Documents of the 14th National Congress of the New Communist Party of Britain

December 2003

 MAIN RESOLUTION

 Introduction

 THE FOURTEENTH CONGRESS of the New Communist Party of Britain (NCP) meets at a time when the slowdown in economic growth of the major capitalist countries has reached the stage where their economies are bouncing in and out of recession and deflation has appeared, or is on the horizon, for a number of them.

 In their analysis to determine the reasons as to why the current slowdown occurred, the ruling class often cite uncertainties arising from the destruction of the World Trade Centre and from their own imperialist wars against Afghanistan and Iraq. Sometimes, they blame the high-profile corruption scandals at Enron, Worldcom and Arthur Anderson. Most of all they blame workers, claiming their wages and pensions are too high, their retirements are too early, their productivity too low and their jobs too secure. What they never do is blame the capitalist system itself – it’s always the workers’ fault or some extraordinary event! Undoubtedly, some of these factors may have had a bearing on the present economic crisis but they did not create it

 Our last Congress anticipated that the ruling class would resort to mass sackings of workers and anti-working class measures such as cuts in pay, benefits and pensions. Since then hundreds of thousands of workers have lost their jobs even in areas of the economy that were previously regarded as giving job security, such as banks and financial institutions. It has been in manufacturing and engineering, the wealth-creating sector, where the bulk of the jobs have been lost. In Britain the ruling class is now “testing the water” by threatening to take the right to strike away from the Fire Brigades Union. British workers are not alone in suffering under the heavy hand of the capitalist ruling class. In the United States (US) hundreds of thousands of workers have lost their jobs, pensions and medical insurance. In the European Union (EU) unemployment is over eight per cent, in Germany it is 11 per cent. Throughout the EU governments are raising retirement ages, reducing pensions and sickness benefit and increasing the tax burden on the low paid through indirect taxation.

 Wages, pensions, retirement age and job security are all gains that have been won over decades by workers engaging in class struggle against the ruling class. The fight must be developed to defend these gains. But the only way to ensure that these gains are maintained and developed in the long term, and will not have to be defended again every time there is a crisis, is by fighting for working class state power, the dictatorship of the proletariat, socialism.

 It is the capitalists’ ceaseless, unremitting aim to make profit and ever more profit. As capitalism develops, so the true type of capitalist develops, the capitalist or group of capitalists who, with complete single mindedness, seek to pile up more and more wealth. The driving force behind this is not satisfaction of personal needs but a necessary condition of the capitalist system itself, namely competition. Failure to seize an opportunity of making more capital and, therefore more profit, is to reduce that capitalist’s competitive strength with other capitalists and resulting in their elimination and their capital being absorbed by their rivals.

 This rivalry between capitalists spills over into their respective base countries and results in the crisis of capitalism and its uneven development. The responses of their respective ruling classes, acting in their own self-interest, can lead to temporary recoveries but only measured by their own economic criteria and definitely not to the benefit of the working class.

 But their efforts during this slowdown have so far proved fruitless as witnessed by the continuing reduction in profits, collapse in stock markets and the major swings in currency exchange rates. They have failed to avert recessions in Japan, Germany, the US, Argentina and Turkey and have been so ineffectual that the Japanese economy is now in a deflationary spiral; Germany and the US are on the brink of falling into deflation. For capitalists there is only one thing worse than deflation and that is the spectre of communism. Deflation is when goods and services have to be sold below their value, resulting in a general negative return on capital, surplus value is not produced and the capital used is not fully replaced, leading to a decline in its size.

 This can lead to a self enforcing spiral as purchases get delayed and real debt rises, leading to a deepening of the deflationary cycle and possibly to depression. In deflationary economies the veil that hangs over capitalism’s ruthlessness during the “good times” is removed as they use all their powers to enforce real wage cuts on workers, substantial job losses and reduced public expenditure. As wages are reduced the debts accumulated in the past, such as mortgages, increase relative to falling prices and falling wages – the burden of debt increases. In Japan, wages have been falling by 2.5 per cent per year, so the value of debt is rising in real terms in relation to wages. This has a serious impact on those workers who during the “good times” had been encouraged to build up massive credit card and mortgage debts. Those who benefit are the lenders, in the short term, who are repaid more in real terms than they lent, that is until such time as the economy deteriorates even further and their debtors default.

  In the past during these times the threat of fascism has increased as the capitalists have found that this is their only viable way of bringing about the necessary conditions to maintain their rule and protection of their vast wealth. Capitalists only look for solutions to the crisis that protect their own self-interest so they ignore solutions that counteract recession and deflation, such as substantially increasing wages allowing workers to buy back the goods that have been produced. This can only happen with a strengthened trade union movement, which recognises the unity that can be achieved by demanding flat-rate monetary increases. A struggle, to increase wages, will be intense as the fight could be over a declining “pot”, but it is a necessary fight as otherwise it could mean the destitution of the working class. Nevertheless this Keynesian approach can only produce short-term solutions. There are no long-term solutions to the contradictions of capitalism except its overthrow by socialism.

 What is significant since the mid-1990s is that capitalists are finding themselves unable to invest capital profitably in expanding productive capacity. In the eight years to the end of the year 2000 the utilisation of productive capacity in the United States, the powerhouse of capitalist economies, was less than 80 per cent and since then it has fallen to 72 per cent, a level not seen since May 1983. To increase overall capacity or utilise that 28 per cent capacity that is not currently used would further exacerbate the fundamental contradiction within the system whereby increased capacity would reduce the capitalists’ rate of return on capital invested. So instead they have sought new ways of making profits by gambling on the stock market, buying other companies either at home or abroad, buying state owned industries or services (privatisation), borrowing money (leveraging) on their balance sheets and using various other accounting methods in order to maintain what they regard as a satisfactory rate of profit or an illusion of the same. They repurchase shares so that profits are shared out between fewer shareholders, increasing the returns on directors’ shares, stock option plans and other “earned” income, thus concentrating the profits of control.

 Some capitalists even resorted to criminal activity by doctoring their balance sheets to show they were making a profit when in fact they were making tremendous losses. None of these accounting methods have reversed the trend and, as panic set in during 2001, the stock markets collapsed and are now 40-60 per cent below their 2000 peaks. All this activity to maintain capital and profits has resulted in the opposite of what was intended with the equivalent of 90 per cent GDP being wiped off the value of US companies since 2000. Weaker capital has been eliminated from the system or redistributed between the remaining contenders.

 In effect they have flapped around burning their fingers in whatever area they dabble in whether it be e-business, telecommunications, south-east Asia, Russia or Latin America. Finally there is nowhere else to run so they pumped their capital back into what they regarded as the final safe havens namely the US, “the economy of last resort”, and to a lesser extent Britain.

 Why did capitalists find Britain and above all the US attractive destinations for capital? Generally speaking it is because their ruling classes have been more effective in ensuring that any crisis is borne by the working class in that:

*          Public spending is low, 30 per cent of GDP in the USA, 38 per cent in Britain against a European Union average of 45 per cent;

*          Laws and regulations are weighted in favour of capitalism to the detriment of the working class;

*          Weak trade unions;

*          Relatively unregulated labour markets;

*          The expansion of outsourcing and temporary work;

*          Privatised social provision and PFI;

*          The ease with which capital can be relocated abroad. This has helped to put a lid on wage claims as workers are afraid that their jobs may be transferred abroad, the export of capital and jobs has become easier with the creation of the euro-zone and the North American Free Trade Association (NAFTA) and other economic zones.

 By the end of 2000 the US had pulled in more international capital than that of all the emerging market economies at the height of the south east Asia euphoria in 1996. Much of this was capital outflows from Europe, $180bn in the year to the end of June 2000, with the bulk entering e-business and telecommunications through initial public offerings (IPOs), mergers and acquisitions, shares in these organisations then increased in value significantly – even though most of these companies had never made a profit and indeed some of them had no products to sell! This brought in more venture money and more successful IPOs rewarding investment bankers, lawyers, brokers and other facilitators handsomely in the process.

So much capital was sucked in that foreign capitalists now have financial claims, on the US, amounting to $6,500bn equivalent to 60 per cent of its GDP and now own more than 40 per cent of government debt, 26 per cent of corporate bonds, and 13 per cent of equities.

 The biggest risk to the world economy is the US. Its $500 billion trade deficit in 2002 means that it must attract $1.9 billion of foreign capital a day to finance the shortfall. If investments aren’t enticing enough to attract these funds the dollar will fall. With the growing risk of recession there is a declining appetite by foreigners to buy US assets. If this becomes an aversion, the gradual depreciation of the dollar, since 2001, will turn into a rout. This scenario is becoming perilously close; decline in interest in the US economy has seen inflows declining to $44 billion in 2002 bringing about economic instability, sudden reversals of trade in goods and large currency fluctuations, driving many countries towards deeper recession and deflation.

 During 1999 and 2000, capital spending by the world’s telecommunications companies rose at an annual rate of more than 30 per cent to reach $241 billion of which $141 billion was spent in Europe to purchase third generation mobile phone licences, many of which were financed from the loan market This was a huge gamble, investing vast sums in products with no guarantee of a viable market.

 The telecommunications companies, having over estimated the market in e-business, found it difficult to live up to expectations and to generate a return on their investments, especially on the then non-existent technology! From predicting huge and profitable demand for capacity on their networks, concern grew at the beginning of 2000 that they would be unable to lure the customers needed to generate adequate cash flows. This in turn brought about a collapse in their shares and made it difficult for them to raise more money, which put the brakes on new equipment expenditure and development of the new technology.

  By 2003, with the technology still not at present commercially available, companies are writing off the investments that they have made. MMO2, Britain’s mobile phone operator wrote off £6 billion. Dutch operator KPN took a £96.3 million (E135 million) write-down on its stake in Hutchison 3G; France Telecom’s collapsed 3G venture Mobilcom has written off  £2.8 billion (E3.9 billion), while Deutsche Telekom wrote down its UK 3G licence by £1.6 billion (E2.2 billion). In addition to writing off the investment these mobile phone operators are now attempting to recoup their losses, for third generation licenses, by arguing that the licenses were sold inclusive of VAT and that they are entitled to reclaim upwards of $25 billion from their respective governments. It has finally been recognised that the market for these new phones is a lot smaller than predicted, Hutchison 3G slashed it’s prices for the new mobile phones just weeks after the announcement that the service would be available later in 2003. Even NTT DoCoMo, Japan’s biggest mobile operator, has scaled back its third generation ambitions because of lack of interest.

 Capitalism is portrayed to be all about risk taking and whoever takes the risk should be rewarded appropriately. But who takes the risk? Not the directors with their large salaries, share option schemes and other perks. The risks have been transferred away from the boardrooms to the small shareholders, pension scheme members and above all workers. At a time when the stock market has shrunk by more than 50 per cent, directors are still awarding themselves large increases from their share of profits. A director of Shell increased their share of the profits by £690,000 whilst a director of the Royal Bank of Scotland increased their share of the profits by £1.1 million and these are by no means exceptions. It is not that directors’ “earned” income is too high, it is that workers wages are too low. It reflects the balance of forces between the working class and capital.

 BRITAIN

 The economy expanded by just 0.2 per cent in the first quarter of 2003, the weakest growth in a year. The service sector – which has turned an average growth rate of 0.9 per cent a quarter over the last 10 years – grew by a mere 0.3 per cent in the first three months of 2003.

 Any future recessions will differ from previous ones in that there are now more service businesses and fewer manufacturing companies operating in the British economy. Manufacturers reacted to earlier slowdowns by, in the first instance, reducing inventories and cutting overtime and as a last resort sacking workers, whereas in the service industry the process leads directly to job cuts, as by their nature they cannot accumulate inventories. This tends to accelerate the economic crisis. This is becoming increasingly evident in that the number of companies going out of business jumping 8.9 per cent in 2002, the highest level for eight years. The number of insolvencies was 16,305 in 2002. Business investment in 2002 fell at its steepest rate for 40 years to £104.2 billion and is now 15 per cent below its peak at the end of 2000.

 On the back of the growth in the international telecommunications and electronics industries, with the relatively unregulated labour market and with subsidies on offer, thousands of jobs were created in Britain during the late 1990s. Now, as a result of the worldwide slowdown, these industries are dealing with the decline in their net rate of return on capital by plant closures and shifting production abroad resulting in the loss of 300,000 manufacturing jobs in the last two years. Therefore manufacturing output fell by more than 10 per cent in 2002 with the sector entering its third technical recession in five years. In the second quarter of 2003 Waterford Wedgewood, the pottery maker, made 1,000 workers redundant, Cable and Wireless 2,500, LG Phillips 870, Corus 1,000 and the train manufacturer Alstom announced it is to move production to Europe.

 Manufacturing in Britain employs nearly four million people and accounts for possibly 18 per cent of GDP and if outsourced activities such as transport, distribution, marketing, advertising, computing, catering and security services are included, manufacturing’s share of GDP would be considerably more. Exports of manufactured goods make up 61 per cent of Britain’s total exports and 37 per cent of the country’s total income from overseas. Britain imports more goods than it exports and this results in a negative trade balance with the rest of the world. This rose to a record £34 billion in the first quarter of 2002 and is running at its highest levels, as a percentage of GDP, since the end of the 1980s. Fifty-five per cent of Britain’s trade is with the EU; up from 40 per cent when Britain joined the EU; 15 per cent of trade is with the US. Inevitably, the world slowdown has affected inward investment. Nonetheless, Ernst and Young figures show that Britain remained Europe’s top destination for FDI in 2001 – receiving almost a fifth of all projects.

 With the capitalists’ ceaseless quest for more profits, capital is increasingly gravitating out of manufacturing, looking for more profitable sectors. This is one of the reasons why the present Labour government is encouraged, by the ruling class, to continue with the previous Tory policies of privatising prisons, police civilian operations, aircraft control, the Post Office and some elements of the health and education sectors. This drive towards total privatisation of the economy is a natural process of capitalism: that it must be given maximum free rein. In essence it means that economic values previously devoted to the working class are now being transferred to capital and to the increased capital accumulation needed by the monopoly capitalists to compete in the increasingly fierce struggle for relatively shrinking markets.

  The mechanism of privatisation adopted in Britain, the Private Finance Initiative (PFI), at its current advanced stage is now showing all the signals that occurred in e-business and telecommunications during the late 1990s, from an initial annual rate of return of 15 per cent, as more capitalists enter the bidding process the rate of return is decreasing. This will not result in more savings for the Government, but will result in bankruptcies of those capitalists who take on these projects and a decrease in the standards and quality of these services that were previously in the public sector. Moreover PFIs are becoming a rapidly growing burden on local government resources, which are already insufficient to deliver high quality services.

For all the hype, from Labour and Tory leaders, home ownership is proving to be a chain around the necks of the working class. The ruling class would like working people to believe that “they’ve never had it so good” in that the value of their homes increases year on year. What is not pointed out is that when house prices increase, no extra resources are created, no extra services provided the overall wealth of society doesn’t increase by even £1. What it does encourage though is mortgage equity withdrawal, debt, used to buy back the goods working people have produced but cannot afford to buy – debt that ultimately lines the pockets of the ruling class in extra profits and extra interest payments.

 Outstanding debt as a percentage of disposable income has risen from about 70 per cent in 1987 to almost 120 per cent in 2003, equivalent to £897 billion, of which about £170 billion is consumer credit – credit cards, personal loans, overdrafts and hire purchase agreements with borrowing now financing 10 per cent of all consumer spending. The expected £95 billion shortfall in endowment mortgages should also be included in the outstanding debt – a figure that will surely rise as it is based on a return of six per cent per annum. Analyses of data collected in 2000 found that the 34 per cent of the bottom fifth of the population by income, people earning less than £8,730 a year, had debts averaging £3,337, with 36 per cent behind on at least one utility bill. Of a sample of single parents, families on benefits or in low-paid jobs; approximately 50 per cent of them had loans on which 18 per cent were unable to keep up their repayments. Of those renting their homes, 33 per cent were behind with their rent, while eight per cent of homeowners were in arrears with their mortgages, owing an average of almost £2,000. And according to the Financial Services Authority one in five families face difficulties with mortgage repayments. Mortgage repayments swallow more than 20 per cent of the income of first-time London buyers and more than 18 per cent across Britain. The gap between house prices and average earnings widened to 6.19 times, higher than the 3.9 times reached in 1989 at the peak of the last housing boom. Even with low unemployment and interest rates, in 2002 the National Debtline has seen the number of calls it receives double since 1996. A rise in unemployment or a rise in interest rates could have a catastrophic effect, not only on those who have these debts but also for the banks, as household debt accounts for 40 per cent of bank loans. Even with a default of only 10 per cent the banks would be in serious trouble. Finance capitalism encourages workers to borrow to their limit and this debt burden is a big factor in Britain's long-hours culture, as workers seek more opportunities to work longer to repay debts. Also fear of defaulting, especially on mortgages where there is a risk of becoming homeless, discourages workers from taking industrial action that can cause even a small temporary drop in income. Good strong trade union leadership will counter this effect, but where such leadership is lacking, heavy debt can make a workforce compliant.

 The trend over the last few decades has been to further tie workers to capitalism by ensuring that their deferred wages, pensions, and housing costs, endowment mortgages, are dependent on the stock exchange. The FTSE-100 has almost halved since its 1999 peak so those workers depending on equities to fund their retirement or pay of their mortgages have been cheated of vast sums of money. A worker on the average wage of £24,000 paying the maximum 15 per cent into a company money purchase scheme over the last three years will have “invested” almost £10,800 of earned income. The fund after those three years would be worth only about £7,200 a loss of about a third. Those on endowment mortgages could have paid £800 in payments during 2002 and seen no increase at all in their “investment”. This money has not disappeared – after all it was real money that could have been spent, in cash, on food or clothing at the local supermarket. The money has been stolen to maintain the lifestyles of the mega-rich – the ruling class – one of the biggest heists in financial history.

 CURRENCY GAMBLING

 So important have international capital flows become they are now a principal determinant of exchange rates. When one compares the global daily turnover in financial markets of $1550 billion with world trade of approximately £4,000 billion a year, or with Britain’s Treasury’s gross foreign exchange reserves of $42 billion, one can appreciate the great difficulty facing governments in trying to defend exchange rates. The international investment flows between the US and principally the EU and Britain, have caused instability in currencies. Countries exporting capital see the value of their own currency fall whereas the countries where the capital is imported to see their currencies rise. For example, a euro-zone company buying a US competitor would sell euros and buy dollars to pay for the deal, thus making the dollar strong and the euro weak. This enabled the US to reduce the impact on their economy of their huge accumulated trade deficit. These investment flows, or now lack of them, to the US are bringing about great pressure on the US dollar, so much so that in May 2003, the euro broke through its launch rate to trade at record levels against the dollar and the Japanese yen.

During the boom years up to the end of 2000, in an attempt to limit the severity of the impending slowdown but, in the long term, aggravating it, interest rates were increased with the aim of slowing growth in the wealth-creating sector by making the use of borrowed money expensive relative to the rate of return on capital. Slowing growth results in increased unemployment and more difficult conditions in which to fight for increased wages, in effect it passes the burden of averting recessions onto the working class.

 As the slowdown developed, significantly, at the beginning of 2001 the US, Britain and the euro-zone changed tack and started to reduce interest rates substantially. Japan’s interest rates were already near to zero and could not be reduced any further.

One result of the creation of floating exchange rates after the repeal of Bretton Woods in 1973 was the potential, for capitalists, to exploit the volatility of exchange and interest rates between countries. This opportunity gave rise to a huge demand for products, known as derivatives; by 2003 the market for derivatives was $120,000 billion. These instruments are effectively contracts entered into by various parties known as swaps, futures and options. Effectively they are all based on the principle of forward contracts and futures and are indicative of the huge increase in existing financial capital. In fact, this is a distinguishing feature of the present stage of monopoly capitalist development.

 Derivatives have been used since the early days of market economies to manage cash flow. A forward contract is an agreement to buy or sell a given quantity of a particular commodity, at a specified future date at a pre-agreed price. So for example a farmer planting barley will have no idea what the price of barley will be following it’s harvest. By entering a forward contract with a merchant at a pre-agreed price, the farmer can guarantee today the minimum price that the barley will ultimately be sold for.

What is new in these instruments is that an ever greater number of these forward contracts and other such derivatives are used in the financial markets. So banks are moving away from the conventional tasks, such as raising capital and matching the needs of savers and borrowers, towards trading these instruments, which is nothing other than gambling on whether an interest rate or a currency will go up or down.

One of the riskier uses of futures is to promise to sell, at a set price on a future date, shares one doesn’t own but has simply borrowed, in the hope of buying them on the stock market at a lower price to return to the lender and thus pocketing the profit. Some funds hedge these bets by buying shares that they hope will rise and borrow large amounts of money in an attempt to maximise their profits. The growth in hedge funds is also a feature of present day capitalism and is a symptom of the instability of the system as well as of the need for increasing amounts of capital to find new spheres of investment.

Another reason why the use of these instruments has increased is due to regulations brought in during the 1980s and 1990s which required financial institutions to increase the proportion of share capital that they were required to hold as distinct to assets. However, by using derivatives, financial institutions found they were able to hide their total financial exposure by moving assets and liabilities off their balance sheets. This increased complexity has now completely outstripped the ability of central banks to supervise or to assess the total financial exposure within the system.

This has introduced global financial instability – so much so that central banks can now only act as a safety net, as shown by the bailing out of Long-Term Capital Management (LTCM) in the late 1990s or Barings, the British bank which imploded after losing more than $1 billion in derivatives trading in 1995.

The instability that this has brought to stock markets was brought home when one day in May 2001 a trader selling shares in a company missed out the decimal point. So instead of trying to sell $5.64 million worth of shares $564 million worth was put up for sale. The effect of this one transaction was to wipe $40 billion from the value of shares on the FTSE 100.

WORLD TRADE

One of the most notable signs of the potential for chaos and disorder can be seen in the challenge that exists to capitalist state power by the transnational corporations (TNCs). This is an example of the contradiction in two of the main aspects of monopoly capitalism; the state and the big economic monopolies are essential to each other yet also challenge each other. The harnessing of these monopolies to a new system of discipline is now a chief pre-occupation of capitalist states. Where previously, and still to a certain extent today, the state has been the instrument for the continuous development of these monopolies, the monopolies now seek to limit the powers of the state.

The most powerful TNCs, represented by the leaders of the developed countries, have striven through the World Trade Organisation (WTO) to tighten their grip on the economies of all countries, in particular those of the developing countries.

The struggle in the WTO is about removing any restrictions imposed by host countries by ensuring that member countries deregulate their markets in trade and services, drop any restrictions on incoming international capital and remove subsidies and tariffs that protect home grown industries and agriculture, thus giving maximum freedom to monopoly capitalist organisations.

The WTO is the focus of the struggle of the developing against the developed nations for more equitable rules and practices in world trade that at present are weighted very heavily in favour of the western-based TNCs. The world’s working class must be mobilised against this future agenda of world monopoly capitalism in it’s drive for ever greater profits in pursuit of monopoly capitalism’s basic raison d’être the accumulation of capital. The efforts of Globalise Resistance the European Social Forum, while far from taking a communist perspective have done much good work in organising opposition to monopoly capitalism.

THE WORLD TODAY

The global capitalist system presides over a festering morass of exploitation (of workers and the environment), racial and communal strife, and rapid growth in crime, drug trafficking, violence and conflict from local to international levels. The potential for major military conflicts is now greater than at any time since the 1930s.

Imperialism, led by the US and Britain, is resorting over and over again to war and the threat of war, in it’s quest to dominate the Middle East, eastern Europe, the Americas, Africa and Asia. But wherever there is oppression there is resistance. The Iraqi people defied the might of imperialism for over a decade and continue to do so even though US and British imperialism occupy their country. The Palestinians demand the restoration of their national rights and continue to resist the US proxy – Israel – and the Democratic People’s Republic of Korea continues to defend its right to peaceful development.

The crises of 1997 in south east Asia and Russia occurred at the most vulnerable points of the global economy and although there was an impact on the economies of the strongest developed countries, their huge reserves, both in terms of organisation, administration and in economic values and capital, enabled them at that time to stave off a full-scale world recession. In 1999 the New Communist Party of Britain warned that the only way to avoid a recession was to sustain economic growth at its then current average rate. Until late 2001 the average economic growth was sustained, but now growth has plummeted to little above zero and in some cases gone into reverse, recession and deflation. The Japanese economy is in crisis and is in its fifth recession since 1991. Turkey and Argentina are in severe crisis and many countries like Germany, Spain and Italy are extremely vulnerable to the worsening conditions and are hamstrung by their membership of the EU.

At one time it was argued that as one economic centre went into a slowdown the slack would be picked up by the other economic centres. To a certain extent this was the case other than in the 1930s. But we are now seeing all the capitalist economic centres heading for slowdown and slump together. It is this deterioration in the economy of the US in particular and of the EU combined with the recession in Japan, which sets the scene for a full-scale world recession. The weaknesses in the smaller economies like Turkey and Argentina are also contributing significantly to this process.

Socialism remains the system upheld and developed in Cuba as well as People’s China, Democratic Korea, Vietnam, Laos and Cuba and they continue to advance along the revolutionary path charted by their communist parties by applying the principles of Marxism-Leninism to the concrete conditions that exist in their countries.

The Democratic People’s Republic of Korea has been repeatedly hit by devastating floods in the last decade and is subject to an economic blockade by US imperialism. But the Korean workers, led by Kim Jong Il and the Workers’ Party of Korea, have mobilised in national relief and reconstruction work, which has staved off the threat of famine and put the country back on the road to recovery. In 2001 their economy grew by 3.7 per cent and last year by two per cent.

Vietnam and Laos, strengthening friendship and co-operation with China and the other socialist countries, are determined to develop their socialist system. Cuba remains steadfast, its workers united around the Communist Party, in defiance of American imperialism’s blockade and just as determined to preserve and extend the revolutionary gains.

EUROPEAN UNION

The European Union (EU) is one of regional building blocks in the process of being developed by international capital to push forward its need to construct a global marketplace with a unified set of rules and regulations that can enable it to exploit the capital at its disposal efficiently, without unnecessary restrictions. This global marketplace will enable them to export capital to regions where they can obtain the highest rate of profit, unfettered by specific regional control.

The EU is an example of how this process is being developed in one particular region and demonstrates how this process is quickening with the expansion of the EU to include a number of east European states. It has strengthened European monopoly capitalism by creating a global convertible currency on a par with the dollar, by centralising the control of all the member economies, through interest rates and government spending levels, in one European central bank. This is in addition to the lifting of any restrictions that member countries could impose on the movement of capital.

Practice has shown that the merging of the 11 individual currencies into one transformed the euro-zone’s capital markets. The elimination of currency risk and trade barriers within the zone allowed investment to take place anywhere within the zone, this has led to increased efficiency in the markets for the monopoly capitalists and a reduction, for them, in the cost of capital. This increased efficiency initially led to a series of mergers and acquisitions within the national boundaries of member countries and then to euro-zone mergers and acquisitions. This must be seen as evidence of the tendency, inherent in monopoly capitalism, to concentrate capital into ever-fewer hands.

Eventually this tendency outgrew the confines of the euro-zone as seen by the huge outflows from the euro-zone to the US and Britain. With the increasingly weak US economy, that money was then redirected to privatisations in the euro-zone where it accounted for more than half the £384 billion ($600 billion) raised by privatisations in industrialised countries, according to the Organisation for Economic Co-Operation and Development (OECD).  Now this capital is being redirected to eastern Europe, which is seen as a source of cheap labour power with a highly educated workforce and market for consumer goods that cannot be sold in the euro-zone, Britain or the US.

Even with the increased efficiency in the use of capital in the euro-zone the zone has not been able to offset the effects of what is in reality a capitalist global slowdown. During the first three months of 2003 the euro-zone output was moribund compared with the previous quarter, with year on year growth at only 0.8 per cent. Germany, the euro-zone’s largest economy, actually lapsed into recession dragging the Netherlands, whose economy is closely linked to Germany, with it. Unemployment in Germany is 11 per cent of the working population or 4.2 million. In east Germany it is nearer one in five, since the counter-revolution female employment has dropped from 90 per cent to 50 per cent, the birth rate has plummeted because of economic uncertainty and the removal of the socialist system of universal childcare. Not only are the Germans struggling with a one-size-fits-all monetary policy that inflicts an excessive real interest rate on their stagnant economy, the stability and growth pact is forcing them to cut budgets at a time when government expenditure would normally expected to have increased as a result of the slowdown in their economy.

In the euro-zone’s second largest economy, France, unemployment is 9.3 per cent of the working population and with growth barely above zero, public finances are likely to breach the euro stability pact hence the right wing French government’s attacks on the pension rights of public employees.

As European capital strengthened with the establishment of the euro-zone, it sought new areas where it could increase the rate of profit, one of which was the US where the conditions to exploit working people were more favourable. This export of capital highlighted one of the downsides of the export of capital in that it brought about a weakening of the euro as compared to the dollar. This weakening of the euro brought about instability, inflation and reduced employment in the euro-zone. It was not until the instabilities in the US economy brought about by the global slowdown emerged, that this trend reversed and the exchange rate of the euro has now climbed back to the rate it held at its initial launch. This appreciation of the euro is the last thing that the euro-zone needs at the moment as it makes its exports more expensive and US imports cheaper.

With weak home demand, caused by unemployment of at least nine per cent, it has been exports that have sustained their economies since the formation of the euro-zone – 75 per cent of the growth in 2002 came from exports to regions outside of the euro-zone. If the euro continues to increase vis-à-vis other currencies, the value of exports will decline further and growth with it, unemployment will increase making a deeper recession more likely with a heightened risk of deflation as monopolies attempt to offload surplus stock. Already in 2003 Deutshe Telekom posted the biggest loss in German corporate history. Alstom, the European engineering group, and Corus, the Anglo-Dutch steel maker, announced bigger loses than expected and Volkswagen announced a profits warning.

One of the prerequisites demanded by British Capitalism to joining the EU has always been to engineer, through rules and regulations, an EU that would make European capitalism as “competitive” as the US. In this context that means that the European working class should, during the “bad” times, bear the brunt of any economic crisis and during the “good” times see their share of GDP diminished in favour of the ruling class. This theme has been espoused by Thatcher, Major and now Blair, so much so that Gordon Brown added what was effectively a sixth test for British entry to the euro-zone. This test seeks to determine whether the euro-zone has embarked on labour market reform, in other words it sought to make it easier for the monopoly capitalism to develop without being “hamstrung” by regulations that restrict the mobility of labour or by the provision of “excessive” social welfare for displaced or retired workers. In Germany where the government has failed to keep its budget deficit within the three per cent of gross domestic product as required by euro-zone rules, it has sought to bring in a whole range of spending cuts in social welfare and has introduced mini-jobs. This has so far forced 600,000 unemployed workers into low paid jobs (£290 per month). The German government is pressing ahead with its Agenda 2010 plans, which include social welfare cuts, looser job protection rules and cuts in sickness benefits.

In France the government is attacking the pension rights and retirement age of public employees and the CGT, the main French TUC, has embarked on a serious of nationwide strikes to stop their government’s plans.

Clearly there is a lesson here for British trade unionists who still argue that one of the benefits of euro membership is increased trade union rights. Trade union rights are only rights if the trade unions are strong and defend and advance the interests of the working class. This can be done in or outside of the euro-zone as any rules or regulations in a capitalist state only reflect the balance of forces between workers and capital.

In the long term British EMU entry will strengthen European monopoly capitalism. The experience of the British ruling class will be used to invoke more sophisticated attacks on the European working class as capitalism tries to alleviate the current instability within the euro-zone at the expense of workers. It is only by direct or indirect pay cuts, increasing job insecurity, cuts in social welfare and trade union rights that monopoly capitalism can build a zone to serve capitalism, imperialism and globalisation.

TURKEY

Turkey is in deep economic crisis. Its currency has been devalued by almost 50 per cent, the economy has contracted by 10 per cent in 2002, it suffers 70 per cent interest rates and 35 per cent plus inflation. Public sector debt stands at $100 billion with a huge burden of interest payments, which in 2001 accounted for more than 50 per cent of central government spending. Unemployment is officially 10.6 per cent, among educated young people it is as high as 29.4 per cent and unpaid family workers amounted to 21 per cent of the economically active population.

For the 19th time, the International Monetary Fund (IMF) and World Bank have intervened in an attempt to stop the crisis spreading and endangering the global economy. The IMF has lent $30 billion since the Justice and Development Party (AKP) won an overall majority in the 2002 general election. They have tasked the new Turkish government with implementing austerity plans including wage cuts, increased taxation for working people, public sector spending cuts, a $4 billion privatisation programme of the public sector including Turk Telekom and Turkish Airlines, energy liberalisation and the removal of any restrictions on foreign inward investment.

The AKP government had hoped to get a $6 billion war compensation package if Turkey backed the war against Iraq. Also on offer was a further $20 billion in cheap long-term loans but because of mass pressure from the working class and labour movement the necessary measures to allow 62,000 US troops to launch an offensive against Iraq from Turkish soil were defeated in a second parliamentary vote.

RUSSIA AND EASTERN EUROPE

Capitalism now considers the countries of the former Soviet Union and the ex-socialist countries of eastern Europe as emerging markets. This march to capitalism has been achieved on the basis of significantly reducing the living standards of the working people, as recorded by chronic unemployment, low wages and disintegrating social services. After 12 years of capitalism, the region’s output is still 25 per cent below 1989 levels. Even in the most advanced states; Slovenia, Czech Republic, Hungary, Poland and the Slovak Republic – those bidding for EU membership – average incomes on a purchasing power basis are only half those of western Europe. At the other extreme, many people in the former Soviet Union are so poor they can barely feed themselves or their families. The results are broken homes and abandoned children. Capitalism has also been sustained by foreign direct investment at $27.9 billion in 2002 to fund the privatisations and the building of the associated infrastructure to support the new factories that are in the process of being built in anticipation of these countries joining the EU. Even with low employment, low social provisional and substantial privatisation programmes the ruling class in the EU is suggesting the changes are incomplete, with still too much public spending and social welfare, which they say imposes a big tax burden on business, stifles growth and job creation.

By February 2003 unemployment in Lithuania had risen steadily to around 15 per cent; in the Slovak republic it is also 15 per cent, in Poland 18 per cent. Even so all of the 27 countries that formed the USSR and the workers’ republics of Europe have managed economic growth in 2002 ranging from 2.1 per cent in Poland to 11.4 per cent in Turkmenistan. Turkmenistan’s GDP is still only at 91 per cent of Soviet times, whilst GDP per capita for the whole region is only $2,692.59.

Russia has made some economic growth since it’s default in 1998, in the year 2002 growth was 6.1 per cent of GDP, but real GDP is still only at 65 per cent of the level it was in 1989 prior to the counter revolution in the USSR. Again this high growth level is misleading as it is calculated from the very low economic base following the country’s 1998 financial collapse. But it has also been helped by the favourable exchange rate following devaluation and the high price of oil, its major export.  In addition to these problems the Russian economy has a 15 per cent inflation rate, which is one of its most feared economic demons as memories of personal savings wiped out by uncontrolled price increases in the 1990s are still very much alive in most workers memories.

The fight back in these countries continues even under the difficult circumstances in which workers find themselves. The Polish government is finding it difficult to secure political backing for painful decisions, such as further restructuring and job cuts in shipbuilding, steel and coal, and in all the former socialist countries millions dream of the stability they enjoyed under socialism. They miss the sense of security and social welfare.

UNITED STATES

United States (US) wholesale prices plunged in April 2003 at the fastest rate in more than 50 years, 28 per cent of the US industrial base sits idle and each week more than 400,000 workers lose their jobs. What remains of the US industrial base is being worked harder as productivity has surged to its highest rate in nearly 30 years, it now requires fewer workers to produce the same quantity of goods and services. How long will this “miracle” last? Not long. Initially the increase in productivity helped companies expand profits but now, whilst a sizeable proportion of US industry lies idle, whilst millions of US workers have lost their jobs and with overall growth near zero, the productivity “miracle” is becoming a poisoned chalice as it is these workers, displaced by productivity, who are supposed to buy the goods and services that are being produced so efficiently!

Ford and General Motors have 400,000 excess vehicles in storage, equivalent to the output of two of its average sized factories. In attempting to try to sell (dump) these vehicles they are offering incentives of almost $4,000; this is eating into their profits. Chrysler has issued a profit warning of $1.2 billion (£725 million) for the second quarter of 2003, having previously forecast a $2 billion operating profit. This cost cutting is not resulting in increased sales, with 400,000 US workers loosing their jobs each week, so the car manufacturers are likely to push for more job cuts. The situation could deteriorate to the point that one of the manufacturers may even go bankrupt in order to forego on its obligations to the healthcare and pension rights of its workers.

General Motors has a $19.3 billion gap in pension funding, approximately equal to the company’s capitalisation. Its unfunded health care obligations are $51 billion, equal to the combined market capitalisation of Ford and Daimler Chrysler, Chrysler’s German parent.

The dramatic swings in currency exchange rates have been most apparent vis-à-vis the dollar and the euro. The dollar has fallen against the euro by more than 28 per cent since February 2002. This should have benefited the US by making its exported goods cheaper in Europe, making them easier to sell and increasing exports and discouraging the import of more expensive imported goods. This has been one of the traditional ways in which capitalist countries have managed to escape a recessionary period. It hasn’t happened this time round as Europe is also close to recession; US exports fell to $81 billion, their lowest since April 2002. This is an indication of stagnant demand in both the US and Europe.

LATIN AMERICA

The Argentine economy has not recovered since its collapse in 2001, a direct result of having pegged its currency to the US dollar and therefore exposing Argentina directly to the economic slowdown in the US. Payment of external debt interest is crippling the economy. Corruption is rife as the ruling class tries to protect itself from the consequences of its own actions.

The solution of the ruling class was to devalue the Argentine peso; a move designed to further inflict the costs of the crisis onto the working class. The peso dropped 70 per cent against the dollar, the banking system failed, workers lost their life savings, their pensions and poverty spread. And still Argentina cannot meet interest payments on its debts to the International Monetary Fund (IMF) and the World Bank and has defaulted several times. After a lengthy standoff, a $3 billion IMF bridging loan has been secured to cover the first half of 2003, until elections are held. The loan was dependent on Argentina repaying $1 billion to the IMF! The European members of the G7 and the US backed the deal out of fear for the health of the global economy and the knock-on effects on other borrowers if Argentina defaulted again, any of which could have led to the collapse of a number of international financial institutions. Under the IMF’s burden-sharing arrangements, the borrowing costs for other countries would also have risen if Argentina had defaulted. This would have made it especially difficult for Uruguay, one of the countries the IMF bailed out in the 2002 series of Latin American rescue packages, as all the signs are, that Uruguay’s debt burden seems likely to overwhelm it.

The Argentine deal came on top of previous loans and swaps. In June 2001 Argentina managed to gain some breathing space by swapping $30 billion of debt due for payment before 2006 with debt due for payment in 2008 and 2031. In August 2001 the IMF lent $8 billion to enable the economy to recover.  In doing so it compounded its problems by entering into a huge gamble that the global economy would recover quickly, thus enabling it to restart its economy. The global economy has not recovered, indeed it has deteriorated further since 2001. It is the working class that will pay for this debt by the pilfering of their pension funds, privatisation of the public sector and high interest rates and low wages.

Throughout this period, with massive debt, lost pensions and 20 per cent unemployment, the working class has had to resort to extraordinary means in order to survive.

JAPAN

Over the last decade Japan has been in and out of recession on a regular basis. Each rise out of recession has never allowed it to reach it’s previous level of production and each dip back into recession reduces GDP to a level even lower than the previous recession. During 2002 prices dropped 2.2 per cent and during the first quarter of 2003 prices were down 3.5 per cent on the previous year. Since 1995 prices have been dropping at an annual rate of one to two per cent, suggesting that Japan has entered a deflationary spiral of falling prices, profits, payrolls and purchases, recession and worsening debt burdens, from which it will be hard pressed to escape.

The banking system is in deep crisis; it has been estimated that the total size of bad loans ranges from $437 billion (the government’s estimate) to $1,924 billion (Goldman Sachs’ estimate). These are loans made to companies and individuals that are never expected to be paid back. With near zero interest rates even the most desperate companies should be able to service their debts, even if they have no prospect of ever repaying the principle which in real terms is increasing at the rate by which prices are falling. As a result the debt burden is growing faster than the ability of companies, the banks and the government to deal with it.

The recent shocks to the global capitalist system, combined with companies’ indebtedness and their low level of productivity, mean the average Japanese company now requires 70 per cent more capital to produce the same value of products as an American one. This has resulted in an ever-increasing number of smaller companies going bankrupt with debts to banks of between $8 billion to $17 billion a month. In absorbing these debts the banks are now so severely impacted that they no longer have the capacity to lend to industry. This is a fundamental weakness that prevents recovery other than through consolidation and monopolisation, with the released capital being absorbed by the major Japanese monopolies. This process is accelerating. In the electronics industry, for example, many companies have formed chip-making alliances with former competitors. Pharmaceutical companies, facing greater competition in a previously domestic market are closing production facilities and outsourcing manufacturing. Construction, retail and insurance companies are merging or announcing long-term cost-saving plans.

With low or sometimes negative growth and increasing bad debts, Japan’s financial crisis contributes substantially to the difficulties of the global banking system and failure to solve it could have far-reaching repercussions throughout the world economy. To ensure that these repercussions don’t occur and that the cost of the crisis is borne by the working class, some sections of the Japanese ruling class are advocating an ill-thought out policy of lowering aggregate wages by around 30 per cent. Already Japan’s retired population has had its pensions cut in line with deflation.

CHINA

China is now the fastest growing economy in the world and the sixth largest trading nation, its economy grew by more than nine per cent in the first quarter of 2003 compared with eight per cent in 2002 and 7.3 per cent in 2001. In achieving this it strives to represent the “advanced productive forces, the advanced culture and the interests of the broad masses” – the “three represents”. The main planks of its economic strategy has been to stimulate strong domestic demand fed by low prices and a stress on quality.

There is little doubt that China’s ability to maintain the exchange rate of its currency contributed in no small measure to the recovery by the nations of south, east and south-east Asia from the 1997 crisis. People’s China is booming with its foreign trade and economic sector, which withstood the severe test of that Asian financial crisis. The fact that China ranks economically ninth in the world and can feed, clothe and educate its people, who comprise 21 per cent of the world’s population, with only seven per cent of the world’s arable land, is a tribute to socialist planning. In 1949, when the People’s Republic was established, Chinese living standards were the lowest in the world. Now the people enjoy a way of life undreamt of in those days, one of increasing prosperity, scientific advance and progress.

An indication of the country’s capacity to generate wealth is the use of machine tools. The Chinese market overtook the US as the world’s biggest user of machine tools in 2002, with $5.5 billion in products sold. Industry analysts forecast that Chinese demand will rise to $7 billion in 2005, half of which will be satisfied by Chinese produced machine tools of as high a quality as any produced by capitalist manufacturers.

These machine tools are being put to good use; Chinese companies can put satellites into space, make cars cheaper than General Motors, manufacture 600MW power generators, produce advanced sheet steel and engineer a high-speed train. A wholly owned Chinese carmaker took just 33 months to build its first car and produced 50,000 in 2002 and will produce 80,000 in 2003 and 200,000 by 2005.

The fast growing manufacturing capacity is also aiding the rural economy, which has seen its per capita income increase by as much 50 per cent in 2002. Thirty-three per cent of this was on home produced durable goods – such as refrigerators, television sets air-conditioners and mobile phones. The infrastructure is also being developed: 530,000 km of roads have been built in the last decade linking rural areas with urban areas and electricity output increased by 17 per cent 2002.

In China’s speedy development of the economy, the Government and local authorities are not loosing sight of the potential social impact. Old uneconomic factories are kept open, prior to new factories coming on stream, on the basis that everyone has something to contribute to the social development of society through common prosperity and mutual benefit.

It is recognised that any co-operation with capitalism must contain potential dangers. The growth of capitalist interests, both domestic and foreign, within China can have both positive and negative effects. The living standards of the Chinese people are rising, but there also exists a small minority of very rich. The Communist Party of China is actively organising itself by extending its membership amongst working people, and opposing all forms of corruption.

Although the growth of China’s foreign trade is planned to slow to an annual growth rate of seven per cent for the next five years, this will surpass the anticipated growth obtained by the rest of the world. This plan expects to strike a general balance between imports and exports with over 70 per cent of the trade being in electrical and electronic machinery and other hi-tech products. China is to be congratulated on putting a man in space and their space programme achievements which are not only technological achievements but also have positive implications in the struggle for peace.

World Trade Organisation (WTO) accession has increased foreign direct investment, which rose to $57.7 billion in 2002 (by comparison in Britain it was $78bn in 2001) during the last 20 years to 2002 it had attracted $448 billion. The US and EU rationale behind eventually allowing China to join the WTO is to achieve, through the medium of the WTO, unrestricted freedom for their capital in China. But they will find it an uphill struggle to compete with Chinese companies on price, quality and social provision. The Chinese people have long memories in respect of how imperialism has treated them in the past and how, through their own efforts, they defeated colonialism and Japanese imperialism. This struggle will continue.

WAGES

The average weekly wage in the UK was £475 an increase of 45% in the 10 years to February 2003. For each £1 that is received in wages, £1 is distributed amongst the ruling class to fund their lifestyles. The “pay” for the top ten executives in the FTSE 100 averaged £6.3 million whilst the top executives at FTSE 100 companies saw their “earnings” rise by 288 per cent in the 10 years to June 2003.

The average wage – including bonuses, overtime, merit pay and shift premiums – masks a wide variation. There are 1.6 million workers on the minimum wage £4.20 per hour. Teachers, firefighters, police officers and nurses have average wages of £19,240; supermarket checkout operators average wages of £10,163, while women cleaners and domestics averaged £10,363.  An average wage also masks other factors such as if one worker works 35 hours a week and another works 60 hours a week and both get paid £475 the average wage is still £475. Sixteen per cent of workers now work over 60 hours a week compared to 12 per cent in 2000, allowing for the six per cent increase in the hourly rate during the last two years, the real average wage has actually declined by £50 a week!

Not included in the average wage is the increase in the amount of debt that workers have to take on in order to live and work, or deferred wages such as pensions. Those workers who have recently retired, having saved money in a money purchase pension fund, have received pensions (wages) half of what they would have been if they had retired a few years ago with the same sized fund. Many workers now see little point in saving for retirement; the number with non-state pensions has dropped by more than 1.6 million since 1993 and the trend is accelerating, with companies now closing occupational pension schemes. Recently the government has announced a safety net for occupational pensions – it is too little too late. It is workers who will pay the price for private provisions irrespective of whether it is through an occupational scheme with the employer or a private scheme with a financial institute. It is future pensioners who will pay for this safety net in reduced benefits. The government has decided to halve the maximum level of inflation-proofing that retired pension scheme members can enjoy from five per cent to 2.5 per cent, which will lead to millions of workers facing hardship in retirement.

The intention to increase the public sector pension age to 65, or for public sector workers to receive actuarially reduced pensions if they retire before age 65, will require a vigorous campaign of opposition from the trade unions.

Deregulation of the labour market and the introduction of the minimum wage have substituted low-waged insecure jobs for better paid jobs, which had generally better working conditions. A study of the job vacancies in the Lancashire area, conducted by the Manchester Low Pay Unit, shows that nearly half of the jobs advertised in Jobcentres were part time and 20 per cent were temporary. The survey also found that 40 per cent of the jobs were offering pay below tax thresholds, 60 per cent below income support levels and over 90 per cent below tax credit rates. One third were at minimum pay rates.

The wages are being forced down to a low level through a variety of mechanisms such as forcing the most vulnerable, single parents, into low-wage jobs and once there ensuring that they stay there, through the shift from out-of-work to in-work benefits such as the working family tax credit and the child tax credit. This shift is a mechanism to redistribute wage levels within the working class, leaving the exorbitantly high incomes of the capitalist class untouched and allowing capitalists to pay wages below the subsistence level. This deepens the poverty trap and brings about a reluctance amongst workers to fight for wage rises because this leads to cuts in benefits.

The boom and bust cycles, brought about by the incessant competition of capitals, had in the past to a certain extent been smoothed by the relative strength of the labour movement. Organised workers have the potential to resist wage cuts and can continue to obtain wage increases despite business slow downs. The automatic stabilisers, notably social insurance payments and progressive income tax that go towards funding state welfare, tend to dampen down cyclical fluctuations. None of these were yielded out of the wisdom of the capitalists, but rather as reluctant concessions to the organised strength and struggles of workers and other anti-monopoly forces.

The wages struggle is central in this situation. Complete social justice can never be possible under capitalism not even by getting a so-called stake in the capitalist economy. The “stakeholder” share will be nothing more than a crumb from the capitalist table. The working class must always strive for improvement, whilst at the same time working to bring about a more fundamental change by promoting a socialist solution.

OUTLOOK

The crucial factor determining the fate of the world economy in the near term is what happens to the US economy. Any further deterioration there, such as a severe reduction in the exchange rate of the dollar, could trigger a worldwide recession and exporting deflation around the capitalist world. This would reverberate throughout the world affecting particularly seriously those most vulnerable economies such as Japan, Germany and Argentina whose problems could, in turn, further aggravate the crisis in the world economy.

In the longer term, whilst it is impossible, at this stage, to foresee how long capitalism’s general crisis will take to mature, it is certain that the contradictions within the system will ensure that this will happen. Capitalism will not, and in any case can never meet the needs of the working class and of humanity as a whole – only socialism can do that. Capitalism has the potential, however, to last for much longer than originally thought. It will not collapse of it’s own volition – it must be pushed. The exact scenario as to how exactly this will happen cannot be predicted other than what is certain is that communist parties are essential to the process of preparing the masses for fundamental social change and ensuring the advance to socialism.

DEFEND THE CLASS

Complete social justice can never be possible under capitalism but the struggle to defend working class living standards is central to the labour movement while at the same time providing the basis for more fundamental change.

This requires political struggle to improve social services and benefits and industrial struggle for better wages and working conditions. Means testing for all benefits should be abolished and the call needs to be made for a fully integrated, publicly owned transport system to meet people’s needs.

The New Communist Party calls for the restoration of free collective bargaining and trade union immunities and the repeal of all the anti-trade union legislation passed since 1979.

Claims for increases should be on an industrial basis negotiated by the trade unions nationally. In this way the maximum number of workers can be mobilised in support of the claim. Local bargaining has a role after national bargaining, to improve on what has been achieved nationally and in catering for specific local conditions.

Claims should be for a flat-rate monetary increase. This upholds the principle of stable wage differentials to reward workers for their skills. Percentage increases widen differentials at the expense of the lower-paid and divide the work force.

Claims should be based on the national rate for the job assessed by the unions and not on the “minimum wage” or regional rates set by the employers. Where new job patterns are established, rates should be agreed by comparing existing jobs with similar skills.

The Party is opposed to the introduction and operation of bonus or piece-working schemes. Where they do exist, workers, via their trade union stewards, must be involved in negotiating the way they operate. But at all times we must campaign to get the bonus element scrapped and the payment incorporated into the basic hourly rate.

We also oppose all forms of Performance Related Pay (PRP) which seeks to perpetuate low pay amongst the widest section of workers. PRP schemes are discriminatory with all minorities – whether disabled, part-time or ethnic-minority workers – and pay lower increases in pay to the most vulnerable. The civil service has seen the use of PRP schemes with the result that 40 per cent of civil servants earn less than £15,000 and 20,000 civil servants earn less than £10,000. Within the Department for Work and Pensions 4,000 workers earn less than a Tesco checkout operator. Trade unions must seek to minimise the extreme differentials within PRP, but continue to campaign for its complete abolition.

The fight for higher wages should be linked to:

*          The minimum demand to restore workers’ rights by rescinding all legislation, enacted since 1979 that works against the interests of the working class and the trade union movement. This is a requisite to ensure that organised labour can compete with monopoly capitalism without legal constraint. We must expose the limitations of working-time legislation and campaign for the closing of opt-out clauses.

*          Increasing the social wage. The decline in the health service, education, social services and public transport has brought about an erosion of overall living standards. This must be reversed, not by putting ever increasing pressure on workers in these industries, or by phoney performance target setting, but by ensuring adequate levels of resourcing and pay.

*          The fight for a reduction in weekly hours. We should aim to unite the labour movement around a demand for a maximum working week of 35 hours with no loss of pay.

TAX THE RICH

For over 20 years under the Conservatives and now under Labour, public spending has been cut. Vital services like the National Health Service, public transport, education and local amenities have all become seriously under-funded. We must mobilise the class in its own defence to fight for the restoration of state welfare to at least the levels existing in 1979.

This demand can easily be met by making the rich pay for them by disgorging a fraction of the wealth they extort from the working class every year.

Taxation is the way essential services are funded. For years both Tory and Labour governments have clamoured for lower income tax. But the only people who have benefited from these tax cuts have been the rich, while the least well off have become poorer.

The NCP maintains that the burden of taxation should be shifted away from workers and onto the wealthy. The current mechanism of a mixture of direct and indirect taxation impacts on the low-paid far more than the rich. While three million taxpayers earn more than £1,000 a week, of which 25 per cent gets deducted in tax, there are 7.5 million taxpayers earning less than £200 a week who get 11 per cent of their wages deducted in tax. Whilst a tax deduction of 11 per cent makes massive inroads into a small income, a 25 per cent tax on high incomes still leaves a very substantial and excessive net income for the rich.

The Party is opposed to all indirect taxes such as VAT. This is because, in proportion to peoples’ income, these bear more heavily on the working class. The richest 20 per cent of the population pay only 15 per cent of disposable income on indirect taxation, whereas everybody else pays over 20 per cent.

Our immediate demands are for:

•           PAYE personal allowances to be substantially increased. This would exempt a greater number of lower-paid from paying any income tax.

•           New PAYE Tax bands, of £10,000 increments from the current high rate tax band, to be introduced at 50, 60, 70, 80, 90 and 98 per cent.

•           The married couple’s allowance should be restored at the basic rate of tax.

•           Mortgage interest relief (MIRAS) should be re-introduced at the basic rate of tax.

•           The removal of all tax on domestic fuel.

•           The abolition of VAT on all goods and services.

•           Taxes on insurance to be withdrawn.

•           Council tax should be reduced to its 2001, level pending its further reduction at a later date. In compensation the central government grant to local authorities should be substantially increased.

•           The Main Rate of Corporation Tax should be increased from 30 per cent to 60 per cent.

•           The Corporation Tax allowance for the main rate be reduced to £1 million, currently £1.5 million. This will bring in more companies into this tax band.

•           New Corporation Tax bands, of £500,000 increments from the proposed main rate tax band of 60 per cent, to be introduced at 70, 80, 90 and 98 per cent.

•           A tax exemption threshold of £500 per annum of interest from savings received from bank, building society, share dividends and credit.

•           The tax exemption limit for capital gains tax should be abolished.

The rich have plenty. They must pay.

NO TO EMU, NO TO THE EUROPEAN UNION

With the large Labour majority, Tony Blair would have liked to have quickly pressed ahead with the ruling class’s plans to take Britain into the euro-zone. But two hurdles had to be overcome. The first, but to a certain extent the least important, was the political issue in that opinion polls suggest that in a referendum 46 per cent of the British electorate would vote against euro entry, even if the Government recommended it, while only 37 per cent would vote in favour. But this opposition to EMU could have been overcome, if the weight of the bourgeois media was used in the run up to a referendum to support membership, as after all some opinion polls have suggested that 70 per cent of the electorate see joining as inevitable.

The second and most important hurdle was to ensure that the British ruling class wasn’t disadvantaged, in relation to those monopolies based in the zone, by entry to EMU. Thus the Government set five economic tests, announced by Gordon Brown in October 1997, which had to be met before Britain would join. The five tests can effectively be summed up as whether joining EMU will promote higher growth for British capital. With a stable home market and with the accommodating use of state controlled statistics, the tests could easily be proved, given time. Thus far these tests have not been met satisfactorily, primarily as a result of the slowdown in Europe, the US and Japan and the currency fluctuations vis-à-vis the US dollar and the euro. The failure to get a positive result with these tests has resulted in the British ruling class temporarily delaying the referendum and consequential entry to EMU.

When the referendum is called, the Party must mobilise for a massive “No” vote, while at the same time exposing the whole fraudulent nature of referendums. The Party must also use the opportunity of the public debate that will no doubt take place prior to the vote, to make the principled stand against the European Union and the Treaty of Rome altogether. Though we will campaign with broad organisations opposed to EMU and the EU, the Party rejects any attempt to make common cause with reactionary, chauvinist, racist or fascist groups who are also campaigning against EMU.

These reactionary elements can never serve the interests of the working class nor does the class need them in the campaign against EMU.

The Party’s main tasks are –

•           To project the fact that the European Union is neither genuinely federal nor democratic.

•           To point out that every stage of European integration has been financed by working people through higher indirect taxes, lost jobs and lost benefits.

•           To elevate our campaign to boycott the European elections – a bogus public relations exercise for a body that possesses no meaningful executive powers at all.

•           To expose the real exploitative nature of the European Union.

•           To show that the European Union cannot be reformed and that it must be dissolved and the Treaty of Rome, which established the Common Market in the first place, and all addenda repealed.

•           To focus opposition to indirect taxation (VAT) and demand the restoration of the public sector and state welfare.

•           To oppose the racist "Fortress Europe" immigration controls and the drive for a European Army.

•           To return to public control Britain’s national resources, essential services and public utilities.

The European Union cannot be reformed; it must be dissolved and the Treaty of Rome, which established the Common Market in the first place, and all addendums repealed.

Our campaign must strive to focus opposition to indirect taxation (VAT) and demand the restoration of the public sector and state welfare. We must oppose the racist “Fortress Europe” immigration controls and the drive for a European Army. We must demand the return to public control of Britain’s national resources, essential services and public utilities.

IMPERIALISM THREATENS THE WORLD

The primary contradiction today is between United States imperialism and the peoples of the world. Since our last Congress American imperialism, backed by British imperialism, has invaded Afghanistan and Iraq.

American imperialism, headed by George W Bush and an administration drawn from the most reactionary and aggressive elements of the US ruling class, is seeking world domination, which it calls “globalisation” and the “New World order”. It seeks to consolidate US power across the globe and extract the maximum advantage from US imperialism’s present strength and dominant position over the entire non-socialist world. The most reactionary, venal and warlike sections of the British ruling class, ably served by the Blair leadership, are backing the Americans to the hilt in the hope of securing a part of the plunder for themselves.

Anglo-American imperialism has abandoned all pretence of upholding the United Nations. The invasion of Iraq was a direct affront to the authority of the UN Security Council. The elevation of the theory of the “pre-emptive strike” or surprise attack, last elevated by Nazi Germany and Imperial Japan in the Second World War, reflects and arrogance and contempt that these would-be rulers of the world hold for the peoples they hope to enslave.

US imperialism is preparing for more wars. The US government has revived the old “Star Wars” project – the National Missile Defence system (NMD) – in direct contravention of the 1972 Anti-Ballistic Missile (ABM) treaty, which it has now torn up. A number of countries that have defied imperialism have been branded as “rogue states” and part of an “axis of evil” to prepare the American public for new aggressions against Iran, Syria and Democratic Korea.

THE WAR FOR OIL

The forces of Anglo-American imperialism have overrun Iraq and George W Bush and Tony Blair are claiming victory: a victory based on the bodies of the thousands of Iraqi civilians killed or wounded largely at the hands of the US air force, a triumph based on lies and provocations.

In the beginning Bush and Blair told the world that this war was over the weapons of mass destruction that Iraq allegedly still possessed. It was not the view of the UN weapons inspectors. The majority of the members of the United Nations opposed it. The other Great Powers including People’s China, France, Germany and Russia opposed it. And it has been exposed as a crude lie by recent events.

Though the war was allegedly fought to rid Iraq of weapons of mass destruction, Iraq used none nor have the occupying forces found any. Though it was claimed that the war would bring “democracy”, popular leaders are being sidelined in favour of worthless and corrupt placemen, groomed for their role during their long years of exile in Britain and the United States.

The warmongers claimed the invasion was for the benefit of the Iraqi Kurdish minority. But the imperialists, who only seek to use them as auxiliaries in their campaign to take-over the whole of Iraq, have categorically ruled out their hopes for full autonomy or independence.

We are now told that the war is about bringing “democracy” to the Iraqi people. But this is the last thing on the imperialists’ minds at the moment. There is no plan for elections, nor any intention to seek a mandate from the United Nations. The imperialists have not even found any credible stooges to set up a puppet government and they have made it clear that they are opposed to the mass movements within the country and that they are not prepared to hold free elections in the foreseeable future.

What is planned is a prolonged period of direct imperialist rule under an American governor. Very detailed plans to carve up the Iraqi oil fields and its nationalised oil industry were prepared long before the war. The immense task of reconstruction needed to get Iraqi oil pumping again for the benefit of imperialism has already been earmarked for chosen American corporations.

Any long-term side benefits for the Iraqi people in the form of education, transport and health will all be paid for by the Iraqi people themselves – out of what is left of the oil profits once the big oil corporations have taken their juicy cut.

By establishing direct control of the Iraqi oil fields, Anglo-American imperialism hopes to control the price and production of the global oil industry. This was what the war was about and this is why France, Germany and Russia are so concerned.

The issue is clear. This was an illegal and unjust war. British troops should never have been sent to Iraq in the first place. They must be brought home immediately. The Iraqi people’s legitimate rights to independence and the control of their resources must be upheld. The Iraqi people have taken up the gun in a new fight for independence. Their resistance must be supported.

The road to nowhere

Palestine Day, 15 May, marks the beginning of the tragedy of the Palestinian Arabs. On that day in 1948 the British colonial mandate ended and the State of Israel was proclaimed. On that day the first Arab-Israeli war began. It has never ended.

The first war led to the expulsion of a million Palestinian Arabs from their homes by the Zionist regime. Those refugees and their descendants have never given up their right to return to their land. And this is the heart of the crisis in the Middle East that has led to five full-scale wars and continuing simmering conflicts.

Anglo-American imperialism is currently promoting the so-called Road Map to Peace in the Middle East. It is little more than a watered-down version of the deal tabled at the American sponsored Camp David talks in 2000, which was rejected by the Palestinians.  It is doomed to fail. This is partly because General Sharon’s reactionary coalition in Tel Aviv is not prepared to make even the modest concessions the proposals demand. But more importantly it is because the “road map” fails to address the heart of the matter – the Palestinian refugees’ right to return and Israel’s continued illegal occupation of the West Bank, the Gaza Strip and Syria’s Golan Heights.

The American plan calls on the Palestinians to end their armed struggle and calls on all the other Arabs to cease supporting the Palestinian resistance and normalise their relations with the Zionist entity. In return the Palestinians are offered a “state” with no defined borders but which is clearly little more than the “autonomous” zones they administered under the previous Oslo agreements and a vague hope that Israel might in the fullness of time evacuate other parts of the West Bank to make this “state” economically and politically viable. The issue of the refugees is ignored. But the Sharon government has made it clear that the Palestinian refugees must renounce all their rights if talks are to progress.

The response of Sharon and his cohorts is not surprising. His Likud-led coalition represents the most reactionary elements in Israeli society – the Zionist fanatics and religious bigots who hate and fear the Arabs. But their petty ambitions and dreams are not the driving force of Anglo-American imperialism.

Israel is economically and politically entirely dependent on American imperialism and successive Israeli governments have existed to serve the needs of American imperialism in the region. And those needs are to weaken and divide the Arabs to ensure that the big oil corporations can continue their exploitation and plunder of Arab oil until it eventually runs out.

The tail does not wag the dog and Israel and the American “Zionist lobby” does not dictate American foreign policy. They serve it. They provide Anglo-American imperialism with a convenient alibi to play the role of “honest broker” in the Middle East. They enable the feudal Arab oil princes whose thrones are propped up by imperialist bayonets to claim that the Arabs’ enemy is not imperialism as such but Israel and this supposedly all-powerful “Zionist lobby” which pulls the strings in the United States.

In a slightly more sophisticated way, Israel’s ruling circles play the same game, claiming to serve a mythical Zionist ideal as a bulwark against persecution. In reality they simply provide imperialism with cannon fodder for the strategic aims of Anglo-American imperialism. Far from being a Zionist paradise, Israel today is one of the worst places for Jews to live, racked by continuing conflict with Palestinians and economic hardship due to its isolation and total dependency on the United States.

Past UN resolutions have provided the basis for a just and lasting peace in the Middle East. First of all Israel must totally withdraw from the occupied territories seized in 1967. The Palestinians must be allowed to establish a state of their own on the West Bank and Gaza Strip. The Palestinian refugees whose homes are now in Israel must be allowed to return or, if they so wish, be paid appropriate compensation in exchange. All states in the region, including Israel, should have internationally agreed and recognised frontiers guaranteed by all the Great Powers.

Anglo-American imperialism believes it can call all the shots in the Middle East today. The imperialists believe that all resistance can be crushed by brute force and they hope to find willing Arab tools to do their bidding, hoist up the white flag and sign a surrender peace.

But wherever there is oppression there is always resistance. In the Middle East imperialist violence always leads to an equally violent resistance.  Imperialism’s refusal to recognise this has led to the spiral of violence and terror that began in 1948 as a regional war, to a conflict that now spans the whole world. A lasting solution must be based on the right of return of refugees, an independent Palestinian state with Israel giving up all territories seized since 1967.

IMPERIALIST ISOLATION

Anglo-American imperialism stands totally isolated in the world even amongst the international institutions it once relied on to do its bidding and give them some international authority for their actions.

The United Nations has been marginalised. US imperialism only pays lip service to UN institutions when it suits its purposes. When the Americans can use it to rubber-stamp their plans, the world organisation is supported. When it is no longer of any further use to them, like now, it is ignored and discarded.

 In the past British and American imperialism upheld the principle of the veto on the UN Security Council – a right the United States has exercised 73 times, mainly to protect Israel. But it was ignored when it appeared that France, Russia or People’s China were prepared to use it to block the Iraq invasion.

The Bush administration is indifferent to the UN and indeed the more cautious views of its junior partners. The Bush administration represents the most reactionary and aggressive sections of the American ruling class: people ready to take the world to the brink in pursuit of world domination.

They call it “the New World order”. It was coined when Bush’s father was in the White House, soon after the Soviet Union fell following the counter-revolution.  It more than echoes Adolf Hitler’s “new order for the world”. Like the Nazis, American imperialism demonises anyone who dares to stand up to them as savage and insane fanatics. Like the Nazis this is used to justify the torture of Afghan tribesmen at the Bagram air base or the American concentration camp in Guantanamo Bay. Like the Nazis, Bush makes one demand after another on those whom American imperialism seeks to destroy. When the first demand is met another soon follows until eventually, like the Fuhrer, Bush’s “patience” is exhausted and war is threatened. Like the Nazis, Bush has elevated the theory of “pre-emptive war” to justify American aggression and the surprise attack against anyone considered weaker than themselves. Like the Nazis, the American imperialists think they can rule the world but the Thousand-Year Reich lasted little more than 12. It ended in world war, the deaths of millions upon millions and destruction on a global scale.

The central issue is the right of the Iraqi people to independence, to choose their own government and social system and control their own resources. They certainly will not be able to do this under imperialist occupation. The Iraqis could easily establish a new independent government within weeks if freely allowed to do so. That, however, is not on George W Bush’s agenda.

Bush and the most aggressive circles within the American ruling class want to carve-up the Middle East as part of their plan to rule the world. Iraq is just the first step. All its oil is going to be handed over to the big oil corporations. All its territory will be used as a strategic base to threaten the other countries in the region that stand in imperialism’s way.

They call it “globalisation” or the “New World order”. They call their colonial wars “the fight against terrorism”. What it means is simply world domination. The next target could be Cuba, Syria, Iran or the Democratic People’s Republic of Korea. Bush branded all, like Iraq, as part of the “axis of evil”.

In the past the imperialists justified their colonial wars by using the racist and imperialist theories of the “white man’s burden”, “the master race” or “manifest destiny”. The horrors of the two world wars of the last century killed most of that reactionary nonsense. So now they fly the false flag of “democracy” and “liberation” to justify their crimes.

We have seen their “liberation” in practice in Iraq; worthless puppets and crooks imported into the country to act as stooges; civilians bullied and gunned down by trigger-happy US Marines while their cities burn, basic civil rights denied while the country is flooded with drugs and criminal gangs roam under the eyes of the occupation forces.

THE EUROPEAN UNION AND THE CRISIS

Blair’s appeal to the rest of the European Union to back British imperialism’s “UN road” received a lukewarm response in France and Germany. While the French and German imperialists want to preserve and increase their own influence in the Middle East, they did not expect much from the Americans in the first place, let alone now after refusing to endorse the Anglo-American aggression in the Security Council.

Nor are they simply going to accept an American carve-up of Iraq and the Middle East and the global oil market lying down. Their next move, following the Franco-German-Russian summit, remains a secret. Though the continuing demand for the return of the UN weapons inspectors to see independently if Iraq was hiding any banned weapons shows that Berlin and Paris are not going to let the matter drop.

Russia, France and Germany have held a summit in St Petersburg to plan their next moves over the crisis. Grandly dubbed the “anti-war alliance” by some Russian commentators and referred to in France as a new “Triple Entente”, the three major powers of Europe re-affirmed their original opposition to the Anglo-American invasion and stressed the need for the UN to now oversee the establishment of an elected government in Iraq.

Any move that blocks the establishment of an Anglo-American puppet regime in Iraq is welcome. But not if it substitutes one protectorate with another, albeit controlled by a consortium of Great Powers under the flag of the United Nations, even though the entire country is under the thumb of the Anglo-American expeditionary force.

THE STRUGGLE FOR PEACE IN BRITAIN

Over the past year an anti-war movement of unprecedented scale has swept the world, not least in the United States and Britain. Mass demonstrations, including one that was two million-strong in London, reflected the mass opposition to the imperialism war inside the labour movement and amongst the people as a whole.

But those in favour of imperialist aggression are the real rulers of our country. They are most aggressive and greedy sections of the capitalist and land-owning class. They are the sort of people who robbed and looted Africa and Asia in the 19th century to build an Empire on which “the sun never set”, killing and enslaving millions on their way. They are the kind who lived the life of Roman Emperors in their grand houses while British workers slaved in their factories for pennies and died broken and destitute in the slums of our great cities. They are the people who sent millions to their deaths in the First World War to preserve and increase their fortunes.

They are the ruling class, the big capitalists, the bankers, the industrialists and big landowners who really run this country. They are still with us.

They pull the strings. Now they show what a farce our so-called parliamentary democracy really is. Now they reveal the contempt they have for the people beneath them. Million elected the Labour government. Millions are opposed to the war. Their voice is ignored and dismissed and the only demand that Blair & Co listen to is that of the ruling class.

The crisis in the Labour Party has spread to the Government. Two Cabinet ministers along with some junior ministerial officers have resigned.  There is anger at the spectacle of a British prime minister reduced to the role of an apologist for George W Bush. There is disgust at the sight of the British army in the Gulf reduced to the role of hired hands of American imperialism like the sepoys of the old East India Company. Even sections of the bourgeoisie and the ruling class are opposed to the war and this is reflected in the position of the Liberal Democrats and the small but growing band of Tory MPs. But Blair & Co have determined to serve one section of the ruling class: the most reactionary and imperialist exploiters who believe that British imperialism’s world-wide interests can only be protected by the might of the American armed forces.

The European Union is divided and so is our own ruling class and the war has brought their divisions to a head. The most reactionary, aggressive and venal sections, those the Blair leadership are serving, are in the war camp.

They are opposed by those in favour of greater European integration: the elements of the ruling class that will profit from partnership inside the EU rather than with US imperialism. And they have turned to the peace movement for popular support in their struggle.

This is why the North American-owned press in Britain is targeting the peace movement and attacking the leaders of the Stop the War Coalition. The campaigning Labour MP, George Galloway, has been singled out for special attention to punish him for his long-standing support for the Arabs over the years and he has now been suspended from Labour Party membership.

The war party, that section of the ruling class in favour of imperialist aggression and who believe that British imperialism’s global interests can only be preserved by American might, are dominant at the moment. Blair still struggles to maintain the old British ruling class policy of straddling the Atlantic to play off Europe against America. But he burnt his bridges in more than one sense in this war.

The Government is now hinting that the referendum on the single European currency will be deferred for a few more years. This is not out of any concern for working people who would suffer from EMU. It simply reflects the demands of the war party, which includes virtually all the Euro-sceptic Tories.

The Blair leadership has aligned itself with the most reactionary and venal sections of the British ruling class – those who profit from British imperialism’s neo-colonial exploitation, those who know it can only be propped up by the guns of the American war machine. This war party, which includes most but not all of the Tory leaders, has the backing of the North American-owned press in Britain. But it does not represent the views of that section of the ruling class that wants closer integration with the European Union. Nor does it represent the views of the mass of the Labour Party nor the mass of the working class.

The struggle within the Labour Party is clearly going to intensify in the few months – a positive development as the only way the war party as a whole can be defeated is by defeating Blair & Co inside the party they claim to lead. But the agenda must not be simply reduced to divisions within the ruling class itself over Europe and the United States. Nor must the movement be used simply as a weapon by one section of the ruling class over another.  We must campaign for an independent working class policy at home and overseas.

We must demand the restoration of all trade union rights, cheap housing for all, good free education and health services, state welfare benefits and pensions that would enable workers to live in dignity.

The fight for a change in Labour’s leadership must be a fight for people’s policies – first and foremost for peace and the withdrawal of all British troops from Iraq, an end to the occupation, a just and lasting peace for all the peoples of the Middle East and an end to imperialist war.

THE THREAT TO WORLD PEACE

British and United States imperialism poses the greatest danger to world peace. The National Missile Defence (NMD) system has triggered off another global arms race. The tearing up of the ABM treaty has undermined every other international agreement on nuclear weapons. Even so, the imperialists are trying to use part of the non-proliferation agreement as an instrument to bully and threaten any country attempting to develop an independent nuclear industry. But given the fact that the non-proliferation treaty has still to be implemented in full by the imperialist camp, every sovereign state has the legitimate right to develop its nuclear industry.

The Big Five permanent members of the UN Security Council all possess nuclear weapons along with India and Pakistan. The United States has an immense arsenal, as does Britain. France also possesses substantial nuclear weapons and so does Russia, which inherited the systems of the former Soviet Union.

Britain is a major arms supplier and its troops are deployed in a growing number of war zones and areas made unstable as a result of imperialist intervention and aggression.

The fifth permanent member of the Security Council, and the only socialist state with nuclear weapons, People’s China, is the only one actively supporting proposals for multilateral nuclear disarmament. China is the only nuclear power to uphold the demand for universal nuclear disarmament. China stands for the complete prohibition and total destruction of all nuclear weapons. China, backed by many other countries, has challenged the West to implement the entire Nuclear Non-Proliferation Treaty, which was signed in 1968 to halt nuclear proliferation but also committed the signatories to work towards universal nuclear disarmament.

In the meantime People’s China calls on all the major nuclear-weapon states to abandon their policy of nuclear deterrence. States with huge nuclear arsenals should continue to reduce their nuclear stockpiles. At present the United States is in violation of the Non-proliferation Treaty by its commitment to its Star Wars strategy and its efforts to develop tactical battlefield nuclear weapons.

China calls on all nuclear powers to pledge not to be the first to use nuclear weapons at any time or under any circumstance, to commit themselves unconditionally not to use or threaten to use nuclear weapons against non-nuclear weapons states or nuclear-weapons free zones, and to conclude, at an early date, international legal agreements to such effect.

China calls on all states with nuclear weapons deployed outside their frontiers to withdraw these weapons to their home territory. All nuclear powers should pledge their support for the establishment of nuclear-weapon-free zones, respect their status as such and undertake corresponding obligations.

China calls for the banning of the development and deployment of space weapons systems or missile defence systems and calls for an international convention on the complete prohibition and thorough destruction of nuclear weapons, concluded through negotiations with the participation of all countries.

These long-standing demands must be projected throughout the peace movement in Britain. The NCP supports the efforts of the Campaign for Nuclear Disarmament and other peace movements for unilateral British nuclear disarmament. We see this as a contribution in the global fight for nuclear disarmament. We must campaign against any British participation in NMD and for Britain’s adherence to the nuclear non-proliferation treaty.

The immediate focus must be the demand to scrap the Trident missile system. The billions spent on Trident is a national disgrace. Money that could be used to refund the National Health Service and other state welfare projects is being squandered every year on Trident – a system developed to “deter” the Soviet Union, which now no longer exists.

THE SOCIALIST WORLD

Socialism operates in over a quarter of the world. In Asia socialism is upheld and developed in People’s China, Democratic Korea, People’s Laos and Socialist Vietnam and socialism is defended in Cuba, the revolutionary island in the Caribbean.

People’s China is making giant strides into the 21st century with rapid industrialisation and development. China is a mighty force for peace in Asia and a friend to all the developing countries. The peaceful re-unification of Hong Kong and Macau provides a model for the return of Taiwan to the Chinese homeland.

Democratic Korea has won stunning political and economic victories in the past two years. The people, led by the Workers’ Party of Korea, are overcoming five years of floods and other natural disasters. The Government, under the leadership of Kim Jong Il, and a policy of steadfastness and determination, has smashed the diplomatic blockade, and the DPRK is now recognised by almost every country, including Britain.

Socialist Vietnam and People’s Laos are developing their economies bringing new prosperity to the towns and rural areas. And Cuba continues to defy the might of American imperialism to build a new life for the Cuban people.

All the socialist countries have strengthened their economic, bilateral and party-to-party ties in the past two years. All work for peace in the international arena and support the national liberation movements that are challenging the imperialist “new world order” and globalisation.

In the socialist countries the communists work to serve the people; in the imperialist countries the communists are working to end the cruel exploitation of capitalism.

FOR A DEMOCRATIC LABOUR PARTY

The New Communist Party was founded in 1977 to build the communist movement around the revolutionary principles of Marxism-Leninism. Since then we have campaigned for the maximum working class unity against the ruling class, while campaigning to build the revolutionary party.

Working people can never achieve state power through bourgeois elections. Bourgeois elections are democratic only for the ruling class and their instruments, a tool to mask their real dictatorship.

We reject the “parliamentary road” and electoral politics. The old Communist Party of Great Britain abandoned the revolutionary road when it adopted the British Road to Socialism. Its successors in the Communist Party of Britain and the Communist Party of Scotland continue this essentially social-democratic and revisionist policy today. The Socialist Labour Party, Scottish Socialist Party (SSP) and the Trotskyite Socialist Alliance express essentially the same theory

The paltry votes won by all these parties – including the SSP whose modest gains in the Scottish parliament were more than matched by the non-socialist Greens – show the futility of programmes that argue that the only way to defeat social democracy is in fact to imitate it. They call for social-democratic reforms while campaigning against the only mass force capable of implementing reform, the Labour Party itself. All of them end up attacking the Labour Party rather than the ruling class as the main enemy of the working class. Objectively they end up in the camp of the class enemy.

But the masses are often much wiser than those who claim to lead them and this is why these parties remain isolated amongst the working class despite all their pretensions. The Labour Party is not the enemy of the working class nor is it a barrier to communist advance.

Day to day demands for reform, progressive taxation, state welfare and a public sector dedicated to meet the people’s needs are winnable under capitalism, particularly in a rich country like Britain today.

We support these demands, support the modest progressive reforms Labour has introduced and back the demands of those within the Labour Party and the trade union movement who are campaigning for greater social justice.

We support those in the Labour Party fighting for left social-democratic policies. We back those, like Ken Livingstone and George Galloway, who defy the Labour leadership, with rank-and-file Labour Party and union support.

Our Party supports left social-democratic Labour activists who have mass support, even when they come into electoral conflict with the Labour leadership. It is part of our struggle for a democratic Labour Party.

Though the Labour Party is dominated by the class-collaborating right wing in the parliamentary party and the trade union movement, the possibility of their defeat exists as long as Labour retains its organisational links with the trade unions that fund it. The defeat of right wing union blocs in most of the major unions over the past two years demonstrates this possibility.

We support the affiliation of unions to the Labour Party. We must fight for affiliation in those unions that are not affiliates and we must demand that the Labour Party reflect the wishes of the millions of its affiliated union members, expressed through the unions’ democratic procedures.

The fight for a democratic Labour Party is linked to the fight for a democratic trade union movement. In the unions we must struggle to elect genuine working class leaderships, who are prepared to represent and fight for the membership against the employers and against the right wing within the movement and to campaign for the removal of all anti-trade union legislation.

The Party must campaign for a democratic Labour Party controlled by its affiliates. A Labour Party whose policies reflected those of a democratic union movement would become a powerful instrument for progressive reforms that would strengthen organised labour and benefit the working class.

At the same time we must build the revolutionary party and campaign for revolutionary change. Social democracy remains social democracy whatever trend is dominant within it. It has never led to socialism. Revisionism, which poses as communism, has only led to the destruction of the Soviet Union and the people’s governments of eastern Europe and the destruction of some mass communist parties millions strong.

Our Party’s strategy is the only way to fight for the communist alternative within the working class of England, Scotland and Wales. We want day-to-day reforms and they can only be achieved by the main reformist, social democratic party in Britain, the Labour Party. We want revolution and that can only be achieved through the leadership of the communist party.

WOMEN

The whole working class – male and female — under capitalism is subjected to wage slavery and exploitation, which prevents workers from getting the full rewards of their labours.

But one half of the working class is subjected to more severe exploitation by the capitalist system, to discrimination in pay and job opportunities and thereby to extra burdens in childcare responsibilities and expectations that they will be the providers of care for the elderly and infirm – simply because they are women.

These extra burdens prevent women from fulfilling their potential in public life, from contributing as they could and from enjoying leisure and recreation as male workers can. Male workers also suffer lack of opportunities to fulfil their potential and enjoy their lives as they should, but on average not to the same extent that women do.

Women workers have significantly fewer opportunities to enjoy their lives and are far more likely to experience severe poverty, poor wages, poor working conditions and long hours of work, both paid and unpaid.

This position persists in spite of decades of equal opportunities legislation and it is the concern of the whole working class.

This is why the New Communist Party opposes separate organisation for women workers. The issues of more severe exploitation and extra burdens are the concern and responsibility of all workers and cannot be sidelined. The fight for equal pay and for a fair division of caring responsibilities must involve all who are fighting for justice for the working class.

The ruling class, the exploiters, use this discrimination to divide men and women workers in separate struggles to increase the exploitation of both. When women are forced into jobs with low pay and conditions because of discrimination or because they must fit this around caring responsibilities, wages and conditions for the whole class are undermined.

An injury to one is an injury to all. The class must remain united and fight all injustice together.

The two priority issues remain the struggles for equal pay and for affordable childcare provision for all who need it. Success on these two fronts will have maximum impact in eliminating the causes of inequality.

The creation and rearing of the next generation should be recognised as the vital contribution that it is to the future of our whole society. The whole working class, male and female, needs to be involved in campaigning for greater social provision of childcare.

We regard the narrow strictures of the bourgeois nuclear family, with pre-determined, inflexible roles for men and women and isolation of women from social life, as an essential component of the system of capitalist exploitation.

We call for full social support for all parents and children whatever their marital status and much greater provision for young children to experience high quality collective care – through nurseries, crèches, out of school clubs and so on, according to need.

We will continue to campaign for women to have maximum control over their own fertility by improving sex education for all young people and the provision of contraception and abortion on demand.

We will continue to campaign for all workers who are parents to have working hours that allow them to spend time with their children, without reduction of income. Paid parental leave should be available for any parent, male or female.

Women workers must be freed from the expectation they will sacrifice their own social and economic lives to care for the elderly and infirm. Furthermore the elderly and infirm must be freed from having to make such demands on female relatives.

Social support and care for the elderly and infirm is essential, to enable them to maintain independence as long as they wish. When this is no longer possible, full social care should be provided flexibly, according to need, to support family relations and contact without imposing heavy burdens on those relations.

Workers should not be prevented from deciding to become parents and raising the new generation through lack of affordable housing. Equally they should not be forced to remain in bad relationships or marriages for fear of homelessness or extreme poverty.

This means that campaigning for affordable housing is also part of the struggle for equality. We therefore campaign to defend and extend council housing to meet the needs of all workers.

The artificial constraints of the narrow bourgeois family isolate people in relationships, create unrealistic expectations and can lead to tensions and alienation between partners. We call for full state and social protection for all children, women and men who are victims of domestic violence or abuse. Divorce must be on demand. All young workers should be encouraged to refuse to tolerate violent or exploitative domestic relationships.

Full economic independence for all is the economic bedrock of freedom of choice in making and breaking relationships. The trade unions, the organs of the organised working class, have an obvious and vital role to play in this struggle. Most unions recognise this and have equal opportunities policies.

ON COUNTERING FASCISM AND RACISM

The New Communist Party is deeply concerned at the electoral progress made by the neo-Nazi British National Party (BNP) in local elections, especially in the north of England.

Support for the racists is still at a very low level and does not warrant panic measures but experience in other countries indicates that racism and fascism are harder to combat if they are allowed to consolidate their small foothold within bourgeois democratic structures.

The experience of campaigning against the fascists and racists clearly shows that where campaigning is most intense and where it is rooted within local communities it is most effective. The view of some mainstream parties – that it is better to ignore the fascists and racists and deny them publicity – is shown to be seriously mistaken and must be opposed.

Experience also shows that most of those who are drawn to support the fascists and racists are deeply disillusioned with mainstream parties yet will accept the doorstep claims of BNP canvassers at face value.

Therefore the exposure of BNP lies, criminal records and neo-Nazi nature are vital. The message will have most impact coming from local community activists who are known and respected rather than from what is perceived as a “middle class circus from out of town”.

Furthermore the racists tend to prevail where mainstream parties have given up on door-to-door canvassing. Anti-racists must not give up on this activity, as it is the best place to counter the lies and distortions of the racists. This means that the task is to build and support local and national anti-fascist and anti-racist groups.  Where they do not exist they should be set up as soon as possible so that they can have time to make their presence known and respected locally.

Experience has also shown that campaigning against racist attacks and harassment is more effective when it also addresses other anti-social behaviour issues.

Many working class households will ignore appeals to support anti-racism unless it is demonstrated to them that this is part of a wider class issue that affects them personally.

Only when all workers, from ethnic minorities and the ethnic majority, are called together to address all local anti-social behaviour do they discover that their experiences and problems are shared across the whole community and that unity in action really can improve all their lives.

This coming together also combats the divisive myths that some ethnic sections of the working class benefit from better funding and resources. The ruling class seek to keep black and white workers divided, each thinking the other is more privileged when in reality both are cheated, deprived and oppressed – though on average black and ethnic minority workers are more oppressed and deprived.

Bringing workers together confounds such mythology. This is why the New Communist Party opposes separate black sections. The extra oppression, through racism, of one section of the class is the concern of the whole class and undermines class unity. It is the responsibility of the whole class to combat racism and this issue cannot be sidelined or neglected.

The trade unions are the obvious working class structures through which racism and discrimination in the workplace should be combated. Trade unions can and do have a powerful role in combating racism within the community with funding, campaigning resources and volunteer campaigners. Recent experience has shown that such campaigners have more respect in working class communities than some campaigners for mainstream political parties.

These conclusions, based on recent practical experience, entirely bear out the Marxist-Leninist class analysis of the causes of racism and fascism and that the only effective opposition to racism and fascism comes from the united, organised working class.

We must oppose any middle class message from mainstream parties that local residents should passively leave such matters to authorities such as police and councils. We should encourage working class people to come together, organise and take action, which will include putting pressure on the appropriate authorities to act.

The recent campaigns have also shown that support for the racists and fascists does not happen where there are large communities of ethnic minority workers living side by side with white workers but where ethnic minorities are feared because they are virtually unknown. This can happen either because there are very few ethnic minorities in those areas or because there is segregation in housing and cultural activities.

We should promote integration at all levels on the basis of equality and mutual respect and in a way that respects and celebrates the ethnic cultures of all.

Many young workers from the ethnic majority in Britain have lost touch with their own working class cultural history and because of this they lack self-respect and the ability to respect other cultures.

 We should promote the learning and understanding of the cultures of the minorities and the majority among young workers, so that they can understand and enjoy their own working class cultural history and respect and enjoy the cultures of fellow workers from other ethnic backgrounds.

 Concerning the creeping fascism of the state, we should oppose the reduction of bourgeois civil liberties and the use of lies, scaremongering and sensationalism over terrorism or the asylum issue.

 We call for asylum seekers to be entitled to basic social security benefits so that the cost of their maintenance does not fall on a handful of local authorities. Britain is a rich country and if the costs are shared fairly and funded through centralised, progressive taxation, this should cause the working class no hardship at all. And we call for the repeal of Asylum and Immigration Acts passed by both Labour and Tories during the 1990s.

 THE ELDERLY

 The treatment of the elderly continues to be a disgrace, whether it is in the pensions they receive or in health and social provision. Pensions are being devalued with the replacement of the “minimum income guarantee” with “Pension Credit” a complex and means tested benefit.

 There is still a refusal to accept the principle of linking pensions to average male earnings. The scam of private pensions has been exposed but not outlawed. The stakeholder pension has not been of benefit to the majority of people and occupational pensions are falling.

 We now see a proposal to increase the retiring age to 70 years in order to put off the payment of state pensions. Whilst Age Concern has supported this change as a matter of rights for the elderly, it has ignored the real reason. We do not oppose those who wish to work past retirement age. But we have to ensure that this does not reduce the jobs available to those starting life in the workforce, who have families to support and who are the future producers of the “wealth” of the country to provide social benefits (social wage).

 Why should people wish to continue working into their 70s? Is it that they have no other way to occupy their time or is it that they do not receive an adequate pension?

 Britain could easily afford the necessary cost to enable all pensioners to have a comfortable and enjoyable retirement. The introduction of a progressive tax system could put the burden where it belongs, on the rich. It could also provide for free public transport for all pensioners, to enable them to take part in educational, cultural and community activities, which would enable them to feel a productive part of the community with their accumulated experiences.

 It is a fact that a greater number of the disabled are to be found in those of pension age. The social services need to be adequately funded to provide the necessary adaptations of homes to enable them to be independent if they wish, or the care homes with trained staff to assist them in overcoming disabilities and feel that they are not second class citizens. This principle must apply to all disabled people.

 The elderly, because of their experiences, have a lot to offer the youth today, particularly in the labour and trade union movement. With the right approach, they will learn from one another.

 RIGHTS FOR GAY, LESBIAN, BI-SEXUAL AND TRANSGENDER WORKERS

 At our last Congress we noted the Government’s progress on this issue with its equalisation of the age of consent after decades of pressure and struggle by the lesbian and gay community and their supporters. This was a big step forward.

 Now the Labour government has moved forward again on this issue with plans to introduce “registered civil partnerships” in 2010. This will go a long way to correcting the inequality and injustice faced by gay couples in the areas of property rights, social security, benefits, next of kin rights and pensions. Again it will be a big step forward – although we demand that it should be introduced as soon as possible as there is no reason to wait until 2010.

 However there are important things left to be addressed. The homophobic Section 28 still exists; the law still discriminates in the area of sexual offences; the armed forces still discriminate against gay people and we lack adequate laws against homophobia and other acts of hatred.

 Although it is true to say that people’s attitudes have changed, homophobic views are still common, and the Government should spend more time and money combating them. If they continue to exist to any great degree, they will surely surface in times of crisis to the detriment of working people.

 HEALTH

 The National Health Service is deteriorating under this Government with mass privatisations of cleaning, portering and other services; with the implementation of foundation hospitals, companies like Carillion and Tarmac will be given a licence to print money and we will see the wholesale destruction of the health service.

 A classic example of privatisation is the care of the elderly mentally ill. Over recent years we have seen the closure of county council homes, and their replacement by private ownership. These homes have deteriorating standards of care, ignoring many aspects of health and safety, cutting down on staff and training, with the principle of free care at the point of need being ignored for the sake of massive profits. The outcome of this leaves most people in this country, whether rich or poor, terrified of old age.

 The working class requires mass mobilisation within the trade union and labour movement to oppose the plans for foundation hospitals, PFI and all privatisation within the health service, and a return to the principle of care and treatment free at the point of need. We oppose Government policy on Agenda for Change as devaluing health workers’ jobs and implementing low pay.

 THE INTERNATIONAL COMMUNIST MOVEMENT

 Over the past two years the Party has strengthened its bilateral relations with communist and workers’ parties all over the world. The Party has developed its friendship and solidarity with the Workers’ Party of Korea, the Communist Party of China and the Communist Party of Cuba. The NCP has warm relations with virtually all the communist and workers parties in the world, built on exchanges of information, meetings and delegations, and common support for regional and international communist conferences.

 We support the consistent efforts of the Communist Party of Greece (KKE), which has played a key role in organising an annual international forum of communist and workers’ parties, as well as an Information Bulletin to develop communist ideas in the new situation and to foster international solidarity.

 The Party plays an active part in the regular communist conferences hosted by the Communist Party of Greece (KKE) and the forums organised by the Belgian Workers’ Party. The Party supports moves for greater global exchanges of views on a bilateral and international basis. We were one of the initial signatories to the Pyongyang Declaration, Let us defend and advance the socialist cause, in 1992, now endorsed by over 240 parties and progressive movements around the world.

 We believe that a co-ordinated communist response across the world is needed to rally working people against the imperialists and oppressors. But calls for the re-establishment of a formal Communist International are premature. The conditions that led to the establishment of the Comintern in 1919 do not exist today. The experience of world communist conferences sponsored by the revisionist leaderships in the CPSU after the death of Stalin has to be taken into account.

 Our view, based on our own experience and that of the world movement as a whole, is that a new international must be based on these principles:

•           It must include and be supported by the ruling parties of China, Democratic Korea, Vietnam, Laos and Cuba.

•           It must be based on the principle of equality between big and small parties and the independence of all parties.

•           It must recognise the principle of a collective secretariat or presidium that reflects the views of the member parties and not of one big party.

•           It must recognise that in countries where there is more than one communist party, the case in most countries today, the differences between them are a matter for those parties alone to settle.

 FOR A UNITED IRELAND AND LASTING PEACE

 Ireland has suffered the consequences of English, and later British, attempts at domination and colonisation since feudal times, with periodic uprisings and rebellions by the Irish people. In the capitalist era, that conflict continued and intensified, with the partition imposed by the British Empire in 1921 resulting in civil war, an apartheid Protestant-dominated state in the north, and the armed conflict between the IRA and Britain from 1969 to 1997.

 The United Irish rebellion in 1798, the Emmet Rising in 1803, the Young Irelanders in 1848, the Fenian Movement, Land League and Irish Republican Brotherhood in the late 19th century, the Easter Rising of 1916, the Anglo-Irish war of 1919-1921, the 1950s border campaign and the IRA campaigns of 1969 -1997 form a thread of continuous struggle for national liberation by the people of Ireland.

 The New Communist Party upholds the right of the Irish people to determine the nature of their struggle for self-determination, be it political or otherwise, a principle which applies just as much to the recently ended conflict with British imperialism as to all the earlier episodes of that struggle.

 The most recent phase of the struggle was ignited by the violent suppression of the Civil Rights Movement, and pogroms against the Catholic population, in 1968-1971. British troops and personnel protected and maintained a unionist state which brutally oppressed of the Catholic and nationalist population in the occupied six counties.

 The latest phase of the conflict has seen British imperialism deploy the full panoply of its forces – military, police, intelligence services, disinformation and propaganda, the use of assassination, collaboration with loyalist death squads, internment, torture, and the killing and maiming of civilians including women and children with plastic bullets and real bullets. The large Irish population in Britain has also suffered state harassment and racist abuse throughout the conflict.

 The subsequent conflict has left a legacy of bitterness and suffering. But at the same time, the sustained and highly effective IRA campaign, and the emergence of Sinn Féin as a highly successful political movement after the 1981 hunger strikes, has created the conditions for dialogue with Britain and the unionist community, and for genuine progress in the north of Ireland in dismantling the apparatus of British and unionist domination.

 The second IRA ceasefire, following the Labour election victory in 1997, and the efforts of the British and Irish governments and parties of the north of Ireland, resulted in a historic breakthrough with the Good Friday Agreement in 1998. This was followed in 1999 by an Ireland-wide referendum in which the people of north and south overwhelmingly endorsed the agreement.

 The New Communist Party believes, in common with Sinn Fein, that the agreement would not have been possible without the election of the Labour government in 1997.

 Despite the many problems in implementing the agreement, and the continuing meddling and interference by the British government in the process, the results have been overwhelmingly and increasingly positive for the Irish people north and south.

 The violence associated with the Orange Order marches and the loyalist paramilitaries has significantly diminished, though by no means ended. This is largely a result of the conditions created by the agreement for dialogue and agreement in the so-called interface areas in the north. Harassment and intimidation of Catholics and nationalists by the British army and the police have been dramatically reduced. The dissident republicans maintaining armed campaigns are now completely isolated from the nationalist and republican community.

 Despite the British government’s repeated suspensions of the Northern Ireland Assembly and executive, the fact that nationalist and unionist ministers were able to work together was a huge step forward. The question of IRA weapons has subsided, and even the unionist community cannot fail to see the enormous benefits arising from the agreement.

 But in order to ensure the continuation of the process, the British government and unionist leaders need to show positive leadership and continue to deliver concrete results. Without this the process is weakened and in danger of being undermined by its opponents. The British government in particular must not permit elements of the British state opposed to the process to engage in wrecking tactics.

 Important steps have been taken to end discrimination and inter-community conflict through the human rights, equalities and parades commissions. A beginning has been made to all-Ireland co-operation through the north-south ministerial council and bodies dealing with education, health, trade, tourism, energy, agriculture and language.

 Although the Good Friday Agreement is not a settlement of the conflict or a resolution of the struggle for a united Ireland, it therefore represents a historic step in creating the conditions for reconciliation and justice, and eventually for a united Ireland itself. Sinn Féin in particular has reached out to the Protestant and Unionist community to assure them of a place in a new Ireland, in which their culture and traditions are respected.

 The New Communist Party acknowledges the position of Sinn Féin as the vanguard force in the current phase of the struggle for national liberation, and pays tribute to the revolutionary commitment and sacrifices of its members in the decades since its foundation in 1908. Sinn Féin has been the driving force in creating the conditions for the Good Friday Agreement and an end to conflict.

 The New Communist Party supports the end of partition and a united Ireland, totally free of British imperialism, with a political system of the Irish peoples’ choosing. We welcome the advances made as a result of the agreement but call for its full and unambiguous implementation, and in particular for the British state to end its unilateral imposition of decisions on the people of Ireland. The agreement is not a British preserve but an international agreement involving the British, Irish and United States governments and almost all the parties in the north of Ireland.

 The New Communist Party will continue to work in solidarity with the Irish people and their struggle for an end to British colonial rule over a part of their country, for a united Ireland, and to oppose racism, discrimination and state harassment of the Irish community in Britain. We will continue to work with the Wolfe Tone Society, the Connolly Association and the Troops Out Movement in support of these goals.

 SCOTLAND AND WALES

 The Scottish Parliament and the Welsh Assembly are now playing an important part in the development of regional government in Scotland and Wales. The Scottish Parliament has used some of its powers to pass modest reforms beneficial to the working class. Though the Welsh Assembly has limited powers, confined to administering the budget allocated to it by Westminster, it provides a focus for democratic demands in Wales.

 The degree of local autonomy won by the Scots and the Welsh is, in itself, no guarantee that the national traditions and culture of the Scottish and Welsh people will be developed, nor will it automatically lead to the strengthening of working class power. But the creation of national institutions in Scotland and Wales has already had some impact on the labour movement and the Labour Party. The Scottish and Welsh Labour parties, which lead both administrations, are developing policies under pressure from the labour movement which reflect more the demands of the working class for social justice.

 The New Communist Party has long recognised the rights of the Scottish and Welsh nations to full national self-determination. We support Scottish and Welsh demands for the right to preserve and develop their culture and national identity. We support their right to posses and control all the physical and other resources present on their land or in their territorial waters. We support the demand for genuine self-governing powers for the Scottish Parliament and the Welsh Assembly.

 The New Communist Party supports the demand for the encouragement of the Welsh language, which should be raised, in practice as well as in theory, to equal standing with English throughout Wales. We likewise support demands for the encouragement of Scottish Gaelic in those areas of Scotland where it is spoken.

 ENGLAND OF THE REGIONS?

 The Labour government has presented its plans for directly elected regional governments in the north of England as a major democratic advance.

 The plan to create three northern regional authorities in the north-west, north-east and Yorkshire together with regional “capitals” in Durham, Warrington and York may look grand on paper. But a closer look at the fine print shows that all that is on offer is a “super-council” with little or no real power.  These regional assemblies will have nothing like the power of the Scottish Parliament, the Welsh Assembly or even the Greater London Authority, which itself has less authority than the old Greater London Council abolished by the Tories.

 Such powers that these regional assemblies will have will cover the environment, economic regeneration, transport, housing, land use, public health, culture and tourism. The proposals will go to regional referenda next year.

 The proposals stem from conclusions of the 2002 White Paper, Your Region, Your Choice – Revitalising the English Regions. But local government reform has been on Labour’s agenda for decades. Back in the 1960s the first Wilson government considered and then shelved proposals not so different to the current plan.

 The major problem with what is on the table today is that the new assemblies will possess little genuine authority and without real power they are hardly likely to generate interest beyond the small minority who participate in local politics at the moment. Other flaws are that the plans only cover the north of England – mainly due to the lack of enthusiasm for this innovation in other parts of the country – and because it fails to address the problems of England’s major urban regions like Greater Manchester or Merseyside.

 This is all part of a hidden agenda directed by the European Commission.  That the European Union envisages a “Europe of the regions” is a fact. The EU is already divided into Community regions for development purposes. Post-war Germany is based on a federal structure with powerful provincial governments. Spain has two “autonomous” regions and Britain has already partially gone down this road with the establishment of the Scottish Parliament and the Welsh assembly.

 But the purpose of the European Union is to create a super-state for the benefit of the capitalist class of the continent – a state which will be neither be democratic nor federal in any real way. We see this in the EU’s plans for the regions, which do not address the democratic and cultural demands of major minorities in Europe like the Basques or the Bretons for example.

The meagre responsibilities and the equally meagre funding of these new bodies are hardly likely to trigger the rejuvenation of the north that Deputy Prime Minister Prescott believes will follow their establishment.  The Government clearly is only seeking to indulge in a cosmetic exercise in local government reform to give the appearance of democratic change and hopefully win back some popularity in the run-up to the next general election.

 But any proposal that gives people more control over their day-to-day lives is to be welcomed, even one as modest as this.

 PROGRESSIVE CO-OPERATION

 The NCP was founded in 1977 on the principles of Marxism-Leninism and the rejection of revisionist and social democratic trends within the defunct Communist Party of Great Britain (CPGB). The Party continues to combat revisionist and social democratic thinking as part of its campaign to build the Party and uphold the revolutionary path.

 Though the CPGB has dissolved, the left social-democratic and revisionist ideas of the CPGB’s British Road to Socialism live on in its direct heirs, the Communist Party of Britain (CPB) and the Communist Party of Scotland (CPS).

 Nevertheless the Party has long recognised that there is the possibility of working together on certain issues, such as peace, anti-racism or the wages struggle with these parties and others that have sprung from the British communist movement.

 In recent years the Party has developed friendly relations with the Revolutionary Communist Party of Britain (Marxist-Leninist). This includes regular bilateral exchanges of views, joint activities and work for peace and proletarian internationalism. This work can only strengthen the British communist movement in the effort to build communist unity in theory and practice.

 The Party supported a CPB initiative for a round-table conference of communist parties in Britain that took place in 1995. The NCP has since called for further meetings on the same basis along terms of reference endorsed at our 12th Congress.

 Our proposals – for a communist liaison committee that would allow for the regular exchange of information and views between the various British communist parties at a leadership level – were rejected by the CPB in 1998. They remain on the table.

 The Party supports the Morning Star, which is an asset of the working class built up over generations. It is a newspaper of the broad left and the trade union movement while the New Worker is the Marxist-Leninist paper of the NCP.

 The Marx Memorial Library is another important asset of the working class and the British communist movement. The New Worker is an affiliate and comrades actively participate in the Library’s work. We call on all comrades to campaign for union affiliation to the Library as well as joining on an individual basis.

 BUILD THE NEW WORKER

 The New Worker is our weekly communist voice. It is read by thousands in Britain and thousands more overseas. An email edition goes all round the world and reports and features are permanently preserved on the Internet by our national, London and central websites. Articles and features are translated and reprinted by progressive and communist journals in Britain and across the globe.

 We must fight to win more readers and supporters of the paper to guarantee its future. We must campaign to develop and expand New Worker groups. Building the sales of the New Worker and raising money for the fighting fund to maintain and expand our communist press is one of the crucial tasks of the Party today. Our paper represents the voice of struggle in all its forms. It gives a clear communist line on the issues of the day, a Marxist-Leninist analysis of the problems facing the working class and it provides a window to the world communist movement and the national liberation movement. The bigger the readership, the greater our influence. This is our paramount task.

 THE COMMUNIST WAY

 The communist party is the monolithic party of the proletariat and not a party of a bloc of elements of different classes. It is based on democratic centralism. Every member must observe unified discipline. The individual is subordinate to the organisation, the minority is subordinate to the majority, the lower level is subordinate to the higher level, and the entire Party is subordinate to the Central Committee. The highest leading body of the Party is the national Party Congress, and, when it is not in session, the Central Committee elected by it.

 The Party must be a fighting party, based on the tried and tested principles of democratic centralism, regular self-sacrificing work and an unyielding hatred of the capitalist system.

 We must be in the forefront of every-day struggle, fighting for the maximum unity amongst the class to achieve winnable economic gains and political objectives. We must always present the case for revolutionary change and communism to end the whole system of exploitation in Britain.

 Only a revolutionary party can make a revolution. Without a revolutionary party there can be no revolutionary movement. Only a revolutionary party can lead the class to overthrow the bourgeoisie. It cannot be done through elections or general strikes. Only mass revolutionary action by a militant working class led by a revolutionary communist party can bring about revolutionary change.

 A revolutionary party can only be built through iron discipline, hardship and sacrifice. Every comrade must work to build the party and take part in the daily struggles of the people at work and in the locality. Class-consciousness is at its sharpest at the point of production and we must focus on industry. We must build the Party in every factory and office, in every industry, trade and housing estate.

 Our Party is based upon the revolutionary principles of Marxism-Leninism. Our purpose is to equip the working class so that it can establish working class state power and then build a socialist society. Our Party is made up of people who have come to the conclusion that the present political and economic system does not satisfy the needs of the majority of the population of this country, or for that matter of most countries in the world today.

 Bourgeois democracy is democracy for the exploiters and dictatorship in all but a formal sense for the exploited. Bourgeois elections, when they are held, are used so that the smallest number of people can manipulate the maximum number of votes. Parliament no more makes the real decisions for the country than do the councils in the localities.

 All the major political parties in Britain seek to perpetuate capitalism. Our Party believes that socialism is essential to eliminate exploitation, unemployment, poverty, economic crisis and war.

 Many come to this conclusion without any knowledge of revolutionary theory and little understanding of the type of organisation needed to lead the struggle for working class unity, revolution and socialism. They come to us voluntarily and expect help and guidance in how to play a part in the struggle to achieve socialism.

 The history of humanity is a history of exploitation and class struggle. For century after century working people, the slaves, the peasants, the artisans, fought for justice and equality. Only in the modern era with the rise of the working class and the development of scientific socialism has it been possible not only to dream of a better world but also concretely to build it.

 The Paris Communards fired the first shots and paved the way to progress. The Great October Revolution in 1917 lit the torch of revolution, which burns on in Asia and the Caribbean. The great revolutionary teachers of humanity, Marx, Engels, Lenin and Stalin, were borne from the epic struggles of the last two centuries.

 The great revolutionary leaders of the struggling masses, Mao Zedong, Kim Il Sung, Fidel Castro and Ho Chi Minh, inspired generations to sacrifice and struggle for the bright red future. That is a world with no classes and no exploitation, a world in which the will of the masses, the workers, the toilers, the people who work in the factories and farms, is carried out. It is a world in which those who produce the entire wealth of the globe get the fruits of their labour.

 A BETTER TOMORROW

 This is the world we work for: a socialist society where there are no slums, poverty or racism; a society where there are no classes, no exploiters, no bigotry and no war. It is a new and better world – the world Marx and Engels predicted and a world that will surely come to pass. It is already being built in the socialist countries of today. It is being fought for in every continent and every country. We are part of that struggle. This is the century of socialism.

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