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From The Socialist newspaper, 25 January 2007

Defending the public sector

Trade unions must give a lead

THIS YEAR promises to be decisive one in the government's attacks on the public sector - the NHS, schools, the civil service, the post office and all parts of local government.

Bill Mullins

New Labour and indeed all the main political parties are as one when it comes to the public sector. They all believe that more and more should be handed over to the private sector so capitalist investors can make profits. During the last general election in May 2005, it was a competition over who could go further in attacking the public sector.

Tory leader Cameron 'generously' offered to help Blair out in supporting his education 'counter-revolution'. The Tory deputy chairman, Howard Flight sent a torpedo through the Tories' election campaign when he promised even bigger cuts than the 35 billion they had already signed up to.

The Liberals say one thing on an election platform but when they have power at local level they do the opposite, as our Socialist Party councillors have found in Coventry, Lewisham and Stoke-on-Trent.

Their leader, 'Ming' Campbell, gave support to the successful resolution at the Liberal spring conference last year to privatise the Post Office. Nationally they are now competing to outdo New Labour with their desire to privatise prisons, the Royal Mint, and several other services that New Labour has not got round to yet!

New Labour attacks

But it is what New Labour have done to the public sector in government, with no real opposition from Labour MPs or the Labour Party membership, that has revealed most clearly that the Labour Party cannot in a million years be considered the party for working people any longer.

Tony Blair and his government, including Gordon Brown, stand for the destruction of the public sector. They want the only role for elected representatives in parliament or in local councils to be to decide which private company will be handed the government contract to supply whatever minimum services they can get away with providing.

Take the civil service as an example. Under New Labour, waves of attacks, cuts and privatisation have taken place. When Gordon Brown announced in his budget speech in 2004 that he wanted to get rid of 104,000 civil service jobs, he was following through what had been planned under the "Gershon" proposals.

Brown has led a campaign to convince people that government services, from the Ministry of Defence to the Department for Work and Pensions, would be better supplied by the private sector. John McInally, a Socialist Party member on the civil service union PCS national executive, exposed what is happening in an article in the Socialist in December 2006: Government strategy is to "cut resources to the bone, implement over-ambitious 'change' programmes, drive down staff morale by staffing cuts and attacks on conditions, implement 'private-sector' factory style practises utterly incompatible with public-sector working, reduce or destroy service delivery and then claim the civil service can't deliver - the inevitable conclusion, privatisation."


The amount of money available to the private sector from dipping into the public purse is astronomical. Hundreds of billions of pounds is spent every year by government on services to their citizens, from the NHS to local authorities, the civil service and the massive subsidies to the rail companies. But boosting the profits of the private sector is not the only reason that capitalism is in favour of privatisation.

One of Gordon Brown's first acts as chancellor back in 1997 was to effectively privatise the bank of England. He did this to distance the government from any responsibility for deciding interest rate levels.

All governments have faced pressure in the past from manufacturers, trade unions and elsewhere to keep interest rates low. But the finance wing of British capitalism wanted interest rates at a level to ensure that the pound would attract overseas money.

Now, as part of Brown's fiscal strategy, he is no longer responsible for the Bank of England's decisions. Instead the Monetary Policy Committee (MPC) sets the rate "independently" of the government.

This was part of the strategy to keep government at arm's length from monetary policy so they could say to those who put them under pressure "it's not us but the MPC".

The reason for this change lay in capitalist classes across the globe turning away from the economic policies of Keynesianism - that governments should spend to avoid economic slumps - to one of brutal monetarist policies adopted by Thatcher in Britain and Ronald Reagan in the USA.

By keeping government spending as low as possible, governments' need to borrow money is also kept at a minimum.

One of the reasons for the crisis that past Labour governments found themselves in was, when they borrowed money from the money market it increased the public sector borrowing requirement. This increased interest rates.

Money is a market like any other and when people are competing in the market (government, manufacturers, private borrowers etc), this tends to put the "price" of money up, ie interest rates.

But if you privatise everything you can, more borrowing is by the private sector and not added to government debt and spending.

Another big reason for privatisation, particularly by Thatcher, who started the whole process when she took on the miners, is to break the power of the public-sector trade unions. 60% of public-sector workers are in unions whilst only 17% are in unions in the private sector.

These nearly four million unionised public-sector workers are a potential threat to government plans. That is why unions like the PCS, with its left leadership, are crucial to defending the public sector.


Unfortunately the PCS leaders are almost alone in wanting to put up a fight for their members' jobs and the services they provide. Most of the other public-sector unions have leaderships which are wedded to the Labour Party and cannot conceive of any other arrangement. They continually say: "It's either Labour or we get the Tories back."

The attacks on the NHS, with privatisation and cuts at the same time, have shown that there is no present health trade union national leadership that is prepared to give a lead, not just to the workers in the NHS but the community at large. This is despite the tens of thousands who are marching every weekend against this or that closure at a local level.

The health unions' leadership have played an abysmal role. For the moment the government is not facing a united struggle to defend the health service but a continuation of localised battles which can go on for some time.

The PCS national executive is giving a lead to their own members and we are at the beginnings of an important struggle. The PCS is not able to defend the whole of the public sector by itself. But its example can rub off on other public-sector unions.

It will be up to the left in unions like UNISON to demand that their union follows the PCS lead and helps unite the struggle to defend the public sector.

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In The Socialist 25 January 2007:

Striking to defend public services

Trade unions must give a lead

War and terrorism

Iraq: build for 24 February protest

'No to the US base'

Socialist Party news and analysis

Labour's super-rich friend

Behind the bonus bonanza

Save our school buses

Support the paper that fights for a socialist future

Big Brother

Big Brother viewers reject racist bullying

New Labour hypocrites wade into Big Brother row

Endemol defends racist abuse

Workplace news and analysis

Strike ballots show willingness to fight

British Airways in more battles with workforce

London Underground workers ballot for strike over pay

Socialist Party NHS campaign

NHS still needs national demo

New Labour leads the big-business assault

A socialist programme for the NHS

Socialist Party Marxist analysis

When will the bubbles burst?

Socialist Students

Join the national day of protest on 22 February

Building for the 22 February Day of Action

International socialist news and analysis

Sri Lanka: anti-war organiser attacked

Workers brave regime's bullets


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