “new found” interest in
the poor “only lasted a few seconds”. The abolition of the 10 pence tax
band had been Tory party policy for many years. The Tories and the
media have used the issue to attack Brown, accusing him of penalising
the poor – though their policies would have hit the poor far more.
But it comes at a time when local elections are just around the
corner and figures published on Wednesday from MySupermarket.co.uk show
that the average family food bill has risen by £15 a week over
the last year – and is likely to rise further.
According to Frank Field it would take just £1 billion to
compensate the 10 pence tax losers.
Brown could hardly argue that he could not find this sum after he has
just made another £50 billion in credit available to the banks in
the hopes they will pass it on to home buyers.
Chancellor Alistair Darling had to meet with leading bankers and ask
them to pass on the Government’s generosity to mortgage borrowers and
repossess people’s homes only as a last resort. A big rise in
repossessions would trigger a crash in house prices.
Michael Coogan, head of the Council of Mortgage Lenders said the
£50 billion was “a very positive step” but that would be just the
start of what they need.
Darling meekly came away from the meeting saying: “The mortgage
market is facing challenges as a result of the US sub-prime crisis. I
welcome the arrangements that the industry has in place, and will
continue to build upon, and address the concerns of borrowers in
difficulty. I hope that lenders continue to take their responsibilities
But the measures the banks will take consist of improving links
to debt counselling services for borrowers facing eviction. There was
nothing about lowering interest rates or refraining from screwing every
last penny they could out of home buyers.
Darling’s words of feeble optimism betray the real economic
relationship between the elected government and the banks. Darling
cannot command the bankers – only ask them nicely.
They will tell mortgage defaulters they are not a charity –
though they expect the taxpayers to treat them like one. They will
demand free market policies and no Government intervention – until they
Then they hold the whole economy to ransom – literally – until
the Government spoon feeds them the money they crave. But they grant
the Government no power over how the money is then used.
This is the reality of the capitalist state. Government aid to
banks should come with the same sort of strings that the banks impose
on their borrowers. If one defaults, taxpayers should repossess the
whole bank and take it into public control, permanently.
Brown out of his
A YEAR ago Labour MPs were
anxious for Tony Blair to resign because his record and reputation as a
lying warmonger was damning their chances of re-election.
Now they are holding their heads in their hands in despair as Brown is
proving even more of an election liability. The Iraq war and all its
horrors, lies and deception are still with us but now Brown has emerged
from Blair’s shadows his reputation for economic wisdom and his claims
of compassion for the poor are evaporating fast. Brown is making the
sort of stupid mistakes that we expect from the arrogant, amateur
would-be tycoons on Alan Sugar’s TV programme, The Apprentice.
Brown’s decision to withdraw the 10 pence tax band was made a year ago,
when he was still Chancellor and Blair was still Prime Minister. But
his fellow Labour MPs, the opposition and the media have only just
noticed the implications, now it is about to be implemented.
This will affect hundreds of thousands of low paid workers. Those who
can claim tax credits to top up low wages will have some protection
from the effects but that still leaves hundreds of thousands who will
lose up to £300-a-year.
This is an economic disaster for these workers at a time when food,
fuel and debt costs are soaring. And it is a political disaster for
Brown, who clearly did not foresee the impact the change would have –
it is obvious that the plight of these low-paid workers did not even
appear on his political radar.
Now he has at least 40 Labour MPs in open revolt and threatening to
vote against this year’s Finance Bill unless changes are made to give
protection to the low-paid workers who will be affected. Since the
opposition will be voting against the Bill, Brown is facing a
Brown and his spin doctors are panicking and making this an issue of
confidence in his leadership – a foolish gambit because it could easily
go against him. Suddenly the whole party is considering alternative
It is a pity they did not consider this a year ago when they could have
supported John McDonnell’s challenge to Brown’s leadership and opened
up a proper debate within the whole party.
Brown is also facing defeat on his attempts to get the time that terror
suspects can be detained without charge or trial extended from 28 to 42
And he is coming under criticism from the media and opposition over the
slow unrolling banking crisis, the resultant falls in house prices
while all other prices are rising sharply.
This is a bit unfair on Brown – but not much. This crisis would have
hit Britain 10 years ago if he had not promoted policies of urging
consumers into borrowing in order to sustain the domestic market. The
crisis itself is an inevitable part of the capitalist cycle. But having
spent tomorrow’s wages yesterday workers cannot spend them again today.
This was just another way of making the workers pay for the faults in
the capitalist system. The debts have led to long-hours working, damage
to physical and mental health of those deep in debt, the undermining of
working hours and conditions and the neglect of children as their
parents work unsocial hours. The workers have paid a very high price.
Many have burnt out physically and mentally; depression and stress have
become an epidemic.
Even now Brown’s efforts to remedy the situation – to bring “liquidity”
into the banking system have led him to put up a total of more than
£100 billion of taxpayers’ money to cover banks for their bad
debts so they can lend more to workers already deep in debt and keep
people buying goods in the shops they cannot really afford.
The Bank of England has cut interest rates three times recently to
persuade the high street banks to lend more. But they have not passed
on lower rates to customers. They have had their fingers burned with
the American sub-prime crash and lending will now be much more
cautious. There is no way out of the coming crisis – it’s much bigger
than Brown or the whole British government.
But the Government is afraid to admit this; they’d sooner blame it on
rumour, panic and even too high levels of testosterone in share
dealers; anything but the truth – that capitalism is falling apart. We
need to change a lot more than just the Labour leader.
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