Workers' Fight workplace bulletin editorials, 27 March 2007

Just as British companies were announcing all-time record profit levels, Brown chose to cut corporation tax for the third time since Labour came back to power, this time by 2p in the pound.

No wonder share prices jumped in the City following Brown's budget speech! Smelling rich pickings, speculators rushed to buy shares and get their cut.

At face value, a 2% reduction in corporation tax may not sound much to write home about. In fact, however, it represents huge additional profits for big shareholders.

For Britain's six big banks alone, this tax cut amounts to an £800m handout from the state. And no-one will expect the bank sharks to show any gratitude, for instance, by reducing the punitive charges they impose on the rest of us. Nor will they suspend the rising number of repossession orders against people who get into trouble repaying their loans.

When the country's 100 largest companies are taken together, Brown's tax cut means that in the coming year, this government will be presenting the 10,000 or so big shareholders who control these companies, with a £4bn tax-free bounty.

But will this bounty stop these companies from carrying on cutting jobs left, right and centre, instead of using their huge profits to create new jobs? No way! This Monday's announcement of a merger between construction giants Wimpey and Taylor-Woodrow speaks for itself: the directors of these two highly profitable companies hailed the event because it would allow them to cut 700 jobs.

In fact, this £4bn handout is 4 times the amount that Brown has pencilled in for the nearly 3 million children living below the poverty line!

Yes, for Blair's and Brown's Labour government, one wealthy shareholder needs as much "help" out of taxpayers' money (that is, mostly out of our pay packets) as 1,200 impoverished children!

Of course, the headline announcement was that the 22p income tax rate is to be reduced to 20p. Except that the cost for this, is the end of the lower 10p rate. This means that the main losers out of this "tax reduction budget" are the poorest tax payers!

Ministers claim that this will be offset by Brown's various tax credits. But this is a lie. If only because few households paying taxes are entitled to tax credits anyway, and certainly not those occupied by single adults.

In fact a single worker earning anything between £7,500 and £16,500/year will lose out due to Brown's alleged tax cuts! And yet this is a level of income on which it is virtually impossible to make a living, especially in large towns where costs are higher.

Since it came to power, Labour has perfected the tax system introduced under the Tories to indulge the richest even more. Britain's current 54 billionaires, with their combined £126bn wealth, get away with paying only £74 million a year in taxes - less than 6p for each £100 they own! And this is under a government which dares to pride itself in its "fairness".

In this system, people earning high salaries are entitled to pay a smaller proportion of their earnings in National Insurance Contributions, as if the social solidarity underlying the National Insurance principle was only meant to apply to the poor!

This is also a system in which living off fat dividends, while doing nothing, is actually cheaper in tax terms than slaving away for a wage: because financial earnings are taxed at a lower rate, with many legal exemptions, and do not incur NI contributions.

And this government's indulgence of parasitic, idle shareholders is all the more revolting, given its obsession to force the poorest into casual low-paid work, including the disabled and long-term sick!

Meanwhile, budgets are cut in real terms where it matters most for the working class. Hospitals close wards and cut nurses' and doctors' jobs. Local councils fail to renew the stock of decent social housing which is desperately needed in the face of the present housing crisis, because they just do not have the funds.

But what does it matter to the Browns and Blairs of this world, as long as the City high-flyers give them good marks? What does it matter to them, at least, as long as there is no backlash against their anti-working class policies. But the more they bend the stick in favour of the rich, the more likely it is to break.