For the TUC and Miliband, resistance is futile

As the coalition puts the finishing touches to next week’s budget cuts, which are certain to devastate services and jobs, you might wonder what the trade union leadership and the Labour Party are up to. Keeping their heads down, is the answer.

While French unions battle the Sarkozy government over pension cuts, our very own Trades Union Congress has called a lobby of Parliament for the day before the cuts are made public. Why then, you might ask? It’s because they don’t want loads of angry workers turning up outside of the Commons once they’ve heard the bad news.

As for a lobby, that is really going to frighten the Lib-Con government! Nothing like seeing your MP and asking him or her to oppose the cuts, to put the fear of God into elected representatives.

And that’s it as far as the TUC is concerned. Perhaps they’ll be a demonstration in March next year, probably on a Saturday to avoid workers having to strike to be there. For the main part, the most dramatic changes to public services and the role of the state will be implemented without official opposition.

When it comes to Labour under Ed Miliband – or should that be Millipede? – they might as well be part of the coalition. Miliband has already spoken out against holding strikes against the cuts and agrees that the budget deficit has to be reduced.

By blocking Ed Balls from becoming shadow chancellor, the job he coveted most, Miliband revealed his hand. Balls’ view is that the government is cutting too much of the deficit too quickly. His argument, essentially, is that the cuts are not really necessary. By giving the job to Alan Johnson, a man who on his own admission knows little about economics, Miliband moved closer to the coalition’s policy.

The reason for this is not hard to fathom. Miliband, Balls, Yvette Cooper and other senior members of the shadow cabinet, fully signed up to the New Labour project. At its heart, was the acceptance that market-driven, globalised capitalism is the only game in town. Whatever you do, don’t upset the bankers.

And, despite the collapse of the banks and the subsequent recession, this is what they still believe. That is their ideology, their world outlook. So when the Tories step up the creation of more Academy schools, raise tuition fees and introduce a market framework in the NHS, they are building on what Miliband and others did in government.

This is the political reality as Britain staggers on towards a further banking crisis and with a national debt that is eating up £70 billion a year in interest rates alone. The International Monetary Fund has revealed the startling prospect that US and European banks need to refinance around about £2.75 trillion in debt over 2011 and 2012. The IMF also repeated its claim that European banks were still hiding losses off their balance sheets, having written down only around a quarter of expected losses.

And guess which country is in the worst position? You’ve worked it out. Britain’s banks need to refinance to the tune of £800 billion over the next two years, nearly a third of the refinancing the IMF has identified. With state finances looking like a sea of red, the idea of another bailout – should the banks, as is almost certain, be unable to refinance on their own – looks highly improbable.

All sorts of political scenarios are possible in such an emergency, including a national government. One that can be safely ruled out is the idea of Miliband’s party doing anything other than rushing to the aid of the capitalist system, as they did in 2008. For them, resistance is futile. For the majority, it’s the only option.


Paul Feldman
Communications editor

Coalition walking a tightrope

That the first serious opposition to the government’s cuts programme has come from within the Tory Party rather than from the usual quarters, reveals the not only the depth of the financial crisis but mounting problems within the Coalition itself.

In office for just two months, the Lib Dem-Tory government is facing all sorts of stresses and strains and you would not put your money on it lasting the scheduled five years. The axing of the school building programme by education secretary Michael Gove has prompted a furious response from within the Coalition.

Last night, Lib Dem Scottish Secretary Michael Moore criticised Gove over the fact that the announcement on the cuts was replete with errors, leading some schools to think mistakenly they had been reprieved. Three Tory MPs have denounced Gove and one threatened to lead a march on Downing Street of parents, students and teachers!

Ian Liddell-Grainger, Tory MP for Bridgwater and West Somerset, attacked plans to halt three schools in his constituency and put three others under review. “If I have to stand outside Downing Street and say, 'Can we please have a chat?', then I am more than happy to do so," he said. Teaching unions have organised a lobby of parliament, to take place on Monday 19 July – a date which coincides with the second reading of the government's Academies bill.

The Coalition’s attack is broad-ranging and will hit every section of the community, whether they voted for the Coalition parties or not. For example, pensions minister Steve Webb is proposing that private sector pensions schemes drop inflation-proofing based on the retail prices index (RPI) and replace it with the much lower consumer prices index (CPI). A pensioner currently receiving £10,000 a year will be more than £800 a year worse off by 2016, according to one estimate.

Apparently the government is concerned that the remaining final salary scheme pensions could go belly up over the next few years and land the government with the cost of picking up the pieces. Cutting the value of pensions by adjusting them for a lower measure of inflation is the Coalition’s answer.

The Coalition is walking a financial tightrope and could fall off at any time. Debt payments alone on the national debt amount to £40 billion in 2010-11 – and are expected to rise to an astonishing £70 billion, which is about 15% of the annual state budget. The government’s own calculations about reducing the budget deficit are themselves based on wildly optimistic forecasts about economic growth.

On many measures, Britain is the most indebted country among the advanced capitalist countries. As the government admits in its latest budget report: “Between 2002 and 2007 there was a near tripling of UK bank balance sheets and the UK financial system had become one of the most highly leveraged [i.e. financed by borrowing] in the world, more so than the US.” British banks are, by the way, still desperately short of capital

The scale of the task facing the Coalition – which wants to “rebalance” the economy in favour of the private sector – is immense and, in my view, beyond its capacity. What they are proposing could only be carried through by force. The groundswell of opposition and discontent that is already building up throughout society will undoubtedly provide us with an opportunity to defeat the Coalition. Building a network of People’s Assemblies to unite communities and plan for a socially-driven alternative to the nightmare of the capitalist financial and economic crisis is key to winning this historic battle.


Paul Feldman
Communications editor

Coalition prepares for showdown with unions

A massive provocation against the trade unions in the public sector is openly being prepared by the Coalition government as it prepares to force through spending cuts that will destroy hundreds of thousands of jobs and wreck vital services.

The question is: how will union leaders respond to the Coalition’s relentless assault on jobs, wages, pensions and redundancy terms that is building on a daily basis? 

In the last 24 hours alone, there are reports of:

• government departments being asked to prepare cuts in budgets amounting to 40% of current spending, which would terminate much of what they do
• new laws to toughen the already-draconian anti-union legislation introduced by the Thatcher government and sustained by New Labour
• legislation to impose reduced redundancy terms on civil servants after the courts ruled that New Labour’s attempt at the same was unlawful.

Staging an effective strike in Britain is well nigh impossible – if unions stay within the law. Solidarity action in support of other workers is illegal, as is mass picketing. Even sticking to the rules on balloting is no longer sufficient. Employers are challenging virtually every ballot, enjoying favourable judgements in most cases.

Now the Coalition is reportedly planning to toughen the ballot regulations even further. At present, a simple majority of those voting is required. The government is discussing plans to impose a higher threshold and is also being lobbied by business to allow striking workers to be replaced with agency employees.

All this follows hard on the heels of a two-year pay freeze, which even Cameron admitted amounted to a salary cut as inflation moves ahead; immediate cuts to local authority budgets with job losses; and plans for higher public sector pension contributions. In October, the Coalition will announce details of unprecedented spending cuts which will take effect from 1 April 2011.

Cameron and Clegg are calling the bluff of the trade union leaders, who – with a handful of honourable exceptions representing firefighters, rail workers and civil servants – cosied up to New Labour for 13 years to no avail. The biggest public sector union, Unison, sat back as Blair/Brown carved up the health service and public services. Loads of cash was sent New Labour’s way, however, even though muted pressure to drop the anti-union laws was treated with contempt.

Union membership has declined to 6.9 million from over 12 million and is barely present in the private sector. But unions represent almost 60% of public sector employees and so are in a position to organise against the cuts. So far the signs are not inspiring. At its annual conference last month, Unison adopted a 1,300-word motion on the “austerity agenda” that in the same sentence referred to “working with employers who share our aspirations “(!), and being ready to take industrial action “where necessary”.

This will simply not cut the mustard. The Coalition is preparing for war while the main trade union leaders are looking for a deal. There is no compromise on offer, however. The crisis of global capitalism deepens day by day and this is what is driving the Coalition’s attempt to transfer wealth to big business at the expense of working people and the millions who depend on public services.

In September, the Trades Union Congress will meet in Manchester from 13 September. Those who are up for the fight like the rail union RMT have a responsibility to take the fight into Congress. Nothing less than the preparation of a co-ordinated, indefinite General Strike against the Coalition, alongside anti-capitalist policies that answer the crisis, will measure up to the task in front. The time for cheap talk is over.

Paul Feldman

Communications editor