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New Labour: losing its hold on power
Temporary blips aside, the popularity of Britain’s
prime minister, Gordon Brown, and his government is on the slide. New
Labour MPs are beginning to squeal, sensing that before long they could
lose their lucrative seats, pulling their noses out of the generous
parliamentary trough. Economic recession and rising working-class anger
are fuelling this political crisis. In the wake of New Labour’s national
conference, PETER TAAFFE assesses the situation.
GORDON BROWN IS the first ‘Labour’ prime minister in
history to have actually been saved by an economic crisis, albeit
perhaps temporarily. In the weeks and particularly the days prior to New
Labour’s conference in Manchester, the plot to remove Brown –
orchestrated by the Blairite ‘Taliban’ – was out in the open. It made
Brutus and the conspirators against Julius Caesar look like participants
in a kindergarten game.
David Miliband was first with his naked grab for
power in July. We then had the drip-drip of totally obscure Labour
junior ministers criticising and resigning from the government. Despite
denials to the contrary, this was a well-organised campaign of the ‘ABB’
(anybody but Brown) tendency. He was to be replaced by anyone from a
panel of candidates including Miliband himself, the hapless Jack Straw,
Alan Johnson, renegade from the Communication Workers’ Union, and even
John Cruddas, formerly a stalwart of Blair’s cabinet office but now
busily polishing his ‘left’ credentials and pro-union stance. Yet, as
Alistair Darling admitted in his speech to the conference, there are no
fundamental disagreements between Brown and those who seek to replace
him: "If you look at it ideologically, if you look at it in terms of
what we are trying to do, our government is quite remarkably unified".
What motivates the plotters is the prospect of
electoral nemesis, which has led to an obscene scramble to save their
own political skins, rather than any high political motives. On the eve
of the conference, an Observer poll predicted an electoral wipe-out for
New Labour with a Tory majority of 146, with several cabinet ministers
losing their seats if Brown remained in place. These particular
‘turkeys’ are therefore not about to vote for Christmas.
On the basis of its present 20% deficit in the
opinion polls, an election to be held no later than the spring of 2010
would see more Labour seats since 1918 falling to the Tory opposition.
The party would be virtually extinguished in southern England and only
elected in its hardcore redoubts of northern England, the Welsh valleys
and deprived inner-city areas. One minister declared to The Guardian
newspaper in late July: "We have moved from a one-nation to a no-nation
party, thanks to Gordon… we are unelectable everywhere and that is
untenable. By and large, when something is untenable in politics
something happens, yet I do not know what it will be". Ex-cabinet member
Charles Clarke, an unreconstructed Blairite, claimed that Brown is
leading Labour to "utter destruction" at the next general election. Even
Labour’s performance in the 1983 general election under Michael Foot –
excoriated and attacked by the right then and since – would look like a
triumph compared to what looms.
Yet, in poll after poll, not one of the
‘alternatives’ to Brown offers much salvation for New Labour. All of
them, including the right’s ‘novice’, Miliband, have the same or even
less support than Brown. The fundamental reason for this is the economic
and social situation collectively presided over by New Labour. Brown’s
claim to have abolished the ‘boom and bust’ cycle came back to haunt him
as the British economy was seen to be more exposed than most to the
economic tsunami, expressed first in the financial sector, that was
sweeping world capitalism. But, irony of ironies, it was the very scale
of this crisis which threatened to bring down the whole ramshackle house
of cards that has stayed the hands of the plotters. Before the ‘five
days that shook the world’ in September, Brown "could walk into your
local high street handing out fivers, and people would refuse them".
(Paul Routledge, Daily Mirror) But now, the discrediting of the very
policies which eleven years of New Labour government enshrined –
free-market, unregulated capitalism – has gone down with Lehman
Brothers, Fannie Mae and Freddie Mac, and AIG.
Darling and Brown, who refused to intervene to save
the jobs of Rover car workers and countless others – and following their
US counterparts Ben Bernanke, Hank Paulson and George Bush – raid the
storerooms of history in order to deck themselves out in the discarded
clothes of John Maynard Keynes. True, Brown and Darling have
difficulties in making these clothes fit. But, like former Tory prime
minister Harold Macmillan – "we are all planners now" – they and the
strategists of world capitalism, without a blush, can claim "we are all
interventionists now". So much so that Larry Elliott, economics editor
of The Guardian, claimed: "Ben Bernanke, the chairman of the Federal
Reserve and Hank Paulson, the Goldman Sachs tycoon who became US
Treasury secretary, have done more for socialism in the past seven days
than anybody since Marx and Engels". (20 September) Business guru, Jim
Rogers, also fumes in Fortune magazine that "America is more communist
than China right now".
This is a measure of how the tectonic plates of the
world capitalist economy have shifted and have affected Britain, more
exposed alongside the US itself than any other capitalist economy in
this crisis. But the underlying world economic crisis has not been
solved, nor has it in Britain. Indeed, the very quasi-Keynesian
mini-measures undertaken could aggravate the problems of the British
economy, impact negatively on already precarious living standards, and
electorally seal the fate of a government led by Brown or any other New
Labour luminary.
A slight whiff of anger
THE NEW LABOUR conference is a pale echo of the
tumultuous, energetic, pulsating ones which characterised Labour
conferences in the 1970s and 1980s. Then passionate debates between
different ideas, even ideologies, were the norm. Now, it is a ‘fan
club’, and a diminishing one at that, where older ‘stalwarts’ cling to
the wreckage of the party through sheer inertia. They are joined by
timeservers – local councillors and trade union leaders. Yet, even in
this zombie-like atmosphere, in this stage-managed conference, a slight
whiff of the angry mood that exists amongst working-class people was
reflected in some of the speeches and resolutions. For the first time in
20 years, trade union leaders like Tony Woodley of Unite suggested that
the renationalisation of utilities should be ‘considered’. A resolution
was passed calling for a windfall tax to be imposed on the vicious
energy companies.
Does this signify a charge towards the left within
the Labour Party and the resurgence of the Labour left itself? Richard
Lambert, director general of the bosses’ organisation, the CBI, gave the
game away when he claimed in The Guardian that "he had been given
assurances by the party leaders yesterday that the left were ‘whistling
in the dark’ if they thought an ideological sea change towards City
regulation was taking place at the top". Yet Darling’s attack on the
rich ‘bonus culture’ of the City of London is, in reality, directed
against him and Brown, who not only tolerated but encouraged this – as
did the now-Blairite Ken Livingstone as mayor of London. This was done
to attract a massive influx of international capital into London and
everything that goes with it. The political commentator of the Financial
Times, Philip Stephens, jeered at Darling and Brown chastising the City
financial sharks: "Surely Labour can read the last rites over global
capitalism? Not really, of course. The market economy may have taken a
severe knock, but you cannot rebuild the Berlin wall".
Yet, if New Labour was serious and the radical
rhetoric meant anything, it would introduce a wall against the
irresponsible spivs and speculators who threaten the British economy and
with it the lives and future of millions. This would involve the
nationalisation of the entire, now severely shrunken, banking system,
with minimum compensation, with a guarantee to maintain the savings of
small depositors. It would go together with a state monopoly of foreign
trade, without which this government, in fact any government, becomes
the plaything of international capital.
Such is the hostility at the damage wreaked by
finance capital amongst wide layers, including the middle class, that
there is a mood that ‘something must be done’. But as Karl Marx pointed
out, the credit system is a necessary lubricant for capitalism in
extending the market beyond its limits for a time. It also brings in its
wake "the pleasant character of swindlers and prophets". In every crisis
such as this there are speculators who become the target of anger –
formerly called the ‘gnomes of Zurich’, perhaps now of London. Action is
demanded, some have their wrists slapped. But once the upswing develops,
they crawl out of the crevices of capitalism and the merry-go-round
resumes.
It is estimated that in this crisis, bonuses of the
moguls of the City of London will drop from £8 billion to only £5
billion! Compare this to the plight of the millions of poor, summed up
by a letter to The Guardian in July. It read: "Up to three years ago I
was a member of the working class… We are now three adults living on £23
a day. Admittedly we have our rent and rates paid. As heart patients, we
have been instructed to stay warm in the winter as the cold thickens the
blood. To this end I contacted my gas and electricity supplier in a bid
to have the pre-payment meters taken out of my home as the tariff was
too high and my income was too low. I was told it would cost £200… The
television is our only window on the life we once led. We sit destroyed
by poverty and watch the world go by as if we were dead and yet to fall
over. While watching the TV we see MPs and MEPs who spend more on taxis
than we get to live on and they are telling the country they are going
to get tough on us and people like us because we live on benefits".
The unspeakable Work and Pensions secretary James
Purnell had people like this in his sights as he outlined measures to
drive them "back into work". What work? There has been an inexorable
rise in unemployment, even before the axe fell on Lehman Brothers
workers, 4-5,000 of whom could go down the road. Ford is seeking to
scale back production at its transit van plant in Southampton, which
could see a thousand workers made redundant. Barrett’s, the builders,
has announced it will cut a quarter of its workforce, and Persimmon said
it would lay off 2,000 staff. Up to now, 50,000 construction workers
have lost their jobs. In total, half a million job losses, according to
Karen Ward, chief economist at the HSBC bank, could take place over the
next two years. There could be at least two million unemployed by
Christmas, with an expected 60,000 workers losing their jobs every
month.
Trying to save the system
AFTER 16 YEARS of quarter by quarter uninterrupted
growth, many workers are posing the question: why is this happening? At
the Labour Party conference, the only answer from chancellor Darling and
Brown was to lamely find excuses in the ‘world economic storm’. But
Marxists predicted that this crisis would take place, the only unknown
being the timing and its scale. It is a product of a system based upon
production for profit and not need. Even without the aggravation of the
situation caused by the colossal ‘financialisation’ of world capitalism,
the system was bound to stall, go into crisis, at a certain stage. The
extension of the market through a massive injection of liquidity and
credit kept this cycle going longer than it otherwise, particularly in
Britain.
This country did not suffer a downturn in the crisis
of 2001, as Brown and Darling consistently point out. That crisis was
mainly in the ‘real economy’ which struck worse those countries with a
manufacturing base. Like a junkie, however, the system needed further
and further injections of liquidity to keep it going. This produced the
‘excesses’ of the subprime crisis in the US, the trigger for this
particular crisis, but also massive indebtedness in the US and Britain,
where household debt is even greater than in the US at 177% of
disposable income compared to 141%.
Before this crisis, the Brown government had little
room for manoeuvre. But during the crisis, as The Financial Times
bluntly put it: "Saving the system is of the utmost priority". As the
fervent free marketeer Samuel Brittan also admitted in the same journal:
"There will be no ‘glad confident morning’ for free-market principles
for a long time to come". Deregulation, extolled and praised by the
economic witch-doctors of capitalism for more than two decades, was
unceremoniously thrown out of the window. The so-called ‘nanny state’
was back in vogue: when it hurts, go back to nurse. Wimpey, Persimmon
and a host of other firms have queued up for the once vilified state to
bail them out, even before the September meltdown. With no room for
manoeuvre, because of increases in public expenditure in the 2001 crisis
and a ballooning budget deficit, the Brown government was under siege.
But what is good for the US – colossal bailouts – is now suitable for
Brown’s Britain. Faced with an underlying economic catastrophe, both
Brown and Darling have promised to boost state borrowing during this
crisis.
Will this do the trick and bail out the British
economy? No more than Bernanke and Paulson’s measures will rescue
completely US capitalism will Brown show a way out of this economic
impasse. Most of the economic indicators are on red with the rest on
amber. House prices continue to tumble, with David Blanchflower, member
of the Monetary Policy Committee of the Bank of England, predicting they
will drop by at least 30%. Consumption this year is at a 16-year low.
House building is virtually non-existent and house repossessions are
spiralling to a 16-year high.
This represents a massive rejection of Thatcher’s
idea of a ‘property-owning democracy’, continued by Blair and Brown in
the indiscriminate showering of money on prospective buyers. Northern
Rock, for instance, as is well known, seduced homeowners to take out
mortgages worth 125% of the price of their houses. Four, five and
sometimes six times the annual salary of mortgage payers became the norm
to lend. Now, so out of reach is home ownership that five million people
in Britain see their only hope of accommodation in ‘social housing’.
This at a time when the number of council houses built in Britain is
less than even under Thatcher’s government.
Rising costs & poverty pay
IT IS THE economy – particularly if there is an
economic decline, jobs vanish and living standards are cut – which is
the ultimate ‘decider’, as Bush put it, of economic and political
events. Even before this crisis, the Organisation for Economic
Co-operation and Development (OECD) had said that the British economy,
already in recession, was the worst-placed of the G7 countries to
withstand the economic storm. Brown is tempted to mollify the growing
discontent with ‘emergency’ proposals, rather than previous measures
which have fallen flat. He launched an ‘initiative’ for ‘special help’
to those who could not get mortgages for houses. But the total package
was worth £1 billion while house prices are falling at £1 billion a day!
At the same time, the Local Government Association predicts that council
housing waiting lists, now 1.67 million households, will rise to two
million (five million people) by 2010. One quarter of British children
will experience "living in overcrowded accommodation and in poor states
of repair". On top of this, Britain now has the smallest space per
person in new housing than any country in western Europe.
An added impost is the rise in the cost of living,
particularly of food and fuel, which bears down most markedly on the
poor. This is the conclusion of Price Waterhouse Coopers, which pointed
out that households in the lowest income decile actually saw inflation
rise to 5.7% in August, compared to the national average of 4.7%. While
the deflationary aspect of the downturn in the economy will act to
depress prices, the present increase in inflation will, in all
probability, continue into 2009.
At the same time, Brown and his government intend to
continue to bear down on public-sector pay. The reaction of workers is
shown by the number of work stoppages, which have increased markedly
this year compared to last. More than one million working days were lost
to strike action in 2007, almost a quarter of a million more than 2006.
The main reasons for this increase were disputes over pay (67%) and
hours (30%). There is enormous discontent with the poverty wages of
public-sector workers (even those on a selected BBC panel of ‘voters’
discussing Brown’s speech expressed support for an increase in pay for
nurses, doctors and teachers). In 2008, there was a two-day strike of
local government workers plus big strikes of PCS civil service union
members, teachers, Scottish council workers and a myriad of smaller
strikes.
Don’t rock the boat
HOWEVER, THE HEAD of steam building up over pay is
in danger of being derailed by the shameful decision of union leaders to
row back in the public-sector pay battle. Representing 700,000 local
government workers, UNISON, the largest public-sector union, Unite and
the GMB have decided to refer their dispute with the employers to the
conciliation service ACAS. This means postponing the struggle for two to
three months. This has been clearly done in order to assist the besieged
Brown government. This will be presented by the trade union leaders as a
quid pro quo for perceived ‘concessions’ by the government on public
expenditure, and the slap on the wrist for speculators made at the New
Labour conference.
But the promise of an increase in public expenditure
will run into serious obstacles. It is likely to push public borrowing
in the financial year 2010-11 to a minimum of £60 billion but some
economists have estimated it could reach £90 billion, £95 billion or
even £100 billion! This will be against the background of falling tax
receipts because of the slowdown in the economy. This level of deficit
is unprecedented and is likely to be the worst in the advanced
industrial countries. It will almost certainly lead to a further run on
the pound, which has already dropped precipitately against other
currencies, fuelling a rise in prices of goods imported into Britain.
This decision of the local government union chiefs
is designed to help out Labour at the expense of their members. It
emphasises once more the crucial importance of the need for a new mass
workers’ alternative to discredited New Labour. Both Brown and, most
recently, Darling have publicly admitted that they are no longer
socialists: "He [Darling] doesn’t call himself a socialist". (Guardian,
30 August 2008) Yet the trade unions provide £9 out of every £10 of
income for New Labour, now that big business has deserted it and crossed
over decisively to the Tories. What does this union support earn for
working people? At the recent meeting between the unions and Labour
leaders – Warwick mark two – they came away with a ‘bag of sweets’.
The membership of the unions will be looking for
their organisations to defend them against the gale force economic winds
that impend. The very scale of redundancies will push the question of
job protection to the fore, where it will probably now rank alongside
pay as the major issue in workers’ minds. An indication of the
employers’ offensive was shown by the sacking by Marks and Spencer’s
management of a worker who leaked company proposals to make sacking
employees easier and reduce redundancy terms. There are seven million
workers in Britain involved in the retail and leisure industries. The
recent phenomenal vote – 40% of those who turned out – in support of the
Socialist Party member Robbie Segal for general secretary of the retail
union, USDAW, is itself a symptom of what is developing in the depths of
some of the most exploited sections of the British working class.
The Brown and Blair governments claimed that they
struck a blow for low-paid workers by introducing the minimum wage. Yet
this is totally inadequate for workers to live on against the background
of the big increases in prices in Britain. Moreover, Ian McCartney, the
former Labour Party chairperson, has revealed that there was a gap in
the minimum wage legislation when it was first introduced. Devised in a
secret agreement with restaurateurs, this deal allowed the ‘hospitality
trade’ to pay its staff less than the minimum wage rate. How? By using
the customers’ service charge to top up the shortfall.
This shows that only the independent power of the
working class is capable of effectively defending working people,
especially in the stormy economic period ahead. For this, it needs
fighters and leaders who are prepared to fight the bosses and not run
away at the ‘first whiff of grapeshot’, as the leaders of the three big
local government unions have done. Bending the knee to the bosses, these
leaders, like Dave Prentis of UNISON, are at the same time pursuing a
vicious witch-hunt against militants in the unions, including the
‘famous four’ members of the Socialist Party – who face expulsion for
ludicrous charges relating to the use of ‘the three monkeys’ cartoon –
and others. (See: Defend the Four, Defend Democracy, by Jane James, The
Socialist No.528, 10-16 April 2008)
Morbid symptoms
THE SAME EXPECTATION, and it is growing, exists on
the issue of the need for a new mass party. The right-wing union leaders
are attempting to bury this idea by emphasising the prospect of a Tory
victory at the next election. This means the trade union leaders must
still cling to Brown’s trouser leg as he continues to kick them. The
situation in Britain towards a new mass alternative to New Labour is
similar to what Antonio Gramsci explained in a different situation: "The
old is dying and the new cannot be born; in this interregnum, there
arises a great diversity of morbid symptoms".
New Labour is dying on its feet. Even a Labour
loyalist like Jackie Ashley, political correspondent of The Guardian,
believes that "the Labour Party could be on the verge of destruction".
Hoping against hope, however, some, amongst whom are the majority of
union leaders, believe that ‘the dying’ can still be revived. Events –
and big events loom – will speed up the new, mass workers’ alternative.
This is shown by the letter writer quoted above: "Those who represent us
are completely oblivious to our needs. I can speak, but have no voice,
and those claiming to represent me have failed me".
What is certain, notwithstanding the ‘success’ of
New Labour’s conference, is that Brown’s chances of lasting till the
next election look as though they will founder on the rocks of the
continuing economic crisis. The coming Glenrothes by-election is likely
to be won by the Scottish National Party (SNP), as was the Glasgow East
by-election in July. That will resurrect all the doubts about Brown,
despite the hosannas at the conference. Thatcher was greeted with calls
of ‘ten more years’ at the 1990 Tory party conference and was out a
month later, ejected by Tory MPs fighting for their political lives. A
similar fate could be waiting for Brown.
On the other hand, the lack of an alternative, the
refusal of the ‘soft centre’ to pluck up courage to politically
assassinate Brown, could lead to a repetition of James Callaghan’s last
days. A recent biographer painted a picture of Callaghan, the Labour
prime minister from Harold Wilson’s resignation in 1976 to the 1979
general election, aimlessly shuffling pieces of paper in his 10 Downing
Street flat, while the bottom fell out of Labour.
The fate of this or that New Labour leader, however,
is of little consequence compared to what the working class faces.
Workers today do not hold them in the same high regard as in the past.
This was illustrated in a letter to The Guardian on the death this
summer of Terry Fields, a Militant MP from 1983 to 1992: "I belong to a
generation that can only remember the tail end of the vicious Thatcher
government. However, reading Francis Beckett’s obituary reminded even
those of us who have the misfortune of being Thatcher’s children that
there were, and still are, politicians of courage, passion and humanity.
The Thatcher government created real poverty – the effects of which
politicians like Terry Fields were prepared to see and experience
first-hand". (Militant was the predecessor of the Socialist Party.)
Irrespective of the outcome of developments at the
top of New Labour, it is most likely now that a Tory government will be
returned. The best that Brown can hope for is a hung parliament, with
the Liberal Democrats holding the balance of power. Tory leader, David
Cameron – like Barak Obama in the US – will inherit a poisoned chalice
if he comes to power. Far more than the case of Thatcher in 1979, his
government would face invidious choices. He is, undoubtedly, trying to
cultivate, like Bush before him, the image of a ‘compassionate
conservative’. Something similar to what happened to Thatcher before she
came to power is also at work in Britain amongst intellectuals, which in
turn reflects a movement towards the Tories amongst sections of the
middle class. As with the likes of Paul Johnson, former left and editor
of the journal New Statesman, who moved over to Thatcher in the 1970s, a
similar shift, even amongst those who supported Blair, is under way now.
However, Cameron’s real intentions are shown by his recent statement
that he intends to be "as radical as Thatcher herself". Both he and
shadow chancellor, George Osborne, have declared that they will not
stick to Brown’s public-sector guidelines but attempt big reductions in
state spending.
As we see, Brown, under the pressure of the economic
situation, has clearly broken his ‘golden rule’, with public expenditure
likely to increase. Osborne and Cameron intend to cut public
expenditure. Boris Johnson, the right-wing Tory mayor of London, despite
his fluffy image, is itching to take on the transport unions,
particularly the Rail Maritime Transport trade union (RMT). Equally, the
Liberal Democrats have shifted towards the right, demonstrated by Nick
Clegg’s ‘tax-cutting’ credo, supported by their treasury spokesman
Vincent Cable at their recent conference. Cable went on record to demand
£20 billion in public expenditure cuts as the price of Lib Dem support,
probably for a Tory government, after the next election.
Effects on the workers
THE BRITISH ECONOMY is therefore in crisis, politics
are in flux, and the main burden in this situation will be carried on
the shoulders of working-class people if the ruling class and its
political representatives are allowed to get away with it. This crisis
can have a two-fold effect on the working class and the labour movement.
Coming after a long, seemingly unstoppable economic upswing, many
workers could be stunned by the effects of the crisis, even before its
full effects strike home in terms of redundancies and falling living
standards. Another section of young people and workers are being
radicalised and looking for an alternative. Previously, the bourgeois
were in denial – they did not want to believe that their economic system
was heading for the rocks. Now, there could be workers in denial,
wishing that the current turmoil is merely a blip which will soon be
over, and that ‘normality’ will resume.
However, the bourgeois are now deadly serious about
what has happened to their system. Like Keynes, who declared, "when
circumstances change, I change; what do you do?", they have
unceremoniously abandoned one way of organising their system for
another. But the purpose is to maintain the system intact. They have,
however, suffered a colossal ideological blow to the idea that
capitalism is the best system for delivering goods and services to the
peoples of the world. Capitalist state intervention has raised the idea
in workers’ minds of similar intervention, through mass pressure, for
their demands and to ensure their interests. This means a return of
labour movement ‘Keynesianism’ – reformism, partial and incremental
increases in living standards – the outline of which we have seen
partially at the TUC and Labour Party conferences.
This does not mean that within the confines of New
Labour a revival of the left can take place. Never in the history of
Labour since it was set up has the left been so weak. Even the accepted
journal of the ‘Labour left’, Tribune – sustained in the past by
stalwarts such as Michael Foot, Tony Benn and a phalanx of MPs – is down
to a circulation of just 4,000, heavily dependent for its future
existence on the Unite trade union. The real left is developing outside
the Labour Party, in the unions and around the campaign – supported by
Mark Serwotka (PCS), Bob Crow (RMT) and Matt Wrack (the Fire Brigades
Union general secretary) – for a new mass workers’ party.
The Manchester conference of the Labour Party
represents not a new beginning, a resurgence that could ensure a fourth
term, but another staging post in the degeneration of a party which no
longer represents working-class people. The way to prepare the working
class for the bumpy road that Darling spoke of is not by reconciling
ourselves to this, the chaos of capitalism, but by mobilising to defend
past gains and to go on to new conquests, only fully possible on the
basis of a democratic, socialist planned economy.
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