News	Review

ROVER

Dancing to the bosses' tune

Alex Callinicos and Dave Beecham on the car industry crisis

In the life of every Labour government there comes a moment when the real nature of world capitalism makes itself brutally felt. For Tony Blair's administration that moment came on Tuesday 14 March 2000, as the news that BMW planned to sell Rover began to seep out.

For earlier Labour governments the financial markets have usually been the agency through which the logic of capital asserted itself. An infamous 'bankers' ramp' brought down Ramsay MacDonald's government in August 1931. Sterling crises broke the will of subsequent administrations--in 1947, 1964-66 and 1975-76. This time it was the decision of a German multinational to abandon the British car industry and wreck the lives of tens of thousands of working class people, but the lesson was the same.

The contrast between capitalist power and government impotence was no less stark because this time Labour had proclaimed undying love for big business. New Labour ideologue Anthony Giddens writes in his latest book, The Third Way and its Critics, 'The left have to get comfortable with markets, with the role of business in the creation of wealth, and the fact that private capital is essential for social investment.'

'Comfortable' isn't the first word that springs to mind when describing New Labour's reaction to the BMW pull-out. According to the Observer, Tony Blair was 'shaking with anger when he was finally told about the decision'. 'That is not the way the prime minister believes people should do business,' Alastair Campbell told the press. Trade and industry secretary Stephen Byers accused BMW of lying to him about its secret plans to hand Longbridge over to Alchemy. BMW bosses coolly replied that this information was 'market-sensitive'.

The wretched Byers, who looked more and more like a braindead weasel as he toured the studios desperately trying to get the government off the hook, deserves no sympathy. He oiled his way into the cabinet by establishing himself as one of the most fanatical Blairites, notably when he floated the idea that Labour should break with the unions. But he isn't the minister who should be carrying the can for the destruction of Rover.

More than anyone else in the Blair government, it is the wooden-tongued braggart who occupies the Treasury who is responsible for this catastrophe. Gordon Brown, who has grasped most of the main levers of domestic policy, is quick to claim credit for any government successes. But he is nowhere to be found when anything goes wrong.

Yet Rover's collapse has his fingerprints all over it. Brown endlessly boasts of his commitment to monetary and fiscal stability, reflected in the squeeze on public spending, and the independence of the Bank of England. In his Mais lecture last November he endorsed Milton Friedman's monetarism but claimed that he could apply free market economics more effectively than the Tories did. Yet Brown's tight-money policies have helped to produce a strong pound that makes British exports expensive and therefore hard to sell on world markets.

BMW's plans for Rover were based on a sterling exchange rate of DM2.40. The pound now stands at DM3.15. 'Had it not been for the pound, they [BMW] would have been successful,' a member of the German firm's supervisory board told the Financial Times. 'I cannot understand the British government for standing by idly and doing nothing.' Ford Dagenham may soon be the next victim.

No doubt various clowns in the media and City research departments will pop up to say that the decline of manufacturing industry in Britain doesn't matter, because in the new 'knowledge economy' it's services that count. The Financial Times carried a piece proclaiming that the West Midlands' 'diversification out of manufacturing has been rapid, led by business services and tourism'. It will no doubt be of great comfort to redundant Longbridge workers that they may be able to earn the minimum wage clearing litter in some leisure park.

Although huge increases in labour productivity mean that manufacturing accounts for a lower proportion of employment and output than it did a generation ago, all the other major economies maintain much larger and more competitive industrial sectors than now survives in Britain. The most successful American information technology firms like Microsoft and Intel have flourished largely because their products have allowed US corporations in manufacturing and services alike to improve their productivity and thus their competitiveness.

Rover, by contrast, sums up the sorry history of British manufacturing industry. In both private and public ownership, the firm has suffered from chronic underinvestment and incompetent management. First under the 1974-79 Labour government, and then under the Tories, workers at Rover accepted deal after deal that squeezed more work out of them in the hope of saving most of their jobs.

The Tories were only too happy when Rover was finally sold off to BMW. It was an example of what Tories and New Labour alike hail as the successful policy of encouraging 'inward investment' by foreign multinationals. But when the economic tides turn inward investment can flow out with appalling consequences for whole communities.

The Rover crisis hasn't just exposed the government's bankruptcy. Sir Ken Jackson of the AEEU, stalwart of the Labour right, has cut a sorry figure. For years the AEEU leadership championed sweetheart deals. Now Jackson is reduced to calling for a boycott of BMW cars--a policy that most of us have been following for years out of sheer necessity.

The tragedy of Longbridge provides an insight into the brutal logic of global capitalism. However desperately you may try to dance to its tune, capitalism will still cut you off at the knees. The only answer is to get rid of it.

BETWEEN THE LINES Poor Rover car sales have been blamed for BMWs decision. New British registrations fell by 8.4 percent in February compared to last year, but that was less than the fall for rivals Ford, Vauxhall and Renault. Land Rover recorded a 5.1 percent sales increase in January and February. The workforce at Rover has fallen from 110,000 in 1995 to 30,000 today. The most recent restructuring meant 2,400 redundancies in return for £2 billion investment including government aid. Rover forms the remnants of the old British Leyland, nationalised in 1975. In 1988 the Tories sold it to British Aerospace, who began the process of asset stripping and sackings which are continuing today. In December 1998 BMW threatened to build the new small car, the R30, in Hungary, and so got another E152 million government subsidy. The European Commission doubted whether Hungary was a 'seriously considered alternative'.

WHAT NEXT? Occupy, nationalise... The facts about Rover are plain. The workers have been betrayed--not just by BMW, but by their managers, their union officials and, most of all, by the government. Rover was the flagship of Blair's 'Third Way' in industry, complete with a partnership agreement under which workers gave up most of the gains they had won over the years in return for participation in company decision-making and guaranteed employment. Some guarantee! We participate--they sack us. If there is one thing that the Rover story proves it is that however much workers do to be more productive, more flexible, more committed to the enterprise, they are still at the mercy of market forces. Rover workers are the current victims of the insane competition for market share in the car industry, but next week it maybe Ford, Fiat, or indeed BMW itself. The best response from Rover workers would be if they occupied and took control of Longbridge to show BMW and New Labour there is an alternative to the market. Stephen Byers, Secretary of State for Hand-Wringing, says that there is nothing to be done except plead for some contribution from the company towards an aid package to the West Midlands, and hope that the Alchemists can turn base metal into gold--ie the new MG. Question: How many venture capitalists does it take to change a lightbulb? Answer: None. They just turn off the lights and pretend to see in the dark. There are in fact a number of options that the government could take. It could renationalise the factory to stop the break up of the company and keep employees at work. It could ensure orders for Rover vehicles in the public sector while retaining the skills that exist within the company. That's the more 'radical' approach--but hardly a revolutionary one. At the very least it would achieve a planned change, boost the morale of workers and provide the opportunity for the company and its suppliers to adjust. Whatever the outcome, it would certainly be better than a panic response to a corporate decision that relies on an unproven company to achieve a miracle, while handing over the profitable bit to Ford which is already cutting jobs, and may soon destroy more. Even a government as wedded to market forces as New Labour could do a lot more. It could enforce a consultation period involving BMW, the unions, local authorities and potential buyers. It could order an inquiry into the breakup and force BMW to delay its decision. It could commission a report from experts in the car industry in Britain which would provide the basis for a proper, public assessment of the outlook for Rover. All this would put pressure on the employer to come up with alternative proposals which could be openly examined, instead of decisions being taken in secret. Yet even this modest course of action appears to be beyond the dreams of Byers, Blair and Brown (how fitting that they sound more like estate agents than a government). What is preventing the government taking this sort of action, or any action that is not entirely determined by their worship of the market? Is it lack of resources? Is it that Rovers are no better than Trabants? Is it that they simply have too much on their minds because of aggressive beggars in the streets? It is time to face facts. There is no Third Way. Labour has sold itself to the crudest form of capitalism, where shareholder value' is everything and inward investment is encouraged on the basis that it's quicker and cheaper to sack workers in Britain than in Germany, Holland, France or Spain. The difference between Stephen Byers and Michael Portillo is this: Portillo placed advertisements in the German press advertising Britain's cheap labour costs and feeble protection for workers. Byers says it behind closed doors.

BETWEEN THE LINES Remember Jennie Page? She was the boss of the Millennium Dome sacked by the government due to poor attendances. Her reward for such outstanding work is to be made a Dame by the government, while another New Labour supporter, sacked BA boss Bob Ayling, is to be made a Lord. You've heard of tagging offenders--now Tesco wants to tag supermarket trolleys to freeze the wheels if they move too far away from a store. many trolleys go missing because students use them to take their shopping home and increasing numbers of homeless people find them useful to carry their belongings around. The Royal Family has ditched a plan to raise £20 million through a charity appeal to mark the Queen's golden jubilee. The press report a 'gloomy' meeting of the Way Ahead Group--which includes the Queen, Prince Philip and their four children--which decided to delay the plan because they feared people would not give enough cash.

ZIMBABWE The lie of the land Robert Mugabe's poll defeat over changes to the constitution has dealt a blow to his prestige as Zimbabwe's undisputed leader since the end of the white racist regime in 1980. By giving himself the right to another ten years in office, to ban strikes and demonstrations, to limit the rights of women and gays and to step up control over the press, he hoped to curb dissent, particularly in the towns. But he recognised--belatedly--that discontent was also undermining his stronghold in the countryside. Some 70 percent of Zimbabwe's 12 million population live outside the urban areas. Land remains a major problem. Whites are 1 percent of the population, yet they continue to own 70 percent of the best land. During the first ten years of independence, land reform saw 70,000 families resettled on 3.5 million hectares. Some of the land went to high-up officials. There are still 100,000 families wanting resettlement. So, to enhance the appeal of these constitutional changes, he included a clause which would have given the regime powers to confiscate land owned by whites without compensation. Yet the situation of farmers and the rural poor has worsened. Zimbabwe's economy is in dire straits, and the regime is involved in the civil war raging in the neighbouring Democratic Republic of the Congo (RDC). Unemployment stands at 50 percent. Some 70 percent of Zimbabweans live in dire poverty. Fuel is in short supply. 'The crisis is worsening each and every day. Six hour queues are normal,' says a socialist in Zimbabwe. 'In rural areas people aren't happy. The dismal shortage of fuel affects the mills which grind maize to make mealie flour.' People aren't happy about the war, either: 'There are calls for the soldiers to come back. We were affected by the same cyclone which brought floods to Mozambique. People are complaining that the government did not respond because most helicopters are in the RDC.' The government is pressing ahead with a new law to confiscate land. Many farms are being occupied by ex-combatants of the war of liberation. Some 18 of these are tobacco plants. The Commercial Farmers' Union says that this will cause huge financial losses to the tobacco industry, because reaping and curing are not being done. The government's attitude is one of cynical tolerance. Elections are due soon. The main opposition comes from the Movement for Democratic Change (MDC), founded last year and led by the general secretary of the Zimbabwe Confederation of Trade Unions (ZCTU). 'It remains popular with all sections of society,' reports a Zimbabwean socialist, 'but the MDC is now saying that land should not be seized. Instead a commission should be formed of all the stakeholders, all the interested parties, to discuss how the land should be distributed. 'It is also demanding that the state-owned industries, including railways and communications, should be privatised. It wants to solicit international support and consult the IMF to sort foreign exchange and implement export investments. It wants to protect commercial and farming interests. That makes the MDC popular with whites and the bosses. It talks of converting communal areas into land for the peasants. That sounds good. But giving title deeds to communal land means that the middle class and the rich can buy all the land from the peasants.' The MDC is likely to win many seats in the new parliament, despite fraudulent attempts by the regime to manipulate the results in advance. At the beginning of the year public sector workers rejected a 40 percent pay offer by the government and threatened strike action, with the unions demanding 150 percent. The government was forced to concede much of this to evade industrial action. Many workers are hoping that once the MDC is in power then things will begin to happen. But its programme will not begin to solve the problems faced by workers and peasants. Gareth Jenkins

WORLD TRADE AND DRUGS

A patent case of murder

One of the greatest indictments of the World Trade Organisation (WTO) is the treatment of Aids sufferers in Africa.

The WTO's 1997 Trade Related Aspects of Intellectual Property Rights (Trips) agreement protects knowledge, allowing drug companies to patent their drugs and thus charge massively inflated prices for them. A get out clause was written into the agreement allowing countries facing health emergencies to 'compulsory licence' the local, and cheaper, production of the necessary drugs. Yet the governments of Third World countries are often excluded from invoking this legislation by their lack of resources.

The most notorious example to date comes from the South African government which is attempting to deal with a developing catastrophe: 26 million sub-Saharan Africans are HIV positive and 80 percent of the people dying of Aids in the world live there. South Africa in particular has the fastest growing epidemic in the world. The drugs which control Aids cost US$10,000 a year. The average wage in South Africa is only US$1,000 a year. Under compulsory licensing the drugs could be produced for US$200. In 1997 the South African government passed a law allowing for compulsory licensing.

The drug companies' representative body, Pharma, labelled this law 'piracy' and employed a top lobbying company run by Anthony Podesta. His brother, and a former director of the company, John Podesta, is chief of staff at the White House. After receiving a substantial contribution from the drugs companies, they pressurised the South African government to repeal its law. So did the US state department. Madeleine Allbright's assistant secretary assured two senators, 'We are making use of the full panoply of leverage in our arsenal to persuade the South African government to change its law.' So did the European Union. Leon Brittan, vice-president of the commission, wrote to the South African government complaining about their law.

Gore's election campaign was dogged by protests over this issue which eventually forced him to distance himself from Pharma. In the midst of the Battle of Seattle Bill Clinton announced that US trade policy would stop blocking access to essential medicines.

But US companies are still, illegally, demanding 'Trips plus' protection for their medicines from African countries, and the US government still refuses to allow the World Health Organisation or UNAids to have access to US government funded drugs in Third World countries. Most ominous of all for the Aids victims of South Africa is the example of Thailand. In the early 1990s the Thai government compulsorily licensed the production of drugs for Aids related meningitis. The US government threatened trade sanctions. As 25 percent of Thailand's trade is with the US, the compulsory licensing was dropped. Did the recent US change of policy mean this policy could be reversed? Well, in case this impression was given, the Thai government was sent an anonymous letter from the US government arguing that compulsory licensing could 'undermine intellectual property rights'. The policy has not been reversed.

A few years ago Pharma took out its own prosecution which named then president Nelson Mandela as principal defendant.This prosecution is still 'active'. It is likely that as soon as the scrutiny of the US presidential election campaign fades, South Africa will once again find itself in the dock.
Judy Cox

RUSSIA

Business means business for the west's favourite warmonger

A victory for Vladimir Putin in the Russian presidential elections seems certain: He commands 60 percent support in the polls and is widely seen as 'the hard hand' who will impose 'stability'. He claims to stand above the party political contest, harking back to the autocracy of the tsars.

Putin is not, as is often portrayed, a nondescript placeman. He spent 15 years as a career officer in the KGB. He was stationed in East Germany when the Berlin Wall fell. He quickly drew the conclusion that the old Communist Party structures could not be sustained. He returned to St Petersburg to back Russia's leading free market neo-liberals, who in turn sponsored his rise to head the KGB's successor organisation, the FSB.

As the Yeltsin era drew to a close he was appointed prime minister, and then Yeltsin's heir apparent. He secured the support of the repressive state apparatus, big business, key regional bosses and the military, expanding military production. For ordinary Russians it is the war in Chechnya that has projected Putin from obscurity to national prominence. He took direct authority over military operations and proudly identified himself with the brutality of his troops. There is growing evidence the FSB itself staged the bombings of working class apartment blocks used as a pretext for war. Other temporary factors have helped Putin sustain support. The rise in world oil prices has brought a significant rise in revenues into state coffers and, para doxically, the 1998 collapse of the rouble. The soaring rise in the price of imports has also given some impetus to industrial production.

But Putin has also received support from another important quarter--the west. A stream of western dignitaries have paid homage to the new power in the Kremlin. Here is a leader who, they hope, will finally impose order and free market 'discipline'. Robin Cook found the Russian warmonger's style 'refreshing and open', and declared, 'His priorities are ones that we share.' Tony Blair's visit in March was the first by a western leader since Putin's appointment as acting president, and was seen as an important mark of western support a fortnight before the elections. The US, Britain and the EU have all assured the Russians that the war in Chechnya will not interfere with business.

Yet, however strong a bet Putin may seem to his Russian and foreign backers, the tensions within his regime remain. Russian workers still face the consequences of continuing economic crisis and rising militarism. The 'honeymoon' between Putin and Russian voters is unlikely to last.
Rob Ferguson
'Stop Russia 2000' demonstration. Meet 8am, and 4.30pm-8pm. Wednesday 19 April, QEC Conference Centre, Westminster

ASYLUM SEEKERS

From one hell to another

The hysteria about refugees begging on the streets has nothing to do with the facts about asylum seekers and refugees coming to Britain and everything to do with whipping up bigotry. Far from England being a 'soft touch' for economic migrants, it is becoming all but impossible for those who fear for their lives to escape here.

There are more than 20 million refugees in the world today. They are driven from their homes by war, civil war, repression and discrimination. Another 24 million are internally displaced. Only 71,160 of these applied for asylum in the UK last year--just 0.16 percent. Last year more people from former Yugoslavia (including Kosovo) applied to the UK than ever before. This is directly related to the war, and a total of 14,185 sought asylum here. Since the end of the war the refugees have been sorely disappointed. The Refugee Council reports that since the summer applications from Kosovan asylum seekers are being refused en masse. Next on the list of asylum seekers are Somali applicants with 7,495 people, then Tamils fleeing repression in Sri Lanka with 5,125 applications.

Roma people are among the most harassed and victimised in Europe. There are no exact figures for the number of Roma people applying for asylum--they are included in the overall figure for the countries from which they fled. Yet despite the hysteria, just 1,985 people from Romania came last year, and a total of 5,500 from the four east European countries from where Roma are included.

In the Slovak Republic Roma women have been subject to forced sterilisation. While the current president of Slovakia was mayor of Kosic a campaign was organised to drive Roma people out of their homes into a ghettoised estate. Yet in November 1999 Straw slammed visa restrictions on those travelling from the Slovak republic making clandestine entry the only way Roma could flee to the UK to declare asylum. This month a fine of £2,000 for any lorry driver or coach operator found with asylum seekers on board comes into force.

For those who do manage to get to the UK life is being made impossible. The voucher system is expensive to run and will create huge profits for the companies which participate. No change will be given to those shopping with the vouchers and the stores will simply pocket the change. In east London, where Sainsbury's is already running a voucher scheme, halal meat is not available--so Muslim asylum seekers need to find cash to buy it in the market.

Currently, in the system managed by local councils, nothing is given for a child over 18 unless they are considered to be wholly destitute and living separately from their families. I recently came across a family forced to throw their son out of the house so he can get the £27.90 per week that Straw considers adequate to meet all his needs. There is no support too for those new arrivals who do not agree to live wherever the Home Office sends them. I found an eight year old child who spoke no English and had been in the UK for just five days. He had been forced to sleep rough because he had asked to go to Newcastle--where some people speak in his language--instead of Manchester where he was told to go. Until he goes to Manchester he has no access to any income at all.

In this situation it is no wonder that some must beg. One Ethiopian group last month reported a dramatic rise in suicides amongst asylum seekers who had hoped to find a country where they could live in dignity and freedom, and instead found they had merely escaped from one hell to another.
Elane Heffernan

THE NEW LAW