Issue 177 of SOCIALIST REVIEW Published July/August 1994 Copyright © Socialist Review

NOTES OF THE MONTH

Government

The charade continues

Hoping something will come up
Hoping something will come up

John Major may have bought himself a couple of months grace with his own backbenchers. But there is no mistaking the growing opposition to his rule.

The industrial peace on which the Tories have relied so heavily seems to have come to an end.

Strikes by workers in the BBC, Post Office, railways and colleges have all shown a new militancy and have created political generalisation which can threaten the government itself.

After years of trying to avoid direct involvement in industrial disputes, the government has placed itself slap in the middle of one. It is hard to credit how clumsily ministers have behaved in the rail signal workers' strike.

Until recently the Tories seemed to be fairly agnostic about their pay policy. They announced it in last year's budget, then seemed to backtrack only weeks later, saying that as long as overall budgets were not exceeded, actual settlements were up to employers and workers, not the government. What has changed their minds?

They appear to be taking a hard line because they want to firm up their own supporters, many of whom deserted them in the recent elections, but who they believe will automatically side with the Tories against strikers. The Tories also see the issue as one with which they can embarrass Labour.

This is very dangerous ground for the government. By raising the stakes in the dispute, the Tories have turned it into a major political showdown which they are by no means certain of winning.

They are also in danger of creating a general mood of opposition around pay which has not yet happened in this pay round. There are signs that acquiescence in low pay settlements among workers is beginning to come to an end.

A government which has shied away from directly taking on groups of workers for five years now--ever since the ambulance workers' dispute--may now find it is fighting on more than one front and without any clear strategy.

The prospect underlines how very vulnerable the Tories are. The election results demonstrate everything that has been guessed at in the opinion polls for over a year now: the Tories' support is at rock bottom. They held on to 18 seats in the European elections, but usually with only a bit over one third of the vote. They lost rural seats such as Hereford and Shropshire to Labour. And they did spectacularly badly in their south eastern heartland, where the swing away from them was higher than average, and in London where they control only four out of the 32 boroughs.

The best news of the election campaign was that there was a big swing to Labour, not to the Liberals (who managed only 16 percent of the vote) and that the Labour vote held up remarkably well even in those places where it looked like being squeezed. Labour is now the Tories' major challenger in the south, winning Euroseats in, among other places, Essex, Hertfordshire, Norfolk, Suffolk and Kent, and nearly winning in Sussex and the Thames Valley.

Labour would win a clear parliamentary majority in any general election on this basis. Many potential Labour supporters seem to have rejected the Liberal Democrats' claim that they are the only party which can defeat the Tories in the south.

The by-elections which took place on the same day as the European elections confirm these voting patterns perhaps even more strongly. The once safe Tory seat of Eastleigh saw the Tories pushed into third place and Labour polling 15,000 votes to come second. The elections in safe Labour seats saw the Tory vote collapse and the Labour vote increase.

The only reason such results have not precipitated a leadership crisis inside the Tory Party is because no one really knows what can be done. The political crisis afflicting the Tories has been going on for five years now in various forms: the ambulance workers' dispute, the poll tax, Thatcher's departure, a brief respite round the 1992 election, then Black Wednesday when the pound was bounced out of the ERM, the revolt over the pit closures, opposition to VAT on fuel and to NHS cuts.

Getting rid of one leader and winning an election have only temporarily pushed the crisis into the background. Now the party is clearly and openly split on Europe, how far to cut public spending and whether to push ahead with unpopular policies or just sit tight.

No one is really certain whether getting rid of Major will make things even worse, or whether he will be replaced by someone even more unacceptable to either the left or right wings of the party. So the charade which is the British government continues. The Tories fear an opposition led by Tony Blair, although on his performance so far they have less to fear from Blair than from his rivals for the Labour leadership. But their real worries should be concentrated on opposition outside parliament. The strikes of the past month all demonstrate a greater determination to fight the Tories. It is coupled with a sense of enthusiasm among many workers about Labour's election victories.

These workers and those who support them can begin to provide a real opposition to the Tories--if they take the initiative and refuse to be bound by their own timid union leaders or the fears of the Labour leadership.

The Tories have injected some politics into the industrial situation in the last month--we have to make sure we reply in kind.


Labour leadership

All a blur

Eyes on the prize
Eyes on the prize

Tony Blair, candidate of the media, the Tories and now even the CBI, looks unstoppable as the next Labour leader. He will be, as Campaign group MP Ken Livingstone put it recently, the most right wing Labour leader ever.

Blair is being sold as the man the Tories fear most and the candidate most likely to appeal to 'southern voters'. Many Labour supporters may feel that the Tories' lack of judgement over their own leader hardly equips them to decide who has the strongest leadership qualities for Labour, and that appealing to southern voters actually means choosing whoever the parliamentary journalists most favour.

But it is clear that Blair's support is also coming from the grassroots. This is only partly because the new system of election--wrongly called one member one vote--is weighted massively towards the Labour MPs and MEPs who control in total a third of the votes in the electoral college. It is also because of a strongly held belief that most voters in the south are middle class who will only vote Labour if it is headed by Blair.

Their hopes are almost certainly misplaced. Blair looks, feels and is lightweight. He seems to be incapable of speaking in anything other than soundbites and there is no evidence that he can deal with any serious political problems. He has long been concerned to drag Labour away from its trade union roots. He has been careful to soft pedal on this issue in the current leadership fight, for fear that even right wingers would shy away from him.

But he has refused to state categorically that he will repeal the Tory anti-union laws if elected. And he uses every opportunity to make right wing statements about the need for more police and law and order.

Blair is hardly in a position to inspire either current or future Labour supporters with his pro-family views, middle class appearance and 'Christian socialist' philosophy.

Unlike in most previous election contests there is no obvious left wing candidate standing. Ken Livingstone wanted to stand for deputy but could not gain the necessary 34 nominations from fellow MPs. Therefore the choice--both for leader and deputy leader--for those who find Blair too right wing is between Margaret Beckett, the acting leader since John Smith's death, and John Prescott.

Neither candidate can be regarded with much enthusiasm. Both have at various times put on a left face in order to win support, but both have also at times been motivated by opportunism. Beckett has some history of compromising in order to win positions, as when she took a junior minister's place in the Callaghan government in 1977, replacing one who had resigned over spending cuts.

Prescott, on the other hand, was to the right of Beckett at last year's Labour conference, when he delivered the present one member one vote system to John Smith against the opposition of the trade union leaders. It is clear that some of the leaders of the big trade unions still have not forgiven him.

Both candidates now stress their support for the unions, although neither has come out unequivocally in support of the rail signal workers' strike for fear of alienating the 'middle ground'.

Beckett's nominations tend to be from the hard left Labour MPs, including the majority of the Campaign group. She also has the backing of the Transport and General Workers Union. She is portrayed in the press as the left wing candidate, with at least some of Blair's supporters trying to stop her becoming deputy.

This is a campaign in which socialists can have little real enthusiasm for any candidate: none are genuinely left wing, all are capable of selling out. The main emphasis in the leadership campaign should be against Blair, rather than for either of the others. His election marks a further victory for the modernisers, and further attempts to weaken Labour's union links.

In the campaign for deputy we should argue without enthusiasm for Beckett, as the candidate most identified with the left. But on current campaigning, none of them are talking in the kind of language which could win potential left wing supporters. Worse, if the sort of attitude shown round the rail strike or round John Major's attack on beggars prevail, the Labour Party's current lead in the elections could dissipate, since most workers will see little difference between Labour and the Tories.

Once again the Labour Party thinks it has learnt the lessons of the last election but one, but it still has no real idea how to fight the next one.


Pay

On the up escalator

It is a time honoured custom for an incoming leader of the Confederation of British Industry to start with a warning on 'excessive pay rises'--the bosses can easily agree on that--and this year's president, Sir Bryan Nicholson, is no exception. 'It is crucial', he told an audience of West Midlands businessmen on 9 June, 'that we hold the line on labour costs. This is our clear responsibility as employers. If things go wrong we shall only have ourselves to blame.'

How far do the bosses' worries about pay reflect reality? Most pay increases in the earlier part of the year were 3 percent or less, at best barely above inflation. On top of that workers have faced cuts in their take home pay because of increased tax and National Insurance. By contrast, directors' pay has shot up by 25 percent and shareholders have been receiving record dividends.

But at the same time the bosses face some uncomfortable truths. Right through the worst recession since the war average earnings have risen faster than inflation, despite their efforts to freeze and cut pay. In manufacturing, average pay is now 25 percent higher than in 1990. And compared to this time last year, when British bosses were boasting they were doing better than the Germans, labour costs in manufacturing have risen by 2 percent compared to a fall of 2 percent in Germany (and 3 percent in the US). The advantage British capitalism secured in 1992 by devaluing the pound has disappeared.

The bosses' current statements reflect anxiety that they have not been able to hold down pay sufficiently in a period that was exceptionally favourable for them. And now that inflation is slowly increasing again, they fear a rising tide of pay demands. This is why the rail dispute is of real significance. The government wants to freeze the public sector pay bill for three years; if the limits do not survive even the first year intact, the pressures will mount uncontrollably.

Why have average earnings risen? The government has two explanations: overtime and bonuses (above all in the finance sector). This is not the whole story, but it is partly true. Bonuses are a normal part of the pay package for many workers.

But more significantly the bosses have not been able to stop pay drift: the processes by which workers increase their pay outside the annual pay review. Employers in manufacturing are continuously demanding that workers increase the range of tasks they perform and raise productivity. In return they have had to introduce special payments, consolidate bonuses, introduce new productivity schemes and let wages drift up gradually.

They have also largely avoided the threat of action by making concessions. Although these concessions may be small--0.5 percent here, an extra bonus there--they add up. And while there have been very few strikes in private industry, there have been many more votes for action. Workers have been slow to accept measly pay increases, and the pay freezes which were widespread at the beginning of 1993 have largely gone.

Firms such as Massey Ferguson have conceded more cash up front because of the tax increases. Companies such as McVities have had to guarantee increases linked to inflation rather than productivity or cost savings. Other employers, such as Burton and Asda, have had to increase pay by 5 percent or more to be able to recruit workers.

It is a patchy picture. But in general there is more confidence, shown by the successful 'check off campaigns to defend union membership.

In its recent annual report the conciliation service ACAS drew attention to the massive pent up anger that exists. 'There are signs', said ACAS, 'that the growing pressures on businesses of all kinds are increasing tensions in the workplace. If not channelled to creative ends, these tensions could increase the level of conflict.'

The balance of forces has slowly been shifting. Behind the genteel language of official reports the fear of an explosion is growing.


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