What the recent budget means for you in N.Ireland


The unveiling of Alasdair Darling’s budget, representing as it does as the strategy on the government’s part to deal with the developing recession which the global economic crisis has caused, has unsurprisingly been surrounded by hysterical commentary from the mainstream media.Both the right and left of the spectrum of capitalist politics are united however in declaring it to be a ‘redistributionist’ budget, in that it represents a channelling of wealth downwards from the richest to the poorest in order to protect the less well-off from the effects of the crisis, keep employment up and restore consumer confidence.

For the left wing of the labour party, desperate to affirm their belief that the party represents in some sense the interests of working class people in the UK, the budget is a reversion to “Old Labour” politics and a sign of the return of the party to its natural constituency. Union bosses are pleased, as are liberal-left commentators.

Take The Guardian’s Polly Toynbee. Declaring ecstatically that “at last the party of social justice has woken up”, she writes in the 25th November edition of the paper that “The New Labour era is over - welcome to social democracy. Following in Obama's footsteps, it is suddenly safe to tax the rich and spend to protect jobs.

Keynes and Roosevelt are the world's spirit guides through this crisis, because in a crisis social democracy is what works. Yesterday that faith allowed Labour to shed its disguise and follow its nature in a £20bn shower of spending.”On the other side, right wing papers are decrying an attack on “aspiration” (i.e. the wealth of the rich), and claiming that the capital flight it will supposedly cause will wreck the economy.

And what justifies this belief that the Labour Party have undergone a Damascus road conversion and are going to squeeze the rich for all they’re worth? An increase of a couple of percent to the income tax rate of those earning over £150,000 – around 400,000 people nationally. This is to net the treasury an extra £1.2 billion. For the labour party faithful, it’s like 1945 all over again, for the right, it’s like 1917.

But lets ignore the hyperbole and look at what is actually happening. Firstly, even by the standards of mainstream British politics, a 45% income tax rate for the highest earners isn’t much. That well known socialist Margaret Thatcher managed a rate of 62% in the high days of her administration.

The only country in the EU to tax the rich less than Britain is Luxembourg. And keep in mind the fact that according to that notorious red rag the Daily Mail, only one in six of the very richest in Britain pay any income tax at all, using various loopholes to dodge it (http://www.dailymail.co.uk/news/article-463252/Only-UKs....html).

But leaving aside the increase in income tax for top earners, the rest of the budget is anything but redistributive. If anything it taxes working class people disproportionately. Take the £5 billion that will come from cuts in services – this won’t affect the rich, who can afford to rely on private healthcare and schooling, but it will hit the rest of us and workers in those sectors hard.

Or take the £5 billion that will come from an increase in National Insurance, which will hit working class people disproportionately because as a regressive tax it represents a larger proportion of their income. Then there’s the £1.2 billion that will come from increases in duty on alcohol and cigarettes. Again, this is a flat tax that will affect everyone but the richest, as the less well off you are the greater the proportion of your disposable income will be eaten up by it.

The temporary cut in VAT of 2.5% has received a lot of attention as a measure that will supposedly help ordinary people out by bringing their bills down, and will get spending up again. Given that retail chains like Marks and Spencer, Debenhams and BHS are cutting prices in response to dropping consumer confidence anyway, it won’t make much of a difference. ­As businesses are not obliged to pass the rate cut on, what this really means is capital having the opportunity to translate more of the till price into profits.

In other words, a gift to the owners of businesses. But even if this wasn’t the case, the VAT cut is hardly progressive. The more you spend the more you will benefit – those with higher personal spending will benefit much more – a really redistributive budget might take the amount that is to be lost from the Treasury’s coffers and just hand it out to everyone in the country. Everyone but the most well off would benefit more from that than from the current VAT cut.

But say, hypothetically, that the budget did represent a real break, say it involved a programme of redistribution downwards. What would this mean?

Ultimately, redistribution, like all those other things which a reformed capitalism could hold out to us, such as real meritocracy, would be of no help to us as a class.

Socialism does not mean capitalism painted red. If it is to mean anything at all, it cannot be a form of capitalism; it cannot mean the continuation of wage labour and private ownership of the production of what we need.

This is by definition exploitation, as for any business to remain viable it must accumulate capital, and for this to take place workers can never see the full value of what they produce, as it must return a profit to those who own the process of producing it. It cannot mean that our day to day activity is decided by others, and points towards allowing others’ money to make more money.

As long as capitalism exists, so will a state of exploitation. Its law of growth or death will subordinate the planet, its people and its resources until we institute a new way of doing things, based on people’s concrete needs rather than the need to capital to expand – for our needs rather than their profits. Historically, social democracy (which this budget is not) is often a last-ditch defence tactic on the part of capitalism, a concession to working class combativity which is less dangerous and costly than all out repression.

Because capitalism by definition means our exploitation and the need to subject our activity to the law of continual accumulation of wealth for others, it by definition means struggle.

As workplaces are not democratic environments, being hierarchical and unaccountable institutions, the only way we can enforce our interests (more pay, less work) against the interests of our bosses (more work from us for less) is to struggle together.

Putting our faith in leaders to make capitalism less onerous is a diversion from our power to make real change, through collective direct action. And it is from this need to struggle together and the real struggles that run through capitalist society in varying states of intensity that a truly socialist society can emerge, a real break with capitalism, as we have the strength to take power ourselves, directly. And at that point, the faces of caring capitalism, such as the leaders of the bureaucratic unions we have no choice but to struggle both through and against, and all the leftist would-be leaders, will be united in their attempts to turn us back and put our faith in them to take care of us.

We can’t hope for better management of capitalism, but through increasing our combativity we can force it to give us what we need and ultimately leave it behind entirely.

Taken from blog of the Anarchist Federation