Top-up fees and the market economy

The narrowness of the New Labour government’s majority over top up fees has led commentators to speculate about Tony Blair’s reasons for facing down his own party when it seemed unwise, uncertain and unnecessary. That is to miss the point about the nature of the Blair leadership and what drives the New Labour regime forward, whatever the obstacles placed in their way.

New Labour exists for one single purpose: to promote and facilitate the market economy and its infiltration into every area of public life it can think of. Some in the party may have just woken up to this fact and 90 voted against or abstained. More to the point, over 300 were in favour of creating a market in higher education, including the entire cabinet. So too was the media, including the so-called liberal press like The Guardian and The Independent, along with the CBI, the bosses’ organisation and the universities.

The day before the vote, Gordon Brown, the chancellor, brought together some of the biggest names in the global capitalist economy to launch yet another “enterprise Britain” initiative. Bill Gates, the owner of the Microsoft monopoly, was given an honorary knighthood for his services to the government.

All accept the New Labour mantra, which is taken from the free market economy handbook: public services must in future not be funded out of taxation and furthermore, those who “benefit” from education ought to pay a contribution towards the cost. That is why during the arm-twisting campaign, the Organisation for Economic Development and Co-operation – which speaks for the major economies – chimed in with support for New Labour saying: “Given the growing constraints in public finances, it would be difficult to raise large amounts of extra funding for British universities via general taxation, nor would it be fair when considering the individuals endowed with education enjoy large gains from it.”

Tax revenues are falling, as even New Labour acknowledges. The government’s budget deficit is indeed growing. But why? There are a number of related reasons. There are undoubtedly more people out of work than official figures suggest. Corporation tax on businesses is at rock-bottom levels. And global corporations simply do not pay their tax in Britain if they can avoid it.

Corporations literally are a law unto themselves when it comes to paying tax. Because they operate across borders, they are able to disguise their profits by transactions within the firm. They also, of course, pay the smallest amounts of tax by registering in tiny countries. The average level of corporation tax in the world's 30 richest countries has been seen to plunge - from 37.5 per cent to 30.8 per cent between 1996 and 2003, according to a survey by accountants KPMG.

A leading accountancy expert, Professor Prem Sikka, estimates that £25 billion is lost to the Treasury each year through multinationals basing themselves in low-tax environments. 'The precise figure is impossible to work out. Some say it could be as much as £80 billion. We don't know because the Treasury refuses to undertake detailed research to get accurate estimates. It is dodging the issue,” he told The Observer in June 2003. Britain is not a poor country. It’s just that the economic and financial resources are increasingly in the hands of a small group of capitalists and financiers, as these figures show. New Labour is a great fan of this arrangement and spends most of its time praising competition and the “benefits to consumers” this allegedly brings.

At a stroke, variable top-up fees dismisses and abandons the consensus post-war that education and other services are funded out of general taxation rather than contributions by individuals. The reason papers like the Financial Times are so enthusiastic about the proposal – “his [Blair’s] policy is both logical and correct” (January 15) – is precisely because of this change. Once this is established, look forward to more “user charges” for nursery care, for hospital treatment. After all, all those who use these services “benefit” and ought to be charged part of the cost.

Doug McAvoy, general secretary of the National Union of Teachers, warned that the fees plan would lead to further extension of a "market place philosophy" beyond higher education. Chris Keates, deputy general secretary of the National Association of Schoolmasters Union of Women Teachers, added: "The introduction of top-up fees is a deeply regressive step and takes no account of the ability to pay."

There was, of course, another aspect of the Blair regime’s politics in the way that the top-up fees policy emerged. It was a proposal from the elite group of universities, whose vice-chancellors now resemble chief executives. The first parliament knew about it was when it was announced by Blair himself. Parliament is treated with contempt by New Labour because its tiresome procedures get in the way and slow things down. In some respects, the MPs who voted against were making a last stand against a trend that has resulted in an unconstitutional form of presidential rule in Britain.

New Labour’s policies are opposed by students, university staff and a majority of voters. But Blair does not give a damn, just as he ignored voters on Iraq. He is on a mission to get us to love the free market and, as a result, plunge deeper into debt and forget any notion of the collective good. The alternative to this is not higher taxation on individuals but a transformation of economic and political life. Resources exist to fund the universities and public services but we are denied access to them while they remain in the hands of the corporations and financiers. Our goal has to be to bring these resources under social ownership and control. A step in this direction is to campaign to bring down the reactionary Blair government, at the same time building a movement that will use society’s common resources as the basis for a socialist society.

Movement for a Socialist Future
28 January 2004