British Perspectives 2006

“The British working class is entering a period when it requires the greatest belief in its mission and its strength. To gain this there is no need for any stimulants like religion or idealist morality. It is necessary and sufficient that the British proletariat understands the position of its country in relation to the position of the whole world, that it has become clear about the rottenness of the ruling classes and that it has thrown out of its way the careerists, quacks and those bourgeois sceptics who imagine themselves to be socialists only because they from time to time vomit in the atmosphere of rotting bourgeois society.” (Leon Trotsky, Writings on Britain, Volume Two, p.182)

This year we are celebrating the 80^th anniversary of the magnificent General Strike of 1926, when Trotsky wrote the words quoted above, as Britain stood on the brink of revolution. At first sight those events seem distant, both chronologically, and politically, compared with the situation which confronts us today.

The task of writing perspectives against the background of general strikes and mass demonstrations, or other dramatic political, social or economic events would certainly seem to be easier than under the current circumstances in Britain. Yet when Leon Trotsky did exactly that in the period preceding and immediately following the General Strike he was met with a stone wall of reactionary Stalinist ignorance in Moscow, and infantile petty bourgeois cynicism on the part of the left labour leaders in Britain. Eight decades on and when one reads the analysis made by Trotsky one is struck by its vitality and its relevance. In the long view of history eighty years is but the blink of an eye. In human terms it is an entire life. Of course much has changed in the intervening years. The betrayal of the leaders of the workers’ organisations, the devastation of a world war, and the long years of economic boom which followed, have all combined to delay a new episode in that titanic struggle, although there were mighty battles which came close to doing so in the 1970s and 80s.

The world looks very different, as does Britain’s place in it, from the perspective of 2006. Nevertheless the method used by Trotsky has not only stood the test of time, but is the only way we can understand the nature of the period through which we are passing and the events that are being prepared.

Some might argue that so little has happened here over the last twelve months that we could just as easily republish the last perspectives document, rather than prepare a new one. There is a grain of truth in this; the present document should certainly be read in conjunction with those from previous years. The ideas presented there retain their full force. It is important at each stage that we check and re-check our previous perspectives, to correct errors, to compare developments as they have unfolded, and to test whether or not the methods used remain valid. The fact that we could indeed republish those documents demonstrates, at least in part, that we have been correct in the broad strokes and, indeed, in many of the specifics.

Perspectives must deal with processes and not predictions. For this reason it is not possible, necessary, nor even desirable to try to analyse every single statistic, or event ad infinitum. Instead we must draw out from the evidence available those elements which help to uncover the processes at work in society, in politics, in economics, in every field.

However, it would be a serious mistake to believe that the continued slow tempo of events here makes British Perspectives less important. On the contrary, to orient our forces, to understand the causes and effects of events, or the lack of them, to point the way forward in a period such as this is, if anything, even more vital. The dangers of ultra-left or opportunist errors, in an attempt to shortcut the historical process, must be carefully avoided.

“The revolutionary proletarian Party must be welded together by a clear understanding of its historic tasks” Trotsky explained. “This presupposes a scientifically based programme. At the same time, the revolutionary party must know how to establish correct relations with the class. This presupposes a policy of revolutionary realism, equally removed from opportunistic vagueness and sectarian aloofness.” (Leon Trotsky, Writings on Britain, Volume Three, p.79)

In any case it would be a gross error to imagine that, just because events have (on the whole) been far less dramatic here than elsewhere, nothing of any importance is happening. This would be to fall into the trap of empiricism, to be seduced by the surface appearance. One should never judge a book by its cover. From the same evidence diametrically opposing conclusions can be drawn depending on the method employed. We must attempt to use Trotsky’s method, Marxism, if we are to understand what is going on under the surface.

Perspectives for 2005 have already been supplemented by the analysis of the General Election, which confirmed what we had written previously, and also added new information for us to consider. In July London experienced the shock of bombs on public transport which were the terrible price paid for Blair’s kow-towing to US imperialism and its adventure in Iraq.

The Tories have a new leader, as do the Liberals, and before long so will Labour. Ironically the New Labour leaders want to return to one of the worst traditions of old Labour, buggins’ turn, by handing over the keys to Number Ten to Gordon Brown with no leadership election.

The last period of Blairism, which we have clearly entered, will not be a quiet one, and the crises being prepared will leave their mark on the opening of the post Blair period for which we must also now be preparing.

Blair has lost his first votes in parliament, exposing the cracks at the very top of the Labour Party. In the past when we pointed to the possibility of some form of national government, we were met with scorn and derision. Now, even before any serious crisis in society, Blair finds himself increasingly forced to rely on Tory votes to get his legislation through the Commons.

Important underlying economic and social changes must all be considered too, not least the latest developments in the housing market, and in relation to attacks on civil liberties, two aspects on which we have laid heavy emphasis in the recent past.

Make no mistake, dramatic events impend in Britain no less than anywhere else. We can assert this confidently. We have faith in the struggles of the workers. The British working class has a very long and proud tradition, before, during and since the great General Strike. That whole history has left its mark on today’s outlook and will equally play its part in the revolutionary struggles of the future. Our faith however is not based on sentiment nor any kind of mysticism, but on the sound science of Marxism and perspectives. When the most dramatic events explode, they do not do so unannounced. All the conditions for creating explosions are prepared in advance, by an accumulation of changes beneath the surface. For some time now we have been trying to describe that molecular process of change, and to understand it, in order to arm ourselves, and to direct our activities in the directions necessary to build our tendency.

Revolutionary events will not simply fall from a clear blue sky. We cannot wait for those events to build our organisation. Once the masses are on the streets it will be too late. Our task is to prepare for those events, by understanding the stage we are at and using that understanding to direct our work and our efforts to build the forces of Marxism. Therefore Perspectives are no less important in a ‘quiet’ period. Rather they are essential if we are to build in readiness for ‘noisier’ times ahead.

That means digging beneath the surface of society, of politics, and the economy, to uncover the changes taking place and how they affect the outlook of all classes.

Of course if we were to confine that analysis to events on our small island we would be able to understand little. Britain must be scrutinised against the background of international events. Trends in politics, economics, and society can only be understood in the context of world politics, the world economy, and so on. In order to understand the role Britain plays in the world revolution, and the impact of international events on developments here, we must always read British Perspectives in conjunction with world perspectives.

International Situation

On a world scale, no-one can doubt that we have entered the most turbulent period in history. This must not be lost sight of no matter how quiet times have been in our own backyard. Every aspect of human society - politics, economics, diplomacy etc. - displays a profound instability. None of these crises are accidental. They are all expressions of the impasse of the capitalist system.

The system has outlived its historical usefulness and is now an immense barrier to human progress. The struggle to maintain itself against the tide of history is what gives rise to one crisis after another in the shape of wars, civil wars, revolutions and counter-revolutions. Nature itself seems to be mocking those crises with disasters of its own. In tsunami, hurricane, and flood we see not only the might of nature but also the inability of capitalism to deal with it. The social tragedies they leave in their wake serve to expose the true nature of the capitalist system and its cold calculating cruelty. These tragedies may not be directly caused by the profit system, yet they are reminders of the damage being done to the planet by the senile short-sightedness of capitalism.

In its death agony capitalism’s ugly counter-revolutionary face is being unmasked for all to see. However, dialectically and inevitably that death agony also gives rise to new life, the seeds of the future are being cultivated in the shape of the revolutionary tendencies growing and maturing beneath the surface.

Revolutionary developments are immanent everywhere, if not imminent here. This process unfolds in different ways, at different speeds, in different countries. After all if the revolution pursued a uniform course then there would be no need for a revolutionary international. Nevertheless, for all the differences on display, this same process will find its expression in the changing consciousness of the working class everywhere, resulting in all kinds of social and political explosions.

As we have pointed out previously the attempts of the capitalists to solve political problems tend to exacerbate economic crises, and vice versa. The world economy is experiencing enormous instability at present. The abrupt changes in the price of oil are an expression of this instability. In turn this is partly an expression of the political and military convulsions in the Middle East following imperialism’s adventure in Iraq. It is now three years since the invasion of Iraq, and politically, militarily, and economically this folly continues to dominate international relations. It continues to have the most important political and economic consequences in the United States and here in Britain.

Bourgeois economists are now drawing parallels between the current situation and the early 1970s when rising oil prices served to provoke the first real world slump since the second world war. Oil prices did not cause that slump, it had already been prepared in advance, but the oil crisis succeeded in tipping the world economy over the edge.

Similarly today all the conditions are being prepared for a sharp crisis. The current boom is a house built on chicken’s legs. For some time now the entire world has been heavily dependent on the United States and to a certain extent China. The high rates of growth in China cannot be maintained indefinitely and are preparing for a crisis of overproduction, whilst simultaneously creating an immense polarisation of Chinese society. Social and economic crises are being prepared in China, which, as we pointed out in the last document, plays an increasingly important role in world perspectives. However, it is not destined to play the role of saviour of the world market previously predicted by many economists. Instead China will add tremendously to the instability in every sphere in the next period.

At the beginning of the last century those who believed in the dawning of a new era of peace and prosperity could at least argue that there had not been a major war involving all the great powers for nearly a hundred years. The price level in the first year of the first world war was actually lower than it had been at the time of Waterloo. New inventions and new technology – the car, the aeroplane – were flourishing. What followed was the most convulsive period in human history, approximately four decades of revolutions and counter-revolutions, two world wars, a global slump, and the rise of fascism.

As the great American writer Mark Twain once wrote “History may not repeat itself but sometimes it rhymes.”

The world is always at its most unstable when the global balance of power shifts. Today world relations are in flux. The centre of gravity, which some time ago moved across the Atlantic from Europe to America, has continued its journey on to the Pacific. In understanding this process we can learn a great deal from a previous period of ‘globalisation’, the decisive period in which capitalism became a barrier to progress on a world scale, the years leading up to 1914 and the first world war.

By the end of the 19^th century Britain’s role as the hegemonic power was already being challenged by the United States, along with Germany and Japan. The Ottoman and Hapsburg empires were already in terminal decline. These years were dominated by the decline of British imperialism, wars, civil wars, revolutions and counter-revolutions. Does the position of the US resemble that of Britain 100 years ago? There are many differences. Is their period of unquestioned superiority drawing to a close? China is still a long way from matching America’s wealth, but the growth in its economic strength brings with it international political clout too. In the period ahead there can be no doubt that China will look to flex its muscles. Washington and Beijing are already competing for Africa’s oil stocks. Competition from China is part of the reason why America now imports so much more than it exports. The US is living beyond its means to the tune of $60 billion per month, their current account deficit is running at 6 percent of GDP. This cannot last indefinitely.

The dominance of US imperialism is not yet challenged by China, but battle lines are already being drawn particularly in relation to world trade. This was demonstrated by the latest stalemate achieved at December’s international trade talks in Hong Kong intended to pursue further reductions of tariffs, quotas and other trading restrictions under the so-called Doha round of trade liberalisation.

The battle lines over trade are drawn broadly between those who favour 'globalisation' as the way forward, and those who fear that the opening up their agriculture, or their industries and financial sector, to American multinationals or imports from Latin America or Asia (produced by American multinationals) will hurt the interests of their own ruling class.

Behind the stalemate in Hong Kong is the fact that globalisation is just not working. It is not working for those economies that are raped by the big multinationals once the doors are opened. But what worries some strategists of capital much more is that, far from globalisation generating steady economic growth that is balanced across the world, it is breeding serious imbalances in capitalism.

One figure alone can illustrate what these strategists fear: China's 1.3bn people consume only 42 percent of their annual output, they save and sell the rest overseas, 40 percent of it to the US. At the other extreme, Americans consume 71% of their annual output, saving nothing and increasingly importing all their energy and daily consumption needs. The US is borrowing hugely to finance its spending binge and is becoming increasingly dependent on the rest of the world, particularly Saudi Arabia, Russia, China, India, Brazil and Japan to provide these needs on credit. The US is now the world's biggest debtor, while Japan and China are its biggest creditors, and the gap is widening.

So far, the US has sustained this imbalance because it controls the purse strings with the dollar as the major international currency; it has a huge banking and financial sector; and, standing behind it is the mightiest military force ever assembled.

According to a recent book analysing the impact of globalisation (The Politics of Empire by Alan Freeman), between 1980 and 2000, the population living in the so-called advanced countries (the main capitalist economies) fell from 32% to 19% and yet their share of world income rose from 80% to 84% - such is the success of globalisation for all! The annual income per person of the advanced economies was 11 times greater than in the so-called developing countries in 1980. By 2000, this ratio had reached 23 times.

It will come as little surprise that globalisation is increasing inequalities between nations and within them. This fact is of little concern to the world’s capitalists. However, they will be more disturbed by the fact that their much vaunted globalisation is not even helping the capitalist system as a whole. Whereas in 1988 the average annual output per person in the whole world was $4885, in 2002 it had fallen to $4778! In the 1970s, annual world GDP per head rose at over 4% a year; in the 1980s it slowed to just 0.8% a year; in the 1990s, it was negative. The world under capitalism is going backwards. The results would be far worse if one removed China - an economy only just entering the control of capitalism – from the calculations.

Even in the US itself globalisation has done nothing for the average American worker as the big multinationals shift their industry abroad to cheaper locations and the government allows cheaper imports of goods and services to wipe out local industry.

As a result, inequalities of income and wealth within the US have worsened sharply. Now, if your household income in America is just $57,000 (£32,000) a year or below, you are in the majority 75 percent of households. In 1993, the bottom 50 percent earned 15 percent of national income; by 2003 that had fallen to 14 percent. Meanwhile, the top 25 percent had increased their share from a massive 62 percent to an even more staggering 65 percent over the same period.

American consumers, corporations and government, have overstretched themselves. As a result the American economy is weighed down by unprecedented levels of debt. In any other country this would already have led to a slump by now. The position of the US as the most powerful and wealthy nation has allowed this to continue as long as it has, but it cannot last forever.

This boom has not led to an improvement in living standards in general. Instead it is based on an intensification of exploitation, lengthening working hours, increased pressure in work. This is the case everywhere. The increase in toil and stress is something we know a lot about in this country. Britain’s foreign policy, home policy, and economy more and more resemble a pale shadow of its American master. The deregulated, hard-pressed British workers have become a model for increasing exploitation internationally.

The fact that this intensification is an international phenomenon, as is cutting social expenditure and attacks on pensions, tells us that this is neither accidental nor incidental. This is not the fault of one government, but a generalised phenomenon. Everywhere we see the old mask of reformism slipping away to reveal the greedy and rapacious face of capitalism in its senile decay exposed beneath. Capitalism can no longer afford the reforms it was forced to concede in previous periods. What it was forced by the working class to give with its left hand in the past, it is now forced by its own inadequacy to seize back with its right hand.

Inequality between nations and within nations has widened into a yawning chasm. According to the United Nations some four billion people, two-thirds of the planet, live, or more accurately struggle to survive, on £2.30 or less a day ($1500 dollars per year). Even in the richest countries, while the share of the wealthy continues to pile up, the poorest are sinking into absolute poverty. This was graphically exposed by the tragic scenes created by the hurricane in New Orleans.

Today more than at any other time in the past it is easy to recognise the process which Marx described as the concentration of capital - both in the mergers and acquisitions which constitute one of the main activities of the huge multinationals that dominate world trade, and indeed every aspect of life, as well as in the accumulation of obscene wealth in the hands of the super rich.

The combination of these factors – war, inequality, and stress – has an impact on all classes in society. While the ruling class strip away the reforms of a bygone age in pursuit of profit, and legislate in an attempt to shore up their power and privilege, at the same time a mood of discontent is prepared among the mass of ordinary working class and middle class people, especially amongst the youth. In the US, in Europe, indeed here in Britain, as well as elsewhere, this has been reflected in the movements against globalisation and the mass demonstrations against the war in Iraq. These are the first signs of a growing revolutionary mood amongst the youth, which also proceeds at different speeds, in different countries, at different times. These changes are already evident in advance of a new world recession, which is casting an ever-lengthening shadow over the whole situation.

Of course the situation faced by the masses in the Third World is immeasurably worse. The impasse of world capitalism means misery, disease, war and death for millions. Africa has been abandoned, for all the fine words on TV and at rock concerts by bourgeois politicians. More accurately the masses of Africa have been abandoned to their fate. The rich natural resources of the continent mean one proxy war after another as a land of plenty is raped in the interests of profit and power.

Millions die of starvation, of curable diseases, or are slaughtered in wars and civil wars. In other words what we are seeing here is a descent into barbarism in one country after another, bringing Marx’s prediction that the choice before humanity would be between socialism and barbarism into stark relief. Yet there is another side to Africa, where hope can be found. Not in foreign aid or charity but in an immensely powerful working class. The general strike in Nigeria shows the way. Only the working class of Africa can halt the slide to barbarism by conquering power. Then, in association with the working class internationally, Africa could be transformed into a paradise on earth.

The profound instability in every field is reflected in sudden and sharp changes in the consciousness of the masses. We must be prepared for this in Britain too. Its dependence on the world market and on US imperialism combined with British capital’s own long term decline ensures that it will not be immune from this process. We cannot allow ourselves to be lulled into believing that because nothing much has happened recently that this will continue to be the case. This may have been – in general, anyway – a long period of calm, but still it comes before a storm.

Closer to home in Europe we have already seen general strikes and a government crisis in Italy; a general strike and mass demonstrations in Belgium; a wave of strikes and demonstrations in France (as well as rioting amongst the dispossessed youth which is a symptom of their despair, and the inability of the system to offer them any kind of future). The EU constitution referendum was like a political earthquake in France, and was in reality a referendum on Chirac (the EU referendum in Holland was a vote on the political establishment as a whole). It can also be seen as a rejection of the reforms argued to be necessary to make the country more flexible and more competitive, in the British mould. That is to say making the workers flexibly bend themselves in two under stress and strain, until their backs break. Then, of course, they can simply be fired like the workers at Gate Gourmet. In the French referendum, at least in part, “flexibility” translated as “work till you drop or you are fired” and was rejected.

The political situation in France is extremely unstable, not only did the EU referendum illustrate the mounting anger in French society, it marked the opening up of a new period in the class struggle in France. The mobilisation against the privatisation of the SNCM and the anti-CPE campaign are also fantastic examples of that developing class struggle. The events in France will have a huge impact on the movement in Europe. France can become a model for the most advanced workers and the youth

In the most powerful country in Europe, Germany, there are over four million unemployed, and a growing social and political crisis which is reflected in the splits in the SPD and the vote for the left party in the recent elections.

In Spain the right wing PP government of Blair’s friend Aznar was overthrown by a movement of the masses. The Zapatero government now sits like a loose lid upon a bubbling cauldron of social unrest. The right wing in concert with the Church organises provocations and demonstrations with the aim of destabilising the government. Army officers even talk openly about the need for a coup.

All across Europe, without exception, we see a growing polarisation to the left and to the right. Though this process is more visible in a country like Spain, it is no less demonstrable in Britain. Politics here continues to be dominated by the imperialist adventure in Iraq, as demonstrated by the London bombings on July 7 last year, and the wave of “anti-terror” legislation which followed. These legal attacks on civil liberties have had a profound impact with Blair losing a vote in the House of Commons for the first time, as he attempted to overturn basic democratic freedoms enshrined in the Magna Carta.

For Jean Charles de Menezes they had a more immediate and tragic impact, as we learned that the police had been given the power to shoot to kill, not through a debate in Parliament but through the brutal execution of an innocent man on an underground train. We will return to this, but the unprecedented attacks on democratic rights in Britain demonstrate that the ruling class at least is preparing for sudden and sharp changes in the situation. This is the meaning of a phrase we have used many times before. The ruling class cannot simply rule in the same way that they could in the past. They are forced to abolish reforms, to squeeze the working class, and to attack democratic rights. In doing so they are preparing for dramatic battles in the future.

Furthermore this turbulence is not confined to Europe, but is a truly international phenomenon. Mass strikes and demonstrations have shaken Australia and Canada, two countries which until now would have been considered to be amongst the most stable of capitalist democracies. What we are witnessing here is a worldwide crisis, which inevitably affects different countries in different ways and at different times, nonetheless it does not leave one single country untouched, not apparently quiet Britain, nor even the mighty USA.

A large majority of the US now opposes the continued occupation of Iraq. Two thousand US troops have died there. Three times as many have suffered brain damage from their injuries. Countless tens of thousands of Iraqis have died. These facts - together which each new scandal of abuse and torture - have a tremendous impact on the outlook of American workers, and on the troops themselves.

The USA is the most powerful imperialist nation in history. With the end of the cold war stand off between the Stalinism of the USSR and the imperialism of the US, came a profound instability in international relations. The US is now spending some $500,000 million on arms per year. Just imagine what that wealth could achieve put to productive use. This is more than the combined military budgets of Russia, China, Japan, Britain, France, Germany, Italy, Saudi Arabia, South Korea and India. In relation to British imperialism when it ruled the waves, Leon Trotsky wrote that its military doctrine was based upon preventing a single land power from gaining preponderance in Europe and then maintaining a fleet stronger than the combined fleets of any two other countries.

Now the US maintains a military power greater not than its two nearest rivals, but than two continents. The foreign policy of the ‘Bush Doctrine’ sees the world as the domain of the US. This is an inflated version of the famous Monroe Doctrine of the 19^th century, through which the ruling class in the US claimed the whole of the Americas as their dominion.

Bush and co used the excuse of the September 11 terrorist attacks to launch their new gunboat diplomacy with the invasion of Afghanistan and Iraq. This has had the most profound impact on politics, on economy and on diplomacy. It produced a split between the ruling classes of Europe and the US. The European bourgeoisie has its own interests in the Middle East and elsewhere and cannot simply accept the domination of the US in their spheres of influence. The result has been divisions within NATO and within the EU, reflected in the crisis over the European constitution. There has been a sharp clash between Britain and France, further destabilising the EU, where Britain plays the role of faithful servant to its US master. Blair is Bush’s poodle but more importantly what is demonstrated in this relationship is that British imperialism’s power has diminished to such an extent that it no longer really plays an independent role in world affairs.

For that matter, Europe as a whole is experiencing a decline in its importance on the world stage. The Mediterranean has not been the centre of the earth for some time now. It will be across the Pacific, in Asia, and above all in China, that the future will ultimately be determined. The US and China are bound to come into conflict, economically and politically, over the Pacific in the next period. China’s growing economic power will be asserted politically, diplomatically and militarily in the future.

American imperialism now considers the whole world to be its sphere of interest, but above all they seek to establish their dominance over the Middle East and Latin America. For all their might they find themselves bogged down in an unwinnable war in Iraq. Sooner or later they will be forced to withdraw. The limits of their power will be exposed.

Those limits are also on display in Latin America, though for different reasons. In the space of just a few short months last year we witnessed an insurrection in Ecuador which overthrew the government, and an insurrectionary movement in Bolivia where only the absence of leadership prevented the coming to power of the working class. Alongside this we have the unfolding revolution in Venezuela.

The inspirational events in Latin America, the insurrections and revolutionary developments across that continent, above all in Venezuela, have the ruling class of the US in a state of apoplexy. This is not the place to go into the perspectives for those revolutions. However, the revolution in Venezuela has entered a new stage in its development. At present it is undoubtedly the key to the world revolution. It is our duty to follow its progress closely, to offer the revolution whatever assistance we can, to learn from its experience, and to use its inspiration to raise our own sights and to win over new layers of workers and especially the youth.

In the faces of Bush and co we see the naked reaction of a feeble and senile system. On the faces of millions of Latin American workers and peasants we see a glimpse of the future.

The economic, political, military and social changes of the last few years, which we have described as opening the most turbulent period in history, are now beginning to have an impact on the outlook of the masses. This represents a most important turning point. Human consciousness always tends to lag behind events. Now it is beginning to catch up. The idea is beginning to take hold that these problems are not local difficulties, nor are they temporary, soon to be replaced by a return to the good old days, but instead something is seriously wrong with the world.

That there has been a delay in the movement of the proletariat can be chiefly explained by the bankrupt leaderships of the workers’ organisations. Britain suffers from this delay more than most, for reasons we have explained many times, nevertheless this phenomenon is repeated everywhere. It is no accident that the workers’ leaders, have moved as far to the right as possible just as the movement beneath them will begin to swing sharply to the left.

Here we have all the conditions maturing not only for class struggle in general, but also, at a certain stage in that process, struggles within the mass organisations of the working class, the trade unions and the political parties.

How does Britain fit into this world view, and what impact are all these factors having on British society, politics and economics? What impact are these developments having on the consciousness of all classes in Britain, above all what effect are they having on the outlook of the working class and the youth? Finding the answers to these questions will help to point us in the right direction to be able to build our tendency.

Britain and the war in Iraq

“Britain had been led into a war under false pretences. It was a war that was to unleash untold suffering on the Iraqi people… During the build-up to war and since, most of the electorate of this country have consistently opposed the decision to invade. People have seen their political wishes ignored for reasons now proved false. But there has been no attempt in parliament to call Mr Blair personally to account for what has transpired to be a blunder of enormous strategic significance. It should come as no surprise therefore that so many of this country’s voters have turned their backs on a democratic system they feel has so little credibility and is so unresponsive.”

General Sir Michael Rose, former adjutant general of the British army

and commander of the UN force in Bosnia.

Politics in Britain has been dominated for the last three years by the imperialist invasion of Iraq and its consequences. Just a few weeks ago the 99^th and the 100^th British soldiers died in Iraq. Walter Douglas from Aberdeen (father of the 99^th British fatality) told the Daily Mirror, “He was against the war he couldn’t see the point of it. The lives of 99 young men have now been lost – and all for nothing.” To those 100 and the 2000 US dead we must add, of course, the countless tens of thousands of Iraqis killed in the interests of US imperialism.

Mr Douglas’ comments provide us with further evidence of the declining morale, and the growing anger in the ranks of the armed forces and their families. This was already demonstrated by the formation of ‘Military Families Against the War’, and in the general election by relatives standing as candidates to express their anger and to protest at the loss of their loved ones.

The decline of the Territorial Army, which is now being integrated into the regular army provides yet more evidence. The TA is supposed to be 42000 strong but 500 are leaving every month. There are now only 35000 of these ‘part-time’ soldiers, the lowest figure since the Territorials were formed in 1907. The morale of the troops is further drained by excessively long tours of duty, as Britain’s armed forces are overstretched by their role in Iraq and Afghanistan. Almost one in twelve of Britain’s frontline soldiers are currently tied down on ceremonial duties, rehearsals for state occasions and guarding royal palaces. Meanwhile those on the front line have to remain there longer than ever.

In the House of Commons, Blair, Cameron et al express their condolences, and shed their crocodile tears at the news of the latest deaths. Yet the parliamentary cant for which British politics has long been famous was exposed when only 20 or so MPs bothered to turn up to listen to the Defence Secretary commit an additional 3300 more young British soldiers to fight in Afghanistan.

With each passing day new slaughter and new atrocities fill our TV screens. Still more photographs from the appalling scenes of torture at Abu Ghraib have been released at the same time as footage of British soldiers beating unarmed young Iraqis, leaving their bodies in pools of blood, have been broadcast worldwide. According to Blair, Bush and co, their troops will only leave when asked to do so by the Iraqi (puppet) administration. In reality they will be increasingly keen to get out of the unholy mess they have concocted for themselves leaving behind a hellhole.

Even the local administration in Basra has announced that they will now refuse to cooperate with British troops. So much for the more civilised, understanding approach of the British army compared to the Americans. We have pointed out previously what inane nonsense this was. The American command shows absolutely no sensitivity at all towards the people of Iraq, and in so doing they are following in the infamous traditions of their British imperialist forebears.

The Iraqi people are faced with one provocation after another. The occupation of their country has brought with it the following fruits of ‘democracy’ courtesy of US and British imperialism: the destruction of the country’s infrastructure; shortages of energy and water; mass unemployment; torture, abuse and death; and now a descent into sectarian conflict and civil war. A price worth paying, according to Blair and Bush, for being able to put a cross on a ballot paper to elect a puppet government.

The war in Iraq was a central question in the general election of 2005. It was also at the heart of the other major event of the year, the terrorist attack on London’s public transport. Both have been analysed in great detail elsewhere so it is not necessary to repeat what has already been written. Instead we must draw out the lessons from these events, their causes and consequences, in order to see where they lead.

In brief, the election saw Blair’s majority reduced significantly in parliament. This is the consequence of the government faithfully doing the bidding of the banks and monopolies at home, and slavishly following the diktats of US imperialism abroad.

Meanwhile the terrorist attacks resulting from this policy are used to introduce further new legislation with little impact on the ability of anyone to bomb, but massive repercussions for our civil liberties and democratic rights. We have devoted considerable attention to this question in the recent past, and for good reason. This is not a secondary question. It represents the preparations being made by the ruling class for the period ahead. Attacks on democracy must be seen as the other side of the coin of attacks on our living and working conditions. It is not just the social and economic reforms won by the struggle of the working class in the past that are being overturned, but also the political and democratic freedoms too.

2005 General Election

The 2005 General Election was the least inspiring and most predictable for a century. Labour won an unprecedented third successive term in office, yet there were no celebrations. Barely 60 percent of eligible voters turned out on May 5^th, 2005 and less than 36 percent of them voted Labour. Put another way, just 22 percent of all potential voters went to the polling stations to keep Labour in office. As a result the government’s majority was slashed by 94. ‘At least we kept the Tories out’ was the view held by most people the day after Labour won a third consecutive election for the first time in its history. The reaction of Glenda Jackson, Labour MP for Hampstead & Highgate and former transport minister, was highly indicative: “The prime minister has spent his premiership distancing himself from his party. Now the time has come for him to leave it for good.”

The combination of widespread opposition to the war in Iraq, distrust of Blair, and disillusionment with the failures of the last two terms of Labour government means that Labour won the election with the lowest share of the vote, just 35.3 percent, of any victorious party in history.

As we explained at the time: “Labour’s majority in the House of Commons has been reduced to 67. This may seem a solid enough foundation for Blair to implement his programme, but remember with a majority of 161 Blair only squeezed through foundation hospitals (a form of backdoor privatisation) by fourteen votes, and student tuition fees by only five in the first vote… With this reduced majority, in the absence of those Blairite MPs defeated on May 5th, these policies would never have been passed. Therefore it would seem likely that this smaller majority will prepare new parliamentary rebellions over any further attempts to privatise health and education, or to introduce identity cards, particularly on the basis of pressure from below, of developing events in society, and, above all, in the trade unions. Under pressure from the movement of the working class outside parliament, backbench Labour MPs will be able to defeat Blair, who will have to look to the Tories and Liberals to vote for his anti-working class measures. Labour has a majority of 67, Blair does not.”

For all the Blairites’ talk of ‘a mandate to continue with a reform of public services’, the reality is that, despite winning the election, Blairism is already dead, ‘New’ Labour is done for, and Blair himself cannot be far behind. Blair should go, but merely to replace him with Brown, the ‘anointed heir’ according to the media, would be no more than a cosmetic change. Yet the desire for a change of policy inside Labour is precisely what is reflected in the desire for a change at the top of the party, even in the shape of swapping Blair for his next door neighbour.

The real meaning of the 2005 election result is clear. Huge numbers are disillusioned with Blair and co; are opposed to the war, to the foreign policy and the home policy being pursued by the Blairites; but the alternative, a Tory government, would have been even worse.

With turnout refusing to budge much above 60 percent, despite the highly controversial ‘liberalising’ of postal voting, Blair won the support of little more than one in five of those eligible to vote. Never has an elected British government’s mandate been so thin. Not only was Labour’s share of the vote, scraping just over 35 percent, the lowest of any winning party, but the Tories 32.4 percent marked the third consecutive election at which they have plumbed depths not seen since the 1850s. They scraped a narrow majority of the popular vote in England – 35.7 percent to Labour’s 35.4 percent - but remain a distant second in Wales and fourth behind both the Liberals and the Scottish Nationalists north of the border.

The Tory vote actually fell in the north of England compared with the 2001 election, and they now hold just 19 of the 162 seats in the north-east, north-west, Yorkshire and Humber regions. In reality they remain a rump in the south-east of England.

The Liberals improved their vote securing more MPs than at any time since Lloyd George was their leader. However their share of the vote actually declined in seats where they were trying to challenge the Tories, illustrating their classic problem of being trapped between the two main parties, moving to the left to win Labour votes loses them Tory votes, while swinging back to the right to win those Tory votes will lose them Labour votes. This is their ultimately insoluble dilemma.

The swing from Labour to Liberal in those 50 seats with the biggest Muslim populations was 8.5 percent. The increase in their vote as a protest over the war is obvious, and is reflected too in the seven percent plus swing in those seats with the highest numbers of students. Election statistics like these are an important indicator of political trends, like a snapshot they give an indication at least of the most general picture, but they must be seen in context.

The turnout figures tell us almost as much as the result itself. Halfway up Mount Snowdon, on the Watkin path, there is a plaque that marks the spot where in 1892 William Gladstone addressed a crowd of 2,000 people on the issues of the day. “How politics has changed” complained Labour’s General Secretary Matt Carter, following the election. “In May, when we were out canvassing, it was often more than we could manage to get voters off their sofas to answer the doorbell, let alone climb a mountain to hear a speech.” Who can blame them?

Politicians, pundits and the bourgeois press like to talk about ‘disengagement, declining turnouts, and disappearing party members’. The reality is that they do not understand the basis of what is an international phenomenon.

Point to any trend in modern British political life and you can find a host of other countries with similar experiences. This is not an accident. Labour Party membership has fallen in Britain, from the recent high point of 400,000 in 1997 to under 200,000 today. Membership of political parties is falling in almost every European country, both as a percentage of the electorate and in absolute numbers.

Turnout in elections has dropped significantly in Britain, falling from 77.8 percent in 1992 to a low of 59.4 percent in 2001, rising only slightly to 61 percent last year. But global turnout has also decreased by almost 10 percent in the past decade, according to the International Institute for Democracy and Electoral Assistance.

Growing ‘disengagement’ is not restricted to these shores either. The British Election Survey shows the number of people who say they have no party attachment has risen from one in 20 voters in 1964 to almost one in six in 2001. Recent studies in Sweden, Canada and the US have revealed a similar trend.

A combination of factors including the Iraq war, and the failure of governments to address the problems of working people, explain the parallel process on the continent. The same trends that helped to aid some of the smaller parties in the UK were also evident in the rise of Haider's Freedom party in Austria, the resurgence of Le Penn in France or even the emergence of the Left party in the German elections. This represents a growing polarisation in society, which we have described previously.

The idea that low turnouts represent contentment or apathy, and that this explains the disinterest in politics is fallacious. According to Mori, people are not switched off from politics. In 1973, 14 percent of the public said they were very interested in politics, with another 46 percent fairly interested. At the end of 2004, the figures were 13 percent and 40 percent respectively. This is the result when people are asked about their interest in ‘politics’. If they were asked their opinion on the environment, the war in Iraq, or the attacks on pensions being repeated everywhere – in other words real politics – the figure would be much higher. It is not politics, but bourgeois politicians and capitalist political institutions which hold little interest for the majority of people.

Blair is Finished

Labour has won an historic third term in office, but Blair knows that he is mortally wounded. Blairism is finished. Blair has announced that he intends to organise an ‘orderly transition’ (not an election one notes) before the next election. By that he evidently means just before the next election, after having served another four years.

Blair’s aim has been to beat Thatcher’s record (in modern terms) of eleven years as prime minister. That means staying on until May 2008. That is highly unlikely. Growing rebellions in parliament, even in advance of movements outside, mean he will be lucky to survive another twelve months. Despite his well documented tendency to be a control freak, and this rather pathetic personal ambition, ultimately the decision will not be in his hands but will be determined by events. As we explained following the election, “the more he tries to implement his programme, the greater the pressure will grow for him to go. If he backs down on that programme he can last longer, but only as a lame duck.” In other words, either he waters down his ‘reforms’ to prevent backbench revolts defeating him, or he relies on Tory votes to get his ‘reforms’ past. On some legislation the Tories may choose to back him, as Cameron tries to position himself as Blair’s real heir, on others they may prefer to see Labour lose. In either scenario pressure will mount on Blair to leave.

In trying to mimic his idol Thatcher (in longevity as well as in policy) he may well end up like her, despised and forced out. Exactly when he will go is not yet clear, but go he will. As Oscar Wilde put it “some spread happiness wherever they go; others, whenever they go.”

How is it to be explained that having won a third successive term in office for the first time in Labour’s history, with a majority of 67 in parliament, we declared Blair and Blairism to be finished?

There is a widely believed myth that Blair was the reason Labour won its landslide victory in 1997, that Blair made Labour ‘electable’ again. In reality the European Exchange Rate Mechanism disaster which pushed interest rates up to 15 percent, combined with the pit closure programme, following the Tories re-election in 1992 saw Labour’s lead rise to over 30 percent in the polls before the death of then leader John Smith. From the time Blair took over the leadership until the 1997 election that lead fell, and it has continued to fall, more or less, ever since. Labour won a landslide in 1997 regardless of Blair and co.

Four years later, in 2001, Labour secured a second term with the lowest turnout on record, in spite of Blair and the experience of four years of New Labour rule. Some refused to vote in protest at Blair and co’s failures, but some wanted to give them another chance. Labour needed longer than four years to roll back 18 years of Tory rule, we were told.

In 2005 nine and a half million people voted Labour, many holding their noses, to make sure that the Tories did not win. That is two million less than voted Labour when Kinnock was leader in 1992, and the Tories won. Labour has shed 4 million votes since 1997. In other words, one in three voters who put Labour in office in 1997 did not turn out to support them in May 2005. The number of voters who chose Labour last year was fewer than in any of the elections fought by Harold Wilson, Jim Callaghan or Neil Kinnock.

It was not just the voters who did not turn up. After being trodden on and ignored time and again the party membership all over the country refused to campaign, at least in anything like the numbers that would have been seen in the past. Streets that once would have been thick with Labour activists were instead thick with the chickens of Iraq, foundation hospitals and tuition fees coming home to roost. Meanwhile Labour posters in gardens and front room windows were about as rare as hen’s teeth.

The Parliamentary Labour Party, Blair’s Programme and Brown’s Inheritance

With the election out of the way, returning to their usual arrogance, the Blairites claimed that their programme of privatisation and attacks on civil liberties was in the manifesto and therefore is what people voted for. "Our job is to implement the manifesto but it's only going to be carried through if we are united as a political party… Our fourth victory will be under different leadership but we have to remain united until then," Blair announced at the first post-election PLP meeting, holding out the carrot of his departure to lure the backbenches to vote for his policies.

Of course, we should note in passing that Brown has gone along with all of this, just as he has supported PFI, student fees and the war in Iraq. In reality Brown would represent no real change. However, the reality and the perception are two different things. The left has no intention of standing against him. Lacking the perspective of Marxism, they have no programme (hence the twists and turns of their voting record) and as a result they have no confidence. Nevertheless the desire for change inside the party and the wider movement is reflected in a distorted way even in the support for Brown. Of course, we can give no support to Brown whatsoever. The choice between Tweedle-Glum and Tweedle-Glee is no choice at all. Not that there will be any choice if Blair and Brown get their way. The intention is a seamless transition from Blair to the heir apparent.

Brown spelled out his Blairite credentials at Labour’s last annual conference. The Party conference voted by 60-40 to legalise secondary action following the experience of Gate Gourmet, but Brown made it quite clear that he will ignore that and any other conference decisions not designed to impress the City. The Brownites no less than the Blairites represent a capitalist trend in the Labour Party.

Those on the fringes of the movement busily building their new mass parties of two and three will see this as a confirmation of their empirical analysis that Labour is now just another bourgeois party. They confuse the leadership with the rank and file and the trade union links. Labour remains the mass party of the British working class for all its current bourgeois leadership and capitalist policy.

Blair has his millionaires’ row mansion ready and waiting for him, and Brown has booked the removal van for his short trip next door. They want Brown to be anointed with no discussion, and no opposition, certainly no election. The trade union leaders, and almost the entire opposition to Blair – except the Marxists – have rushed to endorse Brown. They have been willing to delude themselves that he is ‘better’ than Blair simply because he is not Blair. He has now made it quite clear that he wants to be Blair the second. Brown’s succession is the most likely outcome when Blair finally goes, but it will not be as smooth and simple as either imagine.

Brown will want to simply continue where his predecessor leaves off. However, Brown will not get the honeymoon period enjoyed by Blair after 1997. Whether Brown likes it or not New Labour is dead, it cannot be renewed. The condition of the economy, the situation in the trade unions, in the Parliamentary Labour Party, and in society is very different now.

Had Blair been elected with a majority of 67 against a background of social peace and a booming economy, with rising living standards and without a disastrous war in Iraq, he would now be under less pressure, and there would be little prospect of successful backbench rebellions. Similarly if Brown were to inherit such conditions, his life would be a lot easier. That, however, is not the case. Revolts in parliament are only one element in a complicated equation of social, political, industrial and economic unrest which confronts a third Labour term and will ensure that it is fundamentally different to its two predecessors.

During the last parliament, between 2001 and 2005, Labour backbench MPs rebelled in 21 percent of divisions, a higher figure than in any other parliament since 1945. The rebellions in 2003 over the introduction of foundation hospitals broke the record for the largest health-policy rebellion ever by Labour MPs against their own government. The 72 Labour MPs who voted against the second reading of the top-up fees bill in 2004 were precisely double the number that had until 2001 made up the largest education rebellion ever by Labour MPs. And the rebellions over Iraq were the largest by MPs of any governing party, Labour, Conservative or Liberal, for more than 150 years. To find a larger backbench revolt than Iraq, you have to go back to the Corn Laws in 1846, when the franchise was enjoyed by just 5% of the population. Since the beginning of modern British politics, in other words, there has been nothing to match the Iraq revolts.

For the Blairites the arithmetic is simple and depressing. The government's effective majority is 71. To defeat the government it takes only 36 Labour MPs to vote with the opposition. That has already happened and will happen again. It is never possible to judge how sincere the opposition of each of the ‘rebellious’ backbench MPs is, or how principled their voting will be. As Lenin once explained there is no such thing as a sincerometer. What really matters is the pressure put on them from outside parliament by the labour movement. For example, if the TUC were to call a national demonstration against the proposed attack on public sector pensions (and it is yet another demonstration of the depths to which they have sunk that they do not manage this bare minimum of opposition), this would provide the rebellion of the backbenches with a solid backbone.

When Labour backbenchers do vote against the government, the Tories can, on some questions, vote with the Labour leaders. These calculations will be keeping Brown awake at night too. At present he is odds on not only to take over from Blair but also to win a fourth term for Labour in 2009. However, that can change very quickly. An ICM poll in December put the Tories four points ahead of Labour for the first time since 1992. Current polls indicate that Brown would defeat Cameron by 43 percent to 37 percent, but that is if an election were to take place tomorrow.

Everything depends on events. Changes in the economy, political or international developments can transform the situation overnight. If a week is a long time in politics, then in the space of four years anything can happen. A crash in house prices, events in the Middle East, trade union struggles, parliamentary revolts and any manner of unforeseen shocks can disturb the situation in Britain suddenly and sharply.

Just such a shock took place two months after the election when London was shaken by its first experience of suicide bombers on public transport. On this occasion there were fewer casualties than in the earlier attack on Madrid. There the combination of widespread opposition to the war and Spain’s part in it, and the Aznar government’s bungling of the situation resulted in a mass movement which effectively overthrew the government and led to the PSOE administration of Zapatero coming into office.

Here the response was different. The bombs caused a wave of shock, and the opposition to the war is no less in Britain than in Spain. However, what was the alternative here? The Tories who supported the war? No, instead the attacks created a mood of fear amplified by the media and the government to provide the background to a further assault on civil liberties in the name of fighting terrorism.

Even before the rush to write new legislation we experienced the further shock of the police being given the right to shoot to kill ‘terrorist suspects’. The brutal execution of Jean Charles de Menezes has been dealt with in detail elsewhere, it is not necessary to repeat that analysis here. On the one hand this operation demonstrated a degree of bungling incompetence that is fatal when combined with firearms. On the other it provided a graphic illustration of the changes tasking place in the powers of the capitalist state machine.

The British State, Bourgeois Democracy and Civil Liberties

"There is no greater civil liberty than to live free from terrorist attack" according to Tony Blair, writing in The Telegraph (24/02/2005). If this were true then there would be no greater threat to our civil liberties than Blair’s government. Their slavish support of American imperialism’s invasion and occupation of Iraq has made Britain a terrorist target. In turn this threat and the climate of fear carefully cultivated around it are being used precisely to undermine our democratic rights.

No greater civil liberty, claims Blair. What about the right to vote? The right to demonstrate? The right to strike? The right to trial by jury? The truth is that many of these rights have already been whittled away. Blair’s government undermines that which he claims to be the greatest of civil liberties, just as it is attempting to trample over other hard won freedoms.

The assault on our democratic rights, won by generations of struggle, is not a secondary matter. It is not enough to shrug one’s shoulders and announce that we are not really free under capitalism anyway. We do not elect judges or police chiefs, newspaper owners or the bosses of the banks and big companies that dominate every aspect of life. All this is true, the state in capitalist society is an instrument for maintaining the rule of the minority over the majority, and ultimately it is the big monopolies and their interests that decide all important questions. This hardly exhausts the subject though. It is clearly easier to organise a struggle for jobs and wages, or for that matter for revolutionary change, in conditions of democracy than under a dictatorship.

The democracy afforded to us by capitalism is restricted, but we can no more ignore the attacks launched on our political rights than we can attacks on our jobs, wages and conditions. In fighting for better social and economic conditions we are not promoting illusions in the ability of capitalism to provide for our needs. In the same way in fighting against these assaults on democratic rights, we do not sew illusions in Democracy, the Law etc.

Beneath the cloak of fear being woven by the propagandists of ‘anti-terrorism’ are very real attacks on our ability to protest, to fight back, and to organise to change society. Blair complains that “we are trying to fight 21st-century crime - antisocial behaviour, drug dealing, binge drinking, organised crime - with 19th-century methods, as if we still lived in the time of Dickens." (Tony Blair, 27/09/2005)

Indeed Dickensian era laws are still being used, not to combat 21^st century crime but to stifle protest. In September The Guardian reported that a student campaigning against cruelty to animals, had his city centre stall in Lancaster confiscated under the 1824 Vagrancy Act. "Every Person wandering abroad and endeavouring by the Exposure of Wounds and Deformities to obtain or gather Alms ... shall be deemed a Rogue and Vagabond..." This Act was intended to prevent veterans of the Napoleonic wars from begging by displaying their injuries, but the police decided that this rule could be applied to the pictures of animals’ wounds on anti-vivisection leaflets.

Some of the laws they use against protest predate Dickens, and even Shakespeare, being more familiar perhaps in the time of Chaucer. In two recent cases, protesters have been arrested under the 1361 Justices of the Peace Act. So much for Blair's 21st century methods. The Canterbury Tales could have included a cautionary tale about the woman arrested by Kent police for the heinous crime of writing two polite e-mails to an executive at a drugs company begging him not to test his products on animals. Such electronic threats to national security warrant undermining freedom of movement, freedom of association, the right to trial by jury, and the presumption of innocence in the eyes of Blair and the ruling class. In the new period we have entered more ‘modern’ laws are evidently required to protect the system.

Last autumn the headlines were dominated by the assault on 82 year old Walter Wolfgang, violently removed from Labour’s national conference, and then held briefly under the Prevention of Terrorism Act, for heckling the Foreign Secretary Jack Straw by shouting ‘nonsense’ as Straw tried to defend the indefensible occupation of Iraq. This exposed the control freakery of Blairite stage-managed conferences. More important still are the implications for civil liberties.

There are many other examples hidden away from the front pages which demonstrate that this was not an isolated accident, and the threat to democratic rights is quite real.

The student who had his stall confiscated in Lancaster was one of a group of half a dozen students and graduates of Lancaster University who were recently convicted of aggravated trespass. Their crime was to have entered a lecture theatre and handed out leaflets to the audience. Staff at the university were meeting people from BAE Systems, Rolls-Royce, Shell, GlaxoSmithKline, DuPont, Unilever and other big companies to learn how to "commercialise university research". The students were hoping to persuade the researchers not to sell their work. They were in the theatre for three minutes. As the judge conceded, they tried neither to intimidate anyone nor to stop the conference from proceeding. They were prosecuted under the Tories’ 1994 Criminal Justice Act, as amended by Labour in 2003 to ensure that it could be applied anywhere, rather than just "in the open air".

The new laws on harrassment give the police the power to arrest almost anyone demonstrating anywhere about anything. Had Mr Wolfgang said "nonsense" twice during the foreign secretary's speech, the police could have charged him under the Protection from Harassment Act 1997.

In 2001 two peace campaigners were prosecuted for causing "harassment, alarm or distress" to American servicemen at the Menwith Hill military intelligence base in Yorkshire, by standing at the gate holding the Stars and Stripes and a placard reading "George W Bush? Oh dear!" In Hull a protester was arrested under the act for "staring at a building"!

Section 132 Serious Organised Crime and Police Act 2005 is already becoming an effective weapon against democracy. This bans people from demonstrating in an area "designated" by the government. One of these areas is the square kilometre around parliament. The problem is that we do not get to know where is and where isn’t ‘designated’. The Home Office explains the policy: "It's an operational matter for the police force," says a spokeswoman. "It's up to them to act in the context of a situation so it's not for us to rule out X, Y or Z. Taking a dog for a walk in a dockyard - it's up to the police to decide if they pose a risk or not. There are no circumstances where we could say it can't be used."

The law that has proved most useful against protest is section 44 of the Terrorism Act 2000. This allows people to be stopped and searched without the need to show that there is "reasonable suspicion" that a criminal offence is being committed. This has been used not just against Mr. Wolfgang but repeatedly against anti-war protestors.

With all this legislation already in force, not to mention the criminal shoot to kill policy, what more powers do they claim they need? The right to hold suspects for three months without charge on the say so of a politician, which cost Blair his first defeat in the Commons; the introduction of compulsory identity cards; and now the so-called ‘glorification of terror’ law. The opposition parties, and the legal experts have all protested that the term ‘glorification’ is too vague and ill-defined to stand up in court. They argue that there is plenty of old legislation on the statute books – such as those quoted above, or those used to jail Abu Hamza – without inventing new ‘bad’ laws. On the one hand Blair’s insistence on the word glorification is typical of his attempts to curry favour with the Daily Mail. On the other, vagueness may well prove to be useful to the authorities when they wish to arrest someone who has not broken a specific law.

Even the judiciary are frightened that Blair is going too far. The attempt to give the Home Secretary the right to hold suspects without charge for ninety days provoked a flurry of opposition from the legal profession. The lord chief justice, Lord Phillips of Worth Matravers, said it would be "wholly inappropriate" for a politician to try to put pressure on them. Blair denied that he was "browbeating" the judiciary and went on to warn the judges - again in explicit terms - that they must not rule against the anti-terror measures that were being proposed. "When the police say this is what we need to make this country safe, you have got to have good reasons to say no to that."

Charles Clarke attempted to justify the principles underlying his terror bill by arguing that political violence to topple a government is no longer justifiable anywhere in the world, under any circumstance. "I cannot myself think of a situation in the world where violence would be justified to bring about change," Mr Clarke said. Does this rule out British support for any other US imperialist adventure in the Middle East? What else was their invasion of Iraq than ‘political violence to topple a government’. Marxists are no fans of violence, of course. Whilst we are not pacifists, only a lunatic would glorify violence. We base ourselves on the political power of the working class to transform society. Yet we, along with many others, may be accused of just that crime for supporting liberation struggles of people forced to take up arms against imperialist occupation, for example. Perhaps bonfire night celebrations (the glorification of an attempt to blow up parliament on 5/11 as some wits have pointed out) will be ruled out by this new legislation?

Clarke assures us that this is not so. The new legislation is designed to protect ‘our way of life’. In case the meaning of this threat is too subtle, The Daily Telegraph helpfully published a list of "10 core values of the British identity" whose adoption, it argued, would help to prevent another terrorist attack. These were not values we might choose to embrace, but "non-negotiable components of our identity". Top of the list were "the sovereignty of the crown in parliament" ("the Lords, the Commons and the monarch constitute the supreme authority in the land"), "private property", and "the family". These values can be readily shortened to their more common name – capitalism.

Identity cards will do nothing to protect us from suicide bombers, but it will help the authorities to keep a close eye on troublemakers, anti-war activists, militant shop stewards, and so on.

Giving the Home Secretary the right to hold ‘suspects’ for three months would have been little short of a return to the repression of internment. With this or that minor amendment the bill passed still constitutes an assault on long held freedoms.

There is no greater threat to democratic rights than a capitalist system in fear of its future. As we have stated many times, and we make no apology for repeating, this is not a secondary matter. In the end to achieve real democracy, that is control over our own lives, and over society as a whole we must take power out of the hands of the privileged few, the capitalist class, and their repressive institutions. Even the limited democracy of the past is no longer safe under capitalism. The struggle for political, social and economic freedom is the struggle for socialism.

The importance of this question was demonstrated by the fact that it was responsible for Blair losing his first vote in parliament since Labour’s landslide election victory in 1997. A Labour majority of 67 was, as predicted, no majority at all for this Blairite ‘reform’. Unlike the frequently ignored votes of Labour Party conference - where Blair has shown his contempt for democracy on many occasions - this one was a little harder to dismiss.

The significance of the vote was far wider than whether or not the government succeeded in getting the reactionary policy of holding suspects for 90 days without charge onto the statute book. Blair did not just lose, having put his authority on the line and having made this vote a three-line whip (i.e. making it ‘compulsory’ to toe the leadership’s line), he was humiliated. The scale of his embarrassment was compounded further by having to drag Gordon Brown back from a trip to Israel only hours after he had arrived there. Similarly Jack Straw was flown back from Moscow because Blair needed every vote he could get. Ian McCartney had to limp in from his hospital bed despite just having had a triple by-pass heart operation. Yet even these desperate measures were not enough.

Blair had convinced himself that he had won over the parliamentary party with a speech appealing for unity. He did not understand the extent to which his authority has been undermined even in these upper echelons of the party. As one former minister explained in The Guardian, with his tongue firmly in his cheek: "It was brilliant. I have never heard him so convincing since he sold us weapons of mass destruction in Iraq."

Blair has long since lost the support of trade unionists and rank and file party members. His policies have already been defeated on the floor of the now ruthlessly stage-managed party conference. He has suffered, but survived, previous close votes with the help of his friends on the Tory benches. Now his authority in Parliament and the Parliamentary Labour Party has been shattered.

Forty nine Labour MPs voted against this reactionary Blairite legislation and thirteen more abstained. Together with the votes of the Tories and Liberals the result was a defeat by 322 votes to 291. Blair has had to rely on Tory votes in Parliament before. This time, however, with the Tories intent on giving the prime minister a bloody nose, the Labour leaders astonishingly appealed to the most hard-line, right-wing Tories for support, goading them that the Tory leaders weren’t right wing enough! The Tories’ spurious principled opposition to this bill, couched in hypocritical verbiage about civil rights, will have fooled no one. This was opportunism, a chance to defeat Blair in parliament and breathe some life back into their long comatose party.

There is a real irony in the complaint of one Tory MP, who interrupted the Prime Minister’s speech, shouting out “we aren’t in a police state”. This from a party which has consistently opposed civil liberties and democratic rights. The irony, however, is that in the current atmosphere, Charles Walker, the Tory MP in question, was lucky not to be arrested for the new terrorist offence of heckling.

In constantly appealing to the authority of the police – Blair’s speech appeared to be an appeal on behalf of the Police Party rather than Labour – the Prime Minister demonstrated just how authoritarian he has become.

This was not the biggest rebellion by backbench Labour MPs that we have seen, more voted against the war in Iraq, for example, but it was the biggest defeat in a ‘whipped vote’ since the Callaghan Labour government of the late 1970s. On health and education, even bigger Labour rebellions can be expected in the next period. The difference on this occasion was that the rebels won, Blair was defeated, and if his reactionary plans can be defeated once they can be again.

Were we right to argue that this one defeat in parliament meant the end of Blair? No-one now doubts that this was one of the last nails in his coffin, but then his days have been numbered for some time. However, when is a different matter. Major’s Tory government continued for two years without a majority. His government lost four votes in parliament. The difference here is that Blair is hell bent on confrontation, and not just with the Parliamentary Labour Party. He is intent on carrying through his Tory policies of privatisation in hospitals and ‘reform’ of schools. This will provoke further rebellions inside parliament and outside.

The arrogance of the man is staggering. In responding to his first defeat he made it clear that he was right and those who voted against were wrong. "The country will think parliament will have behaved in a deeply irresponsibly way, I have no doubt about that at all," he said. ‘President’ Blair would no doubt like to dissolve this “irresponsible” parliament and elect a new one more loyal to him and the police. "Sometimes it is better to do the right thing and lose,” Blair continued “than to win doing the wrong thing. I have no doubt what the right thing was to do in this instance, to support the police.”

Even in the restricted democracy afforded to us by capitalism it is generally understood that Parliament is elected to make laws whilst the police and legal system are supposed to implement them, not the other way around. Of course, ultimately parliament, the judiciary, the police are all parts of the state machine designed to manage and defend capitalism. However, as we have often commented, the needs of that system in a new period are coming into conflict with parts of this establishment as they try to refashion it into something more suitable to the task of defending capitalism in a new era. These splits at the top of society represent divisions in the ruling class over how best to proceed in a new situation.

So what will happen now? In reality, despite Labour winning the last election with a majority of 67 Blair now effectively leads a minority government. No doubt if there were a vote of confidence tomorrow morning he would win. However, as for the rest of his modernising agenda, this will now face stern opposition in parliament. For his Tory privatisation policies Blair will now rely on the votes of the Tory party to outnumber Labour rebels. In this sense he will lead a kind of ‘national government’, with a Labour opposition behind him.

This will be the case particularly in relation to Blair’s proposals for commercialising the National Health Service and, above all, in relation to his proposals for schools.

The amendment passed to the anti-terror bill allowing suspects to be held for 28 days is an affront to civil liberties and democratic rights, and is not the last of such reactionary policies. Not just privatisation, and attacks on education and health, but also the continued disastrous occupation of Iraq, the introduction of identity cards and other assaults on democracy, and every other repressive or reactionary proposal emerging from Ten Downing Street are all symptomatic of the impasse of capitalism.

The identity cards bill was passed with little opposition in the end. Backbench MPs argued that it is difficult to vote against something that was in the manifesto. As if anyone reads political parties’ manifestoes. They did not have any such difficulty passing the total ban on smoking in pubs, clubs etc, despite this being in conflict with what they had written in the manifesto. The new education bill will be a different matter. The only question is the size of the rebellion, and how long Blair will be able to continue after it. Sooner rather than later he will have to go.

Blair may well have won the election, but Blairism is dead. The pipedream of converting Labour into a British version of the US Democratic Party, which seduced many of the sectarian groups, as well as the Labour leaders, has evaporated. The triumph of Blairism was a consequence of defeat and demoralisation in the labour movement, leading to a period of inactivity. The right of the movement always rest on such periods. However, that period is over. Blairism reflects yesterday, not today and tomorrow. To borrow an expression of Trotsky’s, history has turned its backside towards these people and the inscription they read there is their programme.

Replacing Blair with Brown will solve nothing. That will not be the end of the matter, however, but only the beginning of a period of change. The task of Marxists is not to be seduced by the surface of events, not to see things in black and white, isolated and unconnected, but instead to piece together all the available evidence to grasp the process under the surface, the direction in which events are moving.

Things are beginning to change. In the context of a new international situation and the impact events like the war in Iraq have already had on all classes in society, we now have important changes taking place in the economy, and a new militancy beginning to develop in the trade unions. What we are witnessing as a result of all these changes is a growing class polarisation of British society.

That means developments to the right and the left. There will be a growth of reaction, of various right wing groups which cannot be ignored. The Tory Party will move further to the right. However the fundamental feature will not be this but the movement of the working class, and the shift to the left in the workers’ organisations, in the trade unions and, at a certain stage, the Labour Party too.

In the next period the working class will turn their organisations inside out and upside down, transforming them time and again until they are more suited to fighting for their needs, for the needs of society, just as the ruling class are busily transforming their state machine to defend themselves against those needs.

The Marxist tendency and the ideas we represent have a vital role to play in that struggle inside the labour movement which represents the cleaning and sharpening of tools in readiness for the job in front of us, namely the overthrow of capitalism and the construction of a new socialist society. The ideas of Marxism must become a potent weapon in the armoury of the working class in all its day to day battles and in the struggle to transform the planet. Only in that transformation can the problems we face be permanently solved and all the remarkable advances in science and technology be put to use rationally, scientifically and democratically in the interests of all humanity.

Labour was not elected to introduce identity cards, nor to turn NHS hospitals into department stores. In short they were not elected because of what was in the manifesto. They were elected to keep the Tories out because they would have been even worse. The common complaint since 1997, ‘we voted Labour but got Tories’, will become literally true as Blair relies on Tory votes to pass Tory policies. Even if only for a short time he will have achieved his destiny and become a Tory prime minister.

The Tory Party: New Leader, New Recovery?

Michael Howard did his job - namely propping up the Tories’ support in the election by winning back the ‘little Englander’ vote from the UK Independence Party (UKIP). He succeeded in this task to a large extent, though even UKIP’s much reduced vote robbed the Tories of several seats they might otherwise have won. By taking around two percent in some areas they clearly stopped the Tories winning, for example, in Battersea where they won 333 votes and Labour held onto the seat with a majority of 163.

Despite winning the biggest share of the vote in England, the Tories’ support remains rooted in the south east. There is little evidence that they won many votes from Labour. Nationally their vote increased from 31.7 percent to 32.4 percent. As former Tory Defence Secretary Michael Portillo remarked, “the Tories used to see themselves as ‘the natural party of government’, now they are thrilled to gain 30 seats even though this is more a result of less people voting Labour than of more voting Tory.”

The UK Independence Party could not repeat their startling successes of the last European elections. That was never a realistic prospect. They remain essentially a foretaste of how far to the right the Tories will move in the next few years.

The BNP, that pernicious, nasty, little fascist grouplet, secured a few thousand votes in Keighley and in Barking. They are not an electoral threat but they do pose a physical threat to local communities and the labour movement must be vigilant, not to their imminent political rise as some falsely claimed, but must mobilise to drive them back under the stones from beneath which they crawled. They will be hoping to use the votes they secured in the general election to build support and gain further council seats, it is a task of the labour movement to ensure that they do not.

The Tories, as was inevitable, have begun to recover in the polls under their new leadership. They remain the main party of the capitalist class for all their recent woes, and those yet to come – divisions over Europe will inevitably re-emerge sooner or later. The Liberals are not going to overtake them. Electoral statistics do not decide which party is the bosses’ main representative, that is a class question. We have explained previously that the Liberals base in the south west, mid-Wales, and in the countryside, together with their radical membership, is too weak and too unreliable for the capitalist class to lean on.

The Tories have entered 2006 with yet another new leader, their fifth in ten years. As we have commented on many occasions the paucity of leaders in the Tory Party is an accurate reflection of British capitalism’s long term decline. We have analysed this crisis in the three Cs of the establishment many times. The crises afflicting the Conservative Party, the Church and the Crown are accurate reflections of the degeneration of British capitalism over a long period.

As well as exposing once more the racist, arrogant, archaic, reactionary face of the monarchy, the leaking of Prince Charles’ diaries about the handover of Hong Kong (The Great Chinese Takeaway), caused a furore in the press. The Mail and co took the opportunity to argue for the ‘right’ of the monarchy to interfere in politics. They portray a ‘radical’, political prince, and hint that the country would be better off if he were running it. Whilst this is not a serious threat at this time, it does underline the purpose for which capitalism maintains the monarchy in reserve – something we have analysed in detail in earlier documents.

The crisis in the Anglican church continues to deepen. They now intend to create new Bishops for those of their worshippers who won’t accept women being elevated to this position. These are to be called Provincial Regional Bishops, or flying bishops. If you support the idea of women bishops you can go to church as normal. If you are opposed don’t worry they will send you a male flying bishop instead. This is tantamount to a split. If this were not bad enough, the Anglican church worldwide already faces a split over accepting homosexual clergy. What an unholy mess. For most people this will pass by unnoticed. Yet it should not be completely ignored as it represents another example of the splits and divisions within the ruling class and its institutions.

Meanwhile the crisis in the Tory Party is not over by a long way. We have pointed out previously that the Tories would continue to move to the right as part of the process of polarisation taking place in society. On the surface this would appear to be contradicted by the election of David Cameron who has been at pains to present a more caring, sharing image for the Conservative Party. Fortunately memories are not so short. Beneath this New Emperor’s Clothes lies the same old naked reaction. If the Tories were to be re-elected they would inevitably pursue a reactionary course. Indeed they would have little alternative. As the main party of capitalism they must act in the interests of the capitalist system. The system can no longer afford reforms in the way that it could in the past. On the contrary, in social, political and economic policy they would attempt to pass the burden for the crisis of the system on to the working class, while undermining civil liberties and democratic rights. If you are thinking that this just sounds like Tony Blair, then that is not an accident. Having firmly affixed their chariot to the free market the current Labour leaders must pursue the same policies as their Tory friends. It is not an accident that barely a cigarette paper could be squeezed between the opinions of the leaders of all three parties.

According to the media this is because they are all trying to occupy the ‘centre ground’. There is a long standing myth in British politics that the main political parties all need to fight for this ‘centre ground’ if they are to win elections. On the surface this sounds logical, providing one is willing to accept that the majority of people find themselves half way between left and right. This is a cunning ruse in which left and right are both positioned within the limits of the capitalist system. The choice is not between capitalism and socialism, but between a reformist or liberal view on the one hand and a conservative and reactionary programme on the other. The reason why there is so little difference between the main party leaders is not that they all represent some mythical ‘centre’, but is because there is less and less room to manoeuvre within the confines of capitalism. This system can no longer afford reforms in the way that it could in the past (and even then they had to be fought for). They are like men forced to stand ever closer together in a room with the walls closing in around them.

Cameron’s strategy now is to present himself as the natural successor to Blair, the occupant of the centre ground. He is attempting the not exactly difficult task of driving a wedge between the Labour Party and the Blairite leadership. In doing so it is not so important to him to appeal to the electorate but to prove to big business that he can be trusted more than Brown to carry on Blair’s good work. While Brown is busily prostrating himself before the city, Murdoch and co. Cameron is in the wings pointing not at Brown, but at the Labour backbenches and the inability of a Labour government even with a majority of 67, let alone one that loses still more seats, to carry the policies required by enfeebled British capitalism. Sooner or later the ruling class will want to install their first eleven into Number Ten. They have been able to rely on Blair for a whole period. No doubt they would have no principled objection to Brown who has done a good job on their behalf as Chancellor. It is not Brown, but the opposition growing in the Parliamentary Labour Party, and above all in the trade unions, to which they object. They rightly see and fear the process of transformation which will begin to unfold in the labour movement in the next period. In such conditions they could not rely on the second eleven – the Labour leaders – but will turn back to their main party, the Tories.

The Liberals – New Leader, New decline?

Were the Liberals not the biggest winners of the 2005 election? In reality the only party to come near 40 percent was the ‘none of the above’ party representing all those who did not vote for anyone. Inevitably since the Liberals fought the election on the basis of being to the left of Labour, (supposedly) opposing the war and tuition fees, for example, they stepped into the vacuum and picked up a good deal of the protest vote. However, they also lost some seats to the Tories by the same token.

Their gains were in the main due to a protest vote against the war in Iraq. On paper (specifically in their manifesto) standing to the left of Blair, they secured that section of the protest vote that did not simply stay at home. They scored particularly well in seats with large student populations such as Leeds North West, Cambridge and Cardiff Central. Their opposition to student fees as well as the imperialist adventure in Iraq won them seats from Labour in these areas, and they managed to come second in many safe Labour seats for the same reason. Yet, ironically, they lost some seats to the Tories. This illustrates their catch 22. By standing to the left of Blair they pick up disillusioned Labour votes, but by the same token lose those Tory voters who had supported them as a kind of Tory-lite, a capitalist party with a nicer face. In reality they are not a third force in British politics but a fifth wheel. Any shift to the left in the future in Labour will see these protest votes haemorrhage back to the Labour Party.

For the last fifty years or so the principal function of the Liberals has been to soak up disaffected Tory votes and prevent them going to Labour. In this election that was simply turned on its head, they were a safety net for disaffected Labour voters. They will now return to their aim of replacing the Tories as the main opposition to Labour. To do this many of their leading lights argue that they will have to move to the right. The Orange Book tendency named after a publication by David Laws MP for Yeovil, argue that they need to be more ‘economically liberal’. This is Liberal for move to the right. Expect new leader Sir Menzies (Ming) Campbell to move quickly to ditch raising taxes to pay for public services, in an effort to win Tory votes at the next election.

The Liberals’ success in the recent Dunfermline by-election was essentially a protest against Labour, and interestingly against Brown whose own seat in parliament is next door. Despite all their woes over the ousting of Kennedy and the scandal surrounding their leadership contest, they picked up another protest vote. This was a vote against Blair and Brown rather than a vote for the Liberals.

The recent growth in support for the Liberals is reaching its limits. This was inevitable as we have long pointed out. The pipedreams of them replacing the Tories were only based on the most empirical analysis of election results. They never took into account the more serious question of class relations, and the class basis of the main political parties.

Recently they have provided a home for anti-Labour protest votes, on the one hand because of the dire mess of the Tory Party, and, at the same time, by presenting a left face. However, to go any further they would always need to move further left to win Labour votes, or, as has been the case recently, further right to pick up Tory votes. This process was already underway before their latest leadership crises.

As the Tories recover somewhat under their new leader, the Liberals will see their support fall in the polls, regardless of theirs. It is the historical role of the Liberals to be crushed between the two main parties. This too is a symptom of the growing polarisation in society.

The Nationalists, the SSP and Respect

That polarisation is reflected in some of the more interesting results to emerge from the last election. By far the most interesting were those where there was some kind of alternative to Labour on offer. In seats all around the country all kinds of fringe elements stood and received derisory votes. This is as normal. Despite the fact that working people are to the left of Blair and co, they have no interest in the insignificant sectarian organisations.

In Scotland and Wales the nationalists could make no real progress from the mounting opposition to Blair. The Scottish parliament and Welsh assembly reforms, and in turn the minor reforms they have implemented, have probably played a role in undercutting support for the nationalist parties. In Scotland the SSP having dumped their front man Sheridan have also lost a layer of the support they had begun to build up. Their vote actually fell from 72,000 to 44,000. The nationalist and reformist degeneration of this group has continued in the form of an approach to the SNP by an important sector of the leadership, the Independence Convention being the most obvious case. If they continue along this road many of the workers and youth that have been attracted to the SSP will be looking for an alternative in the next period.

There were two contests in the general election which provided us with an interesting insight. Undoubtedly the most high profile exception to the rule that workers are not attracted to the small parties to the left of Blair being the victory of George Galloway in Bethnal Green and Bow. The prominent expelled Labour MP, nationally known for his opposition to the war in Iraq, defeated the Blairite Labour candidate Oona King by 800 votes. Although his Respect party picked up a few votes in other seats, it was really only here, thanks to the celebrity status enjoyed by Galloway; the fact that he is an expelled Labour MP; and, according to many press reports, a certain opportunism toward the large Muslim community in this area of east London, that they were able to gain from the enormous antipathy towards Blair and the war in Iraq.

The other highly interesting exception came in the rock solid Labour seat of Blaenau Gwent in South Wales. Here the Labour leaders attempted to impose a Blairite candidate, Maggie Jones, by insisting on an all-women shortlist to select a candidate to replace retiring left-wing MP Llew Smith. This seat was famously held by Aneurin Bevan, the left-wing Labour MP who introduced the National Health Service during the post second world war Labour government; and the former Labour leader Michael Foot.

Local party members would not accept this imposition from on high and backed the independent candidature of Labour Welsh assembly member Peter Law. Even though there is no particular evidence to demonstrate that Law is left-wing (having said that he did stand as an Independent Socialist), there can be no doubt that for ordinary working people in this safest of Labour seats this was a straight contest between Old Labour and New Labour (in almost laboratory conditions since there was no chance of splitting the vote: the other candidates, Tory, Liberal, Plaid Cymru, receiving around 3000 votes in total between them) The Blairites were roundly defeated. A Labour majority of 19,000 was transformed into a 10,000 majority for Peter Law.

Like the Bourbons the Labour leaders forget nothing and learn nothing. This is not the first time their heavy handed manoeuvring has backfired on them resulting in opposition in Wales. The attempt to impose Blairite Alun Michael as First Minister in the Welsh Assembly saw them embarrassed by the rank and file and the unions rejecting him in favour of Rhodri Morgan, a process that was more or less repeated with the experience of Livingstone and the contest for London Mayor.

The Tories have begun to recover, the Liberals are reaching their limits, the various sectarian fronts are on the road to nowhere, and on the electoral front Labour is the only show in town. The two cited exceptions only serve to prove the rule (in the original meaning of that saying, that is, to test whether it is valid or not) that workers are not interested in small, irrelevant little groups outside Labour. In one case an expelled Labour MP was elected, in a clear protest against the war in Iraq. In the other an old Labour candidate defeated a Blairite. In both cases, essentially, Labour defeated Blair.

Blair Sets Collision Course with Backbenches and the Working Class

With a much smaller majority in Parliament Blair and co vowed to continue with their ‘reforms’. However, what they intend and the reality may turn out to be somewhat different. Now the backbenches find their opposition more potent. It will in turn bolster, and be bolstered by, mounting opposition in the unions. The decision to be unremittingly ‘New Labour’ set this third term Labour administration on a collision course, not only with the backbenches, but above all, with the trade unions and the working class.

If you remain within the constricting confines of capitalism then you have to follow its rules and obey its laws. Blair and co remain firmly, ideologically wedded to the market, therefore they must follow its dictates. The working class has already paid a heavy price for the economic boom of recent years in terms of stress and strain, in terms of health and family life. Now that boom is drawing to a close and there are no prizes for guessing who will be asked to foot the bill for a new period of economic recession.

Electoral statistics can tell us quite a lot but only if they are seen in the context of all other events in society. It is crystal clear that the economy was not the central question in this vote. The deterioration of public services, and many other factors played a part, but it is not just ‘bread and butter’ questions that affect the outlook of the working class. The war in Iraq had a major impact on the election, and that is far from over. Its impact and each new development will continue to affect British politics for some time yet.

Meanwhile a simmering discontent in the workplaces is preparing new industrial explosions. We have already seen glimpses of a new militancy in several episodes over recent years. As we have always explained this process does not proceed in a simple straight line but through all kinds of ebbs and flows. The conditions are being created for big defensive battles by workers under attack. Rather than face massive strike action, Blair and co postponed their assault on public sector pensions – a policy which amounted to telling a million workers that the government would delay scrapping their pensions until after the workers had voted for them. If they plough ahead with that attack then massive strike action is what they may well face. More than a million workers are balloting for industrial action on this question. The result could be the biggest strike since 1926.

On the parliamentary front Blair has lost another vote, this time on his religious hatred bill, despite having secured victory on the question of Identity Cards in the Commons, demonstrating the inchoate nature of backbench opposition.

The decisive vote on the parliamentary front will undoubtedly be on Blair’s education proposals. Opposed by over 100 Labour MPs when first published, they were backed by new Tory leader Cameron, as part of his strategy to define himself as Blair’s true heir apparent.

In a desperate attempt to forestall a deeply damaging rebellion the leadership have made many concessions and amendments to the proposal. Either the bill is passed because it is undermined, or it is passed by a coalition of Tories and Blairites with a Labour opposition voting against. In other words the vote will either demonstrate that Blair is a lame duck, or that he is a lame duck. In either event he cannot win. There is a third possibility, that the Tories and Labour rebels all vote against, in which case the bill will be defeated and Blair will be exposed as… a lame duck. Whichever course this vote takes it is likely to prove the final nail in Blair’s prime ministerial coffin.

The war in Iraq has proved to be the central question in British politics in recent years. The economy has certainly not been at the top of the political agenda. The consequences of British capitalism’s failure to invest over decades - the domination of the economy by services, consumer spending and credit - a low wage, high stress, insecure society have nevertheless all been important factors in determining the outlook of the working class.

Blair has been tremendously fortunate that the British economy has managed to drag itself along on the coat-tails of the world economy during his premiership. As a result there has been no economic crisis, no recession, which has helped him survive longer than might have otherwise been the case. Brown likes to take credit for this ‘success’, though in reality having turned economic management over to the Bank of England’s monetary policy committee, abandoned industry to its fate, and privatised large parts of the public sector, the government has had little to do with the boom of recent years. As we have explained that boom has been at the expense of enormous stress and strain on the part of the working class. It has also been fuelled by unprecedented levels of borrowing. It is this credit binge, and the price that will be paid for it in falling house prices, collapsing consumer spending and rising unemployment, for which Brown will get the blame. Like the conjoined twins in DBC Pierre’s new novel Ludmilla’s Broken English, when Gordon and Blair are separated, Brown will find that his luck has run out.

On the one hand, the dependence of the British economy on a world market heading for a fall, and on the other British capitalism’s own sickness - demonstrated by a colossal debt, the decimation of manufacturing and a reliance on services and banking - all point to Brown moving next door just as the economy heads for a fall. To parliamentary rebellions and unrest we must add this third factor of instability, this third promoter of potentially sharp and sudden changes in the situation in front of us – the likelihood of economic recession.

Brown boasts of how well he has managed the economy, yet any measure taken to limit credit brings all economic activity to a grinding halt. Manufacturing is now a hollowed out shell, unemployment rose for six months on the trot in the second half of last year. The Bank of England cannot decide whether cutting interest rates, raising them or leaving well alone will produce the worst result. The only person left who cannot see the black hole in public finances is the Chancellor, who resembles Dickens’ Mr Micawber, confidently expecting something to turn up. As in David Copperfield it will be the creditors that come knocking.

The British Economy

The inherent contradictions of capitalism have not gone away despite the last decade and a half of almost uninterrupted growth. That boom has been based on a cruel combination of stress and strain at work for millions; a service sector based on illegal practices and the virtual slavery of migrant workers; credit and consumer spending; the continued destruction of public services and the disintegration of the country’s infrastructure; and, despite all the rhetoric about tackling poverty, a massive growth in inequality.

The yawning chasm between wealth and poverty, and its impact on health, education, crime and all aspects of life represents a sharpening of the class division of society, dispelling the myths that we have all become middle class, homeowners etc. Conditions determine consciousness and it is the changing conditions of the working class that will be at the core of the class polarisation of society which will be a fundamental feature of the next period.

Alongside the general squeezing of the workforce in industry and the services, we can see that this boom has been paid for by the sweat and stress of the working class and not by the productive investment of the profits the capitalists make from our labour.

Manufacturing and Services

Without an expanding market for their goods at home or abroad - or at least without the ability to compete in those markets where they do exist due to years of underinvestment in new machinery and research - the capitalists do not invest in increasing production. Instead they squander the profits we make on speculation, acquisitions and mergers. Through privatisation in all its different forms they have found a way to make money without the bothersome business of investing, employing and producing, by buying up already existing production and services and asset stripping them while squeezing the workforce dry.

We have explained many times that the economy cannot survive on services alone, they are parasitic on the production of real wealth. Manufacturing now accounts for less than 20 percent of economic activity, once more confirming Britain’s increasingly rentier state. Consumer spending today accounts for seventy percent of GDP. There are now just 3.09 million employed in manufacturing, yet this sector is still vital as the source of capitalism’s profits.

The ‘new’ idea that Britain does not need to make anything anymore, but can rely on production in China, Brazil and elsewhere, is only an extension of the nonsense that services can replace manufacturing in the economy and everything can go on as before. The price of property, shares and government debt cannot continue to rise forever because they depend on something, namely the profits of capitalism. Profits do not come from bankers lending money or rich people buying luxuries, governments buying arms or people buying houses. These individuals are merely redistributing profits that have already been made by the producers of things. Profits are the unpaid labour of the working class, they arise only from the sale of things made that people want. Marketing, advertising and distribution add nothing to the profits of the capitalist system (though they do for the individual companies involved). They are a part of the cost of making a profit for individual capitalists in competition with each other.

Similarly workers in public services are necessary to capitalism (to different extents, at different times, in different countries) to keep the workforce healthy enough or trained to work. They do not produce profits for capitalism. They are unproductive for capitalism. Bankers, mortgage lenders, estate agents and the rest may get paid huge sums but they do not make profits for the capitalist system (even if they do for the individual companies employing them). They too are unproductive.

Yet these are the sectors meant to keep the whole world economy going. Buying a house in Britain is supposed to keep the British economy growing and buying a house in the US is supposed to keep the whole world economy afloat.

The interests of manufacturing and finance capital diverge like a pair of scissors. The series of interest rate rises introduced by the Bank of England – in a vain attempt to control the unprecedented growth of credit and debt in a ‘soft landing’ – choked investment in industry, where the financial press are forever seeing signs of a non-existent recovery. Industrial capital demands big cuts in interest rates, to reduce the value of the pound which they argue hurts their exports, and so that they can afford to borrow to invest. However in December those famous green shoots of recovery were spotted again when manufacturing output rose by 0.4 percent, its strongest performance for seven months! Instead of recognising that such small rises are inevitable when rock bottom is reached, the City of London argues that this recovery means further cuts in borrowing costs are not necessary. Whether interest rates are cut again or not will depend on the housing market and consumer spending not on the desires of industrial capitalists. Finance capital has the upper hand.

While the decline of British industry has continued apace, with a million manufacturing jobs destroyed since Blair and co came to office, 100,000 in Scotland alone, Britain does lead the world in one sector – credit. At over one trillion pounds British indebtedness continues to outstrip GDP.

The Credit and Property Bubble

For the last couple of years we have laid heavy emphasis on trends in the housing market, pointing to the inevitability of a sharp fall, or even crash, in house prices looming. The dependence of the economy on consumer spending, which in turn has been based upon credit linked to house price rises, makes this question vitally important. Following a fall in prices in the second half of 2005 - which as we shall see has already had an impact on spending in the shops - economists and government departments are now reporting a property market revival in 2006. Does this mean that we got it wrong? On the contrary, it is their optimism that is misplaced.

The Bank of England attempted to bring Britain’s unprecedented credit binge to an end, slowly and calmly, by fiddling with interest rates. First they increased interest rates in order to cool the overheated property market, gently, without causing a crash in house prices. This resulted in a further fall in investment and production, causing unemployment to grow, and spending to slowdown as job insecurity mounted alongside the cost of debt repayments. At the same time it resulted in an increase in credit as people paid their higher bills – mortgages, fuel bills (gas alone went up by 19 percent last year, and is set to rise by more than 20 percent again this year) – with their credit cards.

To begin with the rate of increase in house prices started to slow, then eventually prices began to fall, as people with less to spend because of the increased cost of their debts were priced out of the market by higher mortgage costs. However, the price being paid for bringing house prices down by about five percent – leaving them still considerably overinflated – was that the entire economy began to grind to a halt. The only answer was to cut interest rates. That was back in August last year. The quarter percent cut then introduced has done nothing to increase investment - unemployment continues to grow - but it has generated what these economic geniuses describe as a recovery in the housing market.

According to Nationwide house prices rose by 1.4 percent in January to reach an average of £158,478. This was the largest rise since July 2004 when prices rose by 1.9 percent. However, at that time the annual rise stood at 20 percent, in January it stood at 4.4 percent (up from September’s nine year low of 1.8 percent)

Does this mean that the slowdown is over? Will prices now rise again? Nationwide’s economist Fionnuala Earley said three-quarters of that rise was in the last four months as a result of August’s interest rate cut. She added that 2006 was unlikely to see strong price rises because of the chance of further unemployment and the problems of affordability, “Affordability remains stretched and it is unlikely that the market could absorb another strong rally of house price inflation.”

Howard Archer, chief UK economist at consultancy Global Insight, added “Most affordability ratios are still stretched and will become more so if house prices start moving back up markedly… Indeed annual house price inflation at 4.4 percent is actually back above headline annual earnings growth of 3.4 percent in the three months to November… Anticipated continuing relatively moderate earnings growth and the likelihood that interest rates will only be trimmed modestly further in 2006 will maintain pressure on affordability rations.” In English what this means is house prices can get back to the levels that forced the Bank to raise interest rates, particularly if they cut interest rates again, but they cannot go up any further. What cannot go up any further must come down. Having gone up so high they have a long way to fall. The Bank’s fiddling around with interest rates only postpones the inevitable.

First time buyers still could not afford to climb onto the property ladder even when prices fell last year. Young workers and their families don’t earn enough to buy so those wanting to sell to them can’t sell, they in turn can’t move up the ladder and so on. This is property gridlock, which can only be solved by a big fall in prices maybe even of twenty percent, which will leave many in unmanageable debt.

Increased mortgages meant an increase in monthly housing costs of more than £100 for the average family, which, especially when added to increased energy costs, inevitably had a negative effect on consumer spending, and resulted in a fall in property prices as the affordability gap widened. If prices rise in the next few months they will widen that gap still further and eventually result in a crash. If prices begin to fall again millions can be left in negative equity because of the extra money they have borrowed against the rising price of their house. There will be more people desperate to sell, driving prices still lower, and more in unmanageable debt unable to spend. Falling values will block off remortgaging as a source of funding consumer spending.

From the point of view of British capitalism, rising house prices spells disaster… and so do falling house prices. It really is a case of heads they lose and tails likewise. Of course it will be the working class which will be presented with the bill for the system’s crisis, with mounting unemployment, rising debts etc. Falling consumer spending leads to rising unemployment (consider the numbers employed in retailing and other services who will lose their jobs when spending falls). In turn rising unemployment leads to falling consumer spending. This is a downward spiral that must sooner or later result in economic recession.

Even the recent relatively small decline in house prices had profound effects on consumer spending, and consequently on the entire economy. As we have previously explained there has been a dramatic increase in repossessions in the last two years.

Personal insolvencies are now at their highest since comparable records began in 1960. This is a direct consequence of the historic levels of personal debt, an economy based on consumption not production, and is directly linked to the fall in the housing market in the second half of last year. Until recently additional personal spending was funded by remortgaging at around 6 percent. Replacing that with credit card spending – and a remarkable 1 million new credit cards were issued in the last three months of 2005 alone – at 20 percent plus leads quite inevitably to bankruptcy. Individual insolvencies have increased by 57 percent in the last quarter of 2005 on a year earlier to a total of almost 57,000 last year. That is a 38 percent increase in bankruptcies and 117 percent rise in individual voluntary arrangements (where your assets are handed over in order to avoid actual bankruptcy)

As we have pointed out before there are two sides to the housing crisis in Britain. Young workers cannot afford to buy and are increasingly forced into the private rented sector as council housing stock has continued to decline. There are now just 2.8 million council houses left in Britain. The lack of affordable housing is an important issue alongside health and education, and Blair and co have only one answer, PFI. This is a licence to print money for private consortia but cannot begin to solve these important problems.

Meanwhile the property market still teeters like an implausibly high house of cards which must tumble sooner or later.

Interest rate rises resulted in falling investment and production, in turn strengthening the pound, leading to further falls in investment and production. They also meant increased credit to pay for the increasing cost of credit. A small cut in interest rates led to even higher levels of indebtedness without resulting in increased investment. As we have pointed out previously a failure to invest over a long period has led to British production being uncompetitive. British bosses try to overcome this deficit through an increase in the burden on the shoulders of the working class in the shape of stress, long hours and speed-ups. They continue also to abandon manufacturing resulting in an increase in unemployment.

The State of Britain

This is reflected too in the decline of Britain’s infrastructure. In British capitalism’s heyday one of the functions of the state was to provide the necessary infrastructure in terms of transport, energy, communications and so on, for private firms to operate and make profits. The degeneration of British capitalism into a quick buck economy means that this infrastructure has been privatised and asset-stripped in an attempt to make money out of already existing production rather than the troublesome business of long term investment in machinery and employing people to make things.

As a result the roads and railways deteriorate at an alarming rate. Thanks in part to the ongoing destruction of the environment, but also to the short-sightedness of concreting over large numbers of reservoirs to build car parks, and a failure to repair broken pipes – both of which are the consequences of privatising the water industry – Britain is now facing a water shortage. The answer of Blair and co is not a massive programme of investment to repair the damage, but to give water companies the right to make water meters compulsory. More and more Britain resembles a third world country rather than one of the richest countries in the world.

A few years ago we commented on Britain’s looming energy crisis. With supplies of gas and oil rapidly running out, and coal abandoned in a short-sighted political assault on the militancy of the miners, Britain is increasingly being forced to rely on the import of energy. The response of Blair and co has been to raise the prospect of building new nuclear power stations. In the meantime the rising price of oil, combined with the privatisation of gas and electricity suppliers, which has meant a failure to invest in infrastructure, leaves Britain facing an energy shortage.

A cold snap this winter would cause an energy crisis that would force industry onto short-term working for the first time since the three-day week of the 1970s, according to Sir Digby Jones, director-general of the CBI. Amid forecasts from meteorologists that the country could be in for its coldest spell in more than 40 years, Sir Digby said he had told the industry secretary, Alan Johnson, that Britain's limited stocks of gas reserves would run out after little more than a week of sub-zero temperatures. "If we have a harsh winter - and all the long-range weather forecasts are saying that we will - this economy, the fourth biggest in the world and the most successful in Europe, will see the switch thrown on business," Sir Digby told The Guardian.

It will take two or three years for supply of gas to be boosted by a new pipeline from Norway and a new terminal at Milford Haven that will take imported gas from Qatar. At the moment, Britain's storage capacity is 11 days compared with an average of 55 days in the rest of Europe, and that would be quickly eaten up by a week or more of sub-zero temperatures.

Blair and co’s answer? Needless to say it did not involve renationalising gas, electricity etc. No their answer once again is to rely on the market. They are pressing for greater ‘liberalisation’ of the energy market in Europe in order to erode price differentials. They are doing nothing to increase the supply or storage of gas, instead they want gas to be privatised and price controls to be removed on the continent so that gas bills there will be as high as here. The CBI complains that the French and the Germans flout EU regulations by subsidising their firms. Britain’s gas bills are more than 30 percent higher than the average in Europe, thanks to the free market.

In September British Gas increased gas and electricity prices combined by 14.2 percent blaming soaring oil prices and declining North Sea gas reserves. These price hikes have added £96 to the average household's annual bill. British Gas' owners Centrica revealed earlier this year that more than 1.1 million customers deserted British Gas in 2004 after bills were raised by 5.9 percent in January and by 12.4 percent eight months later.

Announcing yet another rise at the beginning of 2006, Centrica argued that higher bills would not fully cover the rising cost of wholesale gas and electricity, which is 50% and 61% higher than a year ago respectively. The new rise will lift the annual gas bill of a family with a typical three-bedroom semi-detached house from £405 to £462 and their electricity bill from £268 to £307. The impact on consumer spending is self-evident.

Energy, water, transport and telecommunications were all sold off years ago. The results of handing this essential infrastructure over to the private sector are now clear for all to see. More recently the wonders of the free market have been imported into the National Health Service. Free health care was a huge conquest of the working class following the second world war. Now it is being dismantled and sold off to the highest bidder, with various forms of privatisation offering lucrative rewards for private consortia of contractors, banks and construction firms. There are fortunes to be made out of the NHS, and not just those leeched off the ill health of working people by the multinational pharmaceutical companies.

The Health Service is understaffed, underfunded, undermined and under attack. Privatisation, contracting out, competitive tendering, PFI are not just economically crazy - in reality a licence to print money with no concern for the service provided - they are themselves now the cause of ill health.

The spread of the MRSA hospital superbug has been blamed on a 45% cut in cleaning staff since the NHS allowed the private sector to compete for the work. UNISON has published independent research showing there were 55,000 cleaners in the NHS in 2003-04, compared with 100,000 20 years ago. Sub-standard cleaning practices at Birmingham Heartlands and Solihull NHS Trust were exposed in a recent BBC Panorama documentary. That was not an isolated case. According to the Scotsman on Sunday, describing the Woodend hospital in Aberdeen, “the hospital had one of the worst known MRSA rates in the country, with one in every 62 patients catching the bug last year. Latest figures show the rate has soared in 2005, with 30 more patients being infected in the first seven months of the year, compared with 2004…photographs taken inside the hospital by relatives of patients reveal the shocking conditions that have led to the spread of the superbug.” Examples like this could be repeated at will.

Add this to the reality of life in hospitals where there is a more intensive use of beds. Patients are frequently moved between wards and discharged as soon as possible so ensure greater “throughput”. At a time when there are reduced numbers of clinical staff to deal with more complex illnesses, these pressures make it easy for MRSA to spread. However, this is only part of the story. The parasitic drug companies have also contributed to the spread of MRSA. Last year, a study of 300 European hospitals found that those with the highest rates of MRSA also had the greatest levels of antibiotic use. In 2002-3 the NHS in England spent over £6bn on drugs and for 2006-7 they have allocated 13% (over £8bn) to be spent on drugs. The pharmaceuticals industry is amongst the most profitable in the world . For example, in 2004 two of the top UK drug companies (GlaxoSmithKline and AstraZeneca) made nearly £34bn from selling healthcare drugs. It is no coincidence that drug companies are happy to sponsor conferences and other health events and provide trainee doctors and nurses with free breakfasts, lunches and freebies!

Despite Blair and Brown’s claims of record spending in the NHS, the service is now in deficit to the tune of around £800 million.

Every aspect of the welfare state fought for by the working class for generations is now under attack. The NHS, pensions, and the benefit system can no longer be afforded by the market. What British capitalism was forced to give with its left hand in the past it is now snatching back with its right.

The benefits system pays out a total of £109bn each year. Whitehall's spending watchdog, the National Audit Office, refuses to accept the Department for Work and Pensions' (DWP) accounts for the last 15 years because of concerns about amounts of money going astray. It called on the DWP to develop a more accurate method for measuring fraud, noting that the department currently estimates levels only to the nearest £500m.

A combination of mistakes by officials and fraud means the government loses £3bn every year, according to the House of Commons public accounts committee (PAC). They reported that the DWP had succeeded in cutting unemployment benefit fraud by 38% since 1997-98. Half of the total figure lost was down to mistakes by officials, and plans to cut 30,000 staff will not improve matters. To cut down on these losses they have a simple answer. Sack a large section of the workforce and make the rest work harder. To ease their workload, benefits will be cut and thousands will lose their entitlement.

The since disgraced Work and Pensions Secretary, David Blunkett, announced that the disability benefits system was "crackers", and told claimants to stop watching daytime television and get out to work! Blunkett and his successors make the Orwellian promise to ‘liberate’ benefits claimants from dependence, insisting the way to overcome depression and stress was to stop watching daytime television and get back to work. "If people ... reassociate with the world of work, suddenly they come alive again," Blunkett said. "That will overcome depression and stress a lot more than people sitting at home watching daytime television."

It was a paradox, he said, that although work was now physically less demanding (!), four times as many people claimed incapacity benefit today than were on the equivalent invalidity benefit 25 years ago. The rise, to 2.7 million people, suggested "something very strange had happened to our society", Blunkett added. Yes indeed, but what has happened is not that millions have become benefit cheats, but that work has become more demanding, both physically and mentally.

While ministers are adamant that the number of people on incapacity benefit can be reduced, they are nervous of provoking a backbench rebellion by being perceived to be cutting benefits. During the government's first term, 41 Labour backbenchers voted against proposals to cut lone-parent benefits, with another 14 abstaining. A similar rebellion would surely follow any new assault on basic benefits.

The PAC says the DWP should put more effort into retrieving overpaid cash, pointing out that only £550m of the estimated £9bn wrongly paid out over the past three years has been recovered. The department should consider increasing its use of private debt-recovery agencies to hunt down "those debtors who may be difficult and time-consuming to pursue".

They mean those who cannot afford to pay the money back, some of whom end up in court, others will have moved, some may even be homeless. These people are very hard to track down.

Much easier to find is a group of real cheats, who are not prosecuted but lauded by the government. Britain’s fifty biggest companies have avoided paying corporation tax worth over £20 billion in the last five years. Whilst some was owed to governments in other countries, some £12 billion of it – enough to build 45 new hospitals – should have gone to the Exchequer. Of course, none of this was illegal. As always there is one law for the rich and another for the rest of us. Get paid a tenner too much in benefit and you are branded a criminal. Hide a few billion away in an offshore bank account and you will probably end up with a knighthood.

Government minister Hutton has hit upon a new scheme to cut back on incapacity benefit. Doctors are to be offered financial incentives not to sign people off as sick. Hamish Meldrum of the British Medical Association is outraged “our first duty is to the patient” he said. “Doctors are advocates for the patient not policemen for the Department of Works and Pensions.”

Incapacity benefit currently starts at £57.65 and rises to £76.45 after a year. Blair wants to cut the incapacity benefit bill by forcing one million sick people back into work. According to the Sunday Times (22/01/06) he also wants to cut the level of benefit by 25 percent to bring it in line with job seekers’ allowance. The system according to the government is too crude. For instance, they argue it automatically entitles all blind people to benefit! That will never do, there must be some low paid menial work they can do. As the welfare state is unravelled by capitalism in decline the system’s ugly, cruel face is being revealed for all to see.

What is left now of the promise of care from the cradle to the grave? It is not only the cost of living that we have to worry about, but even the cost of dying. The average cost of a simple burial has soared by more than 60% since the year 2000. The total cost of arranging a burial - including the coffin, chapel of rest and funeral director's fees - now averages £3,307, compared with £2,048 six years ago.

This is in part due to a kind of sick extension to the property boom, as the price of graves is rising. Pretty soon you will need to take out a mortgage on your final resting place. A shortage of burial plots, particularly in urban areas, and the array of expensive coffins now on offer are two factors behind the £1,250 increase, revealed in a survey of 100 funeral directors by insurer American Life. This may seem like a joke in poor taste, but this is the reality of life in Britain in 2006. Insecurity is now what follows us from the cradle to the grave. Remember that all these cuts in social spending are the best the system can offer us during a boom.

That boom is heavily dependent on consumer spending. When one combines together all these different rises – energy costs, debt burdens, unemployment and job insecurity – with the general uncertainty about the future, about families’ healthcare, education and retirement, the result will inevitably be a collapse in that consumer spending with far reaching consequences.

Consumer Spending

Consumer spending now makes up 70 per cent of the UK's GDP and it has hit stormy waters. Before Christmas sales were falling in the shops. The gloom that settled over the nation's high streets was the deepest since 1983 according to the CBI. The employers’ body said the underlying annual sales trend among retailers in August was the weakest in the 22 years it has been compiling its retail survey. The CBI figures came as accountancy firm KPMG's summer review of UK manufacturing painted a similarly depressed picture. Its business outlook survey showed optimism among manufacturers had sunk to its lowest level since KPMG started the survey three years ago.

By the end of last summer consumer spending was already feeling the pinch of low wage rises, high house prices, rising energy prices and the weight of debt. August’s results were the first time for seven years that more retailers had been negative than positive about their prospects. Month on month the survey’s results have gone from grim to dire. In the CBI's distributive trades survey for November, 51 percent of retailers questioned said sales volumes were down on a year ago while only 17 percent said they were up. The balance of nearly -35 percent was the worst since the survey began in 1983 and far lower than September's figure of -24 percent.

Sales of DIY goods, furniture and carpets, white goods and electrical items were hit hard in the second half of last year because of the malaise in the housing market, according to the survey. The UK's leading DIY store, B&Q, saw half-year profits slump from £225 million to £149m. The downturn has already sparked huge job cuts and a store closure programme.

Even at this early stage in the consumer downturn, a number of once well-known names have already gone bust. Chains such as Courts, the Gadget Shop, Ciro Citterio, Allders, Tiny Computers, Dickins & Jones and Littlewoods have all left the high street in recent months. The retail chain Furnitureland became the latest victim of weak consumer spending when it closed its stores and went into administration. Meanwhile, advertising spending is also projected to fall this year, which is usually a sign of collapsing business confidence.

Increasing mortgages, debts and energy prices, plus the downturn in the housing market, have stuck a pin in a consumer bubble that until now had been swelling relentlessly for 10 years. Will a further cut in interest rates come to the rescue of the high street? As we have already explained the City is split on whether inflationary pressure is more of a priority than weak demand. In reality they will be damned if they do and damned if they don’t.

Britain's annual inflation rate in September was driven to its highest level since 1997 by higher transport and petrol prices. The Office for National Statistics (ONS) said the consumer prices index (CPI) rate had risen to 2.5%, up from 2.4% in August and the highest level since comparable records began in 1997.

The ONS said the largest upward effect on the CPI annual rate had come from transport, mainly due to fuel and lubricants. British economists point to the benefits of higher oil prices in the record profits of Shell. They blithely ignore the fact that for most companies energy is a cost and that cost is rising. Furthermore the more people have to pay to fill up their cars the less there is to spend on anything else. Add to this low wage rises, the fear of growing unemployment, huge debt burdens, and the end of the gravity defying property boom and you have a finished recipe for consumer spending to plummet. Higher oil prices mean rising costs for companies and for workers. This means even more indebtedness, even less investment, more unemployment, a rising balance of payments deficit, higher taxes and cuts in public spending.

Grocers, who had not reported a decline in sales growth since September 2004, recorded year-on-year sales figures at -24% at the end of 2005. The motor trade suffered another poor month of sales in November, with a balance of -50%, following October's balance of -62%.

Ordinarily these results would encourage the Bank of England to cut interest rates. However, in the event many retailers recorded record Christmas sales. Overall retail spending at Christmas was the highest for four years.

How can this be explained? The answer lies in one simple yet remarkable figure. In the last three months of last year one million new credit cards were issued. This in turn will only serve to postpone and exacerbate the problem. Credit takes the market beyond its limits, spending tomorrow’s money today. When tomorrow comes there is no more money to spend, and instead there is a bill to be paid.

According to Nationwide, with Christmas binge spending over, the downward trend in the retail sector has continued apace. Their consumer confidence index fell by five points in December, and their ‘present situation index’, where people are asked how they view the economy and their job prospects fell 10 points to 91, its lowest ever.

Does all this mean that the consumer boom is now over? In the year to November the rise in retail sales volume compared with a year earlier was only 2.1 percent, the lowest for 15 years and well under half the 5.6 percent rise recorded the previous year. The brief respite of Christmas shopping will not alter that.

If consumer spending declines what else can take its place as an engine of growth. Public expenditure? 700,000 public sector jobs have been created since 1998, but as we have already explained cuts in public expenditure are now the order of the day given the fall in government revenues, higher unemployment and lower growth. Exports have risen, but no longer contribute enough to the economy to prevent a descent into recession. Business investment, which fell year on year even at the height of the boom shows no sign of recovery. The huge budget deficit rules out tax cuts to boost investment (the capitalists won’t invest anyway if they cannot see a profitable market for their goods or services) or consumer spending. That just leaves the Bank of England to cut interest rates. This tinkering can have a temporary effect, but beneath this sticking plaster the wound can only fester.

Soaring energy costs and weak consumer demand saw profit warnings rise by 23 percent last year. Half blamed lower than expected sales and more than a fifth blamed rising costs. This is the kernel of the problem.

Profits are the lifeblood of capitalism. The law of the market is quite simple if a capitalist investor cannot make a profit they will not invest capital or employ workers to produce things or provide services.

The reality is that the economy is grinding to a halt, industrial production is falling and the credit that has been fuelling consumer spending and the service sector to mask it is reaching its limit. The trade deficit is now running at £60 billion a year, or £1000 for every man, woman and child in the country. Far from abolishing the boom-slump cycle, as we explained last year Brown could not even succeed in meeting his so-called ‘golden rule’ of balancing the budget in terms of current expenditure over the economic cycle, without moving the goalposts. Growth in the economy would have needed to have been around 3-3.5 percent for that.

Instead in his pre-budget report, the chancellor cut his 2005 economic growth forecast to just 1.75%, blaming inflationary pressures caused by the rise in global oil prices. Any government wedded to the market has no choice faced with these figures but to increase taxes, increase borrowing or cut spending. Most likely it will be a combination of all three and the working class will once again be asked to foot the bill. Wages are not rising fast but unemployment is. House prices and consumer spending dangle over the edge of a cliff. The interaction of all these factors creates a downward spiral at the bottom of which lies recession.

Leon Trotsky explained something quite profound when he wrote that it is not simply the experience of a boom or a slump that determines outlook. The idea that slump means revolution and boom equates to social peace is patently absurd. Often in a boom, if order books are full workers can fight offensive battles for higher wages. A sharp decline in the economy leading to high level of unemployment can curtail the workers’ movement. It all depends on the context of the conditions, what period has been passed through. A slump following a boom based on increased stress and sweat and job insecurity can have a different effect to a slump following a boom in which the conditions of workers have improved significantly. More important is the change from one condition to the other. The mounting insecurity and uncertainty that disturbs routine has an unsettling impact and can have the effect of shaking a sleeping man. This fact makes it even more important not to hang on the prospect of a slump. From any point of view this is foolish.

The exact tempo of the economic cycle can not be forecast. In any case a serious slump in the economy is not the best situation for anyone. From our point of view a period in which despite statistical growth in the economy, jobs are in danger, conditions are under attack, raises questions in the minds of workers. The British economy is undoubtedly heading towards a recession which will have a profound impact on politics and on the outlook of all classes. Already threatened job losses and attacks on pensions are providing the conditions for big defensive battles. Remember, the 1926 General Strike began as a defensive battle over jobs and wages. We are not predicting that there will be a battle on that scale this year, but nevertheless all the conditions are being created for a generalised struggle of the working class. Along the way there can be all kinds of ‘minor’ explosions. We must be prepared for rapid changes in the situation.

In any case, it would be a serious mistake to think that consciousness is determined solely by economic factors. As Marx explained social being (and not just wages) determines consciousness. Many other factors – political questions like the war in Iraq – and social questions like health, crime, education and so on have a big impact too. All the different factors analysed here have an effect not only on statistics, but on real lives, on the outlook of classes, on class consciousness and on the class struggle.

Working hours and conditions have just as much of an effect as wages. A ‘booming’ economy was achieved not through investment in new machinery, but above all through an increase in absolute and relative surplus value, that is through longer working hours and a massive increase in stress and strain at work. This applies to all sections of workers. In the past we have explained the role of speed-ups on the production line and the general introduction of new management techniques. The ingenuity of the bosses in finding ways to cut corners and squeeze the workforce knows no limits – certainly not those of health and safety, nor even those of basic human rights as the latest fad for ‘tagging’ workers demonstrates.

Employment and Stress

More people than ever are in work in Britain, and this has an effect on the outlook of the working class. However that effect is not one of widespread security and prosperity. According to official statistics there are now 28.8 million people in work. On its own however this figure tells us little. It is necessary to know what jobs they are doing, for what wages, with what, if any, level of security, under what degrees of stress.

At the same time unemployment has started to rise significantly over the last six months. The number of people looking for work jumped by 111,000 in the three months to November. The increase brought the total number of people out of work to 1.53 million, the highest since the end of 2002. The unemployment rate for the quarter stood at 5%, up from 4.7% the previous quarter and the highest rate in two years. "The trend in the employment rate may be starting to fall, while the trend in the unemployment rate is increasing," according to the Office for National Statistics (ONS).

Claimant count unemployment, which includes people receiving Jobseeker's Allowance, rose by 7,200 in December 2005 to 909,100, the 11th consecutive monthly increase. The December figure takes claimant count unemployment to its highest level since November 2003.

Analysts argue that the ‘continuing softness in the labour market’ (by which they mean rising unemployment) strengthens the case for a cut in interest rates. As we have already explained the Bank of England is in two minds. The problem is if interest rates go up then investment will fall further, unemployment will rise and house prices will start falling again, setting the whole economy on a downward spiral. However if they cut interest rates, they may prolong the housing boom and consumer spending a little only to prepare the conditions for an even bigger crash later.

The Bank of England follows wage settlements closely in its interest rate calculations and on this score, they are encouraged. Average earnings growth fell by 0.2% to 3.4% in the year to November compared with the previous month. Excluding bonus payments, the figure was 3.8%, down by 0.1% from October's rate. "This confirms that late in 2005 there was still no evidence that pay was starting to be pushed up by recently higher consumer price inflation and increasing energy bills," said Howard Archer of Global Insight. However, as pleased as the capitalists will be to keep wages down, this spells disaster for consumer spending and of course for the housing market.

Employment in manufacturing remains as grim as ever. The number of jobs in the sector fell by another 109,000 in the three months to November 2005 and is on target to fall below 3 million during 2006. There was also an increase in the number of people classed as economically inactive, including students, those looking after a relative and people who have given up looking for a job. The figure rose by 25,000 on the quarter to 7.94 million, the highest total since records began in 1971.

The UK still has one of the lowest unemployment rates in the industrialised world. However this headline masks the reality beneath of millions working under immense stress; many forced off benefits into work; and record numbers abandoned as unemployable. Blair and co are determined to force even more people off benefits. However unemployment is now rising again, which has an effect on the economy as a whole. As well as statistics this fact has an important impact on ordinary workers’ lives, adding to insecurity and stress.

The total number of working days lost to ill health continues to outstrip the numbers of days spent on strike. This is hardly a surprise given the lengths to which the bosses will now go to squeeze every last ounce out of the labour power for which they have paid.

The AA has recently brokered a new deal with its employees, as part of a £12m savings scheme: it plans to introduce "dataveillance", which is a form of electronic tagging, like that applied to criminals. Each employee is entitled to 82 minutes a day away from the computer. Given the statutory 60 minutes for lunch and 15 minutes for tea, this leaves seven minutes for going to the loo, and they will be timed.

This is powerfully reminiscent of the Victorian factory code. This new productivity measure is not confined to the AA - Sainsbury's, Tesco, Pets at Home, Spar, Securicor - are looking at similar monitoring equipment. It is, as the GMB union has said, "treating employees like battery hens". The dark satanic mills of old have indeed been replaced by dark satanic call centres, supermarkets and warehouses.

The Trade Unions

“The trade union question remains the most important question of proletarian policy in Great Britain, as well as in the majority of old capitalist countries…

“The trade unions were formed during the period of the growth and rise of capitalism. They had as their task the raising of the material and cultural level of the proletariat and the extension of its political rights. This work, which in Britain lasted over a century, gave the trade unions tremendous authority among the workers. The decay of British capitalism, under the conditions of decline of the world capitalist system, undermined the basis for the reformist work of the trade unions. Capitalism can continue to maintain itself only by lowering the standard of living of the working class. Under these conditions trade unions can either transform themselves into revolutionary organizations or become lieutenants of capital in the intensified exploitation of the workers. The trade union bureaucracy, which has satisfactorily solved its own social problem, took the second path. It turned all the accumulated authority of the trade unions against the socialist revolution and even against any attempts of the workers to resist the attacks of capital and reaction.” (Leon Trotsky, Writings on Britain, Volume Three, P.75)

Falling living standards; rising debts; deteriorating conditions; increasing stress and job insecurity; combined with the governments’ assault on civil service jobs and public sector pensions are creating all the conditions for industrial struggles. In their turn these struggles will have an impact inside the trade unions and at a certain stage inside the Labour Party. Indeed that process, which we have described many times over the last couple of years, has clearly already begun.

The magnificent struggle of the firefighters marked an important turning point in the events of recent years. Never satisfied with the outcome of their strike, firefighters have drawn many lessons from the experience of their struggle over pay, and as a result have elected a new left general secretary, Matt Wrack – which continues the trend of a swing to the left at the top of the unions – who has pledged to defend firefighters’ pensions threatened by Blair and co. Further strike action looms, which in turn will have a big effect on the outlook of other sections of workers facing similar attacks.

Pensions are a big issue for local government workers and civil servants too, as Blairism attempts to impose the rigours of the market place, i.e. the attacks suffered for many years by workers in private industry, into the public sector. In total more than a million workers are being balloted for strike action against these attacks.

Civil Servants facing massive job cuts have provided, along with London Underground workers, much of Britain’s most recent industrial action. These sectors of young, increasingly militant workers have led the way in the last period.

Unison, along with other public sector unions, is balloting for strike action over the attacks on pensions. Were it not for the inadequacy of the trade union leaders and their lack of confidence in the workers, the result would be guaranteed - more than a million workers taking strike action. They would be in an immensely powerful position. Even in spite of the best efforts of the trade union bureaucracy this may still happen. This would represent an enormous change in the situation, with far reaching consequences in the trade unions and inside the Labour Party.

This proposed strike also involves Amicus members. Amicus remains a decisive union, in terms of its size and the sectors of workers it organises. The turn to the right by a leadership elected on a left ticket was widely predicted and has been confirmed both by their persistent repudiation of strike action and their scandalous attack on the Marxists and consistent lefts in the union.

The shift to the left at the top of the unions which began a few years ago, and which we have analysed in some detail, has continued, but there has also been a refining of that position. A division is now clearly opening up between the left and the centre left who are rapidly becoming the new right. Neither the ruling class, nor their agents in the labour movement, could allow a union like Amicus to shift left without interfering. The role played by the Marxists in that union will have made them extremely nervous. Precisely because of its size and power, there is a long history of interference and infiltration in this union’s affairs (and its predecessors the AEU and the EETPU) by the state.

Derek Simpson was elected as General Secretary of Amicus on a left ticket. He is now desperately trying to abandon his pledge to elect full time officials, and turn to the right. This has assumed even more importance in the eyes of the ruling class and the Labour right wing given the prospect of the union merging with that other immensely powerful force in the labour movement the T&GWU. As Marxists we are, in general, in favour of union mergers that have industrial logic and increase the fighting abilities of the workers involved. For the trade union bureaucracies mergers are usually a matter of finances and consolidating their grip on the union. Whilst supporting the principle of this merger, that does not mean that we will endorse it no matter what proposals the leadership make. We will be fighting for a democratic rule book, to allow the rank and file control over the union.

Simpson has thrown his full weight behind Brown. Several other trade union leaders are with him on this. There is perhaps one difference between the Brown camp and the Blairites. Brown recognises the threat from the unions moving left – after all it has been the unions that have defeated the Labour leadership at party conferences over the last few years (a fact completely lost on the sectarians), and is preparing support for his clique at the top of the union bureaucracies.

However, Simpson was elected because the rank and file were determined to oust Blair’s friend Sir Ken Jackson, and, in the end, Simpson and his supporters can expect the same fate.

His shift right was rapid indeed. Although he later attempted to take credit for the marvellous victory of the Wembley workers, during their dispute he wanted nothing to do with them, allowing scab labour to be employed with impunity.

The struggle of the Wembley workers was an important battle. The workers secured an impressive victory, and many have become active in the union as a result. Another major and far reaching dispute last year was the struggle of the Gate Gourmet workers

At the beginning of August a dispute erupted at Gate Gourmet, the exclusive supplier of on-flight catering for British Airways (BA), when 600 staff were sacked for taking unofficial strike action to defend their jobs.

The company had been threatening compulsory redundancies for months after staff voted earlier in the year to reject a package that would have cut pay and conditions. Things came to a head when, while still threatening lay-offs, management brought in casual staff to cope with basic demand. This provoked a walkout which Gate Gourmet managers then seized upon to carry out the sackings.

The workers, 70% of whom are middle-aged Asian women, were then frogmarched off the premises by security staff. Up to 30 ‘bouncers’ removed their air-side security passes, staff identity cards, and locker keys. Some people were forcibly removed after refusing to leave, including a pregnant woman who, it was reported, was carried out by the arms and legs. People outside the gate were told by a supercilious manager barking into a megaphone that they were all sacked and would receive their P45s by post. The workers were not cowed, by this intimidation, instead they set up a picket on the hill opposite the plant.

The rest of BA’s staff has a close relationship with the Gate Gourmet workers. Until 1997 they worked for the same company, and to all intents and purposes Gate Gourmet still functions as part of BA group. On the very same afternoon 1000 BA ground staff, check-in staff, and baggage handlers at Heathrow terminals one and four were on strike in sympathy in a marvellous display of solidarity. As a result of this action all BA flights from Heathrow had to be grounded, and as time went on more and more of BA’s world operations ground to a halt. Thus a group of catering workers demonstrated just how insignificant the anti-union laws are when they are subjected to a serious challenge, and just how feeble is the leadership of the TUC not to have destroyed those laws by now.

The dispute quickly became a cause celebre. Even former Labour deputy leader Roy Hattersley was moved to write supporting the Gate Gourmet workers, and the principle of secondary action, in The Guardian (19/09/05):

“More than 200 years ago Adam Smith, examining strike action, concluded: ‘The master can hold out much longer than the men ... In the long run, the workmen may be as necessary to the master as the master is to him. But the necessity is not so imminent.’

“Trade unions were created to redress the balance. They cannot do that if they are prohibited from confronting the big companies that manipulate the small.

“That may require union members in ‘associated companies’ to lose pay and risk jobs. The ‘sympathy strike’ requires one worker to make sacrifices for another. That is why secondary action is often laudable. Heathrow baggage handlers are rarely congratulated on their altruism, but during the Gate Gourmet dispute they supported lower-paid workers at considerable personal cost. Solidarity is no longer fashionable - indeed, in industry and commerce it is illegal. But in a decent society it ought to be encouraged rather than condemned.

“It all comes down to the most important political question: whose side are you on? Adam Smith was right again: ‘We have no acts of parliament against combining to lower the price of wages but many against combining to heighten it.’ The odds have always been stacked against low-paid workers. Gate Gourmet employees, and people like them, have no chance of a fair deal unless they receive help from friends. Secondary action is more than necessary. It is right.”

These two disputes are typical of the explosive episodes that have regularly punctuated the apparent industrial peace of recent years. On the one hand they reflect the fact that groups of workers like these have their backs against the wall and are left with no alternative but to fight often without support from, sometimes against the wishes of, their union leaders. Many more such incidents will occur in the next period. In each new episode the role of the union bureaucracy tends to be exposed before a new layer of workers, who can be drawn into the union’s activities and the struggle against the bureaucrats.

What has been missing for the last couple of years has been major national strike action. With one or two exceptions there have been few strikes of this character since the massive public sector strike of 2002. We explained at the time that those workers were in an immensely powerful position, but their leaders settled too early, and for too little. Now we are faced with the possibility of another strike of the same dimensions or bigger.

All the conditions exist for explosions on the industrial front, and are being created for more widespread, generalised action in the next period. We must be prepared for this. Our perspectives point us in the direction of those groups of workers under attack, and likely to take action. They point us towards those unions where a process of change is taking place. At the same time we must be ready for sudden and sharp changes in the situation.

At the forefront of the industrial action taken by tube workers, civil servants and others have been the young workers. Alongside the mood of discontent – expressed in the anti-war movement in particular - amongst students, school students and other sections of youth that we have already described, a similar mood is also brewing amongst young workers.

Youth

In the most general sense it is impossible to separate the perspectives for young people from those for Britain and the world as a whole. At the same time, the whole of history teaches us that youth are always more rebellious, more idealistic, more interested in the future of the planet and of society. This is only natural as it is their future after all. At the same time, whether in work or college, young people are the lowest paid, with the least protection and often work in the worst conditions. This affects their outlook and the outlook of school students looking to their own futures. For some this means despair at the lack of a future on offer to them under capitalism. For others it means anger, and a desire for revolutionary change.

There is a myth that students have the time of their lives, partying, drinking, lazing around. This prejudice collapses under the weight of debt and work students must now accept as the price of studying. In 1992 only a third of students owed money. Now 90% are in debt. That is a heavy price to pay, and explains why so many students are now forced to fit their studies in around working.

Almost 40% of all 16-25 year olds work in distribution, hotels and restaurants. 5.5 million work in these areas, according to the TUC, some of them while studying at university, some of them after their studies have finished. The number described as economically active among 18-24 year olds stands at almost 3.4 million, and unemployment among this age group stands around 400,000, which, according to official figures, means an unemployment rate of around 12 percent. This is more than double the figure for society as a whole.

Meanwhile female students with jobs were earning, on average, 16 pence per hour less than male students in the year 2000. This was an increase in the gender pay gap, which had been 14 pence in 1998. That means that to pay off their student debts female students will have to work more and therefore their academic results will be under threat. But when they finish their studies things do not improve, recently a spokesperson for NUS Scotland said that they estimate that women students can expect to earn 15% less than their male counterparts within three years of graduation. The Equal Opportunities Commission Scotland figures show that women working full-time earn, on average, £559 less per month then men do (The Scotsman 24/08/05).

The vast majority of young people are in work, education, or increasingly both. There are over seven million 16 – 25 year olds in Britain, and 4.5 million of them are in work. The National Union of Students has some 5.2 million members, over two million of them in full time education and in work to pay for it.

The prospect of rising tuition fees has resulted in the number of applications for English universities (the new fees do not apply in Scotland and Wales where the Assembly and Parliament have rejected them) fall by a little over three percent this year. The new fees of up to £3000 will leave students with even higher levels of debt when they leave college.

There has already been the beginning of an important radicalisation taking place amongst school students in the last period. The spontaneous walk-outs and demonstrations amongst this layer of young people, especially against the war in Iraq, illustrate clearly the mood of discontent that already exists in the schools. More recently we have seen the development – here and there at any rate – of school students unions developing. This layer of young people in particular will be looking for a revolutionary alternative to the mess they see all around them. If our perspectives are truly a guide to action, then as well as pointing us towards the trade unions, and those sections of workers entering struggle, above all it is the youth, in college, in work and in school whom we must energetically reach with our ideas.

Conclusion

Far from everything being for the best in the best of all capitalist worlds (to paraphrase Voltaire), it becomes clear, once we begin to dig beneath the surface, that all the features of the impasse of capitalism on a world scale are repeated to one degree or another here in Britain.

Indeed the veneer on the top of British society is remarkably thin. One does not need to penetrate far below the surface to uncover the processes of change at work beneath. The ruling class is increasingly split and divided over how to proceed, how best to defend its ailing system. The middle class feel a profound discontent with the war and the failures of the Labour government. There is a class polarisation of society, where previously blurred lines are being sharpened.

Manufacturing industry is a hollowed out shell. The economy is dependent on debt and consumer spending, and heading for recession.

Blairism is finished. Blair will go soon, and despite the best efforts of his clique, or that of his successor, the attempt to transform Labour into a version of the US Democrats has reached its limits. The Labour government faces new crises on every front. Brown – or whoever – will inherit a party where the process that brought Blair to power in the first place is moving into reverse. He will inherit a divided group of MPs. The economy will not come to his rescue. On the contrary, the slide into recession will add to his woes.

At the same time all the conditions are being created for major class battles, even generalised struggles such as this country has not seen for 80 years. The combination of all these factors is preparing a new period of class struggle, of inner differentiation within the labour movement, big changes inside the trade unions and, as night follows day (though perhaps not quite as quickly) inside the Labour Party too.

The youth have become radicalised already in the recent period and that process has not ended yet, in fact, like the process of change in the unions, and the mood of discontent in the workplaces, it has only just begun.

This process - the different elements of which can be found in different stages of development and maturity in different countries – will not simply pursue a straight line of march. There will be ebbs and flows, periods of advance and retreat. One thing is for sure, there can be no return to the sort of equilibrium established by capitalism in the past. On a world scale, and Britain is no exception, we have entered a period of profound instability and lightning changes.

Basing ourselves only on the surface of society, especially British society, we would be lost, demoralised and depressed, which explains the psychology of the various brands of reformism. The advantage provided for us by the ideas of Marxism is precisely the superiority of foresight over astonishment. “A revolutionary policy” explained Trotsky, “requires above all that we look facts openly in the face so as to foretell the course of their subsequent development. A revolutionary policy appears fantastic to philistines only because it is able to predict the day after next, while they do not dare to give a thought to the next day.” (Writings on Britain, Volume Two, P.176)

That does not mean to say we can predict with any accuracy when house prices will collapse, when there will be a recession, or when there will be major strikes. It does mean however that we must prepare ourselves for sudden and sharp changes in the situation. On the basis of perspectives we can avoid being caught napping and can orient our forces through each stage of the process now unfolding.

Perspectives are a science, but tactics and the building of a revolutionary party is an art. It is necessary to grasp every possible opportunity and make the most of it. A big, powerful army faced with an obstacle in its path may be able to simply smash through the barriers to its progress. The working class possesses that immense power, but is not yet conscious of the fact. The task of Marxism is to make conscious the unconscious strivings of the working class. The molecular process of change within the working class is conditioned by the crisis of capitalism which is unfolding at the present time. White-collar workers, industrial workers, students and youth, all sections will be looking for answers to their problems and the problems of society. We must build and train the forces capable of providing those answers in the shape of the ideas of Marxism.

At this time the revolutionaries are a small minority and sometimes a smaller force needs to tack and turn, to find a path around the road block in its way. The capitalist system is now a tremendous barrier standing in the way of human progress. The leadership of the mass organisations stands like a border guard in front of that barrier. All such barriers must be overcome in order to transform society and free us from the straitjacket in which this lunatic system confines humankind. As Trotsky put it, “The question of the economic emancipation of the British proletariat cannot be seriously put as long as the labour movement is not purged of such leaders, organizations, and moods, which are the embodiment of the timid, cringing, cowardly and base submission of the exploited to the public opinion of the exploiters. The inward policeman must be cast out before the outward policeman can be overthrown.” (Leon Trotsky, Writings on Britain, Volume One, p.33)

These perspectives are a guide to the action we need to take to build the forces of Marxism, and it is to action that we must now turn. The vital question is how do we gather the forces necessary. There is not one simple answer to this. Instead we must make opportunities for ourselves, directing our energies to those areas that our perspectives clarify offer the greatest possibilities. The process of interaction between class struggle and the transformation of the workers’ organisations will take time. Along the way there will be many opportunities for our ideas to find new supporters. Amongst the youth we must not delay. The clarity of our ideas, our perspectives and our programme are the means by which we can reach them. They too are looking for answers and those answers can only be provided by the ideas of Marxism. We must explain that only the socialist transformation of society can meet the needs and aspirations of the working class, and put an end to the nightmare of capitalism in Britain and on a world scale.

“Revolutions are not made in the order of the most advantageous sequence. Revolutions are not generally made at will. If one could rationally map out a revolutionary itinerary then it would probably avoid revolution altogether. But this is just the point, for revolution forms the expression of the impossibility of reconstructing class society by rational methods. Logical arguments even if elevated by (Bertrand) Russell to the status of mathematical formulae are impotent against material interests. The ruling classes will sooner condemn all civilization, including mathematics, to ruin rather than renounce their privileges. In the struggle between the miners and the coal owners of Great Britain the coming revolution already wholly exists in embryo just as in the grain of corn the future stalk and ear exists in embryo. The irrational factors of human history operate most brutally of all through class contradictions. Over these irrational factors one cannot leap. Just as mathematics by working with irrational quantities arrives at completely realistic conclusions so in politics one can rationalize, that is bring a social system into a reasonable order, only by clearly taking into account the irrational contradictions of society so as to overcome them finally — not by avoiding revolution but through its agency.” (Leon Trotsky, Writings on Britain, Volume Two, p.178)

London, 06/03/06