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From Militant, No. 199, 29 March 1974, pp. 1 & 8.
Transcribed by Iain Dalton.
Marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
There are some items in the budget which will relieve some of the misery of the poorest. A raising of the tax threshold for the lowest paid, a penny off the price of milk and the food subsidies of £500 million along with an increase in pensions to £10 and £16 and unemployment pay increases of $1.25 for a single person and £2 for a married man will all be supported.
But the real question arising from the budget is, who will pay? If those measures above were the only ones then it would mark a small step forward, but they are not. It is largely a question of “Robbing Peter to pay Paul”. Even more massive price increases are in the pipeline as a result of Labour’s proposals.
Neither are they increases to tax the “well off” or even “higher paid” workers alone, they will cut into the budgets of every working class family in Britain, soaking up most, if not all of the apparent benefit from other measures.
A brief list should make this point:
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Every one of these increases will directly or indirectly raise the cost of living even further for the working class. Apart from the penny off milk, not one further reduction in price is proposed, the food subsidies will only slow down (and not by very much) the rise in food prices.
The small sums which some workers will save from a raising of the tax threshold and reduction in the weekly insurance stamp will be offset many times over by the other increases, along with inflation in general.
Age Concern, a voluntary organisation assisting old people, have pointed out that the new pension levels are not worth anything like the original offer made by Labour after inflation since then. Since the 1972 Conference when the figure was adopted the £10 has been eroded by £1.69 which will be £2 in the summer.
Compared with the Tory offer of six monthly reviews and compensation for inflation, the new figures are hardly better than they otherwise might have got, by the time they actually get them.
An increase of corporation tax from 42% to 52% has been announced; but most significant is that the promised wealth tax has been dropped until “further notice”. This is a disgraceful retreat from Labour’s Programme. All this will do is give the capitalists time to readjust their affairs so that the tax, if introduced, will have only a small effect, and at the same time enable them to mount a massive campaign to press Labour to drop or drastically modify even the mild proposals they have. At the same time we should recognise that a wealth tax can have two effects: either it can be weakened by amendments to make it ineffective; or if it really hits the rich, then they will launch an “investment strike” thus sabotaging Labour’s plans.
The capitalist press may well have lauded the “fairness” of the budget, how the rich have been stung and so on, but the truth is just the opposite. On the surface the rich are to be taxed at a higher rate, the massive concessions to the rich made by the Tories have to some extent been reversed by the budget, but in reality the benefactors will be the blossoming tax avoidance industry!
There are 1001 ways in which the rich and the high salaried bosses can avoid paying tax. The tax tables published in all the newspapers showing, for example, that the £100,000 a year will be taxed by another £6,000 or £7,000 a year miss the point (deliberately of course) that no capitalist in that position would be seen dead paying tax at those rates. An army of accountants are at his disposal to make sure his affairs are so arranged that he pays as little as possible, and as long as the capitalist system exists and the wealth is in the hands of these parasites, then attempts to tax them severely will rebound.
Once again, beneath the gloss, it is the workers who are being asked to pay for the bosses’ crisis. All the praise for its fairness from the press is designed to persuade the worker to accept a “voluntary” incomes policy, to accept a cut in living standards on the pretext that the misery is being shared around equally.
The games of the Daily Mirror have begun already. Its headline for the day after the budget was “Now it is up to Jack (Jones) and Hugh (Scanlon)”. The Mirror then said:
“Now it is up to the Trade Unions ... will they honour their side of the social contract? ... Now they must show they are ready to make a voluntary incomes policy work, ready to throw their weight into the fight against inflation”.
This argument must be fought tooth and nail. The rate of inflation is now 18.8% a year. This means that a worker with a family take-home pay of £30 a week would need by the end of the year, at this inflation rate, an extra £5.64 just to stand still! And that is take home pay. It means a gross increase of £7–8 a week will be demanded just to keep the same standards as now.
But look at what Len Murray of the TUC had to say on BBC1 TV: “The broad sweep of the budget has been very much what we are looking for. We’ll respond in terms of wage claims, I’m sure.”
Perhaps such an attitude from Murray is expected but even Jack Jones of the TGWU who had opposed incomes policies and is seen to stand on a left wing position said “workers will be making sacrifices as a result of the budget. I believe they will do so willingly.”
In no sense is this a budget favourable to the working class. It stands on the basis of capitalism. There are hardly any proposals to even clip the finger-nails of the big monopolies who control the economy.
If Labour were ready to bring in a socialist budget it would be on the basis of sweeping measures against the rich which could only be implemented as part of a bold socialist programme. Such measures would have to base themselves first and foremost on the nationalisation of the 250 monopolies and the banks thus in real terms making the rebuilding of society on socialist lines a possibility.
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Last updated: 17 August 2016