A rotten system

Politics in Britain has been dragged through the gutter with MPs caught ripping off thousands of pounds worth in expenses. As working-class people face job and wage cuts, the whole rotten system has been exposed. As a result, New Labour was hammered in euro and local elections, while the far-right BNP made gains. With a general election due within a year, now more than ever, a new workers’ party is needed. PETER TAAFFE looks at the processes underlying the political situation in Britain today.

"A BROWN GOVERNMENT could be overwhelmed by an avalanche of the stoked-up discontent of the working class, manifested through trade union struggle… A Brown government could also face a crisis of legitimacy… If he delays too long, he could suffer the fate of the other ‘mid-term’ replacement prime ministers, like Callaghan in 1979… The far-right can make significant gains, particularly with the rise in unemployment clearly taking place and the deterioration of social conditions, especially if a left fighting alternative is not provided". (The Coronation of Gordon Brown, Socialism Today No.110, June 2007)

The ideologists of capitalism, having seen their predictions about the historical vindication of their system demolished by the present crisis, have abandoned all pretence of mapping out the future. On the economy, the Financial Times simply states: "The best that can be said of forecasts is that they accurately predict the present"! Marxism, however, properly applied, can in broad outline trace out the shape of events to come. We did accurately forecast, as seen above, the disastrous future for the Brown government and the fate of New Labour trapped within the framework of diseased capitalism. Gordon Brown is not now facing a winter of discontent like James Callaghan, but a summer of confrontation.

The most significant recent event, from the point of view of the workers’ movement, has been the re-emergence of a section of the industrial working class – the first on such a scale since the 1980s – signified by the disputes at Visteon, on the engineering construction sites, led by the Lindsey site, and the triumphal reinstatement of sacked convenor Rob Williams at the Linamar plant, Swansea. In all three vital battles, it was socialists – specifically, members of the Socialist Party – who played crucial roles in formulating the development of tactics which ensured the working class defeated the bosses. These actions were of a defensive character but can lay the basis for similar action in other industries and prepare the ground for a general offensive struggle at a later stage.

They have, moreover, taken place against the explosive background of the MPs’ expenses scandal, which has triggered a crisis of parliament, and capitalist democracy in general. This has resulted in the further draining away of the authority of both the government and its head, Brown. He could seemingly do no wrong as chancellor while the economy boomed but, as prime minister, can do nothing right. Like his MPs who have ‘flipped’ their homes, he has flip-flopped over one issue after another. The inquiry over the Iraq war is just the latest to see a volte-face: first no inquiry in public, only for days later to concede one.

What shaped recession?

THE UNDERLYING FACTOR which has shaped these events is the devastating economic crisis of British capitalism, which is of a long-term, drawn-out character. This has been enormously aggravated by the world economic crisis. Despite the claim of the more optimistic capitalist economists, there is little evidence of even Peter Mandelson’s ‘green seedlings’, either for Britain or the world. Despite the recovery in global stock exchanges and the oil price currently standing at about $70 a barrel, these are not harbingers of a sustained revival. Nor is the recent small increase in growth an indication that capitalism is coming out of the most devastating crisis since the great depression of the 1930s. With de-stocking of goods coming to an end, a small increase in growth was only to be expected. Nouriel Roubini, who along with us anticipated the severity of the crisis, now says that it is ‘yellow weeds’ rather than green shoots which are to be expected.

A great debate has raged amongst capitalist economists as to the shape of this economic crisis. Some argue that it will take the form of a V (a sharp but quick recovery), an L (a sharp drop before bumping along the bottom with no real recovery), or a W (a double-dip). Now, some have swung round to the idea that it is more likely to be an incomplete W, with a plunge, partial recovery, a further plunge, then a small upswing with no early return to the growth rates seen prior to the onset of the crisis. Bizarrely, some have even opted for musical metaphors: a ‘saxophone’ drop, a sharp drop, small recovery and then a stalling. Moreover, the contention of the quasi-Keynesian economists, represented by Paul Krugman, that the threat of a ‘great depression’ has already receded and, at worst, capitalism faces a ‘great recession’ has been challenged in a recent paper by two economists, Barry Eisengreen and Kevin O’Rourke: A Tale of Two Depressions. They point out that world industrial production "continues to track closely the 1930s fall, with no clear signs of ‘green shoots’." Even the recovery of the world stock markets are "still following paths far below the ones they followed in the Great Depression".

The US and Canadian economies continue to see their industrial output fall approximately in line with 1929, with no clear signs of a turnaround. Japan’s industrial output in February was 25 percentage points lower than at the equivalent stage in the great depression. There was, however, a sharp rebound in March. In answer to Krugman’s characterisation of the present situation as only "half a Great Depression", the authors show that the collapse in the Dow Jones index and the S&P 500 in 2008-09 "shows the US stock markets since late 2007 falling just about as fast as in 1929-30". They write: "Our great recession is every bit as global, early hope of decoupling in Asia and Europe notwithstanding. Increasingly, there is awareness that events have taken an even uglier turn outside the US with even larger falls in manufacturing production, equities and prices". More worrying for capitalism, in a sense, the authors claim that "we are surpassing our forebears… in destroying trade. World trade is falling much faster now than in 1929-30". They conclude: "To sum up, globally we are tracking or doing even worse than the Great Depression, whether the matrix is industrial production, exports or equity valuations. Focussing on the causes causes one to minimise this alarming fact. The ‘great recession’ label may turn out to be too optimistic. This is a depression-sized event".

The very fact that serious capitalist economists can speak in these apocalyptic terms is an indication of the deep crisis facing world capitalism. After 1929 the world economy continued to shrink for three successive years. The bourgeois are determined to avoid a repetition of this, hence measures that were not deployed then which form weapons against the present crisis – massive government stimulus packages, the introduction of quantitative easing, the electronic printing of money, theoretically to be injected back into the economy leading to the stimulation of demand. These measures can help soften the effects of the crisis and avoid the scale of collapse witnessed during the depression.

But this is at the cost of enormously piling up state debt accompanied by the continuation of the company and personal debt ‘overhang’ inherited from the boom. The International Monetary Fund (IMF) suggests that the public debt of the ten richest countries will rise from 78% of gross domestic product (GDP) in 2007 to 114% by 2014. These governments will then owe around $50,000 for every one of their citizens! Moreover, this crisis has not run its full course, with the likely addition of a minimum $3 trillion write-down of the banks. This destruction of bank capital – paid for, ultimately, by taxes on the working and middle classes – is added to by the average reduction of $16,700 in household wealth in the US. The OECD, in what if anything is an underestimate, now says: "The crisis will wipe out 3% of rich countries output for ever". This is, however, dwarfed by the further impoverishment of the poor masses of Asia, Africa and Latin America.

Slashing jobs and wages

IN BRITAIN ALONE, losses in the financial sector – now characterised as the ‘least useful’ industry by even the chief economic commentator of the Financial Times, Martin Wolf – mean a loss of 5% of wealth ‘for ever’, according to another economist, Will Hutton. This does not yet take into account the massive loss of household and individual ‘wealth’ in the cut in incomes through the inexorable rise in unemployment. Unemployment in Britain which recently reached 2.3 million in June, is increasing at the rate of one job lost every 30 seconds. This crisis of capitalist ‘overproduction’ affects not just workers but middle layers of society formerly perceived as props of capitalism. Unemployed stockbrokers, management consultants and lawyers have joined the unemployment queues in Britain, 39,300 from this sector alone in May.

At the same time, the cost-cutting measures of the capitalists have aggravated the crisis. The major problem confronting the system – as the quasi-Keynesians argue correctly – is the lack of demand. World electricity use has dropped for the first time since 1945. This did not happen even during the serious crises of 1974-5, 1979-81, the early 1990s or the early part of this decade. It signifies the depth of the economic contraction in Britain, the largest since 1931. But the very measures undertaken – drastic reductions in hours and pay – act to cut the market. The Financial Times concedes: "Recessions are caused by inadequate demand but cutting wages only reduces demand further".

Ultimately, what concerns the capitalists is the maintenance and boosting of profits which, they hope, under the cover of this crisis, can be restored for the expected future upturn. Hence the brutal methods already employed to cut wages. This is exemplified by British Airways (BA) – now derisively referred to by workers as ‘Bugger All’ – with its chief executive Willie Walsh inviting the workforce to work for one month for nothing! ‘Shared sacrifices’ will mean he takes a £62,000 cut for one month. The rub, however, is he will still have a £600,000 salary while BA workers already under siege from the recession will have to tighten their belts.

In Britain, half the workforce has faced either pay cuts or shorter hours, or a combination of both. This is a confession of bankruptcy by British and world capitalism. Not so long ago we were told that this system was the most effective means of delivering goods and services in an ever-upward spiral in wealth for all. Now the stewards of the system – capitalist governments throughout the world – are repeating the mantra of the 1930s, ‘sacrifice now for a better tomorrow’.

They dangle before workers the idea that they want to maintain staff because they will need them again soon. This may be the case for some particularly valued workers but this organic crisis of capitalism will mean that permanent victims of the system will be left in the wake if, as is likely, there is a revival at a certain stage. Instead of the rock pools of unemployment characterised by previous post-recession situations, there will now be lakes of unemployment and deprivation, similar to the mining and industrial areas following Margaret Thatcher’s attacks on the working class in the 1980s. Leon Trotsky commented that the British capitalists in the 1920s and 1930s philosophised that the working class should sacrifice today, descend one or two steps, in order to rise three or four tomorrow. The harsh reality was that the mass impoverishment of the working class continued unabated until the second world war.

Ten years of pain

CAPITALIST GOVERNMENTS today and their shadows in ‘opposition’ do not even promise early relief from the present economic woes afflicting the masses. Ten years of pain is the premise of the capitalist press. Indeed, the next election – due within a year – is likely to be fought not just between ‘evil’ and ‘lesser evil’ but on the basis of cuts and lesser cuts. David Cameron is dubbed ‘Mr 10%’ – because of the admission by Andrew Lansley, the Tory health spokesperson, that a Cameron-led government will cut public spending by at least 10%, excluding the National Health Service (some hope!) and foreign aid. Brown, despite his stubborn claims that there will be ‘no cuts’, has been labelled ‘Mr 5%’ because of the scaled-down cuts he will propose. The next election will be fought between New Labour, the Tories and the Liberal Democrats on programmes for austerity – for the working class not the capitalists. The only difference will be the scale and areas of the attacks.

In place of the scalpel wielded previously a giant axe is being prepared to ‘slim down’ the public sector. As many as 350,000 public-sector jobs could be lost over the next five years, the Chartered Institute of Personnel and Development has warned. Alongside the six million workers in the public sector who will be subject to attack will be the drastically reduced services which will have a devastating effect on the lives of millions of already-deprived people in Britain. The scale of the problem confronting the government – any government on a capitalist basis – was spelt out by Hamish McRae, economic correspondent of the Independent: "Cuts are inevitable". Yet there is still ‘hope’ that they can be "carried out in such a way as to protect the most vulnerable employees as well as the most needed services". All previous cuts have worsened services and aggravated the deprivation of millions. This will be deepened in an unprecedented manner by the Tories but also by the Liberal Democrats and their new media ‘star’, Vince Cable. He wrote in the Independent: "It is necessary to take on some sacred cows: public-sector pensions (ending defined benefits schemes for new entrants and raising contribution rates) – tax credits (embracing two million recipients with well over average incomes)… and higher education for half the population".

Needless to say, no such sacrifices will be made by the rich 5% of the population – MPs on their basic salary are in this income bracket – but by the mass of the working class. In fact, the MPs – undaunted by the fallout from the expenses scandal – were preparing to add £800,000 to their pension pot until there was a public outcry and this was dropped. But without turning a hair, these ‘dishonourable members’ still propose that civil servants – low-paid PCS members – should now give up their final salary agreement. Former Labour leaders now have lavish lifestyles, even those who previously attacked the rich. For instance, Neil Kinnock – former Labour leader and betrayer of the miners and the Liverpool councillors – is "receiving no fewer than six publicly-funded pensions". (The Daily Mail) With his family, he has amassed a staggering £15 million fortune in the last 15 years.

Despite the mass anger against the bankers and their bonuses they are still laughing all the way to their bank every morning. The former chairman of RBS, Fred Goodwin, has condescended to pay back some of his ill-gotten gains, but Stephen Hester, the present chief executive of RBS – which has been rescued by taxpayers’ money and is ‘nationalised’ or ‘half-nationalised’ – will still receive a £9.6 million pay package. Cuts and shorter hours for the workers, telephone number salaries for the rich. RBS has now been revealed as the worst bank in the world, losing $60 billion in 2008! Moreover, the much-vaunted claims of Brown and Cameron that the City bankers who threatened to bring down the whole financial house of cards will be regulated remain unfulfilled. They have barely had their fingernails trimmed. The same is true in the US and the rest of the world.

Neo-liberal lite

THE PREVIOUS NEO-liberal system continues – more neo-liberal lite – with only a few minimal measures to control the financial mania seen prior to this crisis. Indeed, on the basis of capitalism, it is impossible to control the animal spirits (read naked greed) of the hordes of speculators and outright crooks that inhabit the financial sector. With hand on heart they claim that past behaviour will be remedied and that the banks and finance houses, as Voltaire wrote, will now guarantee the ‘best in the best of all possible worlds’. But once an upswing in the economy develops all the trends seen in the boom – somewhat restrained in the first period – will manifest themselves.

Capitalism is an uncontrollable system with the real power ultimately vested in the ‘markets’. Thatcher consistently intoned: ‘You cannot buck the markets’. With one hand the capitalists will gratefully accept the handouts from the state. But they are also threatening the Brown government and even Barak Obama in the US by withholding the financing of state debt if there is too much encroachment. These governments ultimately bend the knee to the power of the markets – particularly as they need their help in filling the yawning gap between state income and expenditure. This has reached catastrophic proportions in Britain with the chancellor, Alistair Darling, admitting there will be a deficit of at least £175 billion (12% of GDP) this financial year. Last month alone the deficit reached £20 billion – a figure that not so long ago would have been the total annual state debt. If this trend continues, it would put this year’s gap between income and expenditure of the state at more than £200 billion. Already, the rating agencies, such as Standard and Poor, are threatening to downgrade the financial standing of British government debt – which they have already done for Ireland and Spain. Needless to say, no mention is made that these ‘specialists’ gave AAA ratings to securitised US mortgage loans, which was a trigger for the financial meltdown leading to this crisis.

Compelled to boost state expenditure to soften the crisis, these measures have stored up a huge problem. A surge of inflation is possible at a certain stage. If the deficit grows, as it will in the foreseeable future, those who buy government debt (bonds) may refuse to buy or push up the ‘yield’ (their cut from the debt), thus increasing the interest paid on this debt. The markets could then exert remorseless pressure – as they did during the 1976 crisis in Britain when the IMF was called in by then Labour chancellor Denis Healey – for savage cuts in living standards. Mervyn King, governor of the Bank of England, publicly lectures Brown and Darling, in effect, demanding further cuts on behalf of the capitalists. He also clearly shows his preference – as an allegedly ‘neutral’ civil servant – for a Cameron government.

Yet Nicolas Sarkozy, the French president, in true Bonapartist fashion, while representing big capital, occasionally makes noises against them. In the European elections he denounced the "dictatorship of capital". This allowed him to re-gather support forfeited in the previous period of attacks on the working class. The French left did not act with sufficient energy to counter this with arguments and a programme, which meant that, despite the huge strikes, Sarkozy was actually strengthened in the elections. Now he has gone further and rejected any idea of a programme of austerity for France.

The most hated government?

BUT THAT IS not the tune the Tories are whistling in Britain. In a statement that will be hung round their necks in the run-up to the election, George Osborne, the shadow chancellor, has promised that a Cameron-led government within three months will "be the most hated since 1945". For once he is telling the truth! The present economic travails are an expression of the long-term decay of British capitalism but, particularly, the lauding and building up of the financial sector, which formed the bedrock of the Blair-Brown governments. Britain still has the world’s sixth-largest manufacturing industry. This, however, has shrunk to just 15% of GDP and despite the huge collapse in the pound – greater than in 1929, 1949, 1967, etc – is still haemorrhaging jobs. This is, of course, because of the contraction of the world market, the ‘real economy’, following on the heels of the financial sector.

But it also reflects the inability of the former ‘workshop of the world’ to compete with the ‘big boys’ of Germany, Japan, and rising China and India. They have all been severely affected, perhaps more so than Britain, but they retain a cutting edge over outmoded British capitalism, which faces the most exposed position in its history. This was masked by the boom but is now revealed in all its frightening proportions. The evaporation of North Sea oil income and the collapse of services mean that British capitalism now has to frantically cast around for an alternative economic ‘model’. However, like Spain during its slow and inglorious decay, it will now be compelled to face up to its frightening economic collapse and the consequences that flow from this.

Classes, like nations, fight more ferociously over diminishing rations than growing ones. Many factors determine how the class struggle evolves and the form it takes: the role of parties, leaders and trade unions, and the existing political outlook of the working class. But the economic factor, the inability of capitalism to satisfy the basic requirements of daily life, is the ultimate motor force for the class struggle. This is being starkly revealed today.

Huge swathes of the population are already mired in poverty, reports emphasising that inequality is worse now than under Thatcher. Two thirds of the population live below the alleged median wage of £470 a week. Alongside this is the remorseless rise in unemployment. Until recently, this appeared almost as a silent recession, with no visible expression of mass opposition to over two million unemployed, with the prospect of this rising by at least a million (possibly peaking at 3.5m or even 4m). But the silence has been broken in the media by the shock of the recent unemployment figures. In Boston in eastern England, for instance, lines of workers queued to scramble for a handful of jobs in a supermarket. An older worker – a former manager – broke down with tears of relief when he was offered a job! But the tears of those whose hopes were disappointed were not shown.

Added to this is the phenomenon of the young ‘NEET’ generation – not in education, employment or training. One-and-a-quarter million between the ages of 18 and 25 could be unemployed if, as expected, unemployment climbs to three million. The most dangerous aspect for capitalism – and for the organised labour movement as well – is the reappearance of the ‘educated unemployed’. Hundreds of thousands of students will pour out of the colleges and universities this summer eagerly seeking a first foot on the job opportunities ladder. They will meet an industrial and ‘work opportunity’ desert. Some could take a gap year, some will scramble around for decreasing McJobs, but others are destined to be bitterly disappointed and angry.

False democracy

IT IS THIS explosive mixture that has formed the background to the abrupt change in British politics, signified by the outcome of the county council and European elections, and the crisis of British parliamentary democracy. The devastating collapse of New Labour – which now holds no county councils and was reduced to third behind the United Kingdom Independence Party (UKIP) in the European elections – represents a new low. This was the lowest vote for Labour in its history apart from 1910, which was on the basis of a restricted franchise. The expenses scandal, which still rumbles on, and the mass rage which greeted this, was a visible expression of the boiling anger which has been bubbling away and has now surged to the surface. Perhaps feeling too weak and disorganised to fight on the economic front, the mass of the population has vented its rage on this issue.

This has, in turn, pointed up the hollowness of capitalist democracy and its institutions: the working class can say what it wants so long as big business and its representatives have the final say. British history has witnessed the Long Parliament, the Short Parliament and even the Rump Parliament. This one will be known as the ‘greedy parliament’. There is an echo of the Tangentopoli crisis in Italy, arising from the bribery and corruption of the early 1990s. This was brought to an end by the ‘mani pulite’ (clean hands) operation of 1992-94. Corruption in Italy, of course, is on a gargantuan scale, prompting the daily paper, Il Manifesto, to comment: "The indignation threshold of her majesty’s subjects is lower than ours".

But the hitherto accepted doctrine assiduously disseminated by the ruling class that the British ‘mother of all parliaments’ was the model for the world, has been shattered. Ten ministers have resigned from Brown’s government as a direct result of the revelations of systematic cheating, of ‘flipping’ second homes, for instance, that have rocked all parties from top to bottom. This has revealed systematic cheating on expenses from large items (bogus ‘second homes’) to the seemingly pettifogging ones (paper clips, restaurant meals, train tickets), let alone moats, which are not accessible to ordinary mortals. The total amount paid back so far by ‘apologetic’ MPs has reached half-a-million pounds. More important is the loss of respect for those found to have their hands in the till. This has provoked an unprecedented discussion on the character of parliament and the role of MPs. What a contrast between the former Labour MPs who adhered to the Marxist journal Militant – Terry Fields, Pat Wall and Dave Nellist, who all lived on an average worker’s wage – and the new breed of New Labour careerists. MP now stands for ‘money pincher’ in the British political lexicon.

These events, together with the outcome of the recent elections, seem to have sapped the last lingering hopes of New Labour MPs that they can escape electoral nemesis in the next general election. One replied to Labour MP, Chris Mullin, when he asked: "What’s your majority? ‘Six thousand…’ Iffy? I gently suggested… ‘I’m past caring’." (London Review of Books, 25 June) Brown himself, semi-demoralised, confessed to The Guardian that he would prefer to walk away from the prime ministership – given the condemnation that has fallen on his head – but will stay to do his duty. As we predicted two years ago, he could share the fate of Callaghan. This seems most likely, unless he is removed after the expected defeats in two pending parliamentary by-elections, given the piling up of crises, the fumbling personal performances and zigzags of the government such as on the inquiry into the Iraq war.

There is, however, still a lingering hope that an economic revival – which is very unlikely by the time of the election – or the illusion of one, together with the spectre of an axe-wielding right-wing Cameron government coming to power may yet produce, if not a Labour victory, a hung parliament. In this crisis, the last hope of some that New Labour retains some of the features of Old Labour, and that at bottom it still represented working-class people, has been dispelled. The feebleness of the ‘official left’ is personified by one of its alleged leaders, John Cruddas. He counts the ‘hammer of the poor’, James Purnell, as a mate!

A new workers’ party

IT IS NOW almost commonplace for commentators, including those like former standard bearer for New Labour, Polly Toynbee, to predict Labour’s demise. She wrote in the Guardian: "The New Labour ‘project’ was designed by Mandelson, Brown and Blair to abolish the politics of class, scorning the ‘politics of envy’. The project has ended in abolishing the credibility and meaning of Labour itself… Labour, once the natural home for anti-establishment anger, is now the defender of everything people want to rebel against". Simon Jenkins headlined an article indicating the betrayal of Labour’s socialist roots, ‘This gaping hole calls for a new party. Let’s call it Labour’. Unfortunately, the word ‘labour’ has been tarnished and a new formation should preferably anticipate the future by the inclusion of the word ‘socialist’ in its title.

This is reflected in the increasing hostility of organised workers to maintaining the financial link with New Labour. This was on full display in the speech of Unison leader, Dave Prentis, at that union’s recent conference (coming after the doubling of the Socialist Party contingent on the union’s national executive council). Prentis sought to steal the clothes, indeed the exact phraseology – ‘Labour is biting the hand that feeds it’ – used by Glenn Kelly, Socialist Party Unison activist, in threatening to withdraw funds from New Labour. In the past, public-sector workers were regarded as Labour heartlands but that support has collapsed. In a poll commissioned by the union of over 1,000 members, just 30% planned to back Labour at the next election, which was down even from the 42% a year ago. In other words, 70% of public-sector workers were not prepared to support Labour.

This disillusionment of trade unionists and workers is widespread. The altered class character of New Labour was also tacitly admitted by none other than Healey. On BBC Radio’s Desert Island Discs he confessed that the main parties in Britain were not organised on ‘class lines’ any more. This is a complete vindication of the Socialist Party’s characterisation of New Labour as a capitalist party and that, therefore, the most important task is the development of a new mass workers’ party. And it repudiates the arguments of the diminishing ranks of those who still cling to the idea that Labour is ‘reformable’.

The No2EU-Yes to Democracy campaign for the European elections – a bloc between the Socialist Party, the Rail and Maritime Transport union and the Communist Party of Britain – represented a step towards this goal. The hastily-formed bloc did not have enough time to establish a presence in the eyes of workers but, nevertheless, got a credible vote of 150,000 in its first run-out. It is vital that this project is extended by drawing in other unions, workers, shop stewards, trade unionists and environmentalists to present an alternative workers’ challenge in the next general election.

The political situation in Britain is extremely volatile. Millions who have cut away from their previous political loyalties are swinging around looking for an alternative. In elections they vote for parties that they perceive can punish the ‘establishment’ – hence the vote for the British National Party (BNP) that drew its support in the main from previous Labour strongholds, mining areas and former areas of car production such as Dagenham. UKIP, on the other hand, owed its rise in the main to attracting former Tory voters and disgruntled voters from the other parties. The urgent issue for the left is to counter the BNP. While answering its ‘arguments’ and campaigning against it in the localities in which it has a presence, the urgent task is to take serious steps towards the alternative: a new mass workers’ party. The formation of a left party in Germany provided at least an electoral alternative to the far-right, despite its political and organisational inadequacies.

New Labour faces meltdown. It is even possible that the Liberal Democrats could overtake it at the next general election. In the euro-elections the two main parties got less than 50% of the vote, reflecting the political crisis that all the main parties face. The arguments of some political pundits that New Labour overcame the split of the SDP in the 1980s and would therefore be able to survive any challenge from the Lib Dems does not really hold water. In the 1980s, the Labour Party at the bottom still remained a workers’ party, albeit with a pro-capitalist, right-wing leadership. The split of the SDP, which was meant to split the Labour Party itself, only succeeded in splitting the Labour vote, for a while at least. The recuperation of Labour came because of its organic connection to the unions. That is now in the process of being severed and the regenerative powers of New Labour are not the same as Old Labour.

One result of the Italian meltdown following Tangentopoli was the complete disappearance of the Italian Socialist Party (PSI). True, this was always subordinate to the mighty Communist Party of Italy. But it is possible that New Labour could tread in the footsteps of the PSI and come out of the next election as a rump. The right-wing Blairites could split away like the neo-socialists did in France in 1934. Out of this could come a left formation which could then form a bloc with those outside the Labour Party who are seeking to lay the basis for a new mass workers’ party.

British politics is in an unprecedentedly volatile period. Capitalism has failed and that will be increasingly seen to be the case. A section of workers, in despair, has swung over in protest to support the BNP. But this will prove to be ephemeral if the left gets its act together and provides an electoral fighting and campaigning alternative. Socialism, off the agenda during the neo-liberal dark night of the 1990s and early part of this century, is coming back. Marxism – which can provide a vital spine to a new mass workers’ formation – is appealing to a new generation. The Socialist Party intends to fully participate in the re-fashioning of the workers’ movement, which is vital for politically arming the new generation that will be compelled to engage in battle – as the workers of Linamar, Visteon and Lindsey have done – and draw all the necessary conclusions.