Gordon Brown’s £43bn "Spree": Two Sets of Agendas at Work

Workers' Daily Internet Edition : Article Index :

Gordon Brown’s £43bn "Spree": Two Sets of Agendas at Work

Scotland Loses Out in Chancellor’s Spending Review

African Leaders to Push for Debt Relief at G8

Vladimir Putin to Arrive in North Korea

US Move to Go Ahead with "NMD" System

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Gordon Brown’s £43bn "Spree": Two Sets of Agendas at Work

Chancellor Gordon Brown pledged on Tuesday that £43 billion more would be spent on education, transport, law and order and health over the next three years. This is being presented in the monopoly-controlled press as a "spending spree" from the "prudent" Chancellor.

The issue is not really that, in terms of funding of social programmes, this is not enough and that key areas such as pensioners and students have lost out, while other areas such as military spending should not get any increase in funding. If one looks at the agenda of "prudence" versus "public spending", then one discovers that there are some important items hidden in this equation.

To illustrate this, take the report that Treasury officials said that Gordon Brown had been able to afford to loosen the purse strings because of an "unprecedented squeeze" on the costs of social security, unemployment and debt interest payments, which now account for 17 per cent of public spending compared with an average of 42 per cent under the Conservative government. The issue arises in connection with the debt interest payments that if they can be "squeezed", why should they not be eliminated from the "prudence/spending" equation altogether, together with repaying the debt itself? A moratorium on debt servicing would certainly give the Chancellor more funds to invest in social programmes. The "costs" of social security and unemployment are altogether different. It is well-known that this kind of "squeeze" hurts the unemployed and the vulnerable. The "knowledge-based economy" is ensuring that there is no real increase in jobs and that people are forced into the lowest paid jobs only to lose them again after a few months. Meanwhile various ruses are found to cut social security spending so that the needy are made to suffer. Thus this element cannot be considered a prudent saving which can then be spent on front-line public services. Military spending also is increasing as a new arms race gets underway and the economy is further militarised. This also should be ended, allowing more funds to be invested in social programmes.

However, there is another agenda which is not even spoken about. That agenda is the direction of the economy itself. That is to say, the question of the direction of the economy is not being put on the agenda by Gordon Brown and the government, whereas it is fundamental to solving the problems of society. As already referred to, the direction of the economy based on the making maximum capitalist profit and the technical-scientific revolution and digitalisation – which together define what is meant by the "knowledge-based economy" – have led to a situation where more jobs are being destroyed than are being created and at the same time are creating the conditions for an impending world recession as the contradictions inherent in "globalisation" work themselves out. This aspect of the economy is of an altogether different character from the issue of how severely the anti-social offensive is being pursued by the government, and the struggles of the people against this offensive. It raises the issue, which the working class must also discuss, of the need to rid the economy of the contradictions which exist at its base by pushing ahead on the line of march to a socialist society, where the working class control the means of production and the people are empowered to decide on the direction of the economy and plan it for the people’s needs.

Scotland Loses Out in Chancellor’s Spending Review

The Scottish executive’s annual budget will rise to almost £18.5 billion in three years under the spending plans announced on Tuesday by Gordon Brown.

The detailed breakdown of where this money will be spent will be worked out by the executive ministers of the Scottish Parliament over the summer and announced when the Members of the Scottish Parliament return from the recess in September.

However, it has been pointed out by the Scottish National Party that England would get an average increase of 6 per cent in real terms, while the level for Scotland over the same three years would be 4.4 per cent. This is because Scotland is lagging behind England in terms of the so-called "squeeze" on what is known as the Barnett formula. This is the population-based formula by which spending is calculated.

John Reid, the Scottish Secretary claimed the allocation of money to Scotland was fair because it is based on a population-orientated share. Alastair Morgan of the Scottish National Party said: "The truth of the second comprehensive spending review is that Gordon Brown has delivered a raw deal for Scotland because of Labour’s Barnett squeeze." He went on: "The money that the Chancellor will allocate to Scotland merely fills the hole created by Labour sticking to Tory spending plans."

The Scottish Secretary did concede that the increase in public expenditure in England would be larger than in Scotland. He said: "It’s larger because we start from a higher base than England. In proportionate terms since we start with more per head, their percentage increase [in England] will be slightly higher." He reiterated that the Westminster government had no plans to change the Barnett formula.

African Leaders to Push for Debt Relief at G8

The G8 countries of the US, Britain, Canada, France, Germany, Italy, Japan and Russia are to meet from July 21-23 for their annual summit. This year it is taking place on the southern Japanese island of Okinawa.

The South African President Thabo Mbeki has left for Japan in order to push the Group of Eight for relief on the enslaving debt that the African countries are shackled with to the industrialised countries. Nigerian President Olusegun Obasanjo and Algerian President Abdelaziz Bouteflika are to join Thabo Mbeki in this campaign.

A spokeswoman for President Mbeki said, "Their agenda will look at setting up some kind of mechanism whereby countries of the south can contribute to decision-making on what impacts on them, and that includes debt relief and the transfer of resources."

The leaders will have just two hours to put their case to the G8, who are expected to focus on debt rescheduling to Russia rather than the African nations. A year ago, the G8 announced a $100 billion package of debt relief by the end of this year for the over 40 countries who are the poorest in the world, most of which are in Africa. However, hardly any money has been released so far. The IMF has laid down stringent conditions for countries to qualify for the "Highly Indebted Poor Countries" initiative.

At the OAU meeting in Togo last week, Thabo Mbeki stressed his determination to push Africa’s debt relief and renewal onto the G8 agenda, echoing statements he made at the World Economic Forum in Durban last month. As was said by the South African Deputy Foreign Minister, "Debt should not be seen in isolation, but as a vital part of an overall, enhanced and co-ordinated package of measures, aimed at developing a new world agenda to integrate the developing world into the global economy."

Vladimir Putin to Arrive in North Korea

Russian President Vladimir Putin is to arrive in the Democratic People’s Republic of Korea on Wednesday to be met at the airport by Kim Jong Il, Chairman of the National Defence Commission of the DPRK. It is the first visit to North Korea by any Russian or Soviet leader.

Vladimir Putin is flying to Pyongyang from a summit in Beijing that underscored Sino-Russian opposition to the US imperialist plans for its "Son of Star Wars" NMD system. The US is justifying pushing ahead with this system on the pretext that North Korea is a "rogue state" which will threaten the US with missile attacks. In a joint statement, China and Russia said that "missile shields" for the United States and Asia threatened a new arms race. The statement said: "Implementing this plan will have the most grave adverse consequences not only to the national security of Russia, China and other countries, but also to the security and international strategic stability of the United States itself."

Vladimir Putin said last week, "The Democratic People’s Republic of Korea is our neighbour. We have a shared border, we have a vital interest in establishing peace and concord in this region because this has a direct effect on Russia."

After visiting the DPRK, the Russian President flies to the southern Japanese island of Okinawa on Friday evening for the G8 summit.

US Move to Go Ahead with "NMD" System

The Korean Central News Agency (KCNA), on Tuesday, July 18, carried the following article:

Rodong Sinmun (newspaper of the Workers’ Party of Korea) today in a signed commentary assails the United States for intending to continue the anti-ballistic missile test for establishing the "National Missile Defence" system (NMD) despite its recent failure in its third test.

The commentary says:

The United States claims that its "NMD" is for protecting its "security" from a "threat" from the DPRK. This, however, is a sheer lie.

The United States is the world's biggest possessor of missiles and nuclear power. The US move to establish the "NMD" is prompted by its aim to have military supremacy over the world. Its main target is big powers around the Korean peninsula. But, the "ABM treaty" is a stumbling block in carrying out its "NMD" plan.

That is why the US seeks to modify the "ABM treaty" under the pretext of a "missile threat" from the DPRK and establish an unlimited "missile defence" system at any cost.

By doing so it wants to contain those big powers around the Korean peninsula which are challenging its move to build a "unipolar world" and keep Europe under its military control.

With nothing can the United States conceal its sinister design and the danger of the "NMD".