Corrupted by failure

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Jettisoning the unions: Labour's social base is no longer the working class.
Jettisoning the unions: Labour's social base is no longer the working class.


The Labour party learned some hard lessons from the electoral defeats of 1979-92. The New Labour is a different beast, arrogant and unaccountable with a reflex subservience to wealth.

WHATEVER happened to the British Labour Party? The organisation that built the welfare State and the National Health Service, that for generations provided (however incompletely) a political voice and some protection for the country's working class majority, is now one of Europe's most aggressive champions of neo-liberalism, the United States' closest ally in "the war on terror", and has recently been revealed to be in hock to the tune of £14 million to a small coterie of the country's super-rich. In the run-up to the 2005 election, Prime Minister and party leader Tony Blair secretly secured the money (the bulk of the £18 million Labour spent on its campaign) in the form of "loans" from a select group of 12 multi-millionaires. This enabled donors and benefactors to bypass the statutory requirement according to which donations of £5,000 or more must be publicly declared. Subsequently, Blair nominated four of the "lenders" for seats in the House of Lords. Neither the party treasurer nor Cabinet members was informed of the existence of the "loans" (though they must have known large sums were being injected from outside the party), nor was the official panel that scrutinises appointments to the Lords. And nearly a year after the election, not a penny of the "loans" has so far been repaid.

Hardly news

The revelations have been greeted with embarrassment by key supporters of New Labour, and pressure on Blair to leave office sooner rather than later has increased. But the party's intimacy with big business is hardly news. It's a matter of record that every donor who has given £ one million or more to Labour or to one of its pet government projects has received a peerage or knighthood, as have 16 out of the 22 lesser fry who gave between £1,00,000 and £ one million.Though the lure of the Lords should not be underestimated in a status-conscious society, that's not been the primary incentive for business to support New Labour. What these donations buy, in the end, is policies - far more valuable than peerages. The generous millionaires make their fortunes in the supermarket, software, financial services, catering, healthcare and property industries, all of which have increased their profits thanks to Labour's policies of privatisation, environmental laxity and low taxes on corporations and wealthy households. Estimates from the Institute of Public Policy Research indicate that the top 10 per cent now own 54 percent of the nation's total wealth, up from 47 per cent under Blair's Tory predecessor, John Major. Those at the very top, the richest one per cent, have seen their share rise even faster, from 17 per cent to 23 per cent over the same period, leaving the bottom half of the population with only 7 per cent of the pie. The government has fostered an upward redistribution of income, and as a result the economic growth of the last decade has disproportionately benefited the wealthy. The gap between rich and poor has widened, and Britain is now a more unequal society than it was in 1997, when Labour took power after 18 years of hardline Conservativism.

Radical departure

That record is in stark contrast to the performance of previous Labour governments, and is a measure of New Labour's radical departure from the social democratic ideals and practices of the past. Perhaps even more glaring is New Labour's treatment of the National Health Service, where it is introducing privatisation and profiteering to an extent the Conservatives never dared. Already, those hospitals on which private finance arrangements were imposed have had to cut beds by an average of 25 per cent and staff by an average of 15 per cent. Despite increased funding, the NHS currently faces a huge "deficit crisis" that has led to the loss in recent weeks of 4,000 healthcare staff and could see another 11,000 cut in the coming months. The crisis has been brought on in part by debt repayments to the private sector and in part by the increased administrative costs of the government's various competitive, "performance-based", "payment-by-results" schemes, all driven by blind faith in neo-liberal managerial nostrums. Administrative costs now account for 20 per cent of total NHS spending, up from 5-6 per cent in the mid-1970s. Critics warn that if government policies are not reversed, by the end of the decade the NHS will have ceased to exist as an integrated service free and accessible to all. And that's not to mention New Labour's rollback of civil liberties, its xenophobic attacks on asylum seekers, and the staggering growth in the country's already swollen prison population, up to 80,000 from 60,000 under the Tories. And of course, there's the Iraq war, where Blair's subservience to the U.S. has been extraordinary even by post-War British standards. Harold Wilson, after all, kept Britain out of Vietnam, and Thatcher repudiated her ally Regan's invasion of Grenada and bombing of Libya. So whatever happened to the British Labour party? It's important to understand that the party was corrupted by failure long before it was corrupted by success. The lessons drawn from the electoral defeats of 1979-92 were that neither the Tory-dominated media nor big business could be defied, that a calculated presentation-orientated strategy had to replace the messiness of internal democracy, and in general that the Labour party had to become less of a labour party. With the support of the bulk of the liberal intelligentsia, Labour leaders mounted a long war against the party's own traditions and social base. The rights and powers of members were at first curtailed and ultimately annulled. Dissenters were hounded and excluded. Annual conference became a stage-managed charade. Year by year, policy was shifted to the right, ultimately ensconcing "the free market" at the heart of Labour's philosophy, and thus granting Thatcher what she herself acknowledged as her greatest victory - converting the opposition to her core ideology.

The rupture

Decisively, the trade unions, once the paymasters, arbiters and guardians of the party (against both left and right), were relegated to the status of cheerleaders. Across the British media, this rupture was hailed as Blair's greatest achievement, the hallmark of Labour's "modernisation". At last, it was said, Britain's main left-of-centre party would no longer be beholding to a small group with a narrow sectional interest (the trade union movement). But once the union base and the principles that went with it were jettisoned, Labour inevitably fell prey to a much smaller, less representative group with a much narrower sectional interest: big business and the super-rich. The cash-for-peerages scandal is merely belated confirmation of this reality. The arrogance, the unaccountability, the cynicism and the reflex subservience to great wealth are all part of the nature of the beast known as New Labour, and they will not vanish when Blair is succeeded by Chancellor of the Exchequer Gordon Brown, whose dedication to big business and neo-liberalism is as fervent as Blair's.



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