The crisis fuels discontent

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Global economic turmoil has led to food riots abroad and spiralling inflation in Britain. Michael Bradley and Judith Orr report on the growing resentment towards the crisis-ridden Labour government

Where did it all go wrong for Gordon Brown? Was it his failure to call a general election last October? Was it the attempt to impose a pay freeze? Was it the vote in parliament to extend detention without trial to 42 days? Just one year into Brown's premiership a recent Gallup poll showed Labour's popularity at its lowest ebb of support since Gallup first asked people to declare their voting intention in 1943. The government is in a crisis that appears out of control and the central issue that is derailing Brown is the economic crisis.

This crisis is not confined to the boardrooms of big companies and the financial markets. This is a crisis that affects every single household in Britain. Rocketing price increases have become the topic of conversation on every bus, in every workplace and college. When basic foods go up by 12 or 14 percent everyone but the very rich feels it. One Daily Mirror front page stated: "Cost of living up 11.6 percent... Mirror index shock increase: food up 15 percent; transport up 16 percent; utilities up 13 percent."

The housing market, which once fuelled the boom, is now helping to precipitate the crisis. Repossessions have doubled in the last year, house prices are falling but at the same time people's mortgage payments are actually rising as fixed payment deals expire and interest rates rise. The Guardian financial pages reported that there has been a 60 percent fall in people buying new build houses in the last year.

Rising fuel, food and transport prices are causing misery for millions. But how has the government got into this mess? Only a few years ago Brown was boasting that his economic policies had got rid of the boom and slump cycle.

This is not an economic crisis confined to Britain: it is a world economic crisis creating instability across the globe. Capitalist crisis links the teaching assistant in Bradford who can't pay her gas bill with the woman who joins food riots in Senegal. The United Nations Food and Agriculture Organisation states that the world's poorest countries could see their annual food import basket cost four times as much as it did in 2000. According to the World Bank, food riots have already hit more than 30 countries in the past year.

There have been major strikes and protests across the world, including South Korea, Egypt, Spain and France. Last year right wing ideologue Nicolas Sarkozy won the French presidential election. He was being hailed as the new Margaret Thatcher, but one year later his plans to break the French unions and privatise industries lie in tatters as strikes and protests have shaken his government. The rejection of the Lisbon Treaty in Ireland is further evidence of increasing resistance to the political establishment and its neoliberal priorities.

This crisis and the resistance to it are not only creating a crisis of political legitimacy for mainstream parties but also creating the conditions in which many people begin to question the very nature of capitalism.

It is important to understand that Britain is not immune to this process. The struggle may not be as bitter and deep as some countries, but nonetheless it is growing and creating massive problems for the government. Many media pundits are already warning of a "summer of discontent". The detonator for this panic was the victory of tanker drivers employed indirectly by Shell. This small group of workers organised a militant strike that forced the bosses to concede a 14 percent pay rise over two years. The strike showed the willingness of private sector workers both to join the pay revolt and to give solidarity, even if it meant breaking the law.

This victory is also being used as a benchmark for other workers. In fact, the Financial Times expressed the growing concern of bosses that so many inflation busting deals are part of two and three year deals linked to the Retail Price Index, which a year or two ago employers clearly believed was a safe bet to stay low. But it reported that four out of five deals over 4 percent were not linked to the RPI and so have been won by unions. "Mr Darling and John Hutton, the business secretary, argued last week that the Shell settlement was a one-off. But other recent deals include Drax Power, which in April agreed a 7 percent pay rise for 600 workers [plus a £1,500 lump sum], forming the second year of a two year deal. Babcock Engineering recently agreed a 7.6 per cent increase with 500 workers. Barclays has implemented a 5 per cent pay increase for 55,000 workers at the bank, as the first leg of a three year RPI-linked deal".

This wage fight is continuing to escalate. As Socialist Review went to press half a million local government workers in Unison voted to strike over their pay. The action planned for July has the potential to intensify the wage fight, and unlike previous strikes this involves a Labour affiliated union. This will take place alongside action by other unions.

The PCS civil service workers' union passed a motion that is likely to lead to a national ballot over pay and other issues in September. The NUT teachers' union conference backed a ballot for further strikes as a follow up to the stunningly successful multi-union strikes on 24 April, which drew new layers of militant workers into the movement.

Pay cuts

The CWU postal conference supported a strike ballot over pensions, mail centre closures and defence of the post office network - and the leadership responded positively to calls for a mass demonstration at the Labour Party conference.

The fury over pay cuts - and the fact that those cuts are driven centrally by Gordon Brown - combines with a wider disillusion with Labour to produce an unprecedented questioning of the unions' links with the party. At almost every conference the issue of whether (or at least to what extent) to continue supporting Labour was raised openly.

The firefighters' FBU union broke from Labour in 2004 after the government had behaved so aggressively against the union during its national strike. At last year's conference some delegates called for renewed affiliation to Labour. This time there were only a handful of votes against the decision to remain separate from the party.

The GMB union voted overwhelmingly to remove funding from up to 35 Labour MPs who had not measured up to a union assessment of their "value for money". GMB leader Paul Kenny dryly remarked, "We've examined the records of MPs both at local level and national level and many are doing a fantastic job, but there are a number who seem at times to be embarrassed by their relationship with the union. We don't want to embarrass them by giving them union money."

Kenny also told the conference, "We are going to consider our affiliation levels to ensure they represent the realistic level of support within the union for the party."

At the CWU, motions to disaffiliate from Labour or to democratise the political fund were defeated heavily. But this was largely because the leadership had supported an emergency motion which said that unless the government had sharply changed its policies towards privatisation and the running of Royal Mail by March 2009 "then the CWU membership will be balloted on whether they believe the union should fund the Labour Party at the next general election".

Speaker after speaker (including several Labour members) spoke to underline that this was the party's "last chance". Setting this deadline defeated those who wanted an immediate change in the relationship with Labour. But it is now a ticking time bomb that could explode and cause serious damage to the party.

Even at Unison, where the leadership worked hard to prevent a discussion about Labour, the issue was forced on to the agenda. Towards the end of the conference the delegates have a chance to vote for motions they think should be shunted up the order paper. This year every region of the union decided that the priority was a motion on having a review of the union's political fund and support for Labour. In the event it was defeated, but only very narrowly.

Earlier, Unison general secretary Dave Prentis had to declare that the pay deal in the NHS (which the union leadership had pushed) would have to be renegotiated if inflation continues to rise. He warned Brown, "It's time for the government to raise our people up, or our people will bring Gordon down."

The background to the conferences is a collapse in support for Labour among its core supporters and a widening sense of opposition to the system - challenging neoliberalism is now common currency among trade unionists. For example, the NUT and UCU conferences both agreed to campaign against military recruitment in schools and colleges, and the question of how best to build opposition to the fascist BNP was discussed at every conference.

The bitterness about Labour was underlined by an opinion poll commissioned by Unison just before its conference which showed Labour's traditional supporters deserting the party in their droves. Almost half of those who have regularly voted Labour at past elections now say they are less likely to vote Labour than they were in 2005. In addition, 51 percent of the general public say they are less likely to vote Labour than they were at the last general election compared to 4 percent who say they are more likely.

Who could have believed that the man who replaced Tony Blair would have managed to drive Labour support down so far and so quickly, by his handling of the economic crisis? Bank of England governor Mervyn King made it clear that things are only going to get worse when he said, "Rising fuel, gas, electricity and food prices mean that average real take-home pay will stagnate this year. It will not be an easy time, and I know that some families will find it particularly difficult." A new study by accountants Grant Thornton reported that official figures show that income inequality under Labour so far is already higher on average than it was under Thatcher.

One thing is certain. As with any economic crisis in history the government and bosses want workers to pay the price. This has sometimes been successful in the past. Attacks on conditions and financial hardship in times of crisis can have the effect of subduing class struggle. But such attacks can also lead to people questioning the system and fighting back. Such periods of instability polarise society, as we are seeing now. But polarisation does not necessarily mean that people move to the left. The election results for the BNP and the rise in anti-immigration sentiments are proof of this, and a warning. Polarisation is exactly what the word means - a move away from the centre of politics.

The government is on the rocks. Millions of workers want to see a serious battle to defend living standards, to take action for affordable housing, to halt the spread of privatisation and to defend secure jobs. What socialists do and how they react to events will make a difference. The left has already played a major role in shaping the pay revolt as it has developed. The anger felt by ordinary members in unions like the PCS, NUT and UCU found expression in the lead given from the unions' leading bodies.

This in turn has increased the pressure on Labour affiliated unions like Unison to move. The left has won an argument over the idea of joint action and turned it into a reality. Socialists have to continue to place themselves at the centre of the moves for action and unity across the unions. That means pushing for joint action where we can and supporting initiatives like Public Services Not Private Profit, Organising for Fighting Unions and the National Shop Stewards Network that attempt to build unity between trade unionists nationally and in the localities.

The left also needs to be able to raise a political as well as an industrial response to the crisis. We need to popularise a set of demands that activists from different political backgrounds, or none, can rally round. And we have to continue to raise the urgent need for political alternatives to New Labour, no matter how difficult they are to construct. This year's union conferences with the increasing attacks by New Labour make this project more important than ever.