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20th
January 2012
Len McCluskey's Article
in the guardian on 16th January 2012.
Ed Balls's sudden embrace
of austerity and the public-sector pay squeeze represents
a victory for discredited Blairism at the expense of the party's
core supporters. It also challenges the whole course Ed Miliband
has set for the party, and perhaps his leadership itself.
Unions in the public sector are bound to unite to oppose the
real pay cuts for public-sector workers over the next year.
When we do so, it seems we will now be fighting the Labour
frontbench as well as the government.
The political elite that
was united in promoting the City-first deregulation policies
that led to the crash is now united in asserting that ordinary
people must pick up the tab for it. It leaves the country
with something like a "national government" consensus
where, as in 1931, the leaders of the three main parties agree
on a common agenda of austerity to get capitalism – be
it "good" or "bad" – back on its
feet.
The only justification
offered for supporting the pay freeze is that "jobs must
be the priority", thereby buying into the hoary old fallacy
that increasing the wages of the low-paid risks unemployment.
The view that deficit reduction through spending cuts must
be a priority in order to keep the financial speculators onside
has been the road to ruin for Labour chancellors from Philip
Snowden to Denis Healey.
This is the last gasp
of the neoliberalism which led to 2008, and the final point
on the arc of "new Labour" politics – from
"things can only get better" to "heaven knows
we're miserable now" and will be for the foreseeable
future.
A teaching assistant will
be £2,600 worse off as a result of the coalition's pay
squeeze by next year – that does not create a single
extra job. Rather, it represents a further squeezing of demand
out of the economy during a recession, and will lengthen dole
queues. Even the ratings agencies acknowledge that austerity
is damaging the economy in Europe.
Of course, for Labour
to say it cannot make spending commitments now, and will only
make a judgment as to what cuts are reversed in which order
nearer the general election, is absolutely reasonable. But
this is going much further. As Ed Balls told this newspaper,
the "starting point" is "we're going to have
to keep all these cuts". And this year we have seen one
shadow minister after another falling over themselves to endorse
savage spending cuts which are hurting real people. Liam Byrne,
Jim Murphy, Stephen Twigg and now Ed Balls: four horsemen
of the austerity apocalypse.
Where does this leave
the half a million people who joined the TUC's march for an
alternative last year, and the half of the country at least
who are against the cuts? Disenfranchised.
The real points of differentiation
between Labour and the government on the economy are now very
hard to identify, the more so since Cameron and Clegg are
cutely, if insincerely, positioning themselves as proactive
on tax avoidance and executive pay.
No effort was made by
Labour to consult with trade unions before making the shift,
notwithstanding that it impacts on millions of our members.
It is hard to imagine the City being treated in such a cavalier
way in relation to a change in banking policy.
This confronts those of
us who have supported Ed Miliband's bold attempt to move on
from Blairism with a challenge. His leadership has been undermined
as he is being dragged back into the swamp of bond market
orthodoxy. And this policy coup may not be the end of the
matter. Having won on the measures, new Labour will likely
come for the man sooner or later. And that way lies the destruction
of the Labour party as constituted, as well as certain general
election defeat in my view. It is time for those who want
a real alternative centred on investment, job creation and
public intervention to end the slump – and a Labour party
that will articulate that to get organised in parliament and
outside.
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