Labour won the 1997 general election because it was the preferred party of the ruling class. Now we can see why. For the last 12 months, it has pursued ruling class interests with complete single-mindedness. Whether it has been the City of London, the arms manufacturers or News International, Labour has ensured that they have prospered. It has of course been a very different story for the working class. Labour has continued to ensure that the poor pay.
Not that it promised anything else. Labour had made clear it would defend ruling class interests – in particular in relation to Europe, over which the Tories were hopelessly split. By the time of the election, the ruling class was quite satisfied that Labour would defend its political and economic interests in conditions of increasing international instability. It was also confident that when Labour spoke of welfare reform, it would continue, and indeed accelerate, the attack on state welfare started by the Tories. The Sun’s endorsement of Blair showed which way the wind was blowing, and with most of the left also supporting Labour, how could it fail to win?
Fighting for the ruling class…
Over the last 12 months Labour has completely vindicated ruling class confidence. Within days of the election, it effectively handed government control over the Bank of England back to the City of London. The result has been a succession of bank rate increases which have pushed the pound to its strongest position for many years. Meanwhile the stock market has boomed: the FTSE has continued a seemingly remorseless climb from around 5,000 to the 6,000 level. Links between the government and multinationals now exist at every level: Lord Simon, head of BP, has a ministerial post in the DTI; he is also a director of RTZ. Martin Taylor, head of Barclay’s Bank, is on the committee reviewing tax and benefit policies, whilst PolyGram’s Stuart Till is leading an advisory committee on the British film industry.
Being a millionaire allows preferential access to Number 10. Bernie Ecclestone only had to make one appearance (and lob £1m into Labour Party coffers) to get an indefinite suspension of moves to ban tobacco sponsorship of motor racing. Rupert Murdoch has meetings every six months with Tony Blair, the most recent in early May. Meanwhile, as a favour to Murdoch, the cabinet will defeat attempts to amend the current Media Competition Bill banning predatory pricing. Meanwhile, Brown’s boast that Britain now has ‘the lowest main rate of corporation tax of any major industrialised country’ confirms where Labour’s priorities lie.
…and its imperialist interests
David Clark, as shadow spokesperson on defence, spelled out Labour’s historical enthusiasm for the arms industry in October 1995, when he said that Labour ‘believe, unlike the [Tory] government, that the British defence industry is a strategic part not only of our defence effort but of our manufacturing capability. We will work with the defence industry to identify technologies in which we lead the world and to ensure that they realise their potential’ (quoted in John Pilger’s Hidden Agendas). Hence Labour’s current defence review has explicitly excluded both Trident and the Eurofighter from the axe; the latter is a crucial project if British imperialism is to maintain its position as the world’s second largest exporter of arms.
Cook’s ‘ethical’ foreign policy has proved baloney from the outset. Labour has approved the export of 56 batches of arms to Indonesia, and refused only seven. It has sanctioned the current delivery of Hawk aircraft despite acknowledging in opposition that they were being used in East Timor; other weaponry includes 200,000 sub-machineguns. In a visit to Indonesia last year, Cook gave Suharto his political support – not enough to prevent him being toppled some six months later.
The recent debacle in Sierra Leone is another example of this ‘ethical’ nonsense. Mercenary outfits like Sandline, with their links to military intelligence, are now a crucial component of British foreign policy. Sandline’s role was primarily one of co-ordinating the Nigerian invasion which restored Kabbah to power. That the Abacha regime in Nigeria is supposedly subject to British Commonwealth sanctions of course makes the use of such unofficial and deniable means of interference essential. What was at issue was Britain’s diamond interests – apart from being president, Kabbah also holds the largest diamond concession in Sierra Leone. Other examples of Cook’s ‘ethical’ foreign policy are:
• Labour’s military alliance with the US against Iraq, which almost led to another slaughter, and which still means that tens of thousands of children are dying because of sanctions;
• Its enthusiasm for including fascist Turkey within the EU; Cook has condemned what he calls the ‘waywardness’ of British Labour MEPs who have opposed such a move;
• Cook’s support for the extension of the NATO military alliance to include Eastern Europe.
Some things never change; one is that Labour has always been an imperialist party and ever will be, ‘ethical’ foreign policy or not.
…while greasing the palms of the middle class
Winning the election depended on Labour persuading the middle class that its privileged conditions were safe in Labour’s hands. In this it was entirely successful: social class C1 (professionals) voted 47% for Labour compared to 28% in 1992, whilst C2 (supervisors and lower managers) support rose from 40% to 54%. Labour got a greater share of the homeowner vote (41%) than the Tories (35%). And for the moment at least, Labour has delivered. It has not raised the basic tax levels, nor increased national insurance rates, two of its key election promises. Instead it has continued the trend started under the Tories where privilege is increasingly distributed to the middle class through the market rather than through state welfare.
This change has proved an economic necessity for the ruling class as payment for state welfare is a deduction from their profits, and one which provides some benefit, however small, to the working class, through a partial redistribution of wealth from the middle class via the taxation system. The ruling class has to cut this working class ‘social wage’ as much as it has to cut their money wages, but at the same time it has to ensure the middle class retains its privileged position. If this cannot be achieved through state handouts such as mortgage tax relief or higher education grants, then another way has to be found, for privilege there has to be: political stability depends on a satisfied middle class. But to exclude the working class from any benefit, the market mechanism has to be used, and there are no shortage of ways:
• through the perks of privatisation. The middle class got £35 billion from the frenzy of building society demutualisation last year; meanwhile Labour is planning partial sell-offs of the Post Office and London Underground;
• by increasing share ownership. Currently some 16 million people hold shares – far more than under the Tories; the rising stock market has given those who invested the proceeds of demutualisation even more money;
• through rising house prices, which have benefited many of the 16 million house-owners, but especially those who had negative equity, and the 5 million who own their houses outright;
• by retaining existing tax concessions on pensions, PEPs and TESSAs, worth £10bn per annum;
• through education breaks. The 163 remaining grammar schools are safe in Labour’s hands whilst, although there is to be no selection on ‘ability’, there is selection on ‘aptitude’, and it must be a test of one or the other to distinguish between the two.
Falling unemployment and rising real wages have also helped the middle class disproportionately. Of course the withdrawal of state welfare means they have to make some private provision for their healthcare or pensions. But the point is that they can afford it, and the working class cannot. And whilst some sections are facing a more uncertain future, there is still a world of difference between life on a wage of £20,000 per annum and existence on £3 or £4 per hour or less. Privilege is not just an absolute, it is also relative. One in three Labour members earn over £30,000, half over £20,000. Life may be harder for some of the more affluent, even more risky. Yet this cannot compare to the conditions of those forced to live on poverty pay.
…not to mention the trade unions
The alliance between Labour and the trade union leadership remains unbroken precisely because middle class privilege has been sustained. As we have noted elsewhere, the trade unions are ‘increasingly composed of the professional, better-educated ‘middle class’ workers in relatively stable employment’; 38% of those with degrees, 47% of those with other higher education qualifications are in unions compared to 26% with no qualifications at all. 58% of those in employment for more than 20 years with the same employer are unionised compared to only 12% of those in employment for less than a year. With only 38% of jobs created in the last 4 years being permanent, the trend towards a smaller but ever more privileged trade union membership will continue.
For its part, the trade union leadership has destroyed such struggles that have taken place – those of the Liverpool dockers and the Hillingdon workers are two obvious cases. It has no intention of challenging anti-trade union legislation, even though Blair has boasted that it is the most restrictive in the western world. Now that Labour has made some minor concessions over the Fairness at Work White Paper, the TUC will deliver the support that is necessary to maintain social peace, and will go on to ensure that the pitiful minimum wage of £3.60 is likewise accepted.
…all the better to hammer the working class
In the absence of any significant opposition, Labour has had a free hand in attacking the working class, through the New Deal, cuts in lone parent benefit and income support, and mooted cuts in disability and incapacity benefits. It has recruited middle class support for this process by making all sorts of allegations on the extent of welfare fraud – none of them backed by any study – and by stigmatising those on benefits as irresponsible and work-shy. It blames truancy and teenage crime on feckless parents – all of them working class, of course. On this basis it is constructing a regime characterised by authoritarianism, intolerance and vindictiveness. Economic deregulation of the sort that Labour applauds is bringing the disintegration of working class life – but according to Labour it is the working class which is to blame, not ‘flexible’ labour markets which depend on poverty pay and slave conditions. Hence Labour is introducing and extending all sorts of measures to regiment and discipline workers, through the JSA, the New Deal, the formation of the Social Exclusion Unit. The consequence of Labour policies is that the number of those in poverty will rise by a further two million during the lifetime of the government.
Labour has to hold together the coalition which elected it to office whilst it implements the measures necessary to discipline and control the most impoverished sections of the working class. Whether it will be able to do so for any length of time depends on the pace at which the underlying economic crisis develops. A collapse in the stock markets will spell the end of the market-distributed privileges of the middle class, and the political stability they bring. Already sections – teachers, health workers and college lecturers – are under increasing pressure. This is the start of a process of proletarianisation. This is why events in Indonesia are so important: they could have a catastrophic impact on international banking capital, particularly if they spread elsewhere, say to South Korea or Japan. And there is a further lesson which will not be lost on the oppressed: that working class action can lead to the destruction of even the most oppressive and brutal regimes, and in the end imperialism can do nothing about it.
FRFI 143 June / July 1998
