Labour Party conference - Will Corbyn take on Labour councils?

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With rising assurance that Labour will win any snap general election called by Theresa May’s beleaguered government, Jeremy Corbyn’s speech at the Labour Party conference on 27 September was designed to enthuse the layer of young professionals who were key to his election as Labour Party leader. Confident promises on housing, investment, employment and foreign policy were in marked contrast to his evasiveness in an interview with Andrew Marr on BBC the previous Sunday. Corbyn has to perform a balancing act: he needs to keep the support of better-off sections of the working class so that they campaign for Labour in the event of a general election, while reassuring the ruling class that a government he leads will be a safe pair of hands defending British imperialist interests. The most significant part of his speech dealt with the housing crisis; his proposals, including ballots over regeneration plans, are a challenge to Labour-run councils. The question is: will he follow through? Robert Clough reports.

Corbyn’s position as leader is for the present unassailable, given Labour’s unexpectedly strong performance in the June general election. At the conference, Corbyn supporters won elections to the Conference Arrangements Committee and the National Constitutional Committee. Divisions over Brexit remain, but have no significant consequences unless Labour wins an election. A commitment to a two-year transition period, and possibly longer, is sufficient to stave off any damaging split. The conference endorsed a bland motion which left open the possibility of continued membership of both the EU customs union and the single market.

Attacking neoliberalism

Corbyn’s speech struck a radical note as he addressed what he described as the ‘failed dogma of neoliberalism’, quoting the Financial Times that our ‘financial system still looks a lot like the pre-crisis one’ and that the capitalist system still faces a ‘crisis of legitimacy’ stemming from the crash. He added:

‘Ten years after the global financial crash the Tories still believe in the same dogmatic mantra – deregulate, privatise, cut taxes for the wealthy, weaken rights at work, delivering profits for a few, and debt for the many. Nothing has changed. It’s as if we’re stuck in a political and economic time-warp’.

Six out of nine water companies ‘are now owned by private equity or foreign sovereign wealth funds.’ This is the context in which Labour proposes to nationalise utilities, take over PFI contracts and bring rail services back into public ownership as existing franchises expire. Whether any of this will happen in the context of deepening economic crisis will depend on the balance of class forces.

Shadow Chancellor John McDonnell has been on what he describes as a ‘tea offensive’ to charm business executives. His message has been that only a Labour government would make the significant infrastructure spending that the country needs. He has enjoyed regular private meetings with Mark Carney, the governor of the Bank of England, and claims to have begun an attempted rapprochement with former prime minister Gordon Brown. Certainly, many companies felt the need to attend the conference’s Business Forum, a legacy from the Blair days, following the June election result.

Protecting Britain’s imperialist interests

Defence was not debated at the conference; manifesto commitments to support the replacement of Trident and to spend 2% of GDP on defence remain. On foreign policy Corbyn declared ‘Britain’s voice needs to be heard independently in the world’, betraying an illusion that Britain can sustain itself as an independent imperialist power. Regardless, nothing new followed. He condemned the Saudi onslaught on Yemen, but stopped short of pledging an end to arms supplies to the Saudi regime. BAE Systems, the principal supplier of such weaponry, had a stand in the Business Forum boasting of its annual £4.7bn exports. Arms companies are a key component of British industry which both Corbyn and McDonnell want to boost.

The biggest cheer for Corbyn came when he declared ‘let’s give real support to end the oppression of the Palestinian people, the 50-year occupation and illegal settlement expansion and move to a genuine two-state solution of the Israel-Palestine conflict.’ However, this followed his decision for the first time not to speak at a Palestine Solidarity Campaign fringe meeting. Shadow Foreign Secretary Emily Thornberry attended the Labour Friends of Israel reception where the principal speaker, Israeli ambassador Mark Regev, praised Labour’s role in the Balfour Declaration and said the party had a ‘proud history of supporting Zionism’. It was Thornberry who ensured the removal of all opposition to the occupation, the settlements or the siege of Gaza from Labour policy.

Not surprisingly, Corbyn criticised President Trump over climate change, his pandering to racism and his inflammatory rhetoric at the UN. But the US decision to impose a 220% tariff on Canadian-built Bombardier aircraft places the relationship between US and British imperialism under the spotlight and poses a particular challenge to those, like May, who see Brexit as an opportunity for a closer alliance between the two. The prospect of a trade war looms as May threatens retaliation against Boeing, and a Labour government would not be able to escape the consequences.

In this context Corbyn has to offer a programme which can defend the interests of British imperialism and either restore or at least maintain the material conditions of the better-off section of the working class as the Brexit process grinds on. A hard Brexit threatens both: the ruling class may need a Corbyn-led government to salvage something from the negotiating mess that May and the Tory Brexiteers have created. This is the hope of the privileged layers of the working class who opposed Brexit precisely because they could recognise that their conditions depended on a form of Keynesianism which could only function at a European level.

Caution was certainly the word when Corbyn was interviewed by Andrew Marr just before the start of the conference. There would be no increase in death duties, even though they are lower than under Tory governments of the 1950s. Challenged as to why Labour’s manifesto prioritised the middle class over the poor by proposing to spend more money on abolishing tuition fees than on raising benefits, Corbyn could only promise £2bn for the latter. Labour’s election manifesto had proposed to maintain £7bn of Tory cuts to working-age benefits while the abolition of student tuition fees would cost an estimated £11bn. And he avoided any direct answer when pressed over whether he supported strike action which broke Tory anti-trade union laws.

Regeneration, privatisation and rent controls

It is over housing that Corbyn may have left himself hostage to fortune. Since becoming leader, he has studiously avoided criticising Labour councils which, under the guise of regeneration, have launched privatisation schemes that drive out poor working class people, and in which ‘affordable’ housing is not affordable even for better-off sections of the working class (see FRFI passim). The most obscene in a long list is the Haringey Development Vehicle (HDV) which will transfer £2bn worth of council property to private development monopoly Lendlease. The Grenfell fire has made his continued silence untenable. The only alternative, however, is to take on the vested interests of Labour councils. Corbyn was forthright:

‘when councils come forward with proposals for regeneration, we will put down two markers based on one simple principle: regeneration under a Labour government will be for the benefit of the local people, not private developers, not property speculators. First, people who live on an estate that’s redeveloped must get a home on the same site and the same terms as before. No social cleansing, no jacking up rents, no exorbitant ground rents. And second, councils will have to win a ballot of existing tenants and leaseholders before any redevelopment scheme can take place.’

Haringey council was appalled: such issues are too complicated for working class people to understand, a council statement implied, with one councillor saying ‘We will continue to put comprehensive and meaningful engagement with residents at the heart of our regeneration plans, but we do not expect to start using yes/no ballots.’ This echoes London mayor Sadiq Khan who has warned that ballots risk turning ‘a complex set of issues’ into ‘a simple yes/no decision at a single point in time’. Such issues were never deemed to be too complicated when Labour councils rammed through tenant votes on large-scale council house transfers, ignoring results they did not like or re-running ballots to get the desired outcome. As with Grenfell, councils regularly ignore the opinions of working class tenants when it does not suit their interests.

But what will Corbyn do? In 2016, he ordered Labour councils not to set illegal, anti-cuts budgets to avoid a confrontation with the Tory government. That instruction let Labour councils off the hook. Now his words have to mean something. His immediate test will be the HDV where there has been an application for a judicial review of the council’s decision. He must publicly support opposition to the HDV and force Haringey council to abandon it. This would be the first step in rolling back all the privatisation schemes Labour councils have signed up to.

Corbyn will face similar challenges over rent controls. These will be popular with those who are neither able to get social housing or afford their own homes and who therefore have to rent in the unregulated private sector. But the petit bourgeois private landlord who will lose out will have powerful backing from private developers. The latter will regard the policy as a risk to house prices, and will be alarmed at Corbyn’s declaration that their vast land banks might be subject to taxation or compulsory purchase. They will oppose any changes which threaten their enormous profits.

Corbyn has yet another problem: if regeneration plans are to include adequate levels of social housing provision, how will they be paid for? The Financial Times estimates that each council house built in London needs a £200,000 subsidy to keep the rent at a social level. This would require £3.2bn a year for 20 years to meet even the very modest plans set out in the Greater London Authority Housing in London 2015. Labour’s proposed housing review could be used to kick any council house building programme into the distant future.

The June general election result showed that there is increasing disaffection with the Tories; this will accelerate as the Brexit process proves increasingly disastrous and the Tory Party splits widen further. Corbyn is treading a fine line: he has to promise enough to the better-off sections of the working class who are the bedrock of his support while signalling to the ruling class that the economic programme he is putting forward is in their interests. However there is an appetite among growing numbers of young people for real social change, and they will expect Corbyn to keep his word, particularly on housing. The first step is to ensure he stops HDV in its tracks.

Fight Racism! Fight Imperialism! 260 October/November 2017