They are all in it together!

The evidence of Labour’s collusion with the ConDem coalition has piled up so high that even Len McCluskey, the leader of the Unite union, can no longer ignore it. “The real points of differentiation between Labour and the government on the economy are now very hard to identify,” he admits today.

McCluskey’s union propelled Ed Miliband into the leadership in the vain hope that he would lead the party in a new direction, away from the Blairism of the previous 15 years towards a modernised version of Old Labour.

With shadow cabinet members lining up to support the government’s public sector pay freeze, cuts in education and saying that a Labour government would continue with the ConDems’ austerity policies, a shell-shocked McCluskey hit back – at least in words.

Writing in The Guardian, he says that “this year we have seen one shadow minister after another falling over themselves to endorse savage spending cuts which are hurting real people. Where does this leave the half a million people who joined the TUC's march for an alternative last year, and the half of the country at least who are against the cuts? Disenfranchised.”

The general secretary of Britain’s largest union, whose financial support keeps Labour afloat, says the country now has a “national government” consensus among the three major parliamentary parties. McCluskey tries, without success, to paint a picture of Miliband as a prisoner of the Blairites.

He claims that shadow chancellor Ed Balls's “sudden embrace of austerity and the public-sector pay squeeze” represents a victory for “discredited Blairism” and also “challenges the whole course Ed Miliband has set for the party, and perhaps his leadership itself”. This is desperate stuff.

Miliband has actually set the course himself. His front bench has backed many Tory policies and Miliband himself has declared that his policy is to build a fairer, more responsible, prosperous capitalism. It’s an approach that David Cameron himself has embraced enthusiastically if opportunistically.

The Labour leader attacked the mass strikes in defence of public sector pensions and instructed party-controlled councils to implement spending cuts passed down from the ConDem coalition (a policy backed by Labour-affiliated unions, by the way).

Blairism was an outright adaptation to and acceptance of capitalism and the power of financial markets. It marked the termination of the long social-democratic, reformist tradition in Labour politics, no longer viable within a globalised capitalist economy.

With the world economy in a profound crisis, Labour – along with similar parties in Greece, Spain, Portugal etc – has bent with the prevailing economic wind. It was either that or challenging the fundamentals of the capitalist system itself. Anyone expecting the latter to happen, whoever leads Labour, is living in a fool’s paradise.

McCluskey is also angry, rightly so, that as one of the party’s paymasters, he was not asked about the shift that has taken Labour into the arms of the ConDem coalition.Naturally, he has a remedy to hand if he serious about representing his members’ interests.

He could call a ballot on the case for disaffiliating from a party that clearly speaks for big business, the City and the bond dealers. As his members are, as he points out, disenfranchised, McCluskey could generate a discussion on how trade unionists and their supporters could be better served.

Unfortunately, there is no sign of that happening. McCluskey is desperate to keep the political fight inside a party that is now part of a national coalition against ordinary working people. This is, in practice, a great disservice to Unite members who will no doubt draw their own conclusions when they fight the ConDemLab pay freeze.

Paul Feldman
Communications editor

Hang on to your vote!

So the latest opinion polls are again pointing to a “hung” Parliament after the upcoming general election, with no single party able to form a majority government. In that event, say constitutional experts, the queen and her advisors could play a key role in deciding who is asked to form a government.

Yes, we are living in 2010 and the absolute power of monarchy was terminated in the English Revolution with the execution of Charles I for treason against his own people in 1649. But such is the nature of the compromise British constitution, the monarch still has residual powers as head of state. There is nothing written, for example, that says the largest single party in Parliament must be invited to form a government. New Labour could have fewer seats than the Tories but try to govern with the Liberal Democrats at the invitation of the queen.

The fact that an unelected figure, who inherited her power and position from her father (whose family has its origins in the German House of Saxe-Coburg and Gotha!) still has potential political influence in modern Britain just about says it all about the restricted nature of bourgeois democracy. But one suspects (as they say at Buck House) that another unelected group – the global hedge funds and the big wheels in the financial system – will have a more decisive role to play if the election results in stalemate.

That is because the British state is heading for bankruptcy as the recession deepens and the money markets want action sooner rather than later to sort things out. Every January since modern records began, tax receipts have been larger than government outgoings.Not this January, however. In January 2010, the Treasury had to borrow £4.3 billion – compared to a surplus of £5.3 billion last year and £14 billion the year before. All the signs are of a worsening position, as unemployment grows, consumer spending falls further and corporate profits decline.

The markets reacted to the January deficit by raising the interest rates it charges to lend to the British government, adding to the total debt which is probably running somewhere near £200 billion a year or close to 13% of the annual value of economic output. It’s more or less the same ratio in Greece which, as you know, is said to be bankrupt.

Back to the general election scenario. Jonathan Loynes, senior figure at Capital Economics research consultancy, was voicing something more than his own opinion in commenting on the deficit: "It is clear that a more credible plan to restore the public finances to health will be required shortly after the general election to keep the markets and rating agencies at bay."

The markets will not want a weak government cobbled together as a result of some horse-trading between the parties and blessed by the queen. You cannot, therefore, rule out the possibility that in the event of a deadlocked general election, the pressure will mount for an emergency national government of all the main parties in a grand coalition to deal with the country’s financial crisis.

And with a “return to growth” as likely as the discovery of weapons of mass destruction in Iraq, we know that will mean unparalleled, savage cuts in spending on public services, attacks on wages and pensions and more job losses. Opposition will be silenced in the “national interest”. Those who voted for one or other of the major parties will have been disenfranchised. You may ask yourself what the point is in participating in the general election under these conditions? And you would be right. Our votes are too precious to hand over to any of them in 2010.

Paul Feldman
Communications editor

Balls spills the beans

There are at least two conclusions you can draw from the admission by Ed Balls, the schools minister, that Britain is facing its most severe economic and financial crisis for more than a century: We have been systematically lied to about the severity of the rapidly developing catastrophe and the public is being softened up for dramatic political developments.

Balls, the prime minister’s closest political ally and economics adviser to Brown when he was chancellor, is, along with the rest of the government, privy to information we don’t have access to. So when Balls says that the crisis was "more extreme and more serious than that of the 1930s" and that these were "seismic events that are going to change the political landscape", he is only letting the cat out of the bag.

That’s why Downing Street was today trying to “explain” that Balls did not actually mean what he said, just as No.10 had to “explain” last week that Brown’s use of the D word in the Commons was also a “slip of the tongue”, and that the prime minister meant recession and not depression. A Freudian slip might be a more honest account.

For the New Labour government actually knows that the banking system is shattered and beyond repair, that jobs are vanishing at an unprecedented rate, that demand for everything except food has collapsed, that the pound is on its knees on foreign exchange markets and that Britain is the most vulnerable of all the advanced economies because of its reliance on a now broken financial sector.

And yet the government staggers from pillar to post, with a bail-out here and a bail-out there and a pathetic inquiry about City bonuses headed by Sir David Walker, who enjoyed and sanctioned bonuses when chairman of investment bank Morgan Stanley International. Walker earned the nickname Mr Whitewash after being closely involved in two previous inquiries – into the transparency of the private equity industry and ethical standards at BAe Systems – that led to little change.

Back to Balls, who told New Labour members in Yorkshire: "We now are seeing the realities of globalisation, though at a speed, pace and ferocity which none of us have seen before. The reality is that this is becoming the most serious global recession for, I'm sure, over 100 years as it will turn out." More to the point, Balls also them that they should remember how the politics of the 1930s “were shaped by the economy".

We are left to draw our own conclusions about what he implying. The politics of that period included fascism in Germany and Spain, military dictatorship in Japan and, of course, national, coalition rule in Britain following the collapse of Ramsay MacDonald’s minority Labour government in 1931. So which of these are we are being softened up for by Balls’ reference to “seismic events” that will change the “political landscape”?

None of these “choices” are acceptable yet the fact is that we now have a profound political crisis alongside the global economic and financial crisis. This is making itself felt in every country, including America where president Obama is already in some difficulties, in Spain, where the government is being overwhelmed by the growth of unemployment and in France, where Sarkozy is under enormous popular pressure.

At times like these, there is an all too apparent danger that the façade of the parliamentary democratic state will be torn aside in favour of some sort of emergency, authoritarian rule. Such a move will expose the capitalist state for what it is – an instrument for preserving the rule of the corporations and banks at any cost. Balls has spilled the beans and we should take note.

Paul Feldman
AWTW communications editor