Issue 182 of SOCIALIST REVIEW Published January 1995 Copyright © Socialist Review

NOTES OF THE MONTH

Tories

Rotting from within

Post office workers: the power to force retreat
Post office workers: the power to force retreat

Time to go is probably the sentiment which best sums up attitudes to this government. Its performance last month was the most abysmal yet. Kenneth Clarke lost the vote to raise VAT on fuel to the full 17.5 percent.

This is the most serious parliamentary defeat of the government's whole 15 year term. Major cannot depend on a parliamentary majority in passing future controversial legislation. The humiliating Tory defeat in the Dudley by-election underlined what has been apparent for two years if this government stood in a general election it would be wiped out in many parts of the country.

The defeat over VAT on fuel was at the hands of a Labour amendment, but its real importance is to show how divided the Tories are. The eight right wingers who had the whip removed over the vote on Europe, then went on to vote against the government on VAT.

The splits show a party rotting from within. During the 1980s Margaret Thatcher was able to overcome many internal divisions by successfully attacking an external enemy. Different groups of workers found themselves on the retreat. Thatcher's ability to do this and her assault on areas such as education and health appeased her party. Economic growth in the second half of her term created a degree of prosperity which allowed her to reign unchallenged for some years.

But it became harder to sustain the attacks or to achieve victory. Even before the poll tax, which finished her off, the ambulance workers' dispute proved not to be the pushover that the Tories expected. Linked with attacks on the NHS, it symbolised all that people were coming too hate about Thatcherism. Economic recession further dented government popularity.

Today things could not be more different from the mid-1980s. The signal workers were not defeated, Post Office privatisation was abandoned without a fight and the Tories are too frightened to introduce further attacks. Government popularity is at record lows as it blunders into confrontation and is then often forced to retreat.

Europe remains a putrid sore for the Tories. They are split between those who see the future of British capitalism as further integration into a European market, however much this confirms Britain's role as a junior partner to the French and Germans; and those who believe that British capitalism can follow a more independent path.

But there are also divisions over issues closer to home. Should the Thatcher revolution continue with further attacks on the NHS, education, the welfare state, or should the government just sit tight and hope for the best?

Right wingers--of the sort who look to Michael Portillo as their spiritual leader--are in no doubt. Many of them developed politically during the Thatcher years, and they feel their revolution has not been carried through. They do not understand that Thatcherism did not bring about a permanent change. Rather it marked a brief and shallow revival which amounted to nothing more than a blip in the long decline of British society.

The Tory right wingers' jingoism and anti-Europeanism reflects their belief in the underlying strength and superiority of British capitalism. But their ridiculous posturing against the French and Germans also reflects how little Britain counts in the European pecking order. Their increasingly fervent support for the monarchy, the House of Lords and the union with Northern Ireland, Scotland and Wales is simply harking hack to a glorious past that no longer exists.

But while the Thatcherites have been undermined by events, so have their opponents in the Tory Party. Britain's international weakness, the problems of the economy and the residual strength and pro-welfare sentiments of the British working class are all providing obstacles to a clear Tory strategy. Those on the party's other wing have no clearer way forward or coherent set of ideas. Both sides see no alternative to trying to make workers pay for the crisis--but neither is united, strong or coherent enough to push their policies through.

John Major is a true product of this situation. His weakness reveals tensions which cannot be resolved and he is pulled first one way then the other. His latest hint that he will allow a referendum on Europe, when he has opposed such a move for years, shows that he sees no other way of resolving the splits.

So they will continue--and this effectively minority government will face more and more crises. It will try to hang on for its full term because it knows an election now would be a disaster.

At the same time, the effect of the Tory crisis has not been to push Blair's Labour Party to the left. Instead, Labour is even more cautious. As the Tories get weaker, so the pressure is on not to rock the boat for Labour and to be totally uncritical of Tony Blair As the election nears that pressure can grow. Even quite left wing workers are so desperate to see the Tories out that they are willing to accept Blair, warts and all. Membership of the Labour Party has risen 76,000 in the past year, to over 300,000.

But there is disquiet at Blair's policies at the same time as support for Labour. People will have all sorts of illusions in what Blair can deliver. But the gap between workers' aspirations after 15 years of Tory rule and Blair's caution are already causing contradictions.

The question asked by everyone as we enter a new year is, can Major survive? That will depend not so much on the parliamentary arithmetic, but on what happens in the wider world. The building of workers' struggles and self confidence will be crucial to determining the manner in which Major goes and the room to manoeuvre of the government that replaces him.


Labour

The people's choice?

Blair: keeping the lid on
Blair: keeping the lid on

When Tony Blair said he was 'not going to make a choice for my child on the basis of what is the politically correct thing to do', he spoke volumes about where he intends to take Labour.

His characterisation of 'political correctness' as the equivalent of some sort of thought police against reasonable people's expressions of opinion could just as easily have come from the mouth of any Tory reactionary. The issue itself is not merely one of avoiding using racist or sexist language (though maybe Blair's concept of freedom now includes the choice to be offensive), but goes to the heart of Labour thinking over state education.

For many Labour supporters the principle of comprehensive state education is one of the central planks of party policy. Blair's decision to send his son to a school which has opted out of local authority control, schools which Labour are pledged to abolish, has caused much anger and bitterness in the party.

Roy Hattersley--not known as a left winger--reacted in the Observer by writing that this sort of selective education will condemn millions of working class children to an education which is generally regarded as inferior.' Yet there are others in the party who seem to accept the logic of Blair's decision on the basis that working class schools are inherently bad. Margaret Hodge, Labour MP for Barking, was quoted as saying, 'There is a whole range of ingredients to a good school. The presence of middle class children is one.'

All this confirms the impression that the rise to the top by Blair and his cronies is motivated more by personal ambition than by any pretence of fighting for social justice for the millions of working class people for whom such 'choices' are just not possible. Blunkett has been forced both to defend the decision and to issue a statement that Labour policy on opted out schools is unchanged. The argument demonstrates the huge gap between the simmering anger that exists against the Tory government and the policies, and priorities of the current Labour leadership.

This row is only one in what seems an ever increasing compulsion by Labour's leadership to ditch policies which up until recently have been central to Labour thinking. The dropping of Clause Four from the constitution has opened the way for ever shifting ground on nationalisation. Labour no longer says it will take back into public ownership British Telecom, British Gas or even British Coal after it has been sold off, even though the rising prices and huge profits of these companies are hugely unpopular. A survey in the Economist showed that 68 percent of those asked, including Tory voters, supported renationalisation, putting Labour to the right of the majority of the electorate on the issue.

Blair's comments on the Tories' defeat over the Post Office privatisation were revealing. He praised the campaign led by the post office workers union (UCW) saying its leaders used 'intelligence and subtlety' because they 'lobbied Tory MPs as well as other parties. They did not try to persuade through threatening strikes. They refused simply to defend the status quo and instead proposed public ownership, but with commercial freedom.'

Again Labour is to the right of the majority of voters--75 percent said in a recent survey that profit should be invested to the benefit of working people while only 3 percent believed that shareholders and managers should benefit. A key factor in the Tories backing off from privatising the Post Office was the rising militancy amongst post office workers.

Hopes of a radical approach elsewhere were soon dashed. Headlines in the Sun about Jack Straw's statement on the increasingly unpopular wealth of the royal family proclaimed. 'He'll fire Queen Mum.' It quickly transpired that he proposed nothing more than a slimmed down version of the royals, something the queen herself has already agreed.

Despite the continuous shedding of traditional principles and constant vague references to the need to 'equip Britain for the new global market,' Labour enjoys an unprecedented lead in opinion polls, so deep is discontent with the government. But the inability of Labour to articulate the anger and despair of the millions who have suffered under 15 years of Tory rule is displayed with every speech.

When Blair says, 'There is no bigger problem in Britain than crime and lawlessness', he doesn't speak for those who are unemployed, low paid, homeless or waiting for a hospital bed. That job has to be taken up by socialists up and down the country who don't feel they have to ape Tory policy to be popular, and who don't believe as Blair does that, 'The old battles between ...management and workforce are quite simply irrelevant to the challenges Britain faces in the 1990s.'

Far from being out of date, it is precisely those 'old battles' between workers and their bosses that will dictate the future of education, health and the other public services under attack.


Economy

Feel bad factor

UK real personal disposable income

  % increase per annum
Average annual increase 1970-93 2.7
1987*3.4
1988*6.0
19894.9
19901.9
19910.1
1992*2.7
19931.9
1994+-0.9
1995+0-1.5
1996+2.3
1997+2.3
*Election year; +Treasury and London Business School forecasts. Source CSO

The Tories' puzzlement at their unpopularity only grows as new economic indicators appear. The economy is growing fast. Inflation is fairly low (although there are signs that it is growing). The Public Sector Borrowing Requirement for 1995-96 is predicted to be £8.5 billion less than it was expected to be a year ago. Unemployment is falling.

In short, economic recovery seems well under way. So why is history not repeating the experience of the 1980s, and why is the 'feelgood factor' not working?

The simple answer is that few people have much to feel good about. For the first time for many years incomes are not rising, and substantial numbers of people are worse off than they were a few years ago. There are two main reasons for this. Firstly there is the tax hike of the past year which is still being felt. Rises in duty on petrol, beer, cigarettes, VAT on fuel at 8 percent, taxation of insurance policies and foreign flights all mark inroads into the disposable income of every worker.

The second reason is what is happening to wages. Although many workers have won reasonable pay increases, there have also been freezes and even cuts in some areas. So millions of people in work--let alone pensioners, students and those on benefits--feel worse off and quite rightly blame this feeling on government policy. As budget tax increases bite further, so incomes are further eroded. Government and City decreed rises in interest rates will also raise the cost of housing for millions of people.

Can the Tories therefore pull another rabbit out of the hat with renewed prosperity, tax cuts in the next budget, falling unemployment and rising wages? It looks unlikely. Economic recovery may be growing, but it isn't matched with a recovery in consumer spending. One of the main motors of increased personal consumption during the 1980s was the rising housing market, coupled with the easy availability of credit. Today house prices are still falling, credit is much tighter and the level of debt still nearly as high as when the recession began.

And it is still a 'jobless recovery'. Unemployment even on government figures is still around 2.5 million. There are signs that much of manufacturing industry is approaching full capacity--showing just how small its base now is and how many are still left on the dole queues from the last recession.

So far the Tories have not dared let the economy rip as it did during the Lawson boom of 1986-88. They fear raging inflation, debt increases and overheating of a still fragile system. But they will be tempted in this direction as their unpopularity grows and an election nears. They hope to be able to hide behind tax cuts, further expansion and a boost in consumer spending.

Two dangers face this strategy. It can cause further recession, even deeper than the last, and will only exacerbate the problems faced by British capitalism. And politically, the Tories are now facing the possibility that their latest crude attempt at bribery of voters simply will not work.

It is obvious from the row around VAT on fuel that Clarke and Major are trying to take a hard line now, so they can distribute largess in the future. But many people may begin to wonder, why go through all this pain for not a lot of gain?


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