Britain: the lull before the storm

Published below are extracts from a statement on Britain agreed at the Socialist Party National Committee on 19 January. The full document will be discussed at the party’s national congress in March.

AS 2013 BEGINS many commentators have suggested that 2012 was a ‘groundhog year’. "British politics has got a bit stuck", declared Andrew Rawnsley (Observer, 30 December). While this was true on the surface, in reality society, and particularly the working class, underwent profound changes which will accelerate in the coming year. In 2012 the majority of the working class, and wide sections of the middle class, suffered a battering. An avalanche landed on our heads, including benefit cuts, dramatic cuts in local services, hospital closures, the attack on pensions, the headlong rush to turn schools into academies. This is, however, only about 20% of the government’s planned cuts.

At the same time, a majority of households saw a marked fall in their income. The Bank of England’s chief economist, Spencer Dale, noted: "The harsh but inescapable reality is that households and families are worse off – much worse off". Office for National Statistics (ONS) figures show that average wages rose by an annual rate of 1.7% compared to an official inflation rate of 2.7%, meaning a real-term fall of 1% in the last year. This comes on top of years of belt tightening. The Bank of England estimates that the pay packet of the average worker is now worth 15% less than it was in the pre-crisis period.

No wonder that Christmas spending was down. Increasing numbers of people cannot afford the necessities. Three new food banks open every week and the numbers using them over Christmas doubled. Since the recession began people are buying 20% less fruit and vegetables, and far less milk, bread and fish. The Children’s Society reports that 72% of teachers have pupils who not only skipped breakfast but had no lunch or the means to pay for one. Cases of rickets, previously considered a disease of a long-gone Dickensian past, have increased fourfold.

The government has had two stated aims for the misery it is imposing: eliminating the deficit and maintaining Britain’s AAA status. Neither will be achieved. Chancellor George Osborne is being forced to endlessly move back the target date for eliminating the deficit, now to 2018. All three major credit ratings agencies have given official warnings that Britain can expect to be stripped of its AAA rating.

The 2012 budget, particularly the cut in the top rate of income tax, was a tipping point in how the majority, including most of the middle class, perceived the government. It is now widely seen as a government of the rich. Rawnsley summed up the mood with ‘one of 2012’s best political jokes’: "Why did 80,000 people boo Osborne at the Paralympics? Because that’s the maximum capacity of the stadium". At the same time, the conspicuous consumption of the ruling elite is creating a burning rage. The 2012 Sunday Times rich list revealed that the combined wealth of Britain’s richest 1,000 people swelled by almost 5% to £414 billion, the highest amount ever recorded by the 24-year-old survey.

That the growing class anger was not fully given voice in 2012 was primarily the result of the failures of the leadership of the trade union movement. Consequently, the latest round in the war against austerity was another defeat for the working class. It was huge pressure from below, channelled by the National Shop Stewards Network (NSSN), in alliance with the RMT, PCS and the Prison Officers’ Association (POA) unions, which led to the TUC congress taking the historic decision to back the POA resolution ‘to consider a general strike’. Afraid of appearing conservative to their own membership, even the right-wing leadership of UNISON backed the motion, while openly admitting that they did not really support it.

Since then, thanks primarily to the general secretaries of UNITE and the RMT, Len McCluskey and Bob Crow, attempts by the TUC leadership to rule out a general strike have been blocked and unions are being consulted on the possibilities of a general strike. At this stage, however, only the PCS has concrete plans to ballot for strike action and to call for other unions to coordinate their action alongside them. It is likely to take further pressure to force wider coordinated action. A 24-hour general strike is still firmly on the agenda but could be delayed for longer than many expect because of right-wing union leaders dragging their feet.

As the last two years have shown, the working class will find the means to fight back despite the faults of its leadership. The question is whether that struggle is organised into a powerful force or will be inchoate and disorganised due to lack of leadership. Lack of leadership can also lead to struggles developing on a sectional or local level without the workers involved, in the short term, necessarily understanding the need for making common cause with other sections of the working class or not being able to find a route to do so.

The government has succeeded temporarily in increasing the divisions in the working class, particularly between workers and the unemployed. There is also potential for other divisions to grow, including between the old and young and the public and private sectors. Nonetheless, Britain has entered a protracted period of class struggles, as the working class attempts to resist endless austerity. This flows from the continuation of the economic crisis, the worst British capitalism has faced in at least 80 years.

Economy in crisis

FIVE YEARS INTO the crisis, UK gross domestic product (GDP) is still 12-15% below the pre-crisis trend. Mervyn King, retiring governor of the Bank of England, has predicted a decade or more of economic misery. British capitalism is in a dead end, its best scenario being to keep ‘bumping along the bottom’ as it has since the autumn of 2010. Britain has become a new Japan, with its lost decades of stagnation, except that the Japanese crisis took place against the background of growth in the world economy; Britain today is one of many Japans in a stagnant, crisis-ridden world. Larry Elliot wrote (The Guardian, 30 November): "Japan ended up with a zombie economy in which zombie banks were lending to zombie companies. Worryingly, the UK is showing signs of heading in the same direction. One in twelve companies are able to repay only the interest on their debts".

Britain is paying the price for its refusal to invest in industry over decades. The weakness of British capitalism is summed up in the ‘mysterious’, dramatic fall in productivity figures since the crisis began. In the private sector, productivity per hour worked fell an incredible 4% in the first nine months of last year. UK productivity has long lagged behind other advanced capitalist countries, as British capitalism has relied on cheap labour rather than investing in developing technology. During the crisis investment has fallen to record lows, with £750 billion sitting idle.

The productivity gap is the biggest since 1990, with UK workers 20% less productive than the G7 average. Economists have deduced that the latest fall in productivity is largely as a result of the crisis in the finance sector, which drove UK economic growth during the last boom, as it "adjusts from the unsustainable business models of the last decade" (Financial Times, March 2012). In other words, Britain’s previous productivity figures were artificially high because they were based on the massive bubbles in the finance sector which dominates the British economy.

The small decrease in unemployment figures at the end of last year will not last. In any case, the real numbers are disguised by the huge levels of under-employment, which has increased by at least one million since the crisis began to a massive 8.1 million. This includes workers who have been kept on by employers on reduced hours, in the hope that the crisis will be short. Many of these will be laid off in the next period. This part-time army is made up predominantly of millions of workers trying to exist on a few hours of casual work every week. This is now a permanent feature. Karl Marx’s conception of a ‘reserve army of labour’, designed to keep wages down because there is always someone desperate enough to work for less, has been recreated. There is a burning need for the trade union movement to organise the part-time casual workforce.

The disastrous effect of government austerity in exacerbating the economic crisis has even led the IMF to call on Osborne to switch to ‘Plan B’. David Cameron and Osborne have rejected this, saying they are adopting ‘Plan A+’: continued austerity and measures to ‘assist business’. It is not excluded, however, that the protracted crisis could force the government, under pressure from business particularly the construction companies, to carry out increased investment into infrastructure. Nonetheless, this would be combined with further savage public-sector cuts.

Former Tory chair, Lord Ashcroft, let the cat out of the bag when he blogged that the odds were stacked against his party winning the general election, and that New Labour leader, Ed Miliband, "ought to be able to put together 40% of the vote without getting out of bed". Knowing that they stand little chance of winning, the Tories are attempting a scorched earth policy, knowing that Labour in power would not reverse their policies. In doing so, they have the support of short-sighted British capitalism. The CBI continues to "stand shoulder to shoulder" with the government on austerity.

Clearly, there is an ideological element to the government’s cuts and privatisation programme. Recently released papers show that, 30 years ago, the Thatcher government considered almost every policy that is being implemented by the Con-Dem coalition in the name of ‘austerity’. Margaret Thatcher, however, did not dare to go so far. But Miliband’s ‘one nation’ Labour would not have pursued a fundamentally different policy. Miliband defends capitalism which sees the road to increasing profits to be over the living conditions of the working class, particularly by driving down the ‘social wage’ – benefits, pensions, the NHS, etc – despite the fact that this will further shrink the UK market. At the same time, the capitalists are clamouring for the further privatisation of public services to find profitable fields of investment.

One section of the ruling class, voiced by King, has been pushing for even harsher austerity, arguing that the Tories are too worried about electoral popularity! King has talked in brutal terms about the Japanisation of the UK economy, saying that ‘deeper readjustment’ is needed. The Financial Times (13 November) summed it up: "Bank of England insiders fear that the recession did not generate sufficient destruction to enable the creation of more productive companies in the upswing… At the heart of the new thinking lies the remarkably low mortgage repossessions and corporate liquidations in this downturn".

King argues that not enough outmoded value has been destroyed in the recession to create the basis for new investment, leading to a new upswing with a higher rate of profit. He is making a call for more companies to close, more people to be thrown out of their jobs and homes so that, trampling on our misery, capitalism might find a new stability. In attempting to carry this out, however, British capitalism would face powerful resistance by the working class. John Maynard Keynes himself said that his theories were designed to ‘avoid revolution’, and the capitalist class could be forced to move in a Keynesian direction under the huge impact of the workers’ struggles against austerity that are coming. Concessions would be given, which the capitalists would attempt to take back at a later stage if the working class had not yet succeeded in taking power.

The working class faces a weak, divided government, ultimately reflecting the capitalists’ inability to find any way out of the crisis and, flowing from that, the increasingly weak social base for the capitalist institutions in Britain. All of the capitalist parties, including Labour, are inherently unstable, with internal tensions which could become splits later on. Politicians lead in unpopularity polls, but trust in the capitalist media, church, the police and even the BBC has been markedly undermined as scandal after scandal has revealed their feet of clay. The Leveson phone-hacking inquiry, for all the timidity of the final report, has exposed the corrupt relationships between different sections of the capitalist state. The renewed attempt to popularise the royal family, via ‘Kate and Will’, is partly a conscious attempt to strengthen the social reserves of the capitalist state. The queen attending cabinet is a deliberate politicisation of the monarchy’s role.

The government’s weakness will not prevent it stepping up its assault on the working class, unless it is stopped by the working class. The cuts experienced so far, devastating as they have been, are small beer compared to what is coming in 2013. The need to generalise the struggle, through a 24-hour general strike against austerity in the first instance, is absolutely clear. In the meantime, we could see explosions on a multiplicity of issues.

Where the organisations of the working class fail to give movements an organised cohesive form we are likely to see inchoate rebellions, including further riots, perhaps even on a bigger scale than the summer of 2011. Socialists do not condone rioting, which gives the capitalists a whip to strengthen repression, as well as damaging working-class communities and small businesses, but we understand why they are inevitable if a generation of youth are left with no future. We could also see social protests and movements including the kinds of raids on supermarkets and occupations of empty properties that are starting to take place in other European countries.

Public-sector flashpoints

THE PUBLIC SECTOR was previously a relative haven of job security. No more. Over one million public-sector jobs will have gone if the latest round of cuts is implemented. Already, 7,000 nurses’ jobs have gone as the NHS faces the worst spending squeeze in its history. After two years of austerity, the money hospitals will receive for treatment in 2013 is a 4% cut in real terms. The next year is going to see a series of hospital cuts and closures. In London seven out of 32 A&E departments are already marked for closure by 2020. The remainder will have to cover an extra 120,000 people on average. The chief executive of the Health Federation, Mike Farrar, declared that the public must accept "the closure of many hospital units and live healthier lives if they want the NHS to survive". The public show no signs of doing any such thing! In November around 10,000 demonstrated in the pouring rain against the closure of Lewisham Hospital’s A&E department. Many more such demonstrations could take place in 2013.

Alongside cuts public services are facing wholesale privatisation. Education secretary Michael Gove is leading a mad dash to academies, which were first initiated by New Labour. More than half of secondary schools and many primary schools are now academies or have plans to convert. Gove’s latest assault, demanding that head teachers dock the pay of teachers who take part in industrial action, shows his vitriolic determination to smash effective trade union organisation in schools and move to performance-related pay.

However, it was demonstrated at the end of 2012, by the successful strike at Stratford Academy in East London against a head teacher doing what Gove had demanded, that teachers will respond to the whip of counter revolution, and can win the support of a majority of parents and pupils. What is needed is to mobilise for a similarly resolute campaign of strike action at national level. It is not yet clear that the National Union of Teachers’ leadership is prepared to do this, as it appears to be hesitating in the face of the onslaught on its members’ rights. If the teachers’ unions do not fight back their ability to organise effective action will be in jeopardy. But the government could overreach and provoke a reaction from below.

Lack of enthusiasm for Labour

ON THE NHS Labour is 30 points ahead in opinion polls, and is generally ‘more trusted’ to run public services. However, it is not lost on workers that most of the policies now being sledge-hammered through originate in New Labour’s period in office. It is the Private Finance Initiative that is directly responsible for a number of hospitals going bankrupt. Labour has promised to repeal the Health and Social Care Act, although Miliband was reluctant even to commit to this, but has made no promise to reverse the wholesale privatisation of the NHS.

The lack of enthusiasm for Labour was demonstrated in the 2012 parliamentary by-elections. Labour won them, but the turnout in Manchester Central was the lowest ever in peacetime, at 18%. Even Corby, which was a battle between Tory and Labour, could only summon 44%. In every election a majority, and a big majority of the working class, did not vote. It will be different in a general election. Larger numbers of workers will turn out ‘holding their noses’ to get rid of the Con-Dems, but this does not represent positive support for Labour, and will not automatically take place on a big enough scale to guarantee a majority Labour government.

It is not only a question of what Labour did in government, but what Labour local authorities are doing now. In total, local authority spending has been cut by 29.7%. This is leading to the annihilation of countless essential services. Recognising the horror these cuts will bring, leaders of three Labour councils – Newcastle, Liverpool and Sheffield – wrote a joint statement over Christmas begging the government to change tack because "forces of social unrest are starting to smoulder". The possibility that they should mobilise and organise those forces into a mass campaign against the cuts is utterly foreign to them. On the contrary, they were really begging the government to rescue them from the social unrest they can feel developing underneath them.

The pro-capitalist character of New Labour can be summed up by the tiny number of councillors who have so far refused to vote for cuts. The Southampton Two have been summarily expelled from the Labour Party for this, but their stand has received enthusiastic support from workers. Southampton UNITE and UNISON trade union branches have, under pressure from their members, pledged support for the councillors’ stand. UNITE has also backed them nationally. Its general secretary, Len McCluskey, has pledged that UNITE will demand that Labour does not stand against the Southampton Two or any other councillors who have taken the same principled position.

Battles against the coming round of local authority cuts are inevitable. In 2010 the leadership of UNISON, the biggest local authority union, avoided sanctioning many ballots for strike action by arguing that anger should be channelled into the national campaign in defence of pensions. This will not work so easily again. We have to demand national action on pay, linked to building for a 24-hour general strike. Equally important is the fight for local action in defence of pay, conditions and services. We also have to be prepared for more widespread community campaigns, including occupations, than have taken place up until now.

The Trade Unionist and Socialist Coalition (TUSC) has played an important role in providing a banner under which anti-cuts and trade union candidates can stand. It has begun to popularise the idea that it is possible to have anti-cuts councillors, which had a real effect for example on the struggle in Southampton. The growing trade union support for TUSC, particularly the RMT’s unanimous support at its last AGM, gives it potentially far more social weight than any of the previous attempts to build a new electoral formation in this era. Nonetheless, it is still at an early, fragile stage. Electorally it has not yet made a qualitative breakthrough. However, we have to be prepared for the possibility of the anti-cuts struggle leading to much wider support for workers taking the fight against cuts to the electoral plane. While it may be under a Labour government that decisive steps towards a new mass workers’ party take place, we cannot preclude earlier electoral breakthroughs.

24-hour general strike

ELECTIONS ARE ONE facet of the struggle against cuts. In the short term, the most pressing issue is the campaign for a 24-hour general strike. There is a glaring need for decisive action against austerity and the attempts to undermine union strength by slashing trade unionists’ facility time. The trade union movement needs to put the defence of union rights at the heart of the struggle against austerity, making clear to workers – in propaganda and, more importantly, deed – the essential role of the unions in defending their pay and living conditions. If the government manages to force through the attacks on facility time it will weaken the trade union movement in the short term. In the longer term, however, it could rebound on the government as new, younger, more militant fighters develop in workplaces across the country.

In 2012 we already saw more militant methods being adopted by sections of workers, particularly in the private sector. The mass picket lines of the London bus workers were combined with blockades against those bus companies that had obtained a court injunction against the strike action. Crown saw three unofficial 24-hour walkouts and electricians won major concessions via unofficial demonstrations and blockades which, in turn, put pressure on UNITE to act officially. A new generation will tend to adopt these kinds of methods as they see that they cannot let themselves be hemmed in by the law if they are to stand up to the employers.

Of course, even a 24-hour general strike against austerity would not be guaranteed to force the government to retreat, never mind to precipitate a general election, unless it was linked to a serious strategy for further action. Nonetheless, unlike Southern Europe, Britain has not had even a warning general strike for over 80 years, and it would have a gigantic effect on boosting the confidence of the working class and its sense of its own power, while it would terrify the capitalists. Millions of unorganised workers would be attracted to the trade unions.

The right-wing leaders of the TUC will do all they can to prevent a 24-hour general strike taking place – it frightens them as much as it does the capitalist class! In 1972, the last time the TUC was forced to set the date for a 24-hour general strike, it was the strikes developing from below which forced them into reluctant action. Today the anger and bitterness of workers is as great, if not greater. The working class, however, lacks confidence in its capacity to win. It is not aware of its own power. At the same time, the trade union structures remain relatively empty. While there is widespread support for the idea of a general strike – over 80% in one Guardian survey – at this stage it does not occur to the majority of trade union members to attend their branch meeting to demand such action.

Instead the current trade union leaders are seen by many workers as, like relatives, perhaps infuriating but unchangeable. But this outlook is not permanent. In 2011 we saw the working class enter the field of battle for the first time in years, with mass demonstrations, strikes and picket lines. On the basis of experience workers will fight to force their union leaders to act or, if they can’t, to push them aside. The potential for genuine trade union broad lefts, involving fresh layers of workers, is likely to grow in the next period.

The right-wing leadership of the TUC holds up the anti-trade union laws as a means to avoid action. Socialists are not in favour of taking unnecessary risks with union funds. But workers are facing the biggest attack on their living standards since the 1930s. To fail to lead a serious struggle in defence of workers’ rights would be far more damaging to the trade union movement than anything the law courts could deliver. And it is possible to go a long way towards a general strike even within the straitjacket of the anti-union laws.

If the TUC was to name the day for a 24-hour general strike against austerity, and to use all of its power to mobilise workers, it would get a huge response. All unions with live ballots could plan to strike on the named day. Other groups of workers inspired by the call would want to ballot over the real issues in their workplace, which would also allow them to take part in the general strike. Without doubt other workers not currently in unions would flock to take part. Whether the government or employers could use the law – either against those who had not balloted or to invalidate ballots – would depend on the balance of forces. Faced with the threat of a popular general strike, with a clear threat to immediately strike again if any workers or trade unions were victimised, the anti-union laws would be worthless.

The limits to how far the employers can use the anti-trade union laws are shown by the situation in UNITE. Since Len McCluskey became general secretary not a single group of workers has received a ‘letter of repudiation’ from the union for unlawful action. Yet the government and employers have not dared to threaten UNITE with sequestration. Nor has the POA been threatened for its action in defiance of the law last May. Many European countries have seen general strikes, despite also having varying degrees of repressive anti-trade union laws and restrictions. These have been swept away by the struggle.

Prospects for the Con-Dems

IT IS STILL an open question whether this government will last its full term. But it may not be the cuts which act as the immediate trigger for a collapse of the coalition. There is a whole number of possibilities. Europe has once again become a nightmare for the leadership of the Tory party. John Major’s ‘bastards’ are back with a vengeance! Desperate to appease the Tory right, and also to cut across the growing electoral support for UK Independence Party, Cameron and Osborne are ‘talking tough’ on Europe. Osborne has gone further than Thatcher ever did, threatening UK withdrawal from the EU.

His statement, however, horrified the majority of the British capitalist class, including representatives of finance capitalism. The president of the CBI, along with the chairman of the London Stock Exchange and others, wrote an open letter warning that the dominant powers in the EU – Germany and France – are extremely unlikely to accept Cameron’s attempt at renegotiation. The British capitalists fear that in that situation, having played the nationalist card, the government would end up holding an in/out referendum which could result in Britain’s exit from the EU. This would have negative effects for British capitalism. Companies would be less likely to set up in Britain, and the City of London’s global position as a centre of finance would be eroded. It is also a very dangerous situation for the eurozone as it could deepen the divisions within it. Not only German chancellor, Angela Merkel, but now representatives of the US government are trying to make Cameron back-pedal.

Cameron’s fear of a split in the Tory party makes it extremely difficult for him to simply retreat. This issue can escalate further. It will drive the Lib Dems wild. In the main, the ‘Orange Book’ Lib Dems chose their party over the Tories only because of its pro-European stance. In the event of a collapse of the government, the Tories could play the nationalist card to try and win the general election. In recent opinion polls, 51% of people want to leave the EU compared to 40% who want to stay. This is a dramatic shift. While it can swing back under the impact of a campaign, it is a clear sign of how events could develop. In such a situation, the labour movement and the working class must have an answer which poses issues from a class point of view, in particular to cut across the dangers of nationalism.

The current position of the leadership of the TUC, that the capitalist EU’s ‘social Europe’ is a progressive force, is increasingly ludicrous against the background of the nightmare facing workers in the countries of ‘the

periphery’. Socialists argue for the trade union movement to campaign for a referendum, but on the issues of our choosing: the class questions which are at the heart of the neoliberal project of the ‘modern’ EU. This would be a referendum to oppose the EU’s Lisbon treaty agenda of privatisation, cuts in wages, etc. We need to reassert total opposition to the bosses’ club of the EU. We must come together, not in a narrow nationalist fashion but in solidarity with the workers’ movement across Europe. At the same time, the need for a confederation of democratic socialist states must be brought to the fore.

Next general election

WHENEVER THE ELECTION comes it is most likely that Labour will come to power, either with a majority or as part of a coalition with all or a section of the Lib Dems. Miliband would prefer the latter in the hope the Lib Dems would act as a cover for a Labour government’s pro-capitalist policies. However, like Tony Blair before him, he might lead Labour to a majority despite himself. Labour has no answer to the burning problems facing working-class people. The failure of a new Labour government could pave the way for an even more right-wing Tory government at a later stage.

Nonetheless, the building of a new mass workers’ party would also be firmly on the agenda. Work done before the general election to campaign for a serious electoral force to the left of Labour is vital preparation for the development of a mass party of the working class. On the basis of socialists’ intervention and their own experience workers will draw the conclusion that ‘we need our own party’.

Consciousness in Britain lags well behind the objective reality of 21st century capitalism. However, workers’ illusions are progressively being stripped away. Many who previously hoped that the crisis was temporary are beginning to understand that this is the ‘new normal’. While all kinds of divisions remain within the working class – between benefit claimants and others, young and old, migrant and non-migrant, public and private sector – there is a growing unity in a burning hatred of the tiny elite at the top of society. There is not yet a mass socialist, never mind Marxist, consciousness but there is a growing minority of workers and young people who are looking for an alternative. An anti-capitalist outlook is becoming widespread.