LOOKING at the historical development of the economy over the past two hundred years or so, it can be seen that the greater the investments in education, health care, housing, old-age pensions, social insurance, and other social benefits, the better the health of the economy.

One of the questions which arises, however, is: where will this money to increase investments come from? The ultimate answer is that it must come from rising production. The simple equation is that more values produced will give rise to more values to be invested in social programmes. But if in society there is a check on social production in such a manner that its fruits are expropriated privately, as they are under the present system of capitalism, such an equation will not work. It does not matter what the level of social production, social programmes will remain minimal.

At the present time, not only does this equation not work, but another factor has been added. The rich are controlling various state sectors in order to make maximum profits for themselves. They are demanding that no monies be invested in the sectors of education, health care, affordable housing and other social programmes so that they can run these in a manner which benefits themselves. Furthermore, they also want the monies invested in social programmes to land in their own hands. For instance, the decreasing investments in education at a time the costs have also increased make it more lucrative for some to provide education because they make greater profits. Health care has long been the preserve of the highest profits for the pharmaceutical companies, equipment suppliers and other concerns. Similarly with other public services.

The people see money passing through their hands at an enormous rate only to find its way to enriching the financial elite. In conjunction, the government always sets as its priority the payment of interest to the rich on the government debt. It is taken as unquestioned that this should be so, and the claims of the financial institutions on the public purse are put as paramount, while the claims of the people, especially the most vulnerable sections of society, for social programmes are considered dispensable. In fact, the whole society functions so as to pay the rich.

Finally, there is the question of values in social and ethical terms. What kind of people are these who would take values out of the economy for their own pleasure while causing such a devastation to the people that as many as one fifth of the population is condemned to perpetual poverty while the vast majority face continuous insecurities? The hallmark of a truly humane society is one in which more and more values are put back into the economy so that everyone is provided with the highest of standards commensurate with the level of production in society. This is an obligation of a truly humane society towards all human beings. In such a society, the people must be in a position to make decisions on all those issues which affect their lives.

The starting point of putting in place such a programme is the demand to Stop Paying the Rich – Increase Investments in Social Programmes. An integral part of such a programme is that there must be imposed A Moratorium on National Debt Repayment and The Nationalisation of all Banks and other Financial Institutions.

ON THE STROKE OF MIDNIGHT of June 30/July 1, the People's Republic of China (PRC) takes back control of its territory, Hong Kong, after 155 years of British colonial rule. Hong Kong will then become a Special Administrative Region of the PRC, as put forward in the Sino-British Joint Declaration of December 19, 1984. With a total of 1,067 square kilometres, the territory consists of Hong Kong Island, the Kowloon Peninsula and the New Territories, including 235 outlying islands.

As far as New Labour is concerned, the "handover" could not have come at a worse moment. The return of Hong Kong rather undermines the empire-building call of Prime Minister Tony Blair to prettify colonial history and "make Britain great again". From the 1980s, the former Thatcher-Major government at first embarrassed itself with futile attempts to secure another extension to the "lease" of Hong Kong. Then they further exposed themselves by carrying out a number of provocations against the government of the PRC and the Chinese people in Hong Kong.

At the formal Sino-British talks on Hong Kong's future which began with Premier Thatcher's visit to Beijing in September 1982, Margaret Thatcher, knowing full well that successive Chinese governments in the 20th century have never recognised the legality of the unequal treaties with Britain, provocatively declared that "there are treaties in existence. We stick by our treaties." She subsequently said in Hong Kong that Britain had a "moral" responsibility to the territory and people of Hong Kong. This was another provocation since China had successfully asserted its sovereignty over Hong Kong at the United Nations in the sense that the PRC had got Hong Kong struck off the list of territories coming under the purview of the UN's Committee on Decolonisation. Having played the colonial card to no avail, the British government also played anti-communist and racist cards directed against the government of the PRC and the Chinese people of Hong Kong. However, the British government could not go too far with these "cards" either. Mindful of damaging the development of British investments in what investors see as "the biggest market in the world" it also calculated that the anti-communist propaganda suggesting that control of Hong Kong from Beijing would see a violation of "human rights" and "ruin prosperity" could incite the Chinese people in Hong Kong with the right of British citizenship to "flood Britain". Many observers point out that this scenario may have played a vital role in the government's decision to rush through the racist 1981 British Nationality Act, which blocks such a possibility.

The so-called "human rights" and "moral" obligations to the people of Hong Kong are very hollow indeed. The very fact of "owning" a colony whereby an outside power determines a people's life and destiny is one of the worst violations of human rights that a people can be subjected to. The treaty which ceded Hong Kong to Britain was one drawn up with the hand of British colonialism stained with the blood of the Chinese people. From the end of the 18th century, Britain exported increasing quantities of opium into China with the aim of plundering China's silver and drugging its people. The Chinese people bitterly opposed such exploitation. Using the pretext of safeguarding its trade, the British government launched an armed aggression against China, known as the first Opium War of 1840-42. Britain again initiated the second Opium War of 1856-60 to protect this lucrative trade.

On defeating China, the British government, with the aid of the corrupt and treacherous Manchu rulers, imposed the notorious Treaty of Nanking in 1842 and the Convention of Peking of 1860, which forced China to cede Hong Kong Island in "perpetuity" to Britain under the first treaty, and under the second treaty the southern part of the Kowloon Peninsula and Stonecutters Island, also in "perpetuity". By the end of the 19th century, the British government, taking advantage of the other imperialist powers' scramble to carve up China after China's defeat in the Sino-Japanese war of 1894-95, once again, under the Convention of 1898, forced more concessions from the Chinese leaders. Under this "Convention for the Extension of Hong Kong Territory" the New Territories, which comprise 92% of the total land area of present-day Hong Kong, were leased to Britain for 99 years to end on June 30, 1997. The Chinese people have never recognised these three unequal treaties with Britain, and no Chinese leader of this century, beginning with Sun Yat-sen, has agreed with their legality. As early as the Paris Peace Congress of 1919, China requested the return of the New Territories, and did so again at the Washington Conference in 1921. The claims were rejected on both occasions.

As July 1 approaches, the British government and all those filled with colonial instincts are squirming and cannot hide their displeasure at this historical turning point of the restoration of Hong Kong to China and the resumption of the sovereignty of the government of the PRC over the territory. The question of Hong Kong is a lesson that empire-building does not make a country great. On the contrary, it is a shameful and dangerous road of aggression abroad and chauvinism at home, a road which is unacceptable to the working class and people of Britain.

News agencies reported on Thursday that the head of the foreign election monitors in Albania from Britain, Brian Pridham, had vehemently denied that he was giving up his post and returning home "for personal reasons" as had been announced by the Organisation for Security and Cooperation in Europe (OSCE). He told the news agencies that he was leaving because a political agenda was being pushed that was not consistent with free and fair elections on June 29. He said it had become clear that all inconsistencies would be glossed over and that the conduct of the elections would be declared as "favourable" whatever the actual facts. He said that the foreign monitors were unable to carry out their function without absolute constraint. They were only allowed to travel accompanied by troops of the foreign intervention force and so could only cover a very restricted area of Albania. He added that voter registration in many places had only just got under way.

These reports underline the chaotic situation in Albania regarding the elections planned for June 29 which the US and EU powers, with the connivance of the Democratic, Socialist and other Albanian parties, are pushing through under the guns of the intervention force against the will of the people in order to give some legitimacy to the puppet regime they have established and to their imposition of the free market economy and foreign enslavement. These events follow weeks of arm twisting in which, among other things, it is reported that German Foreign Minister Klaus Kingel personally telephoned Bashkim Fino, Socialist Party Prime Minister in the National Reconciliation Government, telling him that if the Albanian parties did not support the elections the international community "might lose its patience".

Meanwhile, it has been reported in recent weeks that the Salvation Committees, which control much of the south and centre of the country, are escalating their demand for President Sali Berisha's resignation. They are refusing to recognise Berisha as a presidential candidate. While Italian officials are calling for "free and fair" elections, the Salvation Committees are accusing the Italian military, which is leading the UN-backed intervention force in Albania, of working for Berisha. Berisha is also being further discredited by reports that he is being funded by those who robbed the Albanian people of more than $1.2 billion through the fraudulent "pyramid" investment schemes.

It is reported that as Berisha was canvassing for his party in Lezha and calling on all Albanians to "change this election campaign into a big campaign of national reconciliation", Salvation Committees in the south and centre of Albania were putting up fierce resistance to Berisha's uniformed mercenaries. At least five members of the Special Forces heading towards Elbasan to disband the Salvation Committees were killed and several others wounded. According to the Albanian Ministry of the Interior the force faced "resistance of some groups, who were armed even with anti-tank weapons".

The Albanian people have risen with arms demanding the resignation of President Sali Berisha, himself installed by an election widely accepted as rigged, the return of the funds robbed from them, and an end to foreign domination. The June 29 election, even if held, will not legitimise the vassal state imposed by the US and EU powers. The working class and all progressive people must demand an end to all foreign intervention in Albania, especially military intervention, and that the Albanian people be left to sort out their own affairs.

NORTHERN IRELAND SECRETARY Mo Mowlam announced on Thursday that government representatives would have a further meeting with Sinn Fein representatives in the coming days concerning participation in all-party talks, at Sinn Fein's request. She insisted, however, that there would definitely be no more discussions with Sinn Fein unless the IRA calls a new ceasefire.

Such an approach characterises the stance of government and state officials since the election of the new Labour government. There has been a flurry of activity, urgent appeals to all concerned, but no sign of any intention to resolve the problem.

It is clear to everyone that without Sinn Fein, representing those who have been fighting for an end to the division of their country, all-party talks are meaningless. Who has ever heard of "peace" talks which exclude the main protagonists! Yet the same unjust preconditions on participation applied by John Major's government are continued. All manner of insults are concocted. Parliamentary rules were bent to deny the two Sinn Fein MPs the facilities at Westminster provided to all MPs duly elected to represent their constituents, even if, as they did, they refuse to take the oath of allegiance to the head of state of a power occupying part of their country. Then, on June 3, the gates of Stormont were symbolically shut in the faces of the Sinn Fein delegation who had arrived to participate in the all-party talks. There is much talk that "if they do not board the train now, on the laid down conditions, the train will leave the station anyway".

It is an unfortunate metaphor. The so-called "train" of the peace process has stood at the station for a year now, with no sign of moving anywhere. Since the all-party talks opened on June 10 1996 no substantive negotiations have taken place. The most important procedural matters regarding the agenda have yet to be resolved. Now Dr Mowlam is urging action to quickly resolve the issue of decommissioning of arms and move onto substantive discussions on the proposed three main strands: relationships within the north of Ireland; relationships between the north and the Republic; relationships between Britain and Ireland.

What do the Labour government have up their sleeves? What new accommodation will they try and impose? Why are they in such a hurry when the new Irish government has not even been sworn in? Or is this all just a bluff to prolong the deadlock? It is clear from Tony Blair's remarks at Belfast City Hall, when he stated he could not conceive a United Ireland in the lifetime of anyone present, that the government intends to step backwards from the Downing Street Declaration of 1993 acknowledging the right of the Irish people to self-determination and pledging no pre-conclusions to any negotiations. It seems that the Labour government, and the financial oligarchy whose agenda they have been put in power to implement, have no intention of giving up Britain's annexation of part of Ireland, or of abandoning the divisions created within Ireland and between Irish and British which have been so important to class rule, nor do they intend to cede advantage to any other rival. Either way, the present manoeuvres of the government can only obstruct a just political settlement and prolong this age old problem.

AT THE MANSION HOUSE ON JUNE 12, Gordon Brown, Chancellor of the Exchequer, speaking directly to the financial oligarchy said that New Labour's task was to ensure that the country was "fully equipped to contribute to and compete within the global marketplace". He said that the first budget would take the "long term view" and start from the "realities and challenges we face in the global marketplace" and will take the "first in a number of steps we are determined to take to modernise the welfare state, and equip our country for the future". He said that New Labour would use this "new approach to welfare aims to strengthen the supply side of the economy" with the "welfare to work programme", "modernise the tax and benefit system" and a new platform of "educational opportunity" because the economy that they inherited "suffers from lack of investment in capacity and skills". He also said that New Labour was "determined to give the private finance initiative a new start".

Thus Gordon Brown spelt out that the reason that the bourgeoisie organised to bring them to power on May 1 was to take forward the "long term view" to ensure that the country was "fully equipped to contribute to and compete within the global marketplace". Such a "long term view" is a not a plan for the economy in the interests of the working class and people but is directly in the interests of the financial oligarchy so that they can maximise their profits in the global market.

Speaking about the "long term view" of the economy Gordon Brown said that "interest rate decisions will be free from any political influence" and will be based on "long term economics: beyond any accusation of bad short term politics". So what this "new long term view" has turned out to be is to introduce legislation to remove the day to day intervention of government from monetary policy, setting interest rates and to give operational responsibility to the Bank of England and the setting up of a new regulatory body for financial services. Speaking about this question Gordon Brown said that "stability" of the post-war period was achieved within a relatively closed economy, with national financial markets, fixed exchange rates and frequent recourse to capital controls. "Today stability has to be won in an environment of global capital markets where investors have more choice and more freedom than ever before...." In other words the "stability" that the financial markets are demanding in the global economy on monetary policy and flexible labour markets is what New Labour is addressing in its "long term view".

Whilst Gordon Brown claimed that New Labour's aim was "national objectives of high and stable levels of growth and employment" this could only be achieved "in a new world and by new methods and new policies". Such a statement is intended to give the impression to the working class and people that the government is changing course on the economy and that it intends to make the priority job security, creating employment and long-term planning and growth for the national economy. But the message it is really giving to the working class is that workers must get behind their employers in the global market, must submit to the demands of business for flexibility and retraining in "skills", whatever the consequences to the fate of the national economy and whilst giving up their rights to comprehensive public services of education, health, and other social benefits, which will be "modernised".

The working class should reject such a "long term view" and present their own immediate and long-term plan for the economy. The "long term view" coming from New Labour is to put every aspect of the economy in the service of the paying the rich. There is no place in this "long term view" of New Labour to meet the needs of the working class and people to "restore the welfare state to pre-1979" by introducing "progressive taxation", and so forth. Such views are an illusion. The only way forward for the working class is to adopt its own programme for a change in the direction of the economy. Only in this way can the plans of the financial oligarchy be blocked. Such a way forward starts by addressing the central problem of the economy today, that society is geared to paying the rich and cutting back on all the social investments that meet the needs of the people. It demands a change of direction in this whole arrangement of the economy. Such an economic programme would ensure that people have the financial resources in their own hands to plan and build the economic foundation of a society which puts the needs of the people as the central concern.

EDUCATION AND EMPLOYMENT SECRETARY, David Blunkett, speaking at the GMB Annual Conference in Brighton on June 4, called for "new unionism" to match "new government" for a "new millennium". David Blunkett is the first Cabinet Minister to address an annual trade union conference since the May 1 election. He took the opportunity to spell out what the government of New Labour is expecting of the trade unions.

After attempting to win over his audience with the high-sounding rhetoric of Labour's commitment to the renewal and regeneration of Britain, through the restoration of decency at work and in the community, to an agenda of employability and to a new partnership with the European Union, David Blunkett laid out what was expected of the trade unions. He said, "We offer an enabling government and ask you to match it with enabling trade unions. This means looking at new ways of responsiveness and a new partnership between the trade unions and government, built on mutual respect and understanding but recognising that progress cannot be made overnight." In the vein of pre-empting any struggle of the workers for their demands, interests or objectives, and in an appeal to a spirit of what came to be known as "new realism", he explained, "In years gone by, grandiose promises were followed by great disillusionment. As we come to the end of this century, it is important that we retain our hopes and aspirations but that we are clear about the reality of the speed at which progress can be made."

Above all, Blunkett was at pains to stress the necessity for workers to suspend indefinitely the class struggle and argue that the trade unions should be the instrument through which workers completely submit to the aims of the success of their employers and be subordinate to their goals. This means a willing partnership between government, trade unions and big business: "My message today is clear. A new beginning means genuine social partnership. Yes, fairness but not favours. Yes, a critical friend but a good one. Yes, the acceptance of common responsibility for achieving common goals!"

While trying to win New Labour a free hand to further streamline the economy to benefit the rich, one of the biggest confidence tricks is for the Education and Employment Secretary, and the Labour government as a whole, to try and assure workers that this is for the benefit of society, for making "Britain a better place to live in". He wants workers to disbelieve their own experience and the evidence of their own eyes that the big monopolies – he cites Ford, for instance – exist to realise "common goals" of worker and capitalist. Therefore the workers would do well to forget their interests as impossible dreams and knuckle under to work for the interests of the capitalists with goodwill and feel obligated to them. This is how Blunkett puts it: "We can do better than the immediate past but we can also do a great deal better than the impossible demands and the inevitable tears of the 1960s and 1970s. Restoring the dignity of work and the opportunity which exists to use our talents to the full, is a goal worth fighting for. Investors in the Future means new forms of responsibility from business and from trade unions. The roots of the trade union movement were built upon a sense of obligation to one another. Now is the time to express it in a new way, with a government prepared to work with all those of goodwill, to make Britain a better place to live in."

It is very dangerous and very unwise for the trade unions to tag along with New Labour in building this new arrangement, this "partnership". It is essential that workers should reject this call for a partnership between the trade unions, New Labour and big business, and fight for their own pro-social agenda.

The march of unemployed youth and unemployed workers to Amsterdam reached London on Saturday, June 7. The marchers will voice their demands on opposing unemployment, job insecurity and social exclusion on June 14 on the occasion of the InterGovernmental Conference of the European Union. Marchers from many other European countries are converging in Amsterdam on that occasion. On June 7, the demonstrators from Preston and Jarrow marched from Southall to the centre of Hyde Park where they were welcomed by a crowd of supporters. Several spoke of their experience of being unemployed and of the need of the people to take the future into their own hands. The augmented demonstration then marched to a rally at Central Hall, Westminster.

According to the Central News Agency (CNA) of the Democratic People's Republic of Korea, on June 5, three warships of the US-backed south Korean puppet regime intruded deep into the territorial waters of the DPRK and fired shells at some ten fishing boats. It reports: "The warships infiltrated from Taeyonphyong island into the waters south of Ssanggyo-Ri, Kangryong county, South Hwanghae Province, and surrounded the fishing boats in a bid to kidnap them. When a naval patrol ship of the Korean People's Army appeared on the scene, the enemy ships fired shells at the fishing boats before fleeing south. This brutal military provocation did not develop into an armed conflict entirely because of the patience and self-control of the Korean People's Army soldiers."

This incident marks one of many in the escalating military manoeuvres against the DPRK. The DPRK news agency reports that in recent weeks there has been heightened propaganda about the DPRK "launching a provocation". It states that officials of the US Government at recent talks with a delegation of the Security Research Council of the Liberal Democratic Party of Japan suggested that the US and Japan should immediately work out a detailed war scenario allegedly to cope with "an emergency on the Korean Peninsula". The "emergency" scenario is based on predictions of a "possible provocation by north Korea" and "the communisation of south Korea by the north", which the Central News Agency describes as "nothing but sophistry to mislead public opinion and justify the military manoeuvres and escalation in the region".

With this argument, the CNA says, they scheme to consolidate the tripartite military alliance of the US, Japan and south Korea as well as the US-Japan military tie-up. In this vein, a re-examination of the "defence co-operation guidelines" is currently under way between the US and Japan. The re-examination includes changing the scope of operation from an "emergency in Japan" to an "emergency around Japan". The news agency points out that this broadened field of operation is an indication that the US and Japan want to legitimise joint military actions and the exercises in the name of "self-defence" for Japan, within the area of the whole Korean peninsula.

Amongst other things, the US and Japan are placing emphasis on the establishment of a theatre missile defence system and the modernisation of Japan's armed forces in the review of their "defence co-operation guidelines". The CNA news agency says Japan is trying to further modernise combat equipment and increase its production through the introduction of high tech military technology from the US for the theatre missile defence system.

While talking about the "emergency on the Korean Peninsula", the south Korean puppets are accumulating state-of-the-art combat equipment from the US and other countries and staging frantic military manoeuvres of various kinds, taking advantage of the stepped-up militarisation carried out by the US and Japan. The news agency concludes: "All this clearly shows that the cries about a possible 'emergency on the Korean Peninsula' are merely to justify the war preparations of the US, Japan and south Korean puppets, stepping up the arms build-up and preparing for a surprise attack on the DPRK."

The European Bank for Reconstruction and Development in a report about its activities in Albania details some of the foreign investments in that country.

The EBRD cites seven investments totalling ECU 67.4 million (around £47 million). Telecommunications, energy and transport were the targeted areas as the EBRD spoke of extending its "involvement" with the infrastructure in Albania.

The report speaks of a programme of privatisation in these sectors. The report, referring to investments being made in 1995, says: "The rapid organisational change and reforms now under way in the sector also provide new opportunities for the Bank to support private sector initiatives." This is simply spelling out the fact that the dismantling of the socialist system in Albania led to the selling out of the resources of the country, and opening it up as a market which international financiers could exploit. In the financial sector, the EBRD said openly that it was "concentrating on establishment of new financial institutions and to strengthen the newly established joint venture banks". In the light of current events in Albania, it can be asked who it was who financed the infamous "Pyramid Schemes" that have brought such devastation to the people of that country. It could well also shed some light on the question of what happened to the money, the return of which the people of that country are now justly demanding.

The EBRD report also speaks of lending money for the setting up of "private investment projects and pilot privatisation and restructuring exercises of state-owned enterprises including public utilities". Investors in Albania cited in the report include financiers and companies from Italy, Japan, Austria, the United States, Greece, Switzerland and Norway. Other projects cited in the report have been co-sponsored by the World Bank, the Japanese Overseas Economic Cooperation Fund and the Italian and Swiss governments. These interests are a source of profits for the international finance capitalists. They have been built up over a period of time under the Berisha regime which has been selling out the country.

They are a stark reminder to workers the world over that it is concern neither for the Albanian people nor for democracy that is behind the military intervention in Albania or behind the noises being made by the OSCE about the need for stability and elections.

A TREATY to establish the European Bank for Reconstruction and Development (EBRD) was signed in May 1990. The Bank was inaugurated on April 15, 1991.

It had 41 original members: the European Commission, the European Investment Bank, all the EEC countries and all the countries of Eastern Europe except Albania, which become a member in October 1991. All the republics of the former USSR joined in March 1992. It was founded on capital of ECU 10 million of which 10% came from the US, 8.5% came from each of the UK, France, Germany, Japan and Italy, and the USSR contributed 6%. The EBRD was set up to lend funds at "market rates" to Central and Eastern European countries and companies "which are committed to, and applying the principles of multi-party democracy and market economics". Facilities were extended to the countries of the former USSR in 1992. A policy statement from the bank dated May 1991 says that initial emphasis would be placed on "programmes to support the creation and strengthening of infrastructure; privatisation, reform of the financial sector" including, amongst other things, "development of capital markets, restructuring industrial sectors to put them on a competitive basis and encouraging foreign investment". The formation of the Bank came in the wake of the Paris Charter of 1990. (Source: Statesman Yearbook, 1996/97)

WITH just over two weeks left before Hong Kong is restored to the People's Republic of China, the government of Tony Blair flatly rejected China's request to deploy more Chinese troops before the formal transfer ceremony at midnight of June 30, so that the People's Liberation Army (PLA) could be in position for the historic moment. "There is no question of Britain agreeing to the deployment of the main PLA garrison in Hong Kong before July 1," said Foreign Office spokesperson Bill Dickson. "Britain is the sovereign power and is responsible for the defence of Hong Kong up to the last stroke of midnight on June 30 and that is when China assumes its sovereign responsibility." This follows Prime Minister Tony Blair's decision to boycott the second part of the Handover Ceremony, when the new legislature is being inaugurated. The United States is also to boycott this inauguration. The first part of the ceremony will last for about 30 to 45 minutes and includes the lowering of the Union and Hong Kong flags and the raising of the flags of the PRC and the Hong Kong Special Administrative Region. It will be followed by the ceremonial departures of the senior British representatives, including the governor, Chris Patten, and Prince Charles who is attending the events.

The petulance by the British government ill becomes the administration of the former colonial power. It is not acceptable from a government that claims to speak on behalf of the people of Britain and in the name of labour, and claims to be taking Britain into the new millennium. Britain has made a fuss about China taking away "democratic rights" such as an elected Legislative Council and replacing it with a new 60-member Provisional Legislature. The farce is that the present Legislative Council was only instituted in 1995 by Chris Patten, in a calculated move.

The President of the PRC, Jiang Zemin, is to lead the Chinese delegation at the Ceremony. He will be present at the swearing-in of the new administration in the first few hours of July 1. The future Hong Kong leader, Tung Chee-hwa, has said in an interview that he will never allow Hong Kong to be used as a base for the destabilisation of the People's Republic of China.