15. New Labour in government



Right from the beginning the New Labour government showed that on key issues it was not likely to be even a ‘reforming’ government, determined as it was to carry on in the footsteps of the Tories. For instance, the Guardian revealed that the Dearing committee, set up by the previous Tory government, was considering a student voucher plan to “revolutionise the funding of universities and colleges”. This would mean that free access to education would end. Parents would be encouraged to save for their children’s higher education. Students whose parents did not take out special credits might, according to the Guardian, graduate owing £10,000-£20,000. Today, of course, debts of this order are considered quite small! Students finish university with twice or even three times as much debt. It is an indication of how far Blair and New Labour went in attacking students, indeed the whole of education. We wrote: “The contradictions between the promises of the government and the realities of what they will or will not do, will be borne by the working class. The continuation of Tory policies in the public sector, particularly with regard to pay cuts, means inevitable collisions. The anti-union laws of the Tories have been kept in place to be used if necessary against public sector workers who ‘get out of line’.”1

Just how far New Labour was prepared to go was illustrated by the treatment of the Prison Officers Association (POA) at the hands of Home Secretary Jack Straw. In his autobiography – modestly called Last Man Standing – he used a few choice words to describe the POA leaders: “I always worked hard for a constructive relationship with the unions, but the POAwere in a category of their own… They went in for impossiblist demands, and then cried ‘betrayal’ when these could not be met.”

For Straw anything which smacked of demanding democratic rights, let alone socialism, was ‘impossiblist’. When the ‘naughty children’ of the POA would not listen to ‘headmaster’ Jack, he did not hesitate to use the anti-union laws, which he had criticised in the past. He writes: “On the morning of Wednesday 29 August 2007, I was woken at 6.30… The POA had, 15 minutes before, given notice that they were to begin a nationwide 24-hour strike there and then.” This was, according to Straw, “utterly irresponsible, made worse by the paucity of their excuse for the action – that a 2.5% pay rise was going to be phased, giving ([the POA] said), a real terms increase of 1.9%.” He accordingly took out an injunction against the union, requiring them to return to work.

He recounts that he was helped by the innately conservative national trade union officialdom: “Brendan Barber, TUC General Secretary, was immensely helpful in persuading the POA leadership to pull back.” The same Brendan Barber was to be equally ‘helpful’ to David Cameron in the 2016 EU   referendum, speaking on the same ‘Remain’ platform as the Tory prime minister. But Straw had decided to take revenge: “Since they had ambushed me, I’d return the compliment. During the autumn, I got collective agreement to add a provision imposing a comprehensive ban on industrial action by prison officers to a bill already going through the House [of Commons]. There was remarkably little dissent from Cabinet colleagues; just as remarkable was the fact that not a word about my intentions was leaked; everyone understood how high the stakes were. The ban went through with a thumping majority of 435. The POA had only themselves to blame.”2

Could there be a clearer demonstration of just how far New Labour had moved towards the right to become the finished expression of the interests of the bosses and the capitalists as a whole? We  stated earlier that in 1969, when Barbara Castle, Labour Minister in Harold Wilson’s government, tried to introduce anti-union legislation which would have banned certain strikes, she was opposed root and branch by the ranks of the labour movement, particularly the trade unions. This was how fundamental the defence of union rights was to the whole movement at the time.

Straw had formerly stood on the soft left, as he recounts in his autobiography. He voted for Tony Benn in the deputy leadership contest in 1981 and had been a supporter of the left-wing journal Tribune. But this was merely a synthetic leftism. Throughout his career he was more of a politician for the main chance, anything which would benefit his climb up the greasy pole. His rapid evolution to the right involved him in attacking Liverpool city councillors, the miners and supporting the abolition of Clause iv. Therefore, his attack on the POA was not unexpected. Yet the trade union leaders in the main ignored this rapid evolution to the right as Blair, Straw and the like, converted New Labour into a completely pro-capitalist weapon for the bourgeoisie. It was no longer even the ‘Second xI’ for capitalism, put into bat when there was a sticky wicket, a crisis. It had sought to convince the bourgeoisie before coming to power of its total loyalty to capitalism.

In his diaries, on the eve of Labour coming to power, Tony Benn related a conversation with the secretary of Chesterfield Trades Council: “He said that some union general secretaries don’t want the anti-union legislation repealed because it keeps their union under control, and I think he’s absolutely right. It explains why they don’t like strikes, because strikes put them under pressure, whereas, if there are no strikes and a bit of unemployment, it keeps their members quiet. I thought that was a significant comment.”3 Unfortunately, Benn, neither then nor subsequently, drew all the necessary political conclusions. Instead of boldly preparing for a new mass alternative, he dragged his feet through all the vicissitudes and attacks on working people which Blair and New Labour carried out both at home and abroad. Longer in power than any other Labour government, it was the most reactionary one. In fact, throughout the noughties it was the best possible government for the bosses and their interests.

It set out its credentials on economic policy by handing control of interest rates to the Bank of England, which met with universal praise from finance capital, in particular the City of London. This was a signal to the capitalists that it would not fundamentally interfere with the workings of the system. Control was to be in the hands of the representatives of the capitalists themselves, like Eddie George, Governor of the Bank of England, followed later by the equally conservative Mervyn King. He repaid his master Gordon Brown, Chancellor of the Exchequer after the 2010 election, by stabbing him in the back by implicitly backing the ConDem coalition and their brutal austerity policy.

However, we showed in Socialism Today that Blair had at least been consistent and open in his unvarnished courting of big business before he came to power. The trade union leaders and the left within the Labour Party should have asked questions about New Labour’s pro-capitalist policies but they adopted a head in the sand position, at best, echoing Dickens’s Mr Micawber, hoping that ‘something would turn up’. They were to adopt this position throughout the lifetime of the New Labour government. Ken Livingstone, erstwhile champion of the left, took a ‘vow of silence’, declaring: “I am not going to say anything now, I don’t want to be blamed if anything goes wrong.” Unfortunately, Benn adopted a similar approach: “I am a soldier in the middle of a war… I wouldn’t want to discuss my views of the generals.”4

Tony Benn, nevertheless, is unsparing in his diaries in charting the rapid switch of Blair towards the right, even when it undermines his case that the Labour Party could be changed. Before the election, he commented: “The big political news today is that… Tony Blair came out in favour of the privatisation of air traffic control, of government land, Channel 4, and so on.”5 He laments: “I’m totally out of sympathy with the politics of the Labour Party.”6 The same themes developed one month after the election: “Blair read a statement saying that the difference between left and right has gone,  the difference between ideologies has disappeared and we are now at the radical centre. It was all crap.”7 Moreover, the idea that the shift towards the right was merely at the top is contradicted by Benn himself when he remarked about the changing character of his own Chesterfield Labour Party: “For some time, the Chesterfield party was moving towards the right.”8

It could not fail to be otherwise, as careerists, timeservers and place seekers, whose main attribute was contempt for the traditions of the labour movement, swarmed into and around the Labour Party. What genuine workers remained were elbowed aside by the middle class ‘gilded youth’. This would be accompanied by scandals, tales of corruption and manipulation, particularly those who were gathered round the figure of Peter Mandelson.

They took their cue from the ‘master’ himself – Blair – who while showing contempt for working people, from his first day in office fawned at the feet of the rich and wealthy. In his autobiography A Journey, he states: “I hate class; but I love aspiration… When I was with a group of entrepreneurs, I felt at home.” This meant concessions to the rich: “So for me, top-rate tax was not about top rate tax. Of course you can make a perfectly good case for wealthy people paying more… but I wanted to preserve, in terms of competitive tax rates, the essential Thatcher/Howe/Lawson legacy. I wanted wealthy people to feel at home.” If largesse from the table of the rich fell into his lap after he left office, who could object? “The stories of me being dazzled by the wealthy are always ludicrously exaggerated… nonetheless, I sometimes underestimated the ruthlessness and amorality that can go with moneymaking.”9 This sanctimonious hypocrisy is out of the mouth of a former prime minister who has cashed in on his reputation as a reliable supporter of the rich, amassing an estimated fortune of £80 million, some of it reward for advising dictators like President Nazarbayev of Kazakhstan! Start as you intend to go on! Blair and Brown bent the knee to big business, and Blair was certainly richly rewarded later.

If this meant challenging all the past gains of working people, the Blair government made it clear that it would do so from the outset. Frank Dobson, the newly appointed Health Minister, stated one month after the government came to power that he had “not ruled out” new charges in the NHS, for elderly people’s prescriptions, state hospitals or visiting the doctor.10 The fact that some of these measures have not yet been fully carried out, 20 years later, does not invalidate the fact that the Blair government paved the way for the attacks that are being inflicted on the NHS  by the Tory government today. Flagged up were £1,000 tuition fees for higher education, again built on by the Tories in their brutal attacks on education. We commented that Brown, in his first budget, employed “mirrors, string, trapdoors and sleight of hand to disguise the budget’s real content, portraying it as a budget for the people”. Yet he made it clear that it remained within the Tory spending limits for everything but health and education. Rarely had a Labour Chancellor met with such a wall of praise from Labour’s enemies. Ken Clarke, a former Tory Chancellor, praised the budget. We remarked in the Socialist: “And so he should because one industrialist told the Financial Times, ‘It was a good Tory budget.’”

The stock market soared as did the pound. We commented: “In all the hosannas for Brown, it should be remembered that the overall effect of the budget is to increase taxes.” Brown also promised a ladder of opportunity for young people with proposals for subsidies to employers for apprentices. At the same time, he made clear that he was going to introduce an element of the US system of workfare, including withdrawing benefits from people refusing to take any job offer.11 This is precisely what the 2010 ConDem coalition government undertook. The consequence was that British capitalists can now boast a lower main rate of business tax than the US, Japan, Canada and many of its European competitors. At the same time working people, through increased costs and taxes, would pay for whatever concessions were made to the rich. The legacy of Thatcher remained: low, poverty wages, structural unemployment and inadequate resources in the public sector.

Brown then made his infamous statement, which was hung round his neck later by his opponents, as he promised to take  Britain out of the ‘boom and bust cycle’. We stated bluntly that these cycles were intrinsic to the workings of capitalism and that Brown, if he remained within the framework of the capitalist system, would surely acquiesce or face colossal opposition from the ‘market’. Undaunted, Labour wheeled out its privatisation programme, the centrepiece of which was the Private Finance Initiative (PFI). We gave a warning in a front page article written by Socialist Party member and Wakefield hospital worker, Mick Griffiths: “In opposition, New Labour called PFI in the NHS  ‘creeping privatisation’. Unison… produced thousands of posters quoting… Harriet Harman’s statement: ‘When the private sector is building, owning, managing and running a hospital, it has been privatised.’ Now, Labour is using the PFI review to simplify, speed up and make the creeping privatisation work.” In prophetic words, the article concluded: “The whole PFI is a hell on earth that will make even the current two-tier NHS  seem like heaven.”12