[page 3]
quarter of this year.
causing an overall fall of 13.2%% since the start of the recession in 1990. This is only marginall! less than the 15.5% fall during the 1979-81 recession. The CBI has scaled down its anticipated economic growth for this year from 1.7% to 1.0%. It expects another "3.000 manufacturing jobs to go in the first quarter of 1992. as opposed to 68,000 in the last quarter of 1991. In fact the rate of monthly job losses in the economy as a whole has started rising again since November last year.
For Britain, this will be the longest recession since the second workd war and, by its end. may yet turn out to be the deepest. It has dragged on due to the continuing effect of the record debt overhang' - indebted consumers and companies prefer to repay their debts before engaging in any major new expenditure - and due to the continuing recession in the American export market and the worsening picture in Europe.
Serious long-term damage has been done to a number of industries in the course of this recession. For example. 70,000 jobs have been lost in car production, components and in sales and distribution. All that salvaged the situation for the UK car industry last year was the continued upsurge in the German market, where there was a 30% rise in car sales. Car sales in Britain slumped by 20% last year, almost double the fall in Spain and France. Now that Germany has also fallen into recession, that outlet for British car sales is being closed off. That must mean further redundancies, and further question marks over individual car plants such as Cowley. Halewood or Dagenham. which itself would have a further depressing effect on the home market.
In addition to this, the crisis tacing British capitalism is being compounded by the crass stupidity of the Tories - a feature of the Thatcher era. Although the faces may have changed. the economic illiteracy of the Tory frontbench is as bad as ever. They are planning, for example. the destruction of the important mining industry: with modern pits in the new selby coalfield already being earmarked for closure. The Tories are making the British econom! dependent on the supply and price of foreign coal. The obsession with privatisation has meant that the electricity companies are able to call the tune and force apace pit closures. choosing. even without new port facilities at Immingham. to import coal when they renegotiate their contracts with British Coal. And they themselves are also shedding labour. National Power will have shed 6.000 jobs, onethird of its workforce, by September, and is now planning to get rid of 2,000 more.
Britain registered minus 2.5% growth during 1991. the steepest decline since the great depression of 60 years ago and the worst figure of all the 'G° major capitalist countries (the Is Japan. Germany: France, Italy. Canada and Britain). In the Tory years since 1979, aggregate growth in Britain has been +.9%. placing it next to bottom in the league of the 21 major western industrial nations. Only Greece has a worse
[page 4]
record. What is perhaps most serious, from the point of view of the long-term position of British capitalism, is that, at only £2bn a quarter, manufacturing investment is now 32% down on 1990. In the slump of 1979-81, it fell by exactly that figure. That fall inflicted serious damage on the ability of manufacturing industry to compete in the subsequent upturn.
WITH ALL THESE statistics of gloom, Labour should be well ahead in the polls. No govern ment has ever gone to the country with the economy at such a low level, and won. Yet Labour is still not assured of an election victory. In fact the Labour leaders are in danger of repeating the ridiculous taxation blunder of 1987. The Tories have seized on this to hit Labour at every opportunity.
In the mid-January period in a concerted campaign, all the Tory tabloids led their tront pages with attacks on Labour's taxation plans. This was the key element in knocking back Labour's opinion poll lead from the turn of the year. The Tories tried to portray Labour as being committed to increasing public spending by 35bn a year, which they say would amount to an extra $1,000 a year for the average taxpayer.
Rather than forcefully record of increasing the the majority of people cutting public spending.
attacking the Tories'
overal tax burden on while simultaneously
the abour leaders'
response was defensive. Neil Kinnock replied that the removal of the £ 20,800 ceiling on National Insurance payments would perhaps be phased in rather than introduced in one go. But by going onto the back foot, the Labour leaders lose both ways. They appear evasive about their own taxation plans but then, by going out of their way to prove that really they are not going to spend such sums, they end up offering nothing in palpable reforms apart from the pensions and child benefit increases.
In fact, most of the 435bn worth of Labour commitments' the Tories claim have been made by Labour spokespersons are the minimal reforms needed to reverse the effects of thirteen years of Tory rule: a £3bn increase in NHS spending: restoring education spending as a share of gross domestic product to 1979 levels Labour's tax (*2.6bn): a statutory national minimum wage plans. (21.5bn); equalisation of pensions at 60) (£3bn): training (£1.83bn): housing construction. repair and maintanance (23bn); disability benetits (£1.3bn): transport (d$2.5bn) and so on. (Guardian. " January 1992).
The resources to fund these commitments could be easily realised if Labour was to introduce a socialist plan of production, based on the nationalisation under workers' control and management of the top 200 monopolies that dominate the British economy. This would end the waste and inefficiency that is inherent in capitalism: the unnecessary costs of competit-
Will Ford Halewood, or Dagenham, survive the recession?
WIR
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40 MIR Spring 1992 The election
Roy Hattersley.
ion in product duplication, advertising spending etc; the speculative activity of the capitalist financial system; the £8,000 a year cost, in lost taxes and social security payments, of keeping somebody unemployed etc. But on the basis of capitalism, the 'market system' which the rightwing Labour leaders' are wedded to, such an increase in public spending could only be financed by government borrowing. which would lead to inflation, or a massive hike in taxes. That is why the Labour leaders are so easily thrown onto the defensive by the Tories' attacks.
Consequently, the taxation issue could be particularly damaging amongst exactly those groups that Labour need to win to be sure of a general election victory - skilled and whitecollar workers. In the West Midlands, a key marginal area, Labour's regional officials calculate that 200,000 non-Labour voters need to be won. This region has a substantially higher proportion of its workforce in manufacturing industry - 33% - than the national average of 24%. Skilled workers, perhaps earning £15- 20.000 per year, are a key section here. But in 198°. Roy Hattersley's declaration that Labour would reverse the two pence cut in the standard rate of income tax which Thatcher had just engineered in the budget, was a significant factor in Labour failing to win back the skilled working-class vote. Now they stand in danger of repeating exactly the same mistake with the same result.
the general election, as the closure date of the Ravenscraig steel mill in Motherwell. The Labour leaders replied that even if they win the general election, they can give no pledge to keep it open. They even held a press conference to pour scorn on the idea of nationalisation and to announce that nothing could be done other than encouraging new jobs to be located in Lanarkshire. The very next day the SNP held their own press conference, with the Dalzell steel works shop stewards, pledging to nationalise Scottish Steel and a future for the Scottish steel industry, including Ravenscraig. The SNP candidate for the Motherwell North seat is a worker from Dalzell.
The recent setbacks the government received in the courts over the collection of the poll tax should have been used by the Labour leaders to finally kill off the tax and end the uncertainty and distress many working class families feel as their unpayable poll tax arrears mount. Yet the only comment of Bryan Gould, Labour's environment spokesperson, was to complain that the Tories had not acted swiftly enough and not clearly retrospectively enough to ensure that computer evidence could now be heard in magistrates' courts!
Helpfully for the government, the Labour frontbench accepted that the cut-off point for prosecuting those who have not paid should be extended from two to six years. And while they called upon the Tories to exempt those liable to pay 20% of the poll tax in this year's budget, they announced that if the Tories did not make this change, they wouldn't either, as it would 'encourage' people not to pay. The Labour-controlled Association of London Authorities bitt-
erly complained that the police were not dilig ently following up the warrants that have been
issued for poll tax non payment. With seven
million liability orders, with up to 18 million
people not paying. who do the Labour leaders
think they are going to convince to vote for
them, by acting as poll tax policemen?
ALL THE OTHER reforms. the Labour leadership maintain, will be paid for out of the hoped for extra economic growth. So on the issues of health, education, jobs, etc. there is nothing with which they can inspire voters to turn to Labour right now.
A January Today/CM poll of first-time voters indicates the effect of having nothing with which to enthuse working-class people or young voters. Amongst 18-24 year-olds. Labour is ahead by 14% (it was 16% ahead in 1987) but Neil Kinnock stands 11% behind Major. However, amongst 18-20 year-olds, the Tories are 10% ahead. In addition, large numbers of young people simply will not vote when there is nothing to convince them that there will be any meaningful change in the way in which they live under a Labour government.
Recent elections across Europe have demonstrated an alienation from official politics and the established parties. The working-class parties, the Labour and Socialist parties of Europe. are paying the penalty of the domination of right-wing reformism which has little attractive on offer to the disenchanted and dispossessed of capitalism.
On all the recent major class issues, the performance of the right-wing reformist leadership of the Labour Party has been appalling. British Steel deliberately chose September 1992, after
IT IS THE failure of the Labour leaders that has put the result of a general election that should be assured in the balance. And they are already preparing for the prospect of a hung parliament. Labour's national executive (NEC) has endorsed the idea of proportional representation for the proposed Scottish parliament and for a new London-wide authority. An NEC working party is now looking into electoral reform for the UK. Although not expected to complete its report until after the election, Neil Kinnock declared that there is "a very strong case for making clear in the manifesto exactly what we intend."
In the event of a hung parliament, therefore, neither the Liberals, nor the SNP given Labour's commitment to a Scottish parliament, could afford to sustain a minority Tory government. After 13 years of Toryism, it would destroy
[page 6]
their base of support if they were seen to maintain the Tories in office for another term.
The result of the election then could be a '1924 scenario' - where Labour formed a minority government dependent upon Liberal support, even though the Tories were the largest single party; a '1929 scenario' - where Labour was the largest single party, but still a minority government; or even 1964 - where Labour won a small overall majority. An outright Tory victory, with a massively reduced majority, is still possible but, barring the most unlikely electoral arithmetic which gives the Vister Unionists the balance of power, a minority Tory government is almost ruled out. Even the Un ionists would not necessarily turn out to be dependable allies for the Tories.
If the Tories do win, however, the situation that would open up would not be a simple repetition of the last few years. A fourth Tory government, in the economic, social and political situation that has developed, would still herald the beginning of a new era in British society After a short period of despondenc!: there could be big movements on the industrial field Attempts at restraint by the trade union leaders would increasingly be pushed aside. The idea of waiting for a Labour government would no longer hold any validity. The feeling will grow: take action or see your conditions ground into the dirt. If the union leaders try to hold back the tide it will be diverted into unofficial channels.
The Tories are committed to privatising British Rail, and to making further private inroads into local government, the civil service, and the post office. A hint of the future has been given by London Underground's new company plan which entails severe reductions in jobs. Signit- ¡cantly it has been met with a willingness to struggle by the tube workers. Rapidly, a new mood could develop in industry in response to a fresh round of attacks by another Tory gorernment.
In the South of Ireland, apparently from nowhere, a mood for industrial action developed recently. The Irish trade union leaders were forced to call a one-day public-sector general strike for 28 January in opposition to the gorernment's attempts to undermine the national wage agreement. Such was the momentum that developed. the police agreed that they would take their one-day emergency leave on that day. Even army association representatives attended joint meetings with the public sector unions. In the face of this, the government retreated, promising to honour the national wage agreement. Soon after premier Haughe! was gone. 'the Great Survivor' as Fianna Fail leader since 1979 ditched. as the Irish ruling class viewed with apprehension the underlying discontent ot the Irish workers
Movements of
this
speed
ITRE
Guil
develop in the L.K following a fourth Tory victory: With only a small majority they would not seem the impregnable power that Thatcher appeared to many workers. with her iron grip over the Commons. Big protests would still flare up among youth, who would feel they have little left to lose. A renewed campaign against student poverty could be unleashed. Students have been mobilised not just on more general questions such as opposition to the Gulf war, but on their own immediate, material needs — and they won't go away. The potential for a movement to develop against racism would not be cut across by a Tory victory.
On top of this, dramatic developments could break out in Scotland. The Tories would be the government, albeit with a small majority, in the UK. but could be reduced to perhaps three seats in Scotland. Yet. in the face of the uproar of the Scottish working class and youth, the Tories seem to be intent on holding the line against more than token concessions to devolution. There is the possibility that, under pressure from below to take a stand against the ravages of a forth Tory government. the Scottish Constitutional Convention, which includes the Scottish Labour Party and the Scottish TUC, could declare itself a parliament-in-waiting and a period of struggle develop in Scotland around the national issue.
Militant would intervene in the social upheaval that would develop in Scotland in this situation, to argue the case for socialism while defending the national rights of the Scottish people. We stand for the right of self-determination for the Scottish people, including, if they so decide, the right to separation. But we do not advocate separation as a solution for the workers of Scotland. The unity of the working-class
High unemployment will continue.
Dramatic events cr unfold i Scotland.
MIR
[page 7]
60 MIR Spring 1992 The election
AM HURS
ere fee Lal be
will be ing that our can pushed.
throughout Britain is vital for a successtul struggle against capitalism. We therefore call for autonomy for Scotland, with a Scottish parliament with full economic powers. In the event of a Tory victory and a struggle developing in Scotland around the national issue, we would campaign for the Labour leaders' to defy the Tory government and establish a Scottish parliament with a commitment to carry through socialist measures, including nationalisation, to improve the lives of Scottish workers and youth. This would attract the support of workers in England and Wales and be an inspiring step forward in the battle for socialism throughout Britain.
Some recent polls have recorded that up to 50% of Scots now favour independence. Although the desire to see the back of the Tories still places Labour ahead in Scotland, support has fallen to around 40% - only just above Labour's average poll rating for Britain as a whole. The polls also indicate that, on Scottish voters' list of priorities, the national issue falls behind unemployment, health, poll tax, education and living standards. But particularly under a new Tory government this could be quickly transformed into large-scale, active support for their national rights.
SOME OF THE Labour leaders hope that, having won the election, the worst of the recession would soon be over and Neil Kinnock would then be able to enjoy the fruits of an upswing. But a Labour government under Neil Kinnock will not usher in a period of social peace and tranquility.
Despite their best efforts to offer as little as possible, there will be big expectations in the Labour leadership to deliver meaningful changes. After 13 years out of office they will be given the benefit of the doubt for a time. But then there could be movements. particularly in the public sector, of workers who would feel more confident at challenging cuts, restrictions on spending or demanding the implementation of Labour's minimum wage proposals. There will be a feeling that a Labour government can be pushed into policies benefiting working people.
There will also be the belief, however mistaken, amongst many workers that taking action under a Labour government will not see the full force of the Tory anti-union legislation coming down on the heads of the trade unions or individual strikers. In fact, the Labour leaders are not committed to repealing the Tory anti-union legislation and in the major battles that would at some stage develop under a Labour government, the employers would consider using them against the unions.
Nonetheless, any economic recovery, which is inevitable at some stage as part of the capitalist cycle of boom and slump. would be accom-
panied by a renewed movement in the private sector. This will take place whatever government is elected. Workers would move in an attempt to secure their share of any increase in profits. For example. last year, after a number of lean years for the German steel industry, unification increased demand, which led to a boost in profits. The steel workers staked their claim for a share with a 10.5% wage demand, threatening to strike even though Germany was on the edge of a recession.
However, if Labour does inherit an economy starting to climb out of the recession, it won't in any way be healthy. During the boom years of the late 1980s, up until 1990, the current account deficit hit £20bn a year. Last year, even in the recession, it was still at the level of sobn. In contrast, during the 1979-81 recession, Britain was running a surplus on its balance of trade. This time, as soon as consumer demand begins to pick up again or industrial investment starts to recover, Britain will suck in manufactured imports - both consumer and capital goods. This will create a fresh balance of payments problem, with pressure on the pound and a return to the memories of 1976. That is the consequence, twice in ten years, of a collapse in manufacturing investment added to the undercapitalisation for a historical period of British industry.
A Labour government basing itself on capitalism will be totall! at the mercy of the world economic picture. It is possible that US and Britain could start to inch ahead towards the latter part of the year and Germany and Japan would merely experience a slowdown in their rate of growth. The OECD secretary general, at an unofficial Davos world economic forum in January, argued that: "We do not expect a strong rebound in any country. There will not be a double dip but a mild and progressive acceleration - not. however. towards very high rates of growth."
But this 'most favourable' scenario for the next few years internationally. would not be a return to the artificially stoked-up growth rates of the late 1980s. but a recoil from their inflationary consequences. It would mean a period of high interest rates, especially in Europe. led by Germany: It would mean a period of tight control on the money supply and a number of years of a 'slower growth recovery
On the other hand the immediate prospects for the world economy could turn out to be a lot bleaker. Germany has registered three consecutive quarters of negative growth: it is already in recession. Japan is slowing fast. The OECD expects it to achieve only 2.*% growth this year (it averaged 5% per year from
1987-90). Howerer. financiers Kleinworth Ben-
son expect only 1% Japanese growth. The spec-
tre of a synchronised world recession, which
they have managed to avoid over the last two
[page 8]
KELTY DON'T PAY BOON PAY 0 PA years of decline, now haunts the capitalist powers internationally. An incoming Labour government could find that the world economy has fallen over the edge into recession, continuing the deep recession in the UK for another twelve months or more. This would seriously restrict the room for manoeuvre ofa Labour government. Moreover, the Labour leaders have constrained themselves by their enthusiasm for the European Exchange Rate Mechanism (ERM) and their commitment to defend the over-valued pound within the ERM. At a time when former Tory minister. Nicholas Ridley, Thatcher's former advisor. Sir Alan Walters, and Thatcher herself. raise the idea of a floating pound or a devaluation, it is the Labour leaders who are determined to maintain the value of the pound, even though it continues to put British industry at a trade disadvantage. Of course devaluation, a departure from a policy of deflation. would push up inflation in Britain.
With their commitment to try and 'manage' capitalism. a Labour government would be set on a collision course. over time. with the organised workers. A new generation will start to come forward to take shop steward and union rep positions, a generation less experienced but not disheartened by the difficulties of the late 1980s. All this would lay the basis for a shift to the left inside the trade unions which at some stage would have its reflection inside the Labour Party.
The mid 1990s will be a period of economic instability: uncertainty, and the persistence of relatively high unemployment, even during an upturn — all the ingredients for a radical change in the outlook of the masses. This broad per- ›pective has also entered the consciousness of the ruling class. A year ago. world imperialism emerged from its victory in the Gulf with its confidence buoyed up. Oil prices had not risen. 4 FEDERATION OF EDINBURGH ANTI POLL TAX GROUPS Better to break the law than to break the poor!"
DON'T COLLECT DON'T PAY!
YOU WONT CEr MINE 81 The bourgeois had stamped their authority on the third world. Gorbachev's Soviet Union had meekly trailed behind US policy in the Gulf and elsewhere. And if Britain and the US still languished in the trough of recession. Germans and Japan were advancing and would hopefull! see the world economy through.
Today, however, Britain and the U'S are still in recession, Germany has just joined them, and in Japan there has been a significant decline in the rate of growth. But their biggest headache is the collapse of the Soviet Union and their fears for the future of the different republics of the new Commonwealth of Independent States. wonder the former head of ICI, Sir John Harvey Jones, reflected on TV's Question Time that New mass the world is proving a more worrying place struggles will than at any other time in his lifetime. Any increase in capitalist confidence of 12 develop.
months ago has rapidly disappeared. At the January meeting of G? finance ministers, they could only agree on their joint impotence. Whatever they did, it was unlikely to have any major effect on the world economy. And most of all, it is the British capitalist class, with their weakening manufacturing base, whose confid- The general election will mark a sharp change in political developments. A Tory government with a much reduced majority could be returned, to face the full force of the accumulated wrath of 13 years. Or Labour could win in a diff icult economic environment, unable to realise the hopes placed in it but facing a working-class more confident of taking action. The mid-90s therefore will be very different from the late 1980s. It will be a period of storm and stress, in which the ideas of Marxism defended by the Militant will be poised to gain ever increasing support. O MIR O7
[page 9]