What lies ahead with the Tory/Lib-Dem coalition government?
Seventy per cent of their planned cuts are yet to come. The Government plans to cut £50 billion from the Health Service.
Its Health and Social Care Act, which aims to transform the NHS from a public service into a marketplace based, for now, on government funding channelled through GPs, will make the cuts hurt worse.
By quarter 2 of 2012 there were 97,000 fewer staff in state schools and FE than before the 2010 election.
Benefits are being cut, first disabled benefits and housing benefit. George Osborne announced a further £10 billion of benefit cuts in the Budget.
What about local government services?
On 10 October, Northamptonshire’s Tory council presented council unions with a choice: 3.6% pay reduction and other cuts; or over 300 compulsory redundancies.
That is an aggressive expression of a general trend. The Government will cut local authorities’ “formula grant” by 27% between 2011-2 and 2015-6.
The average person has already suffered cuts in local services of £238 per year. Councils spent £2052 per person on services in 2010-11, and £1814 in 2012-13.
It will go on. Labour councils which say they have no choice but to pass on the cuts will end up chopping the most cherished services.
If any number of Labour councils defied the Government, and used their town halls as platforms to mobilise the labour movement and working-class communities against cuts, then they could push the Government back. But so far only very few Labour councillors support defiance.
Does the global crisis make cuts inevitable?
Britain’s 1000 wealthiest people increased their riches 4.7% from April 2011 to £414 billion in April 2012. Directors’ pay at the top 100 companies rose 49% in 2010-11 and 14% in 2011-2.
Most workers’ real pay has fallen, and is likely to fall further for years to come. Between 2010 and 2011 the average of household incomes fell 5.7%.
The Government’s cuts are not primarily a means to cut the budget deficit. At present, by depressing most incomes and thus the Government’s tax take, the cuts are increasing the deficit. The Government wants to use the crisis to screw down workers’ standards so that a subsequent capitalist recovery can enjoy higher profits and a balance of forces tilted further in the bosses’ favour.
Can we stop the cuts?
Strikes and militant demonstrations can stop individual cuts. In Southampton, the Tory city council cut workers’ pay. After rolling strikes, the unions got pay levels restored by a new Labour administration elected in May 2012.
Such victories are precious. But the Labour administration in Southampton is making other cuts. The cuts will be stopped across the board only by a vast mobilisation sufficient to oust the coalition government and replace it by a government which will reverse cuts.
Will Ed Miliband reverse the cuts?
Ed Miliband talks about taking on the “predators” and shaping “an economy that works for working people”. But he won’t reverse the cuts.
He hasn’t even promised not to make further cuts on top of the Tories’. He will continue the coalition’s public sector pay freeze.
The only good promise he has made is to repeal the Health and Social Care Act. Even on that, he also says that he rejects a new “top-down reorganisation of the NHS” — which means he will leave in place the current Tory “top-down reorganisation of the NHS”.
The difference between Labour and the Tories is that the unions have 50% of the votes at Labour Party conference, and Labour depends on them for funding. If the unions fight they can turn Labour round.
They are not fighting yet. At the Labour Party conference, early October, the union leaders limited themselves to bland motions, and reserved militant talk for media moments on the side.
Do governments have a choice?
The financiers who trade government bonds in global markets can quickly punish governments. But governments do have a choice. Financiers will lend even to a left-wing government if the government has a workable plan.
Beyond that, to seize economic levers sufficient to reverse the neoliberal tide, a left government would have to expropriate the banks and high finance — take them into public ownership, with minimal compensation, and under social and democratic control.
Why not? Martin Wolf, economics writer for the conservative Financial Times, says: “Banks, as presently constituted and managed, cannot be trusted to perform any publicly important function... Today’s banks represent the incarnation of profit-seeking behaviour taken to its logical limits, in which the only question asked by senior staff is not what is their duty or their responsibility, but what can they get away with”.
What sort of government could change things?
A workers’ government — a government based on and accountable to a mobilised, militant labour movement.
It is the sort of Labour government that we could have if the unions sharpened up and really fought for policies like the public ownership of the banks — voted through as policy by the TUC congress in September — and if they cleared out the careerists which dominate the parliamentary Labour Party and the Labour wonkosphere, to replace them by committed representatives of the working class. (27% of current Labour MPs come from backgrounds as political advisers or aides; 12% from the media; 11% from the law; 15% from the voluntary sector; only 9% from manual jobs).
We need a strong rank-and-file movement in the unions to force such policies on the union leaders.
We must start by mapping out the political programme needed for a workers’ government, and rallying round that programme the working-class organisers who can form the skeleton for the future rank-and-file movement.