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Socialist Party congress 2006

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Social counter-revolution

Assuming that Blair lasts in power for some time, which is not at all certain given the shedding of his authority in the past period, he intends to complete his counter-revolution against what remains of the state sector through a relentless privatisation programme. He clearly intends to dismantle what remain of the state sector. The ‘reforms’, read counter-reforms, promised will, unless amended or withdrawn, allow the vultures in the private sector to strip the NHS and education of all the juicy profitable bits, leaving the bare bones, a skeleton service inadequately catering for the poor and the working class. Another purpose of Blair’s proposals is to allow the middle class – increasingly, his ‘base’ – to receive the lion’s share of the benefits. The losers, of course, will be the working class and the poor. The intention is to turn back the wheel of history to the nineteenth century to create, as in the case of education, reliance on the ‘philanthropy’ of the rich, private schools and church institutions. The net result will be ‘two-tier’ education and health systems along the lines of the US, at a time when the working class and big sections of the middle class groan under the weight of this system in the US.

The rise of a new mass workers’ party in America will have as one of its central demands a fully-funded national health service. Yet this is presently being dismantled in Britain. Blair, in every speech he now makes, shows he is an unalloyed bourgeois, refusing to make even the slightest genuflexion in words, as he did earlier, on the need for a state sector. There is not even the smallest concession to social democratic ideas, the ‘mixed economy’. Schröder in Germany and Jospin in France carried out neo-liberal policies but were not averse to taking verbal sideswipes at the ‘market’; social-democratic spokesperson Müntefering denounced "locusts", foreign capitalist speculators who stripped German industry bare and sacked workers.

This is not for Blair who has completely accepted the logic of capitalism in the ‘modern’ era in words and deeds. He is the high priest of unreconstructed neoliberalism. It is likely that, when he leaves office, the tenuous ties connecting him to the Labour Party could also be sundered. His ferocious assault on the state sector, on the rights and conditions of the working class, his refusal to budge on anti-union laws, are meant to establish a Blair ‘settlement’, along the lines of the so-called Thatcher ‘settlement’ of the 1980s. The very fact that bourgeois strategists can use the term ‘settlement’, which is a military term describing the outcome of a struggle, is significant. They fully recognise the ongoing war between the classes, the class war as a fact while, in practice, deriding such concepts as ‘old fashioned’.


To secure his legacy, Blair intends to end his era with unremittingly ‘New Labour’ policies. He promises further privatisation or partial privatisation of the Post Office – a John Lewis style so-called ‘partnership’ with the workforce – of the state-owned British Nuclear Fuels Limited, including the nuclear facility at Sellafield, part-privatisation of the ambulance service, of Jobcentres, parts of the civil service, etc. This is in the teeth of overwhelming evidence of public opposition to privatisation.

There is a general recognition that the widespread chaos on the London underground arises from privatisation. Brown (‘Mr PFI’) as well as Blair supported this ‘Private-Public Partnership’ (PPP). In fact, Polly Toynbee, once a slavish supporter of the Blair-Brown duumvirate, declared in The Guardian of October 2005: "Gordon Brown’s pigeon has come home to roost precisely as predicted, with added avian flu virulence." He imposed 30-year PPP contracts on London Transport, before the tube was handed over to the Greater London Council.

The breakdown of emergency braking systems, which had been evident to rail workers on the Northern line, led to the halting of the service. But this was only at the insistence of the Rail Maritime Transport union (RMT). This brought forth the accusations from The Guardian that the RMT were "making political points at commuters’ expense". Bob Crow retorted: "Far from creating chaos for commuters, RMT’s concern for our members’ safety makes us the last line of defence for tube users. The only winners out of this chaos are the £2 million a week guaranteed risk-free profits for the privateers who now control the network." Even the government, through transport secretary Darling, has been compelled to beat a retreat and concede that Transport for London can now sack the firm responsible for the chaos. Of course, he stopped well short of renationalising the privatised firms which daily show the complete failure of the private capitalist sector.

Tony Blair conceded in the past that his government ministers could take any measures, even disguised partial renationalisation as in the case of Railtrack, "so long as you don’t call it renationalisation". His government will not revert to state-owned industries, nor halt privatisation, no matter what degree of passive opposition exists to privatisation. The arrow for them points in the opposite direction towards the establishment of an early nineteenth century type of laissez-faire capitalism. This should not, however, lead us to draw pessimistic conclusions for the struggle against this programme. The defeat of the government’s proposals on pensions, where it wanted to raise the retirement age of five million civil servants from 60 to 65, shows that mass pressure through the threat of industrial action -can force even the most flinty-faced, brutal neo-liberal government to partially retreat.

Faced with an implosion of what is left of British industry during a deep recession or a slump, for instance, colossal pressure will be exerted on the government to step in, as Heath did in 1972 with Rolls Royce, and take over failing industries, even if only ‘temporarily’. Therefore, our struggle, along with the majority of trade unions and the labour movement, against further privatisation, is a vital part of the struggle to defend past gains. It is necessary to ideologically combat the idea that the ‘market’ is the only efficient deliverer of goods and services.

Struggle is vital. Propaganda is also essential but for the masses it is the grim reality of the failure of the ‘market’ that will reinforce the idea that along this road lies catastrophe for the working class. The deaths of rail passengers, at Potters Bar and Hatfield, and the absence of any corporate manslaughter law in Britain have reinforced the case against privatisation and for rail nationalisation. Even the mild-mannered Brendan Barber, TUC general secretary, declared: "The families of those killed [at Hatfield] will feel cheated that no senior executives will face punishment as a result of their safety crimes." Balfour Beatty and Network Rail, the successor company to Railtrack, received raps over the knuckles of £10 million and £3.5 million fines respectively. The idea that at least the basic utilities should be under the control of the state will grow as a result of this and future failures and inefficiencies of private capital. We support all steps to take failing industries under the control of the state but we must also link this to democratic control – workers’ control and management – as a springboard for the idea of taking over the ‘commanding heights of the economy’.

At the same time we must point out that all governments and all parties which remain within the framework of capitalism will come under the relentless pressure to adapt to the world market in its present, deregulated, neo-liberal phase. The differences between Schröder, Jospin and other ex-social democrats, who still retain some of its phraseology, and Blair and Brown is one of degree and tone and not of substance. Even a restoration under mass pressure of a significant state sector will still leave the ultimate economic and thereby political power in the hands of the capitalist monopolists. Therefore the struggle against privatisation is to defend past gains, with the fresh lessons now of two decades in Britain of what privatisation represents. It is not an accident that the slogan of the unions in the nuclear industry is ‘No Hatfield at Sellafield’. A rail accident due to negligent maintenance by private firms is one thing. A nuclear accident arising from privatisation is on a different scale entirely.


Not satisfied with the social counter-revolution it has already carried out in Britain, New Labour intends to go further. Brown has been to the fore in defending and extolling the neo-liberal mantra which informs the government. At the TUC he and Blair were brazen in rubbing the trade union leaders’ noses in the mud by pledging to oppose the TUC’s demand for the EU limit of 48-hours maximum working week to be applied in Britain. His government, he said, would still exercise the "opt-out" which condemns millions in Britain to the culture of long hours. Study after study has shown that this enormously increases ill health through stress-related illnesses in the workplace.

The government has tried to increase the retirement age for public sector workers. A victory has been gained for the existing workforces – but not yet in local government or the fire service – which represents a standstill for the existing workforce although new entrants will have a longer working life agreement imposed upon them. There are no ‘final victories’ so long as capitalism exists. The existing workforce, who can retire at 60, will have to fight to maintain what they have achieved in this struggle, and the new generation must be mobilised to fight for the same conditions. We must emphasise that this achievement on pensions arose from the threat of mass industrial action both before the general election and afterwards, together with the pressure exerted in Britain of the mass mobilisations over similar issues in Belgium, France and Germany in the past period.

The reaction of the bourgeois press, however, from the Daily Telegraph to The Guardian – "Government surrender", "loss of nerve" – reflected the explosion of anger of the bourgeoisie over the government’s retreat on its original proposals. It has even raised a question mark over the usefulness of this government to the capitalists. Martin Wolf, prominent Financial Times columnist, expressed this when he wrote: "Let me be frank; the public sector unions have used their monopoly power to demand money with menaces from the taxpaying public." This is the language of war; the mere threat of strike action from the working class results in them being compared to robbers and thugs! Similar noises were made by German capitalist commentators before the 2005 general election. Schröder had done the bidding of the capitalists but it wasn’t enough; they demanded even more of their pound of flesh and concluded that only an openly bourgeois government led by the CDU could carry out their wishes. However they miscalculated and ended up with a weak, unstable coalition.

At the same time as joining in the attacks on the pension rights of workers in the public sector, the Tories, through shadow trade and industry secretary David Willetts, have brazenly called on the government to "socialise" part of business’s pensions’ burden. Unless this is done, they say, ‘zombie companies’ will exist which will struggle to make payments to former workers. These companies are ‘zombies’ because they can’t, according to Willetts , meet their commitments to workers, who have paid into company pension plans, sometimes over a lifetime. In those times when the economy and thereby profits were good, these capitalists cheated on their workforce by raiding company pensions accounts, taking so-called ‘pension holidays’, but now the piggy bank is bare. They should not have to pick up the bill, says Willetts, these "accumulated pensions obligations" should be taken over, partly at least, by the state. This will cost, at a rough and ready estimate, perhaps £150 billion! What happened to the ‘nanny state’, which the Tories have consistently denounced? It is no longer to be described as such if it bails out rotten capitalism.

Adair Turner, former head of the CBI, is to announce the results of his Pensions Commission soon. However, the main recommendations have already been floated in the Financial Times, an exercise in kite flying, clearly intended to soften up the working class for the medicine he prescribes. According to this report, everyone under 50 will have to work an extra two years to 67 for a state pension. If this is accepted, it is estimated that one fifth of men will not live long enough to receive it. This particularly applies to working-class men.

Paul Routledge in the Daily Mirror spoke for millions when he wrote: "Look around you, Tony Blair, and tell me how many 67-year-old bricklayers you see. Or highway construction workers. Or coal miners. Or joiners. Or painters. Or lorry drivers - or even fork-lift truck drivers… Nobody meets an early death from politics, except through self-inflicted wounds in the Strangers’ Bar in Westminster… I challenge their right to make laws for everyone that simply do not fit real life - like raising the age of retirement to 67. Men (and, increasingly, women) who do physically demanding labour should not be forced to work until they drop dead through exhaustion… It’s fine for Tony, of course. He is building up a pension pot of around £2 million, giving him £150,000 a year when he retires - aged 55 at the latest. Then, he will cash in on his memoirs and get hundreds of thousands for lecturing. He will also get a big job with the UN or the EU, and pick up a peerage - handy for the petty cash he doesn’t carry at present."

We must implacably oppose the Turner Commission proposals. That does not mean we accept Britain’s scandalously low state pensions, among the lowest in Europe. If the link in earnings had not been broken by Thatcher, then a married pensioner couple would be receiving £50 more per week than they get now! We must fight for the restoration of the link with earnings and for a substantial cash increase in the level of the pension.

Low pay and the unemployed

The tendency of capitalism in this neo-liberal phase, as commented earlier, is to force down more and more the share of the wealth going to the working class. One prong of this attack is the government and employers together holding down wages to a minimum. The minimum wage, now standing at the princely sum of £5.05 an hour, maintains this shameful position. For 16 and 17-year olds it has been left at £3 an hour. Championed by the union leaderships and New Labour as a great lever to lift millions out of poverty, it has hardly made a dent on low pay. A professor at the London School of Economics has pointed out that the main reason why the minimum wage has not caused job losses is because "it was set at such a modest level that its impact has been much less than originally estimated".

At the same time, the government, in the best traditions of Thatcher and the Tories in the past, have launched a war against the ‘work-shy’ (although they don’t now call them that) the unemployed and particularly claimants. The odious Blunkett demanded that claimants "turn off daytime TV and work". Yet the present 2.7 million who the government says are claiming incapacity benefit are a product of previous Tory governments’ massaging of the official level of unemployment. In the 1980s it issued quotas to Jobcentre managers to keep the figures down by putting the unemployed on invalidity benefit. Now, Blair and the government are trying to force the disabled and the sick – 40 per cent have mental health problems – back into industry at low pay rates with slave-like conditions.

Already, New Labour’s attack on the long-term sick has resulted in a new record high of 28.76 million people in employment, the highest rate in Europe. The Socialist Party must be to the fore in mobilising against the attacks on the most vulnerable sections of society promised by Blair, Blunkett and his replacement, Hutton. Blunkett was found with his hand in the till – a £15,000 investment in a DNA company that promised profits of up to half a million! – and forced to resign. But despite this, Blair is committed to carry through this measure. His majority is down to 66 following the election, and there is now an open revolt in the formerly cowed Parliamentary Labour Party. This saw his majority disappear on the ‘anti-terror’ proposals.

At the same time as this attack against claimants is underway, the first six months of 2005 saw a sustained rise in unemployment, indicating a tighter jobs market. Bourgeois economists are puzzling over the phenomena they call "the benign behaviour of wages given (previous) low levels of unemployment" [Bank of England Assessment on the impact of Immigration in Britain]. Normally during a boom, where there is a shortage of labour, particularly of skilled labour, the pressure for wage rises is increased. Yet the boom of the 1990s and the earlier part of this decade has been marked by a relative stagnation of wages, with increases often barely enough to keep abreast of inflation. One explanation for this is that tame trade union leaders have not sought to exploit the possibilities for higher pay.

Bosses use migrant labour

Another reason is the turn to migrant labour on the part of the bosses to ease labour shortages. As the case of Gate Gourmet indicates (which employed mostly earlier and ‘settled’ immigrants) this provides the alternative of a cheaper workforce (Eastern European labour) for the bosses, earning even less than already low-paid workers in Britain. Official figures released in October show that a record 582,000 people entered Britain in 2004, up from 513,000 in 2003. This is partly balanced by 359,000 people leaving these shores, slightly down on 2003. This nevertheless left a net immigration of almost a quarter of a million people in a year, the highest figure since the present method of compilation began in 1991. This is up from a net increase in immigration of 151,000 in 2003. This country has become a magnet for arrivals from ‘new European Union members’ in Eastern Europe, a euphemism for Poland in the main. The Bank of England recently recorded that: "Migrant labour from Eastern Europe has doubled the growth of labour supply in the UK in the last couple of years."

Firms such as Tesco and Stagecoach are "enthusiastic hirers" of Eastern European staff. Ryanair is stepping up flights for Polish migrant workers, where unemployment is at least 20% at the present time. Employers are rubbing their hands at this influx of cheap labour, which is tending to drag down wages, militate against militant industrial action – reinforced, as the Gate Gourmet dispute demonstrated, by timid official trade union leadership and the failure to organise the ‘incomers’. The use of foreign labour, often drawn from remote regions or countries with little recent tradition of militant industrial struggle, to break strikes has a long pedigree. Friedrich Engels in his marvellous ‘Conditions of the Working Class in England 1844’ told how "the mine owners imported, at great expense, hands from Ireland and remote parts of Wales that have as yet no labour movement" to break strikes and force down wages. We advocate that the unions should make strenuous efforts to organise immigrants into trade unions and undertake struggles to raise the pitiful amounts these workers are paid in wages. In a wave of militant industrial struggle, all boats rise together, both of immigrant and British workers. These are the lessons of the strikes of the low-paid unskilled workers of the late nineteenth century. The conditions that they combated have, in some senses, been recreated in the neo-liberal hell which Britain has become, first under the Tories and now under Blairism.


The quiescence of the majority of trade union leaders is a big factor in allowing growing impoverishment, including of the ‘working poor’, to develop on quite a wide scale. The absence of a new mass workers’ party, which could act as a political and industrial pole of attraction, is an additional factor. The result is an unprecedented polarisation between the rich and the poor in Britain. The general statistics are shocking with a quarter to one third of the population still mired in poverty. Thousands of working class people are dying prematurely, particularly in deprived inner cities, as the gap between rich and poor widens and the NHS disintegrates.

The difference in life expectancy between the poorest and most affluent parts of the country has grown to eleven years and is "more pronounced than in Victorian times" [The Independent]. Contrary to what was promised before coming to power, this gap has actually widened under New Labour since 1997. The best off 10 per cent of people have a household income of £658 or more a week in 2002/03 and the bottom 10 per cent of earners an average of £164 or less. If you are poor you die younger – and that is truer now than in 1997. Working-class people are also more likely to lose a baby in childbirth or in infancy, particularly in the lowest income group. Infant mortality rates have actually risen since 1997 when they were 13% higher for the poorest groups and now it is 19%.

The Blairites were supposed to be the quintessence of ‘meritocracy’; irrespective of your class background, you could climb up the ladder out of poverty into an education and a brighter future. Now, the social escalator is stalled or has gone back. Since the mid-1980s, in the richest fifth of households, collecting degrees has more than doubled from 20% to 47%, while the poorest fifth of households have inched ahead to just 9% of children compared to 6% then. On the other hand, the dazzling increase in wealth and income of the rich and super-rich is open, brazen and flaunted before the gaze of millions living on the breadline. They are like the feudal nobility before the French Revolution who displayed their opulence – Marie Antoinette’s ‘Let them eat cake’ – or the tsarist aristocracy prior to the Russian Revolution. They are typified by the talentless film director Michael Winner, who recently declared: "You couldn’t live on £3 million. You couldn’t buy a house. With just three million, you’d have to be living at the YMCA." [The Observer]

New Labour has done absolutely nothing to switch the balance of power and wealth in favour of working-class people but has acted to the contrary. London has become a haven for Russian billionaires amongst a wave of the rich who have invaded the city – who have stashed away the loot they have robbed from the Russian people in million-pound houses, plus on super-rich football clubs and buying British companies at knock-down prices. At the same time there is a conscious or semi-conscious policy of the British ruling class to distract the attention of the masses away from this by stupefying them, like Tsarism did before the February revolution of 1917, with cheap and easily accessible alcohol, a drugs culture, casinos in every city centre, etc.

Those small measures aimed to redress these inequalities, like Brown’s scheme of tax credits for the poorest families, which initially benefited some. But even some of those families who benefited are losing out. Because of the maladministration of the scheme, said the parliamentary ombudsman, two million families were told they must pay back £2 billion because they were overpaid last year. This means severe financial hardship for between 150,000 and 175,000 low-income families who have been told to pay up immediately, pushing many to live on benefits below the poverty line. They therefore face a double whammy of attacks on their already meagre income and on the benefits that they may receive arising from this. This cornerstone of Brown’s efforts to lift six million families out of poverty is, therefore, a failure. Tax credit call centres have received more than 100 million calls, many of them receiving no advice from the authorities. The gradgrinds of ‘her majesty’s Revenue and Customs’ are refusing to accept the clamour of MPs for back tax to be written off. They are insisting on moral and economic rectitude against the poor when much more is swindled – at least £85 billion a year – from tax evasion and avoidance by the capitalists, aided by crooked accountants in the pay of the rich.



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