Thatcher's 'children' alive and well in the mainstream parties

Margaret Thatcher was a class-war warrior who dragged British capitalism screaming into the 20^th century at the expense of millions of working people. She lives on in the shape of leaders of the main parties who, in a variety of ways, espouse her reactionary policies.

Individuals can and do make a big difference in history. Thatcher confirmed this in a brutal way. While aristocratic Tories dithered, a petit-bourgeois woman acted decisively at home and abroad.

She used the power of the capitalist state to create a Bonapartist form of rule. The impact of a virtual dictatorship was felt during the 1982 war with Argentina over the Malvinas/Falklands, to the hunger strikers who starved to death in Ireland and the miners’ union which for a year fought a civil war with the Thatcher regime.

Right-wing Tories had long prepared to destroy the union, which was provoked into strike action by a programme of pit closures. While the NUM responded, the leaders of most trade unions sat on their hands, along with the Labour leader Neil Kinnock. Anti-union laws – which remain in force to this day – frightened the TUC and the miners were driven back empty handed

It would be a mistake, however, to see Thatcher’s policies just as some kind of personal crusade, though that element was certainly there. They reflected changed international circumstances which perilously exposed an outdated British capitalist economy.

The post-war consensus actually ended at the beginning of the decade Thatcher first came to power, in 1971 when the Bretton Woods agreement collapsed. This system of tight capital controls, fixed currencies and tariff barriers sustained by a gold-backed dollar fell apart.

What followed was a decade of massive inflation, economic depression, soaring interest rates and class confrontation. In Britain, a tripling of oil prices coincided with a miners’ strike, a three-day week and the bringing down of the Heath Tory government in 1974.

A minority Labour government implemented a series of cuts and also fought the trade unions. It too was defeated. The consensus – which was essentially a period of class compromise accepted by all the parties - was shattered, never to return.

Enter Thatcher, stage right.

Influenced by the monetarist theories of Friedrich Hayek and Milton Friedman, she set about giving capitalism a new lease of life. Industries nationalised by Labour after World War II because they were bankrupt were sold off. Public spending was cut back and local councils lost their historic powers to raise revenue. Others, like the Greater London Council, were simply abolished.

And yet, it was a close run thing. The recession of 1981 was devastating and led to mass unemployment, reaching 3.5 million. Huge mid-week demonstrations saw her poll ratings plummet. Argentina’s military adventure played into Thatcher’s hands. So did Michael Foot, then leader of the Labour Party.

When the Commons met on a Saturday morning to discuss the response to the invasion of the Malvinas, Foot gave his blessing to sending a task force. Peace deals brokered by the Peruvians were literally torpedoed when Downing Street authorised the sinking of the Argentine battleship, General Belgrano as it was sailing away from the conflict. 

By the mid-1980s, the intense period of corporate-driven globalisation was well under way. Thatcher’s response was to internationalise the City of London in 1986 through what became known as the Big Bang. From that moment, the financial sector went global and the seeds of today’s present crisis were sown.

Party leaders past and present fell over themselves yesterday to pay tributes to Thatcher. Ed Miliband said he we should “greatly respect her political achievements and her personal strength”. Here speaks one of Thatcher’s children, politically speaking.

Labour has no intention of returning industries to public ownership or of reconstructing a financial system that in large parts resembles a global casino. Miliband believes in monetarism too, citing the need to cut the public spending deficit. His party began the dismantling of the welfare state and the introduction of market structures into the National Health Service. He is for a “responsible capitalism” that rewards “wealth creation”.

Rejecting Thatcher’s poisonous so-called legacy will require a vision and real alternatives to an economic and political system in terminal decline.

Paul Feldman

Communications editor

Welcome to the market state

From welfare to market state is the name of the project that Thatcher began, Blair and Brown continued and Cameron is intent on completing. The words he uses – “choice”, “diversity” and “freedom” – seem harmless. But the real purpose is barely disguised.

Just before he jetted off to Egypt and a tour of the Middle East with arms manufacturers in tow, the prime minister announced the plan to end the public sector as we know it. A “vital part of our mission to dismantle Big Government and build the Big Society in its place”, he announced.

“Diversity” is another warm word. But when Cameron applies it to public services, he means one thing – opening them up to “a range of providers” through competition. In other words, services delivered by the central and local state will be up for auction. Corporations, large charities and others will then compete to run them.

As Cameron acknowledged: “This is a transformation: instead of having to justify why it makes sense to introduce competition in some public services – as we are now doing with schools and in the NHS – the state will have to justify why it should ever operate a monopoly.”

To say, as TUC general secretary Brendan Barber did, that the plan was simply a "naked right-wing agenda that takes us right back to the most divisive years of the 1980s" is to miss out, conveniently, what took place between 1997 and 2010 when New Labour was in office.

Not only did the former state industries like rail, gas, electricity, water and telecoms remain privatised, they were subjected to even more competition and profit making. State subsidies for public transport were run down. As a result, for example, train fares are now the most expensive in Europe.

Not only that, Blair and Brown expanded the infamous “private-public partnership” and "private-finance initiative" arrangements under which companies provide services with the state guaranteeing their profit margins. The value of these contracts is an estimated £90 billion a year, making private involvement in the public sector the largest in any major economy and saddling the state with enormous debt.

Now the Coalition is taking the next logical step, using the cover of the massive regulatory bureaucracy that New Labour created as an excuse for what is certain to be a feeding frenzy for capitalists desperate for new areas of profit making as the recession deepens.

All this amounts to the end of the role of the capitalist state that developed after 1945. Then its purpose was to maintain a kind of class peace, provide services and prop up British capitalism where it could. With corporate-driven globalisation from the early 1980s came a profound change.

In Britain in particular, the state’s former role lost its relevance. Global corporations and a new financial system transcended borders and became more powerful than governments. The state began to assume the task of facilitating the operations of the global economy. Deregulation was its form, especially in relation to finance. Who can forget how Brown denationalised the Bank of England in 1997 as soon as he sat down at his desk.

The harsh world of the market state that Cameron envisages will more than a throwback to pre-1945. It is more like the early 19^th century, when the modern state did not exist. What will be left are the forces of repression – the police, the spy agencies, armed forces and the prison and courts system.

This begs the question as to what use a state like the present one is to the mass of people. The short answer is none at all. Its democratic side is shot through and now it denies responsibility for the welfare of its citizens. Our strategy has to be the dismantling of the market state and the transfer of political as well as economic power to the majority.

Paul Feldman,
Communications editor

Privatisation by stealth set to soar

Whatever the result of the general election, private sector corporations are eagerly looking forward to getting their hands on larger and larger areas of public services as state spending comes under pressure because of the budget deficit.

The trend was set as soon as New Labour was elected in 1997 when prime minister Blair declared that what mattered was “what worked” – not what sector the service was in. Within a short period, contracting out in Britain surpassed every other major industrial country in its size and scope.

Total British government expenditure stands at about £620bn, of which just over a fifth is contracted out to companies operating for profit. You name it and the private sector is involved. They clean your streets, maintain social housing, run prisons and detention centres, train military pilots, transport prisoners, collect parking fines, maintain databases, inspect schools, administer the criminal records bureau and collect TV licence fees.

This is in addition to full privatisation of public services, as well as the so-called public private partnerships (under which the London Tube system is part-privatised) and private finance initiative (PFI) partnerships. Under these, the private sector build new projects like hospitals and schools which they then lease back to the public sector at vast expense because the state picks up the interest on the finance.

With all the major parties promising to cut state spending and find cheaper ways to run services, the leading companies in the field are rubbing their hand with glee. Their shares on soaring as the market anticipates rich pickings.

Shares in Capita, the back-office specialist, closed at 796p on Friday, a record. Shares in Serco, which runs prisons and welfare-to-work schemes, are at their highest since November 2000. The firms have told the parties that they can run services 30% cheaper. “There is almost no area of public services where we wouldn’t be able to help provide efficient and quality services,” said Chris Hyman, chief executive of Serco.

Local authorities account for a fifth of Capita's business, which describes itself as “the UK’s leading outsourcing company”. Outsourcing is increasingly being applied to "frontline" services. Recently outsourcing firm Tribal Group announced it had won a £64m five-year contract from the government funded education inspection body Ofsted to inspect almost half of England's nurseries.

“It will be a really great opportunity,” says Ruby McGregor-Smith, chief executive of Mitie, the facilities management group whose contracts include providing security services for courts across the UK. “I think the challenge can be met.”

In 2008, the DeAnne Julius report commissioned by the government estimated that services outsourced to the private sector cost 20% less. The explanation is obvious. The “savings” are more often than not achieved by cutting jobs and hiring new staff on inferior pay and conditions.

Dubbed “stealth privatisation” by trade unions – whose leaders have done precious little to resist the process – the prospect of an even larger market in the near future has produced a spate of mergers. Babcock, which makes most of its profits from defence contracts, has taken over VT, formerly Vosper Thornycroft and once famous for shipbuilding, which reinvented itself as a provider of services to cash-strapped government and local authorities in a bid to diversify its business.

With all the parties capable of forming a government after May 6 committed to contracting out, oursourcing, private-public partnership – call them what you will – it is just one more reason that the election is a fraud. The best thing you can do in these circumstances is hang on to your vote and instead use your energy to begin to create real democratic politics and a society where services are provided because they are needed.

Paul Feldman
Communications editor

The privatised hell of Britain PLC

A secret document has revealed the shape of things to come as jobs and livelihoods are threatened by economic meltdown. Global corporations will be employed by the government to break strikes under the guise of carrying out public services and responding to national emergencies.

Global Solutions, aka Group 4, is to be awarded a £100 million contract to act as a strike breaker, should the fire services be involved in industrial action. The plan which came to light over the weekend, and is due to be approved in the autumn, means that Group 4, will receive a one-off up-front payment of about £10 million, to be followed by £9 million a year over the life of the 10-year contract in return for supplying a pool of staff as cover.

The company would then be called on in scenarios such as pandemic flu, a catastrophic incident or industrial action. And, as Fire Brigades Union leader Matt Wrack has warned, the taxpayer will foot the bill for replacing the fire services with privatised strikebreakers. The FBU is coincidentially gearing up for industrial action in London following attempts by the employers to impose a pay cut.

Group 4 has done extremely well out of New Labour, and now has 30,000 employees and a turnover of £1.1 billion. It has become the largest “security solutions” company in the UK. The company is not alone in cashing under this government, however. New research reveals that a staggering one third of all the UK’s public services are now carried out by the private and voluntary sectors – double the level when New Labour came to power.

The study commissioned by the government from economist DeAnne Julius shows that the government has encouraged the handover of public services to global corporations at such a rate that they the sector has now overtaken the United States as a share of gross domestic product. Total spending on private and voluntary provision has nearly doubled from £42bn in 1995-96 to over £79.4bn at in what amounts to a massive transfer of wealth to companies.

DeAnne Julius is Chairman of Chatham House and a non-executive director of BP and the pharmaceutical corporation Roche. She also serves on the advisory boards of UK and US hedge funds and is vice president of the Society of Business Economists. She was an advisor to British Airways and Shell and a former director of the services company Serco. The incestuous relationship between the government and companies like Serco, BT and Capita will be cemented further this week as business minister John Hutton goes on a trade mission to the United States to promote their services.

Outsourcing is not simply a cash-cow to increase corporate profits. There are other, equally sinister aspects. The effect of outsourcing can be seen clearly in the prison and immigration services, where seven out of the ten main immigration detention centres in the UK are run by private companies for profit under contract to the Home Office. They maximise profits at the expense of the human rights of the detainees.

A report today by the law firm Birnberg Peirce, Medical Justice and the National Coalition of Anti-Deportation Campaigns exposes how private security guards have abused hundreds of failed asylum seekers during their violent removal from Britain.

The report's authors conclude: "We have found an alarming and unacceptable number of injuries have been sustained by those subject to forced removals. This dossier provides evidence of widespread and seemingly systemic abuse of one of the most vulnerable communities of people in our society, who have fled their own countries seeking safety and refuge."

This is just one example of what happens when big business and the state join together under the executive director of Britain PLC, one Gordon Brown.

Corinna Lotz
A World to Win Secretary

Brown delivers the message

The leaders of the CWU postal workers’ union have waited and waited for the intervention of the government in their pay and jobs dispute with Royal Mail. Yesterday it finally arrived. But it was not what the CWU leadership wanted to hear. New Labour broke its silence – and came down firmly on the side of the employers. Prime Minister Brown and business secretary Hutton denounced the strikes as “unjustifiable”. Brown told postal workers to “get back to work” while Hutton said the union should accept what he described as a “perfectly fair and reasonable offer”.

The postal workers have so far stood steady and firm in their series of strikes for jobs, pay and pensions in the face of an arrogant employer. Yesterday, after the official two-day strike had ended, a management provocation was answered by unofficial walk-outs in Glasgow, Liverpool, London and other parts of the country. The postal workers are up for a fight and have forced their leaders into some fighting talk and a limited strike action.

But the main (and only) strategy of the leadership of their union, the CWU, has been try to get the government to intervene and enforce a “fair” settlement. This was always an entirely hopeless and forlorn perspective. Far from being some kind of arbitrator (as governments were sometimes up until 1980), this government has a different agenda entirely. Not only does the government stand four-square behind the belligerent Royal Mail management, but, behind the scenes, it is dictating and determining the policy and direction of the company. To what purpose? To make it fit to compete with UPS and the other private carriers of mail and parcels, and then to privatise it.

It has become the tried and tested method of governments, Tory and Labour, since the great Miners Strike of 1984-5 to lie about their real intentions and then to rely on the trade union leadership to “believe” those lies and to confine any action to the perspectives and agenda laid down by the government. Behind the statements of Royal Mail about “flexibility”, the “need to modernise” and so forth is the plan to break it up and sell it. They offer below-inflation pay rises and refuse to guarantee jobs in order to streamline and rationalise the business for privatisation.

This all stems from the very nature of New Labour as an outfit that no longer even pretends to protect the interest of workers or their unions, but rather gives total support to the corporations, the banks and the speculators. It is not just the postal service that is facing break-up and the threat of privatisation, leading inevitably to lower wages, pensions and unemployment, but all public services including health, education, local government, the BBC and the civil service. This is not a popular policy. At a rally earlier this week for the postal workers, Mark Serwotka , general secretary of the PCS said the New Labour governments had privatised “more of our work than the Major and Thatcher Governments combined”. He said his union was gearing up for a full-scale battle with the government.

The CWU is now in a fight to the finish with New Labour. This is a political struggle against a capitalist government. If the union leaders were blinded to this harsh reality before yesterday’s statements by Brown and Hutton, their members are certainly aware of it today. The CWU has to mobilise the entire membership in all-out action, asking for the support of other trade unionists in the privatisation firing line. And they should also recommend to the membership that the union should end its financial support and affiliation to New Labour.


Peter Arkell

London's firefighters oppose 12-hour day

London’s firefighters are gearing up to resist unilateral changes to their shift system by employers who are determined to impose the government’s cost-cutting “modernisation” agenda on the service. A staggering 98.5% of firefighters are opposed to the plans to compel them to work a system of 12-hour shifts and strike action is a distinct possibility if current negotiations break down. The conflict arises out of the unsatisfactory agreement that the then Fire Brigades Union (FBU) leaders reached to end the 2002-03 pay dispute. This was linked to proposals to alter working conditions in a way that would reduce the effectiveness of the service and undermine working conditions. A series of disputes throughout the country since then has tested the FBU’s resolve. But the major challenge is in London, where there are almost 5,800 firefighters.

London fire employers originally intended to replace the nine-hour day and 15-hour night shifts with the new 12-hour system in April 2006 but backed down in the face of a strong FBU reaction. Now the employers are on the warpath again and the FBU’s London region is preparing the membership for a struggle. A detailed submission in defence of the existing watch patterns of work has gone out to all members, as well as to brigade chiefs. FBU regional secretary Joe MacVeigh says: “If the brigade ignores the wishes of our members, we will have no alternative but to hold a ballot for industrial action, including strike action. We do this reluctantly, but we also do it in the knowledge that we simply cannot stand back and allow the brigade to emasculate our working conditions so flagrantly.” With travel-to-work times increasing because of affordable housing shortages, it is easy to see that a 12 -hour shift starting at 8am would result in a firefighter leaving their home at 6am hours and not returning until 10pm. A sizeable proportion of the workforce would receive less than seven hours rest between day duties, which would effect performance as fatigue sets in.

Undermining the existing watch system will have serious consequences for Londoners, who depend on crews to put their own lives on the line each day to rescue people from fires and crashes, to deal with floods and terror attacks and to educate the community about risk and dangers. Firefighters obviously depend on each other and the FBU states: “Teamwork is vital in emergency situations, where reliance on your colleagues is paramount to ensure that safety is not compromised. The current watch system is based on the principle of teamwork. Individual members within a watch will have unique personalities, experience and qualities that determine both their strengths and weaknesses. Collectively, these attributes are harnessed on a watch, whereby those strengths are capitalised upon and the weaknesses are improved upon, thus resulting in an effective team.” The abolition of the watch system would reduce firefighters to individuals, which is what the employers – who hate and fear the FBU’s collective strength – actually want.

If a dispute breaks out, it will once more bring the FBU into direct conflict with the New Labour government. As the submission points out: “The fire and rescue service is currently experiencing a period of dramatic change, brought about not only by changes in legislation but by over-zealous fire and rescue authorities which have as their central aim the cutting of costs and resources in the name of ‘modernisation’… All too often, modernisation is a euphemism for frontline cuts whilst opening up the service for private sector involvement.. without a proper examination of the long term consequences.”

Paul Feldman, AWTW communications editor

Picking up the bill for Tube firm collapse

When Gordon Brown set out to part-privatise London’s Underground system in 2001, he was implementing a New Labour strategy designed to transfer capital from the state to the corporations. With the collapse of the Metronet consortium charged with upgrading most of the network, the state (i.e. the taxpayers) will now step in to pick up the pieces. Much of the work will go to the same companies that have just gone into administration! Such is the mad logic of a system where business interests are protected at all costs and the public – in this case, the long-suffering users of the Tube – are on the “any other business” part of the agenda. After Metronet collapsed, Brown told MPs that another private company would take its place, saying: “This is a £17 billion investment that would always be done by private construction and engineering firms.” Yet MPs pointed out that the former chancellor now prime minister had wasted £500m setting up the Metronet deal and that Londoners had been left with £3.5 billion in bank loans as a result of its collapse.

Brown’s “Public Private Partnership” (PPP) is a complex web of contracts, with ownership of the track and stations out of the hands of Transport for London (Tfl), which is at least a semi-public body under the wings of the Greater London Authority and mayor Ken Livingstone. Now Tfl will have to find £50m a week to maintain the vital maintenance work that Metronet has walked away from. The money will come out of Tfl’s reserves while Livingstone said a programme to refit 153 stations might have to be scaled back and that a drive to upgrade signalling systems on the busiest lines will be given priority. The mayor declined to criticise Brown, presumably in exchange for a promise of financial help from the government.

The fact is that New Labour’s love-affair with business is having dire consequences right across the board. Whether it is called PPP or PFI (Private Finance Initiative), the victims include NHS staff axed by trusts who can’t balance their books. Only yesterday, Scarborough Hospital announced it was sacking 600 staff and patients face a 40-mile journey to York for alternative facilities. The scale of the transfer of resources is phenomenal. By the end of last year, PFI contracts worth almost £100 billion had been signed or were in the pipeline. Yet, as Metronet’s collapse demonstrates, the idea that the private sector knows best is rubbish. Companies know what’s best alright – what’s best for them in terms of returns and profits. And if they can’t get what they want, they will walk away and leave the taxpayers to pick up the bill. One final note on the PPP-Metronet saga. When Brown forced the deal through, he was advised by former investment banker Shriti Vadera. After Brown took over as prime minister last month, he made her a peer and a minister in his government.

Paul Feldman, communications editor

New Labour's dead soul

If anything was still needed to convince people of the debased and degraded nature of the social system presided over by the New Labour government, the Freud report – which proposes ways of reducing the number of people on benefits - would fit the bill. As most people have come to realise, the external appearance of every New Labour initiative is an inversion of its true intent. And this one is no different. Whilst presented as a way of helping long-term jobless into work, the real motivation is to turn the benefits system into a money-spinning bonanza for private sector traders. A quick look at the track record of the author, David Freud, great grandson of Sigmund, tells you all you need to know about his interest in those who have been jobless for a year or more, single parents and the long-term sick and disabled. As a stockbroker and banker, Freud was at the centre of the global financial revolution of the 1980s, which he describes as a battle-ground of individualism. He played a pivotal role in the flotation of the now hopelessly-indebted Eurotunnel. At Warburg, his Euro Disney team launched the first truly pan-European flotation, raising £600m – only to be faced with potential disaster when the price went into tail-spin. He was obliged to admit to Deputy Prime Minister, John Prescott that his team raising the finance for the Channel Tunnel Railway Link had got their sums massively wrong. – by £1.2bn. And he was a leader when it came to raiding pension funds to finance big deals. Playwright David Hare described Freud’s autobiography as, "a highly readable, morally ambiguous account of twenty crazy years of buoyant capitalism". All in all, just the sort of man New Labour needed to sort out those obliged to eke out a life on the dole. You can almost hear the rubbing of hands in the City of London, as the idea of creating a market out of joblessness joins the equally odious market in carbon emissions. It’s all highly reminiscent of Nikolai Gogol’s devastating satire Dead Souls. The main character, Chichikov, having invented a quick route to riches, travels the countryside in 19th century Russia, meeting local landowners and offering to buy the legal ownership rights to dead serfs, for whom taxes remain payable until the next census. The more "dead souls" he owns, the higher his social status will grow, until he is able to use them as backing for a huge loan to buy a large estate to which he can retire. At least, that’s the plan. Very New Labour.

Gerry Gold, economics editor