Gordon Brown’s honeymoon is over
pdf version, opens in new window.
Gordon Brown’s honeymoon is over. His initial commanding lead in opinion polls fuelled speculation of a snap election. Now, the new prime minister trails miserably and a series of potential crises loom: anger at public-sector cuts, economic slowdown, calls for an EU referendum. Brown has shown himself to be indecisive and manipulative.
Politics in Britain today is more volatile than at any time since the second world war. This is the result of the extreme narrowness of the space, the supposed ’centre ground’, upon which all three of Britain’s establishment parties stand. As they race to steal each other’s clothes, the opinion polls tip and tilt them like dinghies at sea in a storm.
Barely a month ago Gordon Brown was riding high, so confident of his crushing majority over the Tories that he was seriously considering a general election. Now ’bottler’ Brown is lagging behind the Tories in the opinion polls and his ’great clunking fist’ is failing to land a single punch on them.
The volatility of the polls is such that the situation could be reversed again in the coming months. Nonetheless, September 2007 marked a decisive change in British politics. It demonstrated irrevocably, as the Socialist Party predicted, that the coming to power of a Brown-led government, while its politics are essentially as the same as Tony Blair’s, nonetheless represents an important psychological break in the way the population views New Labour.
Brown’s brief weeks of honeymoon were largely based on his not being Blair and, contrary to the press speculation beforehand, seeming to be relatively competent. In a couple of short weeks he has managed to completely tarnish even these, very limited, assets. The damage has not only been caused by his pulling back from calling a general election at the last minute, although the sobriquet ’bottler Brown’ will probably stick. It was also the way that he was seen spinning far more blatantly and crudely than Blair, ’king of the spinners’, ever did – both by bringing forward the announcement on troop reductions in Iraq, and by blatantly stealing the Tories’ policies on inheritance tax.
Tories bounce back
In the wake of George Osborne’s shrewd announcement to the Tory party conference on inheritance tax, particularly as it was combined with a sideswipe at the super-rich ’non-dom’ hedge fund managers, the Tories recovered sharply in the polls leaving the government aping the same policies three days later. In these circumstances the Tories’ attacks on New Labour are suddenly hitting home.
However, the very ferociousness of the Tories’ attacks on Brown are a reflection of how desperate their situation was prior to their conference. Imagining they were faced with a fourth general election they could not win, the prospect of a split, or series of splits, in the party was seriously posed. The fear of more Tory grandees defecting to Brown’s big tent was combined with representatives of the right of the Tory party beginning to openly attack the leader, David Cameron. Norman Tebbit, once known as ’Thatcher’s boot boy’, even declared that it was Brown, not Cameron, who was the real heir to the iron lady.
The possibility was posed of the Tories disintegrating, probably with the formation of a right-wing populist party from the right of the Tories. New Labour would have been established not just as ’a’ party of the ruling class, but ’the’ party of the ruling class. For now, Cameron and co have staved off their nightmare scenario by boosting their opinion poll ratings and thereby forcing Brown to pull back from a general election. In fact, by doing so they have transformed their party into one that, at least at the moment, seems more capable of winning a general election than at any point since 1997.
Remorseless neo-liberal attacks
The government’s stealing of the Tories’ inheritance tax policy, albeit it with a lower threshold of £600,000, dealt a devastating blow to those remaining illusions in New Labour’s status as a ’social democratic’ party. Polly Toynbee, for example, writing in The Guardian on 12 October, declared that Labour leaders had "left social democracy for dead" and that Brown had "shipwrecked the party". In the same article she praised the Blairite transformation of Labour into New Labour, saying that Clause Four, the socialist clause in Labour’s constitution that Blair abolished, "was indeed an archaic nonsense".
Toynbee and others do not understand that, in transforming Labour into a party of the ruling class, Blair and co had also to abandon the idea of ’reformism’ or ’social democracy’ which was entirely unacceptable to Britain’s capitalist class. Ultimately, the adoption of neo-liberal policies by all three establishment parties in Britain stems from capitalism’s economic crisis and its need to restore profits by driving down the living conditions of the working class.
The comprehensive spending review announced by the chancellor, Alistair Darling, was indeed choc-full with viciously anti-working class and pro-privatisation policies. However, most working-class people who studied it would have been horrified not by the announcement on inheritance tax but rather the continued tightening of the purse strings in the public sector and, in particular, the announcement of three more years of pay restraint for public-sector workers.
By contrast, a layer of better-off workers, along with broad swathes of the middle class, at least in the south where house prices are highest, welcomed the Tories’ proposal to lift the inheritance tax threshold. While only a small minority were liable to pay the inheritance tax, the astronomical rise in house prices (240% in the last decade) means that it increasingly includes a layer of the middle class, and even some workers. The real super-rich, meanwhile, are largely able to use accounting tricks to avoid paying it.
It is the depth of the housing crisis in Britain which has made this such a raw nerve. Millions of people, including younger middle-class people, cannot afford to get a foot on the housing ladder. Those who do are increasingly financially crippled. The average first-time buyer spends 20% of their income just to cover the interest payments on their mortgage. In the last year more than a million householders have been forced to use their credit cards to pay their rent or mortgages.
In these circumstances it is inevitable that the idea of at least being able to pass the value of your house onto your children intact has become totemic. Socialists are not in favour of penalising the middle classes. In her article on inheritance tax, Toynbee pointed out in passing that the increase in capital gains tax announced in the comprehensive spending review, and aimed at the mega-rich hedge fund managers, still only left them paying 18%, a lower rate, in many cases, than their cleaners. Incredibly, even this paltry measure was only introduced to try and catch up with the Tories! It is this, not inheritance tax, which really demonstrates the neo-liberal nature of New Labour.
Brown has now effectively announced that he is not planning a general election before 2009, and may even go as late as 2010. He is hoping that he will be able to use the time to decisively weaken the Tories. On the contrary, he is going to face increasing difficulties which are likely to further weaken him and may strengthen the Tories.
An EU referendum?
In the immediate period, already weakened by the debacle of recent weeks, Brown is heading into further troubled waters on Europe. The EU treaty is largely a repackaging of the constitution which was rejected in 2005 by referenda in France and the Netherlands, despite major campaigns for a ’yes’ vote by the ruling classes of both countries. It was rejected largely because it was seen, correctly, as enshrining neo-liberalism in a constitution. At the time, Blair must have heaved a private sigh of relief that he was therefore not faced with having to call a referendum in Britain, which the government would almost certainly have lost.
Two years on, and Brown is determined to avoid Labour’s manifesto commitment to a referendum, arguing that he has ’protected British interests’ and that ’no red lines have been crossed’. In reality, of course, it is only the interests of Britain’s ruling elite that have been protected. One of the ’red lines’ is a guarantee that the ’charter of fundamental rights’ will not increase employment rights for workers in Britain!
However, Brown is going to come under enormous pressure. It cannot be excluded that he will be forced into a u-turn and has to call a referendum which he would be almost certain to lose. On the right, The Sun and the rest of Murdoch’s media have now joined in with the Tories’ campaign for a referendum.
At the same time, the last Trades Union Congress reacted to pressure from below and called for a referendum, correctly describing the treaty as a Trojan horse for further privatisation and deregulation. The motion from the National Union of Rail, Maritime and Transport Workers (RMT) calling for a ’no’ vote was, however, mistakenly rejected by the TUC. If a referendum were called it is overwhelmingly likely that a majority would vote ’no’. However, particularly given the lack of a mass political voice representing the working class, the trade unions would have a vital role to play in ensuring that class issues were counter-posed to the right-wing nationalism of The Sun in the course of the campaign.
Weak & exposed economy
However, it is on the economy that Brown is likely to be most vulnerable. In the immediate period after the Northern Rock catastrophe, which almost led to a meltdown of the British banking system, Brown was able to pose as the ’safe pair of hands’ that had prevented disaster. Even so, the fact that the government was forced, as The Guardian put it on 12 October, to "nationalise" Northern Rock for "practical purposes", and to provide £16 billion of guaranteed credit to prevent its collapse, will not be lost on millions of working-class people. It demonstrates that, despite its obsession with privatisation, New Labour can and does nationalise, but only when it suits the interests of capitalism. Many will be asking why £16 billion can be found for Northern Rock, but not a penny to stop the collapse of workers’ pension funds, or the closure of car plants.
It will be when there is economic crisis in the real economy, however, that Brown really pays the price. Darling has already been forced to cut the government’s prediction for growth next year by half a percent to 2-2.5%. He knows full well that this is a best case scenario.
Britain is one of the most exposed economies to the economic slowdown developing in the US. The virtual abandonment of manufacturing industry means the lion’s share of growth comes from financial and business services, which account for almost 30% of gross domestic product (GDP). In the second quarter of 2007, whereas the economy grew by 3.1% as a whole, the City boom and housing market meant that financial and business services grew by more than 5%. Charles Dumas of Lombard Street Research summed up the situation in The Guardian: "Britain is threatened by its position as globalisation’s epicentre. Any seize-up of global financial markets affects London and the British economy more than others. Lower real incomes combined with tight monetary conditions, and the overhang of a very high exchange rate, could hammer growth during 2008".
House price growth is slowing, leading to what is already the worst the housing crisis in Britain for 16 years. In reality, Britain has its own potential mini ’sub-prime’ crisis. The sub-prime sector in Britain is estimated at £50 billion, but is higher in reality. Around 50% of all mortgages from mortgage brokers are ’self-certifying’, meaning that no proof of income is required, and borrowers are tacitly encouraged to stretch the amount they borrow to the very maximum. Given the huge level of personal indebtedness in Britain, greater than the country’s GDP, even a shallow recession is likely to lead to enormous personal hardship for millions of workers.
A degenerate system
Writing in the Observer on 26 August, before the development of the Northern Rock crisis, Will Hutton correctly commented: "Gordon Brown runs a government that is essentially conservative over business opposed by an opposition yet more conservative, with the Lib Dems terrified to rock the conservative consensus. Over the last few years, there has been a firesale of British assets to foreigners, together with ever-closer entanglement with the American debt markets to sustain the bonuses of the financial community. It would not surprise me if, before the story is over, at least a couple of household British financial names have to be offered a lifeline.
"Somebody, somewhere must start blowing the whistle. The Americans at least take capitalism so seriously they challenge, monitor and regulate it. No such culture exists in degenerate Britain. We need a party which will speak for an interest other than self-interested, amoral plutocrats. None exists".
The degenerate nature of British politics reflects the degenerate nature of British capitalism. Only by the development of a mass workers’ party will it be possible to create a party which genuinely and consistently does as Hutton demands. The leadership crisis in the Lib Dems, triggered by Brown’s failure to call a general election, is yet another example of how the three establishment parties are morphing into each other. The two frontrunners for the leadership both went to the same public school, both stand on the right of the party, and look virtually identical to each other, and to Cameron!
The demand for an alternative to the three main parties is growing, and is likely to grow dramatically in the coming months and years. The trade union leaders are under enormous pressure from their members to stand up to Brown. His failure to call a general election has left them with no more credible excuses for inaction. This will not prevent them trying to delay and limit action, but it will be increasingly like trying to hold back an erupting volcano.
Unions must disaffiliate
At the same time, the idea of continuing to fund the party which is stepping up public-sector pay restraint, and is backing to the hilt the attempts of Royal Mail management to break the Communication Workers’ Union (CWU), is increasingly abhorrent to trade unionists. It is possible that the CWU will follow the Fire Brigades Union – where a rank-and-file revolt led to disaffiliation from Labour in the aftermath of their strike.
Brown’s removal of the last vestiges of trade union democracy from the Labour Party conference, which the right-wing trade union leaders cravenly accepted, has meant that talk of disaffiliation is becoming acceptable even among some of those previously loyal to Labour. Writing in the Labour magazine, Tribune, Paul Donovan declared: "Labour has become reminiscent of the Liberal Party in the early years of the 20th century. Then, the Liberals had ceased to stand up for working people and another vehicle to defend their interests had to be found. This was the Labour Party and those who founded it were leaders of the trade union movement. Now union leaders need to act again. If the unions disaffiliated from Labour and either created a new party or backed another one – perhaps the Liberal Democrats or Greens – what would happen to Labour? Disaffiliation would certainly shake the ungrateful Brown and the rest of the Labour leadership. At best, the unions and those they represent are taken for granted by the Labour leaders. At worst they are held in contempt. The TUC could become the fulcrum to change this".
Neither the Lib Dems nor the Greens offer an alternative. The latter, while they have a socialist wing, are increasingly voting for cuts when they are elected at local level. Nonetheless, Donovan’s clear call for disaffiliation is an indication of how the mood is shifting on the issue.
John McDonnell MP, the Labour left who attempted to stand against Brown for the Labour leadership, is also altering his position. Writing in the Morning Star recently he publicly abandoned his previous strategy of trying to reclaim Labour, saying: "This week’s vote to close down democratic decision-making at the Labour Party conference and Gordon Brown’s first speech as leader demonstrated that the old strategy is largely over. The conference is now virtually irrelevant and its replacement, the National Policy Forum, is a behind-closed-doors exercise of centralised control of party policy-making". (29 September, 2007)
He adds: "The left has the difficult task of accepting and explaining to others that the old routes into the exercise of power and influence involving internal Labour Party mobilisations and manoeuvres have largely been closed down. We have to face up to the challenge of identifying and developing new routes into effective political activity".
Unfortunately, John McDonnell does not draw any clear conclusions in his article about the alternative to trying to reclaim Labour. He correctly emphasises the importance of taking part in single issue campaigns, but does not raise the idea that these environmental, anti-war and other campaigns need to come together, along with trade unionists, to build a new party that stands in their interests. Were he to give such a clear call, there is no doubt it would quickly gain an echo. The growing mood for disaffiliation at rank-and-file level in the public-sector trade unions, combined with the likelihood of an RMT-initiated list in next year’s London elections, represent important steps on the road to independent political representation for workers in England and Wales.