Britain - "One Nation" Labour bids to serve big business

Oct/Dec 2013

Despite the clamour of Tory media pundits, bizarrely portraying Labour leader Ed Miliband as "Red Ed", what actually came out of this year's Labour Party conference was in shocking contrast to the aspirations of Labour's working class supporters, given the severe deterioration in their living conditions as a result of the capitalist offensive.

Not that there was anything fundamentally new in the party heavyweights' speeches. Labour's record in government under both Blair and Brown is one of favouring big business, above all else. Moreover, Miliband and his right-hand man, Ed Balls, have made no secret of where they stand in the present crisis: firmly behind the capitalists' efforts to maintain profits and, therefore, necessarily against the working class, which is meant to foot the bill.

Of course, this conference came with the usual complement of headline promises, designed to rally voters' support ahead of the next general election - in 19 months time. But these promises were remarkably lightweight, given the problems facing the working class today.

What was far more significant - although it didn't make the headlines  - was how the Labour leadership went out of its way to hammer home the idea that the working class could not, and should not, expect anything from a future Labour government. If and when Labour returns to power, it would carry on managing the crisis in the interests of British capital, just as Brown did after the crisis broke out in 2007 and just as Cameron has done since he took over from where Brown left off, in 2010.

No hope for the low-paid

In this respect, Miliband's hypocritical forays into the issue of low pay were particularly indicative of Labour's general line.

The Coalition was condemned for its failure to increase the minimum wage in line with inflation since 2010. Fine. But even if it had, the adult minimum wage, currently £6.31/hour, would still be only 45p per hour more. Nobody would be able to live on it - not adults on £6.76 per hour, nor the other two age groups under 21 - but even less so, apprentices, currently on the starvation level of £2.68/hour!

Nor would restoring the minimum wage to its 2010 level in real terms have an impact on "poverty in work", given how many more of the working poor and those on in-work benefits have only been able to find part-time work, since the crisis began.

Let it not be forgotten that it was Labour under Blair which set the minimum wage at its low level - the lowest among the rich European countries when it was first legislated in 1999 - in order to promote what Blair called Britain's "flexible labour market" and preserve the bosses' profits. So working class voters already have good reason to be suspicious of Miliband's promises. But he has provided yet more grounds for suspicion.

For instance with his appointment of Alan Buckle, deputy chairman of giant accounting firm, KPMG, which specialises in helping big companies with tax avoidance schemes , to advise Labour on how to "strengthen" the minimum wage. This is inviting a shark to swim in a fish pond! As if the likes of Buckle would help out the low-paid, when their function is to maximise the bosses' profits, by any means necessary!

Labour's "living wage" hat trick

However, Miliband produced a little rabbit from his hat: in the form of the so-called "living wage", which is higher than the minimum wage! Labour has been promoting this for some time, alongside the TUC, and with the backing of a number of big business names such as - surprise, surprise - KPMG, but also other consulting, legal and financial giants which employ mostly skilled staff anyway, like Accenture, Price-Waterhouse-Coopers, Aviva, Linklaters, etc..

Again, it was what Miliband did not say at Brighton which was significant. In the past Labour has promised that when in government it would award state contracts to companies who paid the "living wage". But Labour has a bit of a problem in this respect - namely, the large number of Labour-controlled councils which are quite happy to contract out services to cowboy companies which pay nothing close to the "living wage"!

Moreover, this "living wage" involves a threefold con. Firstly, despite its name, this "living wage" still wouldn't allow working class households to make ends meet: its "London rate" of £8.55 per hour is not enough to meet the cost of today's soaring bills on a full-timer's wage, let alone a part-timer's one.

Secondly, this "living wage" can be used, and has already been used, to try to deceive low-paid workers into settling for derisory wage increases under the pretext of phasing in its introduction by means of a so-called "roadmap towards the living wage". Such was the recent experience of the cleaners employed by the giant service company ISS, on the state-controlled East Coast railway line. Having staged several strikes for a £10 per hour wage, they were offered such a "roadmap" by ISS, apparently with the endorsement of the negotiator sent to speak for them by the railway union (RMT). Except that this "roadmap" meant that they would only get the £8.55 rate in... 3 ½ years, by which time it would be worth peanuts due to inflation! In the meantime, they were meant to be content with a minimal increase - and this, after 12 years of sweating for ISS's profits on the minimum wage! Quite understandably, the ISS cleaners turned down this insulting offer!

Thirdly, behind Labour's championing of the "living wage", there is the idea that different minimum wages could be set for different sectors of the economy - with higher levels for those "those where we can afford a higher minimum", said Miliband, with "business and unions working together in the right way so we set the minimum wage at the right level". Except that, this is exactly where the problem of low pay lies: workers cannot "afford" low pay, nor can they "afford" to wait for the goodwill of companies which, in most cases, do not want to hear about paying workers a decent wage, even when they can "afford" it - which most can, in this period of record profits.

So low-paid workers cannot expect much from a future Labour government. But even if it did increase the minimum wage, would that make much of a difference? Miliband was at pains to highlight the scandal of the estimated 287,000 workers who are currently paid below the minimum wage (mostly by care contractors), blaming it on the Coalition. And he announced that a future Labour government would increase the fines imposed on such employers tenfold, from £5,000 to £50,000. Except that the current level of fines was actually set by past Labour governments. And, under their watch, there was not one single case of prosecution against such scrooge bosses until 2007 and just two attempted prosecutions since. Given this, why should bosses - or workers for that matter - take Miliband's threats seriously?

Casual and jobless workers beware!

Miliband's stance on the casualisation of labour is just as significant as his stance on low-pay.

Although he didn't even bother to mention the question of "zero-hours" contracts at his party's conference - which, in and of itself, probably says it all - he couldn't really avoid the subject in his speech to this year's TUC conference, since it has become such a major issue for trade-union activists in many companies. But his answer was that it was urgent... not to rush into making any proposal. Indeed, there's no question of a blanket ban for Labour. Instead, Miliband announced the appointment of a certain Norman Pickavance, a former Human Relations executive with the Morrissons supermarket chain, to look at a way to "end the abuse of zero-hours contracts" - a rather strange, but telling choice, given the big retailers' record . As if using these contracts was not, in and of itself, an "abuse"! As if workers shouldn't be entitled to a contract which provides them with a guaranteed income for a guaranteed number of hours! Whenever a company sells some goods to another company, there's a contract which states clearly the quantity of goods to be sold and the price at which they are to be sold. Why should it be otherwise when workers sell the use of their labour power to an employer? But that's obviously a logic which is beyond the likes of Miliband, who slavishly woo the bosses and their greed for profits.

This didn't prevent Milband from reiterating again and again his opposition to the "race to the bottom" in which, according to him, the Coalition has embarked upon with regard to labour costs. But what he forgot to say is that it was actually Blair who initiated this "race to the bottom", by encouraging the rise of casualisation and subcontracting and introducing punitive measures against the jobless to force them into non-jobs - thereby providing the bosses with an increasingly cheaper workforce. And this was even before the crisis broke out. In this respect, the Coalition has merely carried on with the same policies, only pushing their logic somewhat further, to coincide with the wishes of big business.

But Miliband certainly didn't say that Labour had any intention of being more understanding towards those without jobs. In fact, he was careful to keep totally quiet on this issue. But his newly-appointed shadow Work and Pensions secretary, Rachel Reeves, didn't, when she was interviewed by the media after her appointment. In particular, Miliband left it to her to give more details about Labour's plans to coerce the long-term unemployed into non-jobs, using a new "compulsory jobs guarantee". "If you can work", she said, "you should be working, and under our compulsory jobs guarantee, if you refuse that job you forgo your benefits" and she added that, in this respect, a Labour government would be "tougher" than the Conservatives.

But where are these jobs that Reeves is talking about? In his conference speech, Miliband referred to the full-employment paradise which would result from the development of a "skill-based, green economy" - something that every politician does these days, as a matter of course. But who will invest in such an economy? Big business, which is already cutting corners on health and safety to maximise profits and complaining that it cannot even "afford" to maintain existing infrastructure? Not likely, at least not without the state kicking them into investing, which Miliband wouldn't dream of doing! The state, then? Not likely either, since Labour has no plans to reverse the Coalition's cuts.

In fact, Reeves' "compulsory jobs guarantee" is about something else, which is very similar to other schemes that have existed in the past, under Labour and Tory governments - and still exist today under the Coalition. What Labour is planning is yet another programme whereby the bosses would be subsidised to "create" jobs, whether in the form of "apprenticeships" or in the form of short-term, casual employment. Nether mind that, in the past, such policies have only succeeded in helping companies to casualise jobs which had been permanent before - and, by the same token, downgrade the conditions of the newly-employed workers. But isn't that precisely what the bosses want - and, therefore, what the politicians who aspire to serve them in government, like Miliband, are bound to do?

Poverty to remain punishable...

The same Rachel Reeves could have been quoting Iain Duncan Smith when she declared in one of her interviews that "nobody should be under any illusions that they are going to be able to live a life on benefits". But she wasn't. On the contrary, she was outlining what would be the policy "under a Labour government".

Labour's stigmatisation of welfare claimants, accused of being a burden on state finance, is nothing new of course. It was already part and parcel of its language under Blair and Brown, first against single parents and then against the disabled. In fact, it was Labour which first introduced the infamous "ability to work" tests to assess the benefits eligibility of the disabled and long-term sick, before contracting out these tests to ATOS - the very same company that Miliband promised to deprive of its contract in his Brighton speech, without bothering to acknowledge that this was yet another case of an attempt by Labour to make "savings" on the backs of the poor which had gone badly wrong.

In fact, there's not much disagreement between Labour and the Coalition when it comes to turning the screw on the poor. So, when asked whether she supported the Coalition's £26,000-a-year benefit cap, Reeves recalled that Labour had actually backed the measure, but that it would look into the possibility of introducing regional variations in order to take differences in housing costs into account. And she added: "I think it is right that those people who are in work do not feel that those who aren't in work are getting something that they couldn't dream of getting".

What's new about this way of peddling slanderous tales about welfare claimants allegedly living in some kind of "affluence"? We've heard it all from Cameron and Osborne, with the backing of a vicious campaign by the tabloids and the Tory press - and Labour is willing to endorse the very same shameless lies. This may well be an electoral ploy, designed to pander to the prejudices of petty-bourgeois voters who have been lured by one government after another into believing that the main burden on public finances and the main reason for their tax bills, is the cost of welfare benefits to the state. But above all, this is a way of demonstrating to the City that a Labour government will retain the "right priorities" and that, regardless of the growing poverty in the country, it will keep using public funds to prop up capitalist profits.

Of course, Miliband has pledged to repeal the "bedroom tax". He couldn't do less, given the blatant injustice of a measure which means misery for hundreds of thousands of households, many of them disabled, and which is so unpopular. More importantly from his point of view, Miliband could afford to make such a pledge without incurring the wrath of the capitalists he wants to serve, since this tax is only expected to bring in the equivalent of less than a quarter of a percent of the total welfare and pension budget!

But this the only one among the Coalition's welfare cuts that Miliband intends to repeal, although he left it to his sidekick Ed Balls to spell it out in his own Brighton speech: "We won't be able to reverse all the spending cuts and tax rises the Tories have pushed through. And we will have to govern with less money around. The next Labour government will have to make cuts too." So not only has Ed Balls forgotten the statement he made last year, committing a future Labour government to reversing the 2.5% increase in VAT introduced by the ConDems, but he has now made it clear that Labour has more public expenditure cuts in store.

... and wealth a merit to be rewarded

What will be affected by these cuts, Ed Balls did not say. Nor did Miliband. But it was clear that Labour has no plans to reduce the state's existing handouts and subsidies to big business. In this respect, there were many clues offered by Labour's heavyweights.

By Miliband himself, to start with, who pointed out that "we need a competitive tax regime for large businesses" - meaning, of course, a regime of low tax on profits which entices big money to settle in Britain. Not that this will bring much in terms of jobs, let alone in terms of productive activity, because most of the "large businesses" which are likely to be attracted to Britain by low taxes are financial holdings - as is already the case today! But this will mean more fat fees flowing in - and bigger profits - for the City's banks and financial services industry.

Of course, Miliband qualified this "low-tax" policy by promising to reverse the 1% cut in the corporation tax paid by the big companies which has been planned by the ConDems for 2015. Will he deliver on this promise or won't he? It's anybody's guess. In particular, is it impossible to imagine a Labour government invoking the "difficult conditions of the global market" and the "need for Britain to be competitive" to justify reneging on such a pledge? Not really. But even if Miliband does stick to this promise, he has already said in his Brighton speech that the resulting additional income for the government (compared to the ConDems' plans) would go straight into the pockets of small and medium companies (but also those of the big companies) in the form of a cut in business rates! No question of this money being used for the poor.

Nor is there any question of going back to more "normal" rates of corporation tax, which were considered perfectly acceptable by the Tory governments of the 1980s and 1990s, including under Thatcher. In fact, when Labour came into office, it inherited a 33% corporation tax rate from the Tories, which Blair and Brown then proceeded to reduce to 28% in stages. And by now, after 5 years of ConDem rule, during which corporation tax will have been reduced by another 7%, the big companies can certainly afford to forfeit a further 1% cut! In other words, regardless of how much Miliband derided the ConDems in Brighton for "talking for their friends at the top" when they claimed "that the economy is healing", it is the same "friends at the top" that Miliband is really proposing to help out - big business.

Ed Balls was far more explicit about Labour's austerity plans: "David Cameron and George Osborne's failure on the economy has led to their failure to get the deficit down, and it will be up to the next Labour government to finish the job... The government's day to day spending totals for 2015/16 will have to be our starting point... There will be no more borrowing for day to day spending. And we will set out tough fiscal rules - to balance the current budget and get the national debt on a downward path". Of course, Balls qualified this by adding that Labour will "combine iron discipline on spending control with a fairer approach to deficit reduction".

But as Chuka Umunna, the shadow business secretary and a rising star in Miliband's entourage, declared to a fringe meeting in Brighton, Labour "is not an anti-wealth party... We want you to go and make your first million". Well, yeah, all well and good to say this to millions of workers on the minimum wage! Perhaps this will be recognised as an echo of Peter Mandelson's notorious remark in 1998, to Hewlett Packard businessmen that "Labour was intensely relaxed about people getting filthy rich". But this reflects the reality of Labour's social stand - on the side of private profit. And while Ed Balls may talk about a "fairer" approach to austerity, the fact is that Labour is effectively endorsing in advance 95% of the existing and future social expenditure cuts made by the ConDems until the general election, in addition to the cuts which it had already been made when it was in government - cuts which are unquestionably aimed against the working class.

"One Nation" Labour behind British Capital

This year's Labour conference took place under the slogan "One Nation". This "One Nation" motto and Miliband's efforts to out-Tory the Tories by adopting this slogan - borrowed from a 19th century Tory prime minister - Benjamin Disraeli - had already been his chosen focus for the 2012 Labour party conference.

Significantly, Miliband used the opportunity of his Brighton speech to wave the Union Jack and "pay tribute" to "our troops, serving so bravely all around the world" and more specifically those in Afghanistan - "young men and women... serving our country". Never mind that the best way to "pay tribute" to these soldiers would be to withdraw them immediately! Never mind either, that the only interests they are serving in Afghanistan - just as was the case previously in Iraq, Sierra-Leone and other British military bases scattered across the world - are those of Britain's big companies, to allow them to carry on taking their share of the imperialist powers' looting of the planet! As to the ongoing bloodbath suffered by the populations of Iraq and Afghanistan - and Labour's share of the responsibility for this - it obviously didn't seem to deserve a mention in Miliband's view. This is "One Nation" Labour for you!

But beyond this crass patriotism, Miliband is merely copying the old Tory tradition of concealing class divisions under a nationalist flag. Of course, denying the existence of class difference is nothing new in Labour's policies. After all, it was Blair who, on the day of his party's victory in the 1997 general election, hailed the advent of what he described as a "classless society". Unlike Blair who had described Labour as the "party of business" in the same speech, Miliband confined himself to proclaiming that Labour was the "party of small business", presumably because explicitly declaring his loyalty to the City wouldn't have fitted in with his denunciation of Cameron's government as the "millionaires' government" - nor would it have gone down very well with most Labour voters.

Nevertheless, Miliband's "One Nation" version of labourism is just another form of Blair's "New Labour". It implicitly says what Miliband didn't dare to say - namely that Labour is just as much aiming to be the "party of big business" as the "party of small business".

But isn't the "beauty" of nationalism precisely that it allows bourgeois politicians to blur the dividing line between conflicting class interests - between the capitalist class and the working class, between the exploiters and the exploited - by waving the flag of so-called "national interest" and claiming that both classes have a common interest against the rest of the world? And guess what - this "common interest" just happens to be? The "necessity" to defend the profits of the capitalist class! How convenient for big business!

And Miliband spelt out what his "One Nation" really meant for the working class when he said: "to make Britain better we have got to win a race to the top... which means that other countries will buy our goods, the companies will come and invest here and that will create the wealth and jobs we need for the future". In other words, the future of the British working class is tied to the success of British companies in competing on the world market and the success of the British economy in attracting foreign companies onto its soil. Either way, and regardless of Miliband's reiterated denunciation of the ConDem policy of pushing Britain into "a race to the bottom", Labour has nothing else to offer. Because how can British companies be more competitive - i.e. more profitable - and how can the British economy attract more foreign companies, if not by driving labour costs down in Britain? And, in fact, Miliband made no bones about it when he added that "we are not going to be able to do it easily. It is going to be tough" - meaning for the working class, of course!

So, the capitalist class can rest assured that Labour will deliver the same goods it has always delivered whenever it has been in government, from the 1920s onwards. As to the working class, it has been warned in advance that it should expect nothing from a Labour government. It must know that in the crisis - and beyond, if there is a beyond - such a government will be just as much a weapon for the capitalists to use in their class war against the working class - as the ConDem government has been.

Miliband's "One Nation" Labour is as much of a con as Cameron's "we're all in it together". No, we're not "all in it together", nor are we "One Nation". We are the working class, the exploited, the "wretched of the earth" as the "Internationale" says, pitted against our capitalist exploiters in a class war. And it is in our struggles that lies our future - not in the ballot box.

20 October 2013