Socialist Worker

Proud to rule for rich

Issue No. 1672

'PRO-enterprise, pro-competition' is how chancellor Gordon Brown summed up his policy on Tuesday. The pre-budget statement handed millions more to the rich, while ignoring the needs of the many. Brown told 'entrepreneurs' that he was slashing the capital gains tax on buying and selling business assets and shares from 40 to 10 percent. Bosses at the British Venture Capital Association were delighted, and hailed 'a massive step in the right direction'.

Between 1983 and 1995 tax as a proportion of gross household income fell from 41 percent to 36 percent for the richest fifth of society. But it rose for the poorest fifth from 27 percent to 39 percent. Labour has done nothing to reverse that trend. Brown has previously cut the corporation tax on business profits from 33 percent to 30 percent. If the rate was restored to the level it was under Tory chancellor Nigel Lawson in the late 1980s, it would raise £12.2 billion extra a year.


Four make mint

THE DIRECTORS of Knutsford are the sort of people that Brown's tax regime favours. They made £44 million in 48 hours last week. They did nothing, created nothing and did not improve the life of a single person - except themselves.

Four millionaires, headed by top Tory Archie Norman of Asda, bought a 90 percent stake in a little known firm, Knutsford. The stock market thought that these rich men must be about to pull off a tremendous coup. As the frenzy increased Knutsford shares rocketed. Norman, plus hi-fi chain owner Julian Richer and property developers Nigel Wray and Nick Leslau, made terrific profits as a result. These worthless scroungers are the people who Gordon Brown praises as 'entrepreneurs'.


Facts

IN 1989 the wealthiest 200 people in Britain had a combined wealth of £38 billion. In 1999 they have doubled that to £75.9 billion.

GROSS operating profits of companies in the first three months of 1999 were £43 billion. This is 43 percent higher than three years previously.


Hidden billions

GORDON BROWN said on Tuesday that he expected economic growth to be a quarter of a percent higher than anticipated. This means that he should have around £30 billion extra to spend on health and education over the next five years. But Brown is refusing to give new money to services. New Labour wants to show business that it will be hard on public sector spending and public sector pay.


Disabled pay tax at much higher rate than fat cats

'DISABLED PEOPLE are suffering a tax rate of 73 percent and the rate for millionaires is 40 percent. It doesn't make sense.' That's how Labour peer Lord Ashley summed up the grotesque reality of the government's cuts to disabled benefits this week.

New Labour's plans penalise disabled people who have a small occupational pension by taking benefits away from them. The way the clawback of benefits works means the effective tax rate on disabled people can be 73 percent. As Lord Ashley points out, that is almost double the 40 percent top rate which the richest people in the country pay.


Figures off mark

THE GOVERNMENT says the Working Families Tax Credit (WFTC) will transform people's lives. But the figures in official adverts are misleading. WFTC is added to wages. People's income is deemed to have risen as a result, and so they lose other benefits such as Housing Benefit and Council Tax rebate.

The government says, for example, that a single parent with a seven year old child who takes home £75 for 20 hours work will be better off under WFTC by £7.30 a week. But after other benefits are deducted the real figure is £1.25 a week.


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Article information

News
Sat 13 Nov 1999, 00:00 GMT
Issue No. 1672
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