Link to this page: http://www.socialistparty.org.uk/issue/637/10182
Tony Blair - a journey to Thatcherism
TONY BLAIR'S memoirs show that he really was Thatcher's heir. He tries to justify New Labour's capitalist economic policies, ferociously attacking Gordon Brown for daring to "depart a millimetre from New Labour." Blair and Brown, of course, jointly fathered the 'New Labour project'.
When the present recession started, Brown and his chancellor Darling spent hundreds of billions of pounds bailing out the banks. But they also put up the top rate of income tax for people earning over £150,000 a year to 50%. People were angry at rich business people giving themselves high salaries and bonuses and paying very little tax.
Blair savages this policy from the position of the free market right. He says: "We should have taken a New Labour way out of the economic crisis: kept direct tax rates competitive (ie low - Eds), had a gradual rise in VAT and other indirect taxes to close the deficit."
Even after the stock market falls, Britain's richest 1,000 people still had a combined wealth of £258 billion. Yet Blair supported regressive indirect taxation that hits hardest at people on low or average incomes and opposed even ameliorative measures for the working class.
He argues that under Brown, 'tax and spend' policies were 'Keynesianism' and wrong. Keynes was a capitalist economist who argued that, in a recession, the state should step up its spending to stimulate demand.
Blair, though, does not think a mere crisis is any reason to change New Labour's pro-market neoliberal policies. His memoirs say: "The role of government is to stabilise and then get out of the way as quickly as is economically sensible." He thinks government measures could "squeeze innovation out of the financial sector."
Recession, however, made capitalist governments desperate to save their system. Brown's government was forced, to Blair's chagrin, not only to pump in taxpayers' money but part-nationalise banks such as Northern Rock and RBS.
The capitalist class in general welcomed the measures taken to stop the banking system collapsing. But Blair hates all aspects of Keynesianism and sees any deviation from neoliberalism as Bolshevism! Even leaders of capitalist parties such as the US Democrats can attack the rich in words at least but not Blair.
Blair speaks like a Tory right-winger because he'd changed Labour, a party based at grassroots on the working class and the ideas of socialist nationalisation, into New Labour which - under the thumb of big business - favoured privatisation and thought wrongly that capitalism was possible without booms and slumps.
When this proved wrong, and the weak, unstable boom collapsed, Blair may have thought all his work was unravelling. Possibly he had nightmares of battles such as those Labour had with the Socialist Party's predecessor Militant in the 1980s!
But what is this red dragon that Blair aims to slaughter? Brown's economic measures after the recession were very mild Keynesianism - little state spending was increased apart from the bank bail-out. And Darling's post-recession budgets started cutting public spending to pay for the bailout. This policy continues under the Con-Dem government.
Keynesian policies would not end this crisis - that would need socialist policies based on nationalisation. But Blair has fallen out with his New Labour soulmate Brown because their attempt to build a permanent party of government based on free market capitalism has failed.
Workers will take heed of this furore at the top of the Labour Party. Instead of choosing between almost indistinguishable potential Labour leaders, they should join in campaigns to resist the cuts and fight for a new mass workers' party.
In The Socialist 9 September 2010:
Socialist Party news and analysis
Socialist Party youth and students
Socialist Party workplace news
Socialist Party NHS campaign
International socialist news and analysis
Socialist Party feature
Socialist Party review