A done deal?


The EU superstate advances, Tories tackle private equity, and I assess the potential of the next six months… Not a bad post for a spare hour’s work.

Protect me from protectionism!
The latest EU summit has ended after two days of negotiations with consensus on the way forward for the 27 states that make up the alliance. The need to review the functioning of European governance supposedly arose from the recent enlargement of the union, but plans to introduce a Constitution for the organisation were shelved when referenda in France and Holland returned “no” votes.

A few hiccups appear to have been dealt with; one concerning the voting rights of Poland, the other the references to the free market, which were problematic for the French. It is not that France has a firm commitment to the free market – well, its government might, but evidence suggests the people do not.

The new French President Nicolas Sarkozy may talk like a Thatcher, but he cannot walk like the Iron Lady. After the calamitous results in the recent French parliamentary elections, where his party did worse than under Chirac the last time and failed to secure hegemony over the legislature, Sarko is in no position to sign up to the “Anglo-Saxon” economic model.

No one is seriously worried about the death of free competition within the internal market of the EU. What is meant by “free competition” is the transfer of publicly-owned utilities and enterprises to capitalist control, the ending of import controls and the outlawing of protectionist measures.

The French insistence on reference to a “social market” and an aim towards full employment arises from the “anti-liberal” movement in France and the current weakness of Sarkozy’s regime, which compels him to tread carefully in matters of European integration.

Now that the terms of the treaty have been agreed all that remains is for the ratification process to take place. In the UK, this will be by a vote in Parliament unless there is a referendum.

The 2005 rejection of the EU constitution was not accepted, European public opinion (largely Euro-sceptic) is ignored, and now there is a constitutional treaty in all but name. The building of a single European state continues…

The Prime Minister in waiting (so far, over ten years), Gordon Brown is being championed by the Murdoch press as the man who urged Blair to stand up to France. Oh, really? Blair might have come out of the summit with his red lines intact, but what does it all mean?

The red lines (or red herrings, as sceptics have called them) are:

1. UK control over criminal justice policy

2. No transfer of powers to the EU concerning taxation or benefits

2. The retention of Britain’s “independent” foreign policy, separate from the EU Foreign Ministry

4. An opt-out of a new charter of rights which would give workers in the UK the right to take strike action

Blair declared since that both Germany and France now have Atlanticist leaders (Angela Merkel and the aforementioned Sarko), the EU Commissioner Jose Manuel Barroso is a “reformer”, and his red lines had been kept, the treaty was in the UK’s best interest.

Brown responded by rejecting calls for a referendum on the treaty, since a promise of a public vote on the constitution had been made in previous years. He knows that the government would lose a referendum on Europe and is not willing to let that happen – especially now that he is in sight of Number 10.

Benito Brown
Gordon Brown has displayed his democratic credentials: he has tried and failed to appoint two unelected Lords to ministerial posts in as many days. The first, Lord Ashdown, is not even a member of the governing Labour party and the second, Lord Stevens, is the former Commissioner of the Metropolitan Police.

Neither men are elected representatives – they are both state functionaries, paid up members of the Establishment, appointed by previous Prime Ministers.

So even without knowing of his record as Chancellor of the Exchequer (of which, more in a moment) it is plain to see that Brown is not committed to democratic participation in government any more than his predecessor, Tony Blair.

His attempts to advance British Nationalism commonly thought to derive from the West Lothian Question posed by his becoming PM, but whatever the reason for his flying of the butcher’s apron and his defence of and support for British imperialism, there is no doubt that this is to the detriment of working class people in England, Scotland, and Wales, the majority of whom do not support Labour’s Middle East wars and support fraternal relations between nations.

The desire of Gordon Brown to form what he calls a “government of all the talents” that includes Lords, Liberals, and policemen has not yet been fulfilled. The necessity of introducing more anti-terror legislation and thus further eroding civil liberties arises from the difficulties faced by British imperialism.

Revolting at home and abroad
Ordinary working people in the UK are being squeezed by rising inflation and mortgage repayments, low pay, high utility bills and rent, long working hours and increasing job insecurity.

New Labour may have promised an end to “boom and bust” economics, but they have been fortunate that the crisis has been emerging gradually. Brown faces co-ordinated public sector strikes against privatisation, below-inflation pay, and job cuts in which hundreds of thousands, if not millions of workers may walk out.

In Iraq and Afghanistan, the British armed forces face increasing casualties at the hands of the anti-colonial resistance – and the fact that both wars are being fought without public support or sufficient resources has led to a crisis of moral, recruitment, and retention.

The growing inequalities domestically and the arrogance of the capitalist class are starting to cause panic. That people earning millions of pounds each year pay no income tax while Brown plans to hike taxes for the low-income workers cannot be ignored, not even by the corporate press and Her Majesty’s Opposition.

Private equity, public scrutiny
The successful campaign by the labour movement to raise awareness of the growth of private equity and its implications for the economy and workers’ rights has led to discussion of the industry in the mass media in light of the revelations about “taper relief”. (See A taper relief and A din of inequity.)

This focus on private equity’s tax situation follows financier and Brown associate Sir Ronald Cohen’s remarks that if the widening wealth gap is not narrowed, there could be riots. There is a dawning realisation on the part of the capitalists that, as they have massively increased their wealth, they have not adequately bribed or subjugated those below. The petty bourgeois and the aristocracy of labour have their own interests, and if they are not met, they may join together with those who really have nothing to lose but their chains to demand radical change. It is this fear, and not concern for those less fortunate, that is leading men like Sir Ronald Cohen, Nick Ferguson, and Guy Hands to speak out.

In an attempt to gain ground for the Tories, the Shadow chancellor George Osborne has pledged that they would impose higher taxation on the private equity “industry”. As the right-wing Daily Mail commented:

“The Shadow Chancellor’s decisive promise contrasts sharply with the tentative approach of Gordon Brown and the Treasury.

“The Prime Minister-to-be has asked Her Majesty’s Customs & Excise to review the issue and hinted that there could be some changes proposed in the Pre-Budget Report late next autumn.

“Labour has been anxious not to be seen as anti-business and does not want to see the private equity business, which includes substantial party donors, driven offshore. [My italics.]”

Osborne supposedly fears that small businesses will be affected if there are changes to the tax system, but this is throwing out a small capitalist to catch a big one. I doubt very much that the Tories would disturb the rampant growth of private equity, but they must be seen to be in line with public opinion. Indeed, the Mail continues:

“Mr Osborne has commissioned the European School of Management, a leading British based business school, to conduct a review the issues.

“He wants the review to investigate how the UK can improve the environment for enterprise and venture capital.

“He wants to avoid damaging Britain’s competitiveness, reward risk-takers and those that take a long-term view on investment. It will report back this autumn, before the Treasury is due to publicise its own findings from an 18-month long examination.

“Guy Hands, one of Britain’s most prominent financiers, is calling on firms to take fight back by lifting the veil of secrecy.

“He issued a dire warning that the private equity industry was viewed ‘somewhere just above politicians but definitely below traffic wardens’.

“Mr Hands, who is poised to take control of music company EMI in a £2.4billion deal next week, said firms should emulate entrepreneurs such as Sir Richard Branson or easyJet founder Stelios Haji-Ioannou, who run their companies in a similar way but have succeeded in courting consumers.

“He added: ‘We have to be counted. We can’t run and we can’t hide.’

“Industry bosses have admitted that the light tax on their ‘carry’ – their stake in buyout deals – is overly generous.

Meanwhile, the industry’s trade body, the British Venture Capital Association, challenged politicians to haul in the banks that grant them risky loans.

“So called ‘covenant-lite’ loans, which have fewer financial heath checks built in, have drawn criticism from Bank of England Governor Mervyn King.”

2007’s Got Potential
The capitalists will destroy the planet before they give up their power and in the UK the only way of dealing climate change, crime, inflation, poverty, and unemployment, is to depose the ruling class, and act that can be achieved by working people in England, Scotland and Wales. In the coming year, there exists the possibility of inflicting a series of defeats on the ruling class: militarily, constitutionally, and economically.

First of all British military participation in any war against Iran must be prevented and a withdrawal of Anglo-American imperialism from the Middle East must be guaranteed. The challenge for the anti-war movement is to build ties with national liberation movements in the Middle East and to publicise the anti-imperialist struggles in this region.

Secondly, a referendum on the “amending treaty” must be forced – which will lay the framework for a further centralisation of power and the building of a European capitalist state – and there must be a victory for the “no” campaign. The case for Scottish independence must be made by the labour movement, and support must be given to the granting of full legislative powers to the Welsh Assembly if there is a referendum on the issue. The national question in England cannot be ignored by socialists, and the answer is unmistakably the establishment of an English Parliament. In this Cornish nation must not be forgotten, and socialists should also endorse self-government for Cornwall.

And thirdly, there has to be co-ordinated strike action in the public sector – if not parts of the private sector – the labour bureaucracy must not be allowed to use the planned strikes as a bargaining chip with Brown, they must go ahead unless the neo-liberal policies are reversed. Given the unpopularity of the corrupt New Labour government, arguing for the strike in explicitly political terms makes sense, even if it makes the trade union hierarchy uncomfortable…


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