IWCA | ukwatch.net

The death of the ‘dream’ of global free-market capitalism

Alex Doherty — Fri, 03 Oct 2008 09:24:53 +0000

New Labour and the Tories are muttering that the left musn’t be allowed to exploit the current economic crisis in order to make a comeback. They have nothing to worry about: the systematic, publicly funded government intervention we’ve seen the world over that has been necessary to rescue global capitalism from collapse demolishes once and for all the myth that private control of capital has anything to do with the ‘free market’. What capital really fears isn’t state intervention per se, but economic democracy: nationalisation without economic democracy suits capital just fine. A worthwhile, pro-working class left would be demanding that in return for being rescued at public expense, the public should be given an increased say in the running of the economy. The middle-class left isn’t doing this, and has no interest in doing this, and so will remain an irrelevance.

Earthquakes on a fault zone

Back in March, the chief economics correspondent of the Financial Times, Martin Wolf, wrote: “Remember Friday March 14 2008: it was the day the dream of global free-market capitalism died. For three decades we have moved towards market-driven financial systems. By its decision to rescue Bear Sterns, the Federal Reserve, the institution responsible for monetary policy in the US, chief protagonist of free-market capitalism, declared this era over. It showed in deeds its agreement with the remark by Josef Ackermann, chief executive of Deutsche Bank, that ‘I no longer believe in the market’s self-healing power’. Deregulation has reached its limits”.

The events of the last two weeks, which have the seen the disappearance of two of the four remaining major independent Wall Street investment banks, with the two left voluntarily giving up investment bank status and scurrying toward the Federal Reserve for protection ; the biggest bank failure in US history, and large scale state intervention the world over to prevent the total collapse of the global financial system (the bailout of AIG following the de-facto nationalisation of Freddie Mac and Fannie Mae; the injection of billions upon billions of pounds of taxpayers funds into the money markets by the world’s major central banks to prevent those markets from grinding to a halt, because “nobody trusted any credit other than the government’s” ; the temporary banning of short-selling on both sides of the Atlantic; the state co-ordinated takeovers of Merrill Lynch by Bank of America and of HBOS by Lloyds, which was waved through by the British state on public interest grounds in order to “ensure the stability of the UK financial system”, and now the nationalisations of Bradford & Bingley here and Fortis on the continent) represent the final nail in that dream’s coffin. This has all culminated in the extraordinary bail-out plan, devised by the most right-wing administration in US history in collaboration with Wall Street, to spend $700bn of taxpayers money on the systematic nationalisation of risk in the US financial system, a plan described by the Financial Times as “the most extensive peacetime expansion of the role of government in the financial system since the Great Depression”.

Indeed, there is only one possible criticism that can be made of Wolf’s coroners report: rather than a ‘dream’, the concept of ‘free-market capitalism’ is perhaps better thought of as a hallucination, or an oxymoron. There is no such thing as a large-scale industrial free-market economy, and there never has been, something the economist William Lazonick refers to, quite correctly, as ‘the myth of the market economy’. It has been rhetorically useful for the right, from Hayek onwards, to equate the private control of capital with free markets, and free markets with individual liberty, but in reality capitalist development has always depended upon state assistance and the abrogation of free-market principles¹, as current events are amply demonstrating. The neo-liberal experiment with deregulation of the financial sector of the economy that we have seen over the last thirty years has been taken as far as possible, and will now be reined back in: as Wolf has put it, “In deregulated financial systems crises are inevitable, like earthquakes on a fault zone. Only timing is uncertain”

But what does this mean for the rest of us? Will the crisis of finance capital cross over to the real economy and result in recession, large scale unemployment and a drop in living standards for the mass of the population? Are we going to see some repeat of the depression that followed the great crash of 1929, the last time Anglo-Saxon capitalism suffered a comparable financial shock? It should be pointed out that even during the so-called ‘boom’ of recent years, the benefits were largely confined to the upper income brackets. The real story of the last 30 years of neo-liberalism is not rising prosperity for all, but rather the utter destruction of the wealth and savings of the bottom half of the population. Outside of property, 50 per cent of the population now own just 1 per cent of the wealth whereas in 1976 it was 12 per cent. Back in July, Ernst and Young reported that average household disposable income after tax and bills had fallen by 15% since 2003 ; a report by the Campaign to End Child Poverty in late August declared that “Poverty is now one of the greatest dangers faced by our children. If poverty were an infection then we would be in the midst of a full-scale epidemic with all the attendant public health measures, including vaccination” ; meanwhile, Guardian columnist Polly Toynbee has written several times since June that in the five years between 2001/2 and 2006/7 those on median incomes of around £23,700 had seen their incomes grow by less than 1% a year, while between 2004/5 and 2006/7 those in the bottom third of the income distribution saw their incomes fall . For much of the population the downturn has long since begun (or never ended), but this has apparently not been considered as newsworthy as the travails suffered by the masters of the universe currently sucking on the taxpayers teat on Wall Street, Canary Wharf and the Square Mile.

But from even this inauspicious starting point, a downturn in the real economy is already in evidence. The last monthly unemployment figures showed a rise of over 80,000 to 1.7m, with both the Confederation of British Industry and the Trades Union Congress predicting the figure will hit 2m before the end of the year, and incomes growth excluding bonuses has fallen to zero (link and link). Manufacturing is experiencing its “worst operating conditions” in 17 years (link and link), economic growth has ground to a halt and the European Commission is predicting a recession , and yet inflation continues to rise toward 5% (significantly higher over the past year in the case of fuel and food: those who were so quick to pass on the rise in oil prices to the consumer have being a good deal less willing to pass on the subsequent falls). The turn toward neo-liberalism was supposed to eliminate such ‘stagflation’ but, now faced with it, the Bank of England has thus far refused to cut interest rates because containing inflation is more important than containing unemployment (inflation is bad for business, unemployment is not). Somewhat surprisingly, consumer spending appears to be holding up, at least according to governmental statistics (although these figures have been greeted with some skepticism by retailers, link and link). This, surely, cannot last: as we have seen, bubbles always burst and economic gravity cannot be defied forever. The Bank of England’s chief economist Spencer Dale has warned of an ‘adverse feedback loop’, or negative multiplier effect, wherein the downturn in property and banking will impact on banks’ ability to create credit and to lend, resulting in lower spending and ‘bringing painful adjustments for many households and businesses’. Likewise the Bank’s deputy governor, Sir John Gieve, has warned that “damage to bank balance sheets would lead to tighter credit conditions, lower asset prices, lower consumption and investment and to a severe feedback loop into more losses for banks and so on down a spiral”.

Financialisation

Herein lies the rub: the boom, and subsequent bust, was driven not by growth in the productive sector of the economy, but by speculation in property and finance which was largely fuelled by the easy availability of cheap credit, which of course is not and will not be so easily available from now on: as the governor of the Bank of England, Mervyn King, has said, the economy will have to adjust to “a more realistic pricing of credit”. With a contraction in the supply of credit, what else is there to sustain current levels of effective demand and fuel economic growth? At the time of writing, the British FTSE 100 index had dropped 23% over the previous year . The most optimistic predictions are that, after a short, sharp period of painful readjustment, there will be a return to business as usual. But what else is there to replace financial and property speculation as engines of growth? There is no significant manufacturing or industrial sector left to fall back on: on the continent and in Scandinavia, the industrial working class has been accommodated to a certain extent, whereas here and in the US it had to be smashed, with the result that finance has come to dominate the economy, something New Labour has been perfectly content to live with. The unusually high level of ‘financialisation’ in the UK economy (which has the additional attraction to capital of tending to concentrate wealth at the top, as outlined above, whereas manufacturing disperses it more widely) means that, contrary to Brown’s protestations, we are more vulnerable to any major financial downturn than comparable economies. Brown, the great Alan Greenspan devotee, bears personal responsibility for allowing what he has the nerve to call the ‘age of irresponsibility’ to happen on his watch, by enthusiastically embracing the deregulated, pro-capital model that has brought us to this pass.

Thanks to prompt and large-sale government intervention funded out of the public purse, we are unlikely to see a repeat of the Great Depression when capitalism went to the brink of annihilation. The lessons that were hard learnt in the 1930s have not been forgotten: regardless of the idiotic blatherings of free-market ‘libertarians’, the wiser heads at the top from John Maynard Keynes and Franklin D. Roosevelt up to Hank Paulson today have always understood that capitalism cannot survive without state support and systematic regulation and intervention -what the historian Michael Hogan calls ‘corporative neo-capitalism’- to ensure the socialisation of costs and risks whilst still guaranteeing the privatisation of profits and control (which is why the bail-out plan will be forced through, over-riding formal democracy if need be). But with nothing obvious on the horizon to make up for the credit shortfall, it is entirely possible that rather than booming again after readjustment, the economy will flatline in the longer term and we will have to get used to lower rates of accumulation, resulting in even less wealth trickling down the economy than now, with the increased distributional struggle that will come with it. Similarly, the downturn will see a decrease in the government’s tax take, resulting in either tax rises (which will fall disproportionately on those on low to median incomes) or cuts in public services, particularly if further large amounts of taxpayers money are required to bail-out the financial sector.

So rather than 1929, perhaps a more useful comparison to make would be the last time we saw economic turbulence on this scale, during the 1970s. Just as the Great Depression ushered in the era of Keynesianism and the Bretton Woods system, so the 1970s ended it and ushered in the era of neo-liberalism. There are a number of similarities between the ‘70s and now: stagflation, a spike in oil prices, imperial overreach on the part of the US threatening the credibility of the dollar as the world’s reserve currency. With the impending economic turbulence, we could well be entering a period of similar political turbulence. A leaked memo has revealed that Home Secretary Jacqui Smith fears the downturn may produce “upward pressure on acquisitive crime”, an increase in support for “far right extremism and racism” and widen “the pool of those susceptible to radicalisation” (link). Meanwhile, Tory leader David Cameron has said that “We must not let the left use this as an excuse to wreck an important part of the British and world economy”.

State control or economic democracy

If there actually were a left of any significance, as there was in the 1930s and the 1970s, then Cameron may have reason to be fearful. However, Cameron seems wilfully ignorant of the scale of the victory his side won last time round. The shift toward financialisation and speculation and away from industry and production not only concentrates wealth at the top, it also leaves no place or role for an organised working class: workers become atomized and have no option other than to become selfish in outlook and take care of number one. In this context, organising a working class challenge to capital becomes all the more difficult. So Cameron can rest easy: his side has successfully vanquished the left and quieted the working class, at least for now. While there will be increased regulation of the economy, it will carry none of the unpleasant baggage of the past, because this time it will be solely on capital’s terms. In 1929 a weakened capitalist class had to contend with a strong working class that had a knife to capital’s throat. Compromise had to be reached if capitalism was to survive, but there is no such imperative now. As soon as the post-war settlement between capital and labour had been reached, capital (again, from Hayek onwards) looked to break it. The economic crises of the 1970s provided that opportunity, and since then capital has been systematically rolling back the gains won by the working class as part of that settlement. The current crisis offers capital the chance to reorganise, regroup and come up with a new regulatory framework, but this time without working class interference, something Keynes (who was perfectly honest about his loathing of the working class) would regard as an ideal. Cameron’s side has nothing to fear from nationalisation without economic democracy.

Old Labour sees the crisis, and New Labour’s seemingly terminal decline, as a chance to re-assert itself, to ‘take back’ the Labour party. This is a dead-end for a number of reasons. Leave aside the fact that the party is near bankrupt; that membership has halved since 1997; that “Many CLP’s [constituency Labour parties] are now husks – hollowed out shells. There may still be lots of members, but active membership has completely collapsed” ; that even liberal cheerleaders like the Guardian’s Jackie Ashley fear “the party’s destruction as a major force in British politics”, or that Old Labour couldn’t even get a candidate on the ballot paper in last years leadership contest: the New Labour initiative has ended worthwhile democracy within the party, so there is no way of ‘taking back’ the party even if the will existed. And New Labour is fully aware of the danger and has no intention of allowing the party to being taken to the left, as Ruth Kelly made clear after her resignation from the Cabinet.

But more than that, for all the talk of ‘reclaiming’ the Labour party, when has it ever truly been a labour party, led by and for the working class? As Robert Dahl has pointed out, there are two potentially contradictory schools of left wing economic thought: state control of the economy and workers’ control of the economy, and by the time Labour came to power in 1945 under Attlee (a public school educated social worker) it had come out decisively in favour of the middle class Fabian tradition of state control and against workers’ control². Beatrice Webb, who along with her husband Sidney co-founded the Fabian Society and was one of the leading lights of the early Labour party, wrote on the second day of the 1926 General Strike that it would be “the death gasp of that pernicious doctrine of ‘workers’ control’ of public affairs”, which she considered “a proletarian distemper which had to run its course – and like other distempers, it is well to have it over and done with at the cost of a lengthy convalescence”. Of the strikers she wrote that “There will be, not only an excuse but a justification of victimisation on a considerable scale” and praised scabs as “patriotic blacklegs!” [the exclamation mark is Webb’s][3]. Fabianism is neither pro-working class, nor is it a winner in economic or political terms: it is a busted flush. And for what it’s worth, there is nothing particularly new about New Labour: as far back as 1959 the (CIA-backed) right wing of the party wanted to dump Clause IV and change the party’s name⁴, a victory it ultimately took another 35 years for the right to win under Blair and Brown.

Starting from these kind of positions, it’s small wonder the middle class left has managed to completely alienate the working class. As things stand, the only likely beneficiaries of any upsurge in radicalisation will be the far-right, not the left (as evinced by recent events in Austria and Italy). A worthwhile, pro-working class, democratically inclined left would currently be demanding that in return for being rescued with public money, finance would have to be made subject to popular, democratic control. The left is not doing this, nor has any interest in, or awareness of the possibility of, doing so. The left had its chance to sever capital’s jugular vein in the twentieth century. It didn’t take it. Until the left takes a resolutely democratic, pro-working class approach, it won’t get the chance again. Neither will it deserve to.

Notes:

[1] See previous IWCA Cutting Edge documents ‘Friedman and Pinochet: an appreciation’, currently available at http://www.ukwatch.net/article/a_planned_economy; and part 4 of ‘Kicking away the ladder at home and abroad: immigration, globalisation and neo-liberalism’, http://www.iwca.info/?p=10129.

[2] Robert A. Dahl, ‘Workers’ control of industry and the British Labor Party’, American Political Science Review, vol. 41(5), October 1947. See also Dahl’s A Preface to Economic Democracy, Polity Press, 1985.

[3] The Diary of Beatrice Webb, vol. 4: 1924-1943 (1985), Norman and Jeanne MacKenzie (eds.) (London: Virago), p76, 77.

[4] Richard Fletcher (1978), ‘How CIA money took the teeth out of British socialism’ in Philip Agee and Louis Wolf (eds.), Dirty Work: the CIA in Western Europe (London: Zed Press), also available at http://www.wcml.org.uk/internat/wattw.htm. See also Hugh Wilford (2003), The CIA, the British Left and the Cold War (London: Frank Cass).

Kicking away the ladder

Alex Doherty — Wed, 20 Aug 2008 18:47:45 +0000

The administrators of the British economy and UK plc have openly admitted that the recent large scale immigration into the UK has acted to depress wages, something they welcome as a positive development. Meanwhile, the middle class left condemns anyone who acknowledges the possibility that immigration might being used as a weapon of class warfare by business against the domestic working class as reactionary, racist and right-wing, a stance that benefits no-one except the BNP. What might be a progressive, pro-working class position on this most contentious of issues?

1) ‘The business case for quality and controlled immigration’

Back in April, the House of Lords Economic Affairs Committee published its report ‘The Economic Impact of Immigration’[1]. The report looked at the effects of the recent high levels of net immigration into the UK, described within the report as “reaching a scale unprecedented in our history” (over 300,000 in 2006). The report’s headline finding was that there was “no evidence for the argument, made by the Government, business and many others, that net immigration ~~immigration minus emigration~~ generates significant economic benefits for the existing UK population… immigration has very small impacts on GDP per capita, whether these impacts are positive or negative”.

However, while it seems that net immigration has had little or no effect on overall GDP per capita, the report found that it has had certain distributional effects: “In the short term, immigration creates winners and losers in economic terms. The biggest winners include immigrants and their employers in the UK. Consumers may also benefit from immigration through lower prices. The losers are likely to include those employed in low-paid jobs and directly competing with new immigrant workers. This group includes some ethnic minorities and a significant share of immigrants already working in the UK”. Specifically, the report finds that, with regard to wages, “immigration has had a small negative impact on the lowest-paid workers in the UK, and a small positive impact on the earnings of higher-paid workers”. On training and apprenticeship, the report noted that “there is a clear danger that immigration has some adverse impact on training opportunities and apprenticeships offered to British workers”.

None of this should come as a great surprise to the observant. In 2002, Richard Layard of the London School of Economics, also a Labour peer and economic adviser, and one of the authors of the Lords report, wrote in the Financial Times: “For European employers and skilled workers, unskilled immigration brings real advantages. It provides labour for their restaurants, building sites and car parks and helps to keep these services cheap by keeping down the wages of those who work there. But for unskilled Europeans it is a mixed blessing. It depresses their wages and may affect their job opportunities. Already unskilled workers are four times more likely to be unemployed than skilled workers and it is not surprising that they worry”[2].

Specifically with regard to the recent UK experience, the governor of the Bank of England, Mervyn King, stated in 2005: “The Home Office estimates that around 120,000 workers entered the UK from the new member countries of the European Union between May 2004 and March 2005. That is not far short of the average annual increase in the labour force over the past decade. Without this influx to fill the skill gaps in a tight labour market it is likely that earnings would have risen at a faster rate, putting upward pressure on the costs of employers and, ultimately, inflation… Private sector regular pay growth has been subdued, which is somewhat puzzling in the context of 30 year-high employment rates, and 30 year-low unemployment rates, which we would usually associate with a tight labour market. It is possible, indeed likely, that inflows of migrant labour have eased labour market pressure”[3].

In his testimony to the Lords committee, David Blanchflower of the Bank of England’s Monetary Policy Committee (the nine person committee that sets the UK’s official interest rate) submitted that: “The flow of workers from the A8 and the A2 [the ten Eastern European countries admitted to the EU since May 2004] appear to have increased the ‘fear’ of unemployment, which tends to have a downward impact on pay especially in the non-union sector. The ‘fear’ of unemployment refers to the probability of a worker losing their job, and may increase if the competition for jobs rises, for instance, through immigration or the threat of greater outsourcing to lower-cost economies. Both these channels can be used to explain an increase in the ‘fear’ of unemployment in the UK since the accession of the A8 nations in May 2004… Consistent with a rise in the ‘fear’ of unemployment, wage growth has been depressed in both the UK and Ireland since A8 accession. According to the UK Average Earnings Index (excluding bonuses), wage growth has fallen from 4.2% in 2004 to 3.9% in 2005, 3.8% in 2006 and 3.5% in 2007Q2. Average weekly earnings growth in Ireland has fallen from 5.0% in 2004 to 3.1% in 2006. Given the strong growth rates of both economies, many economists have struggled to find an explanation for this apparent weakness. I believe a rise in the ‘fear’ of unemployment is the only realistic candidate explanation”. It should be noted that Blanchflower, like Mervyn King, doesn’t see this as a bad thing: “An easing in wage growth has helped to offset inflationary pressures emanating in other areas of the economy, such as increases in the prices of energy and food. Immigration has therefore helped the Monetary Policy Committee to hit its inflation target”[4].

Traditionally, one thinks of the right wing as being hostile to immigration and immigrants of every hue. However, as the above shows, in our era of unfettered, unchallenged, globalised neo-liberal capitalism, the recent large-scale net immigration into Britain has, in fact, been perfectly in keeping with the interests of UK plc, although perhaps not with those of the general population. As the Lords report puts it: “Although clearly benefiting employers, immigration that is in the best interest of individual employers is not always in the best interest of the economy as a whole. If, as [immigration minister] Liam Byrne MP says, the Government is “not actually running British immigration policy in the exclusive interests of the British business community”, it is important to examine the economic basis of the arguments that immigrants are needed to fill and reduce vacancies, and that immigrants have a superior work ethic, and thus are needed to do the jobs that British workers cannot or will not do”.

These ‘arguments’ were handily summarised by one of British capital’s most prominent spokesmen, Digby Jones, the former Director-General of the Confederation of British Industry and Gordon Brown’s personal appointee as current Trade Minister, in 2006. Jones declared: “Stop immigration and you stop building houses, schools, hospitals, roads and offices in the UK. If “they” were to “go home”, you can forget this year’s harvest in our fields. In a tourism industry that contributes some 8 per cent of the nation’s wealth, 17 per cent of the workforce was not born in the UK… It’s about time we looked to our own failings in the world of work. You cannot blame a migrant for the fact that we don’t have sufficient numbers of skilled British-born people to do the jobs. Half the kids who took GCSEs last year did not get grade C or above in English and Maths. One in five of the adult population in this country cannot read and write to the standard required of an 11-year-old. You cannot blame a migrant for being prepared to work hard for the minimum wage. It is not the migrant’s fault that so many in western Europe have become lazy, complacent and picky. We live in a world where China wants your lunch and India wants your dinner – and either work is done at competitive rates here or it’s not done here at all. We have a tight labour market in the UK and yet wage inflation has not been a problem. Immigrants are doing the work for less”.

On this basis, Jones contends that: “Business must make the case for quality and controlled immigration. You will speak English, you will bring a skill, you will have a National Insurance number and participate in the transparent economy, pay tax and enjoy the protection of employment and health & safety legislation. The colour of your skin or the God you worship doesn’t matter. Play by these rules and this fair-minded country will welcome you. Come here, work hard, help create wealth – and show us up for what we are becoming: lazy, poorly skilled and complacent, often using “immigration is a bad thing” as an excuse for our own inadequacies” [5].

2) Creating the reserve army of labour

It’s a familiar refrain, and one heard as much on the middle class left as on the right: the domestic working class ~~including previous generations of immigrants~~ is ‘lazy, complacent, picky and poorly skilled’, in contrast to our East European counterparts who are willing to do the dirty work the pampered, soft-bellied and feckless British are not, and it is only this which is still keeping the country competitive in these lean, mean, hungry times.

Racist garbage, of course: Eastern Europeans are no more or less pre-disposed to hard graft than the British or anyone else, they are simply economically and politically weaker than the native population, and are thus more easily exploitable. As Jones himself pointed out in his statement (without commenting on the significance of it): “No migrant from the EU accession states can claim state benefits until they have been here for 12 months – they must work or go home”. It is not so much that migrant labour is more willing to accept the minimum wage than the domestic population, it is that they have less choice other than to accept it, whereas domestic workers are at least eligible for welfare, and can rely on family support for accommodation, for example (this is what Jones means by “lazy, complacent and picky”). It is also easier to force migrants ~~legal or illegal~~ to accept less than the minimum wage, as the Lords report finds: “some employers and agencies imposed various charges on immigrants’ salaries, thus reducing their pay below the minimum wage… Our concern is to avoid the development of a specific demand for immigrant workers that is based on immigrants’ lower expectations about wages and employment conditions or on a preference for labour whose freedom of employment in the UK is constrained by the worker’s immigration status”.

On the assertion that “immigrants are needed to fill and reduce vacancies”, the Lords report instead explains that “because immigration expands the overall economy, it cannot be expected to be an effective policy tool for significantly reducing vacancies. Vacancies are, to a certain extent, a sign of a healthy labour market and economy. They cannot be a good reason for encouraging large-scale labour immigration”. Likewise, in his response to the report, the chief economics commentator of the Financial Times, Martin Wolf, wrote that it is “unambiguously untrue in the long run and for the economy as a whole” that “immigration lowers vacancies and relieves job and skill shortages… despite record immigration, there has been no change in the number of vacancies. In a flexible labour market, vacancies and the number of jobs adapt to the size of the labour force”[6].

The government responded to the Lords report on the 11th of June, publishing separate reports by Liam Byrne’s department, the Home Office, and the Department of Work and Pensions. The Home Office report claimed that, in contrast to the findings of the Lords report, “we estimate that recent immigration has raised the GDP per head of the non-migrant population by about 0.15 per cent per annum in real terms (over the ten years to the end of 2006)”[7]. The press reported that this translated as £1,650 per capita over the ten years, and £300 per capita over the previous year alone⁸ (the £300 per capita figure is a longstanding assertion of Byrne’s⁹). This is the government’s stock position: that recent immigration, far from being used to dampen down the wages of domestic workers, has actually increased their incomes. The Socialist Workers Party support this stance, praising the joint evidence submitted by the Home Office and the DWP to the Lords committee in October 2007 as a “blow” to the “right wing consensus that immigration leads to job losses and lower wages”[10].

The 0.15% per annum estimate (and it does appear to be just an estimate, no further justification for the figure is given) in the Home Office report is attributed to a 2007 study by the Low Pay Commission (paragraph 2.5). This very same study actually finds that “although the overall effect of migration on wages is positive, wages at the low end of the wage distribution are held back, while wages in the middle of the distribution increase”[11], which would appear to back up the conclusions of the Lords report, rather than debunk them. Also, given that the day before the Home Office and DWP reports were published, communities secretary Hazel Blears admitted that the government was unaware of the number of immigrants living in the UK¹², and that in May a Treasury sub-committee found the government’s migration figures were “not fit for purpose” and was “stunned to learn that there was simply no reliable source of information”[13], it is hard to understand how the government could credibly come up with such a precise figure on how much recent immigration has supposedly benefited the native population per capita.

The more sophisticated DWP report¹⁴ found “no statistically significant impact of A8 migration on claimant unemployment, either overall or for any identifiable subgroup. In particular we find no adverse impacts on the young or low-skilled. Nor do we find a statistically significant impact on wages, either on average or at any point in the wage distribution, although the evidence here is less complete”. But again there are problems with this paper’s statistical base. It uses the Worker Registration Scheme as the data source for the level of immigration, while acknowledging that “anecdotal evidence of non-registration amongst some A8 migrants has been reported” and that “self-employed workers are not required to register”, which includes many of the skilled tradesmen who make up a significant proportion of Eastern European immigrants. The WRS also fails to pick up at all on illegal immigration. The authors state that “we see no reason why such omissions should be systematic and they should therefore not bias the results”. Is this credible? Another difficulty is the income data used. Like David Blanchfower, they take their income data from the Average Earnings Index, but unlike Blanchflower they don’t exclude bonuses, which are disproportionately earned by the wealthiest, and thus inflate the income figures for all workers upward. With better information, how would the analysis work out? The authors themselves state that “Our estimates of the average impact on wages are not inconsistent with those found in Dustmann [the Low Pay Commission paper], although they are somewhat smaller” (i.e., statistically insignificant), and also acknowledge that they do not know the ‘counterfactual’ – what would have happened to employment and wages of natives if migrants had not arrived.

But despite these deficiencies, the Independent seized upon these government reports as definitive proof that the findings of the Lords committee were “spurious” and no more than a sop to the “blinkered tenacity of the anti-immigration lobby”[15]. The DWP paper also stated that “the generally poor labour market outcomes of low-skilled natives in the UK do not reflect either a lack of available jobs, structural factors in the labour market, or a lack of formal qualifications ~~since A8 migrants find it relatively easy to find employment~~ but rather issues around basic employability skills, incentives and motivation”. This is simply a more polite expression of Digby Jones’ opinion of British workers as “lazy, poorly skilled and complacent”, and the Independent enthusiastically endorsed this statement too, stating that “we should not seek to shift the blame for our own social shortcomings on to hard-working migrants” (something that none of the material cited above does). Likewise, the first sentence of the Home Office report declares that “The Government is clear that carefully controlled economic migration [emphasis added] benefits both our economy and our exchequer”, before stating that “The Committee notes – and we agree – that migration can keep down inflationary pressure in the labour market”, again both sentiments that Digby Jones would wholeheartedly endorse. Here, the Labour party and the Independent reveal themselves as being fully in tune with the neo-liberal agenda.

So, among those to concur with the Lords report (whose authors included two former Tory Chancellors, Richard Layard, former Thatcherite frontbenchers John Wakeham and John MacGregor, former chief executive of BT and current Lib Dem trade and industry spokesman Iain Vallance and former head of the CBI Adair Turner, among others) that current immigration policy is beneficial for capital but not necessarily for the domestic working class are the Bank of England, the Financial Times, Digby Jones and the Low Pay Commission. Those who insist otherwise are the Labour government (using a flawed statistical base), the Work Foundation¹⁶, the Independent and the Socialist Workers Party. The Centre for Economic Performance at the London School of Economics found that “The evidence so far suggests that, overall, immigration has had few adverse effects on the labour market performance of the UK-born workforce, though this average may disguise some negative effects in the low wage market and positive effects in the higher wage labour markets”[17]. It seems that the masters of the British economy are quite open about who gains and who loses from current immigration policy (something they generally approve of), while the middle class ‘left’ either denies or seeks to obfuscate the issue. The reader is invited to make up his or her own mind.

People have always migrated, of course, and always will: it is part of human nature to travel, explore, mix and intermingle. However, current migration into the UK is of a somewhat different type from that of the pre-neo-liberal period. During the ‘Golden Age’ of capitalism between 1950 and 1973, unemployment in the UK was historically low, around 2%. During this period ~~particularly the early part of it~~ there was often a real labour shortage: due to unprecedented economic growth, there were genuinely not enough people to build the cars, lay the bricks, dig the roads, drive the buses and work in the hospitals, and so it was necessary to import people from Ireland, the Caribbean and south Asia. However, there is no labour shortage today: officially, current unemployment is 5.2%[18], which translates as 1.62 million people¹⁹. Unofficially, it is probably somewhat higher. Any skills shortage among the British workforce is therefore not due to any shortage of numbers or innate deficiency, but to the poverty of the training and education system. UK plc wants a certain level of “quality and controlled immigration”, not because it is benevolent or kind hearted, but because this dampens wages down and keeps the working class insecure through the creation of what can only be described as a reserve army of labour: immigration is being used as a weapon of class warfare. The importation of skilled labour from overseas also represents a free gift to capital: why spend time and money investing in British workers when you can simply steal much needed skilled labour from poorer countries instead?

3) Freedom for capital, not labour

Net migratory pressures are ultimately driven by the differential in wages between countries: for someone in Eastern Europe or beyond, even the minimum wage ~~or less~~ in the UK may be better than what can be earned at home (if the wage gap were the other way round, of course, British workers would be heading East). The greater the differential, the greater the incentive for labour to migrate. However, the signs are that the wage gap between the UK and Poland, at least, has closed, and thus, as was reported in February, “for the first time since they began arriving en masse four years ago, more UK-based Poles are returning to their homeland than are entering Britain”. As one Polish painter and decorator based in London explained: “Two years ago I could make five times the amount of money here than I could in Poland. Now the wages are about the same and the living costs in the UK are much higher. There is a lot of work in Poland, probably more than in the UK. It’s a good time to go back”[20]. If Polish workers are beginning to head home, this raises the question of where the UK, and the other wealthy EU countries, will find their next tranche of migrant labour. Further exploitation of the Baltic states is one option; the newly integrated EU states of Romania and Bulgaria are others; the further expansion of the EU (to include Ukraine, Belarus, the former Yugoslav states, Turkey and maybe even Russia) is another; looking outside the EU altogether is another option still. Similarly, the greater the differential in wages between rich and poor countries, the greater the incentive for capital to export manufacturing jobs, and even certain service sector jobs such as call centres, abroad to where labour costs are lower (”either work is done at competitive rates here or it is not done here at all”, as Digby Jones puts it). This has been a significant (although not the only) factor behind the decline of heavy industry in the UK.

Supposedly, this is all the natural, organic, inevitable outgrowth of economic development. However, this ignores perhaps the most significant feature of globalisation, at least as far as immigration is concerned: the global movement of labour is largely restrained and regulated, but the movement of capital is, by and large, completely unrestricted. Indeed, the term ‘neo-liberalism’ is perhaps best understood as ‘freedom for capital, not labour’. The political choice to remove state controls on capital movements ~~real and speculative investment funds~~ following the breakdown of the Bretton Woods system (beginning with the US in 1974, Chile in 1975 and the UK in 1979, with the rest of the developed world gradually following suit throughout the eighties and nineties)[21] is perhaps the most significant, and defining, feature of capital’s post-1973 triumph. Current immigration policy, like everything else, is now predicated solely on capital’s terms, and no longer on the terms of the 1945-1973 post-war settlement between capital and labour. The ‘business case for quality and controlled immigration’ dictates that labour is only permitted to move insofar as it benefits capital (one result of the EU expansion has been ~~and presumably will continue to be~~ the opening up a large supply of cheap labour to western European capital). Capital, on the other hand, is free to move around the world as it pleases, playing off not just international workforces but also states against each other, forcing them to compete to offer the most attractive environment for capitalist investment.

For instance, amid the recent furore over Labour’s 10p tax hike, it went largely unremarked that Gordon Brown’s 2007 budget also cut corporation tax from 30p to 28p. This was done in response to falling corporation tax rates overseas, to where British-based businesses (mostly services and finance) were beginning to relocate their HQs and submit their tax receipts. In a survey of more than 80 countries, the auditors KPMG found that since 1997 average corporation tax rates have fallen from 33.2% to 27.1%; and from 35.5% to 25.8% within the EU. In the same time period, corporation tax in the UK has fallen from 33% to 28%, while capital gains tax has fallen from 40% to 18%. As Richard Lambert of the CBI commented: “The chancellor has acknowledged the need for the UK to compete with the tax regimes in other developed countries… The challenge for government now is to get a grip on public spending so as to create the headroom that will be needed for further tax cuts in the years ahead”. In this case, one of the ways the Treasury clawed back some of this lost tax revenue was to raise tax on smaller companies and cutting capital allowances for firms that invest in equipment and buildings (that is, manufacturers)[22]. The tax burden is relaxed on those who can easily move to where the tax structure is more amenable, and increased on those less mobile (small business and manufacturers in this particular instance). At about the same time, the clothing company Burberry shut down its (profitable) factory in south Wales, at the cost of 300 jobs, and relocated production to China where production costs for their £55 shirts are £4 per item as opposed to £11. The move has saved Burberry £2m in the first year²³. On the bad publicity that Burberry attracted for this, their PR adviser, former Sun editor and Harvard Business School graduate David Yelland, said: “Who’s going to invest there [Wales] now? They’ll look at the headlines and go to Ireland instead. I can tell you now that I know of more than one company that has already made that decision”[24].

The current frustration regarding fuel and vehicle taxes (which are not just restricted to the sectional interests of haulage companies, although they tend to be the most vocal) are similarly rooted in the burden of taxation being shifted away from the wealthiest to those on low and middle incomes who cannot ‘regime shop’. Such is Labour’s eagerness to offer capital a welcoming home that in 2007 the IMF included the UK in its list of ‘offshore financial centres’ ~~tax havens~~ alongside such luminaries as Bermuda, the Cayman Islands, Jersey, Panama and Vanuatu²⁵; HM Revenue and Customs estimate that tax avoidance is now somewhere between £11 and £41 billion a year²⁶; and the Health and Safety Commission has had its staff levels cut by 1,000 over the last five years, resulting, predictably, in a five year high in the number of people killed at work²⁷. Meanwhile: “Workers in the UK have the lowest sense of job security out of employees in 18 of the world’s leading economies, a bi-annual survey has found. Some 24.2% of British workers think it is very probable or somewhat probable that they will lose their job over the next 12 months”[28]; “Ernst & Young’s annual discretionary income study showed that after tax contributions and monthly household bills, the average family has just under 20% of its gross income left over, compared with 28% in 2003. The average household now has £772.79 to spend each month after total fixed monthly outgoings, compared with £909.84 in 2003/04″[29], and inequality is at its highest level since records began in 1961³⁰. For the British working class, the pressures of neo-liberal globalisation have produced insecurity, depressed wages and lost jobs; whereas for capital, these self-same pressures have driven taxes and regulation down.

In addition, the creation of a reserve army of labour in the UK through immigration is also placing an increased burden upon an already underfunded and neglected infrastructure. For instance, the Lords report points out that “Immigration is one of many factors contributing to more demand for housing and higher house prices. We note the forecasts that, if current rates of net immigration persist, 20 years hence house prices would be over 10% higher than what they would be if there were zero net immigration”. This, inevitably, can lead to tension and conflict between the pre-existing and migrant communities (the recent violence in South Africa being an extreme example of this). However, it is not Digby Jones’ and Richard Lambert’s constituency that suffers in any fight among the lower orders for ever more scarce resources. The failure of the left to fully tease out and expose the relationship between neo-liberalism, the globalisation of capital and current immigration policy; to recognise the legitimate concerns of the domestic working class, and acknowledge how net immigration is being used as a weapon of class warfare against them (not to mention the tendency to denounce as racist anyone who points this out) plays perfectly into the hands of Digby Jones and his constituency.

4) Kicking away the ladder at home and abroad

No-one should be compelled to leave their home in order to make a decent living: a decent living should be available to everyone, everywhere. As pointed out above, it is inequality between nations ~~the wage gap~~ that drives migratory pressures, whether legal or otherwise, and naturally capital manipulates and regulates these pressures to produce outcomes favourable to them (what else would you expect capital to do?). During the ‘Golden Age’, the UK ~~typically among the developed nations~~ became markedly more egalitarian, and the insecurity faced by workers today was far less prevalent. The late Oxford economist Andrew Glyn has written of the 1960s and ‘70s: “the level of unemployment benefits rose substantially compared to pay, and eligibility for benefit became more relaxed. Unemployment, as well as being less likely, was also less costly financially to those affected, thus reducing the pressure to take the first job that became available regardless of conditions. Employment protection legislation, against arbitrary dismissal and generally limiting employer prerogatives over hiring and firing, was also extended in this period… Another very significant gain for workers was a sharp fall in average hours worked from around 2000 per year in 1950 to 1750 in 1973 – the equivalent of more than half a day less work per week”[31].

This increase in equality within the developed nations did not occur in isolation: the world as a whole became more egalitarian during the period 1950-1973, perhaps for the first time in recorded history, as the gap between the richest and poorest nations shrank: “Within the capitalist epoch, one can distinguish five distinct phases of development. The ‘golden age’, 1950-73, was by far the best in terms of growth performance. Our age, from 1973 onwards (henceforth characterised as the ‘neoliberal order’) has been second best… Although our age is second best, and international economic relationships have been intensified through continuing liberalisation, the overall momentum of growth has decelerated abruptly, and the divergence in performance in different parts of the world has been sharply disequalising. In the golden age the gap in per capita income between the poorest and the richest regions fell from 15:1 to 13:1. Since then it has risen to 19:1″[32]. These gains in equality within and between nations ~~and the concomitant increased strength and security of the working class that came with it~~ both went into reverse at the same time, beginning in the mid-to-late 1970s, with the political triumph of capital, neo-liberalism and Chicago school economics. The Observer’s Will Hutton has noted: “There has not been a gap between the rich and poor on the current scale ever in history… It is unstable. Sooner or later, there will be popular outrage and a political response”[33]. As inequality increases, migratory pressures ~~and insecurity~~ will only increase too. Those who have a little will fight ever harder to keep it; those who have nothing will fight ever harder to get it; those who have everything will continue to accumulate ever more.

The Cambridge economist Ha-Joon Chang has in recent years revived the “kicking away the ladder” hypothesis of the 19th century German economist Friedrich List. The hypothesis has it that the developed nations, by and large, became developed in the first place not through the ‘free market’ but via state activism such as protection of fledgling industries through tariffs and subsidy (from the protection offered to British wool by Henry VII, to the stewarding of the US economy by Alexander Hamilton, to the growth of the Asian Tiger economies post-World War II, right up to the development of the internet and the bale-outs of Northern Rock, Bear Stearns and the US mortgage industry). However, once development is obtained, the dominant countries would “kick away the ladder” of state-led development and protectionism from the developing countries, imposing free trade and open economies upon them instead, keeping them in their place as sources of cheap raw materials, cheap labour, and captive markets. For Chang, the modern day manifestation of this is loans and debt relief to the developing world from the World Bank which are conditional on the implementation of neo-liberal IMF policies such as privatisation, deregulation, the removal of protectionist tariffs and the opening up of their economies to foreign capital (the ‘Washington Consensus’ policies). This stands in contrast to the models of independent national development that were prevalent in the developing world during the ‘Golden Age’. The consequence of forcing neo-liberalism on the developing world has been that “average per capita growth rate among developing countries has fallen from around three per cent p.a. during the period 1960-1980 to 1.5 per cent p.a. for 1980-1999″[34]. During the period 1960-1980, average per capita growth in Latin America was 3.1%, while it was 1% for sub-Saharan Africa; during the period 1980-1999 these figures fell to 0.6% and minus 0.7% respectively³⁵ (Chang also notes that the two coming powers, India and China, have been strong enough to avoid the diktats of the IMF and World Bank, and develop and liberalise their economies on their own terms). As Chang explains: “the plain fact is that the neo-liberal ‘policy reforms’ have not been able to deliver their central promise – namely, economic growth. When they were implemented, we were told that, while these ‘reforms’ might increase inequality in the short term and possibly in the long run as well, they would generate faster growth and eventually lift everyone up more effectively than the interventionist policies of the early postwar years had done. The records of the last two decades show that only the negative part of this prediction has been met. Income inequality did increase as predicted, but the acceleration in growth that had been promised never arrived… So we have an apparent ‘paradox’ here – at least if you are a neo-liberal economist. All countries, but especially developing countries, grew much faster when they used ‘bad’ policies during the 1960-1980 period than when they used ‘good’ ones during the following two decades”[36].

The distribution of wealth is an indicator of the balance of political power. The redistribution of wealth towards the top that has taken place across the world over the last thirty years is a product of capital’s triumph, and is also a wedge capital uses to further strengthen its position: increased global inequality creates and increases the gains to be had in moving jobs from the developed to the low-wage countries; causes the movement of labour from poor to rich countries, depriving developing nations of skilled labour while creating an excess of labour in the developed world; and produces increased latitude for playing international workforces off against each other. Neo-liberal globalisation has succeeded in kicking away the ladder at home and abroad: at home the working class is weak, defeated and divided, our wages undercut, our jobs moved overseas; abroad, the once strong Third World movements that contributed so much to the increasing equality of the immediate post-war era are similarly beaten; all are increasingly helpless against the power of unrestrained global capital, and keeping the developing world poor and insecure goes hand-in-hand with keeping the working class in the developed world weak and insecure. Ethnic and identity politics are increasingly filling the vacuum where there once existed strong working class and national independence movements.

There are those who argue for a ‘no borders’ position, for no immigration restrictions at all. This is an admirable ideal, but at present it is not only politically infeasible, it completely neglects the crucial political points, namely that of who controls capital. So long as control over the economy remains concentrated in private hands – and there remains no worthwhile opposition – capital will simply manipulate and regulate net migratory pressures (which ultimately derive from inequality between nations) according to its own requirements. The ‘no borders’ position is simply the liberal flipside to the BNP position of closed borders, and is no more a pro-working class position than ‘send the bastards back’ is necessarily a pro-capital one. Likewise, it is impossible to see how ‘no borders’ would benefit the poorer nations: far from reducing inequality, such a policy would actually make it easier for wealthier nations to steal their skilled labour from them. No matter how superficially liberal the ‘no borders’ approach might appear to be, it has no practical application at best, and at worst stigmatises those who might express genuine concerns about the impact of large scale immigration as xenophobic and racist. A policy that serves as a recruiting sergeant for the BNP as well as allowing capital a free hand can hardly pretend to be progressive or pro-working class. Withdrawal from the EU may reduce the democratic deficit and allow greater domestic and democratic control over immigration policy, rendering capital less able to import workers from overseas and hurt the domestic working class through the creation of a reserve army of labour.

But ultimately, there is only one pro-working class resolution to the problems outlined above: democratic control of the economy. This is the only way of producing a migratory framework ~~indeed, an economic framework~~ that is geared toward human needs (of the domestic population as well as of migrants), not just the sectional needs of capital. However, the very idea of economic democracy has, to the left’s eternal and deserved shame, been off the ideological menu for decades, during which time the left has allowed the debate to become fossilised into a stale ‘neo-liberalism vs. state control’ false choice. Recent developments in Latin America have shown that a progressive, popular opposition to neo-liberalism can be built (although one must be wary of the possible development of autocracy and authoritarianism, as has been so often the case before with the left). As yet there is no indication of any counterpart materialising in the developed world.

Notes:

[1] Available in full at http://www.publications.parliament.uk/pa/ld200708/ldselect/ldeconaf/82/8…

[2] Letter to the Financial Times, 15 May 2002, (link).

[3] Mervyn King, speech at Salts Mill, Bradford, 13 June 2005, http://www.bankofengland.co.uk/publications/speeches/2005/speech248.pdf.

[4] Blanchflower’s testimony is available at http://www.parliament.uk/documents/upload/EA218%20Blanchflower.doc

[5] Digby Jones, ‘Pride and prejudice about immigration’, Daily Telegraph, 19 August 2006, http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/08/20/ccimmi…

[6] Martin Wolf, ‘Four Falsehoods on UK immigration’, Financial Times, 3 April 2008, http://www.ft.com/cms/s/0/a008241a-0189-11dd-a323-000077b07658.html?ncli….

[7] Home Office, ‘The Economic Impact of Immigration’, June 2008, available at http://www.bia.homeoffice.gov.uk/sitecontent/newsarticles/economicimpact….

[8] Andrew Taylor, ‘Migrants win support over jobless fears’, Financial Times, 12 June 2008, http://www.ft.com/cms/s/0/af8f3d86-37dc-11dd-aabb-0000779fd2ac.html?ncli… and Alan Travis, ‘British workers lack skills and drive of east Europe’s migrants, says study’, The Guardian, 12 June 2008, http://www.guardian.co.uk/uk/2008/jun/12/immigration.immigrationpolicy1.

[9] Liam Byrne, ‘The case for a new migration system’, 6 February 2008, http://press.homeoffice.gov.uk/Speeches/sp-lb-lga-feb-08; and Byrne’s submission to the Lords committee, 15 January 2008, http://www.publications.parliament.uk/pa/ld200708/ldselect/ldeconaf/82/8….

[10] Simon Basketter, ‘Report shows benefits of immigration into Britain’, Socialist Worker, 27th October 2007, http://www.socialistworker.co.uk/art.php?id=13313. The Home Office/ DWP submission can be found at http://www.homeoffice.gov.uk/documents/economic-impact-of-immigration?vi….

[11] Christian Dustmann, Tommaso Frattini, and Ian Preston (2007), ‘A Study of Migrant Workers and the National Minimum Wage and Enforcement Issues that Arise’, Low Pay Commission, available at http://www.econ.ucl.ac.uk/cream/pages/LPC.pdf, p11-12.

[12] Jim Pickard and Jimmy Burns, ‘Ministers unaware of present migrant numbers’, Financial Times, 10 June 2008, http://www.ft.com/cms/s/0/1d9176b0-373c-11dd-bc1c-0000779fd2ac.html?ncli….

[13] Simon Briscoe, ‘UK migration data ‘not fit for purpose’, Financial Times, 19 May 2008, http://www.ft.com/cms/s/0/2be2f4a2-2524-11dd-a14a-000077b07658.html?ncli….

[14] Sara Lemos and Jonathan Portes (2008), ‘The impact of migration from the new European Union Member States on native workers’, http://www.dwp.gov.uk/asd/asd5/wp52.pdf.

[15] ‘Brickbats and Slurs’, The Independent, editorial comment, 12 June 2008, http://www.independent.co.uk/opinion/leading-articles/leading-article-br….

[16] David Coats (2008), ‘Migration Myths: Employment, Wages and Labour Market Performance’, http://www.theworkfoundation.com/Assets/PDFs/migration2.pdf.

[17] Centre for Economic Performance, ‘Immigration to the UK: The Evidence from Economic Research’, http://cep.lse.ac.uk/pubs/download/pa010.pdf.

[18] Office of National Statistics, http://www.statistics.gov.uk/instantfigures.asp

[19] ‘UK jobless level increases again’, BBC News, 16 July 2008, http://news.bbc.co.uk/1/hi/business/7508816.stm.

[20] Alexi Mostrous and Christine Seib, ‘Tide turns as Poles end great migration’, The Times, 16th February 2008, http://www.timesonline.co.uk/tol/news/uk/article3378877.ece.

[21] Age Bakker and Bryan Chapple (2002), Advanced Country Experiences with Capital Account Liberalization, IMF Occasional Paper No. 214 (Washington: International Monetary Fund).

[22] John Willman, ‘City and services are big winners’, Financial Times, 21 March 2007 (link); and John Willman, ‘Business relieved its voice heard at last’, Financial Times, 22 March 2007 (link).

[23] Lucy Killgren, ‘Enthusiastic US lifts Burberry’, Financial Times, 29 May 2008, (link).

[24] Carole Cadwalladr, ‘Squaring up to Burberry’, The Guardian, 25 March 2007, http://lifeandhealth.guardian.co.uk/fashion/story/0,,2040157,00.html.

[25] Ahmed Zorome (2007), ‘Concept of Offshore Financial Centres: in search of an operational direction’, IMF Working Paper WP/07/87, http://www.imf.org/external/pubs/ft/wp/2007/wp0787.pdf.

[26] Vanessa Houlden, ‘’Tax gap’ estimated at £11-£41bn’, Financial Times, 13 March 2008, http://www.ft.com/cms/s/0/a44427b6-f13c-11dc-a91a-0000779fd2ac.html.

[27] David Hencke, ‘Number of deaths at work rises to five year high’, The Guardian, 26 July 2007, http://www.guardian.co.uk/politics/2007/jul/26/immigrationpolicy.

[28] ‘UK staff top job insecurity table’, BBC News, 16 November 2005, http://news.bbc.co.uk/1/hi/business/4443406.stm.

[29] Kathryn Hopkins, ‘Disposable income hit hard by rising mortgages and energy bills’, The Guardian, 4 July 2008, http://www.guardian.co.uk/business/2008/jul/04/consumerspending.mortgage….

[30] Mike Brewer, Alistair Muriel, David Phillips, Luke Sibieta (2008), ‘Poverty and Inequality in the UK: 2008′ (London: Institute of Fiscal Studies), http://www.ifs.org.uk/comms/comm105.pdf, p1.

[31] Andrew Glyn (2006), Capitalism Unleashed: finance, globalization and welfare (Oxford: Oxford University Press), p4-5.

[32] Angus Maddison (2001), The World Economy: a millennial perspective (Paris: OECD), p125, 126.

[33] Will Hutton, ‘Feeble government lets the superclass soar over the rest of us’, The Observer, 4 May 2008, http://www.guardian.co.uk/commentisfree/2008/may/04/globaleconomy.econom….

[34] Ha-Joon Chang (2003), Kicking Away the Ladder: development strategy in historical perspective (London: Anthem), p133. A précis of the book is available at http://www.paecon.net/PAEtexts/Chang1.htm. An hour long lecture by Chang is available to view at http://www.youtube.com/watch?v=T5-ojv5-b3U.

[35] Ibid., p132, 134.

[36] Ibid., p128, 129.

A New Form of Government?

Ellie Keen — Sun, 13 Jul 2008 00:00:00 +0000

European elite looking to a new form of government—a pre-democratic one

It is surely just a matter of time before neo-liberal logic demands that the spheres of politics and business also be synchronized. After all, doesn’t the whole notion of ‘political accountability’ rather smack of ‘restrictive practice’ when you think about it?

Britain, unlike, say, Ireland and most other countries, does not have a written constitution in which the relationship between the national and local government is codified. This, however, has not stopped us from developing a balancing act between Parliament and local councils that, while sort of muddling through, still seemed to work well enough for most of the people most of the time.

However, the instant local councils were stripped of their revenue raising abilities, the essential equilibrium was forfeited and power flooded toward the centre. Thereafter Government awarded councils an allowance and, to add insult to injury, liked to interfere in how it should be spent. Along with the loss of prestige suffered by the council as a whole, the stock of the individual councillor was further eroded when, on the grounds of efficiency, the cabinet system was introduced by New Labour.

Here was a move that knowingly increased the conflict between councillors elected to represent and vote on the interests of their constituents at ward level, and ministers and/or council officers making the real decisions at some other time and some other place. Rather odd in a democracy that the elected representative can be called junior to some anonymous factotum in the town hall, don’t you think?

Well, seemingly Hazel Blears’s forthcoming Local Government White Paper promises to resolve the inconsistency. Rumour has it that the status of local elections is to be reduced ‘to a largely consultative status with their remaining powers supplanted by forums, meetings and consultation sessions, subject to superior veto.’

Now such a stroke has been on the cards for quite a while. Local government by quango was something the IWCA anticipated a decade back: ‘Already almost 90% of local funding comes from central government. While the percentage may increase, the funds allocated may well be reduced. No proper funding, no proper services, no need for accountable local government. Local government by quango is a very real possibility in the near future.’ (Interview with IWCA spokesman, Red Action, Spring 1997)

No doubt this shedding of democracy will be promoted under the title of ‘empowering local communities’ or something equally Orwellian.

But if this does appear a rather radical departure even for New Labour, it is because many otherwise politically educated people simply do not get neo-liberalism. Uniformly, left liberal commentators, if they refer to it at all, do so in terms of economics only.

But neo-liberal philosophy has so much more to offer. Like its social democratic and Keynesian predecessors, it too looks at society in the totality, even though the kind of economic freedom available under neo-liberalism is of a very narrow kind and ultimately illusory if you’re working class.

Putting that rather major philosophical flaw to one side, neo-liberalism nonetheless demands that if the free will of the individual (the ‘choice’ agenda) is lauded in one sphere, beginning, say, with business, it must eventually be celebrated in every other sphere.

We have been hearing for over a decade now how people do not really care how or by whom the health service is provided so long as they receive effective treatment free at the point of delivery as always.

This is a fairly obvious strategm with the architects fully understanding that the means of delievery will in the long-run determine both the quality of the service provided and the price for providing it. Or putting it another way, the means will inevitably determine the end. One way or the other, long before they’re finished, ordinary people will be faced with a straight choice alright: pay for adequate treatment or make do with second best. This contributor to the Daily Telegraph online discussion ‘The NHS is foolish to demonise privitisation’ sums up the thinking behind the choice agenda rather nicely.

‘Even as an ex-doctor I find the concept of free healthcare a mistake when added to the free everything else that the lazy spineless underclasses aspire to. I packed up medicine largely as a result of having to deal with their minor moans and need for excuses.

‘Paying for health care concentrates the mind and the finances and makes peope very much more aware of the consequences of their failings. Cutting out the lager, reducing food intake, illegal drug bills, huge TVs, keeping themslves fit and so on, which are presently paid for by the taxpayer, would easily pay for the fairly small payments required for a family under 50.

‘The absence of free medical care requires a new mindset for most if the parameters are correctly assigned. Even in the USA there are measures to ensure that the VERY poor are not left to die at the roadside and those foolish enough not to have taken out insurance or saved for the eventuality will, quite rightly, pay for it with their possessions.’ (Posted by Meditek June 5 2008)

NHS dentistry is already a fair distance down this road. The latest reports show that dentists are being incentivised to take more private patients and to avoid taking on NHS patients whose treatment might prove costly. Legal aid is another area that has benefited from the same choice agenda.

Taken together with the ‘freeing up’ of the railways, gas, electricty water, housing and schools it is surely just a matter of time before neo-liberal logic will demand that the spheres of politics and business also be synchronized. After all, doesn’t the whole notion of ‘political accountability’ rather smack of ‘restrictive practice’ when you think about it? And so awfully last century to boot? How long before the cry is heard for politics also to be freed? After all, as long as the right decisions are arrived at, what does it matter who arrives at them?

We may be nearer than you think. Witness the European power elite visibly bristling with impatience after the Irish No vote on the Lisbon Treaty. Now try and convince yourself they are not actually hankering for the return to a more efficient form of government: a pre-democratic one. What’s significantly different between now and a decade ago it is that we are no longer the only ones saying so.

Wrting in The Guardian, Simon Jenkins argues that ‘Loathing of elections has led British democracy to atrophy: Unchecked by any formal constitution, power drifts to the centre, where the will of the people is treated with utter disdain.’

New Labour plc?

Tim Holmes — Tue, 24 Jun 2008 15:18:18 +0000

Recently support for New Labour registered at 23% nationally, the lowest since opinion polling began back in 1938. The party has lost 53% of its membership between 1997 and 2006 and will undoubtedly have lost considerably more since. It is struggling to pay off loans which with interest amounts to an estimate of between £24 to 28 million. Annual running costs amount to £25 million and private donors are understandably refusing to step up to the plate. And why would they? It’s not as if New Labour will do something for them that the Tories won’t.

As for the unions, calls to hold a vote on whether to disaffiliate are becoming more frequent. The GMB have threatned to withdraw funding from 30 Labour MP’s. Stephen Ladyman, vice-chairman of the party described the move as “tokenistic and hard-left”. That the kind of response is not likely to help mend bridges. Meanwhile senior officials in the Labour party, including Gordon Brown, could become personally liable for millions of pounds in debt unless new donors can be found within weeks. Almost unbelievably the New Labour response is to consider changing its status to a company – so that it would limited liability! Which is apt as they are set on privatising everything else.

The party has four weeks to find £7.45m to pay off loans to banks and wealthy donors recruited by Lord Levy, Tony Blair’s former chief fundraiser, or become insolvent. A further £6.2m will have to be repaid by Christmas – making £13.65m in all. The sum amounts to two-thirds of the party’s annual income from donations.

The figures are a conservative estimate as they do not include interest that will also have to be paid. A Labour source said that although the total debt was listed as £17.8m on the Electoral Commission website, the true level, with interest, was nearer to £24m.

The possibility that party officials and members of its national executive committee could become liable is being taken seriously by union leaders, and has been underlined by the decision of equity fund chairman David Pitt-Watson not to accept the post as Labour’s general secretary.

Though he was Brown’s candidate for the post, he declined the offer after receiving independent legal advice that he would be personally liable for repaying the loans and could be bankrupted if Labour’s finances collapsed.

The advice from City solicitors Slaughter and May said unequivocally that leading party officials and members of the NEC would be ” jointly and severally” responsible for the party’s debt.

The reason is that the Labour party constitution is framed like a local club or society, and has no provisionfor limiting the liability of its officials or managers.

A Labour source said: “The party’s constitution is like a five-a-side football club, or the local cricket club. The big difference is that the most club officials and managers could expect to have to fork out is an unpaid bill for hiring the pitch. In Labour’s case, it’s tens of millions of pounds.”

The advice was the sole reason why Pitt-Watson, a committed Labour supporter and former Westminster City councillor, turned down the job this month.

But the reverberations inside the party have been enormous. Earlier this month the GMB union’s executive decided to indemnify its two members on the NEC – Debbie Coulter, the union’s deputy general secretary and a former Labour party conference chairwoman, and Mary Turner, GMB’s president – to protect their homes and savings. A GMB spokesman told the Guardian: “They told the executive they would not continue to sit on the NEC unless they were indemnified. It’s too much a risk for them.”

As leader of the party and a member of the NEC, Brown is also potentially vulnerable. Other prominent members of the committee are Harriet Harman, the deputy leader; her husband, Jack Dromey, the party treasurer; Pat McFadden, minister of state at the department for business; Angela Eagle, exchequer secretary at the Treasury; Dawn Primarolo, public health minister; and former ministers Keith Vaz and Janet Anderson.

Anderson said last night: “I am very concerned and we should look into the situation immediately. If this is the case, I can’t see how anyone, unless they are very wealthy or are indemnified, like in the case of the GMB, can serve on the NEC. I can’t see who would want to be general secretary following this advice.”

The party’s financial plight can be shown by the current negotiations taking place with banks and donors.

The Co-operative bank, whose £2.61m loan is due to be repaid on June 30, has told the party it wants its money back, even though it is getting 7% interest. The bank has asked the unions to offer loans to Labour so the party can pay its debt, but some are refusing to do this. Paul Kenny, the GMB’s general secretary, has told the Co-operative bank it will refuse to help unless the bank withdraws its de-recognition of the union, which represents staff at Co-operative Funeral Services.

Three other loans are due to be repaid on June 30 and July 1. They are a £1.54m loan from Unity Trust bank, also at 7%; a £1m loan at 6.75% from Nigel Morris, founder of the Capital One financial group, and £2.3m from Sir David Garrard, a property developer. He had already extended the loan by 15 months from April 2007.

Labour is hoping that the donors can be persuaded to extend the loan period. Sir Richard Caring, owner of the Ivy and Caprice restaurants, has agreed an indefinite extension of his £2m loan, due to be repaid last March. He has agreed to give 180 days notice if he wants it repaid.
The party’s financial crisis could be compounded this autumn. Three of the biggest unions, Unison, the Communications Workers Union and the GMB have tabled motions at their annual conferences this month calling for members to disaffiliate from Labour. If this goes ahead, Labour would lose £4m of its £19m a year in donations.

The Labour party is said to be investigating whether it can change its status to a limited liability company to protect its officials and NEC members – but such a move could be open to legal challenge until it clears its debts.

Blair/Brown ‘pretend society’ exposed

Ellie Keen — Mon, 02 Jun 2008 20:19:11 +0000

£35bn debts to avoid being seen to be working class

It all seems rather silly now, but it was not so long ago that many on the liberal left fully expected the Gordon Brown coronation to deliver a significant change of political direction rather than a mere, though welcome, change of style.

It was always a fantasy, of course, and Brown did not waste much time in disillusioning them. But what was the basis for the wishful thinking in the first place? In part it can be put down to Brown seeking to out-manoeuvre Blair with a series of ‘dog-whistles’ to the party faithful. These supposed ‘values’ were in turn given undue credibility as a result of a febrile media constantly delivering bulletins on the teeth-bared battle behind the scenes between the so-called Blairities and Brownities for control of the party, and, as too many allowed themselves to think, for the soul of it. After all, if the intense internecine warfare was not evidence of a deep ideological divide, what was it about? After the wretched dithering over the autumn election, the fêting of Thatcher, the delay in nationalising Northern Rock, the 10p debacle and much more, culminating in the tactics leading up to the Crewe & Nantwitch by-election, the mystery may have been resolved. New Labour’s strategy at Crewe is what caused the penny to drop.

First of all, here was a party that once grandly announced that it had ‘no problem with people getting filthy rich’ and had spent a decade and half of bowing at the altar of privilege now attempting to dupe voters by playing the class card. More than anything it is the little details that suggest the gig is up. For example it has been reported that voters had been woken up at 4am by callers pretending to be Tory canvassers. And four-by-four vehicles festooned with blue balloons according to an article in The Independent have been careering through council estates – more pretend Tory canvassers. Next minute they’re pointing the finger at the Tories for being soft on immigrants. A chorus of ‘You don’t know what you’re doing!’ would have mocked these clunking inconsistencies in the New Labour message in any football ground in the country. The sheer desperation, panic and by-any-means-necessary approach is not, however, matched by the ruthlessness characteristic of the Blair regime in terms of delivery. Instead, there is an absurdly amateur element that would have had Blair apparatchiks recoiling in horror. Which raises an interesting question. If, as is now almost universally accepted, the Brown v Blair tug of war never was ideologically based, why then were there ‘Brownites’ at all? What were they for? It is when you check out the Brown Cabinet, jam-packed as it is with sycophantic time-servers who could never have hoped to have made the cut in the Blair era, that it starts to make sense. There never was any genuine Brownite faction devoted either to leader or cause at all. What there was were individuals who, aware of the Blair-Brown pact, hitched themselves to Brown’s bandwagon out of nothing more than grinding personal ambition matched deep down with a cold-eyed estimate of their true abilities. In short, sub-prime ‘Blairites’ to a man/woman—and they all know it.

One senior Labour MP quoted in the London Evening Standard said, on the disastrous Crewe Nantwitch by-election campaign, “It has been juvenile and counter-productive. And if they think this has played badly in the North of England, that’s nothing to the way it looks to people in the South and London who thought class warfare was a thing of the past. Down here people do not hate those who are better off—they aspire to join them.”

Many indeed may well ‘aspire’ but jumping classes is an altogether different matter, as a recent survey shows. Millions of Britons are getting into debt to finance a lifestyle beyond their means simply because they want to give the appearance of being middle class.

An astonishing 15 million people have racked up debts of £35billion despite their income being below the national average, the survey found.

Six million wannabe middle class households bring in less than £15,000 a year and many rely on credit cards and bank loans to fund their spending.

The average income for working class people is £23,000 and £33,000 for the middle class.

But rent and mortgage payments are nearly the same at £366 for a working class household compared with £334 for the middle classes.

Those considered to be in the ‘upper middle class’ were found to earn more, with average earnings of almost £52,000 a year.

Richard Mason, director of moneysupermarket.com, which carried out the research, said: ‘It’s worrying to see that so many people are spending and borrowing beyond their means to try to keep up with the lifestyles of others.’

Rather optimistically, personal finance expert Sue Hayward said that it all showed ‘the class divide was shrinking’. Actually what it shows is that together with the ever-expanding wealth divide between rich and poor, the politically more significant class divide between working and middle classes is also keeping pace. More significant because in the real world, contrary to myth, it is the working class, not the middle class, that is really expanding. But if Ms Hayward is confused it is understandable. With his slogan ‘we’re all middle class now’ Blair seemed to promise a meritocracy. But as repeated surveys show, neo-liberalism did not and indeed could not deliver. Social mobility stalled or went in to reverse. So what we have instead is not a society based on solid achievement but on the appearance of achievement; a facsimile of a true meritocracy. And while ‘pretend canvassers’ might be risible, a pretend society, with all the attendant psychoses, will in the long run be the real Blair/Brown legacy that will prove altogether more damning.

The Threat of a Good Example

Ellie Keen — Sun, 18 May 2008 01:33:06 +0000

On a night where Labour were deservedly massacred across the whole country how were a bunch of lacklustre candidates able to win two out of three against the IWCA in Oxford?

In the local elections on 1 May, the IWCA lost two of its four councillors on Oxford City Council. In Churchill ward, Claire Kent’s vote from 2004 –where she won by 10 votes from a standing start- stood up, but Labour were able to add on over 200 to theirs. In Blackbird Leys, Labour were able to turn Lee Cole’s 80 vote majority from 2004 into a 230 vote deficit. These results were greeted with unrestrained glee and relish by Labour at the count. In Northfield Brook, IWCA group leader Stuart Craft held on, though his majority was reduced from 116 to 66.

Elsewhere, the BNP officially took 5.3% in the London Assembly elections and now have one of the 25 Assembly members. They also added a dozen or so councillors and now have over 100 elected representatives at various local levels. In the individual London Assembly constituencies, the British Nationalists took 5.7% in Greenwich and Lewisham, 5.6% in Bexley and Bromley and 4.5% in Ealing and Hillingdon. Respect and the BNP only faced each other in one constituency, City and East, where they finished third and fourth respectively with 14.3% and 9.6% (City and East is made up of the Respect/ Galloway fiefdoms of Newham and Tower Hamlets, and the BNP stronghold of Barking and Dagenham). The Left List stood a candidate in every constituency, and the best they could manage was 3.56% in Enfield and Haringey. The Left List’s Mayoral candidate, Lindsey German, pulled in just under 52,000 votes, compared to over 120,000 that she got running under the Respect banner last time. By way of comparison, the IWCA’s Lorna Reid pulled in just under 50,000 votes in 2004 on a significantly lower turn-out (37% to 45%).

On a night where Labour were deservedly massacred across the whole country and posted their worst electoral results for forty years—the Observer’s Andrew Rawnsley wrote: ‘The genius of New Labour was to create an election-winning alliance of both traditional supporters and converts, of Labour heartlands and new territories. Labour was not hammered in one or the other – it was slaughtered in both’—in Oxford they were able to successfully unseat two dedicated, born-and-bred independent working class representatives.

How? The Labour candidates that were stood against the IWCA were in themselves hardly A-grade material: in Churchill Labour stood Mark Lygo, a man relatively new to the area with no track record of community work or local activism, and who himself said he was ‘surprised by the margin of victory’. In Blackbird Leys Labour stood Val Smith, an incumbent county councillor and wife of the sitting Oxford East MP Andrew Smith. The Smiths are New Labour personified, and Andrew Smith is holding onto his Parliamentary seat by his fingertips: his majority in the last general election was cut from over 10,000 to less than 1,000. Labour’s candidate in Northfield Brook was a corporate lawyer from wealthy North Oxford. So how were this shower able to win two out of three against the IWCA?

In January an Oxford Green councillor, Matt Sellwood, predicted precisely this very outcome. His reasoning?: ‘part of their [the IWCA’s] problem is that they’ve made such an impact that they’ve scared Labour half to death, and so Labour are going to do everything they can to defeat them … even more so than against the Lib Dems, and much more than against the Greens (Labour have pretty much abandoned most of our wards these days, and given up trying to get them back). So basically their seats are Labours #1, #2 and #3 targets, and that is hard to resist in a city that still has a lot of Labour funding and volunteers. Not impossible, but very difficult.’

The Smiths are the biggest political fish in Oxford and they have taken personal charge of the campaign to defeat the IWCA. In September 2004, soon after the IWCA increased its number of councillors in Oxford from one to three, Andrew Smith suddenly and mysteriously resigned from his post as Secretary of State for Work and Pensions ‘to devote more time to the responsibilities I enjoy in my constituency and to my family.’ And in their efforts to stop the IWCA the Smiths are not averse to bringing in outside reinforcements: in this local election campaign no less than Gordon Brown himself paid a visit to Oxford, where he made three stops: Blackbird Leys, Churchill, and Stuart Craft’s workplace (‘Brown backs slur-hit city estate’, Oxford Mail, 8 April 2008). Brown never visited Bury, a key swing battleground where Labour eventually lost the council to the Tories.

So Labour pulled out all the stops and threw everything they had at us, up to and including the Prime Minister. Does that explain everything, particularly the large, and unforeseen, swing towards Labour away from Lee Cole? Perhaps not. This is not the first time that Labour, increasingly nationally unpopular and devoid of decent personnel, have been able to produce a large vote against the IWCA seemingly from nowhere: the same thing happened in Islington in 2006.

The day after this years elections, the Guardian reported on comments made by members of the Labour controlled Public Administration Select Committee on postal ballot fraud. Labour MP Gordon Prentice said: ‘Our elections are wide open to fraud. We have judges that have said in recent months and years that the UK is like a banana republic when it comes to an election.’ Tory MP Charles Walker said: ‘In many parts of this country, it is one man, one woman, three or four hundred votes.’ Labour’s Kelvin Hopkins has argued for the introduction of individual voter registration to clamp down on fraud, while adding with admirable candour: ‘I hesitate to say this, but one of the reasons our party is reluctant to do this, is because it might actually dent our support in certain areas,’ (‘Election fraud: Labour failed to act, say MPs’, The Guardian, 2 May 2008).

The Lib Dem MP John Hemming has written: ‘Labour’s strategy (called the L Vote) in recent years has been to identify where their own supporters are, and address the campaign to them. This may result in lower turnouts, although having postal votes where individuals fill in a few hundred votes each has helped increase the Labour vote. Happily the more recent changes to election law will reduce the amount of electoral fraud’.

An undercover investigation by the Sunday Times into the Labour party in Leeds showed the ‘L Vote’ strategy in action, with canvassers ‘chasing’ postal votes by going door-to-door prior to election day collecting postal ballots from voters, and filling them out on their behalf if need be. When one of the group suggested that the practice was illegal, the team leader responded with: ‘Yes it is. But we’ve done 25% already, so …’ (( ‘Get the votes and we can win, but don’t get caught with them’, (The Sunday Times, 29 April 2008 ).

A report by the Joseph Rowntree Reform Trust published in April found: i) ‘Greater use of postal voting has made UK elections far more vulnerable to fraud and resulted in several instances of large-scale fraud’; ii) ‘There is widespread, and justifiable, concern about both the comprehensiveness and the accuracy of the UK’s electoral registers – the poor state of the registers potentially compromises the integrity of the ballot’; iii) ‘There is a genuine risk of electoral integrity being threatened by previously robust systems of electoral administration having reached ‘breaking point’ as a result of pressures imposed in recent years’.

But far less important than the ‘how’ of Labour’s victory is the ‘why’. Why would Labour—the Prime Minister included—go to all this trouble to try and knock out three councillors on the eastern edge of Oxford? Because of the threat of a good example: if working class people—with virtually no resources—can get organised, sling out Labour and demonstrably start to take back control on the eastern edge of Oxford then they can do it elsewhere (when Gordon Brown visited Blackbird Leys he remarked that the estate had ‘made a huge step forward’ and that ‘there is so much improvement taking place on Blackbird Leys’, forgetting to mention who was the source of this improvement or who was responsible for the previous neglect). Will Hutton wrote in the Observer on 4 May: ‘There has not been a gap between the rich and poor on the current scale ever in history. It is unstable. Sooner or later, there will be popular outrage and a political response… Who isn’t spooked by the renaissance of Italian fascism? Challenging times require courageous responses.

None is in prospect,’ (‘Feeble government lets the superclass soar over the rest of us’, The Observer). As we have seen above, the renaissance of Italian fascism is being mirrored by the far right’s greatest ever electoral success in the UK. Neo-liberalism is becoming increasingly unstable, yet only fascism is positioning itself as a viable alternative. Meanwhile, the middle class left, in the shape of the Left List, with sufficient resources to make an impact, continue only to provide further proof of Peter Wright’s claim that the British left ‘are about as dangerous as a pondful of ducks.’

The IWCA is not: the BNP’s current success is largely based on the same analysis of New Labour that led to the formation of the IWCA in the first place. In 1997 the BNP’s Tony Lecomber said, ‘The people who have been abandoned by Labour and have never been represented by the Tories will, in their desperation, turn to us. This is unlikely to happen next May, since people will still be giving Tony Blair’s Labour Party the chance to show what they can do. After that, though, disappointment will set in.’

One of the IWCA’s early breakthroughs came in the London borough of Havering, where we took 25% of the vote the first time out in the wards of Gooshays and Heaton in 2002. Since then, unfortunately, the IWCA branch there has had to cease activity due to pressures of work and time on the key activists. However, this gave the BNP the chance to move in, win Gooshays marginally in 2006 and then decisively in 2008.

This, in microcosm, is the choice we face. The IWCA analysis, applied from the left rather than the right, calls into question the very legitimacy of the Labour Party, of it’s alleged reason for being as the party of the working class. More than that, pound for pound the IWCA strategy works and has been proven to work where we’ve been able to apply it and so the Labour party –‘scared half to death’- has had no choice other than to try and stop it at source. We now know how hard and how dirty Labour will fight in order to safeguard their position and prevent a progressive, working class alternative to the barbarism of neo-liberalism, and the greater barbarism of fascism, from emerging. We now know that the working class will have to fight all the more effectively in terms of organisation, numbers, tactics, resources and ideas if that alternative is to be made a reality. We will.