As opposition to austerity increases Mark L Thomas looks at how the Tories are entering a new and much nastier phase and considers how the issue of European integration is forcing old divisions to the fore.
The government has entered a new and much nastier phase. Two events stand out. Firstly, George Osborne's autumn statement to parliament on 29 November promising further austerity - the day before the mass public sector strike - and 9 December, when David Cameron wielded the British veto to block proposals at a European Union summit for a new EU-wide treaty, much to the delight of his Eurosceptic backbenchers.
At first glance the significance of these events is easily overlooked. The Tories want more cuts and dislike the European Union? Isn't that just business as usual? Yet taken together they symbolise the collapse of the original economic and political strategy of the Tories and potentially a major political realignment as Cameron seeks to build support for the government by appealing to the right with a diet of nationalism and scapegoating in the face of rising opposition to austerity.
Osborne's announcement amounted to a declaration of war on workers. The original four-year programme of public spending cuts will now be extended to six. According to the Treasury, spending cuts and tax rises are set to amount to £147 billion a year by 2016-17, up from £126 billion predicted as recently as the March budget, and the cuts will be even more severe in the two years after 2015. And if the overall sums sound frightening, the details are equally unpleasant. Osborne announced a public sector pay "cap" of 1 percent for two years after the current two-year pay freeze - a measure also intended to set a benchmark for the private sector pay deals. And this is on top of the attempt to drive through a hike in pension contributions of 3.2 percent of overall pay for millions of workers (for a worse pension at the end).
More cuts also mean more job losses, with the total number of jobs to be destroyed in the public sector revised sharply upwards from 400,000 by 2016 to 710,000 by 2017. Osborne also brought forward the rise in the state pension age of 67 to 2026 instead of 2034, froze some tax credits and scrapped a planned increase in child tax credits.
But even that wasn't the final sting in the tail of Osborne's poisonous plans. He called for public sector pay review bodies to make pay "more responsive" to local labour markets. This would break up national pay bargaining in order to drive down wages in depressed areas. It is also an attempt to weaken the bargaining strength of the unions. Coupled with the rising calls by Tory ministers for paid facility time for public sector trade unions to be sharply curtailed and the threat that the accelerated programme of academies and "free" schools - both outside local education authority control and national pay bargaining - represent to the teaching unions, all of this marks a major attempt by the government to break key unions in order to drive its offensive through.
Falling living standards
No wonder then that the Institute of Fiscal Studies estimates that average living standards, which were falling even before the 2008 economic crisis hit, will not return to 2002 levels until after 2015. After decades in which overall working class living standards rose (apart from two years under Labour in 1976-78) this represents a staggering reversal.
Behind this grim extension of austerity lies the collapse of the government's original economic plans. Dreams that public spending cuts would be offset by a wave of private sector investment as the state stepped out of the way, allowing the coalition to head into a 2015 election with money to spend, have turned to dust, as growth forecasts have been slashed. Official projections now suggest that Britain's economic contraction will be longer than during the 1930s Great Depression and will result in a greater loss of output. And such assumptions exclude the possibility of the eurozone collapsing - hardly a far-fetched idea.
But the government is also facing rising hostility to its austerity programme, just as it further entrenches cuts. One sign of this was the scale of public support for the 30 November strikes, with one BBC poll suggesting 61 percent supported the strikes - rising to a remarkable 79 percent among those aged 18 to 24.
Cameron seems to have a made a calculation in the light of this to bid to shore up support by appealing to the right. Wielding the British veto at the EU summit in early December to prevent moves to a new EU-wide treaty and see off a threat to the City of London of a new financial transaction tax delighted backbench Tory MPs. But though use of the veto also reflected deeper tensions inside the British ruling class over its relationship with Europe (see page 20) it was no doubt designed to try and broaden the Tories' support, appealing to some of those who had drifted from the Tories towards UKIP in the past.
Attacks on multiculturalism
Cameron has also renewed the attack on multiculturalism that he launched back in February in Munich. In a speech last month to mark the 400th anniversary of the publication of the King James Bible, Cameron insisted, "Britain is a Christian country and we should not be afraid to say so."
Cameron went on to deride "passive tolerance", claiming this "has allowed segregated communities to behave in ways that run completely counter to our values". As David Edgar pointed out in the Guardian, key passages in this speech were directly lifted from the earlier Munich speech (despite many critics pointing out that there was no evidence for his claims of segregation by minorities). But his speech in December introduced a new element. Cameron now held multiculturalism responsible not just for Islamic extremism but also for last summer's riots: "One of the biggest lessons of the riots last summer is that we've got stand up for our values if we are to confront the slow-motion moral collapse that has taken place in parts of our country these past few generations. The same is true of religious extremism." Linking an attack on multiculturalism to the riots is a dangerous, if implicit, encouragement to those who want to explain the riots in racialised terms.
The Tories' lurch to the right is a reversal of the political strategy Cameron pursued in the period from his election as Tory leader in 2005 through to the formation of the coalition with the Liberal Democrats. Then Cameron's main effort was to steer the Tories away from an association with Thatcherism. Part of this included attempting to draw a line under the Tories' obsessive and hugely damaging debates about Britain's relationship with the European Union. Seen in this light, Cameron's embrace of a coalition with the Liberal Democrats was more than just a tactical convenience, but part of a strategy to marginalise the Tory right and its ideological fixations.
Crumbling Lib Dem support
Cameron seems to have calculated that much of the political capital that could be extracted from this approach has now been used up. And, paradoxically, the Lib Dems' crumbling support leaves them largely prisoners inside the coalition - to pull the plug and force an election would risk major losses. Cameron has thus been looking to reconfigure his support in the face of rising hostility to austerity. And savage cuts require nasty ideas to be driven through - Islamophobia, nationalist attacks on the EU, attacks on multiculturalism and so on.
None of this reflects a confident government. Resorting to racism and scapegoating is a reflection of weakness, not strength. The coalition itself is now simply a matter of mutual convenience based on attacking workers and sharing the spoils of office.
Above all, the government's problems reflect the rising unpopularity of austerity and neoliberalism more generally. One small reflection of this was that even as Cameron fulminated against rioters and Islamic extremists last month he also had to condemn (if only in passing) the immorality of bankers' bonuses and MPs who fiddled their expenses.
Providing an alternative to the agenda of cuts, nationalism and scapegoating will be vital in the period ahead. What are the prospects for our side?
Crucially, 30 November demonstrated that the mood inside the working class to resist the government's offensive is hardening. The strike was marked by several significant elements that underline this. Firstly, its sheer size, with up to 2.5 million workers taking part - the biggest single day of strike action since the 1926 general strike (bigger than the 1.5 million who struck in January 1979 against the Labour government's policy of wage restraint).
The strike was also notable for the active participation of strikers, despite the ludicrous claims by parts of the media that everyone went shopping. Some estimates put the combined number who demonstrated across Britain on the day at around 750,000, a remarkably high figure. This was also despite clear attempts by some within the TUC to keep a limit on the size of the protests.
The picket line also experienced a major, if inevitably uneven, revival. Report after report suggests that most cities and towns were strewn with picket lines, some small, but many with dozens and, in some cases, hundreds of pickets. The sense of solidarity and unity was matched by a widespread mood to continue the fight beyond one day if no concessions were forthcoming, with speakers at rallies who called for more action often the best received.
Splits at the top
But the new mood of resistance among workers hasn't been matched by some of those at the top of the labour movement. Ed Miliband again distanced himself from supporting the pension strikes, even if he softened his tone slightly from his earlier rejection of the 30 June strikes. Yet his failure to endorse and defend the strikes was particularly spineless - the strike after all was more popular than Labour currently is, so support could have boosted Labour. The real difficulty is that Labour accepts the need for unprecedented austerity, even if it argues about the exact speed and manner of its implementation.
Equally, the TUC under Brendan Barber repeatedly sought to head off 30 November - failing partly because of the scale of the votes for action, even in those unions perhaps willing to go along with the TUC, and the partly due to government intransigence. Barber accepts the argument that strikes would jeopardise Labour's electoral prospects. But as the flurry of negotiations before Christmas revealed, some union leaders - Dave Prentis of Unison, in particular - have pursued a strategy of going out the door once and then looking to settle as quickly as possible.
Yet despite government attempts to present the whole dispute as over, it's also clear that there are important splits inside the trade union bureaucracy. A number of unions either rejected the terms on offer outright or held off signing up to the government's "heads of agreement" and expressed significant reservations. The pensions dispute is a key opening battle in what will be a much longer war over austerity. It would be a criminal waste if the opportunity for our side to score significant advances was thrown away. But the lesson of 30 November is clear: the working class is capable of mounting a serious fightback.
Working with those sections of the trade union leaderships willing to give some expression to that feeling, while starting to rebuild rank and file networks and combining this with a political and ideological fight against the Tories' attempts to promote scapegoating and nationalism, will be vital in the months ahead.