Playing chancellor

This week was budget week. Gordon Brown, the UK chancellor, had at his disposal his prudently amassed £18 billion surplus, built up through the continuation of attacks on our class. Meagre concessions are being offered as bribes to secure the return of his pro-big business government in the general election.

The minimum wage is to rise, there are suddenly small dollops of money to be handed down to mothers with young children. Across Britain, Labour-run councils have - for a few months - eased back on their cuts. Labour is prepared to buy its way to a second term, albeit with pitiful pay-outs to a working class that expects little in the present political climate.

What should be the response of the Socialist Alliance?

A number of questions arise here. A press release went out last Sunday (March 4) on behalf of the Socialist Alliance. It was titled, 'People before profit: Socialist Alliance outlines a budget for working people' and this "outline budget" was issued just six days before our policy conference. The press committee had pulled back from committing itself to a much more detailed economic policy statement, which would have been a mistake and would have short-circuited our still, at times, fragile democratic process.

Even so, there is much to be criticised in the press release. It commits us to a £7-an-hour minimum wage (for a 40-hour week!); it calls for a one percent tax on City transactions to fund a "massive increase of aid without strings to developing countries"; it endorses the Scottish Socialist Party's service tax. It calls for a 25% increase in public spending (why this amount?).

The central concern I have is on the issue of the defence budget. It states: "Scrap Trident and slash the defence budget by at least 50%, including withdrawal from Nato, withdrawal from all foreign bases and from large projects like the Eurofighter. We would nationalise the defence sector to ensure that not a single job is lost through the implementation of this pledge."

Slash by a half? Enough to half-bomb Baghdad? To withdraw just 50% of British troops from Bosnia and Sierra Leone? Only send half as many weapons to the Indonesian government? Only withdraw from "large projects"? The 'pledge' to "nationalise the defence sector" has to be the strangest demand. Surely our policy on the defence budget is to fight for not a penny or a person to the British imperialist war machine. How can we advocate any financial prop to Her Majesty's armed forces?

I have to say that the final press release is less detailed and slightly less offensive than the original draft. Then the suggestion was for the UK defence budget to be reduced to the EU average. No to a nasty, British imperialist defence budget; yes to a nice, reasonable, European imperialism. The key problem here is that the politics of the defence budget is ignored: it is only seen in terms of money 'wasted' that could be spent on hospitals, schools, etc. This is imperialist economism par excellence. The politics of the working class's attitude to the military is ignored; it is reduced to a matter of pennies and pounds. This is unacceptable for a socialist statement on the British economy and Labour's budget.

There is some confusion in the document as to whether this is a critique or an economic statement. The fact that it is presented as an "outline budget" is a mistake. We are not in a position to form a government. 'A working class response to the budget' would be more appropriate. Our economic platform, primarily, must be a set of demands that the working class fights for in society, not a list of measures we hope a bourgeois government would introduce in the name of common sense.

Calls for investment in housing, health and education must be based on what our class needs, not what the system can afford. We should demand an end to secrecy in government, for workers' inspection of records, independent workers' committees to decide on needs, and so on. Of course, we must also show the perversity of Labour's priorities, as demonstrated by its budget. That is about all the press statement does.

In the statement to the media our national chair, Dave Nellist, is quoted as saying: "If you tried to enter our budget into the treasury computer model of the UK economy it would reject it. It breaks all the rules. That is an illustration of our intent. We are not tinkering with capitalism, but building a new kind of society where the needs of ordinary people come first."

However, the logic inherent in the way our economic statement has been drawn up leads me to the opposite conclusion. It attempts to cost our demands within the framework of current economic conditions, while making grandiloquent statements about a different sort of society (the original draft was even worse). There is no democratic bridge between the sentiment and the actuality. This is where we are in a bit of a bind. As socialists, we actually do not think that our policies and demands can really be 'costed' under a capitalist society in the same way that the bourgeois journalists and economists cost budgets. By trying to fit into this, we ensure our statement ends up as a reformist/utopian wish list. We need a fighting plan of action and a scathing critique of the inhuman essence of the capital system.

This does not mean that we refrain from putting forward concrete demands on the budget. Abolition of VAT is a perfectly sensible demand. (However, retaining VAT on luxury items is perverse. This makes them even more expensive for working class people. Why should only the rich be able to buy 'luxury' items?)

In general the Socialist Alliance demands on tax are worthy. The statement calls for a "radical overhaul of the tax system, so that direct taxes on businesses and the rich become the predominant form of revenue collection, while regressive taxes on ordinary people are scrapped altogether". Further, it argues that direct taxes on those on an average wage or below should be abolished. Even though at the end of the day all taxes under capitalism are actually taxes on capital, this makes perfect sense. The class struggle is intensified and generalised. Another positive inclusion is the demand for state benefits and pensions to be at the level of the minimum wage. This shows up the Socialist Workers Party's pitiful call for a £100 a week pension for what it is: the demand for pensioners to continue to exist on a poverty income.

There is a fundamental problem of method here. With only an opportunist eye on spontaneous movements to guide it, the SWP has already been 'outbid' by the TUC (£5 an hour), when it comes to the minimum wage demand in its Action programme. Indeed, even Gordon Brown has nearly caught up with the SWP's pathetic, but not "too radical" £4.61 poverty pay. Appearing electable is everything; the final goal is nothing.

Alongside this problem of method is one of form and content, as highlighted by our press release. We have comrades who pride themselves on being revolutionaries, consciously writing a left reformist budget statement to fit into their schema of the alliance as a 'united front'. The danger is obvious.

Marcus Larsen

Socialist Alliance budget: key points

A budget in the interests of working people and their families, built on a 25% increase in public spending, to be financed by tougher taxation on Britain's millionaires, on corporate profits, and on the capital gains of the financial sector.

A radical overhaul of the tax system, so that direct taxes on businesses and the rich become the predominant form of revenue collection, while regressive taxes on ordinary people are scrapped altogether.

The abolition of PFI - which is the privatisation of public spending - and the cancellation of all existing PFI contracts.

VAT abolished except on high ticket luxury goods and services.

A 15% levy on oil company revenues, but a reduction in excise duties for consumers.

Income tax abolished for those on the average wage or less, and capped at the existing basic rate for middle-income earners. A 60% rate for those on £70,000-100,000, a 70% rate for those on £100,000-200,000, and a 90% rate for those on £200,000 and above.

A minimum wage of £7 an hour, with pensions and state benefits set at the level of the minimum wage: £280 a week, with no means-testing.

Lift the cap on National Insurance contributions, to raise £5 billion a year. Raise the employer contribution from 12% to the European average of 28%.

Increase Corporation Tax from 30% to 52% - the level it was under Margaret Thatcher.

Impose a 'Tobin tax' of 1% on all City transactions to fund a massive increase of aid without strings to developing countries.

Release capital receipts from council house sales to fund a massive social housing programme.

A 25% increase in NHS spending - this could be covered just by spending the £18 billion budget surplus on better healthcare.

Pour the £22 billion mobile phone licence receipts into a 25% increase in spending on education and training. Abolish tuition fees and bring back student grants, with no means test, at the level of the living wage.

Renationalise the railways, buses and British Airways, with no compensation to the privateers - and pour billions into a national integrated transport plan, based on minimal fares and good transport provision to all regions.

Our budget would remove the exceptions granted by Gordon Brown to the Climate Change Levy and make all industry liable to a pollution levy. An environmental task force would be given powers to investigate firms, order disclosure of documents and the right to take samples in any areas.

At council level we will introduce a Service Tax along the lines of the one proposed by Tommy Sheridan MSP. This would replace the council tax and mean the rich would pay more while workers would pay much less.

Scrap Trident and slash the defence budget by at least 50%, including withdrawal from Nato, withdrawal from all foreign bases and from large projects like the Eurofighter. We would nationalise the defence sector to ensure that not a single job is lost through the implementation of this pledge.