The budget ax falls in Britain

June 28, 2010

James Illingworth looks at the new British government's far-reaching austerity program--and the emerging resistance to the budget-cutting agenda.

BRITAIN'S NEW coalition government this week announced an "emergency" budget that amounts to a declaration of war against the public sector and the whole of the working class.

The ruling alliance of Conservatives and Liberal Democrats, which British leftists have taken to calling the "Con-Dem government," has conclusively demonstrated that it intends to make workers and the poor pay for the massive bailout of the British banking system undertaken by the preceding New Labour government.

Its new budget is stacked with anti-working class measures intended to fix a deficit of $226 billion. Conservative Finance Minister George Osborne announced that while he was cutting taxes on corporations--and would continue to do so for every year that the coalition remains in power--he was raising VAT, or sales tax, from 17.5 percent to 20 percent. This form of indirect taxation on spending inevitably hits poor people the hardest.

At the same time, Osborne announced a two-year pay freeze for public-sector workers--equivalent to a significant reduction in wages when inflation is taken into account--and cuts of 25 percent over four years to most government departments. Some of the cuts are nothing more than petty and vindictive provocations--the new budget freezes child benefits and cuts programs like free swimming for the children of working-class families.

Britain's Chancellor of the Exchequer George Osborne
Britain's Chancellor of the Exchequer George Osborne

Alongside the obvious immediate costs to working-class living standards, the austerity budget also contains the very real threat of causing a double-dip recession in Britain. Only massive state intervention to nationalize the British banks staved off a total financial collapse 18 months ago, so cuts to public spending could easily drive the economy back into crisis. Some commentators estimate that cuts to the public sector will cost the jobs of half a million workers over the next five years.

Incredibly, some Conservative politicians used the word "progressive" to describe the budget, a sign of just how meaningless the term has become in the mouths of British politicians. "Overall, everyone will pay something, but the people at the bottom of the income scale will pay proportionally less than the people at the top. It is a progressive budget," blustered George Osborne during his budget speech.'

Very few of Britain's poor will be fooled by Osborne's weasel words. This budget is a return to former Conservative Prime Minister Margaret Thatcher's anti-working class agenda of the 1980s. British workers now face one overriding question: how can they best fight back against the ruling class offensive?

SOME WORKERS will inevitably look to the opposition Labour Party as the vehicle for resistance to austerity measures. With Labour in opposition and a right-wing government in power, some political commentators expect the party to shift left and perhaps become more responsive to its trade union constituency.

Even the moderate, New Labour-supporting Guardian columnist Polly Toynbee called on the party to "become the insurgent" in the aftermath of its election defeat in May.

At the moment, however, things don't look particularly promising for those who hope to reclaim the party for the left.

Labour is currently embroiled in a leadership contest that will determine the political trajectory of the party during its time in opposition. The leading candidates--Ed Balls and brothers David and Ed Miliband--all come from the New Labour faction in the party. All are white men from middle-class backgrounds who got their education at the elite universities of Oxford and Cambridge. They are hardly the kind of figures likely to lead a militant working-class fightback against austerity.

The center-left is represented in the contest in the person of Diane Abbott, the first Black woman ever to contest for the leadership of one of Britain's main parties. Abbott has a solid record as a member of parliament. She consistently opposed the war in Iraq, for example, and has spoken out against Britain's nuclear arsenal. Even more importantly, Abbott has taken a strong public stand against the scapegoating of immigrants at a time when anti-immigrant bigotry is a defining feature of mainstream politics.

At the same time, however, Abbott's route onto the leadership ballot reveals the extreme weakness of the left in the Labour Party. She was only able to gain the necessary 33 nominations by MPs because the other left-wing challenger, John McDonnell, stepped down in her favor.

Even worse, Abbott received the nomination of David Miliband, one of her right-wing opponents for the leadership, and of several other representatives of the Labour Party's more conservative wing. This suggests that powerful pro-business forces within the party see Abbott's candidacy as providing a left-wing cover for the likely winners.

The new Labour leadership is likely to provide more continuity than change compared to previous party leaders--former Prime Ministers Tony Blair and Gordon. Brown. Resistance to the cuts will have to come from outside parliament--and from the trade union movement, in particular.

As Bob Crow, leader of the militant railway union the RMT, said in the Morning Star newspaper, "When someone's winding up to give you a kicking, you have a clear choice--you can either take them on right from the off, or you can roll over and hope that they go away." Crow has called for an emergency meeting of the Trades Union Congress (TUC) to plan a campaign against the cuts.

Sadly, however, Crow and the RMT don't represent the mainstream of organized labor in Britain. So far, the economic crisis has been met with little response from union leaders. Although British Airways cabin crews are engaged in a long-running and intense dispute with their employer, most struggles have remained confined to particular industries and companies. There has been little effort made to link up the efforts of different unions or groups of workers.

The first step for British workers is, therefore, to emulate the militancy of their brothers and sisters in Greece, where a series of general strikes and protests against austerity have demonstrated the potential strength of the working class united in defense of its basic interests.

A Europe-wide coalition of trade unions has called a continental day of action against austerity for September 29. The task of the British and European left is to build pressure from below--so that union actions like this can become part of a genuine and sustained fightback.

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