Britain - Blair's first three years and the bosses' offensive

Mar 2000

Next May's local election will coincide with the third anniversary of Blair's election victory. And the odds are that this election will reflect, more sharply than ever before, Labour's growing lack of credit among its traditional working class electorate.

This discredit has already been illustrated during the selection process for Labour's candidate in London's mayoral election. First the threat of a rebellion among the party membership forced the leadership to include the maverick Ken Livingstone in the official short list of "selectable" candidates. Then, to ensure that his preferred candidate, Frank Dobson, would win, Blair had to resort to a humiliating public manoeuvre. The "one member, one vote" system that "New Labour" had championed so loudly in the past was scrapped. Instead an electoral college system was reintroduced, just like in the days of "Old Labour". The 85 London MPs, MEPs and London Authority candidates were given as much weight as the entire membership of the London Labour Party and as much again as all the London members of Labour-affiliated trade unions.

Even then, Dobson only won the selection process by a very narrow margin - 51.5% against 48.5% to Livingstone. But in fact, Dobson owed his victory entirely to the MP-MEP college, where he got 86% of the votes. In the London Labour party, Livingstone came first with a 53% majority. But it was in the affiliated trade- unions college that Dobson got the most humiliating defeat. In every union where the membership was given a chance to vote, Livingstone won the ballot by a large margin: 86% in the transport union T&G, 78% in the municipal union GMB, 74% in the retail union USDAW, etc.. In fact in every union the membership sided with Livingstone, except in one - the engineering union AEEU - but this was because its leader, the arch-Blairite "sir" Ken Jackson, decided to vote for Dobson on behalf of his members without seeking their opinion.

Most strikingly, the turnout in the ballots organised by the various unions was significantly higher than is usual for votes over ordinary union affairs. And yet this does not appear to reflect the presence of many illusions in Livingstone himself. Generally workers seem to see Livingstone as an astute politician, a big mouth, but above all, and rightly so, as an opportunist who is not very trustworthy. In other words, tens of thousands of union members grabbed this opportunity to censor the Labour government's policy. They voted for Livingstone because the media had portrayed him as a potential thorn in Blair's flesh and because he was most likely to defeat Dobson, who appeared as Blair's puppet candidate.

Such disillusion, if not anger against Blair's policies, is not altogether new, of course. But it has been growing steadily over the past months as Blair's government demonstrated again and again its determination to meet each and every wish of the bosses.

An unending servility

At the end of last year, Labour ministers announced that there would be no increase in the minimum wage, despite the fact that its already totally inadequate level was set more than two years ago. Following a petition signed by 93 Labour backbenchers, Blair opted for a gesture in order to avoid a public debate on the issue. The outcome was announced in mid- February: a 20p increase to £3.20/hr rate for the 16-21 age group, a 10p increase to £3.70/hr for the over 25s and nothing for the 22-25 age group. Moreover this increase will not come into effect before October 2000 at the earliest.

According to the Treasury's own admission this miserly increase is expected to have "no significant impact" on businesses. Brown's officials could have added that it will have no significant impact either on the plight of the two million workers (including 30% of all young workers) who have to live on this minimum wage, according to official statistics. But then the Treasury was primarily concerned with reassuring the bosses, not showing its sympathy to low-paid workers.

This is all the more revolting as, at the same time, ministers have been quoted time and again defending the exorbitant levels reached by top management salaries in the private sector - on the grounds of "performance" and "skill", of course. But what on earth can justify the fact that, in 1998, the chief executives of Britain's top 5% percent companies earned 94 times as much as their average employee, as opposed to 80 times two years before? As if their so-called "performance" was not due to the sweat of their workforces in the first place!

The Labour government's servility towards the capitalists was illustrated further in a number of issues concerning the so-called "new rights" for workers that Blair boasts so much about.

On January 24th, the TUC issue a press statement entitled "working time - government advice is legally wrong", which was in fact a long and bitter diatribe against the government - something very unusual on the part of the TUC. This statement followed the publication of a revised version of the Working Time Guidance issued by the Department of Trade and Industry - a document meant to serve as a layman's guide to the working time directive (or 48-hour Bill) for both employers and employees. And the reason for the TUC's outburst of frustration was that this document totally understated employers' duties, thereby encouraging them to ignore the law and in any case making it difficult for employees to know their rights. For instance the TUC's statements complained rightly that "the definition of a worker is simply wrong and would have the effect of wrongly excluding many workers from the protection of the regulations." Moreover, added the TUC, "the statement telling employers that they do not have to ensure that workers take their breaks or annual leave are totally unacceptable and will encourage abuse and avoidance."

This kind of backstage twisting of its own legislation by the government is becoming the norm. In February a similar trick was revealed, concerning the implementation in Britain, from April 1st, of another European directive which gives full equal employment rights to part-time workers. Once again the trick consists in altering slightly the terms of reference. Instead of using the term "worker", the draft bill uses the term "employee". On the face of it, it does not seem to make much difference. But given the infinite variety of contracts which bosses are allowed to use with their workforces, only a small minority of workers can claim to fall within the legal definition of an "employee".

And this is not an oversight on the part of the DTI officials who drafted the bill. On the contrary, the "summary of regulatory impact assessment" which is attached by the DTI to the draft bill states clearly that it "could benefit directly 45,000 employees through increases in pay and non-wage benefits." 45,000 out of between 6 and 8 million part-time workers, depending on the estimates! And this when most of these workers are still deprived of rights enjoyed by full-time workers, such as redundancy rights, protection against unfair dismissal or equal pay for equal work, and when a large proportion do not even enjoy pension rights or paid holidays!

In fact the DTI is very proud of this sleight of hand which benefits the bosses, as its officials spell out in the presentation of the draft bill: "The proposals will not impose any new burdens on the majority of businesses. The government has opted for a light-touch' approach, avoiding red-tape." And what this avoidance of red-tape means is that, in effect, the new regulations will be voluntary since there will be no legally enforceable code of practice, so that the 45,000 eligible part-time workers are not even given any guarantee that they will benefit from the new regulations. But this does not prevent the DTI from boasting, for the benefit of the general public no doubt, that the aim of this new bill "is to raise the status of part-time employment and create conditions where more people are willing to vary their hours of work." Because the DTI expects people to be conned by this Labour government into thinking that they will not be worse off in a part-time job, no doubt!

"The capitalists are always right"

Meanwhile another kind of legislation will come into force on the same date as this directive, April 1st. This time it is not legislation which claims to be favourable to workers. On the contrary it is a set of measures which are designed quite overtly to coerce the jobless into taking low-paid casual jobs. In addition to the existing repressive legislation known as the New Deal, benefit agencies will now be able to suspend all benefit payments to claimants for up to six months, instead of a maximum of four weeks. It will be entirely at the discretion of benefit agencies' managers and the appeal procedure is so long that it will make it difficult for claimants to defend themselves.

At the same time, Labour's new "Employment Zones" will come into existence in a number of high-unemployment areas across the country. In these areas, private companies will take over part of the role played by benefit agencies. In Liverpool for instance, the Reed group (one of the country's biggest temp agency groups) will take over responsibility for all those who have been unemployed for 18 months or more and receive the equivalent of 6 months worth of JobSeeker's Allowance for each one of them. Reed will then "help" these unemployed to find a job. And if this happens before the end of the 6-month period, Reed will keep what is left of their JSA. Needless to say that Reed can be expected to be ruthless in putting pressure on these unemployed to take the first bogus job available, regardless of the pay, conditions or suitability of the job for the person concerned. Not only is Reed expecting to make a big profit out of this, but Liverpool employers will benefit from a sudden inflow of workers who will have no choice other than to accept the conditions that will be imposed on them.

But while the Labour government boasts of being "tough" on the unemployed, it is definitely soft of those who create unemployment.

Since the beginning of this year, large companies have been announcing new waves of large-scale job cuts. It started in the first week of January, when the two tyre giants Dunlop and Continental announced 1,400 redundancies in Birmingham and Scotland. Then, in mid-January, progress in merger talks between pharmaceutical multinationals Glaxo Wellcome and SmithKline Beecham was announced with the result that up to 10,000 jobs will be cut, or 10% of the workforce. On February 1st, British Airways announced yet another round of redundancies - 6,500 or 10% of its employees. Ten days later, the completion of NatWest's takeover by Royal Bank of Scotland was announced, together with 18,000 job cuts, or 20% of the combined workforce. On the same day, Lloyd TSB announced 3,000 job cuts. Another ten days, another announcement - this time in the insurance industry, with 4,000 job cuts as a result of the merger of CGU and Norwich Union. It is estimated that a total of 15,000 jobs will disappear this year in the insurance industry, on top of the 16,000 which were cut over the previous 18 months.

Then on February 18th, Ford announced that it was reducing its production capacity by 15% across Europe. Car production would be cut by 30% by next August at the Ford-Dagenham plant in East London, with 1,350 redundancies among line workers. Three days later, Unilever announced 25,000 job cuts and 100 plant closures across Europe, with about 20% of the cuts in Britain. Another four days and BP-Amoco announced 18,000 job cuts by the end of 2000.

And, of course, these are only the headline announcements. But when a factory like Ford-Dagenham cuts production by 30%, this means a comparable production cut for its many parts suppliers and subcontractors, with many more redundancies which will not even be mentioned in the papers because most of them are small or medium-sized companies.

The Labour government's reaction to these announcements can be summarised by the statement issued by the DTI after the Ford redundancies were announced: "Job losses are always bad news. The decision has to be a commercial one for the company." Period! Never mind the fact that Ford had announced, just a week before, £4bn profit for 1999, "more than any other automotive company in history" as Ford's blurb to shareholders boasted. Never mind either the fact that Ford's "reduced" profits in Europe (still £15m though) were due to the cost of buying Volvo and Kwik-Fit for £3.4bn. And finally, never mind the fact that Ford sits on an enormous pile of cash - more than £6bn according to its own accounts - ready to be used for future takeovers. The DTI and Labour ministers had nothing to say about any of this, despite the fact that Ford already managed to extract tens of millions of pounds of public subsidies not so long ago, under the pretext of "saving" jobs in Britain!

Nor had Blair anything to say about the massive job cuts announced by British banks and insurance companies, which, unlike Ford, are at least under the direct statutory control of the British government and owe a large part of their enormous profits to the scandalously favourable tax regime they enjoy.

No, this government had nothing to say against companies which are cynically depriving tens of thousands of workers of their wages, not because they are in dire straits, but because they want their profits to break even higher records than they do today. Unilever is a good illustration of this. Last year it made so much profit that it decided to repay over £5bn to its shareholders, because its directors could not think of anything better to do with that money. And this year they intend to push 25,000 workers out of their jobs, under the pretext that they want to increase their profit margin from 11% to 15%. But the £5bn they gave back to shareholders last year would have been enough to pay these 25,000 "redundant" workers for over ten years, to do nothing!

And this government has nothing else to say about all this than to repeat endlessly, with disgusting servility, that "the capitalists are always right".

Worse, Blair and Brown are now preparing even more handouts to these job-slashers and their shareholders. The next budget to be announced at the end of March will include a large reduction in the taxes paid on profits made from share dealings and income from dividends. This government which claims hypocritically to fight the plague of unemployment is in fact creating it by giving tax incentives to companies to make even higher profits - necessarily at the expense of jobs and workers' conditions, since these companies do not invest in production.

Reversing the balance of forces

For years now, the capitalist class has been able to increase the exploitation of the working class through job cuts, speedups, longer hours and aggravated conditions - and all this without coming up against any major resistance. In addition they can now count on the active support of the trade-union leaders who have more to gain by remaining in Blair's boat than by rocking it. So the union machineries remain a major instrument for the Labour government to paralyse the working class. This, together with the servility displayed by Blair and his ministers, leads the bosses to think, rightly or wrongly, that they will get away with any attack against workers. It is this fundamental complicity between the Labour government and the bosses, in increasing the exploitation of the working class, which is discrediting Blair and his policies. Maybe this will be reflected in the coming election, either through an even lower turnout than in the previous one, or through larger votes for candidates who appear to be to Blair's left, including Livingstone who has now announced his intention to stand against Dobson as an independent.

But it would be a real waste if, in the end, the anger which exists in the working class electorate against Blair's policies ended up being used merely as a springboard to boost the career of a political adventurer like Ken Livingstone, who does not give a toss for the working class and its interests. All the more so as the votes of those workers who would choose Livingstone would inevitably be mixed with those of a trendy middle-class which advocates a fashionable cynicism towards politics and with the tactical votes of a section of the Tory electorate.

Elections are at best a means for working class voters to express an opinion. Maybe they will be able to do so in the local election or in the London mayoral election, although for the time being it is hard to see how. But in any case, no real change will, nor can come out of this election or any other. Neither Blair nor the capitalists will be frightened off by ballot papers.

What would really frighten them off, on the other hand, would be a determined counter offensive of the working class, using its own weapons - not the ballot box, but the class struggle, in the streets and council estates, in the factories and offices. It is with these weapons and only with them that the working class will eventually find real solutions to the problems it is confronted with today. These unending waves of job cuts by enormously rich companies will only be stopped provided the working class starts a fightback on a scale large enough to impose the banning of all redundancies by such companies under threat of confiscation. The chronic total or partial unemployment which is the lot of a whole section of the working class today, will similarly only be resolved, if the working class imposes on companies to invest their enormous profits into socially useful, productive activities, instead of going to waste on the financial market; and if it imposes on the government to use its resources to create jobs in public services, instead of being channelled into the capitalists' pockets through subsidies and tax rebates. Only such a counter-offensive by the working class could tip the balance of forces in its favour.

The capitalist class has had a free ride for too long. The Labour party has proved to all those who had any doubts, that it was on the same side of the fence as the bosses. It is time for the working class to prepare itself to take its fate into its own hands!

6 March 2000