Chris Marsden | ukwatch.net

Europe plunges into recession

eddie — Sat, 08 Nov 2008 17:58:35 +0000

The European Central Bank yesterday cut interest rates for the second time in less than a month. The ECB, meeting in Frankfurt, cut the benchmark lending rate by half a percent, to 3.25 percent from 3.75 percent, and is predicted to cut the rate to 2.5 percent by April.

Prior to the move by the ECB, the Bank of England made a shock decision to cut interest rates in the UK by 1.5 percent to 3.0 percent, its lowest rate since 1955.

The interest rate cuts are yet another attempt to stimulate the economies of Europe, amidst reports that the continent was entering a recession and had already suffered its worst slump for 15 years.

All previous measures to encourage banks to step up lending to pump-prime the economy have failed. The euro-zone economies have committed a combined US$1.7 trillion to protect the region’s banks and this does not include measures taken such as Britain’s £500 billion package and other stimulus measures such as German Chancellor Angela Merkel’s proposal to inject €50 billion into the economy. Even so, interest rate cuts have often not been passed on and banks have been depositing record amounts of money overnight with the ECB rather than lending to each other, even after they have been given hundreds of billions in taxpayers’ money.

In its half-year report issued Tuesday, the European Commission admitted that the 15-member euro-zone economy—worth US$12.2 trillion—was probably already in recession for the first time since the currency’s inception in 1999.

The euro-zone’s economy—both the manufacturing and service industries—contracted by 0.2 percent in the three months to July and would probably continue to contract for the next two quarters. The commission statement said, “In 2009, the EU economy is expected to grind to a standstill.”

Joaquin Almunia, European economic and monetary affairs commissioner, warned, “The horizon that this forecast offers is dark.”

In an extraordinary admission of incompetence and bewilderment, euro-zone chairman Jean-Claude Juncker told the European Parliament in Brussels, “Recession awaits us, and we didn’t think that recession lay in waiting. We were badly mistaken with the different sequences of this crisis…. The headwinds we were facing turned into a veritable storm.”

According to the EC, the Irish, Spanish and UK economies will all contract next year, while Germany (Europe’s largest economy), France and Italy will stagnate. Growth in 2009 is projected at just 0.1 percent. For 2010, the commission predicted the euro-area economy would expand by 0.9 percent.

Investment is set to fall amid slowing demand and tightening credit standards. Unemployment will rise to 8.4 percent next year across the euro-zone from 7.5 percent in September and will rise still further in 2010. Budget deficits are also expected to widen. Executive and consumer confidence has slumped to a 15-year low.

Economists at BNP Paribas and Citigroup said the EU was still overly optimistic and predicted that the euro-area economy will shrink next year. Jacques Cailloux, chief euro-area economist at Royal Bank of Scotland Plc in London agreed, stating, “Today’s new GDP forecast of 0.1 percent for 2009 by the European Commission still looks too optimistic to us…. A recession in 2009 seems now unavoidable.”

Neville Hill, economist with Credit Suisse in London, was more specific, predicting the economy would shrink by 0.3 percent next year. “The idea that the euro-zone will not see negative year-on-year growth seems contradictory to all the data,” he said. “We’re in the midst of one of the most synchronised global recessions we’ve ever seen.”

French Prime Minister Francois Fillon also admitted that France, the euro-zone’s second largest economy, faces “a context of quasi-recession.”

The European Union leaders are meeting today to formulate a recovery plan and to hopefully coordinate their position before a summit of world leaders hosted by President George W. Bush on November 15. Speaking for the EU, Economic and Monetary Affairs Commissioner Joaquín Almunia urged, “We need a coordinated action at the EU level to support the economy similar to what we have done for the financial sector.”

But there remains widespread concern that the EU has not been able to formulate such a combined response to the financial crisis and will not be able to do so now that the recession is hitting the manufacturing sector. All measures taken so far have been purely national in scope and have the impact of plunging the economy into beggar-thy-neighbour competition for markets and investment. Germany, which alone has not suffered a rise in employment, in particular wants to utilise its economic advantage against its rivals and has opposed any cross-border response.

Euro-zone manufacturing activity sank to record lows in October, with output, new orders and the number of purchases falling at the steepest rate in 11 years. This is the fifth consecutive month of a contraction in manufacturing.

The Markit Euro-zone Purchasing Managers’ Index for the manufacturing sector fell to 41.1, a record low. All countries within the euro-zone saw new orders and manufacturing output fall, with Germany, France, Italy, Spain, Austria and Ireland experiencing record falls. The Markit index for the service sector also revealed that activity in October fell to its lowest level since the index was first compiled a decade ago.

“The surveys continue to show record pessimism,” said Guillaume Meneut of Merrill Lynch.

Retail sales also fell in September by 0.2 percent from August, and by 1.6 percent compared to September 2007. Of the 15 euro-zone economies, Germany suffered the biggest drop in retail trade from August, falling 2.3 percent. The biggest annual fall came in Spain, where spending has fallen 7.1 percent.

New-car registrations, a major indicator of economic health, have fallen in Germany, France, Spain and the UK. The number of newly registered cars in Germany fell by 8 percent in October. Orders for new cars in Germany dropped 12 percent. Car exports declined 10 percent last month, while foreign orders fell by 24 percent. French car sales fell by 7 percent. New-car sales in the UK were down by 23 percent from October last year, the largest monthly fall in 17 years. Spanish car sales have fallen by fully 40 percent.

European companies also cut jobs at the fastest rate since January 2002. Stocks of finished goods awaiting sale reached a record high. Even as the report was issued, shares across Europe were in a steep decline that has continued against a background of even bigger falls in Asia and the United States.

The economic crisis is leading to a massive rise in job losses. Ireland’s unemployment reached its highest level in a decade in October, at 6.7 percent. Unemployment in Spain has reached a 12-year high of 11.9 percent, an increase in the number of those claiming jobless benefit of 37.5 percent.

Unemployment in Britain is set to reach 7.1 percent, according to the EC, which predicts that the UK will be the worst-hit economy in Europe. Unemployment will increase by 25 percent in 2009 to 2.25 million. The commission predicted a contraction in the UK of 1 percent and revised its prediction on unemployment upwards by almost 1.5 percent. Only Estonia and Latvia are expected to suffer deeper recessions next year.

The commission’s report spoke of a “budget deficit and debt spiral,” with the budget deficit rising to 5.6 percent of GDP next year, about £80 billion, and 6.5 percent, or £94 billion, in 2010. New figures from the Halifax showed house prices fell by another 2.2 percent in October, pushing the drop in house prices to 13.7 percent annually. Activity in the service sector shrank in October for the sixth month in a row. Services are the backbone of the UK economy, accounting for more than half the GDP. Manufacturing also shrank by 1.3 percent in the last quarter and has fallen for seven consecutive months.

Mervyn King’s moment of clarity

Simon Birritteri — Sun, 26 Oct 2008 15:26:19 +0000

There is some truth in the old saying, “Don’t shoot the messenger”. Though his admission was certainly damaging, Bank of England governor Mervyn King’s statement Tuesday before businessmen in Leeds that, “It now seems likely the UK economy is entering a recession”, was not responsible for the precipitous fall of the pound that followed.
If anything, King’s was a deliberate understatement of the real position facing the UK economy. What was in reality most significant in his statement was his frank admission that on October 6 and 7 Britain’s banking system had been closer to collapse than at any time since the start of World War I.
King told his well-heeled audience that it is “difficult to exaggerate the severity and importance of those events. Not since the beginning of the First World War has our banking system been so close to collapse”.
Bank funds had started to dry up and it required the radical action of the £500 billion bank bailout to ensure the survival of the financial system. Even so, King insisted that the provision of liquidity by central banks was only “a sticking plaster” and not a substitute for proper treatment of the problems afflicting the banking sector.
King went on to speak of how “the plan to recapitalise our banking system, both here and abroad” meant we had “turned the corner” and begun “a long, slow haul to restore lending to the real economy, and hence growth of our economy, to more normal conditions.”
But this proved to be less convincing than his admission, as summarized by the BBC, that “this was one of the worst banking crises ever. He does not say in so many words, but the Bank of England, along with counterparts at the Treasury and the Financial Services Authority, seem to have found themselves looking over into an abyss with unthinkable consequences if they fell.”
The next day, the pound plunged almost five cents against the dollar and fell against the euro. The 3.4 percent fall to its lowest level since September 2003 was the biggest decline since September 1992, when investor George Soros drove sterling out of Europe’s Exchange Rate Mechanism.
However, King’s remarks could only have an impact if what he was admitting was what the markets already believed—that sterling is overvalued because of the dire state of the UK economy. In reality the UK is already in recession, something that Prime Minister Gordon Brown was also forced to accept in a speech to parliament the next day when he warned of a “sharp and prolonged slowdown”.
Moreover, the pound’s fall took place against a background of sharp falls on European and Asian stock-markets due to fears of a deep global recession with the United States at its epicentre.
The International Monetary Fund’s six-monthly study has warned that euro zone economic growth will almost grind to a halt next year, with zero growth in Germany, Europe’s most powerful economy. With Sweden only the latest European government to announce a $205 billion bank rescue, the IMF also warned Wednesday that more European banks might still fail. Private funding is “virtually unavailable” the IMF said, and banks will have to rely on public intervention, asset sales and consolidation. Europe’s banks have already been forced to borrow $72 billion in short-term loans from the European Central Bank, as other credit sources have dried up.
Even so, it is becoming clear is that the UK economy is perhaps the most exposed to the global downturn. The National Institute of Economic and Social Research has said the UK is on the brink of its first full year of recession since 1991 and that the economy will shrink by 0.9 percent in 2009, with consumer spending falling by 3.4 percent, business investment down by 3.8 percent and private housing investment by 17.1 percent.
The NIESR has warned that “The British economy will suffer next year as it experiences the worst setback among the G7 countries.” And if the government’s £50 billion banking bail-out did not succeed, the recession could be even deeper and longer. The NIESR said its forecasts assumed that the Bank of England would cut interest rates to 4 percent early in 2009.
The Ernst and Young Item Club predict that the UK economy will decline more dramatically still next year—by one percent—and that it has “deteriorated dramatically” in the past three months. The credit crunch would hit the economy “very hard”, it warned. Consumption will fall by 1.2 percent next year, with credit continuing to be hard to obtain and unemployment expected to rise.
It also predicts house prices will fall 14 percent by the end of this year, and drop a further 10 percent next year. Mortgage lending fell to its lowest level for more than three and a half years during September, according to the Council of Mortgage Lenders, ten percent less than during August and fully 42 percent below the level for September last year. Housing sales have fallen by more than half, down 53 percent in September compared with the same month in 2007. Andrew Clare, head of asset management at Cass Business School, told the Sunday Herald that housing prices could slide by a further 40 percent, “taking UK house prices to 2023 before they matched the level reached in 2007.”
The Confederation of British Industry has reported falling demand for UK made goods and a drop in output leading to the sharpest single-quarter fall in manufacturing confidence in 28 years, with 46 percent of firms reporting falling orders—the fastest decline since 1999. Many firms are planning to reduce spending on machinery and buildings, the largest cut back since the early 1980s. UK retail sales fell 1.5 percent below their September 2007 level, with Homebase, Currys and Argos reporting falling sales. “Christmas will be painful for much of the sector as consumers continue to batten down the hatches,” reported Ernst and Young.
This will lead to a massive rise in unemployment.
The CBI predicts that 23,000 manufacturing jobs will be shed in the third quarter and that this number will increase to 42,000 in the fourth quarter—a total of 65,000 redundancies. Such job losses in manufacturing will add to the hundreds of thousands in the financial, retail and service sectors.
The number of people out of work in the UK has soared by 164,000 compared to the previous quarter, the biggest rise for 17 years. Now at 1.79 million, or 5.7 percent, unemployment is widely predicted to stand at two million by December possibly rising to three million by December 2010—or nine percent.
The Chartered Institute of Personnel and Development said that recruitment is slowing and redundancies rising. “We’ll see hundreds of thousands of jobs being lost, and unemployment is likely to rise, certainly above two million. The question is how much further than that,” said the organisation’s chief economist, John Philpott.
The Sunday Herald, in a survey entitled “Capitalism isn’t working” noted that unemployment would rise across all sectors of the economy, all age groups and all regions.
It reported, “In the last turn-down in the 1980s some areas of Britain escaped, especially London and south east England. This time round, unemployment in London is already estimated to be 300,000 and rising daily as the City’s financial institutions re-evaluate their needs in a shrinking market. The latest unemployment figures appear to show increases across Britain and there is no evidence to suggest that the rise towards three million won’t be uniformly felt.”
This is politically significant in that both the Conservatives under Margaret Thatcher and John Major and Labour under Tony Blair and Gordon Brown depended on relatively better-off social layers predominantly located in the south east to provide a degree of social support for their pro-business agenda. Now even that is breaking up, threatening ever-sharper political and social convulsions.
The efforts by government to bail out the super-rich also herald massive attacks on working people. UK government borrowing soared to a 60 year record high of £8.1 billion in September and is projected to reach £64 billion this year or over 40 percent of GDP. With £500 billion already committed to supporting the banks it is inconceivable that increased levels of borrowing can be sustained without tax hikes and deep cuts in public spending and welfare programmes.

Alistair Darling- International Marxist?

tim — Sun, 28 Sep 2008 21:44:21 +0000

When Britain’s Chancellor Alistair Darling was interviewed by Decca Aitkenhead in the August 30 edition of the Guardian, his comments created an international furore.

His admission that the economic times we are facing “are arguably the worst they’ve been in 60 years” led to accusations that he had undermined confidence in Britain’s economy and prompted a run on the pound.

In some rather more limited circles, there was at least a measure of incredulity at how Darling had so blatantly lied about his political background.

The interview reports, “There was no teenage radicalism, and he would have been astonished, he says, if he’d known his future lay in politics. Studying law at Aberdeen, he stood for election in the student union, but not for a party. ‘I was just quite interested in getting things done.’ His manifesto favoured ‘strictly bread-and-butter issues, things like food prices in the student refectory’. When he joined the Labour party in 1977, he never expected to be more than a member. ‘I was enjoying becoming a lawyer.’ He’d simply realised, he explains, that ‘if you want to make any changes, there’s only one way you can do it, and that’s by getting into a position where you can influence things. And the obvious thing to do seemed to be to join a party.’”

He was then asked by Aitkenhead, “Why Labour?” He replied, “Just… I suppose, overall, I thought the Tories were unfair. They were only for one side, and not for everyone. The Labour party just seemed to reflect my outlook on life—you know, that we were better working together—fairness, helping everyone to get on, rather than just a few.”

Giving his sole attempt at providing political context for his decision to join, Darling added, “The Labour government in 1977 was in a terrible mess, and I was getting fed up looking at all these things on the television, and thinking, God, surely we can do better than that. I wanted to do things. But I was never really interested in the theory of achieving things, just the practicality of doing things.”

When this author read Darling’s comments, I found it difficult to understand why someone would even join the Labour Party in 1977.

I wrote that “This was a year during which Labour was in coalition with the Liberals and imposing IMF-dictated austerity measures that met with fierce resistance from the working class, and ended with the 1979 ‘Winter of Discontent’ and the election of the Conservatives.” (See “Alistair Darling and the implosion of the Labour government”)

Millions of working people were bitterly angry towards the Labour government and had turned against it. And within the party, there was a move by Labour’s left wing against its right wing that saw the election of Michael Foot as leader, and the adoption of the Alternative Economic Strategy as party policy. Over the next years there was a period of ideological and political warfare in the party that eventually proved to be a last gasp for social democratic reformism and ended with the triumph of the right wing. I thought, how could Darling not be involved in this?

As it turns out, Darling was intimately involved. Like so many others, he is in fact someone who has traversed the political spectrum from left to right to end up as a loyal supporter of Tony Blair and Gordon Brown.

According to informed sources, his early years were not spent as the apolitical young man he professed, but as a member of the International Marxist Group, then the British section of the United Secretariat of the Fourth International. He must also presumably have stood in the Students Union as an IMG member and joined the Labour Party in 1977 while either still a member or under the IMG’s political influence. Certainly in the early 1980s he was still on the left of the Labour Party.

The satirical magazine Private Eye was almost alone in responding to Darling’s dissembling, by drawing attention to a March 10 column in the Daily Record by the former Labour MP and now leader of Respect Renewal, George Galloway.

Galloway, who is sympathetic to the Stalinist Communist Party of Britain, has no love lost for any of the various middle class radical groups which he always refers to as “Trots,” even though many work with him politically. Neither has he forgotten how he was forced out of the Labour Party by Blair and Brown. Therefore he was not averse—and clearly took some pleasure in—trying to cause Darling some political embarrassment when he recounted his first meeting with Darling.

“When I first met him 35 years ago,” Galloway states, “Darling was pressing Trotskyite tracts on bewildered railwaymen at Waverley Station in Edinburgh. He was a supporter of the International Marxist Group, whose publication was entitled the Black Dwarf.

“Later, in preparation for his current role he became the treasurer of what was always termed the rebel Lothian Regional Council.”

Galloway continues, “Red Ally and his friends around the Black Dwarf were for a time a colourful part of the Scottish left. The late Ron Brown, Red Ronnie as he was known, was Alistair’s bosom buddy. He was thrown out of Parliament for placing a placard saying hands off Lothian Region on Mrs Thatcher’s despatch box while she was addressing the House. And Darling loved it at the time.”

Galloway also states how “The former Scottish trade union leader Bill Speirs and I were dispatched by the Scottish Labour Party to try and talk Alistair Darling down from the ledge of this kamikaze strategy…”

Clearly, in the long-run at least, Galloway and Speirs must have been persuasive as to the merits of collaboration rather than confrontation with Labour’s leadership.

Naturally the Guardian would also have been well aware of Darling’s past, but chose not to raise it and instead allowed him to present himself as a somewhat pragmatic liberal. Its only acknowledgement of its “error” came the following week in the form of an aside in the blog of political editor Michael White in which he stated that “Alistair Darling doesn’t do red meat politics, though—as Private Eye pointed out this week—he did have a Trot phase in his political youth as a turbulent member of Lothian regional council, defying Margaret Thatcher’s calls to cap the rates.”

Aside from this brief passage, and a side-swipe from arch Tory Peter Hitchens in the Daily Mail, the story then died the proverbial death.

This is extraordinary. If what is said about Darling is true, we have someone who was once a member of a supposedly Marxist and even Trotskyist group who has held five ministerial posts and is today Chancellor of the Exchequer, the second most powerful position in British political life. Yet not only is this not considered as an obstacle to holding such high office, it is not even mentioned by anyone in the media—other than a few disgruntled political mavericks like Galloway.

Such silence in the media can only be explained by the fact that no one within ruling circles wants to politically embarrass Darling, because he is such a key figure in government. It must also be surmised that the security services, who will have vetted Darling long ago, must have determined that no issue should be made of his youthful excesses. It is, at the same time, an indication of how the IMG itself was viewed by the security services.

Throughout the late 1960s and early 1970s, the IMG established a certain base amongst radicalised students, often coming into conflict with the police in its work around the Vietnam Solidarity Campaign and its support for the IRA in Northern Ireland. A 1974 protest against the National Front at Red Lion Square resulted in the death of the student Kevin Gately. Its other major activity was to regularly denounce the International Committee of the Fourth International and its then section, the Socialist Labour League, later the Workers Revolutionary Party.

By the 1980s the IMG’s revolutionary posturing and flirtations with “direct action” were to give way to total submergence into the Labour Party and support for the party’s left wing led by Tony Benn. The British state was happy to make full use of the IMG during its radical protest phase and, together with the Labour Party bureaucracy, appears to have unreservedly forgiven its former supporters for the follies of their youth, welcoming those such as Darling and others, such as journalist Tariq Ali, as trusted members of the political establishment.

Along with the silence of the media, at no time, either now or in the past, has anything been said of Darling’s political history and evolution by the United Secretariat itself.

Naturally, it can never be excluded from possibility that someone on what passes for the left can end up on the political right—especially when he or she comes from one of myriad radical groups characterised by opportunist and essentially reformist politics that have provided decades of slavish loyalty to Labour and the trade union bureaucracy. So-called “entry work” in the Labour Party, apparently in Darling’s case “deep, deep” entry, and holding positions within the trade unions are frequently the starting point for personal career advancement in which early alliances are easily shed. Thus today not a few former radicals now sit alongside former Stalinists at Labour’s top table.

Even so, Darling’s political passage seems to have been smoother than most. Neither the United Secretariat, nor the IMG and its various splinters have ever felt it necessary to explain the political evolution of someone who is easily their most prominent ex-member in Britain. And there is no record of political struggle against him, either when he broke from the group or at any point when he was making his way up the ranks of the Labour Party.

For his part, Darling has also kept silent about his past rather than seeking to earn his spurs by denouncing his former comrades and railing against Marxism. By way of a contrast, the former cabinet member Stephen Byers was once a supporter of the Militant group. But like many others, his march to the right involved him participating in the political attacks on the group in his position as deputy leader of North Tyneside Council from 1986 to 1992.

Another prominent former member of the IMG within Labour’s leadership is the arch-Brownite Secretary of State for Health, Alan Milburn. As an IMG member in the 1980s he ran the “Days of Hope” radical bookshop in Newcastle. A June 3 2000 interview with the Independent reports him stating that he “left the IMG ‘by 1984’, although there is some vagueness as to when he joined the Labour Party: ‘after the 1983 election’ is about as exact as it gets, leaving open the intriguing possibility that Milburn was an entryist.”

Milburn too has never felt the need to attack the IMG as, like Darling, he moved effortlessly to the right of the Labour Party and took up high office in the process.

Such a pact of silence regarding such renegade members could only be maintained by an organisation that is rotten to the core. The leaders of United Secretariat clearly not only understand, but indeed sympathise with, Darling’s actions in securing a place for himself within Labour’s highest echelons. They would not take issue with him in any event for fear of alienating their many friends in the party and trade union bureaucracy—and thus closing off avenues for exerting their political influence and hopefully securing their own political careers.

Once again the United Secretariat and its affiliated groups have proved themselves to be the training ground for individuals considered worthy of being entrusted with the most fundamental interests of the bourgeoisie—in Darling’s case, control of Britain’s economic policy.

In addition, it should be noted that the rest of the radical left has also kept quiet about Darling’s past. They must calculate that, as the old adage insists, “People in glass houses should not throw stones.” Like doyens of a West End gentlemen’s club, they have decided that it is best not to point out the disreputable behaviour of one of their number for fear of a retaliatory citing of their own reprobate members’ misdeeds, past and present.

Left talk but no fight against Labour government

tim — Sat, 13 Sep 2008 15:45:49 +0000

At the beginning of the week, the reports of what to expect at the Trades Union Congress (TUC) at Brighton were apocalyptic.

Amidst what is almost universally acknowledged as the worst economic situation for decades—and possibly since the 1930s—there was talk in the media of a new “Winter of Discontent”, or the conflict between the trade unions and the Labour government of James Callaghan that ended with the Conservatives coming to power under Margaret Thatcher in 1979.

Ballots are planned for protest strikes in November against the government’s below-inflation 2.45 percent wage ceiling by the Public and Commercial Services (PCS) civil service union, the National Union of Teachers, the local government union UNISON and the UCU college lecturers union, which involve up to one million workers. In addition, the Prison Officers Association (POA) called for a general strike against the government’s failure to rescind the anti-union laws. It also moved an amendment to add the word “strike” to demands for action against the government-imposed wage cap.

Prior to the congress, the TUC issued a series of reports highlighting the bitterness felt by many of its affiliate’s members, and called for the government to change course. A survey found that 13 percent of respondents—equivalent to three million workers—are not confident they will be in their job in a year’s time. Another found growing disenchantment in the workplace, with 42 percent of workers questioned believing their pay has not kept pace with inflation and 46 percent saying the amount of work asked of them has increased.

Another report, “Do the super rich matter?” pointed to the growth of a fabulously wealthy elite under the Labour Party governments. While one needed at least £50 million to be among the UK’s 200 wealthiest people in 1990, one would now need £400 million to be included. The report urged the government to raise taxes on those earning more than £100,000 a year.

The TUC also criticised the “big six” energy firms for making £1.6 billion last year, while raising prices by 42 percent, and called for a windfall tax on power companies to fund a rebate for poor households.

As the congress events unfolded, the unions’ threats were exposed as largely empty bluster, meant to mollify and deceive their own discontented membership.

Delegates backed the idea of some sort of “coordinated action, a national demonstration and joint days of action” against the government’s pay policy, but voted down the strike call demanded by the POA. Its call for a general strike over the anti-union laws was also rejected, supported only by the RMT transport union.

Writing in the pro-Labour New Statesman, Jeremy Dear, the nominally “left” national secretary of the National Union of Journalists, commented cynically, “So we’re ready to threaten the government with a series of leaflets and angry newspaper articles—but no TUC-led industrial action.”

The TUC, far from seeking a confrontation with the government, is doing everything possible to avoid one. Labour is heading towards electoral disaster, with the Independent newspaper’s “poll of polls” showing its support “flatlining” while the Conservatives are set for “an overall majority of 174 seats”.

Without the support of the trade unions, Labour would be finished. They provide fully £9 out of every £10 received by the party. Yet far from mobilising against Labour, the TUC’s most strenuous efforts were made to oppose any leadership challenge to Prime Minister Gordon Brown. TUC President Dave Prentis said of Brown, “I believe he will continue to be [prime minister] until the next election. Of course we want him to. He is the leader of the Labour Party and he is Prime Minister of this country.”

The most likely leadership challenge to Brown is from the Blairite Foreign Secretary David Miliband. This prompted one of the few genuinely angry reactions from a leading union bureaucrat. Interviewed by the Observer on the eve of the TUC congress, Derek Simpson, joint general secretary of UNITE, “accused Miliband, in a stream of swearwords, of being ‘smug’ and ‘arrogant’,” the paper reports.

“In terms that caused fury on the right of the party, he also said Miliband would take the country back to the ‘failings of Blairism’ and could be a worse choice as Prime Minister than the Tory leader David Cameron.”

Simpson may as well have saved his breath, as Miliband and the rest of Labour’s cabinet took part in a series of high-profile media events to make clear their support for Brown. The foreign secretary said Brown would “prove people wrong” by winning the next general election.

At a private dinner with the TUC leaders Wednesday, Brown was able to give what was reported as “relaxed, 20-minute speech” during which he “cracked jokes” and was “was warmly received”. More than a dozen cabinet members joined him, including Miliband.

Brown did not deign to address the TUC conference, left instead to Chancellor Alistair Darling. Before this appearance, the TUC had officially backed calls for a rather paltry £1 billion windfall tax on the energy companies. To put this tax in perspective, Blair and Brown levied a much larger £4.5 billion surcharge on the privatized utilities in 1997.

Again conflict was predicted as Brown had already rejected the windfall tax in favour of a scheme to provide some aid for loft insulation. Gerry Doherty, general secretary of transport union TSSA, said, “Darling will get a tough time from the public sector unions. There is bound to be some sort of demonstration.”

At the event, only a small number of UCU college lecturers held up banners saying that food, housing and education were “not an additional extra”.

Darling took the occasion to call for pay restraint and to reject calls for a windfall tax on the energy companies. Michael White of the Guardian summed up the response of delegates as, “They didn’t dance in the aisles, but they didn’t riot either”.

To complete this somewhat pathetic picture, Deputy Labour leader Harriet Harman’s speech was supposed to be a sop to workers’ anger at growing social inequality, and provide something the trade unions could cite approvingly.

Though she stated that the inequality of opportunity between “the rich and poor” and “the north and the south” must be overcome, she dropped references to “socioeconomic class” in her published speech.

The TUC bureaucrats gathered at Brighton are fully aware that they are sitting on a powderkeg of social and political discontent. The rhetoric of the lefts and the call for protest strikes are an attempt to provide a safety valve through which to release these tensions, but nothing more. That is why, even now, the only discussion of a break with the Labour Party at the congress was confined to a fringe meeting hosted by the Morning Star, the daily paper of the ever-declining Stalinist Communist Party of Britain. PCS General Secretary Mark Serwotka vaguely called for a new party and Bob Crow of the RMT argued that there would be a need for a new party at some point, while UNITE General Secretary Derek Simpson reportedly argued for changing the Labour Party from within.

The entire union bureaucracy is opposed to any struggle that might threaten the fundamental interests of the major corporations or the Labour government. They are not the representatives of the working class, but social policemen who owe their privileged status to their intimate relations with big business and the state apparatus at municipal and national levels.

Control of union assets is one source of their privileges, but it does not translate into a desire to defend their members. As a definite social layer, their existence is bound up with maintaining a position as valued “social partners” of industry and government.

It was possible for the unions to secure certain gains and social reforms from the employers as long as economic life was largely organised on the basis of national production. But with the development of globalised production, the defence of jobs and living standards now demands a coordinated international struggle of the working class led on the basis of irreconcilable opposition to the profit system. The union bureaucracy has developed in the opposite direction. It has abandoned the struggle for reforms and integrated itself ever more closely into the apparatus of corporate management and the state.

As a result of their repeated betrayals, the unions have lost over half their membership from their post-war peak in the 1970s. The number of employed union members fell to just 28 percent in 2007. But even this is a distorted figure, since union density in the public sector is 59 percent, compared with just 16.1 percent in the private sector.

The full extent of the political decay of the trade unions found its most finished expression in a call meant to coincide with the congress issued by Rory Murphy, the former head of the Amicus union, now part of UNITE.

Writing for Personnel Today, Murphy recommended the TUC change its “outdated” name to something like the “Organisation for Workers’ Rights or The Centre for Improvement” and then seek a merger with the main employers’ organisation, the Confederation of British Industry.

He urged, “If the TUC is unsure of its role, and can’t change, might the unthinkable need contemplating? If we are truly to make progress as a society, should the TUC consider amalgamating with the CBI to fight for fairness and justice for all workers and employers? Are the aims of both organisations so widely apart that such an idea is a non-starter? After all, what is the real difference in seeking ‘to improve the economic or social conditions of workers’ and helping ‘create and sustain conditions for business to compete and prosper for all’.”

There is no way that the unions, organising millions of workers as they still do, will not experience an eruption of opposition to the government within their ranks. The TUC congress confirms, however, that workers within the unions, as well as those who are un-organised, are faced with mounting a combined offensive against the union bureaucracy that is just as fundamental as that they must wage against the government and the employers. This requires the construction of independent rank-and-file workplace organisations to take the struggle out of the hands of the union leaders, as part of a broad political movement for the construction of a genuinely socialist and internationalist leadership.

Alistair Darling- New Labour implodes

tim — Sun, 07 Sep 2008 14:10:01 +0000

The August 30 Guardian interview with Britain’s Chancellor Alistair Darling was extraordinary in many respects. In the first place there can be few occasions that so dramatically reveal the sense of profound crisis within ruling circles in Britain.

Darling admitted to Decca Aitkenhead that the economic times we are facing “are arguably the worst they’ve been in 60 years… And I think it’s going to be more profound and long-lasting than people thought.”

Within 24 hours, he was accused of undermining confidence in Britain’s economy to such an extent that the pound hit a record low against the euro and a two-year low against the dollar. The FTSE 100 shares index also fell sharply.

Darling had committed the cardinal sin of stating openly, if still guardedly, that economically things are really bad and likely to get worse. His choice of 60 years was somewhat arbitrary. He could not mention the 1970s as many have done without raising the spectre of mass movements of workers bringing down governments. And references to the hungry thirties were similarly beyond the pale. But even such a partial acknowledgement as his was considered a serious blunder, even though only last week the Bank of England’s deputy governor, Charles Bean, had warned that the economy is facing a period “at least as challenging” as the 1970s.

Ian Stannard, a senior currency strategist at BNP Paribas, told the press, “Most people believed that things were probably deteriorating faster in the UK than the government was admitting, but the fact that we’ve seen the chancellor come out and admit that things are far worse have put sterling under pressure.”

The reaction was swift from both the government and the media. Prime Minister Gordon Brown instructed Darling to make a humiliating explanation of how he had been misinterpreted and was in fact focusing on the “unique problems” facing the “global economy.” Brown’s own speech to the Confederation of British Industry delivered Thursday was leaked in advance, in which he again emphasised that the problems facing Britain are international in origin, centering in the credit crunch, and that Britain was in fact well-placed to weather any downturn.

One senior Labour figure declared baldly to the Guardian, “Alistair must be insane. There is no rhyme, nor reason why he would want to talk like that.” The Financial Times declared scathingly that his “prognosis” on the economy “is too bleak,” whereas his fretting about the state of the Labour government “is nowhere near bleak enough.”

The ferocity of the reaction to Darling’s comments itself belies such efforts to belittle his estimation of the gravity of the economic crisis. Even as they were being made, reports were published that the British economy was at a standstill in the second quarter of the year, after a revision of figures wiped out the 0.2 percent growth reported earlier. The number of permanent jobs available had also plunged to its lowest level since 2001, with unemployment rising by about 70,000 this year and predicted to hit two million by Christmas. The manufacturing sector shrank for the fourth month in a row.

Mortgage approvals fell to 33,000 in July, the lowest since data was first collected in 1993, with the number of new mortgages issued down 71 percent in a year. House prices fell in August for the eleventh consecutive month and are now falling at an annual rate of over 10.5 percent.

Even as Darling was being decried for his candor by the Telegraph, the newspaper published an estimate by one of Britain’s foremost economists and former Bank of England policymaker, Charles Goodhart that “Britain is now facing a severe recession which will last for a year or longer and a worse housing crash than in the early 1990s”. Two days later, the Organisation for Economic Cooperation and Development (OECD) predicted recession for Britain, even while the other G7 countries will see either modest growth or a standstill.

If all that Darling’s interview confirmed was the dire state of the economy it would be interesting enough. But the chancellor’s comments provided a revealing glimpse into the deep sense of crisis gripping a Labour government that is on the verge of implosion. His interview reads like a cry of despair by someone who does not want to carry the can for Labour’s failure, but apart from this sees no way out.

Labour’s worship of the market

The government’s mantra, echoed here by Darling, that it is merely the victim of an unfavourable international situation should be opposed on many fronts. New Labour earned its place in power by breaking with reformism and embracing Thatcherite economic nostrums. It was the political vehicle through which big business set out to impose a discredited economic and political agenda on a hostile population.

With the Conservatives hated and unelectable after 18 years in power, it was Labour under Tony Blair and Gordon Brown that came in to continue where Margaret Thatcher and John Major had left off. Labour insisted that capitalism was not only triumphant, but that there was also no alternative to it. It was the best of all possible worlds, provided only that government abandon all attempts at national regulation and recognise the economic and political imperatives of globalised capitalist production and the need to be internationally competitive.

To this end old-style reformism must give way to government in partnership with corporate management, wholesale privatization of state assets and public services and unbridled speculation by the City of London presided over by a Bank of England set free from governmental control. Above all workers should heed the message from the government and their allies in the trade union leadership—that the class struggle was a thing of the past and participation in creating a globally efficient economy would raise all boats.

For ten years, this provided the ideological justification for Labour facilitating by every possible means a historically unprecedented transfer of societal wealth to the super-rich. With the actual wages and purchasing power of working people in constant decline, and vital social services being gutted, Labour became ever more alienated from its former working class supporters. But it was able to maintain power to the extent that a speculative boom in house prices and a flood of credit allowed people to live well beyond their actual means.

Once this speculative boom burst internationally, it was inevitable that it would hit the British economy hardest of all and would signal the end of the Labour government.

The biographical material on Darling contained in Aitkenhead’s interview is sketchy, but revealing in painting a portrait of someone who was an ideal New Labour apparatchik.

She notes that while “A blaze of glitzier New Labour stars have since fallen… Darling survived, accumulating five ministerial posts on a stainless ascent to the exchequer last year. His career had been distinguished by an almost freakish absence of failure. He has never lost an election, he joined the front bench after just 12 months in parliament, and 20 years later he has never left. Only two other members of that first cabinet, Gordon Brown and Jack Straw, are still in government with Darling today.”

This rise to prominence is incredible because Darling’s own statements make clear that he is a political zero—someone with no connection to the Labour Party, old-style reformist socialism or the working class. Both his grandfathers were Liberals, his great-uncle a Tory MP in Edinburgh, and his father, a civil engineer, voted Conservative. He was educated at a private boarding school before studying law at Aberdeen where he stood for election in the student union, “but not for a party.”

He only joined the Labour Party 1977. This was a year during which Labour was in coalition with the Liberals and imposing IMF-dictated austerity measures that met with fierce resistance from the working class and ended with the 1979 “Winter of Discontent” and the election of the Conservatives. Darling’s response? “The Labour government in 1977 was in a terrible mess, and I was getting fed up looking at all these things on the television, and thinking, God, surely we can do better than that. I wanted to do things. But I was never really interested in the theory of achieving things, just the practicality of doing things.”

Later he tells Aitkenhead, “He doesn’t call himself a socialist—‘There’s nothing wrong with the term, it’s just not one I use’—and feels uncomfortable with political labels. Class envy is a mystery to him; he sees no point in raising taxes for the super rich, because, he says, it wouldn’t raise much revenue. ‘I’m not offended if someone earns large sums of money. Is it fair or not? It’s just a fact of life.’ Asked to define his politics, he offers, ‘Pragmatic’.”

The party’s over

Like his colleagues, it was precisely Darling’s “pragmatism,” his hostility to socialism, absence of “class envy” and relaxed approach to fabulous private wealth that made him so successful for so long. He was ideal material for government as far as the Labour Party and its backers were concerned because was ready to do whatever he was told, unencumbered by any extraneous ideological baggage.

He was in effect a true and unalloyed believer in capitalism.

That is why, as he states, “For 10 years as a minister, by and large I had a charmed life.”

And that is also why all this changed by the time of that fateful day in June last year when he was appointed chancellor by Brown, as Labour was attempting to distance itself from the Iraq war and the sordid record of Blair’s premiership. Instead, as his wife states, his life has been “a crisis a week.”

In an extraordinary passage, he states that although “we knew the economy was going to slow down”: “he hadn’t the faintest inkling of the financial crisis about to unfold before him. ‘No, no one did. No one had any idea’.”

“He can clearly recall the day last summer when alarm bells first began to sound. The chancellor was on holiday with his wife and their two teenage children in Majorca. ‘I remember I picked up the FT in the supermarket, as you do, and it had the European central bank starting to put money into the economy. I phoned the office to ask why they were doing quite so much. It didn’t surprise me that money was going in—there was concern going around—but it was the sheer scale of it. I said, what about our institutions? This was when Northern Rock started to figure.”

“Even then,” Aitkenhead continues, “the gravity of the credit crunch was still not fully clear. ‘No one knew how serious it was yet’,” she quotes Darling saying.

What then is the future for a party that was so enamoured of capitalism that the man it appointed as chancellor was apparently so blissfully unaware of an unfolding financial disaster sweeping the world economy?

Aitkenhead states that today, “the mood is so febrile, it’s even possible he won’t be chancellor by the time this interview appears.”

As for Darling, he doesn’t want a cabinet reshuffle that may see him replaced—“Frankly, if you had a reshuffle just now, I think the public would say, Who are they anyway? You name me a reshuffle that ever made a difference to a government, actually.” Nor does he want a leadership challenge against Brown, even though he makes clear he has little hope of winning the next election.

“This coming 12 months,” he declares, “will be the most difficult 12 months the Labour party has had in a generation, quite frankly. Both the general economic situation, and in terms of the politics. In the space of 10 months we’ve gone from a position where people generally felt we were doing OK to where we’re certainly not doing OK. We’ve got to rediscover that zeal which won three elections, and that is a huge problem for us at the moment. People are pissed off with us.”

Whatever Darling might wish for, there is little chance that Brown will survive the next months unscathed, less chance still that Labour will win an election under any leader whatsoever, and a distinct possibility of the party imploding. As if to underline such political realities, even as the government was attempting to recover from the damage inflicted by Darling the former home secretary Charles Clarke was busy telling the BBC that Labour is facing “utter destruction” at the polls and insisting that Brown must either improve the standing of Labour within a few months or resign as prime minister.

What does David Davis stand for? (Part 2)

JamieSW — Thu, 24 Jul 2008 13:52:56 +0000

This is the second of a two-part article examining the political history of Conservative MP David Davis, who resigned his parliamentary seat in protest at Labour’s terror legislation enabling 42 days’ detention without trial. Part one can be viewed here.

In concluding his speech on the campaign to abolish the National Dock Labour Scheme, the former director of Britain’s National Association of Port Employers, Nicholas Finney, explains:

“We knew that confrontation would be inevitable and when at last the government announced on the 5th April 1989 that they were going to repeal the dock labour scheme we knew we had won a famous victory. What we then had to do was put our plan of action into operation. We set out to achieve reform as fast as possible using a £35,000 redundancy payment provided by the government in its repeal bill, to break the strike and to shed labour. Under UK labour law you can actually dismiss workers lawfully providing you are not selective. If all workers are on strike you can say ‘either you come back to work or you are sacked.’ We were accused of ‘gangster tactics.’ Nevertheless, that was the threat and it certainly had a major effect on breaking the strike, because of the potential loss to the dockers of their £35,000 sterling redundancy payment.”

He then cites the accomplishments made after just one year:

“We had 9,221 dockers on April 5th 1989. In October 1990, there are less than 4,000 dockers left and many ports where there are no ex registered dockers at all. The restructuring of the labour force has been complete.”

He boasted that “We” had removed “all national agreements…all port agreements…all industry Conciliation and Arbitration procedures…developed entirely new work patterns, totally flexible shift patterns” and “introduced part time working/contracting out.”

“But,” he concludes, “I think the greatest of our achievements (and this is an achievement for the company as a whole) is that we destroyed for the foreseeable future the power of trade unions to hold the country to ransom by calling a national dock strike, which is so wrong for any democratically elected government. I think these achievements are worth learning from.”

There is not a word uttered by Finney from which Davis could legitimately attempt to distance himself. Whether he was one of the three MPs cited by Finney or not, he acted as “an influential voice in parliament” and as a member of the “influential political body,” the Centre for Policy Studies, to help wage the propaganda war against the dockers preceding the abolition of the National Docks Labour Scheme.

How David Davis wanted to criminalise strikes

David Davis next ventured into print for the Centre for Policy Studies (CPS) in November 1989, with a pamphlet that went even further than his plans for the docks. Advocating a major assault on the democratic rights of working people, his objective was nothing less than to outlaw strikes altogether in vast areas of the British economy.

The CPS pamphlet, “The Power of the Pendulum” is subtitled, “Reducing strikes by ‘final offer’ arbitration.” In it, Davis writes of the “rumblings” that the government might face from a series of strikes in a “summer of discontent,” which were “symptoms of a dangerous factor in industrial relations—the great difficulty of reforming the state sector unions.”

By “reform,” Davis means preventing strikes. He complains that while strike activity was at its lowest level for 50 years in the private sector, public sector strikes had not declined to the same degree.

The need for “reform” was not mediated by privatisation, he argued, because the recently privatised companies still often enjoyed a large or monopolist position.

Between them, the “combined state sector and recently privatised monopolies…can effectively bring the country to a halt. They can impose vast losses on other people and other businesses. They employ six or seven million people, about a quarter of all employees; and for all these reasons their continued productivity is a proper cause of government concern.”

Davis’s solution is to make strikes illegal throughout this entire sector, while bringing in a system of compulsory arbitration. He favours what is termed “pendulum” arbitration. As opposed to conventional arbitration, where the arbiter decides on pay and conditions based on a consideration of the positions of management and unions—and usually decides a settlement somewhere in the middle ground, Davis wanted a decision backing either one or the other position. If they faced the “pendulum” swinging against them, he believed this would force the unions to make more “moderate” demands.

Davis makes clear that his call to illegalise strikes goes much further than legislation to prohibit strikes in what are usually described as essential services—a demand that has often been raised by the political right.

He writes, “It has been suggested, both in Parliament and outside, that essential services are the proper area for restriction of the strike weapon…. This paper addresses the issue from a slightly different angle, that of monopoly industries.”

Listing the scope of his proposal, he continues, “Water, obviously, qualifies as an essential service which is in effect a monopoly. So does the National Health Service. But what of gas, electricity, telephones and the postal service?... [T]his paper’s policy proposals are aimed at all monopoly suppliers, not just state sector or ‘essential services.’ ”

Davis rejects the right to strike

Civil liberties are often represented as individual rights that are inalienable to the citizen. But for working people, faced with the power of major corporations and the state, the preservation of individual democratic and civil liberties has always been bound up with the right to organise collectively in furtherance of common social and political interests.

The right to a decent standard of living meant challenging the tyranny of the owners of capital. It meant the right to organise in trade unions, to collectively bargain and to withdraw labour, if necessary through strike action. This in turn meant preventing not only the individual worker being victimised, but also the collective union body from being subject to attack by the employers or the state.

On the political front, the struggle for the right to vote led inexorably to the struggle to break the monopoly of the parties of big business. This meant, of necessity, to establish and fund a party that would represent working people.

This is the only way that civil liberties can be properly understood. But as far as Davis is concerned, these collective rights do not properly exist and can be done away with.

Davis always writes of the “right to strike” in quotation marks, arguing that “British law does not explicitly recognise a ‘right to strike.’ ”

Instead, he acknowledges only a “combination of immunities in civil and criminal law” that “render strikes a viable tactic for trade unions and workers under certain conditions” [emphasis added].

After briefly describing how in 1906 trade unions secured freedom from liability for losses occurred during strikes, he states that because of the damage they can inflict in monopolistic sectors this freedom from prosecution for liability should no longer hold.

He believes this should be the case not only regarding official strike action, but also when the union does not actively prevent unofficial wildcat action by effectively policing its members. Any no-strike legislation, he insists, “must be able to deal with this sort of difficulty: able to deter guerrilla action which is apparently (and often only apparently) leaderless…. We should recognise that a trade union is its membership. Therefore if it has the majority of the membership of the bargaining unit involved, and that bargaining unit takes disruptive action, then in the absence of effective action to put the matter right the union is guilty of a breach.”

He concludes, “Any union that breaks this constraint should face sequestration of its assets.”

To make the legislation even more far-reaching, he proposes that prosecutions “should recognise who is the real victim of such action; and allow customers of the service or industry to initiate the action for sequestration of assets.”

Thus, Davis wanted a situation in which any Tory party activist could initiate legal proceedings against a union taking strike action, paralysing or even bankrupting them.

David Davis—then and now

Davis and his defenders might argue that he no longer calls for these measures and, like the rest of the Tory Party, has suffered an acute attack of niceness. In reality, he does not make these issues his central concern because—as he argues in his only other CPS pamphlet, “Modern Conservatism,” written in 2005—the Tories have successfully dealt with “overweening union power.”

That is why he continues to hail Margaret Thatcher for having secured “our freedom from the threat of the Soviet Union” and “from socialism at home.”

Even in 1989, he was able to cite as examples that should be emulated the “single-union ‘no strike’ agreements,” and the industrial relations pursued by Japanese companies investing in Britain—which were signed with the Electrical, Electronic, Telecommunications and Plumbers Union and Amalgamated Engineering Union, now part of Unite. He then noted that “more surprisingly, the GMB, TGWU and ISTC are also signatories to no-strike pendulum arbitration deals.”

Since 1989, the phenomenon of no-strike deals has proved to be only one manifestation of the transformation of the trade unions into an adjunct of corporate management. The imposition of no-strike legislation was not necessary, because trade unions hardly ever called a strike, ingratiating themselves with the employers during year after year of record low levels of industrial action.

Nevertheless, should the trade union bureaucracy prove unable to prevent an eruption of militant activity as a result of today’s worsening recession, Davis and the Tories, together with Labour, would not hesitate to impose the harshest sanctions they deem necessary. Even more likely, they will demand measures targeting anyone who leads an unofficial action outside the control of the trade unions.

It is not David Davis who has moved to the left, but the Labour “left” and erstwhile liberal milieu that have moved inexorably to the right. They have not met Davis on the political middle ground, or recruited him to the cause of civil liberties. Rather, they have ceded any claim to defend the basic democratic rights and essential social interests of the working class to the Tory party’s big business agenda. In the process, they have abandoned even the pretence of an independent political existence or purpose.

What does David Davis MP really stand for? (Part 1)

JamieSW — Wed, 23 Jul 2008 13:59:44 +0000

This is the first of a two-part article examining the political history of Conservative MP David Davis, who resigned his parliamentary seat in protest at Labour’s terror legislation enabling 42 days’ detention without trial. Part two will be published tomorrow.

Veteran Labour “left” Tony Benn, Labour MP Bob Marshall-Andrews, Shami Chakrabarti of Liberty and a plethora of liberal journalists from the Guardian and the Independent all hailed David Davis for leading a campaign in defence of civil liberties after his resignation triggered a by-election in Haltemprice and Howden.

The Socialist Equality Party stood Chris Talbot against this attempt to corral hostility to the Labour government behind Davis, advocating an independent socialist perspective to defend democratic rights. On the day of the vote, we explained, “The end product of allowing Davis to be identified as the leader of a supposedly non-partisan movement in defence of civil liberties is to maintain the exclusion of the working class from political life. At the very point where the necessity of breaking with Labour is becoming clear to millions of people, and when the most thoughtful layers are looking for a political alternative, workers are urged to either remain loyal to Labour despite everything or to back the Tories.”

Just what it means to lend credence to Davis’s pretensions to be a civil libertarian, and what the working class can expect from any government of which he is a part, is illustrated by his own writings.

Davis is hardly prolific when it comes to setting pen to paper. However, in the late 1980s, he did publish two pamphlets for the right-wing Centre for Policy Studies (CPS) that refute any and all claims he and his newfound allies might now make for him to be a guardian of democratic rights. They make clear that as far as working people were concerned, Davis’s aim was to deprive them of any possibility of mounting an independent defence of jobs, wages and conditions.

In the name of “allowing management to manage,” he sought to both utilise and extend the draconian anti-union laws enacted by his party leader and political idol Margaret Thatcher in order to outlaw strikes and bust any unions that defied the Tories’ sweeping privatisation programme and the “rationalisation” of industry and public services, at the expense of thousands of jobs.

As someone representing a constituency adjoining the seaport of Hull, Davis centred his attention initially on plans to deregulate Britain’s docks.

In 1988, the then MP for Boothferry, largely merged into Haltemprice and Howden in 1996, published a pamphlet for the CPS, entitled, “Clear the Decks: Abolish the National Dock Labour Scheme.”

The National Dock Labour Scheme (NDLS) was first introduced by the Labour government in 1947, in response to the rank-and-file wildcat dock strike of 1945. The strike was opposed by the Transport and General Workers Union (TGWU), and the government used troops to keep the ports open. It ended after six weeks when the striking dockers accepted an assurance from the TGWU leaders that they would negotiate a “Dockers’ Charter” with the government.

The NDLS promised an end to casual labour by giving dockers the legal right to minimum work, holidays, sick pay and pensions. It was administered by a National Dock Labour Board, made up of equal representation from unions and management, and also gave the unions a veto over dismissals and control over recruitment.

Registered dockers who were laid off by any of the 150 firms bound by the scheme had to be taken on by another firm or be paid compensation. By the time of Davis’s pamphlet, employers at the 60 British ports were all covered by the scheme.

Davis wanted an end to this situation. Above all, he sought the destruction of dual union-management control, the guaranteed employment rights for Registered Dock Workers (RDW) and other protections. He denounced these measures as “restrictive practices.”

The preamble in his pamphlet declared, “This paper demonstrates how unjust and ludicrous existing legislation is. If Britain is to seize fully the economic opportunities which will be offered by the Single European Act after 1992, the Dock Labour Scheme must be abolished. Legislation must be brought forward to end the Scheme; and steps be taken by the Government to secure the profitable expansion of Britain’s ports industry in order to meet the demands of a single European Market with 320 million consumers.”

Davis complains that a docker fired by an employer could not then be prevented from working elsewhere in the industry without the agreement of the Local Board. He cites as an extreme case one worker who was convicted of “smuggling” but continued to work on the docks. He lists various “abuses” such as “bobbing or welting”—setting too high a figure for workers needed for a particular job so some “bob-off” home—and “Ghosting”—enforcing a non-registered dockworker carrying out work on the docks to be monitored by an RDW.

All of this is used to portray the registered dockers as a group of corrupt time-wasters, who should be dealt with for the benefit of everyone else. What he actually wanted was to impose massive job cuts and greater levels of exploitation and thereby secure bigger profits for his corporate friends.

Strike-breaking and union-busting

One passage is revealing in that it explains how Davis saw the attack on the dockers as a continuation of the destruction of Britain’s mining industry, after the defeat of the 1984-1985 miners’ strike. He states, “Another difficulty which arises from the Scheme is that the port employers can be powerless to prevent political strikes.”

He gives as his example a July 9 strike in 1984 at Immingham that escalated to a national strike, when the British Steel Corporation used non-registered dockers to unload iron ore. “In light of the miners strike,” he writes, “it was important for British Steel that the work should continue.”

The national strike was to continue until July 21. Davis was incensed, as this was a rare example of an industrial action breaking the spirit, if not the letter, of Tory anti-union laws prohibiting so-called secondary action: “This example shows how the TGWU is able to manipulate the Scheme for its own political purposes, in this case giving support to the miners.”

Apart from this incident, the TGWU, like the rest of Britain’s unions, never did challenge the anti-union laws and bring out their members in solidarity with the striking miners—who were isolated and defeated. In contrast, Davis was prepared to do whatever was necessary to defeat both the miners and the dockers, using the legal powers of sequestration against the TGWU to possibly bankrupt and break the union that earlier had been employed against the National Union of Mineworkers.

Davis anticipated that the TGWU would call a strike should the government determine to abolish the NDLS. He stressed that the combined effect of the anti-union laws and the propaganda campaign he played a part in would isolate the dockers, noting that if a strike were to involve non-scheme ports then it would be illegal:

“If the TGWU is to have immunity from civil actions for damages resulting from a dock strike, it would have to be recognised by the law as a ‘trade dispute’...if the eventual decision went against the TGWU it would risk a large fine and the possible sequestration of all its assets if it persisted with a strike.”

He continues,

“The legislation, however, on trade unions and industrial disputes brought in by this Government, has laid down that a sympathy strike, by definition, cannot be ‘in contemplation, or furtherance of a trade dispute.’ Therefore if the non-Scheme workers were called out on strike in sympathy with the Scheme port RDWs, the employers in the non-Scheme ports would be able to obtain injunctions against the trade unions involved and damages for any losses incurred.”

The National Dock Labour Scheme was finally abolished in 1989, the year after the publication of Davis’s pamphlet.

A revealing speech

The dockers came out on strike in July of that year, but this was defeated without the need to implement Davis’s full agenda.

However, a speech delivered in Australia in 1990 by the former director of Britain’s National Association of Port Employers, Nicholas Finney OBE, vividly describes the nature of the campaign waged against the dockers in which Davis played such a prominent role.

Finney describes how the port employers prepared for the abolishing of the Scheme:

“When the confrontation came, a number of important factors made a difference to the outcome…

“We held two major conferences before we were sure the government was actually ready and these conferences were to try to persuade employers to plan in advance how they would go about setting new working patterns, how they would set about breaking down the demarcation lines, how they would go about setting new pay agreements, new manning levels, etc. Fundamentally and long before the government repealed the scheme, we took the decision that the employers were going to abandon all national and port pay bargaining.

“The campaign was conducted through parliament by using every possible parliamentary device. Early day motions, adjournment debates, etc. We had three MPs who really acted as our voice in Parliament. They did all the hard work, they talked to the other MPs, they introduced briefing materials into the House of Commons, and we made sure that they were always well supplied with appropriate material.

“We talked to influential political bodies (like your own) such as the Institute of Economic Affairs, the Centre for Policy Studies, the No 10 Policy Unit, the Aims of Industry. We made sure that those people who really had influence in government were fully committed and would themselves talk to a wide range of people. It was too serious an issue to just leave to transport or employment ministers. We knew that it would be a Cabinet decision; we knew we had to get people like the Chancellor of the Exchequer and the Foreign Secretary on our side. So we used every political body which had influence. We also used the press and media. We constantly searched out and supplied the media with anti-docker stories, headlines such as ‘welcome return even if the man’s a thief’ or ‘ghosts who keep vanishing’; ‘twenty things you never knew about fiddling dockers,’ ‘they can’t be fired.’ These headlines were all designed to make it easier for the dockers to be isolated. By the time government acted every national newspaper at one time or another had published an editorial calling for the government to end the dock labour scheme.

“We had a Times columnist write headlines like ‘dock ages on the docks,’ ‘queer seaside customs,’ ‘legalised extortion racket,’ ‘time to end it,’ ‘block those dock rip offs.’ We also encouraged radio and television to do documentary programmes on the docks scandal.

“We commissioned economic studies. One particularly important economic study (and perhaps it is worth thinking of using in the Australian scenario) was to try and prove that by getting rid of the dock labour scheme, you actually create many more jobs than you lose. Getting rid of the restrictions on the waterfront meant a whole new world in ‘investment opportunity.’ We sought two benefits from this approach. One, to make it much more difficult for the Labour Party and for the unions to argue against repeal, and secondly to make sure we could drive a wedge home to isolate dockers and describe them as a selfish, small group of workers who were actually stopping people from gaining jobs in unemployment black spots which frequently were in under-developed city dock areas which had been derelict for many years.”

To be continued

The Guardian divided on response to David Davis

tim — Tue, 01 Jul 2008 17:59:32 +0000

The decision by David Davis to resign and force a by-election based on opposition to the Labour government’s erosion of civil liberties has produced divisions within what passes for Britain’s liberal milieu. A conflict over whether or not to support Davis, based on his campaign against the extension of detention without trial to 42 days, is being fought out in the pages of the Guardian and the Observer.

The issue for some goes beyond simply deciding whether or not to register a protest against 42 days detention and other measures undermining democratic rights. What is being fought out is whether to remain loyal to Labour while nodding occasionally towards the Liberal Democrats, or to transfer political allegiance to the Conservatives.

The Guardian’s Sunday sister paper, the Observer, was initially cautiously supportive of Davis, describing his resignation in its June 15 edition as “A wild move but the principles are correct.”

“Opinion polls show broad public support for the government’s position on 42 days,” the Observer claimed, before adding, “Mr. Davis hopes, and it is a decent aspiration, that a by-election campaign will change minds more effectively than parliamentary debate. But, meanwhile, the business of passing or rejecting this bad law falls to the Lords. They must heed the principled arguments that should have defeated the government in the Commons last week.”

The belief that the public backed the government was quickly proved to be wrong. It soon became clear that Davis had more correctly judged the national temper.

Pro-Davis, Pro-Tory?

A number of Observer and Guardian feature writers were far less cautious and began openly speculating about whether Davis and even the Tory Party itself could be supported against Labour.

Chief political commentator Andrew Rawnsley wrote in the same edition of the Observer, “David Davis is vainglorious, mad and really rather terrific.”

“It tells you quite a lot about David Davis that his nose has been broken five times,” Rawnsley declared. “David Davis is no saint. There’s truth in some of the accusations that are being hurled at him by furious Tories…. In tabloid cliché, he is usually described as a bruiser. I see a man who is actually a romantic, not least about himself…. So, yes, there is ego here … But there is also an extremely strong element of fiercely held belief.”

Finishing his eulogy to Davis, the man of action and principle, Rawnsley opined, “In the background, there is a serious and significant philosophical and political divide in the Conservative party which will matter hugely if and when they return to power. It is a tension about whether the Conservatives are essentially a libertarian or an authoritarian party.”

Others commissioned by the Guardian’s “Comment is Free” seemed to have lost their heads and even their hearts to Davis. Jan Morris wrote breathlessly on June 25 how, “In defending 800 years of hard-won political rights, this rebel is also standing up for a crucial part of the national spirit…. It is not just a matter of those 42 days, of habeas corpus or even of human rights in the political sense of the phrase: it is an elemental struggle that is dividing the British again into two nations, as Benjamin Disraeli saw them long ago.”

Morris accused half of the British people of having been “Brainwashed by a tabloid press of brilliantly insidious techniques, then, numbed by the relentless mediocrity of television,” “willingly forfeited the right to make up their own minds, and mutely accept[ed] indoctrination.”

In contrast, Davis is hailed for defending “not just political liberty but liberty of the mind, of the identity, of the spirit—even, patriots might sententiously say, of the national soul…. So perhaps Davis is a prophet as well as a politician. When he talks of habeas corpus he is echoing ideas far older and more profound, reaching back to the earliest yearnings of antiquity, the first glimmerings of human individuality, when our ancestors began to break from tribal disciplines and devise preferences of their own.”

The coverage in the Observer and the Guardian never again reaches these levels of hero worship, but on occasion its own writers have come close.

On June 27, the Guardian’s G2 supplement ran several pages on Davis by Nicholas Watt under the heading, “Maverick or freedom fighter?”

Watt begins by describing how, “Narrowing his gaze with the poise of a former SAS officer, David Davis shifts slowly in his armchair and points through his sitting room window to a line of trees in the distance. ‘The key to security is the line of sight’ ... Davis will take no lectures about failing to appreciate the threat of terrorism. ‘I was on an IRA death list,’ he says. ‘We’ll have none of that nonsense about being soft on terror.’ “

Like a passage from a 1950’s Boys’ Own comic, Watt describes Davis as “A Tory bruiser,” known to some as “the Knuckleduster.” We learn yet again of how Davis frequently succeeded in breaking his nose, while playing Rugby, swimming and intervening “to save a friend who was being mugged on Clapham Common.” In addition, “The Davis clan have all been taught to be toughies, thanks to an imposing climbing wall in an outhouse.”

The most explicit political exposition regarding the significance of supporting Davis is made by Henry Porter, who writes regularly on civil liberties.

He insists in the June 29 Observer, “We can’t leave David Davis to carry the fight on his own.”

It is when he explains who he means by “we” that Porter asks, “So who is to answer those questions?”

Answering his own question, he replies, “Certainly not Labour, though there are many good people on the backbenches.” The Liberal Democrats are patted on the back for being “ardently for freedom.”

But in reality, Porter insists, “it must be the Tories, right?”

He places caveats on adopting a pro-Conservative stance, but argues for it nevertheless. He goes so far as to compare the democratic and freedom-loving credentials of various prominent Conservatives. Party leader David Cameron is “said to be more libertarian than his friend, the shadow Chancellor George Osborne. Dominic Grieve, who has succeeded Davis as shadow Home Secretary, is solidly libertarian,” and so on.

He then appeals to the Conservatives to “make the big argument, because there are political opportunities here.”

“The first is that Labour has betrayed its mission to champion the poor and vulnerable…. The Tories could surely demonstrate Labour’s failure in this department.

“The second opportunity concerns the traditional Conservative mission to champion the individual and roll back state power.”

To portray the Tories as a party of civil liberties at best expresses an extraordinary level of political disorientation amongst a petty-bourgeois layer who once would have recoiled at such a description. But to some degree it is also a recognition of the direction in which the wind is blowing.

Cameron and a future Tory government would, after all, have need of apologists and converts with a vaguely leftist background if they were to have any chance of maintaining a grip on power. The same phenomenon—former social democrats and liberals transferring their allegiance to the new political order—has already been amply demonstrated in France following the coming to power of Gaullist President Nicolas Sarkozy.

Pro-Labour, pro-Jill Saward?

Even so, to even begin to advance Davis and Cameron as defenders of democratic rights is testimony to how far to the right Labour itself has travelled.

Not everyone is quite so prepared to abandon the sinking New Labour ship. But those opposing support for Davis are, if anything, advancing positions more politically grotesque than their journalistic colleagues.

On June 20, with Labour refusing to stand against Davis, the Guardian published a comment by Olly Kendal, former adviser to Liberal Democrat leader Charles Kennedy, entitled, “Wanted: an election challenger.”

He appealed for anyone whatsoever to stand “who will serious challenge the former shadow home secretary.”

Kendall insisted that any high-profile public figure that came forward as a “credible candidate” would do. And he or she certainly need not oppose 42 days, “as important and fundamental to our society as it is.”

Instead he proposed a single-issue campaign on the burning issue of MP’s pay, suggesting as a candidate—“Who better than the man who in 2000 took over the helm of the BBC, promising to ‘cut the crap’ at the corporation”—Greg Dyke.

Kendall closes by acknowledging a small flaw in his proposal, given that Dyke, “refused to stand as London Mayor unless he could stand as a unity candidate for both the Lib Dems and Tories.”

Nevertheless, the search for a supposedly “credible candidate” was clearly being pursued in earnest.

On June 25, the Guardian’s senior political correspondent Andrew Sparrow wrote in his politics blog, “David Davis may find himself facing serious by-election candidate after all.”

The person in question was Jill Saward. Sparrow designated her as a “serious candidate” not merely because she supposedly has a “high-profile” for having “waived her right to anonymity after being raped at her Ealing Vicarage home in 1986, [and] has made her name as a campaigner on behalf of the victims of sexual violence.”

Sparrow is boosting Saward because she intends to use the issue of rape as an emotive argument against Davis and in a way that helps Labour.

He quotes at great length from Saward’s web site, in which she defends the use of closed-circuit TV cameras and the amassing of a national DNA database on the basis that this helps the police track down and convict rapists.

Sparrow adds, as if presenting a profound insight, “Interestingly, she also criticises Davis for not accepting the result of the Commons vote on 42-day detention. ‘Why would anybody want to stand as a member of parliament if they are not prepared to accept the will of parliament when it makes a decision?’ she asks.”

On June 26, Sparrow moved to the Guardian’s print edition to again proclaim Saward as “Davis’s most prominent opponent,” devoting an entire article to presenting her views, before merely listing the names of six of the other candidates standing against Davis. (Chris Talbot, the Socialist Equality Party candidate, was omitted, as is the norm.)

Though Saward is standing as an independent, Sparrow makes even clearer that she is being given such preferential treatment in large part because she functions as a proxy candidate for Labour. He writes, “Saward floated the idea of standing as a candidate in an article on her web site on Tuesday. She said that, at that stage, it was her own idea, but that since the article appeared she had received encouragement from party politicians.

“She would not say who was urging her to stand. But it is known that Labour is very keen for a high-profile candidate to challenge Davis.”

The debate being conducted in the Guardian and the Observer could end with them taking opposed positions on the Haltemprice and Howden ballot or not taking a position at all. But the fact that these two publications respond to the growing threat to civil liberties by discussing whether to continue supporting Labour or to back the Tories is a measure of the profound decay of liberal thought in Britain.

Labour’s electoral meltdown continues to worsen

tim — Thu, 08 May 2008 14:21:42 +0000

The meltdown suffered by the Brown government in last week’s local elections, coupled with Ken Livingstone’s defeat by Boris Johnson in the contest for London Mayor, is a major staging post in the ongoing collapse of New Labour.

The party’s share of the vote fell to a 40-year low of just 24 percent, compared with 44 percent for the Conservatives and 25 percent for the Liberal Democrats. But its eclipse by the Tories is only part of the picture. Turnout was just 35 percent, confirming the widespread alienation from all the major parties.

Labour has long ago lost most of the support it once enjoyed in working class areas. The May 1 poll demonstrated that it has now also lost much of those sections of the middle class electorate it had won from the Conservatives in 1997.

In England, these twin factors found expression in the Conservative victory in Bury, in the north, for the first time in 22 years, and Labour’s loss of Reading, one of its few strongholds in the southeast.

The picture in Wales is even more devastating. Long considered Labour’s heartland, the party has continued to hemorrhage support and lost control of Merthyr Tydfil, Blaeau Gwent, Torfaen, Caerphilly and Newport councils. No one did particularly well, least of all Labour’s coalition partners in the Welsh Assembly, Plaid Cymru, as Labour’s vote dispersed across the political spectrum and resulted in victories for the Liberal Democrats, Tories and independent councilors.

Even so, the rise in support for the Conservatives amongst those who turned out to vote would be enough to secure them a general election victory. The poll has been compared with the situation that faced John Major’s Conservative administration in the local elections that preceded Labour’s landslide victory in 1997.

Just as devastating for the government was Livingstone’s defeat in London. Conservative candidate Boris Johnson has a high media profile, having cultivated his image as an eccentric plain speaker. He is in fact an arch right-winger, whose racist and anti-Islamic statements, and denunciations of people from Liverpool, has necessitated him making public apologies and made sections of the Tory party extremely nervous about his candidacy. In the final weeks, he was told to keep his mouth shut and maintain a low profile, leaving his campaign firmly under the control of Lynton Crosby who had spearheaded electoral campaigns for former Australian prime minister John Howard.

The pro-Labour press and the party apparatus—along with Respect Renewal, the Socialist Workers Party and the Greens—had all urged support for Livingstone. Labour promoted Livingstone’s support in the City of London, but it also hoped, with the aid of the nominally left and socialist parties, to be able to mobilise support in the inner-city areas, particularly amongst black and Asian workers, by portraying Livingstone as the “progressive” candidate.

Labour’s vote did rise slightly in these areas, but not by nearly enough to counter Johnson’s gains in the outer suburbs. The more fundamental problem for Livingstone and his left apologists was summed up by journalist Andrew Gilligan, who led the pro-Johnson offensive in the pages of the Evening Standard.

Responding to accusations that he was backing a reactionary, Gilligan retorted that, “Livingstone is the ally of some of the most reactionary forces in this city. I’m thinking of [Police Commissioner] Ian Blair, I’m thinking of property developers he’s in bed with, I’m thinking of City big business.”

The reaction in Labour circles to its electoral meltdown centred on disaffection with Gordon Brown’s premiership. He was condemned privately and publicly for his performance since taking over from Tony Blair in June 2007.

Martin Kettle, a personal friend of Blair, wrote in the Guardian that “the answer that stares these [Labour] MPs in the face is that, echoing Cromwell, they should tell [Brown]: ‘in the name of God, go.’ ” And there was widespread speculation as to whether a leadership challenge would be mounted and if so, when. Others more loyal to Brown urged him to “reconnect” with the electorate and Labour’s traditional supporters, or to “renew” New Labour’s “coalition,” supposedly marrying economic efficiency with social justice.

All that this produced was the pathetic spectacle of Brown seeking to emulate former US President Bill Clinton by telling the media how he felt “the hurt” of people struggling with rising prices and mortgage repayments.

In reality, Labour’s performance under Brown has only deepened a crisis that began under Blair. When Blair left office, he was widely hated and led a government condemned for the war against Iraq and viewed as a corrupt party of the super-rich. Its previous electoral showing in May 2007 gave it a predicted 27 percent of the national vote in a general election—just 3 percent higher than last week.

With Brown’s successions to leadership, there was a concerted campaign to claim a new era for Labour. The Daily Mirror described him as a man “on fire,” with a new “moral purpose,” while the Guardian wrote of a new “dawn” for a “new government.”

What actually took place was that Brown continued the big business agenda of Blair, bringing into government figures such as Sir Digby Jones, former head of the Confederation of British Industry, and praising Margaret Thatcher as a “conviction politician.”

The deluded belief within Labour circles that the new premier would somehow restore the party’s popularity found finished expression in Brown’s humiliating retreat from plans to hold a snap election as early as November last year when it became clear that, at best, Labour’s majority would be slashed and that it might even lose.

Brown’s climb-down at that time took place in the aftermath of the collapse of Northern Rock, amidst scenes of savers queuing up to withdraw their money. Since then, the economic crisis that began in the US subprime mortgage market has spread throughout the world and had a particularly severe impact on Britain.

Brown admitted, “What people are most worried about…[is that] petrol prices are going up, food prices are going up, they are worried about utilities bills, they are worried about their standard of living, there is an uncertainty about the economy…. People’s immediate priority is how to deal with the family budgets and the problems we face as a result of what is an economic downturn which started in America.”

But while Brown claimed to understand the “anxiety” over economic insecurity, his government suffered particularly badly at the polls because of its decision to abolish the 10 pence tax band for lower-income workers. The move, which had been announced by Brown when he was chancellor in 2007 and took effect this year, hit millions of people earning less than £15,000 per annum. In the same budget, Brown had slashed the headline corporation tax rate by 2 pence.

Under these circumstances, how could anyone believe that Labour’s support would not continue to plummet?

Since it came to power, New Labour has functioned as the political representative of the oligarchy, presiding over a historically unprecedented transfer of wealth from working people to the fabulously rich and the City. Only the flooding of the economy with cheap credit and rising property prices helped to partially conceal this process. Now that this possibility no longer exists, the full scale of Labour’s decline becomes apparent.

There had been calls for the prime minister to modify the 10 pence tax rate change or make some kind of recompense. But, beholden as it is to big business, Labour’s room for manoeuvre is strictly limited. Writing in Rupert Murdoch’s Times newspaper, Peter Riddell warned that “the real danger is that the government will find it hard to resist calls for relaxing spending controls and public sector pay limits in order to respond to the worries of Labour MPs and core working-class voters.” This is equivalent to instructing Brown not to do so.

Neither does Brown face any substantial unified opposition within the parliamentary Labour Party, let alone one that in any way advances the interests of the working class. Speculation that the leader of the Campaign Group of Labour MPs, John McDonnell, would stand against Brown was quickly dashed by McDonnell himself. In any event, McDonnell could only count on a few MPs and was unable to mount a leadership campaign last year.

For his part, Dagenham MP Jon Cruddas, who has the support of the Compass group and is portrayed by the media as a more traditional Labourite, limited himself to calls for Brown to “learn from Boris Johnson and from [Tory leader] David Cameron as well…. They seem to be more emotionally literate than us. Boris Johnson is connecting with people emotionally.”

Aside from that, there are merely reports of 40 or so MPs supposedly considering the possibility of making their unhappiness with Brown public, Brown being “safe” from direct challenge for at least a year and Labour’s Frank Field speaking about a sense of “private despair” amongst MPs.

What is unfolding is not simply the crisis of a premiership, but the crisis of a party. Labour’s fortunes cannot be restored by changing leaders. It is dead on its feet due to the impossibility of securing a popular mandate for policies that serve the interests of a tiny minority at the expense of working people. Labour is not merely exhausted and in need of reinvigoration. From the standpoint of the working class, it is a hostile entity that must be replaced by a genuine party of socialism.