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Brown’s blues
Gordon Brown’s honeymoon is over. His initial
commanding lead in opinion polls fuelled speculation of a snap election.
Now, the new prime minister trails miserably and a series of potential
crises loom: anger at public-sector cuts, economic slowdown, calls for
an EU referendum. Brown has shown himself to be indecisive and
manipulative. As HANNAH SELL reports, this marks a significant shift in
the political situation in Britain today.
POLITICS IN BRITAIN today is more volatile than at
any time since the second world war. This is the result of the extreme
narrowness of the space, the supposed ‘centre ground’, upon which all
three of Britain’s establishment parties stand. As they race to steal
each other’s clothes, the opinion polls tip and tilt them like dinghies
at sea in a storm.
Barely a month ago Gordon Brown was riding high, so
confident of his crushing majority over the Tories that he was seriously
considering a general election. Now ‘bottler’ Brown is lagging behind
the Tories in the opinion polls and his ‘great clunking fist’ is failing
to land a single punch on them.
The volatility of the polls is such that the
situation could be reversed again in the coming months. Nonetheless,
September 2007 marked a decisive change in British politics. It
demonstrated irrevocably, as the Socialist Party predicted, that the
coming to power of a Brown-led government, while its politics are
essentially as the same as Tony Blair’s, nonetheless represents an
important psychological break in the way the population views New
Labour.
Brown’s brief weeks of honeymoon were largely based
on his not being Blair and, contrary to the press speculation
beforehand, seeming to be relatively competent. In a couple of short
weeks he has managed to completely tarnish even these, very limited,
assets. The damage has not only been caused by his pulling back from
calling a general election at the last minute, although the sobriquet
‘bottler Brown’ will probably stick. It was also the way that he was
seen spinning far more blatantly and crudely than Blair, ‘king of the
spinners’, ever did – both by bringing forward the announcement on troop
reductions in Iraq, and by blatantly stealing the Tories’ policies on
inheritance tax.
Tories bounce back
IN THE WAKE of George Osborne’s shrewd announcement
to the Tory party conference on inheritance tax, particularly as it was
combined with a sideswipe at the super-rich ‘non-dom’ hedge fund
managers, the Tories recovered sharply in the polls leaving the
government aping the same policies three days later. In these
circumstances the Tories’ attacks on New Labour are suddenly hitting
home.
However, the very ferociousness of the Tories’
attacks on Brown are a reflection of how desperate their situation was
prior to their conference. Imagining they were faced with a fourth
general election they could not win, the prospect of a split, or series
of splits, in the party was seriously posed. The fear of more Tory
grandees defecting to Brown’s big tent was combined with representatives
of the right of the Tory party beginning to openly attack the leader,
David Cameron. Norman Tebbit, once known as ‘Thatcher’s boot boy’, even
declared that it was Brown, not Cameron, who was the real heir to the
iron lady.
The possibility was posed of the Tories
disintegrating, probably with the formation of a right-wing populist
party from the right of the Tories. New Labour would have been
established not just as ‘a’ party of the ruling class, but ‘the’ party
of the ruling class. For now, Cameron and co have staved off their
nightmare scenario by boosting their opinion poll ratings and thereby
forcing Brown to pull back from a general election. In fact, by doing so
they have transformed their party into one that, at least at the moment,
seems more capable of winning a general election than at any point since
1997.
Remorseless neo-liberal attacks
THE GOVERNMENT’S STEALING of the Tories’ inheritance
tax policy, albeit it with a lower threshold of £600,000, dealt a
devastating blow to those remaining illusions in New Labour’s status as
a ‘social democratic’ party. Polly Toynbee, for example, writing in The
Guardian on 12 October, declared that Labour leaders had "left social
democracy for dead" and that Brown had "shipwrecked the party". In the
same article she praised the Blairite transformation of Labour into New
Labour, saying that Clause Four, the socialist clause in Labour’s
constitution that Blair abolished, "was indeed an archaic nonsense".
Toynbee and others do not understand that, in
transforming Labour into a party of the ruling class, Blair and co had
also to abandon the idea of ‘reformism’ or ‘social democracy’ which was
entirely unacceptable to Britain’s capitalist class. Ultimately, the
adoption of neo-liberal policies by all three establishment parties in
Britain stems from capitalism’s economic crisis and its need to restore
profits by driving down the living conditions of the working class.
The comprehensive spending review announced by the
chancellor, Alistair Darling, was indeed choc-full with viciously
anti-working class and pro-privatisation policies. However, most
working-class people who studied it would have been horrified not by the
announcement on inheritance tax but rather the continued tightening of
the purse strings in the public sector and, in particular, the
announcement of three more years of pay restraint for public-sector
workers.
By contrast, a layer of better-off workers, along
with broad swathes of the middle class, at least in the south where
house prices are highest, welcomed the Tories’ proposal to lift the
inheritance tax threshold. While only a small minority were liable to
pay the inheritance tax, the astronomical rise in house prices (240% in
the last decade) means that it increasingly includes a layer of the
middle class, and even some workers. The real super-rich, meanwhile, are
largely able to use accounting tricks to avoid paying it.
It is the depth of the housing crisis in Britain
which has made this such a raw nerve. Millions of people, including
younger middle-class people, cannot afford to get a foot on the housing
ladder. Those who do are increasingly financially crippled. The average
first-time buyer spends 20% of their income just to cover the interest
payments on their mortgage. In the last year more than a million
householders have been forced to use their credit cards to pay their
rent or mortgages.
In these circumstances it is inevitable that the
idea of at least being able to pass the value of your house onto your
children intact has become totemic. Socialists are not in favour of
penalising the middle classes. In her article on inheritance tax,
Toynbee pointed out in passing that the increase in capital gains tax
announced in the comprehensive spending review, and aimed at the
mega-rich hedge fund managers, still only left them paying 18%, a lower
rate, in many cases, than their cleaners. Incredibly, even this paltry
measure was only introduced to try and catch up with the Tories! It is
this, not inheritance tax, which really demonstrates the neo-liberal
nature of New Labour.
Brown has now effectively announced that he is not
planning a general election before 2009, and may even go as late as
2010. He is hoping that he will be able to use the time to decisively
weaken the Tories. On the contrary, he is going to face increasing
difficulties which are likely to further weaken him and may strengthen
the Tories.
An EU referendum?
IN THE IMMEDIATE period, already weakened by the
debacle of recent weeks, Brown is heading into further troubled waters
on Europe. The EU treaty is largely a repackaging of the constitution
which was rejected in 2005 by referenda in France and the Netherlands,
despite major campaigns for a ‘yes’ vote by the ruling classes of both
countries. It was rejected largely because it was seen, correctly, as
enshrining neo-liberalism in a constitution. At the time, Blair must
have heaved a private sigh of relief that he was therefore not faced
with having to call a referendum in Britain, which the government would
almost certainly have lost.
Two years on, and Brown is determined to avoid
Labour’s manifesto commitment to a referendum, arguing that he has
‘protected British interests’ and that ‘no red lines have been crossed’.
In reality, of course, it is only the interests of Britain’s ruling
elite that have been protected. One of the ‘red lines’ is a guarantee
that the ‘charter of fundamental rights’ will not increase employment
rights for workers in Britain!
However, Brown is going to come under enormous
pressure. It cannot be excluded that he will be forced into a u-turn and
has to call a referendum which he would be almost certain to lose. On
the right, The Sun and the rest of Murdoch’s media have now joined in
with the Tories’ campaign for a referendum.
At the same time, the last Trades Union Congress
reacted to pressure from below and called for a referendum, correctly
describing the treaty as a Trojan horse for further privatisation and
deregulation. The motion from the National Union of Rail, Maritime and
Transport Workers (RMT) calling for a ‘no’ vote was, however, mistakenly
rejected by the TUC. If a referendum were called it is overwhelmingly
likely that a majority would vote ‘no’. However, particularly given the
lack of a mass political voice representing the working class, the trade
unions would have a vital role to play in ensuring that class issues
were counter-posed to the right-wing nationalism of The Sun in the
course of the campaign.
Weak & exposed economy
HOWEVER, IT IS on the economy that Brown is likely
to be most vulnerable. In the immediate period after the Northern Rock
catastrophe, which almost led to a meltdown of the British banking
system, Brown was able to pose as the ‘safe pair of hands’ that had
prevented disaster. Even so, the fact that the government was forced, as
The Guardian put it on 12 October, to "nationalise" Northern Rock for
"practical purposes", and to provide £16 billion of guaranteed credit to
prevent its collapse, will not be lost on millions of working-class
people. It demonstrates that, despite its obsession with privatisation,
New Labour can and does nationalise, but only when it suits the
interests of capitalism. Many will be asking why £16 billion can be
found for Northern Rock, but not a penny to stop the collapse of
workers’ pension funds, or the closure of car plants.
It will be when there is economic crisis in the real
economy, however, that Brown really pays the price. Darling has already
been forced to cut the government’s prediction for growth next year by
half a percent to 2-2.5%. He knows full well that this is a best case
scenario.
Britain is one of the most exposed economies to the
economic slowdown developing in the US. The virtual abandonment of
manufacturing industry means the lion’s share of growth comes from
financial and business services, which account for almost 30% of gross
domestic product (GDP). In the second quarter of 2007, whereas the
economy grew by 3.1% as a whole, the City boom and housing market meant
that financial and business services grew by more than 5%. Charles Dumas
of Lombard Street Research summed up the situation in The Guardian:
"Britain is threatened by its position as globalisation’s epicentre. Any
seize-up of global financial markets affects London and the British
economy more than others. Lower real incomes combined with tight
monetary conditions, and the overhang of a very high exchange rate,
could hammer growth during 2008".
House price growth is slowing, leading to what is
already the worst the housing crisis in Britain for 16 years. In
reality, Britain has its own potential mini ‘sub-prime’ crisis. The
sub-prime sector in Britain is estimated at £50 billion, but is higher
in reality. Around 50% of all mortgages from mortgage brokers are
‘self-certifying’, meaning that no proof of income is required, and
borrowers are tacitly encouraged to stretch the amount they borrow to
the very maximum. Given the huge level of personal indebtedness in
Britain, greater than the country’s GDP, even a shallow recession is
likely to lead to enormous personal hardship for millions of workers.
A degenerate system
WRITING IN THE Observer on 26 August, before the
development of the Northern Rock crisis, Will Hutton correctly
commented: "Gordon Brown runs a government that is essentially
conservative over business opposed by an opposition yet more
conservative, with the Lib Dems terrified to rock the conservative
consensus. Over the last few years, there has been a firesale of British
assets to foreigners, together with ever-closer entanglement with the
American debt markets to sustain the bonuses of the financial community.
It would not surprise me if, before the story is over, at least a couple
of household British financial names have to be offered a lifeline.
"Somebody, somewhere must start blowing the whistle.
The Americans at least take capitalism so seriously they challenge,
monitor and regulate it. No such culture exists in degenerate Britain.
We need a party which will speak for an interest other than
self-interested, amoral plutocrats. None exists".
The degenerate nature of British politics reflects
the degenerate nature of British capitalism. Only by the development of
a mass workers’ party will it be possible to create a party which
genuinely and consistently does as Hutton demands. The leadership crisis
in the Lib Dems, triggered by Brown’s failure to call a general
election, is yet another example of how the three establishment parties
are morphing into each other. The two frontrunners for the leadership
both went to the same public school, both stand on the right of the
party, and look virtually identical to each other, and to Cameron!
The demand for an alternative to the three main
parties is growing, and is likely to grow dramatically in the coming
months and years. The trade union leaders are under enormous pressure
from their members to stand up to Brown. His failure to call a general
election has left them with no more credible excuses for inaction. This
will not prevent them trying to delay and limit action, but it will be
increasingly like trying to hold back an erupting volcano.
Unions must disaffiliate
AT THE SAME time, the idea of continuing to fund the
party which is stepping up public-sector pay restraint, and is backing
to the hilt the attempts of Royal Mail management to break the
Communication Workers’ Union (CWU), is increasingly abhorrent to trade
unionists. It is possible that the CWU will follow the Fire Brigades
Union – where a rank-and-file revolt led to disaffiliation from Labour
in the aftermath of their strike.
Brown’s removal of the last vestiges of trade union
democracy from the Labour Party conference, which the right-wing trade
union leaders cravenly accepted, has meant that talk of disaffiliation
is becoming acceptable even among some of those previously loyal to
Labour. Writing in the Labour magazine, Tribune, Paul Donovan declared:
"Labour has become reminiscent of the Liberal Party in the early years
of the 20th century. Then, the Liberals had ceased to stand up for
working people and another vehicle to defend their interests had to be
found. This was the Labour Party and those who founded it were leaders
of the trade union movement. Now union leaders need to act again. If the
unions disaffiliated from Labour and either created a new party or
backed another one – perhaps the Liberal Democrats or Greens – what
would happen to Labour? Disaffiliation would certainly shake the
ungrateful Brown and the rest of the Labour leadership. At best, the
unions and those they represent are taken for granted by the Labour
leaders. At worst they are held in contempt. The TUC could become the
fulcrum to change this".
Neither the Lib Dems nor the Greens offer an
alternative. The latter, while they have a socialist wing, are
increasingly voting for cuts when they are elected at local level.
Nonetheless, Donovan’s clear call for disaffiliation is an indication of
how the mood is shifting on the issue.
John McDonnell MP, the Labour left who attempted to
stand against Brown for the Labour leadership, is also altering his
position. Writing in the Morning Star recently he publicly abandoned his
previous strategy of trying to reclaim Labour, saying: "This week’s vote
to close down democratic decision-making at the Labour Party conference
and Gordon Brown’s first speech as leader demonstrated that the old
strategy is largely over. The conference is now virtually irrelevant and
its replacement, the National Policy Forum, is a behind-closed-doors
exercise of centralised control of party policy-making". (29
September, 2007)
He adds: "The left has the difficult task of
accepting and explaining to others that the old routes into the exercise
of power and influence involving internal Labour Party mobilisations and
manoeuvres have largely been closed down. We have to face up to the
challenge of identifying and developing new routes into effective
political activity".
Unfortunately, John McDonnell does not draw any
clear conclusions in his article about the alternative to trying to
reclaim Labour. He correctly emphasises the importance of taking part in
single issue campaigns, but does not raise the idea that these
environmental, anti-war and other campaigns need to come together, along
with trade unionists, to build a new party that stands in their
interests. Were he to give such a clear call, there is no doubt it would
quickly gain an echo. The growing mood for disaffiliation at
rank-and-file level in the public-sector trade unions, combined with the
likelihood of an RMT-initiated list in next year’s London elections,
represent important steps on the road to independent political
representation for workers in England and Wales.
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