Britain: Labour and the Tories - are the battle lines being drawn?

The verbal exchanges between Cameron and Ed Miliband over the last few weeks seem at long last to indicate that battle lines are being drawn. With 18 months until the General Election, the political ground has at last begun to shift. The Labour Party seems to be moving – in its rhetoric – slightly to the left, while the Tories are reverting back to their old image as the “nasty” party.

The first indication of this apparent change in the political terrain was over Syria. The last minute opposition stand by Ed Miliband, the leader of the Labour Party, over non-intervention in Syria constituted a massive blow against Prime Minister David Cameron, who was visibly seething at this “betrayal”. Miliband’s stand simply reflected the widespread opposition to another foreign adventure. As expected, he was criticised in the capitalist press for political “opportunism”.

Miliband's promises

Then came the Labour Party conference, where Miliband made a speech in which, for the first time, he outlined a string of policies that seemed to chime with the anger that many people feel over falling living standards. He appealed to people’s concerns by coming out against corporate greed and Britain’s “privileged few”, which certainly struck home.

Miliband promised to get tough with energy companies by proposing a 20 month freeze on energy prices. He promised to double the number of new homes built to 200,000 a year. He would cut corporation tax. He would stand up to “powerful vested interests”, whilst Cameron was “always weak when it comes to standing up against the strong”. Miliband promised to “strengthen” the minimum wage and to examine the introduction of a “living wage”. There would be more childcare, funded by a £800m bank levy. He would also introduce a tax on bank bonuses and reverse the coalition’s “reforms” to the National Health Service. There would also be a mansion tax.

As significant, Miliband stated that whilst Cameron would be known as the PM who introduced the Bedroom Tax, he would be known for being the one abolishing it – the first time the Labour leader has made such a commitment.

“We have shown this week who we will be fighting for”, stated Miliband on leaving the Labour conference. This was a marked change from previous conferences. In 2009, he mentioned energy bills only once. This time was different. “The companies won’t like it because it will cost them money”, Miliband said accusingly. “They have been overcharging people for too long because the market doesn’t work.”

He was absolutely right. One by one, the Big Six energy companies (SSE, Scottish Power, npower, EDF, Eon and British Gas) denounced the planned interference in capping prices. Some threatened to turn out the lights. “It will frighten investors!” they exclaimed. Sir Roger Carr, chairman of Centrica, said the policy was “potentially a recipe for economic ruin.” The Tory energy minister, Michael Fallon, said the cap was “irresponsible… and only increased the risk of the lights going out”.

But the energy companies are already warning of power cuts this winter. They have reduced capacity in their search for profits. The Big Six have increased their profits massively from £2.16bn in 2009 to £3.74bn last year. They have increased energy bills by 37% since 2007, while household incomes have fallen year on year.

Capitalists in a frenzy

As expected, Miliband’s speech sent the capitalist media into a frenzy; not least the Daily Mail, which was a sign of things to come.

House builders denounced the 200,000 house-building target as “wild”, saying it was physically impossible. “Where are we meant to find that sort of growth?” said a building chief executive. “Who is going to build these homes?” asked another. Charles Fairhurst, chief executive of Fairbridge Residential, said that once again politicians were failing to understand how “real” markets worked. Given the 1.8 million families languishing on the housing waiting list, clearly the markets do not work.

John Cridland, director-general of the bosses’ organisation, the CBI, called the speech a “setback for the enterprise credentials of the Labour Party”. Lord Jones, former trade minister in the last Labour government, claimed the policy represented a return to “tribal socialism”. These criticisms were all echoed in the capitalist press who described it as a return to “old-style socialism.”

The Financial Times urged him to stop “trafficking in populist gimmickry”. “Unlike Tony Blair, Mr Miliband does not aspire to win the support or financial backing of big business, nor is he likely to receive it after a speech that is certain to revive the old ‘Red Ed’ jibes”, stated the big business newspaper. “There is a whiff of Poujadiste populism about all this”.

“He (Miliband) is still too close to his soft-left comfort zone, and a fair way from the centre ground conquered so successfully by Tony Blair… it is a risky strategy.” (FT, 25/9/13)

It is clearly a “risky strategy” for big business, but for millions of ordinary people it is a very attractive strategy. Five years on from the crisis, bankers’ bonuses are back in the news. So is ICAP, the inter-dealer broker, founded by Michael Spencer and former Tory party co-treasurer, which was fined £55m to settle allegations over Libor rate rigging.

Chiming with the public

Whilst older opinion polls showed Labour and Tories as being neck and neck, recent polls, like the latest Mail on Sunday poll, have given Labour a 10-point lead over the Tories.

Miliband has, it seems, finally begun to tap into the growing public distrust with big business and the banks after mounting pressure from below.

“The public seems to think there is something rotten in the establishment”, states John McDermott in the Financial Times.

“In 2010, a Policy Exchange poll found that 81% of Britons agreed with the statement: ‘Politicians don’t understand the real world at all.’ This month the British Social Attitude Survey reported that only 18% trusted governments to put the nation’s needs above a party’s, down from 38% in 1986. Banks fare worse. In 1983, 90% thought they were ‘well run’, compared with 19% today, perhaps the most dramatic attitudinal shift in the report’s 30-year history.

“Britain’s views of its institutions wax and wane – ask Her Majesty. But the successive scandals hitting banking, parliament and the media have the feel of an almost operatic collapse of faith in those who exert power in the country… There is a profound ignorance among the powerful as to the depth of anti-elite sentiment, in Britain and beyond.” (FT, 28/9/13)

Tories: back to being the "nasty" party

George Osborne in 2010. Photo: The CBIThis ignorance certainly applies to the Tory Party, which has reverted to being the “nasty” party. The Tory leadership appear to be completely out of touch. Cameron and Osborne, the Chancellor of the Exchequer, have been described by one of their own MPs as “posh boys who don’t know the price of milk”. While people display growing hatred towards the bankers, the Tory coalition had rushed to the courts to protect bankers’ bonuses from a European cap.

Out has gone the green tree image, brought in by Cameron to project a softer caring image, and in its place have come the darkest blue and a return to traditional Tory values. The attempt to distance themselves from Thatcherism has failed, especially with Cameron’s eulogies over Thatcher’s death. Her shadow and image hung over the Tory party conference. Cameron was clearly on the back foot as he denounced “Red Ed” Miliband for becoming a Marxist menace to Britain.

Cameron came out openly on the side of big business, painting his party as the friend of corporate fat cats and the privileged elite. This was reinforced by George Osborne who said that the austerity would continue until at least 2020. He promised to curb welfare for the long-term unemployed and under-25s, if they failed to participate in workfare. Other policies, designed to appease the Tory grassroots, were trotted out, such as denying illegal immigrants the right to rent a home and forcing foreign prisoners to pay their own legal bills. This line reflected a shift to the right in the Tory party.

Interestingly, the bourgeois strategists were not entirely convinced by this change. “There are risks for the Conservatives in this strategy. A promise of yet more austerity to an electorate that is already battered by years of stagnation is scarcely much of a tonic for the troops,” stated the FT (3/10/13).

Support for the Tory party is falling as it bleeds towards UKIP. Electoral prospects do not look good. Forty years ago in Manchester, where their conference was being held, the Tories were winning the same share of the vote in city council elections as Labour. But the city’s last Tory MP lost his seat in 1987 and the party now has no councillors in Manchester, Liverpool, Newcastle or Sheffield. The collapse of Tory support in the north was the result of Thatcher and the widespread closure of industry. In Scotland, where the Tories took 50% of the vote in the 1950s, they have been almost wiped out with one remaining MP.

Even elsewhere, support for the party has declined. The average age of members is now 68 and the membership has fallen to around 134,000, the lowest ever in modern times. From being the most successful bourgeois party in Europe, it has now failed to win a general election since 1992, more than 20 years.

Facing in two directions

With the biggest fall in living standards since the 1870s, the numbers living in poverty up by one million, and half a million relying on food banks, a million on zero-hour contracts, the only growth in Britain under the coalition is low pay and job insecurity. On this basis, if it appeals to the working class, Labour could win a landslide in the next election. But Labour currently appears to be looking in two different directions.

Socialist Appeal supports the bringing down of the Tory Coalition and the election of a Labour government. We support every step forward and every gain for working people. The promises of Ed Miliband, while welcome, are minimal and need to go much further if they are going to tackle the real problems facing us. The main problem is that Miliband’s promises are based on patching up capitalism and not upon changing society. He made this abundantly clear in a recent interview with the Financial Times:

“We are talking about how we are going to reform capitalism – not abolish it, as my dad would have wanted – so that it works for people,” Miliband said. “Look, we want successful wealth creators, successful entrepreneurs in this country… We’re committed to a dynamic market economy.”

“I think the big question now in Britain is between those who want to fix broken markets and those who want to defend broken markets.”

This interview was an attempt to “put the record straight”. The “left” lurch by Labour had not gone down too well in the boardrooms and the City. The Labour leader wanted to reassure big business that a Labour government would act with responsibility and would not be a threat. Rachael Reeves, the new Shadow Work and Pensions Secretary, has stated that Labour will be tougher than the Tories when it comes to slashing benefits! All this is to appease big business, but will only turn potential Labour supporters away from the party in disgust. “There is no difference between them”, they will say.

Miliband’s idea of “making markets work for people” has shown to be nonsense by the experience of the last five years. Capitalism is in deep crisis and has clearly failed. All big business is interested in is making profits. If it is not profitable to provide more jobs, or build more houses, or keep energy bills low, then they will not do so. They control the economic levers of power. They are the ones who dominate the economy. The attempt by Miliband to appeal to the social responsibility of big business when they are attempting to maximise profits is like asking the Pope in Rome to become a Protestant.

There is no such thing as “responsible” capitalism, only dog-eat-dog capitalism. The reason for the austerity and the attacks on the working class is due to the crisis of capitalism, which can no longer afford reforms, only savage counter-reforms. That is the reason for the attacks and the massive fall in living standards.

It was as a reflection of this fact that the Labour movement historically advocated a socialist alternative: the abolition of capitalism and the use of resources for the needs of people – epitomised by Clause IV of the Labour Party constitution and a number of trade union constitutions.

Whilst Miliband is making some “radical” noises, Ed Balls has been sticking to a different script of continued austerity. He has been reluctant to attack the City and their “excesses” and wants to be an Iron Chancellor. He has agreed to stick to Tory spending plans for at least the first year. As a further restraint, he has asked the Office for Budget Responsibility to audit his spending plans!At the same time, he has told the unions that the squeeze on public sector pay will continue. It is a clear indication of where his priorities lie and where a future Labour government is heading.

No half-measures: Labour needs socialist policies

We will not be fooled by this. We must learn the lessons of history. Past Labour governments have attempted to “reform” capitalism, but they all failed and ended up carrying through counter-reforms. This was due to the fact that they did not dictate to the capitalist economy, but rather the capitalist economy dictated to them. The same situation will face a new Labour government that attempts to placate capitalism. The attempt to appease big business by talking about “successful wealth creators”, when it is the working class that produces the wealth, will cut no ice. They are only interested in one thing: the maximisation of profit.

There is an old Labour movement adage: you can’t plan what you don’t control, and you don’t control what you do not own. It is as simple as that. Unless a Labour government challenges capitalism and takes over the commanding heights of the economy, then it will be subject to the laws of capitalism. It will be forced to do the bidding of big business. Capitalism demands austerity and deep cuts. The only way this can be avoided is to do away with the capitalist system itself. On this basis, industries and banks can be run for the interests of people and not the interests of multi-millionaires. Only then can we transform the lives of millions of people mired in unemployment, poverty, and falling living standards.

Originally published by Socialist Appeal: Labour and the Tories: are the battle lines being drawn?