Strike action in public sector
In the immediate period the battle is likely to be concentrated in the public sector. Last year more than six million public sector workers were given what was effectively a pay cut. From Brown's point of view it is imperative that the government presses ahead with pay restraint again this year and in particular the introduction of three year pay deals.
National trade union leaders are under enormous pressure to fight on this issue. They were able to avoid generalised action last year with great difficulty.
Last year we campaigned for a one-day public-sector strike on the issue of pay at the same time as arguing in every public-sector union for a battle to defend their members pay.
Unfortunately, a significant section of people formally on the 'left' tail-ended the national trade union leaders, rather than, as we attempted to do, launching a struggle to force national ballots for strike action.
In the end strike action over pay was only organised by the Public and Commercial Services union (PCS), the Communication Workers' Union (CWU), and of course the magnificent action by the Prison Officers' Association (POA).
The vicious anti-union nature of the New Labour government was highlighted both by its backing to the hilt of the union-busting Royal Mail management and its reintroduction of the law completely banning the POA from taking strike action.
The latter could lead to further action in the prisons very quickly. In the face of this government hostility the very determined CWU strike and the 100% solid POA walkout, showed the willingness of workers to take resolute action to defend their pay and conditions.
Discontent with the very poor deal accepted by the CWU leadership was shown clearly by the significant no vote of 36%, in circumstances where, because of the role of the leadership, there was no clear way of effectively continuing the struggle.
It is very doubtful that they could have held back the tide without Brown's 'build up' to a general election.
However, Brown's failure to call a general election has seriously weakened the New Labour government, marking the end of the fleeting Brown bounce, and has made it much more difficult for the trade union leaders to avoid strike action this year.
The fact that the National Union of Teachers (NUT) executive has been forced to call a ballot for strike action is an indication of the enormous mood of discontent that exists below the surface and the difficulties national trade union leaders are having in holding it back.
However, having been forced to call a ballot will not prevent the NUT leadership continuing to do its best to dissipate the mood to fight.
Nonetheless, it would be wrong to conclude that the lack of generalised public-sector strike action was preordained or that there will not be action this year.
Even if the union leaders succeed against the odds in holding back the tide for another year, it will not hold indefinitely.
While pay is the unifying issue across the public sector it is far from the only cause of anger. Job cuts and increasing workplace pressures and management intimidation are also major issues. The question of pay also takes several different forms. As the Birmingham strike has shown, in local government there is enormous anger over the effects of single status.
It is absolutely clear that, unless he is forced to retreat by the working class, Brown will keep on attacking the public sector.
One of the reasons that Britain avoided recession in 2001 was the fact that Brown increased public-sector spending from the levels it was at for the first two years of New Labour government (37.7%) to around 41%.
In reality New Labour had kept to the previous Tory government's brutal spending plans which gave room for a relative increase.
In addition the increased spending was linked to privatisation. Nonetheless it did result in some extra spending on public services. Now, however, public borrowing has spiralled upwards and the government is struggling to avoid breaking its own '40% rule' - that public sector borrowing should never exceed 40% of GDP - even without the consequences of Northern Rock.
Even before a recession has hit, record low levels of taxation of the super-rich and the drying up of revenue from North Sea oil have put public finances in a parlous state.
They will undoubtedly get worse in the coming months. For example, in the 1989-92 recession the then Tory government's budget plummeted from a 3% surplus to a 7% deficit as tax revenues decreased and spending, particularly on unemployment benefit, increased.
This means that Brown is determined to continue with attacks on public sector pay. His government will also continue to attempt to cut other aspects of public spending. The latest 'welfare to work' announcements are aimed at 'out-Torying' the Tories with attacks on the poorest sections of society, but they will also have a real effect in cutting benefits.
At the same time the government's privatisation programme is accelerating, particularly in the NHS and education.
We will undoubtedly see further local movements against both privatisation and cuts and closures - whether libraries, schools, hospitals, or other public services.
There are also significant local struggles against post office closures taking place, which could potentially link up nationally.
A second wave of the national movement against cuts in the NHS is also probable. The Darzi Report is clearly going to recommend severe cuts. He has already talked of the need to cut future increases in spending on the NHS by £1.5 billion by 2016.
One of the key issues that he raises is for an end to district general hospitals and for these to be replaced by more specialist treatment centres.
In London, for example, this would have the immediate effect of closing 16 of London's 32 accident and emergency units.
Darzi also raises the need to cut the number of beds available in London's hospitals by 6% over the next ten years at a time when London's population is set to rise by 8%.
Up until now London has not been at the forefront of movements against NHS cuts, however, this is likely to change in the coming period.