British politics, the Eurozone crisis, and the November 30th strike

This was discussed and agreed by the Socialist Resistance National Committee on December 17

1) The crisis and Osborne’s Autumn (budget) Statement

The world economy is heading for recession – gripped in a multiple crisis of the economy, energy, food, and of the ecology of the planet. Christine Lagarde the Director of the IMF has spelled this out with a startling new and more urgent warning of a slide towards protectionism and a 1930s style slump. Even the Chinese economy, looked to by many as the savior of the global market, is faltering.

The crisis of the EU has reached the stage where the European Central Bank (ECB) is openly talking of the possibility of the collapse of the Eurozone itself and the British Government is making contingency plans for the repatriation of a million British citizens from Spain in the event of the collapse of the banking system and the closure of the ATMs.

This was the background to the Autumn (budget) Statement, delivered by George Osborne to Parliament the day before the November 30th strike. His approach (unsurprisingly) was to continue and deepen the same dogma driven austerity agenda he has been conducting the past 18 months. It is the approach of a completely Thatcherite Coalition Government representing the City of London and the bankers. All the spin about the Tory Party as the party of the family and we’re all in this together was dumped.

The Autumn Statement came as the Office of Budget Responsibility (OBR), created by the Coalition soon after coming to office, revised their previous (ludicrously optimistic) predictions for the British economy sharply downwards. They slashed their previous growth forecast for 2011 from 2.5% 0.9% and for 2012 to 0.7%. They raised their predicted public sector job losses from 400,000 to 710,000. Borrowing for 2011, far from going down as they had predicted, would now go up by £158bn. Unemployment would likewise rise sharply (it was up by another 128,00 in the last quarter) and living standards would plummet. Youth unemployment has rocketed by over 90% over the past year.

Even more ominous was the caveat the OBR put on its new assessments that even this depended on the crisis of the Eurozone being resolved – otherwise all bets were off.

The Autumn Statement therefore was yet another brutal attack on the poorest sections of the working class – low paid families and children in particular. Osborne would not only stick to his current disastrous austerity policy but would deepen and extend it. The current period of austerity will be extended from 4 years to 6 – taking it two years into the next Parliament. Child tax credits for low paid working families would be frozen – propelling 100,000 more children into poverty. There would be an extension of the public sector pay freeze by adding another two years at a limit of 1.0% increases – which is in fact a 16% pay cut over the four year period taking inflation into account. The rise of the retirement age to 67 would be brought forward by two years and national pay bargaining would be ended for the public sector. All this will choke off the British economy even faster and push up borrowing even higher.

This attack on the poor has to be set against the grotesque situation where director’s pay has gone up by 49% in a year and bankers’ bonuses have topped £14bn.Britain already has the fastest rising levels of inequality of any of the wealthy nations.

Previous rhetoric about the Coalition being the greenest government ever was dumped. Now environmental measures, even the meagre ones they had undertaken, could no longer be afforded. This reflects an increasing offensive against the ecological movement at all levels, which is impacting on the campaign against climate change in particular. The disastrous outcome of the Durban climate summit to do nothing now but to aim to have an agreement in nine years time by 2020 also reflects the scale of the problem.

That the previous OBR’s figures were so far from reality was blindingly obvious to any objective observer of the British economy, but for the Coalition it is a major problem. It means that after 18 months in office their economic strategy – to turn the economy around before the next election – has fallen apart. And the trend is still downwards, by whatever indicator is used. The crisis of high street shops with a series of bankruptcies pending shows it clear enough and the job losses in the public sector will push it even faster. In fact the British economy is almost certainly already in recession, which will become clear as the figures emerge. The Coalition’s crass prediction (or calculated lie) that the private sector would replace jobs as public sector workers were sacked has fallen apart pushing official unemployment towards 3m with the real figure double that.

Osborne’s mantra that austerity is crucial in order to meet the requirements of the dreaded rating agencies – which he has promoted over the last 18 months as the oracles of wisdom (the same agencies which had all the banks which collapsed in 2008 on triple A ratings) – thereby enabling Britain to borrow money at a uniquely cheap rate is also fantasy economics. This was clear recently when the rating agency Standard and Poor (now followed by Fitch) put fifteen of the seventeen Euro Zone countries, including France and (remarkably) Germany, under warning of an impending rate reduction. The reasons they gave for this was not just the determination (or otherwise) of governments to introduce austerity programmes but the political instability in the Euro Zone, the lack of growth, and the onset of a double dip recession! The notion, therefore, that Britain is a ‘safe haven’ or is shielded from such downgrades by the Coalition’s austerity measures is fanciful in the extreme.

The rating agencies are in any case not just (private) economic institutions but political institutions with a political agenda. This was behind the spat between France and Britain following the EU summit over the agencies and their agenda. Sarkozy was furious that France was threatened with downgrade despite the fact that its budget deficit is set to be 5.7% of GDP for 2011, a lot lower that Britain’s at 9%. The governor of the French Central Bank has also got involved arguing that since Britain had “more debt, higher inflation, and less growth than us” the rating agencies should, he said, be more worried about Britain than France.

Whilst Britain does have the advantage in this regard of being outside of the Eurozone at the present time once the economy is officially in recession it will be wide open to such downgrades – something which would collapse Osborne’s plans into yet another crisis. In fact it is surprising in many ways that Osborne’s austerity approach has survived the last 18 months, and even more surprising that it still has majority support in the country despite growing opposition, the damage it is doing, and the amount of people it is hurting. This, however, is based on several crucial factors.

First of these (as is the case across Europe) is the successful use of the debt as a bludgeon to batter people into accepting that there is no alternative but to tackle it through austerity. The ludicrous comparison is made to a personal credit card or a personal debt – ‘if you have a debt you have to repay it’. This is presented as the ‘common sense’ approach. Yet the notion that governments with all the levers in their hands over the whole of society, from printing money to a range of fiscal and political options (nationalisation, expropriation etc) at their disposal, are in the same position as the individual with a credit card is ridiculous in the extreme.

There are two principal reasons why they have been so successful in getting this kind of stuff across to the population as a whole. This first they have had the slavish support of the media to this approach right from the early days of the Coalition. It is often hardly necessary for the Coalition to put up a Minister to put their case because most presenters, including the BBC can be completely relied upon to do it for them. Any cuts campaigner interviewed on radio or TV has it immediately put to them by the interviewer: ‘but cuts have to come from somewhere don’t they?’ This also extends to wider support for the Coalition. They are now for example beginning to present divisions within the Coalition as healthy expressions of democracy having spent years presenting divisions within Labour as a death rattle.

The second is New Labour’s position itself. Whilst Labour’s position is not the same as the Tories since they are calling for some minimal stimulus (which is important and should be supported as far as it goes) their ability to argue this effectively is totally lacking. At the some time their support for the neo-liberal agenda leads to have their own extensive cuts agenda which they would implement if they were in office completely compromises them. And the media plays it to the full asking them in every discussion on the cuts what and how far they would cut.

2) The crisis of the Eurozone

The crisis of the Eurozone is clearly a product both of the world crisis and of structural contradictions within the Eurozone itself which are rooted in the diversity of the economies of the member states and their separate fiscal and political structures. The Stability and Growth Pact (S&GP) was designed to control this diversity by capping budget deficits at 3% of GDP and national debts at 60% of GDP. This collapsed when Germany and France took the lead in ignoring it. This is, therefore, by far the most serious crisis the EU has faced and threatens its continued existence, at least in its current form.

The real issue at the recent EU summit, therefore, was not that Sarkozy and Merkel found a way of getting Cameron and his xenophobic crew out of their hair but that they were all of them devoid of any answer, or even the beginning of an answer, at the level on the 17, the 26 or even the 27, to this problem. The chances, therefore, of the eurozone, or the EU itself, surviving in their current forms, therefore, remains remote.

The reality is that the model for the EU established by the Maastricht treaty (European monetary union in a neoliberal straitjacket) has collapsed and the so-called Fiscal Compact – the creation of a S&GP Mark 11 by a revision of the Lisbon Treaty in the hope that this time it would work – will resolve nothing. Under it the EU would still be a bosses Europe with even less democracy (with additional EU powers over national budgets etc) and harsher penalties for default directed against the poor.

Fiscal and political integration to the level required to ‘overcome’ this problem (effectively the creation of a United States of Europe) would require even bigger attacks on the working class, structural adjustments, and social upheavals, on a scale which renders it unacceptable and probably impossible. As with the original G&SP the only way it could be policed would be by the application of supply side austerity to those who breached it – as is happening with Greece, Italy, Portugal, Spain and Ireland at the moment.

Cameron’s decision to veto the Fiscal Compact at the level of the 27 around protectionist demands for special safeguards for the City of London did little to stem the crisis – as the markets afterwards demonstrated. It was, of course, an instant hit with the right-wing head bangers in the Tory Party, who are now setting Cameron’s agenda. It was also a hit with the nationalistic, xenophobic, and mostly foreign owned, tabloids giving the Tories a boost in the polls with a six-point lead over Labour.

Such a lead would be guaranteed to be short-lived given the economic situation and the course of events was it not for the abject position of Labour. The response of Labour to Cameron’s veto has been incoherent at best. With no socialist or working class analysis of the EU or alternative to it the best they could argue for was a fudge. It demonstrates the urgent need for a socialist/working class/internationalist critique of and alternative to the EU/Euro which could get a significant voice.

3) The crisis of the Coalition in Britain

The Coalition is now caught between two equally intractable crises: that of the British economy and that of the Eurozone, and one feeds into the other. The question now is whether it can hold together for the full term, and despite its support from the media the odds are now strongly against.

Even if it survives the full term it has problems when it comes to the next election. First the fact that they have extended their current austerity programme by at least two years into the next Parliament not only marks the demise of their original plan to get the crisis under control in advance of the election but it means they have to go into the election with an austerity plan as jointly agreed policy – which would imply some kind of electoral black. On the other hand they will be bitterly divided over Europe which makes any kind of electoral block impossible.

The Tories are divided even deeper over Europe than they were under John Major, and this can only get worse given that the EU is going to be at the front of the political agenda for a long time. The Tory right will not settle for the victory they have had in recent weeks. In fact they are already making plans to push their nationalist and xenophobic agenda towards a referendum for withdrawal from the EU – something which would destroy the Coalition if they were successful. All this underlines the extent to which Cameron has swung the Tory party back to the days of Thatcherism and the rabid rightwing nature of recent Tory MP intakes.

The Lib Dems, of course, are in political disarray and face electoral meltdown should there be an election – a factor (along with their political spinelessness) which keeps them firmly under Cameron’s thumb. They have been humiliatingly defeated on their two main issues around which their party was constructed: PR and Europe. They have been treated with brutal and predictable contempt by the Tories – sucked in and spat out is the phrase which springs to mind. Cameron used the veto in the EU without the slightest reference to them despite agreed Coalition procedures, and with no mandate from Parliament. The vote in Parliament supporting his actions only went through as a result of a line-up between the Tories and the DUP with the Lib Dems abstaining. During the debate Tory MP Phillip Davies called them ‘lickspittle Euro-fanatics’. They now have a choice between holding the Coalition together with their politics side-lined or facing annihilation in an early general election.

All this should be food for thought for the trade unions and the anti-cuts campaigners since it makes the Coalition extremely vulnerable to a serious campaign against the cuts, particularly one which involves mass strikes.

4) The November 30th strike

November 30th was an historic day for the trade union movement. With around 2 million out, organised across 27 unions, it was the most important action yet in the campaign against the cuts with the vast majority taking action for the first time. There were thousands of militant actions, picket lines, and demonstration across the country – from the big cities to the smallest of towns. In Birmingham 10,000 took to the streets, Manchester 25,000, Newcastle 8,500, Glasgow 25,000 plus, Bristol 20,000, Oxford 5,000 and in London up to 50,000. There were hundreds of other marches and rallies up and down the country. There were several international delegations on the London march including large group came from the French CGT. The ETUC has now called for a co-ordinated day of action across Europe.

The strike received a remarkable level of public support. Various opinion polls put it at between 48% and 61% with the highest support amongst women and young people. This is very high for a strike in Britain. It was reflected on many of the demonstrations, which were clapped through the streets by onlookers. The contradiction, however, is that most people even when they support the strike are still confused about the question of the debt and remain open to the mantra that cuts are inevitable.

The Government set out to split public sector workers from private sector by seeking to convince private sector workers that they would be better of if the public sector was defeated. This was increasingly challenged by the unions, who rightly denounced it as a race to the bottom. After the strike Cameron attacked the strike (pathetically) as a damp squib, claiming that there had been “only” 1.4 million people on strike! Even this, however, would have been substantially more than the entire days lost in strikes in 2008 and 2009 across the entire economy.

Since the majority taking part on N30th were women it was clearly one of the biggest strikes of women ever in this country. Big sections of it were also young (teaching and civil service unions in particular), and it involved unions which had never taken action in their entire existence, or only in the dim and distant past. Crucially it represented the reemergence of trade unions in Britain, a glimpse of the power of the unions and their ability to bring about change. There is now a trade union voice in the public discourse for the first time in many years with trade union leaders and even activists back on the media.

We are not back to the strike levels of the 1970s and 1980s, of course, and the employers are still dominant in most workplaces. But only a year ago the trade unions had done absolutely nothing since the start of the cuts onslaught. This began to change after the student revolt at the end of 2010 and then the mass turnout for the belated TUC demonstration in March – far more than the TUC had expected. These events were followed by the 700,000 strong strike by the teaching and civil service unions in June which was another groundbreaking action. In August we had the voice of the voiceless reflected in riots in a number of cities across England. In October we had the occupy Movement with its highly successful tented presence at St Paul’s in London and elsewhere reflecting the powerful example of the Arab Spring.

It was these events along with the key role played by left leaders in the NUT and PCS – who had fought long and hard for united action around pensions which produced this landmark action.

The key TUC rally of the strike day was in Birmingham, where 4,000 highly responsive strikers assembled in an indoor arena address by Brendan Barber and a string of union leaders. It was a good yardstick for the strike nationally. Every militant statement and/or attack on the bankers was met with standing ovations.

The best speech was made by Kevin Courtney who not only spoke as if further action was inevitable but stressed very strongly the opportunity the action presented for rebuilding the unions. He ended with an appeal to the rally to go back to their workplaces and organise: recruit more members, elect more reps, and prepare for the next action was the message he put forward to a standing ovation. He is absolutely right about this and it is clear with confidence still low after decades union weakness big strikes of this kind can begin to bring confidence back.

Should we expect an imminent sell-out? Of course the TUC has an infinite capacity to retreat but there is little sign that this is the way things are going at the present time, in fact the reverse that more action in the new-year is highly likely. Even though the key payers are right-wingers with long and dishonorable records in that regard it is not easy for them to drop this campaign given the support it has received. They also have to consider what future the trade unions would have in Britain if they simply roll over on this one.

CoR had a remarkably good intervention on the day despite its small activist base. It sent placards and broadsheets to its groups and had a wider geographical spread than in previous actions. Despite is small activist base it was again it was the only national coordination with such a presence. Its placards and broadsheet were well judged and had a very good impact. We are able to play a significant role in building its profile on the day. There will be a separate paper on the implications of all this for CoR in the NC discussion but what was clear was the continuing relevance of CoR and the need for us to put more effort into building it.

One one-day strike of course is not going to stop the government, of course. And Barber did not talk directly about further strike action in his Birmingham speech but the tone, was not one of retreat. He stressed that this was just the beginning and that the TUC intended to see this campaign through to the end. The likelihood therefore is that there will be more strike days fixed in the new-year. It is crucial, however, that the dynamic and momentum of the strike is continued and the pressure maintained. This mean not only consolidating the gains of this action but preparing for the next. This is the best opportunity get to strike a serious blow against this government and it is important that the movement takes full advantage of it.

Rebuilding the unions is at the end of the day a highly political task, and without a parallel political development which can give voice substance to a militant component in the unions it is very difficult indeed. This also means alongside rebuilding the unions we have to construct a political alternative in the form of a broad inclusive and democratic party of the left.

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