[page 3]
Europe unravels
EC commission
presidenı
Delors.
With the
collapse of linism, new
inter-
imperialist strains have
surfaced
.MIR
ts of recent
tumultuous
weeks in western Europe will impact on political and economic velopments across the globe. They
an important turning point in
world perspectives.
The tumultuous even
THE SHATTERING OF the exchange rate mechanism, and the subsequent events surrounding this, represent a major dereat for capitalism internationally. The exchange rate mechanism (ERM) was set up in 1979 as the precursor of a single currency. It was seen as a further step toward a united Europe, which would lead to a new era of peace and prosperity for its 3+0 million inhabitants.
True, the prospect of a further development of European integration produced an ambivalent response from its north American and Japanese rivals, grappling with the transformation of world relations after the collapse of Stalinism and the end of the cold war. On the one hand, a Pentagon 'Defense Planning Guidance' document released this February: argued for an American foreign policy "to deter the emergence later in this decade of a global adversar- ¡al rival' or international coalition" which would threaten US interests. This included a more integrated Europe. The initial dratt, before it was diplomatically reworded in May: warned, for example. against "the emergence of European-only security arrangements. "(Finan cial Times. 20 May 1992).
On the other hand, another section of 15 strategists. including a group closely linked to the Democratic Party's presidential candidate. Bill Clinton. has argued that. with "greater economic parity among north America, east Asia and Europe" causing "a sea change in world trade and finance. We have no choice but t move from what was formerly the hegemony of i single country to collective management by the industrial democracies." (The Carnegie Commission, America and the den World Jul!
1992).
This idea is completely illusory: It is true that the I'S. while still the pre-emininent capitalist power, has lost, at least economically, the hegemonic position it enjoyed over its capitalist rivals at the end of world war two. But it was the existence of the Soviet I'nion and the Stalinist states of eastern Europe as a powerful bloc against imperialism that, since 19+5. overrode the persisting mutual rivalries of the major capitalist powers. With the collapse of Stalinism that era is over. World relations. including world economic relations, will never be the same again. New inter-imperialist strains have surfaced, and will deepen in the future.
Nonetheless, a more integrated Buropean Community (EC) was looked to by the Is and Japan to handle the exploding crisis in castern Europe and the former Soviet Union. Despite their fears that it could turn into a protectionist Fortress Europe: it was also looked towards to provide a locomotive to help pull the world economy out of its present stagnation.
But now the effective break-up of the ER. and the following antagonisms, especially between the British and German bourgeois, mean in reality the end of the Maastricht treaty: In spite of the majority for the les vote in the French referendum, the idea of European monetary and political union is now no longer credible even as a distant aspiration. Notwithstanding the protestations to the contrary: for example at the EC: finance ministers meeting at the end of september. the more likely prospect now is for a two or three tier Europe. dominated by a Deutschmark zone of Germany: the Benelus countries. and even for a period France. with increasing antagonism between the various capitalist classes.
[page 4]
While ettorts will still be made to patch together the exchange rate mechanism again, and moves to create a single market will continue. these will not prevent the process of increasing national antagonisms becoming more dominant. These events brilliantly confirm the basic ideas of Marxism, represented in Britain by the Militant and the Militant International Rerieu: (MIR) that on a capitalist basis the unification of Europe was ruled out and that the bourgeois cannot overcome the different competitive interests created by the private ownership of the means of production and the existence of the nation state.
Thus. tor example, in contrast to the initial euphoria of the capitalist media at the time of Britain's entry into the ERM in October 1990, in the following issue of the MIR we soberly explained that, while it was "possible on the basis of an economic upswing for the capitalists, like thieves sharing out the swag. to cooperate in lowering tariff barriers, seeking to co-ordinate and harmonise tax, customs duties, laws etc... once the upswing turns into stagnation. never mind downswing. it will be every man for himself and the devil take the hindmost. The battle.. between Britain and France on agriculture." we argued. "merely foreshadows future. inevitable conflicts." (MIR No.+5. p6). THE CRISIS OF the exchange rate mechanism and European integration will impact upon developments in the countries of castern Europe and the former Soviet U'nion. But it will not change the direction of the processes in these countries, although it could affect the tempo. The authority of the 'market and the western bourgeois has been weakened by these events. It will be less easy now for the IME, and the ignorant bourgeois economists advising' these regimes. to get the same slavish response to their demands trom the governments in these countries as they have in the past period. The process to capitalist restoration will continue but the crisis in the west is likely to buttress that wing of the pro-capitalist forces which secks to move to capitalism by the slower route. In the former Soviet Union it is likels to reinforce the Rutskoi Nolsky Civic I'nion wing This means i strengthening of the forces of Russian nationalism in the corridors of power in Moscow:
The increased antagonisms between the western European bourgeois will also weaken their ability to intervene in the conflicts to their cast. Under cover of this crisis in the west the nationalist forces in the east will feel confident to pursue their aims more determinedly: The overall result then in eastern Europe and the former Soviet Union of these events will be to tend to increase national conflicts and increase the antagonisms between the different wings of the various regimes.
Of course the other effect will be to increase Major and the questioning of the 'market and capitalism German among the best layers of the working class and chancellor Kohl.
youth in the former stalinist countries. The Los Angeles riots showed that IS capitalism had serious problems at home. The problems of European integration will show that capitalism in western Europe and worldwide is wracked by fundamental contradictions. It further weakens the ideological offensive of the bourgeois on a world scale, and this includes eastern Europe and the former Soviet I'nion.
THE PROSPECTS FOR world economic growth have been damaged by the crisis around the exchange rate mechanism. The increased currency instability weakens investment, especially international investment. At the same time these events have reduced the prospect of agreement on the current General Agreement on Tarifts and Trade (GATT) talks. This round of talks, which started in December 1986, have been deadlocked. Disputes have flared between the Is and the EC on agricultural subsidies in particular, which have been maintained by the capitalists in the past for social reasons, to balance the rural areas against the industrial areas. With the European governments. especially France and Germany: weakened. it will be less likely that they will be prepared to force sacrifices on their farmers to placate the Is government. This unwillingness will be strengthened by Bush's recent electoral promise to hand out an extra sibn to ds farmers. The I's pressure on Germany to lower its interest rates to provide a market for As exports will further poison the atmosphere.
Faced with the breaking down of the world MIR 03 trading sustem of GATT in the recent period.
[page 5]
regional trading bloes have begun to form in 40 MIR Europe, north America and south east Asia. The Autumn 1992 battle between these trading blocs is set to Editorial worsen but at the same time these blocs themselves will be increasingly convulsed by internal conflicts. Ratification of the North American Free Trade Agreement is proving difficult. Antagonisms are increasing in south east Asia. Now the European bloc is riven with the accusations. currency instability and competitive devaluations which have recently exploded to the surface.
The short-term economic prospects have been worsened by these recent developments in Europe. Even betore. the outlook was not good. In the ISA in August retail sales, industrial production and capacity utilisation all fell by 1.5%. Growth in the second quarter of 1992 was less than half the growth in the first quarter Increasingly it looks as if the IS cconom! is set to move into a triple dip'.
Japan. according to the Financial Times "may be on the verge of its worst recession for Paralysis in the (22 September 1992). GDP almost 20 years"
Italian growth was only O.2", in the second quarter of parliament.
this vear. Moreover this prognosis was made atter the government spending package of 10.trillion yen (.£13bn) announced in August "Many private sector economists." reported the Financial Times. "beliere the economy faces such serious problems — overcapacity in manufacturing. huge bad debts which could disable the banking system and stagnant private consumption - that it will fall further unless the government takes additional action." The British economy remains in recession. the German economy is grinding to a halt: its GDP fell 0.5", in the second quarter of this year. Its high interest rates have a deflationar! effect throughout Europe. as do the attempts to cut budget deficits in Grecce. Haly: Sweden and most of the major European economies. In France industrial production fell be 0.t"o in June. The world economy is therefore in danger of entering recession on a worldwide scale. THE QUESTION POSED is — where is growth to come from for this to be averted? Mars spoke of to departments of production: "department one being the production of the means of production. and department two being the production of the nicans of consumption. Little prospect of growth can be anticipated from department one. the means of production. Overcapacity exists porkhvide: the market is not there for major investment in this arca. On top of this a severe crisis of profitability is now steeping world capitalism from Japan to the ls to Europe. In the post war period in the l'S, at this point in the recovery stage in the capitalist oyde of boom and slump. corporate profits would have been recovering at a rate of 32.2'» on average: In the present recovers' the rate is 1.3'o. This crisis of profitability: added to the lack of markets, cuts across growth coming fron the deselopment of the means of production Department to, the means of consumption. provides no basis for growth cither in the immediate future. Unemployment in the (ECD) countries has risen from 25m to 30m in the past two years. Reeling under the massive debts piled up in the 1980s. the working class and middle classes, the source of the major portion of consumption, either cannot make ends meet or put any surplus they may have into paying off debts or saving against an uncertain future On top of this the falling price of assets. esp. ecially houses, after the rise in these prices in the 1980s. further cuts into spending power. In California in the 1980s the combined book value of homes rose by Sibn every 18 hours Now these are falling and with them the abilit! of their owners to consume. This is a phenomenon which is taking place worldwide. The 1980s boom has resulted in a massive build up in the debt of governments. corporat ions and consumers. This fuelled the 198290 boom. In the E's, for example. public and private debt reached 192, of GDP. As Mars explained. credit allows capitalism temporarily to go further than its own limits. But now this massive debt build up drags like a dead weight on the world economy and pulls world capitalism back toward its limits. In the 1980s the debt crisis of the ex-colonial countries surfaced. Vour in the 1990s the debt crisis of the advanced capitalist countries is added onto this Faced with worldwide economic stagnation at best. the bourgeois internationally are abandoning monetarism and moving to a semike!nesian position. The Japanese government. because of their budget surplus, are the most capable of carrying out this policy: But even Japan is expected to have a shortfall by the end of the year and may be forced to issue bonds to pay for its spending programme. which will take money from elsewhere in the econom! Nonetheless, albeit to a lesser extent. the capit alists internationally are now beginning to con sider some increase in state spending. for ex ample Clinton's plans in the d9. An increasing!! vocal wing of the capitalists and their media internationally calls for such measures. Such state spending will be mainly on infrast ructure. And given the budget deficits that exist in most countries. it will be accompanied by a massive onslaught on public spending on ser vices. public sector pay and jobs This is leading to huge conflicts in the public sector. as has been seen in Canada. Greece. Germany and now Italy. Battles loom in the public sector in Britain. including in the key arena of local gor pages (0.11). Thir ernment. (See article on attach on the public sector will tend to negate the spending programme on the infrastructure and. when taken with the other factors outlined!
[page 6]
THE EVENTS OF the past wecks in western Eur- isations. the workers parties — Labour. Socialist (right) with above and the defence cuts flowing from the collapse of stalinism. the overall economic eftects will tend to be deflationary. The short-term perspective for the world economy: thercfore. is stagnation at best. such as that experienced over the past six to twelve months, or perhaps somewhat more likely: a net tall in workd output which could last for some time.
It could not be ruled out that this could derelop into a world slump. In fact. this is less like- Iy. as the bourgeois would move to prop up the financial institutions and revert to the printing press to avert this, albeit at the cost of an explosion in inflation. But one qualification that should be put on this is that. if protectionism exploded out of control. then this could put more serious economic possibilities more firmly on the agenda.
But into these processes must be added the Swedish prime role of the leaders of the mass reformist organ- Minister Bildt ope are set to have very significant political and Communist - and the trade unions. As the effects. It is clear that after the Reagan Thatcher economic crisis deepens the reformist leaders 1980s the pendulum has begun to swing back have moved further to the right. holding out on i world scale. The ending of the illusion of their arms to prop up capitalism. Increasingly unifying Europe. the shattering of capitalism the bourgeois are being forced to rest upon the with a human face' in Sweden and Germany: the mass reformist leaders. In Sweden the leaders of prolonged economic stagnation. the terminal the opposition Social Democrats. backed by the condition of the Bush presidency, the broken trade union federation. the LO, actually entered authority of the Major government after just into an agreement with the Thatcherite govern- 18) days: all are signs of the slipping away of ment of premier Bildt to help carry through the the 1980s era of capitalist triumphalism and the CUTS.
beginning of a new turbulent period. The severity of the crisis. with the abject cap. The prolonged boom from 1982-90. the collitulation of the reformist leaders and the smallapse of Stalinism. and the victory of imperialism ness of the forces of Marxism mav, as in Sweden in the Gult war. combined to enable the bournow: result in illusions developing among sectgeois to launch a powertul idcological offenions of the working class that the collaboration sive. The recent events have dealt this offensive of their leaders with the capitalists is the onl! a serious blow. At first among the most combatalternative. But such attitudes will not last long ive sections of the working class and youth, and in the face of the unfolling attacks. At first in then as events procced. more widely, the workthose sectors most directly affected by the cuts. ing class will begin to scck an alternative to and then graduall! spreading throughout the capitalism.
working class, resistance will surtace. In Europe severe convulsions are on the The deepening of the crisis and the capitulatagenda. The explosive struggles in Grecce, with ion of the reformist leaders will increase the three general strikes in three weeks and street tensions between the working class and its fighting with the police, are an indication of the leadership. As the process unfolds new splits intensity of the class battles that will increasing will take place and opposition currents emerge Iy untold. The crisis of Italian capitalism is not within these organisations. In some countries only economic but also one of the corruption new organisations can be thrown up in which and paralysis of the state. In a sign of things to the ideas of Marxism can find a significant echo. come internationally: in the longer term. the Rank-and-file opposition movements will de. government has sought bonapartist 'emergenvelop in the unions and the workplaces. In the cy powers to deal with the crisis. unions themselves at a certain stage new figures In all twelve countries of the EC. and in fact will step forward to take a stand under pressure throughout most of western Europe. practically ofthe rank-and-file. and in some cases under the every government has been severely weakened fear of the advances of the forces of Marxism be the recent events. Yet trom this position of The deepening crisis of capitalism is accompanpolitical weakness they are moving to step up ied by the deepening crisis of reformism. In this their attacks on the working class. The perceptsituation. with clear principles, a clear program. * Workers that these governments are vulnme. and flexible tactics. Militant. and our inter. ..rength to their resistance and national co-thinkers, can make great gains in the ween the classes events that lie ahead Social Democrat leader.
Carlsson.
After the Reagan- Thatcher 1980s the pendulum has begun to swing back
[page 7]
Councils'
last stand
The Tories
moving to mericanise'
local government
MIR
With the public sector in the
frontline Louise James asks, can local government survive the Tories'
fourth term?
ONE OF THE central features of the Tories' fourth term will be their renewed assault on the powers of local councils. Despite the defeat they suffered over the poll tax, once again they are moving to curb local government.
Extended compulsory competitive tendering, the opting out of schools and homes from coun cil control, further financial restrictions on council budgets: all will inexorably lead, if not resisted, to the 'Americanisation' of local gorernment. There, cities are run by elite boards of elected officials whose sole responsibility is to allocate state contracts to the private sector. Large sections of the poorest layers are left literally outside society, with no public services at all.
Even before the turmoil on the currency exchanges. the Tories were being spurred on in this drive by the developing economic crisis. The fall-away in tax revenues and rising unemployment has added to the escalating public sector borrowing requirement (PSBR). This is expected to reach a massive £32bn, almost 5% of gross domestic product (GDP), by the end of this year - with predictions of a £40bn deficit next year! The present percentage is as high as that inherited by Thatcher in 1979 - when the Tories came to power on a manifesto which argued that "the state takes too much of the nation's income; it's share must be steadily reduced"!
Public spending is now a huge 43% of GDP. With the Tories exchange rate strategy shattered by the recent dramatic events, they are now looking to 'fiscal policies, ie tax increases and, especially, spending cuts. to combat the inflationary consequences of sterling's devaluation. The public sector is in the front line. During the emergency debate in the House of Commons, the Chancellor, Norman Lamont, declared that control of public expenditure and public sector pay were at the top of my agenda." Despite the added demands on spending created by the introduction of the council tax, new 'care in the community' responsibilities, and the teachers' pay award, the savage cuts that are likely to be made in the November public spending announcement will see local government further hit.
These short-term considerations, however. coincide with the long-term strategic aim of Thatcherism - and now. "Majorism' - to roll back the frontiers' of the state, including local government. This is necessary, from the point of view of the ruling class, in order to restore the long-term profitability of British capitalism. Financing the 'social wage' of public services, through company taxes and business rates, is an imposition on their profits. Local government, as the provider of housing, education. social services, leisure facilities. waste disposal, the fire service etc — services worth over £60bn
[page 8]
annually — is a key component of the 'social wage'. It is also an important alternative focus of power to central government.
Ironically, first Thatcher and now Major. have conducted the assault on local councils under the banner of citizens' rights', promising to 'empower the consumer'. In fact, the advent of Thatcherism heralded the greatest centralisation of power seen in British society since workd war two. As The Guardian columnist, Hugo Young, said of this process in his book One of I/s. "Whatever else this might be. it was not an exercise in reducing the power of the central state. Rather, bodies that might rival the central state were emasculated or dismantled."
Since 1979 more than 120 pieces of anti-local government legislation have been passed. Over thirteen years the Tories have moved from establishing enterprise zones free of council controls. to the deregulation of public transport: through ratecapping and the abolition of the Greater London Council and metropolitian county councils, to the poll tax. Now a new stage in the battle looms.
THE TORIES ARE committed to a long-term goal of ending local government's role as a provider of housing. Their aims are threefold: to reduce state expenditure; to create. they hope. i permanent social base for capitalism (Thatcher's "property-owning democrac!'): and to remove the 'disincentive to labour mobility' caused by the secure tenancies, and cheaper
rents, of public rented housing. They have al-
ready moved a long way down this road, adopt-
ing a dual approach.
From 1979 to 1990 public spending on hous-
ing investment was cut from £11.3bn to
£5.3bn. Severe restrictions were placed on how
councils could spend their money. The 1989
Local Government and Housing Finance Act 'ring-fenced' housing revenue accounts (receipts from council rents etc) to stop transfers to or from the general rate fund (the income from poll tax, business rates. government revenue support grant etc). This removed an important discretionary power from the hands of elected local councillors.
Thus, any decrease in government housing subsidies, or increase in management or maintenance costs, had to be met by an increase in rents. The aim was, and still is, to force rents upwards to 'market' levels — to 'encourage' tenants to look outside the council sector. Since the Act was introduced council rents have risen by 1+%, according to the Association of District Councils. (The Guardian, 28 July 1992).
The other side to this strategy, was to offer a series of attractive 'alternatives outside the local authority sector. This included the Rightto-Buy: which, with generous discounts of up to 50%. led to over one-and-a-half million tenants buying their homes. But this represented just 20% of the council housing stock, leaving over five million homes in the council sector. The initial response of most council tenants to
Newham council workers demonstrate
Since 1979 over 120 pieces of anti-local government legislation have been passed
[page 9]
8 MIR Autumn Britain
other measures, such as the first attempt to introduce Housing Action Trusts (HATS) in 1988, was one of hostility. Local authorities still own over two-thirds of rented housing in Britain sales to new landlords, primarily housing associations, have only affected 2.5% of council housing. (The Observer, 5 July 1992).
But with the re-election of the Tories, a new offensive has been launched. 'Alternatives' to council housing, many formulated before the election, are now being pushed by the Department of Environment (DoE) with new vigour.
In addition to a re-vamped HATS programme, these alternatives include the wholesale selling off of council homes - 'voluntary transfer' - to housing associations. The Tories have promised to pump money into housing associations - £2bn a year for the next three years - most of which would have previously gone into council housing
Other measures include the 'estate action programme' - where DoE grants are tied to 'changes in housing management' - and the promotion of estate management boards (EMBs) and tenants' management co-ops (TMCs). These give tenants varying degrees of control over estate budgets, depending on which scheme they take up. In 1991-1992 $270m was made available to encourage tenants to take up these schemes, to tempt them onto the first steps away from the council sector.
A SIMILAR STRATEGY has been adopted towards state education. Polytechnics and colleges of higher education were moved out of local authority control, becoming 'free' standing organisations with the governing bodies reorganised to include representatives of private industry. From April 1993, the 450 further education colleges and 113 sixth-form colleges are to follow. The governing bodies determine college budgets threatening, for example, student union funding. National pay bargaining agreements will be under threat as individual colleges can fix their own wages and conditions.
The 1988 Education Reform Act introduced the local management of schools ( LMS), passing on control of school budgets to governing bodies. Under LMS, schools are funded according to a formula based mainly on the number and age of pupils. Consequently, schools will have to 'compete' for pupils in order to obtain maximum budgets. Such competition will inevitably lead to selection, the first step to a two-tier system. Because funding is also based on average rather than actual salary levels of teachers, and schools now have to pay out of their own budgets for services such as swimming and transport previously provided by the local authority, most schools over the next few years will find themselves in deficit.
Local management of schools was introduced as a first step to encourage them to opt out of council control into grant maintained status (GMS). Grant maintained schools are run entirely by their heads and governing bodies, of which only a minority are elected. The governing body has the power to hire-and-fire staff and negotiate wage levels. Day-to-day running costs are paid directly to the school by the Department for Education, although it is planned to set-up appointed regional funding bodies when a sufficient number of schools have opted out. While to date only 278 out of the 25,000 schools in the state sector have opted out just 1% - the government expects a total of 4,000 to become grant maintained within three years, including a majority of secondary schools.
WHAT ARE THE prospects for a fightback to defend council housing and local authority provision of state education? A key consideration still in determining how and through what avenues a struggle could unfold, is the role of the Labour and trade union leaders.
The prolonged world boom of the 1980s, coupled with the collapse of Stalinism, had a profound effect above all on the consciousness of the Labour leaders. This has been compounded by the successive election defeats suffered by Labour. Labour council leaders today have swallowed the Tories' ideology that the capitalist 'market' is more 'efficient' at providing responsive' public services.
Thus, immediately after the election, in a Labour Party broadsheet ironically entitled The Challenge of the Fourth Term, Phyllis Starkey, Labour leader of Oxford city council, argued that, to "exercise effective quality control" " tO "get the service our electors want... it may mean seriously considering management buyouts or allowing council employees to go into parinership with an external company: "Jeremy Beecham, leader of Newcastle council and chair of the Labour-controlled Association of Metropolitan Authorities, spelt out the implications for local authority workers jobs and conditions: "let's admit it... cost effectiveness and the needs of the service have to take priority over the traditional practices of both management and the workforce.
In fact, the 'market' is less of a guarantor of 'efficiency', "quality control' and the 'needs of the service' than extending democratic control and accountability in housing, education, and other council services. It introduces unnecessary costs which result from competition, such as product or service duplication and advertising. However, 'market forces' can be used to drive down wages, and local government is a "service industry' where labour is the major 'cost'. According to the Local Government Chronicle, (2 August 1992), pay accounts for 64% of all local authority spending.
(NEWHAM)
CUTs
[page 10]
The Labour council leaders are meeting 'the challenge of the fourth term' by... preparing their surrender. Before the election only 18, mainly Tory, councils had completed the 'voluntary transfer' of under 100,000 homes. Now over 150 councils are considering transfers. Some Labour councils are considering encouraging schools to opt out en bloc so that they can combine together to 'save' the central services currently provided by local education authorities.
This attitude is an important difference even with the verbal opposition of Labour council leaders in the battles of the mid-1980s. Then, in the fight against ratecapping, over 20 Labour local authorities agreed a joint strategy of not setting a rate until the Tories had made concessions. This campaign, in the last few months of 1984 and the beginning of 1985, received an enthusiastic echo from council workers and workers generally. It included a one-day London local authority strike, with 100,000 workers taking action, and a demonstration of 30,000.
True, the fighting talk of these council leaders such as Islington's Margaret Hodge and David Blunkett, then the leader of the 'Socialist Republic of South Yorkshire', was just that - fighting talk. The abandonment of the battlefield by these then 'lefts' meant that Lambeth and the Militant-influenced Liverpool council were left to fight the Tories alone. The defeat of the struggle against ratecapping both strengthened the hand of the government and pushed the Labour leadership further to the right. In the aftermath most Labour authorities had only one 'strategy' against the cuts: the hope that Labour would win the general election in 1987. In the meantime confrontation was delayed by a combination of cuts and 'creative accounting'
But with the Tories re-elected, the offensive against local councils continued. The poll tax was introduced which, along with the uniform business rate set by central government, reduced councils control of locally raised revenue to 15% of total local government expenditure. This smaller tax base meant that a one per cent increase in revenue would require a council to lery a seven per cent increase in its poll tax
The idea was that poll tax payers would rebel against 'high' council spending in order to keep poll tax bills low, as ratepayers had demonstrated in the early-1980s against a number of Labour councils that had raised rates to compensate for cuts in government grants. What happened, of course, not least because of the role of Militant supporters in organising and giving direction to the struggle, was that they 'rebelled' against the poll tax!
This was despite the role of the Labour leaders. Councils had a clear choice - fight or implement the poll tax. Without exception, ignoring the millions who refused to pay and the thousands of protestors outside the town halls
- the biggest movement of civil disobedience ever seen in Britain - Labour councils complied with the Tories' legislation without a fight, once again looking to a future Labour government to bail them out.
Now the Tories have been re-elected for a fourth term. After 13 years of manoeuvring to avoid a confrontation, Labour councils are now setting their agendas around government principles to dismantle local government. This mood of demoralisation was summed up by Harry Rimmer, the current leader of Liverpool council: "Those who want to stand up to the government and pretend we can find the money (to improve council services) are talking bullshit." (Sunday Times, 16 August 1992).
THINGS WERE NOT much better at the tops of the trade union movement. The strategy of the union leaders too was to wait for a Labour government to save local councils. Now, however, faced with the reality of a continued offensive, the union leaders will come under enormous pressure from the membership to defend jobs and conditions.
Moreover, presently it is Labour councils who are pioneering the offensive against local authority workers. Newham council, having sacked striking poll tax workers protesting at compulsory redundancies, then went to the High Court under the Tories' anti-union laws, to win an injunction against the entire Newham NALGO membership. Camden council earlier this year sacked 25 social workers after provoking a year long strike.
Such attacks will compel the local authority union leaders, albeit reluctantly, to distance themselves from the Labour council leaders. In some cases the pressure from below will be resisted by witch-hunting the activists. This was the response of the NUPE full-time officials in Durham, where nine of the eleven local government branches in the region had produced a bulletin criticising council cuts. The post-election NUPE conference also backed the leadership's position, after a sharp debate, to reject a fighting motion against compulsory competit ive tendering (CCT).
This contrasts with the situation in NALGO where the national local government committee 'cuts strategy' guidelines urge branches "to take appropriate measures", including industrial action, in defense of jobs and services. While the NUT leaders managed, with difficulty, to resist the call for national strike action against teacher redundancies at the Easter NUT conference, votes for action have been and will be won at local level. Moreover, the merger of the three public sector unions, NUPE, COHSE and NALGO, into one union, UNISON, will raise the confidence of local authority workers in their capacity to successfully defend their jobs and conditions.
MIR 09 utumn 1992
Britain
David Blunkett.
Presently Labour councils leading the offensive against loc:
authority workers
[page 11]
100 Autu Brita
MIR mn in
The local
authority
unions are potentially a
decisive ction of the orking class
The local authority unions - not just UNISON but the teachers' unions, the GMB. TGWU and UCATT - are not broken. In fact they are potentially a decisive section of the working class, with enormous latent power. Local councils employ over two-and-a-half million workers - over 50% of the total public sector workforce - with a higher level of unionisation compared to the equivalent service industries in the private sector.
Nonetheless, the strategy of 'leaving it to the branches' to defend local jobs and services is insufficient. It underestimates the seriousness of the Tories' intent to deal not just with local government but with the public sector as a whole. The public sector unions are now in the frontline in the same way the NUM was after the Tories' re-election in 1983. In Newham, moreover, this strategy led the NALGO leadership to make deals with management behind the backs of the strikers to end the strike, rather than fight for a decisive victory as a springboard for a national campaign.
The primary cause of the defeat of the miners was the failure of the TUC leaders, and of the left-led unions independently of the TUC, to organise decisive solidarity action. What is needed now to meet the Tories new offensive is action across the public sector as a whole, with the organisation of a public sector alliance. The local authority unions should take the lead in this. Imagine what could be achieved in London, for example, where the local authorities are the largest employers in 30 out of the 32 boroughs, if joint action was organised in a public sector alliance of local authority workers, teachers, firefighters, tube and bus workers. postal workers, NHS workers, civil servants and students! At the very least, the battles ahead will open the way for the development of rank-andfile movements, amongst local authority workers and with other public sector workers, of borough-wide Broad Lefts, of Joint Shop Stewards Committees at a sectional and borough level, and even at regional and national levels
THE OPPOSITION OF the council workforce can strengthen, and in turn be strengthened by. the resistance that will develop in working class communities to the attacks on local services. This was a feature of the magnificent campaign in Hillingdon, in which a huge 80% of tenants voted against attempts by the council to transfer it's entire housing stock to a housing association. The local NALGO branch worked with the tenants' Campaign Against the Transfer of Council Housing (CATCH) from an early stage. paying for two mailings to all 14,500 households and producing their own leaflet defending council housing.
However, resistance in the community will not develop in a straight line. The years of underfunding, with the acquiescence of Labour
councils. has taken it's toll on renants in council slums or parents whose attend cash-starved state schools. Ten parents are also attracted to the idea. illusory it may be, of having more con running their estate or local school. In text, the Tory alternatives can appear to at least offer a way out.
It was this sense of desperation, that there was no other way to get something done. along with the huge financial incentives offered, that accounted for the result of the recent ballot of Liverpool's high-rise council tenants. On a 79% turnout, 82% voted to transfer to a HAT.
Other factors, peculiar to the recent history of Liverpool, also came into play. The rightwing Labour council, whose leader. Harry Rimmer, is the vice-chair of the HAT. campaigned for a yes vote, along with the Liberals and Tories. Only the Liverpool Labour councillors group and the Broad Left, who are carrying on the traditions of the heroic struggle of Liverpool council from 1983-85. warned of the clear dangers to tenants of joining the HAT. But the $128m that the HAT expects to receive, is more than the amount that was demanded by the council to meet it's budget deficits in the battles of the mid-1980s! Not surprisingly, given the setbacks of the last period. including Labour's general election defeat, many tenants swallowed their doubts about the HAT and voted ves.
The HAT will cover 5,387 homes. just 8% of Liverpool's council housing stock. If all of Liverpool's 60.000 council houses were to receive the same level of investment as that promised to the HAT, the government would have to spend over &l.tbn. To spend an equivalent amount on the 5.1m council houses in the UK would cost £121bn. 20% of Britain's GDP! This reveals quite clearly the Tories' strategy. HATS are a loss leader, to tempt other tenants to 'come inside from the council sector. And where better to advertise than Liverpool? As The Sunday Times gloated: "Tenants in socialism's once strongest bastion have proved the keenest of all to escape their council landlords... where there was Hatton there will now be HATS." (16 Aug ust 1992).
Similarly: the first schools to opt out received higher funds than local authority schools. If the same favourable treatment were to be given to 1,000 schools, it would add nearly £000m to government spending. (The Guardian. 31 March 1992). Opt outs have also slowed down the efforts of local councils to close or merge schools to meet the fall in secondary age pupils. from #.1 million in 1970 to three million in 1991. The Audit Commission estimates the cost of surplus secondary school places at £.350m. (The Guardian. 20 July 1992).
Yet the purpose of the Tories' assault on local
›vernment is not to increase public spending
who live children ants and however trol over this con-
to some
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but to reduce it! While 'flagship' schools or alternative housing schemes may, at least initially, receive extra cash, those that follow won't.
TENANTS AND PARENTS are not tempted to look outside the public sector for ideological reasons, but for material ones. Consequently, even if significant steps are taken along the road to ending council services, they will be followed by a massive rebound.
Of course, this movement will not proceed like a pendulum, swinging evenly in one direction and then the next. There will be local variants, setbacks and defeats, because of the failure of the Labour leaders to pull together the different strands of opposition that exist to the Tories' plans. The process of 'Americanisation' can go far. But the outlines of a rebound are already there. Pointing to the one-and-a-half million people with 'negative equity' - with mortgages worth more than the value of their house - and the 600,000 mortgage holders with average arrears of £t,000, The Guardian commented, "some economists believe that we may not see a proper recovery (of the housing market) until the next century - and that the limits of home ownership have been broached." (23 July 1992).
Council housing itself was born out of struggles against the consequences of 'market forces' in housing. The 1919 Housing Act, which opened the way for council housing, was introduced in response to the rent strikes which took place against profiteering landlords during the first world war. The 1915 Glasgow rent strike involved 25,000 private tenants, spilling over into action in the factories. Similarly, all significant advances in the provision of state education and there was no free universal secondary education until after world war two — came as the result of struggle.
A foretaste of the battles to come in education today was given by the recent events at Woodroffe School in Dorset. Having opted out last September the school had accumulated an £80,000 deficit and sacked seven teachers. Parents organised in protest and teachers passed a vote of no confidence in the school authorities. Consequently, the governors' chairperson stood down and the headteacher was suspended. (The Guardian. 12 September 1992). All this followed the July education white paper announcing new funding methods which threatens cuts in 10% of the already existing grant maintained schools! (Sunday Times. 9 August 1992). A further indication of a new mood is the response in Scotland to the recent Tory proposals to privatise water. The Tories announced their water privatisation plans for England and Wales in 1986. While there was opposition, reflected in public opinion polls. privatisation was carried through by 1989. By contrast, in Scotland, a real campaign of resist-
ance late
looms.
1980s,
Today is a the height
different period of the boom.
BUT THE DIMINISHED aura of 'the market' is not the only difference with the late 1980s. The experience of the anti-poll tax campaign, in Scotland in particular but also in England and Wales, has affected the consciousness of millions. It established, or more accurately, re-established, methods of struggle in working class communities - organised mass non-payment, mobilising the community to resist bailiffs and so on - which will be used again in the battles to defend local services. Capitalist commentators are already nervously drawing parallels between the prospects for resistance to water privatisation in Scotland, and the mass civil disobedience that defeated the poll tax.
The poll tax replacement, the council tax, may not provoke the same widescale opposition as the poll tax. With one demand per dwelling, there will be half the number of bills. Those who paid 20% of the pull tax will get a full 100% rebate. There will be transitional arrangements for two years for those with council tax bills higher than their last poll tax demand Nonetheless, bills will be a lot higher than initial estimates.
Moreover, while the council tax for the highest band properties will be three times that for the lowest band, this is a much narrower differential than under the old rating system. Under the rates 10% of households with the highest rates paid 25% of all domestic rates. For all its faults, this was a progressive feature of the old rating system. In contrast, under the poll tax this group paid just 13% of all the revenue due. which meant a transfer of £2.4bn from the 'bottom 90%' to the top 10%! Under the coun cil tax, with a limited difference between the highest and the lowest tax bands, a disproportionate burden will still fall on the middle and low band properties.
The council tax has the same enforcement procedures as for the poll tax. There will be countless appeals against house valuations and disputed liability. At the very least, against a background of mortgage debts. rising unemployment and continuing action to collect poll tax arrears, the council tax is unlikely to reverse the 'culture of resistance created by the struggle against the poll tax.
It will certainly not erode the authority earnt by those fighters in working class communities, foremost amongst whom were supporters of the Militant. who saw the struggle against the poll tax through to the end. In the new battles that will develop around the defense of council services. in the unions, on the estates and in the schools. Militant will again be to the fore, fighting for the tactics, strategy and perspectives that can bring the Tories offensive to a halt.
MIR 011 Autumn 1992
Britain
DON'T
PAY
STOP
WARRANT
SALES
888:88
The anti-poll tax campaign re-established methods of struggle that will be used again in the battles ahead
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