The problems of the Blair government are the problems of the whole ruling class

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Tony Blair appears to be adrift in a sea of troubles: revelations about his role in the build up to the Iraq war, tensions with the rest of the EU,  ‘conflict’ between him and Gordon Brown over pension policy, warnings about the level of government overspending, open revolts in his party over anti-terrorist laws, over the use of nuclear power… The golden boy of British politics, who could do no wrong, is now mired in problems as his stint as the leader of the ruling team comes to an end. He has certainly added to his problems through inept political decisions, such as bringing Blunket back into the cabinet, but it is essential to see that Blair’s problems reflect those of British capitalism as a whole.

At a recent meeting of the ICC section in Britain this situation was analysed in a report on the national situation, taking up the deepening of these problems over the year since the 16th WR Congress adopted a ‘Resolution on the National Situation’ (WR 281). This article is based on the sections of this report which deal with the problems being generated by the deepening economic crisis and the political life of the British ruling class.

The report also dealt with the problems effecting British imperialism. The most important event for British imperialism in the last year has been the London bombings, which brutally expressed the spreading of the imperialist barbarism ravaging Iraq to the very heartlands of capitalism. Readers can find a detailed analysis of these events in International Review 123. Nevertheless, it is important to  see that Blair’s dilemmas arising from the invasion of Iraq are those of the whole ruling class, as they were a year ago.

“The central division that has developed within the British bourgeoisie is not a dispute over strategy but over the best tactic to continue to defend the independent strategy that remains the dominant view in the ruling class. Recently Blair has reaffirmed Britain’s independent stance and declared his opposition to US ‘unilateralism’... The increasing tensions between the great powers can only make it harder for any policy that situates itself between them and that attempts to play one against the other. The British bourgeoisie is incapable of resolving the contradiction it is in. This is because there is no rational solution. The US will continue to assert itself and, recognising the situation of the British bourgeoisie, will put pressure on it without mercy. The danger of the tack towards the US lies in the fact that it makes the British ruling class more vulnerable, not just to pressure from the US, but to reciprocal pressure from its European rivals. The perspective is thus for the contradiction to continue to sharpen”. (‘Resolution of the National Situation’, Nov 2004).

The economic difficulties deepen

The so-called “unprecedented” economic growth of the last few years, as we showed last November, “rests on a regression to the early days of capitalism when growth was achieved through the increase in the absolute rate of exploitation. This situation is the result of a quarter of a century of gradual, covert attacks by the British bourgeoisie, to create a ‘flexible’ labour market and reduce restrictions on business and it reveals once again its intelligence and ruthlessness”. In the past 12 months these attacks have accelerated as the ruling class has felt the fingers of the underlying crisis increasingly gripping it by the throat.

We are coming to the end of the ‘Brownian miracle’ – indeed the bourgeoisie makes no secret of the fact that the UK economy is due for a fall. In WR 286 we reported the prediction of ABM Ambro, one of the City’s biggest banking groups, that the economy is due for a decline, with a vicious circle of falling house prices and unemployment leading to the loss of about half a million jobs by 2008. This is exactly what we must expect given the debt-fuelled nature of the economy with much personal debt guaranteed by inflated house prices. This is just what we showed in WR 288, in the article ‘End of the Brownian miracle’, which looked at the impending housing price crisis. After huge inflation (totally disregarded by the inflation statistics) net housing wealth is falling, due to falling prices and increased mortgage debt. This can only lead to a drop in consumer spending – as well as a huge increase in misery with families evicted when they can no longer keep up with the payments.

Treasury estimates of growth are continually overoptimistic, or downright dishonest, and so are the tax revenues based on them. The Chancellor has only managed to keep up the level of state spending, and maintain the fiction of fiscal prudence, by changing the date he has set for the start of this ‘business cycle’ on the one hand, and creative accounting, so that government guaranteed private investment in public/private finance does not count, on the other. The situation is unsustainable.

The attacks on the working class have continued.  MG Rover collapsed – in the middle of the election campaign – with the loss of 5,000 jobs directly and 15-20,000 in the supply industry. At the same time Index announced the loss of 3,000 jobs. Unemployment continues to be disguised, with a rate of 4.7% according to ILO definitions. However, while unemployment remains static, the number of those claiming Jobseekers’ Allowance has increased month on month for 9 months, with a claimant count of 890,100 in October. Job vacancies have fallen. The employment rate is just under 75% and the economic inactivity rate is 21.3% - nearly 8 million people.

Perhaps most threatening for unemployment is the introduction of proposals for ‘trust status’ in health and education, making hospitals, health trusts, and eventually schools, responsible for hiring and firing staff at local level. This, along with making staff reapply for their jobs, can only be a preparation for future job losses or re-grading downwards to lower pay scales. We are already seeing this:  the NHS is preparing to lay-off 6,000, on top of the loss of 3,000 (including 1,000 nurses) already predicted by 11 Health Trusts  (Nursing Times, 22-28 November). Many other Trusts are stopping recruitment, thus worsening the workload.

Meanwhile the extraction of absolute surplus value is continuing. There is the constant drive to lengthen the working day (see ‘Capitalism in crisis can only lengthen the working day’, WR 285) and also the increasingly draconian efforts to control every aspect of exploitation (‘Big Brother in the warehouse’, WR 286). Average earnings, excluding bonuses, remain static, but including bonuses have fallen ( The proposals contained in the Turner Report to lengthen the number of years in which capitalism can exploit workers before they are entitled to a pension takes this onto a new level: it will mean that millions of workers will be worked to death and forced to pay the capitalist state for the pleasure through increased taxation (see lead article).

The life of the bourgeoisie

“The rules of the game have changed” was Tony Blair’s message in relation to state terror in the wake of the London bombings. In fact, the one thing that was least changed was the new terror legislation, since measures such as Control Orders came in before the bombs and even the 2005 Terrorism Bill was envisaged beforehand. And much of what is in the Bill was already possible without new legislation. What has changed in relation to state terror is the ability to make propaganda about it, particularly the strident discussion of the relation between individual liberty and safety in a democracy. This propaganda campaign is essential to legitimise the use of the enormous repressive powers the state has already given itself. The propaganda around the Bill has allowed an increase in detention without charge from 14 to 28 days to be posed as a defeat for the government’s proposal of 90 days, and a victory for civil liberties and habeas corpus, rather than the draconian increase in repression that it really is.

Something else has changed in the life of the bourgeoisie. At the beginning of the year we were treated to an election campaign with the bourgeoisie making no secret of the fact that it was all about re-electing the Labour government, with a couple of side-shows about when Blair would hand over to Brown, and how soon Michael Howard would go after another disastrous Tory showing. The only other main concern was how to reduce apathy for the election. As we said at the time, the bourgeoisie got the election result it wanted: “Having imposed a range of attacks on the living and working conditions of the working class, having strengthened many aspects of British state capitalism, having brought in a series of repressive measures in the name of ‘anti-terrorism’, and having defended the interests of British imperialism on the world stage, the Labour government is currently the chosen team of British capitalism.

“The measures announced in the Queen’s Speech show that Labour is not going to let up. An Incapacity Benefit Bill will attack 2.7m claimants, there will be reductions in certain other social benefits. Apart from the introduction of ID cards, repressive legislation will include a Counter Terrorism Bill, adding further offences not included in the last Prevention of Terrorism Act. Asylum and immigration will not escape from Labour’s offensive” (WR 285).

Today, the ruling class is quite clearly getting its options ready for a change of PM if not of the governing team as a whole. This is not wholly a surprise as Blair announced he would step down before the next election even before the last one. Since then the Tory leadership election has been played up in the media, with very sympathetic handling of the two remaining candidates. The media darling is the younger David Cameron, portrayed as the potential leader able to reform and modernise the party, as Labour had to be reformed and modernised to fit it for office in the 1990s. The extremely long drawn out leadership election has allowed this message to be repeated ad nauseam.

At the same time the Labour government has been scandal-ridden with Cherie Blair’s earnings from a charity speaking tour making money out of being the PM’s wife; Blunket forced to resign for impropriety a second time in a year; DC Confidential portraying the government as ineffective and incompetent. All in all the current government has been described as having the same stench as the Major government before its defeat in 1997.

The decline in the economy is an important factor here, which will necessitate many further attacks on the working class. Disappointment has been expressed over the government handling of the public sector pensions deal. So “the acceleration of the crisis is focussing the minds of the bourgeoisie, it still means something. The ruling class is broadly happy with Labour’s imperialist policy apart from Blair’s tendency to not maintain the most rigorous independence from the US. Also, at the moment, there is not an immediate need to modify the government team because of the need to confront workers’ struggles. But the economic factor can undermine any government.

“At the same time, if the Tories are to appear as an ‘alternative’ they have to distinguish themselves from Labour. Cameron’s political line is that Blair does indeed have the right policies on many issues, but he is hampered by his own party in introducing the necessary reforms in the public services. The bourgeoisie’s political commentators seem to think that this is exactly how things are going to play out in Blair’s last term as Prime Minister” (WR 289).

The bourgeoisie seem to be keeping their options open for the Blair succession, either to allow the next Labour PM to claim to be of a different mould, or to develop an alternative governing team in the Tory Party, around their version of Blair.

Blair: spearhead of accelerating attacks

These extracts show that Blair’s problems are those of British capitalism as a whole. In the final throws of his leadership Blair will carry out one last major service for British capital: he will drive through the attacks on the working class. He has made his determination to bring about ‘lasting reforms’ amply clear in recent weeks. The ruling class will be able to fully utilise his increasing unpopularity in order to divert workers’ discontent with the attacks into futile anti-Blairism and ideas about a better Labour Party without Blair. It has already done this to a large degree in relation to the quagmire in Iraq: all British imperialism’s problems are reduced to the actions of one man and his team. Blair is quite happy to play the role of hate figure if that means capital can better attack the proletariat at the economic and political level. Anything to stop the working class from seeing the system, rather than individuals, as its enemy.  WR