Miliband tacks slightly left

Power house of the Tory recovery
Power house of the Tory recovery

Ed Miliband’s speech at the Labour Party conference has opened up the political situation and has started a debate on the left on the direction Miliband leadership writes Alan Thornett.

The Socialist Unity web site, the day after the speech, carried an image of the Daily Mail front page that proclaimed ‘Back to The Bad Old Days’ and then its own headline: ‘Proof that Ed Miliband and Labour are on the right track’.

While this response reflects the site’s long time capitulation to Labourism there is an element of truth in what it says.

Although the speech was deeply contradictory it contained a number of popular proposals that socialists should welcome and support. These included a 20 month freeze on energy prices, the repeal of the bedroom tax, a pledge to build 200,000 new homes by 2020 with the threat to take land banks from the speculators if they won’t build on them and an undertaking to free up local councils to start house building again.

It also included pledges to extend childcare, give 16 and 17 year olds the vote, and ‘strengthen’ the minimum wage (though this, apparently, does not involve a rise in the basic rate) and the repeal of the Health and Social Care Act (though exactly what that means is not so clear). Before the conference, Ed Balls had questioned (rather vaguely it has to be said) whether Labour should go ahead with HS2 if the costs continue to rise.

All this is a distinct tack to the left from the old Blairite agenda. He has been forced to make if he is to make headway against the coalition and it stands in contradiction to the collapse Labour has made into the Tory cuts agenda and its pledge to stick to it in the first years of office if a Labour Government is elected. Labour is far from on the right track but is an improvement on the paralysis which has predominated for the past two years.

The speech was met with howls of protest from the right wing media, and Peter Mandelson and Digby Jones were trotted out to denounce it. The power companies ranted that they would leave the country and cause power cuts if the policy was implemented. Essentially they were threatening to go on strike against the policies of a democratically elected government.

Whilst such pledges are only a start from a socialist point of view—there was no commitment to renationalise Royal Mail for example despite 70% of the population favouring it—these are issues which will undoubtedly improve Labour’s electoral chances. In fact Labour had gone up three points in the polls within 48 hours of the speech.

The energy price freeze in particular, with the cost of living spinning out of control, hit a particularly popular chord with 64 % of people supporting it. The proposal also wrong footed the Tories in advance of their conference with Cameron opposing it and Gove supporting it.

We can also welcome Miliband’s rejection of the damaging race to the bottom which coalition policy is generating. He was right to say that the Tory cuts agenda would make the crisis worse. He was right to say that ‘the cost of living crisis isn’t an accident of David Cameron’s economic policy, but it is his economic policy’. He was right to say that that Tories are leading a global race to the bottom based on low wages, declining working conditions, and fewer rights at work.

As Caroline Lucas argued at the Peoples Assembly, the Tories—as loyal groupies of Milton Friedman and his shock therapy mantra—have never seen this recession as crisis but an opportunity. A unique opportunity to change British society in a radically fee market direction—building on the defeats they inflicted on the trade unions in the 1980s. A chance to create the kind of society they have always craved

All they had to do was convince the majority of the population that draconian austerity measures were necessary to pay off a debt they had played no part in creating.

And the ‘lickspittle Lib Dems’, as Denis Skinner witheringly called them, have been accomplices in the whole thing. The claim that they have protected the poor from the ravages the Tories would have inflicted without them is laughable.

They have been the enablers of Tory onslaught from the outset providing voting fodder in Parliament and stridently defending the most destructive Tory policies. Their conference, this year, loyally fell into line by backing not only the whole austerity agenda but nuclear power and fracking as well.

They have had audacity to claim that the rise in the tax threshold took millions out of income tax and gave them increased real income. The problem with this is that when it is set against falling wages it does not mean very much. In fact employers take it as a signal to cut real wages even more. It is give with one hand and taken even more away with the other.

Miliband was also right when he argued that ‘Britain can’t win a race for the fewest rights at work against the sweatshops of the world and the more we try the worse things will get’.

In Cameron’s Britain nearly 5 million people (according to Unite’s figures), in both the public and the private sector, rely on zero hour contracts for a living. Millions more, particularly in the private sector, are subjected to wage cuts (either agreed or imposed) and/or the intensification of their work. Public sector wages are frozen. Many in the private sector can effectively be sacked at the whim of the employer.

But the trouble is Miliband still supports the Tory cuts agenda and their wages policy, which are what the race to the bottom is all about. He has not lifted a finger to defend or improve conditions in the workplace or strengthen the trade unions or to challenge the anti union laws. In fact his main preoccupation recently has been to weaken the link between the Labour Party and the unions by the abolition of affiliated membership.

Austerity will continue under Labour

All this, moreover, was in his speech. Don’t think life will be easy with Labour in office he told the conference! Austerity will continue! A Labour Government will be a fiscally responsible and committed to reducing the debt. What is that if it is not a race to the bottom? Len McCluskey, speaking straight after the speech, stressed that Labour would never be able to tackle the economic situation it it continued to support the freezing of wages.

Miliband has tacked to the left for electoral purposes but he has not renounced his support for the neoliberal agenda. Nor has he reversed the slide into new labour and marketisation that took place in the 1990s. Far from it. It is a tactical shift within a right wing orientation.

It does not resolve the crisis of working class leadership that we have lived with the several decades or the need for a new working class party. In fact it raises all the warning signs as far as what Labour world do in Office. You only have to look at the collapse to the right of the Hollande Socialist Party Government in France since it took office to see what might well be ahead.

It has, however, opened up the political situation and has created an opportunity for the left that it must and can build on. Now is the time to pile on the pressure for Labour to go further along this road and break with the whole Tory agenda.

Left Unity, which is building its membership every day as it moves towards its launch conference on November 30, will need to discuss how to engage with Labour supporters in a non-sectarian way in campaigns to defend services on the ground while putting forward a more radical set of demands which break from the austerity agenda—showing in practice that this is the only way to defend and democratise the public sector.

Osborne and the so-called recovery

The claim by Osborne and Cameron that the British economy has turned a corner and is on the way out of recession is a sick joke.

True some sectors of the economy performed marginally better between April and June this year than was predicted – mainly in the South East. Manufacturing grew by 2 percent (according to the Office of National Statistics) and services grew at their highest rate for six years. Car sales increased in Britain by 13 per cent in June (though they have fallen across Europe as a whole) and house sales and prices are rising.

Manufacturing output remains 14 per cent below its pre-recession peak and construction is still over 17 per cent lower. Far from government borrowing being reduced it has increased.

Nor does this signal an end to the crisis that broke out in 2008 – which was a global crisis based on debt and remains so. The crisis in Europe and the Eurozone remains unresolved. Greece is still in deep crisis, Spain depressed, and Italy paralysed. The Chinese economy is faltering, and all this is linked to an environmental crisis which is reaching new depths.

In any case the notion that a growth rate in Britain of 0.6% for a few months after three years of austerity and plunging living standards is a vindication of coalition strategy beggars belief.

Even this rate of growth, however, is not based on rising incomes, but on people digging into their savings as wages have sharply declined. Public debt is being transformed into private debt. The TUC points out that in the past year household savings have dropped by 43 per cent as people try to cope with rising prices or replace essentials of life that are wearing out.

The average household in Britain has lost around £1,500 a year in real terms since the coalition came to office and is now saddled with nearly £8000 in unsecured debt. Loan sharks such as Wonga step in as people are forced to borrow at exorbitant rates to pay for basic necessities. Since 2009 the value of the payday lending industry has gone from £900m to over £2bn today.

Osborne’s picture of the corner being turned is a million miles from the reality of life for millions of people who have lived through the biggest fall in living standards for over 100 years. Real wages are falling at a near-record rate. Recent figures show that they were 6% lower in April than they were in April 2008. This is the biggest five-year drop since 1921-26, and the second-largest fall since records began in 1855. There is a severe cost of living crisis, people with several (usually part-time) jobs are unable to make ends meet and food banks become a last resort.

What we have, therefore, is a so-called recovery based on, poverty pay, depleted welfare, precarious employment, under underemployment (which is rising in both full time and part time work), and personal debt. Women and disabled people in particular are being targeted.

The already grossly inadequate minimum wage, which supports the poorest in society, has been declining since the crisis broke because it is pegged to wage rates that have been falling in real terms. The growing numbers of the working poor are trapped between rising rents and mortgages and falling wages and benefits whilst the cost of essentials such as food gas and electricity increase relentlessly.

Unemployment (according to the mostly fictitious official figures) is slightly down, in some parts of the country, as people are driven to take ever-lower paid and more precarious jobs or equally precarious self-employment. Both long-term and youth unemployment, however, remain at very high levels. One in five young people are out of work and underemployment is at a record high.

Election prospects

The last hope that Cameron and Osborne see for Tory victory in 2015 is the housing market. To this end they have launched the mortgage guarantee scheme that underpins private mortgages from taxation. It is an attempt to compensate for the fact that as a result of their own policies most young people no longer have the stable jobs or pay rates to raise a deposit or get a mortgage under normal market conditions.

The fact that they are prepared to indulge in such controversial and high-risk state intervention into the housing market is a measure of the desperation they face.

Such intervention has indeed stimulated the housing market—and as a result house prices are now rising 5 times faster than wages. In August mortgage lending increased by 29% as the speculators moved in. This prompted the Royal Institute of Chartered Surveyors (no less) to call on the Bank of England to impose a cap on house price inflation in order to avoid what it called a ‘dangerous debt bubble’.

There is a fat chance of this happening since in the end house prices are being kept high by a deliberately created shortage. Fewer than half the new homes needed are being built every year so the pressure mounts. Money thrown at mortgages through the Mortgage Guarantee Scheme is finding its way to developers and landlords rather than to people who need housing. As a result the scheme is rapidly generating the same kind of housing bubble that triggered the banking crash in 2008.

The reality of the next election is that Labour could hardly be better placed. The Lib Dems are stuck on 10% in the polls and with Clegg as the most despised of the three leaders will be hard hit in the election. They look set to lose the one third of their seats where they are facing Labour opponents and in order to defend the rest they need labour voters to continue to vote tactically against the Tories. Whether they will do this after the experience of the Lib Dems in office supporting the ‘blame Labour’ line for the crisis is not clear.

In any case under the Clegg, Alexander and Laws leadership the Lib Dems are crypto-Tories anyway. They are desperately hoping for another hung parliament and another coalition with either the Tories or Labour in order to cling onto their ministerial positions but it is statistically very unlikely.

The hatchet job the Tories did on the Lib Dems over the voting system has also meant that the Tories were unable to get the boundary changes they wanted through Parliament—which means that they still have a disadvantage in the way the constituencies divide up.

Then there is UKIP—assuming they survive the debacle at their conference, which they no doubt will given that few of their supporters will have any objection to women being insulted in the way they were. This being the case will take some votes from Labour but the bulk will come from the Tories. Recent figures have shown that Labour would win if UKIP hold on to the 5 or 6 per cent of Tory voters they have recently won over.

The UKIP effect could be even worse, however. A survey by Lord Ashcroft has shown that because most disaffected Lib Dems will vote Labour and most disaffected Tories will vote UKIP Labour is polling much stronger in the marginal seats than their national average. In the 32 seats with the smallest Tory majorities Labour has treble their average lead.

All this makes a majority Labour government at the next general election by far the most likely out come. The task now, therefore, is to build the fight back against the cuts and to continue the struggle whoever wins the election.

The People’s Assembly set the scene in June with militant speeches from Frances O’Grady, Len McCluskey and others. The PA called for the demonstration at the Tory party conference on September 29th in defense of the NHS and also for a day of civil disobedience on November 5th.

The FBU has just taken action over pensions and the CWU is about to ballot for strike action which is likely to be successful. The teaching unions—the NUT and NASUWT—have confirmed the dates of regional strike action. On Tuesday October 1st there will be strike action in the Eastern Region, the East Midlands, the West Midlands plus Yorkshire and Humberside regions and then on October17th there will be strike action in the North East, London, South East and South West regions.  A one-day national strike is scheduled before the end of the autumn term, likely to be towards the end of November.

The myth perpetrated by the coalitions and its many mouthpieces in the media is that there is no alternative to austerity. This is rubbish. Of course there is an alternative. It is massive investment in green jobs and green technology. It is massive investment in sustainable housing which would bring down house prices and rents. If the money can be found for fighting wars it can be found for such investment.

Miliband’s speech has opened a new situation that is favourable to the left and  to the fight back. The task now is to build militant resistance on the one and a political alternative on the other. These are the elements needed to make a real change in the situation and take the workers movement forward.


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