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Posted on 20 May 2008 at 0:00 GMT


Force more u-turns out of this weak government

A YouGov opinion poll has put New Labour on 23%, their lowest share of support since polling began in the 1930s. This follows their disastrous showing of 24% in the local elections earlier this month. New Labour MPs are debating whether Gordon Brown will have to be removed if they are to save their jobs at the next general election. But the same YouGov poll showed that replacing Brown as Labour leader would not improve Labour's standing, as his colleagues are viewed as even worse potential leaders.

The Tories on the other hand were on 49% in the opinion poll. But this shift is ephemeral in the sense that it is largely a reaction against Labour. Also, other factors have come into play, such as in the London mayoral election, the Tory Boris Johnson portrayed himself as a fresh face and a 'rebel'. When the Tories are tested out - whether in councils, the London mayoralty or nationally - and are found to be no better than Labour, support for them will also plummet.

The speed with which this can happen is being illustrated in France, where right-wing president Nicolas Sarkozy celebrated his victory only last May, but has now sunk in the opinion ratings to a record low of 36%.

This does not mean that when Tory support falls, Labour is likely to have a sustained, major resurgence in popularity. As long as the Labour leaders are wedded to neo-liberal policies of privatisation, cuts and low public sector pay, this will not happen. But some volatility in support for the main parties is inevitable in this period, as there is so little to choose between them that small factors can have temporary sharp effects. It is also the case that the gains made by the Tories and to some extent the far-right BNP will contribute to the volatility, as many people will recoil at the prospect of them regaining some influence.

Having previously argued that it would be "totally irresponsible" to "unravel or rewrite the budget" that abolished the 10p tax band, chancellor Alistair Darling did a U turn and raised the personal tax allowance for all tax payers, to compensate most of those who had lost out. Fearing further meltdown in the looming Crewe and Nantwich byelection, he suddenly found 2.7 billion to make this major, backdated tax change.

Damage limitation

Losing the by-election would be a serious setback for Labour, as they are defending a 7,078 majority and the Tories have not won a byelection from Labour for 30 years. Around 100 Labour MPs and ministers have descended on the area, though notably not Brown himself, who is probably viewed as liable to do more harm than good. But whatever the by-election result, the emergency tax compensation will be seen for what it is - as a damage limitation measure that has been wrung out of the government by mass outrage.

To counter accusations of irresponsibility in increasing the public deficit, and of giving in under pressure, the government tried to dress the 2.7 billion package up as a 'Keynesian' measure that will boost the economy by increasing consumer spending. But it is just a drop in the ocean in the economy as a whole, so will not make much difference.

And although it was a significant climb down, there are 1.1 million people earning under 13,000 a year who will still be out of pocket and so will remain angry that Labour is penalising the low paid.

This budget U-turn will add to the feeling in the population as a whole that the present government is very weak, and that it can be forced into taking measures in the interests of ordinary people if the pressure is great enough. Public sector workers in particular need to take this message on board. Following the recent strike action of teachers, college lecturers and civil servants, 970,000 local authority workers are soon to ballot for strike action against a 2.45 per cent wage increase offer. Coordinated action by the entire public sector could force this government to back down on its pay limit.

And with the economy heading for greater crisis, ordinary people have no choice but to fight back. Any wishful thinking by economists that the worst of the problems are now over, was dealt a blow by the comments last week of Mervyn King, the governor of the Bank of England. He declared that inflation is going to rise further and that take-home pay will be squeezed as a result. That in turn will slow consumer spending and reduce economic growth.

The signs of an impending long period of economic crisis are accumulating every week. The latest include the news that the cost of living rose at its fastest rate in almost six years last month, that food prices are now nearly 7% more than they were last year, that unemployment has risen for three consecutive months and that average house prices have fallen for six.

As well as being hit by rising costs and inadequate pay rises, people are less able to make ends meet by borrowing money, as the credit crunch has resulted in fewer loans being available and at greater cost.

The economic changes taking place will have a certain shock effect, but they will also have an impact on political consciousness. This will not help any of the three main capitalist parties in the long run, but will inevitably do the opposite, by compelling ordinary people to search for a political alternative that can act in their own interests.

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