Charities row about venal self interest

The Coalition’s proposal to limit tax relief on charitable donations to £50,000 per year or 25% of a donor’s income has touched a raw nerve within the government’s natural constituencies – so called “wealth creators” and those who back the notion of “the big society”.

At present there is no limit on the amounts that can be donated to charities, thus making it possible to avoid paying tax altogether. One thousand millionaires currently pay 30% or less tax while nearly one in 10 people earning more than £10 million a year pay less than 20% in income tax, according to the Treasury.

Outraged members of the rich list have joined up to complain that the Budget proposal would “deter future donors” in a letter to the Sunday Telegraph. Infringing their “right” to use their wealth as they see fit is a restriction on the “liberties” of the rich and the super rich. To paraphrase Mandy Rice Davies, “they would say, that wouldn’t they?”

The idea that you can appear righteous and generous by giving away some of your wealth to the worthy poor and other selected “good causes” goes back to Victorian times and has long been the foundation of old Toryism as well as liberalism.

Philanthropists like Joseph Rowntree combined Quaker beliefs to build model housing schemes and fund research into social issues. Others raised money for public parks.

But the notion of selfless generosity has gone out of the window in favour of venal self-interest. Offsetting tax by making donations to charity is a convenient way for millionaires to minimise their tax payments. In fact Osborne’s proposal would only affect those giving more than £200,000, so it hardly “punishes” anyone but the super rich.

The web of connections between charities, politicians, corporate and banking interests are more often than not incestuous. Former prime minister Tony Blair, for example, has let it be known that "this is absolutely the right moment for government to do all it can to promote philanthropy; and certainly nothing to harm it."

Not too surprising for a man whose Faith Foundation pays six figure salaries to its staff. And his wife Cherie Blair’s Foundation for Women is backed by top US banks, JP Morgan Chase Foundation and Goldman Sachs.

Behind the pious phrases of “giving back to the community” is not only greed but a deep-seated animosity to the notion of a state that can tap into the income of the rich to provide any kind of benefit to the rest of society including the health service, pensions, education and all the rest.

So why has the coalition made this move? The globalisation of industry and banking combined with tax avoidance, growing unemployment and an aging population has significantly reduced state revenues. So little surprise that the state is desperate to claw back tax money while giving the appearance – and that’s all it is – that “we’re all in together”.

But fear not, ConDem ministers! Shining knight Ed Miliband has come riding to the rescue. Trying to outflank the coalition with a demagogic attack on “big money” funding of political parties he has proposed a £5,000 cap on donations. This makes Osborne’s £50,000 limit on charitable donations look like a tax bonanza to the rich.

Miliband equates trade union donations with those given to the Tories by capitalists and bankers. This is really reactionary and shows what contempt the Labour leader has for ordinary workers. His proposed cap also opens the door for Tories to demand that union members in affiliated unions opt in to paying the political levy to Labour (at moment unionists have to opt out – i.e. make a conscious decision not to pay).

Yes, they are all in together – the major political parties, that is. That’s why so many people are deciding to hold on to their precious votes until there’s something better to use them on.

Corinna Lotz
A World to Win secretary

Challenge the hate-filled state

The low level of debate at the emergency recall of Parliament underlines the yawning gulf between rulers and ruled, and the establishment’s poisonous hatred for working class youth.

Prime Minister Cameron claimed the uprising on streets around the country was 'criminality, pure and simple' - an intellectually bereft characterisation in a country where the entire social, economic and political structure is shaking.

MPs bayed for water cannon and baton rounds and censorship of social networking sites. Ed Milliband called for police spending cuts to be reversed and joined blanket condemnation of the rioters.

The police have shown a more sophisticated understanding of events than politicians. And they were also quite afraid of furious gangs ready to fight them. As one young woman said, the aim was to show the police that people control the streets and 'can do what they like' there.

The prevailing mood on the left has been one of ironic comment. It is pointed out that flat-screen TVs were high on MPs' looting lists too. The hypocrisy of condemning criminality when politicians, police and newspapers have been hiding each other's lawbreaking is also highlighted. Others point to politicians weeping over high streets already devastated by out-of-town shopping centres, with one in seven shops empty across the country.

Governments and corporations are desperate to kick start growth by getting people back spending on precisely the goods people were helping themselves to. And yesterday, Chancellor George Osborne was telling MPs that Britain is a 'safe haven' for investors precisely because of the brutal programme of cuts that led to youth clubs in Tottenham being shut.

Alongside this post-modernist irony, it is said that this is a non-political movement without a goal, it has no future, and we must 'condemn the violence'. This takes the appearance of the riots and compares and contrasts it to other aspects, when in fact these are all moving and developing parts of the same violent whole which is the out-of-control capitalist crisis that has the planet in its grip.

These moving parts are not outside of the political realm but inside it. You could say that politically the riots were more realistic than the student fees protests, because the youth were not asking the government or the police to change course - which they won't - but simply fighting them.

This new part - angry working class youth - has emerged with dramatic force. It will not disappear, but interact with other parts and with the global whole, each changing and conditioning the next phase.

In the meantime, hundreds of youth will be criminalised. A 23-year-old man with no criminal record was jailed for six months for taking bottled water from Lidl. Rioters are being held in custody for charges where they would normally be bailed. Hundreds will go to jails and young offender institutions already bursting at the seams, with inhuman conditions. Others will be stuck with fines they will never be able to pay.

We must not abandon the youth to the tender mercies of a hate-filled state. The challenge is to break decisively from the illusion that the current system of rule can offer us any kind of decent future.

The formation of People's Assemblies to defend communities, jobs, services, education and housing, is the positive way forward. Representing all parts of the community, they can do a better job of protecting facilities and small businesses. Capitalism only wants young people working for minimum wage or spending up credit and store cards. It has no regard for them as individuals. Within the People's Assemblies they can represent their views, enjoy respect, and have a decisive role in forming their own future.

Community gatherings are already taking place in Lewisham, Clapham and Tottenham and other areas. There is a desire to mend the damage to town centres, small shops and people’s homes as well as address the deeper causes of the riots. This offers the opportunity to discuss practical ways to replace the bankrupt political establishment. The development of assemblies for the widest possible debate and action is the order of the day.

Penny Cole

Cracks deepen as 'recovery' proves a myth

New figures from the Office for National Statistics confirm what most people know only too well: living standards are falling sharply as a result of the recession. And the Con-Dem Coalition’s budget measures will ensure that things get a whole lot worse.

Real household disposable income – the total income of Britain's working and unemployed populations after taxes and adjusted for inflation – dropped by 0.8% in 2010, according to the ONS. The slide signals the first drop in real incomes since 1981, also during a recession, and the biggest since 1977, when there was double-digit inflation. The decline is set to worsen sharply to about 2.0% this year as the biggest public spending cuts since the second world war begin in earnest.

Incomes are being held down or falling, whilst prices of basic necessities including food, clothing and transport are soaring. Despite historically low interest rates and falling property prices, housing hasn’t got any cheaper apart from a lucky few with short-lived tracker deals.

Chancellor Osborne has learned something from the family wall coverings firm of Osborne and Little. He’s adept at papering over the cracks, or trying to, using faint praise from the Organisation of Economic Co-operation and Development – the club of rich countries – which said: “While this budget includes hard measures, we are convinced they are unavoidable in the short term to pave the way for a strong recovery,"

The trouble is there’s no chance of a strong recovery. Trying to bring one about just makes things worse. Despite adopting a series of unprecedented changes, the list of bankrupt European countries is growing rapidly.

Food price inflation brought on by the tsunami of credit that followed the 2008 financial meltdown triggered a wave of simmering revolutions in the Middle East and North Africa that is spreading throughout the region to Syria and Saudi Arabia sending oil prices to record levels despite slowing demand.

In America, the strengthening of financial services regulation is already making a bad crisis worse. According to Alan Greenspan, former chairman of the US Federal Reserve, the legislation “fails to capture the degree of global interconnectedness of recent decades which has not been substantially altered by the crisis of 2008”. Greenspan should know about these things as he presided over the growth of the credit bubble in the first place.

Greenspan, an arch-defender of unbridled capitalism says the modern economy is far too complex for regulators to understand, and to meddle is dangerous. He’s a much more old-fashioned kind of “hands-off” guy, seeing crises as unfortunate exceptions to the normal functioning of the system.

He says: “Today’s competitive markets, whether we seek to recognise it or not, are driven by an international version of Adam Smith’s ‘invisible hand’ that is unredeemably opaque. With notably rare exceptions (2008, for example), the global ‘invisible hand’ has created relatively stable exchange rates, interest rates, prices, and wage rates.”

There is a truth in what he says, of course, in that market forces are pretty much uncontrollable. But in arguing against regulation, Greenspan is forced to open the can of worms that bedevils every one of the capitalist camps – the post-war relationship between growth and ever-expanding credit:

“The vexing question confronting regulators is whether this rising share of finance has been a necessary condition of growth in the past half century, or coincidence. In moving forward with regulatory repair, we may have to address the as yet unproved tie between the degree of financial complexity and higher standards of living.”

Like Osborne’s wallpaper, this thinly-veiled threat fails to mask the reality. Regulation or not, the majority of us will either have to live with the devastating and worsening consequences of the great crash that inevitably brought 50 years of credit fuelled growth to an end, or organise ourselves to replace the capitalist system with a sustainable, not-for-profit alternative.

Gerry Gold

Economics editor

Time to end the profit system

The Lib-Con Coalition government’s Spending Review is an attempt to rescue an already bankrupt economy. With £81bn cuts in public spending, it is the biggest and most sustained assault on the public sector since the creation of the welfare state sixty years ago.

But the reality is that despite the ruthless measures announced yesterday, the cuts will hardly make a dent on Britain’s budget deficit, which at £162 billion is the largest of the world’s major economies.

The plan is to bring government borrowing down by £149 billion in four years. This is a 19% per cent cut in real terms, as opposed to New Labour’s proposed 12 per cent. But can this gamble succeed? The very measures intended to reduce the deficit will deepen the crisis.

The one million people who will be thrown out of work and those made homeless will need some kind of support. And whilst blighting the lives of countless citizens, especially the most vulnerable, government spending will continue to rise by an additional £38 billion over the coming four years. As Chancellor Osborne announced: “total public expenditure - capital and current - over the coming years will be £702 billion next year, then £713 billion, £724 billion and £740 billion in 2014-15.”

An additional £7 billion cut brings the total cut in the welfare budget to £18 billion so far. The poorest ten per cent of the population stand to lose the most. It is a monstrous bludgeon expected to achieve just a £5 billion reduction in the £43 billion per year interest payments.

The measures include:
• a 30% cut in funding for local authorities
• a 74% cut in the budget for house-building combined with a trebling of rents for new tenants in social housing
• insecure tenancy of council house dwellers
• the minimum possible increase for the NHS, that will leave health care struggling to keep up with an aging population and scientific advance
• ending the universal right to Child benefits
• a 3.4% real cut in education
• cancellation of major infrastructure projects, like the renewal energy from the Severn Barrage
• a 10% increase in rail fares
• a £7 billion cut in the welfare budget
• Culture Department to be cut by 42% with almost 30% cut for Arts Council
• up to 30% cuts in budgets for government departments
• 20% cut in funding for the police
• rapid acceleration in the process of adding a year to the working life of a man and six to that of a woman before they can claim a state pension
• huge and damaging reductions in the settlements for Scotland, Wales and Northern Ireland

There is certain to be much more as the contraction of the global capitalist economy tightens its grip. The attempt to reduce repayments to the money markets will be undermined by tax revenues falling faster as the recession turns to slump. The populist gesture of £2 billion to be raised from a permanent levy on banks will surely be passed on in the form of higher costs of borrowing.

Cuts in administration of around 30% over four years will lead to a loss of an estimated 490,000 public sector jobs, 8% of the total. The effects of the overall programme confirms consultancy PriceWaterhouseCooper’s estimate of a further 500,000 jobs evaporating in the private sector as spending is reduced and contracts are cancelled.

The Coalition has issued a sinister threat with its promise that it will always be better to be in work than on benefits. It means that they’re hard at work on schemes to reduce wages across the board. No doubt employers will be rubbing their hands at the prospect of new sources of cheap labour from the enlarged European Union and beyond.

This is only the beginning. The Spending Review spells out that the capitalist state can no longer afford to fund any of the rights or life-support benefits won by unions in a century of struggle.

The intention to reduce the wide and complex range of benefits needed by millions of people suffering the effects of three decades of profit-chasing globalisation to an all-encompassing single payment, and a time-limit on the Employment and Support Allowance reflects a profound contempt for the individuals whose needs have been assessed by cohorts of public sector workers. Capitalism in crisis wants to reduce millions people to bottom-line cyphers of cost before trying to eliminate them altogether.

Calls last night outside Downing Street for “French-style” strikes are a welcome move from the total inaction of the Trade Union Congress. But even industrial action needs a political purpose. The desperate gamblers in No10 and 11 are driven by a real economic crisis of the capitalist system itself.

The solution to the debt mountain comes in the shape of action by People's Assemblies http://aworldtowin.net/frontline/BuildPeoplesAssemblies.html, formed locally throughout the country with a view to defending services, livelihoods, jobs, and homes. Eventually a government formed from a network of people's assemblies will need to take control of the financial sector, cancel the debts and turn it into a not-for-profit service.

The global capitalist classes are watching to see the results of Osborne’s cruel experiment. It’s time to realise that we too must enter new territory.

Gerry Gold
Economics editor

All bark and no bite

There was dismay and anger amongst the several thousand trade union members who crowded Westminster Central Hall; some including a large number from the prison officers union, couldn’t get in to the TUC’s anti-cuts rally. People had travelled from Lancashire, Devon, Cornwall, Northamptonshire and around London to take part in the protest meeting and lobby of MPs.

As well as the Prison Officers Association, there were big delegations from Unison, actors’ union Equity, rail and transport workers, public services unions UNITE and GMB, the National Union of Teachers and the Right to Work Campaign. Screen actors Benedict Cumberbatch and Roger Lloyd Pack said they opposed cuts in the arts which will privilege the rich. They all shared a deep anxiety as it emerged that around half a million jobs are to go by 2015.

Tony Woodley, joint secretary of the UNITE trade union, pointed out that for every four public sector jobs scrapped by the cuts, three more would follow in the private sector. He pointed out that the Lib-Con coalition has no mandate for the cuts, and that people “did not vote for the dismantling of their schools, hospitals and communities.”

“Cuts on this scale make no sense,” he said – but they make sense to the coalition, the bankers and the IMF. It’s the survival of the capitalist system that is at stake for them.

TUC general secretary Brendan Barber continued the myth that the cuts are just a political choice, not an economic necessity for the ruling class: "They want us to believe....this is economic necessity. Yet economic experts across the spectrum warn us that the cuts are too deep and too rapid.”

Dave Prentis of Unison warned that if the government doesn’t listen, “we will be back. For every one of us in this room today, we will bring a hundred more. We’ll march in our thousands and we’ll vote in our millions,” he said in a fit of demagogy. But vote for what? For New Labour Mark 2?

None of the trade union leaders have any answers. In fact they are determined to hold back any serious movement by workers in the face of the re-shaping of the entire British state. Asked why the British workers were not angry as those in France, Woodley cited the anti-trade union laws making striking difficult. But if they were serious about halting the cuts, trade union leaders would bring every member out and let the law go hang. By directing all their fire towards parliament and the next election nearly four years hence, they hope to act as a lightning rod to defuse and disarm any movement.

And where was Milliband? He was in hiding from the trade union leaders who got him the Labour leadership. The reality is a New Labour government would be doing the same – and it may not be too long before they too are co-opted into this government of desperate decline.

Today’s spending review is not the result of a nasty bunch of old-style Thatcherite Tories. It is a response to the most serious economic and financial crisis of the capitalist profit-based system. As Bank of England governor, Mervyn King, speaking in the Midlands, made plain. Deep tensions underlay discussions at the International Monetary Fund meeting last week, he said.

Global currency conflicts, particularly between the US and China, are evidence of profound disagreements about the way to deal with the crisis. A 1930s-style collapse of business activity and international trade is possible. So much for the cuts being an “ideological exercise”! They are the ruling class’ response to an uncontrollable crisis of the system.

Fighting against the cuts agenda means challenging the ruling class by working for a transfer of power, property and control to a democratically elected and accountable network of peoples’ assemblies http://aworldtowin.net/frontline/BuildPeoplesAssemblies.html. Come to the Beyond Resistance conference on December 11 to make this come alive.

Corinna Lotz and Peter Arkell
A World to Win