The UK political class between a rock and a hard place – UK report October 2020

Dear comrades,

This is the second report from the UK for comrades abroad.

https://letsgetrooted.wordpress.com/2020/06/26/whats-going-down-on-Covid-island-a-uk-report-june-2020/

The focus of this report will be on the structural constraints that the ruling class in the UK are facing. Any government would face similar constraints, whether it wants to ‘get Brexit done’ or enact a program of ‘socialist’ nationalisation.

We will look at two main aspects of these constraints.

Firstly, there is the severe economic blow since the pandemic which forces the government into debt financed measures from which they will have difficulties to ‘ween society off’. Here they are squeezed between two main risks. On one hand sudden reduction in deficit spending would lead to an actual crash, involving mass bankruptcies and unemployment. On the other hand the increasing debt will undermine the stability of Sterling as an international currency and, more importantly, the ‘economic discipline’ of both the capitalist and working class.

Secondly, there is the international dependency of the UK economy, both in financial terms and regarding industrial investments and know-how, best exemplified by the dispute around the use of Chinese companies to build the 5G network or finance nuclear reactors. This dependency limits the scope to attain a ‘sovereign Brexit’. The UK has been caught in the middle of the tech and trade war between the US, EU and China. The government compensates for a lack of ‘industrial and financial fire-power’ by political poker games, which threaten to break up the UK.

In this report we don’t want to speculate about the Brexit outcome. Our main interest is to highlight how the current crisis lays bare the brittle productive backbone of the UK economy and its global nervous system. The crisis allows us to understand the composition and contradictions of the UK economy.

Our political challenges again are twofold.

Firstly, we have to turn this understanding into a clearer critique of ‘democratic socialist’ ideas, which still believe in the possibility of overcoming capitalism through parliamentary means. At the end of this report we will briefly engage with the current crisis of the ‘post-Corbyn’ left in the UK, which is rattled by both the ‘Tories real-existing socialism’ of state intervention and the conservative turn of the new Labour leadership.

Secondly, and more importantly, we have to analyse the changing power relation between bosses and workers. The lockdown and the public focus on the ‘essential workers’ has increased the confidence amongst low-paid manual workers, increasing the wage pressure from below. At the same time the crisis and increasing unemployment puts pressure on workers from above. The tension rises. We will highlight some recent disputes at the end of this report and present our idea of an interview series.

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* The crisis blow

Of all EU countries the UK has been hit hardest by the Covid crisis, both in economic and health terms. The UK economy shrank by a fifth in the second quarter of 2020, falling into the deepest recession on record. Corporate investments recorded over the year until September 2020 are down by over 30%. The slump is related to a longer trend: in the UK, productivity has stagnated since the 2008 financial crisis and failed to recover. Since the second quarter of 2008, the UK’s lack of growth contrasted with an average 9 per cent expansion in labour productivity for the 36 member countries of the OECD.

In terms of the health crisis the state showed that the links between the ‘high command’ and the various ‘civil society’ institutions of the state (local administration, health organisations, community structures) are brittle and often communication and decisions are badly transmitted through various ‘public / private’ company forms, which led to chaos. The industrial sector was not able to provide the necessary services and goods, such as testing or masks. This combination explains the high number of fatalities, which exceeded 42,000 in September 2020. It is an expression of the bankruptcy of a model of accumulation based on outsourcing and financialisation and of the disintegration of the political class, which has been driven furthest in the UK over the last four decades, in particular under New Labour. [1]

The government tries to counteract the free-fall by increasing deficit spending, meaning, by taking on debt in order to pay workers’ wages and give cheap credits to companies. The government’s £221.2 billion deficit in the first five months of 2020-21 was 11 times higher than the previous record over the same period in the financial year. Net borrowing jumped from 2.6 per cent of GDP last year to 19 per cent this year — the highest in peacetime. Since the Covid-19 crisis, in the UK, like in many other countries the control of the supply of money has quietly passed from the central bank (Bank of England) to the government. The state is in the spotlight. This is a risky situation for the ruling class, both economically and politically.

There are immediate economic risks. Over the last two years the annual trade deficit of the UK increased, while the value of the Pound declined, resulting in imported goods (food items, mass consumer goods) becoming more expensive. Despite all the talk of the super-powers of ‘sovereign currencies’ like the Pound, a debt spiral can result in instability and decline in the value of the national currency. The Pound has recently been compared with the Mexican Peso in terms of its ups and downs. Another immediate risk are unforeseen chain reactions of defaulting smaller economic players who cannot service their debt. Even the state has little overview of how various corporations and institutions are intertwined economically, e.g. how local government is dependent on the price increases of the real estate sector or how pension funds depend on the development on the share market. During the last months various weak links in the economic chain started to crack. A survey released on 8th April by the British Chambers of Commerce suggested that 57 per cent of British businesses did not have enough cash to survive beyond three months of lockdown, while 6 per cent had run out of cash already. But the crunch does not only affect the ‘private sector’. Local authorities announced an additional £2 billion funding shortfall, e.g. Croydon council said that due to the £11 billion debts and increasing costs due to Covid they will have to make 175 council workers redundant. The pension funds for university and railway employees have declared a respective funding gap of over £15 billion. Debt levels are rising also for households. The Citizens Advice estimate that over 6 million households have fallen behind on at least one household bill. At the same time banks have increased overdraft charges on personal credit cards. There is a concrete economic risk that these chains break and get out of control. This is why the state is forced to dish out money as long as they haven’t figured out ‘who is too big to fail’ and who can go bust without much of a wider risk.

There is a deeper political risk. Economic decisions which were previously mediated by seemingly ‘impersonal’ market forces are now seen as a result of political decisions, e.g. not to bail-out this or that company. The state as the representing and administrating body is subjected to increased scrutiny and political pressure from both the capitalist class and the working class. From Virgin Atlantic to to the City of London, all capitalists try to force the state to compensate for losses. The state tries to avoid straight-forward bail-outs and primarily guarantees for loans taken through commercial banks, rather than directly through the state. These lending schemes have provided nearly £53 billion to over 1.2m companies. There is also pressure from below, e.g. workers question why the state-financed furlough system that compensated them for wage losses during the lockdown is abandoned and replaced with a worse scheme in autumn 2020, while governments in other western countries continue ‘paying their workers’. Again, the state tries to avoid getting into the spotlight by handing the furlough money to the employers, rather than directly to the workers.

In this sense the main task of the state’s crisis regime is to re-enforce economic discipline, which is difficult if the state is piling on debt and signalling that ‘payments’ can be postponed. The crisis regime has to force capitalists to restructure and increase the exploitation of their workers. The state can intervene in this process, e.g. by an increase in taxation. The crisis forces the government to re-think the low taxation levels in the UK. Ironically the Tories considered a raise in corporation tax, whereas Labour under Starmer warned that this might be a premature step. According to the IMF, UK government tax revenue was 37 per cent of GDP. This is well below Canada on 40 per cent, the Netherlands on 44 per cent and Germany on 46 per cent. The question of taxation is one area of political infighting within the ruling class. In other regards there is unity: in order to react to the holes in the pension funds the retirement age has been increased to 66 years in 2020 and will increase further. The government also plans to go ahead with cuts to the basic social benefit Universal Credit in April 2021, which will affect up to 8 million people on the lowest income scale. This will further widen the wage gap between the working and the ‘middle-income class’, which the lockdown aggravated: while higher income people who were able to work from home might actually have saved money during the lockdown, those who were furloughed on 80 per cent of their minimum wages will have dropped deeper into debt. In order to manage the increased number of unemployed the government announced to hire an additional 13,500 ‘job coaches’ to get people ‘back to work’.

The crisis regime also has to determine who should be rescued and who can be safely doomed to bankruptcy. For this purpose the government set up ‘Project Birch’, a body that is supposed to determine the terms of state aid to the private sector, which could lead to the state taking over shares and management functions in aided companies. In the case of Tata Steel and the UK’s biggest automobile manufacturer Land Rover / Jaguar, which employs more than 30,000 people in the UK and lost close to £1 billion between January and July, the state decided that instead of taking over shares of these companies through financial support future restructuring is best left to ‘the private hand’. The state admits that its own financial powers are limited and accepts UK manufacturing’s international dependency: in the end a group of Chinese banks, who also finance Land Rover / Jaguar suppliers in China, lent the car manufacturer £560 million to keep ‘Made in Britain’ running. This is a good example of the other major structural constraint, apart from the current economic crisis, which limits the political scope of the UK state: a position of international dependency and weakened status in the international state system, while having to defend the idea of ‘sovereignty’ during the current Brexit process.

* The Brexit dilemma

We don’t want to go deeper into the ins and outs of the Brexit negotiations. The main contentious issues relate to the question of how much autonomy the UK state will have to intervene into ‘its own’ economy, e.g. through subsidies. While these details are important, for us it is more interesting that the economic structure and international dependency of regional capitalism is more clearly revealed during the Brexit negotiations and the position of the UK in relation to the main global power blocks, meaning the EU, US and China, becomes more apparent. Before we go through some concrete recent examples we want to quickly summarise how the global competition between these main power-blocks and the economic dependency of the UK interact with each other.

The main trading partner of the UK is the EU, which poses the main problem for Brexit. In this sense Brexit will create economic damage, whatever the deal. The most recent official estimates in 2018 reckoned the UK would miss out on 4.9 per cent of future income over 15 years if it left the EU with a basic trade deal. Under a no-deal scenario, that would rise to 7.7 per cent over the same period. In order to get the best deal possible the UK needs the prospect of deepening trade relations and a favourable trade deal with other major economic powers, primarily the US and China. In previous trade talks the US government signalled that there would be no good deal if the UK a) agrees to stay within the customs union with the EU – which would not allow the boosting of US exports and give easier investment access to the UK – and b) continues to deepen the trade relations with China. The latter poses a significant problem, given the dependency on both finance and productive know-how from China, from 5G technology to nuclear power. During the final phase of UK-EU Brexit talks the UK government was eager to settle at least one deal with a significant trading nation, in order to have a better hand in the negotiations with the EU. The trade deal with Japan in summer 2020 was meant to play that role. The problem was that even in the relation with Japan the UK is on the ‘receiving end’, meaning, the UK is dependent on productive investments from Japan, rather than the other way around – see examples below. The UK negotiators would have to swallow a cut in import tariffs for Japanese cars from 10% – which is the current EU rate – to zero.

To sum it up: while trying to loosen the ties with the EU (Brexit) the UK is caught in the middle of the US – China trade and tech war. This increases the tension within the UK ruling class, where an US-axis opposes those who emphasise the need for closer collaboration with the EU and China. The UK government engages in pretty pathetic ‘still-want-to-be-imperial’-diplomacy in order to signal submission to US interests [2], e.g. by offering asylum to Hong Kong dissidents by coming ‘back home’. This cannot lessen the economic tension between the US and the UK: the more significant question is if the UK government will drop the digital service tax (affecting major US corporations such as Google and Apple) and further open UK agriculture and the health sector to US interests. The following examples of the last few months can exemplify some of the material constraints and dependencies.

Financial services

This is a significant sector in the UK, employing around 1 million people and contributing around 7% to GDP. Unsurprisingly the global character of the sector clashes the most severely with the Brexit plan. A major issue is whether the UK finance sector can still profit from ‘delegation’, meaning, offer financial services in the form of managing hedge funds and assets of companies who are based in the EU. Currently £1.7 trillion of EU investor assets are managed in the UK and competition, in particular with banks from France and the US, is heating up. In 2015, six out of the world’s 10 biggest hedge funds were listed as basing their money management wholly or jointly out of the UK. Five years later, that number has shrunk to three.

Automobile sector

The automobile industry is still the main manufacturing sector in the UK, employing around 180,000 people and contributing just under 1% to GDP. The sector is highly dependent on the exchange with the EU and Japan. Around 78% of manufactured cars are exported and over 50% of parts that are necessary to manufacture are imported – primarily from the EU. As we mentioned above, the automobile sector has been hit hard by the crisis slump and the prospect of Brexit, which threatens to rattle the just-in-time supply-chains. During 2020 car production is likely to be down by 40%. In September, during the height of UK – Japan trade talks, Nissan (main car manufacturer in the UK) has pushed back the production of its flagship new Qashqai model until the middle of next year.

Chemical industry

The chemical and pharmaceutical industry is the UK’s second biggest industry and equally shaken by the prospect of Brexit. This is primarily due to the extra bureaucratic work which becomes necessary if chemical firms based in the UK drop out of EU safety registrations (required for international trade) and would have to register with the UK equivalent, UK Reach. This is likely to result in relocations, e.g. German chemical maker BASF, which has 10 small plants in the UK, each employing about 100 people said the company would have about 1,200 substances to register and had calculated the combined cost would be around £60m-£70m. Total costs for the industry is estimated to amount to £1 billion.

Textile industry

Covid-19 cases sky-rocketed in Leicester and the town was sent into lockdown. People started to ask for the reasons why and only then heard about the new local textile industry. Leicester used to be a mill town, but most textile factories were closed down in the 1970s. In the industrial ruins a new ‘workshop economy’ grew, framed by mafia-type of relations, manufacturing garments for big fashion companies, such as Boohoo. Around 10,000 of these workers are supposed to have been paid around £3.50 an hour, less than half the minimum wage. Bad working and living conditions contributed to the increase in Covid cases. “I’d rather manufacture in Bangladesh than in Leicester, because they’re far further advanced [in terms of labour protection],” said the chief executive of the retailer Esprit in an interview with the Financial Times. Boohoo, which receives one third of its supplies for its £5 billion worth garment business from inside the UK, announced that they will formalise the workshop economy and build a local garment factory with 250 workers. Even with global transport costs and therefore imports likely to become more expensive, the competition with suppliers based in Asia will put a major pressure on wages and conditions.

Agriculture

The sector depends heavily on migrant labour from the EU and subsidies. These subsidies are at the centre of trade negotiations, both with the EU (which want to tie the UK to common standards) and the US (which want to lower subsidies and open the UK agricultural sector for US excess produce). Subsidies make up 61 per cent of profit for the average English farm, while almost one-fifth of farms would be unable to meet production costs without subsidy payments. Based on 85,000 farms that claim EU-style payments in England, this amounts to 16,150 farms unable to make ends meet. If the state doesn’t come to help, international capital has to jump in. For example, the UK’s £1 billion potato growing sector has been hit hard by extreme weather and Coronavirus. The main buyer is the Canadian company McCain, which buys around 15% of the UK’s total annual crop. In order to stabilise the supply-chain McCain was forced to advance £25 million to UK growers.

Energy / Nuclear power

In autumn 2020 the government announced that it wants to build 16 new small-scale nuclear reactors by 2050. The UK currently has 15 operational nuclear reactors at seven locations. At its height in 1997, 26% of the country’s power was generated from nuclear, but this has since slipped to 19%. Currently the UK doesn’t provide either the financial means nor technical know-how to build its reactors. Current construction depends on companies from the EU (primarily the French company EDF), China (primarily the state-owned CGN) and Japan (Hitachi and Toshiba). Apart from Huawei and the 5G network, Chinese investment in UK nuclear power is one of the main contentious issues between the UK and the US. As Hitachi and Toshiba have both pulled the plug on the construction of existing projects due to finance issues, the UK dependence on China and the EU has increased. There are two reasons why the government opt for small reactors: a) much of the work can be done pre-fab in factories, rather than on construction sites, and within 3 to 5 years, rather than 8 years; b) more importantly, they cost only around a quarter of large-scale reactors, which facilitates investments from the private sector. Foreign investment might be necessary, given that major UK-based engineering companies, such as Rolls Royce, are hit hard by the Covid crisis – see below.

Aviation and arms industry

Mainly because of the slump in the aviation sector Rolls Royce had to report a £5,4 billion loss for the first half of 2020 and announced cutting 9,000 jobs globally, which is 15% of its total workforce. This is the main UK engineering company going down the drain. Another leading UK company is also in dire straits: in July 2020 there were talks that the British micro-chip designer ARM would be sold by its current Japanese owner to a US company. ARM-designed components are used in 95 per cent of the world’s smartphones. Labour politicians raised alarm that the US company will probably try to shift the main design and research work from the UK to the US. They also pointed out the ‘national interest’ in ARM, as the company is also a key supplier to the defence industry. This is what connects Rolls Royce and ARM – supplying the arms industries, which is one of the few manufacturing sectors where the UK still has a leading bloody role in the world. British manufacturers exported £11 billion worth of arms during 2019 – it is the second highest figure on record, placing Britain number two in the global rankings behind the US. 60% of British arms are exported to the Middle East.

Education sector

Another major export good of the UK – others would call it soft imperialism – is higher education, which surpasses even arms exports with a revenue of over £20 billion. Over 480,000 foreign students enter UK universities and pay top dollar for it, in particular for education at prestigious sounding institutions. Brexit is threatening the sector, as many international study programs are related to the EU. The Covid crisis hammered this sector, as many students stayed abroad. University management tries to counteract this by introducing new (online) teaching methods and further casualisation of university work. There has been an upswing of struggles from university workers (for example at Goldsmith and Edinburgh university) and students – who have been called back into university in order to maintain the cash flow just in order to be quarantined in dormitories when Covid cases have exploded. There have been rent strikes in response.

Migration

When it comes to (labour) migration the UK state shows its contradictory position. The UK depends on migration in the form of foreign students. The NHS depends on migrant nurses – and when the government wanted to introduce that ‘foreign NHS staff’ would have to pay for their health treatment they had to back paddle. One argument for Brexit was the ‘end of free movement’, to stop low skilled workers from Eastern Europe from ‘flooding the UK’. During the Covid pandemic it became more apparent that there is actually a lack of workers who would do heavy work, such as agricultural labour. While speaking about ‘independence’ on the public political stage, behind the scenes the government signs contracts with the government of Ukraine to allow seasonal workers to come to the UK, given the fact that not enough eastern European workers from EU countries take up these jobs. Back on the political platform the government shows its ‘tough populist face’. The media reported in October that the government discussed detaining migrants in centres on remote islands in the south Atlantic, as well as proposals to build facilities in Moldova, Morocco and Papua New Guinea. Further ideas included holding them on oil rigs, or deterring them from crossing the Channel with wave machines and blockades.

Finally a boom sector: customs officials

In an economy devastated by the pandemic, the UK can boast at least one new boom industry — customs. As many as 50,000 people could find new work as customs agents, facilitating trade between Britain and the EU under new Brexit arrangements. There will probably be a few hundred job openings shunting trucks on mass parking lots in Kent, that have to wait until their papers are processed. This is on top of about 8,000 civil servants and lawyers who have been hired since 2016 just to deal with Brexit procedures. The National Audit Office (NAO) estimated that at least £4.4 billion had been spent on ‘Brexit preparation’ by the 31 January 2020 exit date.

Corona economy

The UK state has major problems providing various services and goods that are necessary to deal with the Covid crisis. Due to a lack of local manufacturing capacity most personal protective equipment (PPE) items had to be imported from China – many of these items turned out to be useless. In terms of pharmaceuticals, the UK and the EU are deeply intertwined, a problem that was already highlighted during discussions about a ‘no deal’ scenario (“Will we get the insulin for our diabetes?”). In 2016, the UK exported £24.9 billion of pharmaceutical products, of which 48 per cent went to the EU. At the same time, the UK imported £24.8 billion of pharmaceutical products, of which 73 per cent were from the EU.

Even more apparent was the UK state’s problem in organising the necessary administrative work to deal with the pandemic. Much of the work was outsourced: since March 2020 over 850 Corona related contracts worth £10 billion were dished out to private companies. Both the private and public sector companies had trouble to coordinate their work. Public Health England lost track of 16,000 Corona cases because they used an outdated version of Microsoft Excel. The outsourcing giant Serco received a £108 million contract to organise contact tracing and decided to further outsource this work to 29 smaller companies. A £252 million contract for the provision of PPE was given to a supplier with no experience of providing such equipment, and owned by an adviser to the international trade secretary, Liz Truss.

* Johnsonomics? Johnsonism?

The last example is generally used by the left to describe the particular feature of ‘Johnsonomics’ – a mixture of elitist corruption, rentier capitalism and right-wing populism. Wasn’t his main achievement as the Mayor of London to turn the city into a global money launderette and isn’t his current strategy to just scale this up to a national level a la ‘Singapore on the Thames’? Or as Paul Mason put it:

“This is the new Tory dream. They will use state aid to give preferential treatment to tech start-ups run by their Oxbridge friends, and create from scratch an AI industry, a space industry and a genetic medicine cluster. And to do it they need absolute freedom from Europe. In fact, much more overtly than in Brexit 2.0, they need Europe to fail. If you follow the logic of Peston’s anonymous quote, the purpose of Britain having a “trillion dollar tech company” is to “own/coerce” those who don’t.”

We think that the left’s attempt to reduce the current government to lackeys of the ‘rentier class’ is more of an expression of their own identity crisis which was caused by the Tories’ the massive state intervention during the Covid crisis – as this was seen as the trade-mark of ‘leftist state policies’. This was further deepened when the Tories announced significant infrastructure investments and plans to increase corporation tax and struggled on the international terrain to obtain a certain autonomy regarding the management of state subsidies. By focusing on the easy targets (‘Cummings wants to sell out the NHS to Trump’) they can ignore the fact that a Labour government would have to deal with the same structural constraints of crisis and global dependency, which would limit the prospects ‘socialist reforms’ severely.

Having said this, the Tories still are fundamentally the ‘party of landlords’. The real estate sector is significant economically and as a social lobby. In the end around 45% of the furlough wage payments will end up being spent on rent and mortgages. The government offered a ‘mortgage holiday’ to property owners, but no real equivalent to people who rent. Stamp duties that you have to pay to the state when you buy property have been cancelled till April 2021, which is supposed to incentivise real estate deals. Johnson proposed that banks should introduce ‘low-deposit mortgages’, which would make it easier to get in debt to buy a house.

The Tories know that they lack industrial and financial fire-power in the trade deal negotiations and try to compensate it by playing political poker, e.g. by tearing up the withdrawal agreement with their ‘Internal Market Bill’. ‘We break international law if necessary in order to get Brexit done’ is virtue signalling for the local electorate.

* The breaking up of Britain?

The weak position of the UK aggravates the centrifugal forces: current surveys see 54% in favour of Scottish independence (8% of the UK’s population lives in Scotland, contribute around 10% of GDP) and the Scottish and Welsh nationalists can use the pathetic state of the UK to present themselves as strong. In July they confronted the governments plan to allow Westminster to set environmental and food standards unilaterally – basically the power to impose lower industrial standards primarily in order to have better cards in the trade negotiations with the US.

Despite equally pathetic cultural posturing Scottish ‘independence’ is built on weak fundaments. The calculations for an independent Scottish economy were based on inflated oil revenues. The collapse of oil prices and the costs of Coronavirus have made clear that Scotland would have faced huge difficulties if it had voted to leave the UK in 2014. The rest of the UK accounts for 60% of Scottish ‘exports’ the EU only for 19%. Fiscal transfers from the rest of the UK still amount to £11 billion a year, which Scotland would lose out on. The Tory government was able to easily exploit this situation by pointing out that the UK financed the furlough scheme and business loans in Scotland during the first phase of the Covid-19 crisis, protecting 900,000 local jobs. The other big question mark is whether the EU would allow Scotland to re-join after Brexit – as they would not want to encourage political secession by contributing to its success..

* The disintegration of Labour

As already mentioned, the Labour left is confronted with a Tory-led state interventionism which they have difficulties to handle. The new Labour leader Starmer tries to outmanoeuvre the Tories and make a move to the right by declaring that the government’s plan to increase corporation tax from 19% to 24% in the November budget is premature. In the culture war Starmer and Foreign Shadow Secretary Nandy portrayed Labour as the party of ‘family and security’, or to quote Nandy: “I think you’ll see a real change in tone and approach from the Labour Party. I think you’ve already seen it, that we have set out in a number of areas – including my area of foreign policy – that we stand up for Britain, we stand up for British people, we stand up for British interests and we will always put that first.” ‘Britain First’ is a fascist political party.

Labour leadership also called their MPs not to vote against the Covert Human Intelligence Sources (Criminal Conduct) Bill which allows undercover cops to commit crimes ‘in order to prevent bigger crimes’ – and this against the background of current cases on ‘the left’ where environmental and union activists experienced sexual abuse and collaboration between cops and bosses which led to mass blacklisting. There is more evidence emerging that Starmer himself has close relations to the intelligence service from his times as Director of Public Prosecutions (DPP). In 2010 and again in 2012 Starmer made the decision not to charge an MI5 officer for his role in torture. Starmer put Charlie Falconer, who engineered the legal justification for the Iraq War under Blair, into the position of Shadow Attorney General.

All this resulted in a moderate exodus of Corbynistas from the Labour Party and the decision of some unions to reduce funding for the party – but not in a more fundamental questioning whether parliamentarian politics are not doomed to fail due to more structural reasons. Many of the new ‘socialist left’ members will actually have voted for Starmer. [3]

* Workers’ struggle

The lockdown measures have revealed the material underbelly of society: the largely manual and low paid work in the essential sectors. Nurses, delivery drivers, agricultural workers were in the public spotlight, which has increased their confidence. We can see that this translated at least partially,( e.g. in the case of nurses or local refuse workers), into demands and even struggles for higher wages. At the same time we can see that the rise in unemployment and the wider crisis regime, e.g. the cut in social benefits, will counteract the wage pressure from below.

Currently the second wave of the Corona pandemic is in full swing. The first wave arrived in aeroplanes and affected primarily the metropolitan areas. The second wave travels by train and bus and hits primarily the poor industrial north, in particular Liverpool and Manchester. Local lockdowns imposed by the centre increase the tension between the local and national political class. These areas are at the same time shaken by the first wave of redundancies, e.g. the relatively high-earning (£45,000) engineering workers at Rolls Royce in Barnoldswick, whose work is said to be relocated to Singapore. We see the first mutterings of the political class against Johnson. There is a faction amongst the Tories who are picking up on the statement issued by ‘scientists’ that society should get back to normal and just protect the vulnerable. Let the poor and old die in favour of money making. But this attitude, half understood, gains a lot of support from a wide range of the population who see that the government has no plan, that there is no end in sight and that if people can’t work they’re fucked. Due to this combination – a badly managed health crisis with arbitrary lockdowns, a sharp economic slump and a badly prepared working class – the right-wing tendencies might profit.

As working class militants we have to do two things. We have to question some of the ‘dooms day scenarios’ that the left likes to paint. These might work in the bosses favour to blackmail workers into accepting worse conditions. So far unemployment has increased only slightly, from 3.9% to around 4.5% – in the three months before August 114,000 people have been made redundant. This doesn’t mean that things will not change once certain wage subsidies run out, as there are still many workers on the furlough scheme and/or away from work: their number fell from 7.3m in the April-to-June period to 6.4m people in June to August. We need to analyse the changing composition of unemployment. Secondly, we have to look at the actual changes in power-relations on the shop-floor during the lockdown and beyond. For that purpose our collective started an interview series. We hope to summarise interviews with workers from dozens of sectors in a pamphlet with clear positions regarding the crisis and with practical proposals how to counter-attack. [4]

We can see the problematic role of the established trade unions where we work. One comrade works at Heathrow airport [5] where British Airways used the crisis for a sudden attack, threatening to sack most of their workers and to re-hire half of them on worse conditions – a total number of around 10,000 job cuts. There are various unions representing workers at the airport and they didn’t coordinate a collective response, instead they started a ‘BA betrays Britain’ campaign, which has so far mainly targeted the government. Individual union branches signed contracts to worsen conditions, hoping that their departments were spared and effectively selling other departments down the river. The union ended up offering ‘temporary wage cuts’, but the company felt encouraged to demand that these wage cuts be permanent.

We see a similar situation during the Tower Hamlets council workers strike against redundancies, where some comrades were involved. [6]

For a deeper understanding of the current situation at work and to be able to support working class initiatives against the crisis attack we have to be organised. We are in touch with comrades in various towns who want to form local groups. [7] Get involved.

AngryWorkers / Lets get rooted

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[1]

The legacy of New Labour:
“Under Blair and Brown, the share of finance in the economy had grown more sharply than in the us, that of manufacturing dropped more steeply than under the Conservatives. Mortgage debt per capita was higher than in America, and inequalities of income and wealth had only increased. A fifth of public spending was now sub-contracted to the private sector; 90 per cent of capital expenditure in health. In higher education, quant-mania had gone a pathological step further with the Research Excellence Framework (ref). In the name of the War on Terror, repressive legislation had intensified and numbers incarcerated risen. (…) In foreign policy, Labour’s traditional Atlanticism had taken on a new twist, a hyper-subalternity to the us in an era when America had become the sole super-power, whose pay-off overseas was a hugely greater sum of killing and torture than under Macmillan, Thatcher or Major: alone reason enough for New Labour to be thrown out of office.” (…) “The Blair–Brown governments saw a continuing contraction of industry; lighter regulation of banking; yet greater inflows of overseas capital—foreign ownership of equities quadrupling again; a still more distended property bubble; and higher levels of household debt. By now the balance of payments was deteriorating, along with a further deepening of the regional divide between London/South-East and the North. After 2004, a steep rise in immigration from the eu helped sustain Ukania’s low-skill/low-wage model of growth by sparing firms training costs. In the same years inequality escalated anew, to a Gini coefficient of 0.36, ‘its highest level since comparable time series began in 1961’. Summing up New Labour’s record, a survey of 2007 observed that it had relied on a consumption binge to drive demand, whose hangover had yet to come, and ‘washed its hands of rising inequality’, with a policy-set that simply ‘refined and developed the Thatcherism that preceded it.’”
(Perry Anderson: https://newleftreview.org/issues/II125/articles/perry-anderson-ukania-perpetua)

[2]

The decline of the UK:
“In effect, slow and well-cushioned regression to drone status: 1914–18, loss of world leadership; 1947–62, loss of empire and in 1956 of international sovereignty; in the 1980s, conversion of the City into a service centre for overseas banks, dissolving recognizably national wealth into more diffuse global holdings; in the 1990s, demotion of regional status with the reunification of Germany; in the new century, of global status with the rise of China.”
(Anderson)

[3]
The Corbyn – Starmer continuity:

“Corbyn was elected as leader in 2015 with some 250,000 votes, a majority of 59.5 per cent. Five years later, Starmer was elected with 276,000 votes, and a majority of the same order—56 per cent, if on a considerably lower turn-out, at just under 63 per cent as against 76 per cent. There was no massive turnover of membership in between. The half of the party’s membership that predated Corbyn remained weakly or staunchly Blairite, while the candidate of the left, Rebecca Long-Bailey, received just over a quarter of the vote. In other words, most of Corbyn’s supporters decamped without compunction to a politician who had conspired with others to depose him within a year of his election.”
(Anderson)

[4]

https://letsgetrooted.wordpress.com/2020/07/07/interview-series-workers-power-during-the-lockdown/

[5]

https://letsgetrooted.wordpress.com/2020/09/14/local-groups-heathrow/

[6]

https://letsgetrooted.wordpress.com/2020/07/02/tower-hamlets-council-workers-strike/

[7]

https://letsgetrooted.wordpress.com/contact-local-groups/

Posted By

AngryWorkersWorld
Oct 16 2020 08:26

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