The richest 1% of people own a quarter of all wealth in Britain. The bottom half of the population-28 million people-own between them just 6 percent of national wealth. The gulf between the super-rich and the majority is widening. Government ministers say this gap does not matter, and that everyone is getting better off, even if the rich are soaring ahead. They dismiss poverty figures, saying people in modern Britain face only "relative poverty", not genuine hardship. In fact the figures in the Child Poverty Action Group report are not based simply on some statistical measure or device which masks the reality of people's lives. They rely on measures related to concrete things such as people's access to essential goods. The most chilling parts of the report show how real poverty is inflicting real suffering. It is killing people. The report says, "Although overall death rates for babies and young children have declined over time, disparities remain. In 1999 infant mortality was almost twice as high in unskilled manual classes than in professional classes." The gap between rich and poor does not stop in childhood. Life expectancy for men in the bottom social classes is 5.2 years less than at the top. For women the gap in life expectancy is 3.4 years. There is nothing natural about this class devide. The simple explanation for it can be gleaned from what happens every year in Britain.
Death rates increase by 30 percent in the winter months. There were estimated to be over 54,000 "excess winter deaths" in Britain in 1999-2000. Many of those who die unnecessarily are pensioners. The winter death rate is three times that of far colder Scandinavian countries. It is poverty that is killing people. Every other area of life from health to education is hit by this divide. The report also shows that people tend to stay poor. Those who get above the poverty line tend to remain just above it. Even those who do get decent jobs face increasing risk of being pushed down as employment becomes less secure. Those at the very top tend to stay where they are. All that has happened under New Labour is that for many of the poorest people things have not got worse as quickly. Some-especially single parents-are actually worse off. Larger numbers of workers are on the verge of sinking under huge debts. This is in the good years-before, as Tony Blair says, "The government has to make difficult choices." "I try to cut down on my electric. Many a Sunday afternoon our electric has gone. We've just waited till Monday." That's how Trudy, quoted in the report, describes the reality of life for the poorest in Britain today. One survey shows that 6 percent of all people had been disconnected from gas or electricity. Gas disconnections soared from 18,600 in 1991 to 29,500 in 1998.
Remember New Labour's general election campaign in 2001? There were billboards and television ads reminding us of the nightmare Tory years of recession in the early 1990s. One of the most frightening effects of the last recession was the explosion in the number of repossessions, as people could not keep up with mortgage payments. Incredibly, this report shows that more people were in danger of losing their homes under New Labour's "boom" than during the depths of the recession ten years ago. Courts issued 137,000 warrants to repossess homes in 1999. That is higher than the previous peak of 134,000 in 1991. Increasing numbers are falling behind with mortgage payments, even before full-blown recession hits the economy as a whole. Over a million households in England were homeless at some point in the ten years to 1998. It is very difficult to be officially accepted as homeless; less than half of those who apply to councils are put on the homelessness register. Renting a home is becoming more expensive. More people are living in damp homes than in 1990. Three million people are in substandard housing. A study for the Scottish Executive found that "cold, damp and mouldy conditions pose the greatest risk to health, and the prevalence of illness appears to increase with the level of dampness". One person told other researchers, "I have asthma, and when I get worried or I'm not warm I get worse. We put on the heaters for the children because you have to, but for ourselves we say no."
Labour is in chaos. The Brownite and Blairite wings of the party are still at each others’ throats as their election strategy collapses in slow motion. The third failed coup against Gordon Brown fizzled out last week – but it revealed divisions that go to the heart of the Labour government. In the hours between former ministers Geoff Hoon and Patricia Hewitt writing letters demanding a secret vote on Brown’s leadership – and ministers issuing statements of support for Brown – a flurry of meetings took place between Brown and senior cabinet figures. In return for keeping Brown on political life support, a group of ministers around Peter Mandelson demanded more cuts, more quickly – and no more talk of “class war” against the Tories. Brown had used some left rhetoric when he said that Tory tax cuts for the rich were “dreamed up on the playing fields of Eton”. But even that was too much for ministers. So chancellor Alistair Darling stressed, “To me, cutting the borrowing was never negotiable. Gordon accepts that, he knows that.” He went on to say that the next spending review will be the “toughest” for 20 years. So the axemen are now pulling Brown’s strings. But they’re not the only ones propping him up. Despite more than a decade of New Labour attacks on working class people, many trade unions are still bankrolling the party. The Unite union gave Labour £4 million last year – almost a quarter of the party’s total funding.
But, in contrast to Mandelson and his puppets, the unions have got no say in Labour’s policies whatsoever. Unite has policies to protect jobs, support council housing, oppose the war, and much more besides. Union members should ask what we get for our money when it’s handed over to Brown – and the unions should stop signing blank cheques to Labour. Having spent the past decade attacking its own supporters, the Labour Party is now in deep crisis. Elected on a wave of revulsion with the Tories in 1997, New Labour today is in crisis. The party faces wipeout at the next election. Opinion polls predict it could lose 17 of its 44 MPs in London alone. Millions who hoped that Labour would be different are now asking questions – about why the party attacks ordinary people, what that shows about the nature of Labour, and whether the party has a future. Talk of the “death of Labour” is premature – even if a Tory government is elected. The party could revive as a symbol of opposition and could even shift its rhetoric to the left. For people who are shocked by the scale of Tory cuts, Labour could become a beacon of hope, even if it maintains its right wing policies. Part of the reason for this is the strength of reformist ideology. Reformism – the belief that capitalism can be improved to meet the needs of working people without the need for more radical social change – is common sense to most people, most of the time.
This is hardly surprising - the key institutions of society perpetuate the ideology of capitalism. The parliamentary system, schools and the media all present the world in a way that makes alternative ways of organising seem unrealistic, or worse, dangerous. The main reason why working class people accept reformist ideas has to do with their position in society. Workers produce all of the wealth. But because they have no control over what is produced or what happens to it afterwards, rather than feeling like they are players, workers usually feel like pawns. Society becomes something that shapes them, rather than something they can shape. Reformism flows from these feelings of powerlessness. Because it raises confidence, workers’ self-activity – such as strikes and industrial action – is a key element in weakening the hold of reformism. The ideas it rests on can be broken down when we assert control over our lives. When workers’ experiences don’t coincide with what they’ve been told, many will question aspects of the system. But some experiences, like big strikes or major campaigns, can lead people to question the system as a whole and push them to look to alternatives like socialism.
Nevertheless, even at times of mass struggle, people often still have contradictory ideas – on the one hand embracing new notions of militancy and solidarity, while as the same time continuing to hold on to old prejudices. Therefore reformist ideas won’t completely melt away. And even if workers are driven away from a reformist party, like Labour, this is not necessarily a wholesale rejection of reformism. It is for this reason that the Labour Party has been able to rebound from crushing defeats. The fact that Labour, the Tories and the Liberal Democrats are all united in demanding spending cuts adds to a general assumption that all the main parties are essentially the same. But for all its crimes, Labour is not the same as the Tories. The party’s history and connection to the workers’ movement mean that despite its betrayals, millions of workers have seen it as their party. Trade unionists and socialists formed the Labour Party in the early 20th century because they wanted workers to have a political voice. Much to the disgust of New Labour “modernisers”, the party retains a political and financial link to the trade unions. And, unlike the Tories and Liberal Democrats, the Labour Party contains a few principled left-wingers who take up battles on the side of ordinary people. But today’s Labour left is both small and politically weak; while it wants to push for left wing policies, it does not want to risk damaging the government.
Many on the left of the party share the pessimism that lay behind the creation of New Labour – that class struggle is a thing of the past. They believe the left must “modernise” if its ideas are to get a hearing. Many former left wingers have found that rather than changing the party, they are changed by it. Those like Labour’s deputy leader Harriet Harman, who were once proud to stand on picket lines, can become cheerleaders for the most horrendous attacks on workers and the poor – particularly at times of economic crisis. Labour’s history of attacking the working class did not begin with Tony Blair. New Labour represents a serious shift in ideology from Old Labour, but it doesn’t represent a fundamental break. It is true that New Labour has enthusiastically embraced neoliberalism and the idea that big business can run society more efficiently than the state. Its attacks on jobs, pensions, welfare provision and services are a direct assault on its own core supporters. Yet so-called “Old Labour” attacked workers too. Within a few years of heralding the birth of the welfare state, a Labour government began rolling back its reforms. The 1948 budget froze wages and changed tax rules to benefit the rich. The prescription and dental charges that were to undermine the NHS started as ideas under Labour.
Labour prime minister Harold Wilson responded to a financial crisis in the 1960s with cuts to wages and spending on health, housing and pensions. His government worked with the security services to break a strike by the National Union of Seamen. During the economic crisis of the 1970s, it was a Labour government that slashed pay and spending and created the demoralisation that was a prerequisite for the election of Margaret Thatcher’s Tory government in 1979. And, to the shock of many on the left, it was precisely the link between the party and the workers’ movement that allowed Labour governments to get away with it. The leaders of the trade unions would greet the announcement of every new assault with the cry, “however bad this is, it would be worse under the Tories”. Surely if the government rejected bosses’ demands for cuts and instead implemented policies that people actually want, it would stand more chance of being re-elected? Most people who have voted Labour in the past are opposed to policies that allow the rich to get richer at the expense of the poor. They want to see an end to privatisation and war, and support greater funding for services like health and education. So why does Labour continue to attack them? The answer to this conundrum lies not only with the free market ideology that Labour has so wholeheartedly adopted. It lies in the very nature of the Labour Party itself – and the nature of capitalism.
Labour was formed by the trade union bureaucracy. It is a reformist party that accepts the constraints of the capitalist system. Crucially, it believes in the concept of a “national interest”. In reality this means that the profits must come before people, and that what’s good for big business is good for us all. Past Labour governments that have attempted to resist this pressure have quickly found that power lies not with parliament, but with the ruling class – those who own the factories and workplaces and run all of the major institutions of society. On the rare occasions when Labour has tried to challenge this power, it has backed down under pressure. In the mid-1970s Labour cut business taxes after bosses caused a crisis by moving their money abroad and caused the value of the pound to collapse. Having learnt its lesson, the government set about making workers pay for the crisis with the biggest assault on living standards since the Second World War. Progressive reforms, like the welfare state and the NHS, can’t simply be explained by looking at which party introduced them. Sometimes even the most profit-hungry capitalists will support reforms they think they will benefit them – or ones that could prevent social explosions.
In boom times, more reforms may be possible. But accepting the logic of capitalism means that, in times of crisis, Labour will advocate sacrifices. New Labour will likely lose the next election – not because most people want David Cameron’s Tories in power, but because they are so disgusted with Labour that they can’t bring themselves to vote for the party any more. Building resistance to the attacks – whether they come from a Labour or Tory government – is crucial to defending our living standards. But is also key to revival of working class confidence necessary to both break the hold of reformism and fight for a system that does not fail the majority. In its prebudget statement, the government last week claimed it planned to squeeze the rich in an effort to boost income, and spare “core” public services from any serious cuts. In reality, Chancellor Alistair Darling declared war on working people on a scale not seen since Margaret Thatcher’s Tory government in the 1980s. Darling wants to cut £47 billion from public spending over the next four years—and the true scale of the assault could be much higher. As the chancellor announced his plans, the Tories rubbed their hands with glee, knowing he had opened the door to even more savage slashing if they come to power.
Public services will face brutal cuts. The Financial Times newspaper estimates that, excepting police, hospitals and schools, most will face a 14% spending reduction over three years. That will mean hundreds of thousands of jobs will be lost. Even the so-called ring fenced services, such as the NHS, are to feel the pain. The government wants to slash an astonishing £20 billion from the health service. And, as the government measure of inflation rose to 1.9 percent, Darling declared that six million public sector workers will have their pay and pension “rises” capped at 1 percent from 2011. Working people have also been hit hardest by the rise in VAT to 17.5% on 1 January, as the tax takes no account of income. The government claims that its increases to National Insurance contributions will only affect the well off. The reality is that everyone who earns more than £20,000 a year will lose out. David Phillips, an economist at the Institute for Fiscal Studies, points out, “National Insurance is, ultimately, paid by workers. In the short-term, bosses might take on the cost themselves. But, in the long-term, employers will cut gross pay.” The response of the union leaders to this assault is mixed. Unite’s joint general secretary Derek Simpson said, “When it comes to a choice at the next election voters will reflect on who acted to save jobs, protect our services and build a fairer future.”
If the choice is reduced to Labour’s pay cap or the Tories’ pay freeze then it is no choice at all. Dave Prentis, general secretary of Unison, was more outspoken. He said, “I am not going to sign up to this. It is just not on to make nurses, social workers, dinner ladies, cleaners and hospital porters pay the price for the folly of the bankers. The people who earn most should pay the most.” That means that every service threatened by cuts must be defended by the most militant means possible. If the axe falls on your local library, organising a community sit-in that involves workers and service users could save it. If council bosses shut your child’s nursery, occupying the building is one of the few weapons capable of making them change their minds. The bosses and politicians of all parties have thrown down the gauntlet. Now it’s up to us all to ensure that working people aren’t made to pay for their crisis. Gordon Brown has crushed any lingering belief that Labour is going to run an election campaign that addresses the needs of working class people. In a speech to the Fabian Society conference last month, he declared his commitment to the “squeezed middle”, adding, “My predecessor and friend Tony Blair said that we had campaigned as New Labour and would govern as New Labour. Let me say to you today, we have governed as New Labour and now we will campaign as New Labour.”
The speech completely repudiated what some commentators have called Labour’s “class war” approach. Last year Brown called Conservative plans to raise the threshold for inheritance tax as “dreamed up on the playing fields of Eton”. Such statements were enough to send papers like the Daily Mail into fits. More importantly they upset Lord Mandelson, the unelected minister for nearly everything. Coming after 13 years of a Labour government that has betrayed working people on every issue, Brown’s attempt to talk about class was empty. Still his slight tack leftwards saw a small improvement in Labour’s poll ratings; but Labour does not talk about class anymore, and so such talk must go. That is why Brown made his speech in late January. He defined the key issue of the general election as “social mobility”. This means that class differences will not be eliminated, but Labour will allow a few more children from poorer backgrounds to “make it good”. Even in its own terms New Labour has failed on social mobility. The longest ever period of a Labour government has seen the greatest inequalities for a century. An OECD study put Britain at the bottom of a panel of 12 countries for social mobility and on many indicators the figures are getting worse.
The Financial Times newspaper reported, “Alistair Darling will order ministers this week to start work on the most swingeing public spending review in a generation, as officials acknowledged that some departments could see cuts of about 16 percent over three years.” Darling told the paper he would “emphasise the importance of London as a financial services centre”. He added that there would be no repeat of the (wholly ineffective) tax on bankers’ bonuses, and that he wanted to reduce taxes for the richest. In other words Labour has now adopted vacuous policies that are even closer to those peddled by the Tories. That means hundreds of thousands more job losses, a squeeze on living standards, more children in poverty, more pensioners dying from the cold and more young people without a future. Inside the Labour Party, after the last Blairite coup failed to shift him, there seems to be agreement that Brown is the best man to lead the party to defeat at the election. But clinging to Labour as a real alternative to the Tories is becoming less realistic every day. We need more resistance to the cuts and job losses, to the wars and the obscene level of military spending. And it must not be held back by fears that such struggles will undermine Labour.