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Four years of handouts for the rich

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Issue 1722

Gordon Brown’s record

Four years of handouts for the rich

Big oil firms are laughing BP 1.3m profit an hour, Shell 1m profit an hour

SHELL’S PROFITS of 2.24 billion in the last three months, an 80 percent rise, are an all-time record. BP made even more. Its profits, announced on Tuesday, were 2.65 billion for the last three months alone.

Last week Exxon Mobil announced three-month profits of 3.04 billion-the biggest “in corporate history” and 94 percent up on a year earlier. Chevron-Texaco, two oil firms which have just merged, saw combined profits leap to 1.75 billion.

Just these top four oil companies are on course for a whopping 40 billion profits this year. The oil companies are laughing all the way to the bank because New Labour refuses to undo the huge handouts the Tories gave them.

Until 1993 the government took 60 percent of all North Sea oil profits in tax. The Tory government then slashed the Petroleum Revenue Tax from 75 percent to 50 percent. It also scrapped tax altogether on all new oilfields.

The effect has been to cut overall tax on North Sea oil down to just 25 percent. Restoring the tax to its pre-1993 levels would bring in tens of billions of pounds. That could easily fund services and begin to undo the damage to the planet’s climate done by the oil companies.

Bosses rake in a pay rise of 20 percent

BRITAIN’S bosses have never had it so good. Pay for chief executives of the top 100 companies has increased by a fifth in the last year.

This 20.4 percent rise means they now get on average 717,000 a year. That is according to a report by the New Bridge Street pay consultancy firm. Top of the pile is a man who once talked of dealing with his workers’ trade unions as “pest control”-Sir Clive Thompson of Rentokil.

His basic pay is 950,000-over 450 an hour. Jan Leschly has just retired as boss of drugs firm SmithKline Beecham. His final year’s pay was a whopping 2.15 million.

Bosses in firms just below the top 100 did even better. Determined to catch up, bosses in the top 250 firms have pushed their pay up by almost a quarter in the last year. Their 23.3 percent rise takes them to an average 488,000. Taxing these people is the way to fund pensions and public transport.

Not enough for pensioners

WHATEVER GORDON Brown gives to pensioners this week, it will not make up for the money they have been systematically robbed of over the last 20 years. The Tories broke the link between pensions and earnings in 1980. Some 30 a week has been stolen from pensioners as a result.

Gordon Brown says the best way to help poor pensioners is through the Minimum Income Guarantee. But this is still below what pensioners would get if the link with earnings was restored.

The Minimum Income Guarantee is means tested. Some 700,000 pensioners do not claim the Minimum Income Guarantee because they do not understand it is available, they are intimidated by the forms, or they feel it is undignified to be means tested.

One quarter of all pensioners do not receive the benefits they are entitled to.


THE TORIES have the cheek to complain about “stealth taxes”. They doubled VAT to 15 percent in 1979. They raised it further to 17.5 percent in 1991.

They imposed the nastiest fuel tax of all, a special 8 percent VAT on domestic fuel, in 1994. Labour reduced this to 5 percent but refused to scrap it.

The Tories also introduced the “fuel escalator”-a rising tax on petrol and diesel. The billions raised have not gone into public transport, but to fund cuts in income tax for the rich.

  • One million people in their sixties are still waiting for winter fuel payments.
  • 800,000 over 75s are still waiting for a free TV licence.
  • 100,000 do not receive their correct Serps pension.
  • two million pensioners live below the poverty line.

Heavy burden

  • The rate of national insurance paid by employees has risen from 6.5 percent to 10 percent over the last 21 years. The rate paid by employers has fallen over the same time from 13.5 percent to 12.2 percent.
  • No national insurance is paid on any income over 535 a week.
  • People with an average mortgage are now paying at least 100 a month more than in 1997.
  • Average council rents are about 13 percent higher than four years ago.
  • Average council tax bills rose by over 6 percent this year.


THE GOVERNMENT was warned five months ago that it needed to increase the amount spent on flood defences. Britain’s top flood experts told ministers in June that chaos was inevitable without extra cash.

John Prescott has now pledged just 51 million over four years to prevent future devastating floods. But even the government’s own Environment Agency says at least 100 million a year extra is needed.

And the department for the environment estimates 4.5 billion is needed over the next 50 years, around 90 million a year.

Homeless attacked

THE HOMELESS were under attack from New Labour this week. The government launched an outrageous poster campaign to stop people giving money to those who beg on the streets.

New Labour’s “homelessness tsar” Louise Casey says giving money to beggars just “perpetuates homelessness”.

But Chris Holmes, the director of homeless charity Shelter, says the government’s scheme “could increase the stigma of homelessness and make life even worse for people who are already subject to high levels of abuse and violence”.

Some 60 social policy experts wrote to Tony Blair last week saying the poster campaign was “potentially harmful” and could force people into crime and prostitution.

It is not ordinary people’s generosity or the work of charities which pushes more people onto the streets. It is New Labour’s Tory policies.

If the government really wants to tackle homelessness, why doesn’t it build more public housing at affordable rents instead of privatising Britain’s council housing? Why doesn’t it restore benefits for 16 and 17 year olds?

Scot free

CHANCELLOR Gordon Brown has outdone even the Tories in slashing taxes on business. In 1994 Margaret Thatcher cut the rate of corporation tax on profits from 52 percent to 35 percent. By 1992 the Tories had reduced the rate to 33 percent.

Gordon Brown has cut it to just 30 percent, the lowest rate in the industrialised world. Putting corporation tax back up to its 1979 level, when Thatcher became prime minister, would raise at least an extra 25 billion a year for welfare and services.

Why no change?

IN 1979 the top rate of tax on unearned income was 98p in the pound. The top rate on “earned” income was 83p.

The Tories cut both to 60p, until 1988, when they slashed it to 40p in the pound. If Brown put the top rate of income tax back to where it was in 1988, at 60p in the pound, he would raise 8 billion a year for services.

Job warnings

GORDON BROWN boasts about a healthy British economy but jobs are still being axed.

This week:

  • Rolls Royce threatened to cut one eighth of its 40,000 workforce over the next three years. That means over 5,000 jobs.
  • Boots the chemist is set to make workers redundant in order to cut costs by 100 million. Boots has already slashed 1,000 jobs this year.
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