The latest budget represents a defeat for the ruling class. Naturally it does nothing for the poor, the pensioners, etc., but what it does do is attempt to expand the cconomy in a situation in which not merely have the trade unions not been defeated, but on the contrary have scored a victory in the miners strike. There should be no doubt but that this is a recipe for disaster for British capitalism. As we have noted many times, Heath had intended to expand the economy, in order to raise productivity for entry into the Common Market, after dealing with the unions. He could then possibly have hoped for 3-4 years of growth with a fair chance of winning the next General Election. Now we can predict with relative certainty that the first signs of real trouble will begin to appear long before that is over.
From the budget it now appears that Heath may actually be going to try to make a shift to acting as leader of that section of the ruling class which wishes to try to do a deal with the trade unions. it is unclear whether be actually wants to do this, still less whether he will be capable of it, but it should be understood clearly that this bourgeois strategy will fail. In those circumstances the Heath government will drift without a policy. The crisis of the ruling class will intensify. Already, as we noted in our editorial after the miners strike, the Labour leaders have been able to move out of their peripheral position in British politics and go onto the offensive. The response of Labour M.P.s to the Tories' announcement on the readoption of Labour's regional policies shows that they are now convinced they are on the offensive. Wilson, with his negotiations with Sinn Fein, is already beginning to take up his 'gimmicks' strategy. Providing that Jenkins cán be neutralized, Harold Wilson must be feeling more confident than he has done for the last two years.
As regards the real actors on the stage, that is to say the working class and its "leaders", and the employers, the situation is as we described it in our editorial at the end of the ners strike. The rank and file of the trade unions have en encouraged by the miners victory. The occupations in Manchester are the best signs of this. Sections of the aling class are now going to see clearly that if Heath has decided to make a change in policy it is not going to work. All that will probably now occur is that the section of the ruling class represented by The Economist and other such publications will now change its policy over the next year from "Support Heath" to "Dump Heath". If the section of the ruling class which wants to adopt the policy of doing a deal with the trade unions has succeeded in gaining the The analysis of the current situation carried in the editorial of The Red Mole, 37, has been vindicated by the Tory Government's Budget. All the Government's measures are determined by the fact that it realises that it has to go for expansion and an investment boom, before it has inflicted a decisive defeat on the trade unions. This is extremely dangerous but is forced upon the Government by the failure of its previous endeavours to get investment going, and in light of Britain's coming entry into the Common Market. Unless British industry can be quickly modernised and made competitive, entry itself is extremely risky from the bourgeoisie's point of view.
It is this which has determined the lines of the Budget and the economic strategy it represents. The Government must appear to be acting to reduce unemployment drastically (to sweeten the TUC, to gets its cooperation for restraint) but without taking real measures along these lines before the power of the unions is emasculated. One has only to pose the problem to see how difficult the Government's situation is; even if it does get upper hand over that section which wants a confrontation then all that signifies is that they will become discredited more completely in the next few years when it is revealed once again that integration won't work.
What we may be in for, is a little musical chairs amongst the representatives of the ruling class. Wilson post 1966 model, who must now be thinking how he can make it up with the bourgeoisie over the Common Market, will probably move back to trying to look like Wilson 1964 model. Heath will try to look like Wilson in his post 1966 model, and Powell, who has been made to seem exceedingly quiet by the first two years of Tory Government, will now probably try to emerge as a souped up Heath. A few people may beexpectedto become confused and take up odd positions. Grimond of all people, in a bizarre gesture, has returned from the dead to call for a hard line. It is all really of no interest which side the individual actors take up. forces remain as before.
The main threat within the working cles movement still remains the moves to an agreement on incomes policy be tween Wilson and the trade unions. As for the TUC and the trade union leaders, a few may now have illusions about a deal with Heath. Certainly sections of the TUC want it, if for no other reason than that the TUC is largely an irrelevance if the trade unions are not doing business with the government. Indeed the TUC's main role has become errand boy between unions and government. On the other hand Jones and Scanion still must feel they have little to gain from an incomes policy. Even if Heath has decided to retreat to a policy of integrating the unions, it is by no means certain he will succeed at all, even in getting verbal agreement (see editorial in the last issue of The Red Mole).
In short, what does this budget represent? It represents (as someone once described a Rodgers and Hammerstein musical) sound, words, music and signifying nothing. All it means is that Wilson will now, at least for a period, have the whip hand against Heath. In that particular contest the working class has no real interests at stake, except that it would help to destroy a few Labourist illusions if Wilson were once more in power. In any case the change in Tory strategy, if there has truly been one, will fail. The confrontation policy was the only one with any chance of succeeding. In a few years time we could be back to the 1970-72 strategy, only this time with more venom. The basic slogans corresponding to the situation remain the central ones we advanced at the end of the miners strike. the cooperation of the TUC bureaucrats (by no means certain) it has no guarantee that this will have much effect on the level of wage settlements. This is a policy doomed to failure and the measures of the Budget are a desperate attempt to buy time.
The first thing to note is that the budget gave only a derisory pension increase (and that not till the Autumn either) to the pensioners.
Coupled with this is the fact that there was absolutely nothing in it for those who earn so little that they do not pay tax.
Next we come to the rise in personal allowances. All those who pay tax will pay f1 a week less tax. This is to keep the demand on the home market at the level it is now at.
Let nobody be under the illusion that they are actually going to be better off. The £1 a week will easily be swallowed up in the near future by Increased Graduated National Insurance, by the operation of the so-called "fair rents" scheme, by the increases in coal and electricity, and by a whole host of other increases.
WAGE NORM!
The basic land.
There were a few proposals to keep those with plenty of money happy on a personal level.. The first was the restoration of stock options. This is a scheme whereby senior executives can obtain shares in their own companies cheaply and sell them at profit later. After a series of speculative scandals the previous Labour Government made the gains liable to Income Tax and Surtax, but this budget reverses the previous legislation. Next came no estate duty payable on the first C15,000 of an estate, or first £30,000 if handed on to your spouse. Thirdly came the announcement that next year those with investment income will not have to pay extra tax on the first £2,000 of it (unlike at the moment where all investment income is chargeable to at least 15 per cent more tax). And lastly we come to the question of dividends paid by corporations. For some time now it has stuck in the throats of the bourgeoisie that these are taxed twice (first by corporation tax and then by the shareholder's own Income and Surtax). As from next year the budget is reducing this to one lot of tax. However, all of the above was merely flirting around with various sections of the ruling class who needed to be kept happy. The key to Heath's economic strategy for the immediate future lies in the new way in which the depreciation of machinery will be treated in future, together with the way in which grants will be given out for building factories and the like (depreciation is the way the financial consequences of a machine wearing out are dealt with in company accounts). The old way of working out depreciation of machinery was to allow part of its loss of value each year until it hecame effectively worthless. With the new proposals companies will be able to set the whole of the cost of new plant and machinery against the profit for the year in which the machine was bought. A numerical example will bring out the consequences of this policy. Let us suppose that a firm buys a new compuFINISH THE JOB THE MINERS STARTED-SMASH THE GOVERNMENT'S ATTEMPTS TO IMPOSE A NO TO ANY FORM OF INCOMES POLICY! NO COMPLIANCE WITH THE INDUSTRIAL RELATIONS ACT, NO UNION REGISTRATION, FOR IMEDIATE SOLIDARITY STRIKES IN DEFENCE OF VICTIMS OF THE ACT!
Given that in at least the best organised sections of the working class the 7 per cent norm is taking a beating, the central slogans remain the second and third. On this basis, if these types of slogans are taken up by the whole of the working class, it will be possible to fight both any reversion to integrationism by Heath, to get up ahead of steam in the more favourable conditions for trade union action created by an economic expansion, and most importantly of all, to fight any new manoeuvres by Wilson. The issue which now assumes even greater importance than before is that of IreIf Heath is going to fail in the long-term with his economic strategy, his Government can well and truly suffer political defeat in Ireland in the coming few months. The greatest defeat for British capitalism (and, therefore, a victory for the working class) would be a victory by the IRA against the British army. Already a really drastic manoeuvre has been forced upon the Tory Government by the mass struggle-social and military-of the nationalist minority in the North of Ireland. Whilst some confusion may be caused in the short-term and methods of struggle may alter, nothing indicates that the catholics are likely to be bought off by the sops they have been offered.
So far the British working class has virtually destroyed the bourgeoisie's economic strategy. It has not succeeded in destroying its political credibility. This blow is now on the agenda in Ireland. As so often in the past, the key to the contemporary stage of the British revolution is in Ireland. Despite their complete unity in "the national interest" on the question of direct rule neither Heath nor Wilson has an answer to British imperialism's Irish problem. This time, however, it would be good, for a change, if the British working class didn't leave the Irish working class to do its fighting for it. This makes the campaign in solidarity with the Irish struggle against British imperialism an extremely important question for British socialists and a good focus for this is the coming ISC conference in Oxford (for details see elsewhere in this issue).
ter for £10,000. They would be able to set off the whole of this against their profit for that year, and thus if the rate of corporation tax is 40 per cent (as it is now) the firm would be getting tax relief of 14,000. This means that the cost to the firm is in fact only £6,000, i.e., only three fifthsof the machine's actual price. In addition to this if the firm was in a development area it could obtain a regional development grant of 20 per cent of the cost. another £2,000. The cost to the firm has now come down to £4,000 for a £10,000 machine, in other words the firm is only paying two fifths of the cost of the machine itself!
As was said earlier it is these measures that are crucial to Heath's economic policy over the coming period. These measures are clearly intended to speed up the capital intensification of industry, and, if the goods can be sold, expand the economy without more than marginally reducing the unemployment. That this budget will only marginally affect unemployment was noted by the Financial Times when it stated "... their (the government's proposals) tendency is to encourage capital-intensive investment, of in the potem boute eins is often a pool of unemployed labour... torial, 22 March). The key is, of course, the question of selling the goods and it is here that Heath is taking a major risk with this new economic strategy. It would seem to be highly likely that Heath is looking to the E.E.C. for a market and looked at in this light the fantastic rush to get the British Tax system in line with that of the E.E.C. makes some sense. One need no longer be surprised that the rate of Value Added Tax has been announced so soon, for not only will it, as proposed by Barber, redistribute wealth against the interests of the working class, but the nearer that our tax conforms to the E.E.C.'s the less paper work is involved in exporting to the E.E.C. and the easier it becomes,
The recent miners' strike is only the first of a whole series of battles to come in the mines.1 By the time the 16 month period of the new agreement has come to an end most of the wage claim will have been caten up by inflation. In addition the National Coal Board will have had 16 months to think up new productivity schemes, and the government 16 months in which to prepare to defeat any new strike. It is therefore vital that the militancy and political understanding created during the latest struggle are not allowed to go to waste. For this reason we initiative of the International Social calling a rank and file miners" conference in Barnsley on 26 March, although wo pity that the conference was called on the ment will be accorded full democratic rights As regards the programme put for The Colber we agree with most of its provisions but think that the way the questions are dealt with is incorrect. Firstly, the fact that "Workers' Control of the Industry' is only the 31st in a series of 32 demands indicates a failure to understand the nature of this slogan. At present all the other demands are put forward as demands to be granted by the management. But the essential feature about a revolutionary policy in the trade unions is not that it demands this or that concession from the management, but that it demands that the workers' organisations weires should have the right to decide The programme I.S. have put forward falls precisely into this mistake and is therefore a Social Democratic programme. Certainly it is perfectly principled to work within a united front with those who believe that the Labour Party can achieve socialism (we leave it to the struggle and our propaganda to sort that one out) but it is absolutely incorrect not to point out that the demands for workers' control are only achievable through action at the level of government and are therefore merely empty words unless placed in the context of a struggle for a workers" government. What we say to members of the Labour Party is "You believe Labour can adopt and come to power on a socialist programme. We do not. We will at all times point this out. Nevertheless let us agree on at least one thing. We will struggle together for this programme. If we continue together on this, and do not compromise, then we will see in practice who is right on the Labour Party". However this approach, which is the basis of the United Front, is a million miles from I.S.'s failure to raise the question of government. On the contrary the United Front approach takes its starting point as the struggle for a government which will defend the interests of the working class ie. for a workers government.
Nevertheless, because the rank and file conference and the establishment of The Collier represents a positive step forward towards a rank and file movement in the NUM, the International Marxist Group will continue to support The Collier and any organisations it sets up as long as these remain freely open to all members of the NUM who accept the policy of the newspaper. IMG members and sympathisers in the NUM will therefore be supporting the newspaper, participating in the conference, and starting a discussion round a draft basic type of programme for the newspaper The Collier. In order that the political differences may stand out clearly and not get bogged down in trivia we have basically used the demands of The Collier plus a few vital ones omitted. The political context is however entirely different.
N.B. This article went to press before the conference met. A full report of the conference appears on another page.
1. Already the discussion has started about the for the NUM conference in July calling for £40 a week for face workers, £32 for other underground and £30 for surface workers;
Yorkshire and Scotland are demanding a sixhour working day; and Yorkshire wants after noon and night shifts to be paid at time-anda-third, The right wing wants to avoid the fixing of exact targets-they want room to manoeuvre. 2. One of the big debates at the NUM conference this year will be around the demand by York sire that there be proportional representation in the unions's leadership-the present system works to the advantage of the right wing because the bigger areas are the most militant.
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THE BUDGET MEASURES The Budget will do little to reduce unemployment. Its measures are mainly intended to speed up the capital intensification of industry.