While the pro-Labour left continues with its shrill ‘Tories out’ demand, the ruling class has grown impatient with a Tory government characterised by incompetence and corruption, one whose every move is dictated by the needs of parliamentary survival. Under its third prime minister, Rishi Sunak, the government lacks any plan in which the ruling class has confidence, with major decisions liable to almost immediate reversal. In the meantime, Labour leader Sir Keir Starmer has positioned himself and his shadow cabinet as a competent pair of hands to manage the crisis of British capitalism, and is energetically signalling that the Corbynite left has been comprehensively crushed. ROBERT CLOUGH reports.
A stagnant economy
The British economy remains officially in recession despite a tiny 0.1% rise in GDP in November 2022, the worst-performing developed capitalist economy after Russia. A November 2022 OECD economic forecast predicted a GDP contraction of 0.4% in 2023 and a miniscule rise of 0.2% in 2024. The underlying stagnation, compounded by Brexit and its impact on exports, expresses the low productivity of the British economy. Overall, between 1974 and 2008, the UK’s productivity grew at an average rate of 2.3% a year; between 2008 and 2020 by just 0.5% per year. Adjusting for inflation, the average annual rate of the UK’s productivity growth between 2008 and 2019 was 0.27%, compared to 1% in the United States and 0.7% in France and Germany (NIESR, 26 September 2022). It reflects the insufficient rate of profit, the consequences of which are record balance of payments deficits (£101bn in the first three quarters of 2022), a soaring public deficit (£128bn in the first three quarters of 2022/23) and stagnant or falling wages as capitalists ‘sweat’ their assets, a euphemism for forcing workers to work harder and for less pay in order to secure profits from outdated technology. It is therefore not surprising that British manufacturing has invested far less in robot technology than its major competitors. In 2020 the number of robots per 10,000 manufacturing workers was just 101 in the UK, placing it 24th in a league table headed by South Korea with 932 per 10,000 workers. Figures for Germany and France were 371 and 194 respectively.
Another facet of the profitability crisis is the explosive growth in the numbers and combined wealth of rentier capitalists – billionaires whose individual wealth has increased massively as a consequence of quantitative easing programmes following the 2008 crisis and the 2020 pandemic. All these have done is inflate share and stock prices to levels which bear no relation to a stagnant economy. The result is that in 2022 there were 177 billionaires in Britain, up by 20% from 141 in 2019; their combined wealth is now £654bn. In 1990, there were just 15 billionaires with a combined wealth of £54bn. Oxfam reports (16 January 2023) that the 685,500 richest people in Britain (1% of the population) hold more personal wealth (£2.8 trillion) than the poorest two-thirds of the population (48 million people) who have £2.4 trillion.
The Oxfam report was released on the same day that a story emerged of a mother who collapsed from hunger after she walked two miles with her two toddlers to a foodbank in Tyneside. This obscene growth in inequality is ringing alarm bells for the ruling class. It has no direct control over the Tory Party whose 150,000 members are Brexiteers and hard-right Little Englanders, and whose major concerns are immigration, asylum seekers and culture wars. To get rid of Johnson for his corruption, lying and incompetence, the ruling class had to go to a former senior civil servant (Lord MacDonald) to spill the beans on a Foreign Office investigation of MP Chris Pincher and prove that Johnson was lying when he said he knew nothing about it. With Liz Truss the ruling class had to have recourse to the financial markets in order to dispose of her government and so avoid both financial disaster and social instability.
Sunak slowly sinks…
Sunak – elected Tory leader only by the party’s MPs – is proving no more adept than his predecessors. The very narrowness of his electoral base means he is in thrall to differing parliamentary factions. His premiership has been characterised by continuous policy reversals. He has abandoned the sale of Channel 4, raising opposition from the right wing of the Tory Party. He was forced to abandon minimum targets for house building after opposition from 60 MPs. He was also forced to U-turn when he announced a ban on the construction of on-shore windfarms. And having declared one week that everything was in order with then Tory Party chair Nadhim Zahawi’s tax affairs, he had no choice but to sack him for a ‘serious breach of the ministerial code’ the next.
In order to rescue his tattered reputation, Sunak announced a five-point plan on 1 January which included a promise to halve inflation by the end of 2023, commit to a falling national debt, end the current recession, ensure hospital waiting lists are falling by the time of the next general election, and stop small boat Channel crossings. In the case of the promise to halve inflation, the Office of Budgetary Responsibility has already forecast that it will fall to 3.8% by the end of 2023 from its high point of 11.1% in November 2022. It has also predicted both a recovery from recession by 2024 and falling national debt by 2027/28. So the three promises will happen anyway without Sunak doing anything. The pledge on NHS waiting lists can have so many different metrics that success can be proclaimed on any one of them, while failure to stop the boats can be blamed on events outside the government’s control.
…so more repression is needed…
Although such vacuous promises help to hold Tory MPs together, repressive legislation is even better – and it comes in the form of the current Public Order Bill and a new round of anti-strike measures.
The Public Order Bill includes measures against climate change protesters which the government had failed to get included in last year’s Police Act. The Bill would ban protests that cause ‘serious disruption’, in particular those which are intent on ‘obstructing major transport work’, and those which involve ‘locking on’. A series of amendments presented on 16 January 2023 would give even greater powers to the police to ban a protest before it starts, in particular by extending the definition of ‘serious disruption’ to include slow walking on a highway. The government also intends that police would not have to wait for ‘disruption’ to happen before closing down a protest; police can treat a series of protests for their total impact, or ‘long-running campaigns designed to cause repeat disruption over a period of days or weeks’ in deciding on a ban.
The proposed Strikes (Minimum Service Levels) Bill would allow the government to impose ‘minimum service regulations’ of an unspecified kind on groups of workers to force nurses, firefighters, teachers, rail or border staff to work during strike action. It would let employers give a ‘work notice’ to ‘identify the persons required to work’. If workers fail to comply, they can be sacked, and the union can be sued into bankruptcy for the first time since the 1906 Trades Disputes Act. It would ban effective strike action.
All of this is to appeal to the most reactionary sections of the electorate. The focus on banning cross-Channel crossings however ignores business demands that immigration rules are eased to allow in much-needed workers to fill the yawning gaps in social care and crop picking on English farms. That the government has refused to involve itself in any negotiations over the current round of strikes has exasperated sections of the ruling class. They are now turning to the Labour Party to provide a safe pair of hands in managing the crisis, trusting that it will contain the social unrest that may come with the savage cuts in state spending planned for 2025/26 onwards.
…meanwhile Starmer’s sun rises
Certainly the ruling class will find nothing to fault Labour under Starmer’s leadership; it now holds a 20% lead over the Tories in the opinion polls, enough to give it a 180-seat majority. Thousands of left-wing members have been purged, many for expressing or endorsing simple pro-Palestinian sentiments. Starmer can boast that unlike the Tories, Labour is united: the left has been reduced to irrelevance in the Parliamentary Labour Party, while outside the PLP, the Labour left is in complete disarray, unable or unwilling to offer any serious resistance to the expulsions. Gone is any commitment to the ten pledges Starmer made on becoming leader in April 2020. Instead we have a re-run of Blair’s schmoozing of the ruling class in the lead-up to the 1997 general election. On 8 December 2022 Labour convened a business conference in Canary Wharf which was attended by 350 senior representatives from companies such as Microsoft, Tesco, EY and SSE. It was an opportunity for Shadow Chancellor Rachel Reeves to exult that ‘Labour is back in business’. Since then members of the shadow cabinet have set out their stall:
- Shadow Home Secretary Yvette Cooper has complained that the Tory government has mismanaged the so-called small boats crisis, and that it was now necessary to fast track asylum applications for people from what she calls ‘safe’ countries: ‘It means that if you’ve got cases and where you’ve got cases that are clearly unfounded, they can be swiftly decided and returned, where, for example, people are not fleeing persecution and conflict,’ she said. This is a recipe for abandoning any serious consideration of their asylum applications.
- Shadow Health Secretary Wes Streeting, along with Starmer, has denounced what they call ‘NHS bureaucracy’. Calling for yet another reform of the NHS, they have made no commitment to restore levels of NHS funding to the level where it can recruit the staff it needs to deliver a safe service.
Shadow Justice Secretary Steve Reed wants to update Blair’s mantra ‘tough on crime, tough on the causes of crime’. He has pledged to recruit an extra 13,000 police; victims of ‘anti-social behaviour’ would be able to select the unpaid work that would be carried out and oversee the sentence being completed. - Shadow Foreign Secretary David Lammy has demanded the government proscribe the Islamic Revolutionary Guard as a ‘terrorist organisation’ in the wake of Iran’s execution of Alireza Akbari. At a conference in the US in March 2022 he dubbed ‘Putinism’ as the single biggest threat to ‘our democracies’. It was one of the speaking engagements for which he has picked up £202,000 since December 2019.
- Reeves has called on Sunak to drop a proposed 12p a litre increase in fuel duty in a sop to small businesses and to portray Labour as a party of low taxation in contrast to the Tories.
In a repetition of the sleaze that characterised the Blair government, Cooper and Streeting have been quick to reap the rewards of Labour’s new found popularity with the ruling class; they along with fellow MP Dan Jarvis have received tens of thousands of pounds from a shadowy company MPM Connect which appears to conduct no business and has no website.
Both Reeves and Starmer attended the Davos World Economic Forum in January, setting the seal on Labour’s dedication to the interests of capitalism. They are committed to Tory spending plans which will necessarily involve savage cuts to state spending after the election. That is why they will not give any financial commitment to the NHS. Blair’s commitment to the three-year Tory spending review in the first two years of his government resulted in the near collapse of the NHS in 2000. It is an omen for the future: the difference is that in 2000 there was an expanding economy which made extra NHS spending possible. The truth is that a Labour government will be as brutal as the outgoing Tory government.
FIGHT RACISM! FIGHT IMPERIALISM! 292 February/March 2023
