Issue 188 of SOCIALIST REVIEW Published July/August 1995 Copyright Socialist Review

Editorial

The backstabbers

Rogues' gallery

The Tory government is in its death throes. It is embroiled in a very public and bitter battle which cannot avoid doing further damage to a divided party. John Major's decision to resign and stand again as party leader has opened up all the divisions which have seethed beneath the surface since Margaret Thatcher was deposed five years ago.

We went to press before the first round in the leadership election--between John Major and the arch right winger, former Welsh secretary John Redwood--and it was impossible to judge what the outcome would be. As one anonymous cabinet minister was quoted as saying of the Tory MPs, 'This is the most duplicitous electorate. What they say on record is a million miles from what they will do.'

However, the idea that this was a bold and courageous measure on the part of Major to unite the Tory Party can be discounted. It was the action of somebody both desperate and weak, who saw absolutely no alternative to this gamble in order to save his own skin.

That the gamble would succeed, even in the short term, was looking increasingly unlikely. But even if it does, it is likely to mean at best that the government limps on for a few more months before its final ignominious collapse at the hands of the electorate. In the meantime the acrimony, dissent and sheer bitter hatred inside the Tory Party can only get worse. More importantly, none of the problems which have led the Tories to such an impasse will be solved by the leadership election.

The simple fact is that since the late 1980s the Tories have been increasingly divided over policy and ideology--divisions which have deepened in the three years since Major was re-elected. Then the Tories thought they could put their problems--on the poll tax, Europe, the recession--behind them. They had won a fourth term under Major against all expectations and they believed themselves in an invincible position.

This feeling lasted six months, until the combined political disasters for them of exit from the ERM on Black Wednesday and the hostility to the government's pit closures campaign. Since then government unpopularity has become deeper and deeper. Every election result has been a disaster, culminating in the local election results this spring, first in Scotland, then in England and Wales, which confirmed the revulsion against the Tories on a mass scale. Recent poll findings put Labour at around 50 percent while the Tories have slumped very often to third place behind the Liberals with around 20 to 25 percent of votes.

Behind this unpopularity is what is commonly called the 'feel bad factor'--a phrase which, whatever its limitations, adequately encapsulates the complete reversal in the perceptions of millions of people since the 1980s.

Then a whole range of issues combined to make people feel better off--rising real wages, an extremely favourable housing market, cheap shares in privatisation issues, tax cuts. Although the economy slowed down in the middle of the decade, Thatcher and her chancellor Nigel Lawson allowed the development of a huge speculative boom which in the short term created jobs and allowed credit and borrowing on an unprecedented scale. The boom turned to bust at the beginning of the 1990s bringing with it job losses, higher interest rates, a slump in the housing market, and a terrible debt overhang--as those who had borrowed easily found they were having to pay a very high price for doing so.

A buyer's market, but no buyers

Disgruntlement at these issues came together in a wave of revulsion against the Tories towards the end of 1992 and--to the astonishment of the government--this feeling has never really abated, despite a fall in unemployment and some signs, until recently, of at least a partial recovery.

The reasons are straightforward: growing feelings of insecurity about jobs; still falling house prices in large parts of the country, with millions having greater mortgage debt than the value of their houses; tax increases--through abolition of allowances such as mortgage tax relief, or through increases in VAT on fuel or insurance tax; and low wage increases all combine to make many people worse off than two or three years ago.

Cuts in education and health spending have also put further pressure on individuals and made the government deeply unpopular. Revelations of corruption and government wrongdoing investigated by the Scott and Nolan reports have helped to push government standing about as low as it can get. The beneficiary has been Tony Blair's Labour Party, seen as the obvious alternative by millions who voted Tory or Liberal in 1992. All this has resulted in a Tory government out to save itself but deeply divided about how best to do so.

Every election result, every protest over school or hospital closures, every opinion poll showing the Tories trailing, leads to further agonising about what the government should do. Should it do as little as possible--clearly the strategy followed by Major on the grounds that this will upset the least people, or should it introduce radical Tory policies: a harder line on Europe, deep cuts in public spending and the welfare state, tax cuts?

The leadership election debate is tending to put these options in terms of 'one nation Toryism' versus right wing populism. But both wings of the Tory Party have been prepared to launch vicious attacks on the NHS and schools, for example, Virginia Bottomley's hospital closures. And the right wingers like Redwood and Portillo--for all their ideological fervour--favour an increase in state subsidy for mortgage holders through higher tax relief. They are prepared to back public spending if they think it will buy them votes.

Their divisions highlight the contradictions facing Tories in the 1990s. During the Thatcher years they were able to take on and defeat successive groups of workers by isolating them one by one. They are no longer in a position to do so and have been forced to pay groups like the signal workers who took strike action last year. Their privatisation programme, such as in the Post Office, has run into the sand.

These problems in themselves would be enough but the tide of opposition to them in recent years demonstrates how little Thatcher won the ideological battles of the 1980s. There are big majorities wanting a minimum wage, more public spending and higher taxes for the rich.

It is fantasy for the right wing to believe that the present government is unpopular because it is not right wing enough. Yet the right is able to present itself as appealing to ordinary voters partly because it is out of touch with opinion wider than discontented Tories, partly because all the debate is dominated by a Tory agenda.

The role of Tony Blair's Labour Party cannot be underestimated in all this. If the government is falling apart under the weight of its own contradictions, just think what would be happening to it if Labour were really on the attack over schools, hospitals and the economy, instead of accepting half of the Tory arguments. If the union leaders backed a real fight among the tens of thousands of workers who have voted for strike action in the past few months then the government would find it impossible to hang on.

As it is, even without such opposition, this bloodletting is not going to allow the Tories to recover their popularity. Whoever wins, the divisions will continue with large sections of the party respectively hostile to any of the victors.

The possibility of a general election in the next months is therefore high, and with it the likelihood of a Labour victory. But that alone will do little to break the impasse at the top of politics. The key to ensuring that the demise of a Tory government doesn't just lead to a Labour government carrying out cautious procapitalist polices--and so rapidly itself becoming highly unpopular--lies in the level of fightback at the bottom of society.

We know that in recent years many more people have wanted to protest and fight against the attacks they are facing. Accompanying this has been an ideological shift. We also know that many of those people will also vote for Blair in the high expectation that some of these problems can be solved by Labour. At the same time, there is resistance to Blair's policies, as we have seen from the TGWU elections and from many of the union conferences.

The more we fight now, the wider the number of strikes and protests become, the more likely we are to be able to fight not just against a Tory government, but against the political consensus which Blair has accepted so wholeheartedly and which is such an attack on working people.


The government that devoured itself

Can you remember where you were when wotisname resigned?

The early summer of 95 will surely be remembered by all socialists as a time for glorious spectator sport. There seems no need any longer to say or do anything against the Tory administration. Like strange creatures from Greek legend, Tory ministers seem determined to devour themselves.

Leading the field is the Prince of Crassness himself, the prime minister John Major, who in a fit of public petulance for which them is no parallel in the history of the British parliament, suddenly decided to give up his job as Tory leader and seek a new mandate from his narrow and punchdrunk electorate, the 327 Tory MPs.

First to pick up the gauntlet was the far right neanderthal, John Redwood, whose total programme is to cut deeper still into the meagre benefits of the poor--and to bring back the hangman's rope. The Review goes to press as the outcome of this bizarre contest remains uncertain, but lurking in the wings is the old fox Michael Heseltine, a politician so unprincipled that he is quite prepared to make common cause with Michael Portillo, another far right fanatic even more sinister than Redwood.

If Major beats Redwood substantially, he and his lame duck administration will limp on at least as far as the Scott report, scheduled for October. If the first ballot is indecisive, the two Michaels seem the most likely to reap the prize.

The Tory troubles, we are told, are caused by their long period in office. This is nonsense. The Tories happily and unitedly cling to office as long as they can. Their current discontent is caused by the inability of their economic system to solve its own dreadful crises--their 'economic recovery' for instance, on which so much of their rhetoric is now based, is disintegrating in front of their eyes. The tax cuts they promised turn out to be tax increases. Their 'remedies'--union bashing and privatisation--have been employed to the full, with no noticeable benefit to anyone except the mega rich.

No longer able to balance their books by bashing unions and the poor, they have turned to bashing the hallowed middle classes. Even mortgage relief, that enormous Thatcherite subsidy for homeowners, has been breached. In anguish as they contemplate losing their seats, Tory MPs lash out at any target which presents itself. Europe and foreigners everywhere, the BBC, each other.

For Socialist Review readers who have been exposing this crisis, and predicting its political consequences for years, it is tempting in these times to sit back like sadists at a wrestling match between unbacked and hated contestants, and to enjoy every injury inflicted by one Tory leader on another. Such delightful abstention, however, misses the real question--how and why are these Tories still in office?

Every moment of their survival means further inroads into the living standards of the workers and the poor, further grotesque riches in high places and further disillusionment on the left. And while it is fun indeed to watch the Tories tearing themselves apart, there is no guarantee that the infighting on its own will bring the Tories down. They are entitled, if left alone, to go on until the spring of 1997: nearly two more terrible years.

The plain truth is that the Tories are still there because of the spinelessness of the Labour leadership and the TUC. While the people turn against Thatcherism and all its works, the Blair leadership of Labour turns towards it, equating in its negative rhetoric 'old Labour' and 'the new right', as if nationalisation, a free health service, comprehensive education and a trade union movement unshackled by Tory laws were as great a menace as capitalism. This despicable equation lies behind the truce which has been offered to the Tories not just by Labour but by the TUC, which has watched the dismemberment of its own movement with detached passivity.

Even a fraction of the protests of the weaker and less organised trade union movements in Italy and in France in recent months would have driven this government from office and spared us the ridiculous gavotte now being danced by the absurd and discredited Tories.
Paul Foot


Europe

Third division

What is the row over Europe all about? It is tempting to dismiss it as irrelevant, the pathetic backward looking rantings of Tories who are never happier than when wrapping themselves in the Union Jack.

There is some truth in this. No one should doubt the deep strain of Little Englandism and nostalgia for empire which permeates the Conservative Party. But the arguments over Europe are much more fundamental, and reflect splits within not just the Tory Party but also the British ruling class over which strategy to follow.

The decline of Britain as a world power is dramatic--from second industrial power and possessor of a massive empire just 50 years ago to being 'a small island off the coast of Europe', as defence secretary Malcolm Rifkind described it last year. Successive arguments over Europe have been about what Britain's role in the world should be.

The increasing internationalisation of capital in recent years has also presented a dilemma: should Britain aim its industries, investment and exports at a European market or should it be much more closely tied to North America and the east Asian economies?

There is a genuine division here between different sections of capital, such as the Hanson Trust or Cable and Wireless, which have big investments respectively in the US and Hong Kong, and those who look to France or Germany for their markets and investments. The collapse of the pound in the ERM exacerbated this difference.

The Financial Times editorial recently put the dilemma like this..

No wonder it is a choice which is helping to split the Tories down the middle.

But these splits are still more of a symptom than a cause. If the economy were booming, if workers were acquiescent, if they really had tamed the unions and if everyone were happy with the Tories, then these divisions would be of much less consequence.

Despite all the grandiose claims, they demonstrate the long term decline of British capitalism and Thatcher's failure to fundamentally defeat the working class.


Far right

Top of the populists

Newt Ginrich--role model

The very thought of a Redwood or Portillo government is enough to send shivers down the spine. The right wing agenda includes big attacks on public spending and the welfare state, less money for those on pensions and benefits, anti-European bigotry and calls for more immigration controls, plus ideological attacks on groups such as single parents.

The right wingers feet confident. We do not know the outcome of the leadership election, but their strategy is that even if they are defeated now they can still gain in a couple of years time.

The scenario goes that the Tories--under whichever leader--lose the next election to Labour. A Blair government fails to deliver and rapidly becomes unpopular. Meanwhile the right gains the advantage in the Tory Party and presents a radical populist programme based on tax cutting and slashing public spending which allows them to win an election in two or three years time.

John Redwood has made it clear that far right US Republican Newt Gingrich is a role model for many Tories. His 'Contract with America' allowed him to romp home in a record election victory at the end of last year.

Tories also point to the recent turnaround of Canadian Conservative fortunes. A government party which was reduced to two MPs at the last election has recovered sufficiently to allow it to win the local election in the biggest Canadian province, Ontario, again on a right wing populist platform.

Those who believe they can repeat such performances ignore a number of key points. Firstly, Gingrich's Republicans won overwhelmingly because Bill Clinton was unpopular, not because there was an endorsement of their policies.

Indeed, today Clinton finds himself much more popular despite his failings because so many people hate and fear Gingrich. Only 16 percent of people backed Gingrich in a poll just four months after he was elected (incidentally on only 17 percent of the eligible vote).

Secondly, Gingrich has met huge opposition across America. Protests greet him every time he makes an appearance, and there have been big demonstrations against cuts in healthcare and education in New York, while last April 100,000 pro-choice activists marched in Washington against attacks on abortion and against the Contract with America.

It will be very hard for right wingers to introduce similar policies in Britain, where there is a much more developed welfare state, without provoking even greater anger.

However, it is possible for even such ideas to take hold with some people if there is no clear alternative. Tony Blair's echoing of Tory policy can have very serious consequences in government. Already he is accepting much of the right wing ideas about cutting spending on welfare through ending universal benefits. What if a Tory opposition launched a right wing scare on immigration--how would a Labour government respond? We know from records of past Labour governments that the response is likely to be to make concessions and move onto the Tories' racist ground.

This is where the question of a fightback becomes so important. If it is just left to an argument within parliament then little will change for working people. Only if workers fight to defend what they have and to extend their rights will we see improvements in spending in welfare and all the other areas where people want it. Only then will we see the employers being forced to concede a minimum wage.

Tony Blair and the union leaders have done their best to prevent the sort of fightback which can win such demands. They think this will win them an election. But every time they hold back the struggle or attack the left they are giving the Tories a breathing space within which to recover.

We are seeing how unpleasant the Tories can be to one another--just think what they would like to do to the rest of us. The only way we can prevent further attacks from them--or from a Labour government--is to ensure that in every factory, office and estate there is an alternative being put to both the main parties based on the power workers have to change the world once they begin to fight back.


Economy

Hungover after all these years

'Surely no one will trust Labour with the economy', is the secret prayer of many Tory MPs. Yet its own record since 1992 has been a disaster for the government. Commonplace wisdom then was that although the early 1990s had seen a severe recession, recovery would allow a return to the sorts of policies which had enabled the Tories to win elections throughout the 1980s.

It hasn't worked out like that. There have been signs of recovery, but they have been only partial. It is true that industries geared strongly to exports have been able to grow in recent years. They have been helped in this by the recession in Europe. But most industries geared towards the home market have seen absolutely no upturn.

Consumer spending has remained completely depressed, held down lower and for longer by the fall in house prices and rises in indirect taxation. Even worse is the fact that any signs of recovery now seem to be receding again, as industry no longer expands and the fall in the level of unemployment slows down. Therefore the Tories face the prospect of entering an election period not with a 'feel good' boom but with a further dip in the economy.

They faced this problem in 1984-85. The solution then was for Thatcher and her chancellor Nigel Lawson to let rip with an inflationary boom. Credit flowed, spending was encouraged and the economy overheated to such an extent that bust was inevitable. The consequences have been apparent in the past five years, with high unemployment, very slow recovery, the collapse of the property market, bankruptcies and factory closures and a very high overhang of both private and public debt.

Most of big business and the City of London fear a repeat of such a boom--and Kenneth Clarke's policies are designed to assuage their fears. Ironically, Clarke's unpopularity inside the Tory party is very much connected with this. That is why he has cut mortgage tax relief and other tax allowances, put up indirect taxes, held down public spending and raised interest rates.

It may be that he--or some other chancellor--will reverse this policy, going for short term electoral gain. But to do this will involve expenditure of billions of pounds which the government has much less access to than in the days of North Sea oil and easy privatisation. More importantly, it will simply lead to all the problems now being faced simply coming back to haunt them in an even worse form--and probably sooner rather than later.


Labour

Something borrowed, something blue

Fine weather ahead?

With the Tories going into self destruct, what better opportunity for Labour to announce its alternative plans for Britain? You might expect to hear Tony Blair challenging the obviously bankrupt government to call a general election. He could be giving press conferences every night listing the most unpopular policies of the Tories and promising to abolish them under a Labour government--particularly those which have led to such dire consequences in education, jobs, housing and healthcare.

Yet each time a new document is released laying out Labour's plans, what is most startling is just how much it intends to keep. It seems that the Labour leadership are the only people in Britain who haven't yet heard that the government's policies are unpopular and that the majority of voters want something different.

Take education. On the same day that Blair announced his U turn on opted out schools--calling them 'foundation schools' and giving the local authority only limited say in their running--an all party Commons committee reported that there were serious concerns about the finances of such schools. For instance, there was little or no control over the ability or outside financial interests of school governors who now have responsibility for a whole range of funding decisions. The report also found cases where huge balances of money had been held over at the end of the school year.

This money should have been spent on education, not used to accrue interest in the bank.

Yet none of this has deterred Blair from changing party policy justifying his decision to send his child to an opted out school. Far from denouncing the rule of right wing dogma in education which has led to selection, sacked teachers, larger than ever classes and run down schools, Blair has proudly announced that he is ditching left wing dogma! He blames left wing teachers for problems in schools. So Labour will now support testing for five year olds, fast track for some primary school children in subjects like maths, and the introduction of a new 'expert teacher' grade for what are called 'super' teachers.

There have even been hints that parents might be allowed to vote in local ballots on 11 plus' selection, whose abolition was a fundamental plank of Labour's comprehensive education policy in the 1970s. In case there was still anyone in any doubt as to the intentions and colour of the future Labour government, Blair is going out of his way to stress continuity saying, 'We will reform what the government has done, not reverse it'.

This attitude is not of course, restricted to education, but becomes even more startling when it comes to economic policy. It is now accepted that Labour will not set a level for a minimum wage until it gets into power. Even then the amount will be decided by a panel that will include representatives from the City and captains of industry, hardly a promising prospect for millions of workers trying to survive on the poverty line. Yet a recent MORI poll shows that three quarters of those polled want a minimum wage, with 57 percent wanting it at 4 an hour, and a further 25 percent at 5.50.

The latest document on the economy stresses the promotion of productivity and competitiveness to fulfil the long term aim of increasing the growth of the economy. If that means workers continue to pay the price then--according to Blair and Gordon Brown--so be it. At the same time support for high pay awards for executives 'for exceptional performance' has not been rejected, leaving the gross inequality of Cedric Brown and his ilk with their noses still very firmly in the trough while the majority suffer pay cuts.

The only consolation for consumers is that there will be a promise of automatic rebates and price cuts when profits rise above a pre-agreed 'normal' level. It remains to be seen who will be involved in deciding what a 'normal' level of profit will be. But given that Gordon Brown is falling over himself to assure the suits in the City that Labour won't make a move without their express approval, it seems unlikely that the opinions of the workforce or the customer will hold much sway.

There has been an eerie silence on plans for public spending and taxes, with the understanding being that Labour will inherit such a bad financial situation from the Tories that no concrete promises can be made. It doesn't take much imagination to see how this excuse will be wheeled out at the first signs of discontent at lack of progress on everything from pensions, the NHS and public sector pay to unemployment benefit.

It is true that many people who have put up with 16 years of Tory rule will accept that Labour can't fix things overnight. Yet the same people will expect that having finally elected a Labour government some concrete improvements in their lives will be made. What happens when even these are not forthcoming will depend more on what socialists on the ground do now than on any number of glossy policy documents Labour produces.
Judith Orr


Labour and health

Breach of trust

Thumbs up for funding

Many people will no doubt be relieved to hear that Labour plans to 'renationalise' the NHS, though it is ironic that it only uses that word about the NHS, which has not actually been privatised.

What it means is that the NHS is to be restored to a national unit, trusts will no longer be self governing, and overall responsibility for healthcare will be in the hands of the local health authorities. Audit commission figures suggest 1 in 10 of NHS money now goes to ward management costs as opposed to 1 in 20 in 1989. Labour claims its proposals will check the worst excesses of the internal, market and trim the bureaucracy that it has generated.

That sounds fine, but the concrete proposals in the leaked preliminary report are less impressive. In practice, the approach to the bureaucrats is timid. Trusts will remain, albeit with reduced powers. And fundholding family doctors will be retained, even though new applications for fundholding will be refused. Rodney Walker, chairman of the NHS Trust Federation, is relieved.

Labour, he says, has recognised 'the overwhelming necessity not to implement wholesale change into an organisation that is now coming to terms with the effect of the recent reforms'.

The alarm bells really start to ring when one of Labour's health advisers talks about 'retaining what is best about recent NHS reforms', by which he apparently means the split between purchaser and provider. Health authorities will still have to purchase services from local hospitals, and GPs have a role in deciding how money is spent by their authorities. This might sound nice and democratic but in reality this kind of devolution was always about localising often desperate decisions between expenditure on one area of healthcare rather than another.

Once again, the managers are happy. Peter Griffiths, president of the Institute of Health Service Managers, expressed 'absolute delight that they have reaffirmed their commitment to the purchaser/provider principle, which is the centrepiece of current reforms'. This looks like a modified internal market. It seems there is no going back to the idea that the NHS should provide decent healthcare for those who need it when they need it.

Anyone who works in the NHS or uses one of our decrepit hospitals knows that the health service's basic problem is funding. Britain spends less than almost every other European country on healthcare. Yet Labour is expressly refusing to promise more money for the NHS. Worse still, it is making no pledges to reverse the Tories' programme of hospital closures, or to fund a decent pay rise for hospital staff.

Instead it looks as if Labour has decided to modify the current system.

Its proposals may hold back creeping privatisation in the NHS, but they will not even begin to tackle the fundamental problems of a service in crisis.
Chris Nineham


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