- City Stockbroker in the Sunday Times, 11 April Dennis Healey has produced a Budget which changes nothing - and yet somehow changes evervthing.
It changes nothing in the sense that (to use the language of the commentators) Healey has produced a 'neutral' Budget — neutrally maintaining one and a half million unemployed. But the rules of the game have certainly been changed. Healey has topped and tailed a carrot and offered the union bureaucracy the bit you throw away — a 3 per cent pay deal plus backdated tax concessions.
This fraudulent scheme - it would mean a seven per cent cut in living standards over the next year even if the annual rate of inflation in 1976-77 was reduced to 12½ per cent caused even Jones and Murray to turn white. Not because they oppose cutting their members' living standards-after all, they have been doing that quite successfully with the £6 limit — but because, to use Murray's words, it has put them 'on the spot". Capitulation Last year's capitulation by the TUC on wage controls, far from strengthening the hand of the unions in relation to the Government's economic policy, has meant that Healey can now turn round and tell the union bureaucrats just what they can or cannot have. When Wilson asked everyone to give a 'Year for Britain' last summer the union bureaucracy's collapse prepared the way for Healey's attacks on social spending, the latest Budget and another year Capitulation doesn't bring concessions but prepares the way for further attacks. Murray and Jones already fear that the lesson may be sinking in among wider layers of the rank and file. And now Healey is telling the bureaucracy to capitulate without even the smokescreen provided by back-room manoeuvring.
Healey's master stroke is to link the tax concessions to the achievement of a 3 per cent norm. In this way he is attempting to line up every group in society against the trade unions if they do not accept the deal.
Heath's mistake was to take on the miners when neither the middle classes nor the whole of the ruling class were ready for a bead-on confrontation with organised labour. This "Labour' Government - if it survives much longer - intenas to make no suca mistake Healey has placed the TUC leaders right on the spot by making them appear to the mass of the population as the people who will decide whether they get a tax cut or not. Weapon But his weapon of strength is also a confession of the ruling class's economic weakness. The role of the trade union bureaucracy has always been to argue about how to carve up the cake. In apparently ceding to the unions the power to determine to a small extent the level of taxation, Healey is trying to make the bureaucracy the official policemen of the cake-cutting.
Any union leadership worth its salt would reject this fraud, saying we don't want to dole out the crumbs but want the cake - and the bakery too! It would refuse to police the Chancellor Healey has produced one of the most anti-working ly does it make huge economic attacks on the working class we have had plenty of that before-but it systematically attempts to ment.
demanding bigger wage increases and a return to free collective bargaining. An alternative programme for the organisation of the economy-measures which protect the working class from the effects of the capitalist crisis and prepare the way for socialismhas to be put forward. In the following pages, Red Weekly looks at Healey's fraud and some of the policies which are needed to fight it. working class in the interests of capitalism and say: 'Yes, we will have "policemen" but they will be our members, organised in the factories, sites and social services to fight for workers control over production and in defence of the welfare services.' Such a leadership would campaign for the formation of workers and housewives committees with control over prices - the best way to win over the middle classes driven into the arms of reaction by soaring inflation. But the present trade union leadership, while they fully understand the political cunning behind Healey's move, have neither the policies nor the intention to fight him.
The 3 per cent plus tax concessions isn't the only fraud in Healey's budget. What happened to Healey's bold announcement class Budgets ever to come from a Labour Government. Not mereline up every section of society against the organised labour moveThe workers movement cannot meet such an attack simply by when introducing the publie expenditure White Paper that unemployment would be reduced to 600,000 by the end of 1978?
That would have required an annual growth rate of 8.5 per cent — which is slightly less likely than Britain putting a person on the moon in the same period. In fact Joel Barnett, Healey's understudy and secretary to the Treasury, confessed to the Commons Committee on Public Expenditure that it was anybody's guess what the annual rate of growth would be.
However, the present concentration on rationalising industry and cutting welfare services, which are amongst the biggest employers, means that boom or no boom, two millión unemployed by 1980 is more likely than Healey's guesswork.
The fraud is just cheap trickery when it comes to pensions. For months pensioners have been paying increased prices for electricity, gas and food. But they won't get any increase until November, and even then it will fail to keep up with the higher prices already paid — a mere £15.30 for a single pensioner instead of the £16.30 needed just to pay for past inflation.
The Government has consciously changed the rules — exeluding the peak months of 28 percent inflation last summer by basing the pension increase on the projected level of inflation between November 1975 and No. vember this year. A similar fiddle has been applied to unemployment and sickness benefits, conveniently saving the Government £500 million in the process.
Concessions Further tax concessions have meanwhile been made to the bosses and the rich. If you care to put your money into pictures and statues, you can pass on any amount of money to your children. Another £65 million in tax has also been given back to those wealthy enough to possess stock which can appreciate.
Meanwhile managers wanting cheap labour can now get &20 a week per head for keeping on people they want to sack. For thus 'saving a few thousand jobs, the Government will pay those responsible for the present mess £60 The Budget is a nasty cheap fraud. It is based on the hope that production will rise by 4 per cent over the year to mid.1977 while wages will be restricted to a 3 per cent rise. The benefits of increased production, even in the unlikely event of it being achieved on such a scale, are reserved for the ruling class As far as inflation goes, there is little likelihood that it will run at as little as 12½ per cent over the next year, with a further reduction to 5 per cent by the end of 1977 - so the cuts in living standards will be even greater than the 7 per cent Healey is proposing. on top of the decline already suffered under the &6 limit.
Inflation The present run on the pound pushes up the cost of living daily, accelerating the rate of inflation. The Financial Times noted on 6 April: "As the threat of the recent sharp devaluation works through, there is a clear threat that prices may rise faster later in the year'.
The Economist, the magazine of big busi ness, was well pleased with the Budget. It smugly commented: 'If a Conservative Government had dared to propose anything so sensible as a 3 per cent minimum for wage rises in 197677, the trade unions would be mounting demon strations in the streets. Because a Labour Gov. ernment has proposed it, the unions will try initially just to bargain the proposals' cutting edges away.
We must wipe the smile from their faces by organising to smash up that rotten alliance between the trade union bureaucracy and the Cabinet which has guaranteed the success of Labour's anti-working class policies. Having gone through purgatory over the last year, let's avoid hell over the next!
MICK GOSLING
photo: JOHN STURROCK (Report) Red Week!