[This year the gap between state spending and…]

Scan page 3

This year the gap between state spending and revenue in Britain (the 'borrowing requirement') will be over £12 billion, most of it financed in effect by printing money (getting cash from the banks in exchange for government bills which the banks treat as the equivalent of cash).

Denis Healey in recent speeches to candlelit gatherings of finance capitalists has tried to create the impression that this vast deficit results from the Labour government's valiant:efforts to maintain employment and the social services during the slump in face of the united hostility of the world's bankers.

This fraudulent claim is exp osed by a detailed analysis of the figures. The deficit has arisen not as an effort by the government to eliminate the consequences of the slump but as a direct result of the crisis and slump.

Unemployment and falling real incomes and spending have relatively reduced state revenue from taxes, but simultaneously increased payments in the form of unemployment benefits and social security payments.

Meanwhile inflation, aside from raising the costs of existing state spending programmes, has produced a jump in the interest rate which the state needs to pay on its borrowing. As a result the deficit increases simply as a result of the existence and growth of the deficit itself.

The Labour government's deliberate action on the deficit, far from reducing the effects of the slump, has made them worse: th e cuts in government spendins programmes announced in the April budget are now responsible for redundancies, speed-up and cuts in real wages throughout the public sector.

What has pushed the deficit up most rapidly however are handouts and subsidies to crisis-striken capitalists, along with Healey's of antic reduction in the taxation budget.

This shows clearly that the gruwih of the deficit results not government to maintain employment and the level of social services for the working class, but above all from its efforts to rescue the most ailing sections of the capitalist class.

In the first year of the Labour government, spending on goods and services (education, health and othBe to take out & subscription es, I enclose £..

Name...

Address.

Name ..

Address ..

capitalist firms went up by 95%!

this involves, along with the mounting demands for rescue operations by bankrupt capitalists, means that the pressure for reductions in spending on the social services which have been won by years of struggle will be intensified.

To maintain the same real level of total state spending would involve continual reductions in the value of these benefits. The present reductions in services will appear as only a foretaste of the even mroe savage cuts it will try to impose as the crisis develops.

Scan page 4

(RATATE ADICT MATICE AND CURE: THE £6 FRAUD EXPOSED" by G. Matthews Stalin: Source of the "British Road"

As the world economic crisis deepens, all over Europe the working class, taking up the defence of its living standards, comes into sharper and sharper conflict both with the capitalists and with its own reformist leadership.

Led by the Portuguese workers, and with Spanish workers now I beginning to show openly their strength and willingness to fight, the working class in Europe is placing a question mark over the continuity of capitalism.

But this forward movement of the working class only serves to strike fear into the hearts of the Kremlin bureaucrats, who know that a socialist Europe would strengthen tremendously the working class in the Soviet Union and Eastern Europe in their ability and resolve to overthrow the bureaucracy and restore workers' democracy. It was for this reason the Kremlin bureaucracy participated with such enthusiasm in the Helsinki conference in Augusti to reaffirm, along with the leaders of social democracy, the carve-up of Europe into 'spheres of influence' originally agreed at the Potsdam and Yalta conferences after the last war.

"THEORY"

Since that time the British Communist Party has peddled its line of "The British Road to Socialism" of the "peaceful" "parliamentary road", . According to this treacherous "theory" ", capitalism will at some unknown future date relinquish its domination by Act of Parliament, with the organised strength of the working class playing only a supporting role.

This nonsense is reiterated in the latest version of the Stalinist programme Time to change course by Jack Woddis published in 1973 in which it is envisaged that:

"With a changed composition at Westminster and using their democratic rights to change existing institutions the working people would be able to ensure that Parliament carried through major legislation challenge capitalist power."

By politically disarming the working class in this way the British Stalinists in concert with some of the major West European Stalinist parties have sought to carry out the Kremlin policy of 'peaceful co-existence' and to preserve that bureaucracy by preserving capitalism in Western Europe.

The latest excretion of the British Party entitled Britain's Crisis, Cause and Cure: The £6 fraud exposed continues its energ etic defence of capitalism. It puts forward a "programme" against inflation, unemployment and the cuts in the social services which involves, as its central framework, a policy of "Expanding the economy at the rate of 6 per cent per year - the policy which used to be advocated by the TUC and is the minimum growth rate needed ... [which] would increase production by about £3,600 & year, providing more jobs and reducing the cost of unemploy. ment benefit."

George Matthews, the author of this tract, late editor of the Morning Star, after advocating that military spending "should be cut by half and a wealth tax "should be introduced" , then concludes that:

"By these means enough A REVIEW by money could be raised to finance the lobs programme, the expansion of the social services, the re-equipment of industry and the other measures outlined above."

Two pages later on we read that:

"All this would bring nearer the day when the British people get rid of capitalism and estab lish a socialist sytem in our country."

It is a pity that Mr.Matthews' nimble intellect will escape the understanding of most workers reading his pamphlet. For if by the measures he mentions "enough money" could be found and the economy expanded accordingly under capitalism then they will no doubt conclude that it is not necessary to bring nearer the day when capitalism will be replaced by socialism. But of course this is by no means the case.

Brezhner a Let us now see what Mr.

Matthews' programme for an expanding capitalism involves.

Firstly, he wants to create a thriving home market by stimulating demand. The £6 curb on wages should be removed and Britain should cease to be a low wage Secondly, inflation will be controlled through a price freeze which: "should last at least six months and should be followed by effective price controls on food and other necessities."

be dealt with. Here Mr. Matthews is at his most subtle. He begins by attributing the crisis to the fact that British capitalists, "instead of re-equipping British industry with the most modern and up-to-date machines encouraged the investmeit of vast sums abroad for the greater profit of the big monopolists and the multinational firms.

But he then goes on to argue that a price freeze "would not mean bankruptcy for the big firms, many of which increased their profits last year faster than the rate of inflation."

He follows this up by a IOHN LEA OF "BRITAIN'S CRIS proposal to ensure that profits are invested in the right place: "The main national and multinational firms should therefore be taken over" (nationalised). Of course, such nationalisation must somehow be "democratic not bureaucratic control, with representatives of the workers and of the TUC having a majority on the management boards."

TUC and an increasing number of right-wing Labour MPs in addition to the "lefts', Matthews calls for import controls, on the grounds that it will help British capitalism expand. "In the past" ", he goes on, "all attempts to expand the [capitalist!! economy have Ford: United against the, Working Cla floundered because the resultant increase in imports has worsened the balance of payments problem."

Matthews is able to put forward such a reformist programme for an expanding capitalism because he refuses to locate the crisis of British capitalism in the very organisation of capitalist production itself.

_Instead it is for him the result of the wickedness and bad faith of British capitalists in taking their capital abroad in search of higher profits, putting up prices in Britain to increase profits and indulging in various types of commodity and monetary speculation.

He proposes to deal with this not by giving a clear leadership to the working class. Indeed nothing is further from his thoughts than putting forward a programme to show the necessity for the working class to end once and for, all the capitalist system of production in favour of a socialist planned economy, and mobilise workers for such a struggle.

Instead he proposes reforms which though radical-sounding in places, act only to increase illusions in the possibility of an expanding capitalism. The Stalinists thus attempt to totally disarm the wotking class in the face of the massive attacks on its living standards and democratic rights being carried out now by the , CAUSE AND CURE: THE £6 Wilson government, and which must worsen if capitalism is to restore its profitability.

The proposal to increase wages and stimulate demand is a case in point. It is quite true that wage reductions have contracted the market for commodities and so sales have fallen and more firms gone bankrupt.

Why then do the capitalists and their lackeys in the Labour movement advocate the £6 limit? Because they have no choice. As long as capitalism faces a crisis stemming from the falling rate of profit, then employers have to demand wage cuts to cut costs and increase exploitation in an attempt to restore profits.

An increase in wages would expand purchasing power without expanding profitability. It is widely known by all except Matthews, who for his own reasons chooses to deny it, that the rate of profit in British industry has fallen continuously over the past ten years. It is because of this that investment has fallen off.

CLOSURES

The only way known to capitalism to restore profitability is to destroy unprofitable capital by closing down inefficient sectors of industry and increasing productivity through speed-up, labour force reductions and wage cuts of the remainder. Wage increases would simply add to costs, worsening the profits crisis.

Only when profitability has been restored will capitalist expansion be resumed. In such circumstances, involving massive deprivation and unemployment and political defeats inflicted on the working class, capitalism seeks to solve the problem of its markets without the economic advice of such willing assistants as Mr. Matthews.

Indeed the role of Mr.Matthews and the Stalinists is to prevent any working class understanding of the crisis, and to derail any revolutionary struggles by workers who resist the logic of capitalism.

In a similar context the nature of Matthews' 'price freeze' stands exposed. He is totally unable - and does not attempt - to explain why the Labour government's pathetic price freeze failed. Why did the anployers fight it tooth and nai and the government capitulatel LEADERS Matthews could only explain this as a question of will. But the real reason, covered up by Matthwith his allegations that British capitalists are making massive profits, is that the Labour leadesship, determined to defend capitalism, understood only too well the real profits crisis of British capitalism. From this position, having long ago abandoned any idea of ending capitalism, they were prepared to accept the "necessity" of price increases as part of an attempt to fend off the falling rate of profit.

It is because there is a profits crisis that the massive attack on workers wages and living standards now takes place. It is because there is a profits crisis that the only way the working class can act to defend itself is by acting independently to end the capitalist property relations one and for all.

This requires a programme to spell out the steps leading to this and to show concretely that they are the only steps the working class can take to defend itself.

DEFENCE Wage increases must be fought for, not with the perspective of expanding capitalism, but with the perspective of an all-out defence of workers living standards, while understanding that each victory on this worsens the crisis of capitalism. dISI Wedne JD EXPOSED"

Wage increases must further be secured against inflation by a sliding scale of wages. This is the only defence for workers against inflation. But at the same time it deprives the capitalists of inflation as: a weapon to take back wage increases from the working class, posing sharply the question of power between the capitalists and the working class.

At the same time unemployment cannot be fought by calling for the "expansion of the economy" Capitalists will not expand the economy until profits are restored through further massive wage cuts and unemployment.

Only the working class can now expand production by taking it out of the hands of capitalists. The demand for work sharing on full pay - the division of the total amount of work between the total number of workers, poses the issue clearly and openly.

To bring this about without any cuts in wages is beyond the capacity of capitalism now. Such a policy flies in the face of the employers need for speed up, pay cuts, and redundancies. Again it poses the question of power, bet ween the classes - now.

To guarantee jobs and production a policy of nationalisation of all bankrupt industries is thus required. This cannot be called for in Matthews' manner. For him it is just propagandistic hot air. Neither he nor the Stalinist party he represents has anything to contribute to the mobilisation of the working class to fight for nationalisation.

On the contrary the Stalinists act to prevent such a struggle beginning. They do this firstly by advocating nationalisation alongside expanding the capitalist economy by other means (wage rises), so that nationalisation becomes one policy among many.

'LEFTS'

Therefore the fact that the employers will fight tooth and nail against any massive programme of nationalisation is covered up. Also covered over is the fact that the 'lefts' in the Labour Party have completely abandoned the leadership of such a fight.

Nationalisation comes into conflict with the requirements of capitalism. The only way nationalised industries can co-exist with capitalism now is by taking a leading productivity. (As is currently the role in job cutting and increasing case with the steel industry).

UTOPIA

A programme of nationalisation to defend jobs would clash irreconcilably with capitalist profits since it would require a massive increase in spending which would involve a diversion of capitalist profits. This is why it is sheer utopia to talk of a "parliamentary road" to large-scale nationalisation today. Nationalisation will only take place in those industries where the most determined struggle of workers establishes workers control over production and the full occupation ists, along with the Stalinists and of threatened factories. The capital reformists will try at each stage to prevent this taking place.

Also for this reason the fight for nationalisation cannot be sep arated from the fight to drive out

----- pull-quotes -----

PROFITS Thirdly, profits must of course

IMPORT Fourthly, together with the