New Labour's Turbulent Second Term

NEW LABOUR managed to survive its first term of government without facing a mass movement of struggle by workers. They did, however, face many protests and crises, not least the oil price protest last September, which would have taken the entire economy to a standstill had it lasted a further few days.

Although it had mass support, the action itself involved only a small number of people, mainly transport vehicle drivers and farmers, and was short-lived following huge pressure to back down from the government and trade union leaders.

Nobody can predict exactly what will happen in New Labour's second term, but we can be sure that it will be turbulent and very different to the first.

Although Blair made it clear in his 1997 election campaign that he would do nothing to upset big business, this did not stop Labour voters from holding out hope of improvements in living standards. Yet, far from improvements, the gap between rich and poor has widened and there has been an onslaught of attacks, in particular through devastating restraints put on public expenditure. Hopes that Blair will deliver advances have now been dashed for most people, giving way to great anger at the starting point of his second term.

Economic havoc

ANOTHER MAJOR factor that will influence New Labour's second term is the approaching economic recession. The US economy is heading downwards with no end in sight at present.

Although there have been falls in the massively overvalued shares on Wall Street, they are still estimated to be overvalued by 50%, so further falls are still very likely. All factors point towards a prolonged US recession, an experience that Japan is still immersed in. Europe, including Britain, is already feeling the effects.

The degree of effect in Britain will depend on how deep and long the recession is. But given the levels of poverty that exist now, it is certain to wreck havoc on working-class communities throughout the country.

200,000 jobs have been lost in manufacturing industry over the last two years, and the pre-recession prediction of some economists for this year is the loss of a further 150,000.

This is devastating enough, but an indication of what can happen following an economic crisis can be seen in Turkey, where since the onset of severe crisis just three months ago, 500,000 jobs have been lost and workers' living standards have plummeted by around 30%.

In Britain, it will not be just manufacturing that is affected; every sector of the economy will be hit hard.

New Labour has proved its pro-big business credentials in its first term and is determined to continue on that course. They promised virtually nothing to ordinary people in their manifesto, except some modest cuts-reversals in public expenditure which were in the main announced last year.

How much difference will a 10,000-strong increase in the number of teachers make, when this is only a 2% increase in the total number? Likewise, the increase promised in the number of nurses only amounts to 6%.

Privatisation

BLAIR HAS made it abundantly clear that privatisation will be stepped up in health, education and all other sectors. Observer columnist Andrew Rawnsley wrote: "On the quiet, government advisers have told health companies that anything is possible and everything is up for grabs, from taking over failing health authorities to running GP surgeries" (20 May 2001). Twenty local education authorities now have the private sector delivering all or part of their services.

Initially, the handing over of schools out of the public sector was made to 'non profit-making' companies. But, a recent ominous development has been the appointment of the undisguised profit-making firm, Nord Anglia, to run Abbeylands school in Surrey.

New Labour's limited promises were made in a period of economic growth, and according to the Chancellor, Gordon Brown, depend on continued growth at 2.25% per year. So his plans will be thrown into complete disarray once recession bites.

Also, given the government's commitment to the interests of the capitalist class, they will turn to a new round of attacks on benefits, services, pensions and wages to try to prevent a rising public-sector deficit.

Working-class and middle-class people have been outraged by the effects of rail privatisation and are increasingly aware of the dire consequences of privatisation elsewhere.

This is adding to the widespread discontent that exists. During New Labour's first term there were a number of strikes and disputes which gave a glimpse of the anger and frustration: more recently there have been the demonstrations of car and steel workers against closures, strike action by London Underground workers against attacks on health and safety through privatisation and the postal workers' strikes, to name a few.

The fact that breaking points are eventually reached was well summed up by a striking postal worker, saying: "This is the straw that broke the camel's back. It comes down to one question doesn't it? How many times are you going to get kicked by them?" (Guardian, 24 May 2001).

Explosive mood

WHILST THE overall level of strikes has been low, to foresee future events it's necessary to look beyond the action taken, to the general mood that exists amongst workers in Britain. The conclusion that follows is that the situation is potentially explosive.

View any section of workers, whether teachers, civil servants, shop workers or others, and it's clear that a combination of workplace stress, job insecurity and low pay is fuelling a degree of anger which will inevitably be expressed in upheavals at some stage.

There would already have been major struggles over the last few years if it were not for the role played by trade union leaders in holding them back. For instance, National Union of Teachers leader, Doug McAvoy, has defied the decision to take action against performance related pay made by two union conferences. But action cannot be held back indefinitely.

The trade union leaders, although ideologically committed to Blair's project of support for big business, have recently expressed unease about his brazen announcement of more public-sector privatisation. They are reflecting, in a small way, the pressure from below, and are fearful of a backlash due to worsening pay and conditions.

Though they will continue to do their utmost to prevent major struggles from breaking out in the coming period, there will inevitably be times when they are temporarily by-passed, such as in the recent post strikes over which they had no control initially. There will also be times when some will feel forced to lead action or demonstrations, to placate rank-and-file demands for defence of jobs, pay and conditions.

Labour splits

WILL ANY of New Labour's leaders or remaining activists rebel against attacks on workers' living standards during this government? We have pointed out before how the New Labour leadership have shut off the channels inside the party through which any real pressure could be brought to bear on their leadership.

Also, if it were necessary, Blair would turn for parliamentary support to the Liberal Democrats rather than be a hostage to a left-leaning layer in his own party.

This is not to say, however, that individuals, and at times groups of members will not leave the party in disgust when they feel that Blair has gone too far. Certainly there will be continued disagreement amongst the leadership, which could open up into more public splits under the pressure of events.

Revolt against New Labour will not just come from the industrial arena, but will come from whole communities, students, pensioners, the unemployed and other sections of society. Students are suffering the effects of university funding cuts as well as unprecedented debt levels arising from the introduction of tuition fees and the abolition of the student grant.

Amongst young people in general, a layer have developed a strong awareness of the environmental destruction and workplace exploitation of multinational companies on a global scale. They have shown willingness to get involved in anti-capitalist activities. This activity is at an early stage, but is a clear sign of a changed consciousness among a layer of youth, which will lead them onto the plane of struggle in the coming period.

The growth of the far right into a sizeable force is not likely during this government. Nevertheless, New Labour will be laying the basis for disillusioned youth to turn in that direction if a workers' alternative is not posed.

The general election has shown even more clearly than before that there is little to choose between the three main political parties and that there is an urgent need for a new mass party to represent workers' interests. The recent decision of the Fire Brigades Union conference to support election candidates in opposition to New Labour is an initial step towards seeking political representatives who will stand up for workers' interests.

The struggles and events that occur during Labour's second term will play an important role in laying the ground for the building of such a party.

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In The Socialist 9 June 2001:

Labour wins but anger grows