ISSN 0957-8657. PUBLISHED BY AURORA LTD. © 1996 ALL RIGHTS RESERVED. PRINTED BY EASTWAY OFFSET LTD. (TU ALL DEPTS) election, press speculation is already rife.
How big will be the tax cuts he offers as a desperate bribe to win back lost Tory voters? And how will these be paid for?
Whose services, whose benefits, whose jobs will be cut to line the wallets of the rich and buy a titth term of Tory rule?
The Mail on Sunday claims to know what a hither hike in netrol prices, booze and fags will be used to suck in extra cash, which could then be ostentatiously "given away" - with the most generosity, as usual, going to those on the highest incomes, and thus paying the most in tax.
The promise of tax cuts (together with nationwide relief at the departure of Maggie Thatcher and ie: bated Pe.! Tax) was what is ...2 ......us. the bes care cisezarded their own -edges and repeatedly and massivelt increased taxes. to such a level that no Clarke budget could raget 36 245 Monday Rally speakers include Tony Benn MP, Neill Gerrard MP, Geoff Martin (Convenor London Region UNISON), pensioners, students and anti-JSA campaigners now hope to reverse the process.
The gamble for Clarke is whether tax cuts would now be recognised by the electorate as a cynical gesture, and serve to undermine rather than rebuild support for the Tories.
Lined up to lose?
But there is another calcultion, too. Clarke knows that - whatever he does in this budget - there is a strong chance that the Tories will lose the next election.
It is obvious that there is a body of Tory opinion that feels this might not be a bad thing. It would leave Latour to carry the can for divisive pelica decisions on European Monetary Union, and to pick up the tab for the Tories' 17-year spree of borrowing to finance tax cuts for big business and the wealthy. And it would give the divided Tories time Called by the Welfare State Network to slug it out over Europe and reprouD.
On this scenario Clarke could well be tempted to go for broke, imposing hefty cuts in taxes and in public spending, knowing that this will leave the welfare state in tatters and put immediate pressure on an incoming Labour government.
This kind of "scorched earth" policy could exploit Labour's political timidity, and leave a new government rapidly discredited.
Blair and Brown have gone out of their way to tie their own hands in advance, by promising they will not increase taxation.
But all the indications are that the Tory squeeze on NHS budgets, on schools and higher education and on social services will have triggered a succession of crises bv next Mav.
Preliminary leaks from this year's Clarke: will he take another slice out of the NHS, squeeze pensions and benefits, or confront the growing anger of staff and students fighting cuts in our colleges? public spending round suggest that Health Secretary Stephen Dorrell lost out heavily in his bid for extra cash to avert a major crisis next year. Since then NHS Chief Executive Alan Langlands has repeated a categoric insistence that there will be no additional money to stave off closures and bed shortages as Trusts run into difficulties this winter.
Analysts also appear to agree that part of Clarke's strategy will be to cut back on central government grants to local councils, forcing a massive hike in Council Tax payments, safe in the knowledge that there are only a handful of Tory-run councils and that therefore Labour and Liberal Democrat councillors can be torced to take the blame Labour has also fended off rather than resolving the pressure from the pensioners movement Ior a restoration of the link with earnings and for a significant increase in the basic state pension.
Retreats
New Labour has staged a succession of damaging retreats trom full-hearted defence of the welfare state, and insisted that their minimal pledges on health, education and training schemes can be funded from one-off sources (cutting bureaucracy, ending the assisted places scheme and the "windfall tax" on privatised utilities). But despite Blair's conservatism, Labour's electoral appeal rests on the widespread assumption that a change of government would bring real changes, and would be a way to defend the welfare state.
These - and other - demands cannot be met without raising additional revenue from taxationwhich Labour insists it will not do. But it need not involve raising income tax on individuals, if Blair and Brown grasp the nettle and step up the taxation of big business, which has revelled in astonishingly low levels of taxation since 1979.
As Alan Simpson MP has pointed out, a tax of just one eighth of one percent (0.125%) on the speculative turnover of the City of London would generate a massive £50 billion a year, (equivalent to 25p on income tax): enough on its own to pay the pensioners' demands, rebuild our schools and hospitals, and put the country back to work.
The Tory calculation is that Labour will lack the nerve to implement even such minimal reforms, and will swiftly antagonise and disillusion its supporters. The fight we must wage inside the trade unions, the campaigns and the Labour Party is to make sure this plan misfires.
Ament Tory Hands Off Our Welfare State!