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

Tory plans will destroy state education

By inviting all head teachers in the country to re-invent their schools as independent “academies”, Michael Gove, the new Tory education secretary, is really tempting them to abandon the principles and traditions of comprehensive state education.

Taking all schools away from elected local education authorities will further disadvantage students with learning difficulties as well as those who are challenged by their background and social environment.

Furthermore, the second plank of the proposals, the so-called “free schools” that will be set up and run by parents and other groups, will almost certainly fall into the hands of private companies before long. Private profit-making companies are waiting, jaws agape, for just such an opportunity.

Of course, it was the previous New Labour government that opened the doors wide for Tory plans. Driven, as always, by the wishes of big business and the employers’ organisations, the Blair/Brown governments enforced an unpopular and restrictive national curriculum onto the schools. It went along with a regime of constant testing, league tables according to exam results and the gradual privatisation of services.

And it was New Labour who foisted 200 academies onto the education landscape, against the wishes of most teachers and their unions, as a kind of Trojan Horse, in order, principally, to de-stabilise non-selective, neighbourhood comprehensive schools.

The new Tory proposals develop naturally out of this introduction of the market into the education system and they also profit from the general disillusion and frustration of teachers and parents with the New Labour model. They will seem attractive to many at first sight. Head teachers of those schools that have been labelled as “outstanding” have been promised a fast-tracked process so they can become academy schools by September.

There is no evidence that semi-independent, state-funded academies raise standards compared with other schools. There is plenty of evidence to show that they are divisive and expensive. Private business, disguised as charities, has a key role in the running of academies. Some now teach creationism as a scientific fact in opposition to the theory of evolution.

At present academies are allowed to select up to 10% of their new pupils. With this power, which may well be extended, they are able to cream off the brightest pupils, altering the balance of all the schools in the area.

They will soon establish themselves as the school of choice at the expense of others in the area. The former two-tier system of grammar schools and secondary modern schools looms again, though the new names given to them will no doubt try to cover up the fact.

These new schools will not only have extra freedoms over admissions and the curriculum, but they will have control over salaries, introducing competition for the best teachers. This measure is a direct challenge to the unions, which presently negotiate pay agreements on a national level.

The two main unions have condemned the proposals. Chris Keates, of NAS/UWT, accused the government of breaking up state education. “It is essential that those who care about social justice, fairness and equality, who value public services and care about the future of state education, do not allow this to happen,” she said

Christine Blower of the NUT commented: "Creating academies on the scale proposed by the government will have the effect of transferring billions of pounds of publicly funded assets in the form of buildings and land into the hands of private sponsors … This is a retrograde step which will cause social division and planning gridlock...What is needed is a good local school for every child working within their local family of schools."

The question is: What will they do about it? If the union leaders are serious, they will order immediate ballots of their members with a view to challenging the coalition government’s plans with industrial action. Unions should build a united campaign with parents, communities and other public sector workers in the firing line. It's now or never for the teaching unions' leaders.

Peter Arkell

Let the battle commence

The £6.2 billion cuts package announced by chancellor George Osborne and his Lib Dem partner in crime David Laws will cost jobs and hit services, and are just the opening round in plans for savage reductions in public spending. The big issue is how workers and communities can defeat these plans.

Osborne claimed that the first tranche of cuts were aimed at eliminating “wasteful expenditure”. But the freeze on job recruitment in the civil service and the axing of a series of semi-government agencies can only result in fewer jobs and more intensive conditions for those who remain. The cancellation of private sector contracts will inevitably result in closure of medium-sized firms and send more people to the dole queue, which is already at its highest level since the early 1990s.

The immediate cuts will be followed by an emergency budget next month and a major programme of reductions lasting years will be announced in the autumn. These are certain to include effective pay cuts for hundreds of thousands of public sector workers.

To plan how to defeat the coalition and its plans, we have to be clear what the cuts aimed at reducing the state’s £150 billion plus budget deficit are about. The deficit is a result of the meltdown of the financial system in 2008, the bank bail-outs and the consequent recession.

The economic globalisation that began in the 1980s was driven by debt – the debt of individual households, corporations and governments. There is a reason for that and it’s called capitalism. As we explain in our Manifesto of Revolutionary Solutions:

“Competition on price demands increases in the productivity of labour which reduces the hours needed for the production of a commodity. So the value, which is determined by the quantity of labour it contains, and hence the price of, and profit from each commodity tend to decline as a result. To offset the reducing profit derived from each ever-cheaper computer or car, more units of each type of commodity must be manufactured and sold.”

Because people’s income through wages can never be sufficient to buy all the goods produced globally, the financial system developed new ways to provide credit. This in turn got completely out of hand, as the Manifesto notes:

“The global cloud of credit expanded way beyond the value of productive capacity, goods and services it supposedly represented, engulfing the world in debt. By 2006, around 90% of the world’s credit was effectively worthless, sustained by and sustaining the fiction of endless growth ... The consumer boom gave way to a downward spiral that ended the dream of continuous credit-and-debt fuelled growth.”

The globalisation train is now running in reverse as global capitalism heads for an unparalleled slump. Countries with massive state debts are the weakest links in the chain. These include not just Greece and Spain but the United States and Britain.

The cuts are the expression of the destruction of capacity and assets by capitalism when it is in crisis and, of course, they only deepen the problems of the economy as more people become unemployed. The British coalition government has to make the cuts because that’s what the system demands, just as British Airways has to slash staff costs and benefits to survive.

So when Osborne says “we are in this together” and that today’s cuts are a first step to “improve the quality of people’s lives and build a better future” we know that he is simply lying. The immediate future is one of building an all-out struggle against the government, telling the trade union leaders that if they are at all serious, they will have to defy anti-union laws and lead immediate walk-outs.

Actions in Spain and Greece have already provided a significant lesson. Strikes, rallies and resistance must be part of a vision of a different society, one based on co-operation and co-ownership not competition and profit or they will not succeed. People’s Assemblies that take up the issue of power and an alternative to capitalist rule have a decisive role to play in the coming struggles.

Paul Feldman

Communications editor

End of 'old politics' is our chance

For all its outward appearance of partnership and harmony, the Lib-Con coalition government is an inherently unstable regime. Patched together solely to impose the burden of the economic and financial crisis on the backs of ordinary people, the coalition is a high-risk operation.

Far from ushering in a “new politics”, the coalition only operates by rejecting politics altogether, setting aside not just party differences but their parties as well. As we noted last week, we are witnessing a very British coup by David Cameron and Nick Clegg, which is already producing internal resistance.

Yesterday Cameron won his bid to allow government ministers and whips to have full membership of the Tory backbench 1922 Committee, but only by 168 votes to 118. Now plans are already afoot to create a new committee made up entirely of backbenchers. One backbencher said Cameron’s move was “very dangerous”. He added: “We are not lemmings like most Labour MPs – we don’t just do as we are told. It’s as if power has gone to David Cameron’s head.”

Many backbenchers are not enamoured with the joint programme of the coalition published yesterday, which ditches several cherished Tory policies on inheritance tax, stamp duty and abolition of the Human Rights Act. Similar simmering political tensions exist inside the Liberal Democrats too.

The coalition will shortly be involved in conflict on another front – with ordinary people.

The Lib-Con merged programme insists that the need to cut the deficit “takes precedence over any of the other measures in this agreement”. The £170 billion annual deficit results from a combination of bailing out the banks and the recession that followed the meltdown of the financial system in 2008.

Starting next week, the coalition will start to cut the deficit, which presently funds public services and jobs. Teachers and civil servants were placed in the immediate firing line yesterday, along with postal workers through the privatisation of the Royal Mail promoted by the Lib Dem’s Vince Cable. VAT is certain to rise along with other taxes to reduce living standards.

The insecure nature of the coalition makes it heavily dependent on the capitalist state bureaucracy for its survival. Leading officials applauded after Cameron went through the agreement with the Lib Dems in a public show of support senior civil servants are not normally given to. They, of course, facilitated the creation of the coalition in the first place. There is a distinct Bonapartist air about the two youngish public schoolboys now running the government, balancing between bureaucrats and sections of the electorate, while sidelining their parties.

Things can only get worse for them as the debt crisis which brought down the banks finds its way into governments, particularly in southern Europe. Panic measures have done nothing to stabilise the euro and the continent is on the brink of a major slump. Financial markets are demanding their pound of flesh and governments are no match for the beast they helped create in the first place.

We have to think about what is coming up the line. Serious conflict between public sector workers and the government is certain. Emergency measures against strikes cannot be ruled out. Yet opposing the dictatorship of the markets and the coalition has to have an objective beyond resistance itself.

Halting the cuts is only possible if the financial system and the basis of economic activity is reorganised to replace profit as its foundation with a socially-useful approach to meet society’s needs. Politically, the aim cannot be to replace Cameron/Clegg with a new generation of Blair/Brown type New Labour leaders. That would be just a change of management.

The crisis since the general election, with voters displaying a distinct lack of trust in any party or the Parliamentary system itself, must lead to a truly “new politics”, founded on a revolutionary, democratic transformation of capitalist society. The opportunities for building a people’s coalition against an unsustainable capitalist system are opening up before our eyes.

Paul Feldman

Communications editor

Vote for 'none of the above'!

The spectre of a hung Parliament – where no party has an overall majority – is a possibility when the votes are counted after next year’s general election. It’s the last thing the ruling classes want and could open the door for quite a sinister development.

While the Tories remain ahead in the polls, their lead appears to be shrinking. Although they would probably emerge as the largest party, the Tories would not be able to form a majority government without the support of the Lib Dems. Nick Clegg, the Lib Dems’ leader, has already indicated his willingness to back the Tories rather than New Labour.

David Cameron’s New Tories need a swing bigger than the one that brought Thatcher to power in 1979 to win an outright majority. Winning an extra 117 seats would, for example, leave the Tories with an overall majority of just one. With virtually no support in Scotland or Wales, winning a comfortable majority could prove an electoral mountain too high to climb.

For Philip Johnston, the Daily Telegraph’s home affairs editor, a hung parliament is a ”nightmare scenario”, one made more possible by the fact nearly 100 of the 646 MPs in Parliament are from parties other than the Tories and New Labour.

The cat was set among the pigeons last week by former Tory chancellor Ken Clarke, when he remarked: “I do think that in the middle of an acute national crisis a hung parliament would be one of the biggest disasters we could suffer … that would be a bigger danger than a Labour victory.”

Clarke was, of course, referring to the massive state debt resulting from bailing out the bankers, the unparalleled programme of public spending cuts that all the major parties are proposing, alongside rising unemployment, especially among young people and a deepening recession.

In the event of an inconclusive election, it is questionable whether financial markets, for example, would be willing to lend a weak government the £220 billion it needs to borrow next year. This could precipitate a run on the pound. As commentators have noted, the only lender remaining then would be the International Monetary Fund.

Why should we be bothered about all this? Well, an economic collapse that coincides with a political crisis is the recipe for a “government of national unity” – or a coalition of the three major parties. If this sounds like a wartime arrangement you would be right. Except on this occasion, the “enemy” would be public sector workers and those who use services. The living standards of the vast majority would be targeted in order to save capitalism at our expense.

As in wartime, a national government might find it necessary to “suspend” democratic rights to oppose what would amount to a Parliamentary dictatorship. No doubt the security service MI5 is compiling lists of people that might prove troublesome in such circumstances.

Of course, none of this may happen and a government with a working majority might result from the election. It would, of course, enjoy the support of the other parties as it inflicted the pain of the crisis on ordinary people. So one conclusion is – whatever way people vote, they are going to get it in the neck!

This undemocratic Parliamentary system is inherently incapable of acting in the interests of the majority of working people, however they vote. We need to extend democracy and reconstruct the state to take power out of the hands of the corporations and bankers if we are to solve the economic and financial disaster at their expense. There is, therefore, a strong case building for voting for “None of the Above” and creating the momentum for revolutionary solutions to the crisis.

Paul Feldman

Communications editor