Understanding and Fighting the Cuts - The party's position: a branch presentation

On the day that George Osborne finally unveiled his cuts, the Communist Party’s emergency statement announced that the barbarians were at the gate. That pretty much summed up what I think most of us immediately felt and several non-communist friends of mine said how much that expression resonated with them.

The party’s statement was also unequivocal in declaring this an open class attack  on working people and on the welfare state.

Around a million workers face unemployment as a direct consequence of these cuts. 500,000 public sector jobs will go immediately, while even the Office for Business Responsibility has calculated that this will lead to the loss of 700,000 jobs in the private sector.

The Local Government Association estimates that 100,000 jobs will go across councils.

Teaching unions say 40,000 teachers will lose their jobs while a similar number of lecturers face the same fate in higher education.

And of course the cuts will have a devastating impact on those who depend on them.

The TUC’s research into the impact of the cuts in public services estimates that working class families will face cuts equivalent to between 13 and 20% of their annual income, according to their means.

The caps on housing benefit, coupled with the cuts to capital spending budgets in social housing, the end of secure tenancies in council housing and the introduction of effective market rents in housing associations will produce ghettos and social cleansing in our inner cities, particularly London – you know it’s an extreme measure when even Boris stirs from his torpor to oppose it.

You don’t have to be a communist to recognise the CSR and, indeed almost every major piece of forthcoming legislation, as attacks on the poor.

Even the traditionally right-wing Institute of Fiscal Studies has deemed it a regressive attack on the poorest in society. According to the Institute, poorer families with children have the most to fear from the Bullingdon slasher.

 At a deeper level, the CSR, together with the planned legislation in the NHS, higher education and other areas represent a new round of privatisation in public services, the final boot sale, if you like, flogging off the remains of the post-war dream.

Why is this happening?

If  you believe George Osborne, this is about staving off a Greek-style attack on our credit rating and restoring fiscal prudence after the years of binge spending under Labour. If you listen to Alan Johnson, there’s not much opposition to the principle of deficit cutting, it’s just a matter of timing and distribution of cutting. Pretty cold comfort there.  

Yet our deficit is currently 70% of GDP, lower than for a 30 year period in the middle of the twentieth century. It does not need to be paid off now or in ten years to defend the economy, if a different approach is taken to economic growth – Ed Balls managed to work that out. And what’s more, the deficit could be paid off by a completely different approach to taxation: a wealth tax, raising corporation tax, a Robin Hood tax – a combination of progressive taxes on the wealthiest in society would do the trick.

So why is this not being considered and why the full-scale attack on the public sector?

For the Communist Party, the key to understanding George Osborne’s CSR lies in understanding what’s really happening in the economic crisis, and this also is the key to building a successful movement to challenge it.

For the Communist Party, the financial crisis was not an abberation caused by the Banking sector. Instead it was a product of the systemic tendencies toward crisis at the heart of capitalism, combined with the growing dominance of monopoly and finance capital over economic life.

For Communists, capitalism is a system with crisis at its heart, driven towards over-accumulation of capital, over-production of commodities, dislocation of markets and immiseration of the working class by a contradictory need to generate profit, far beyond the ability of capitalist societies to do so.

The anarchic competition that characterises capitalist expansion also generates a tendency toward the centralisation of capital as one capitalist kills many, creating a tendency toward the creation of great monopoly companies, dominating whole fields of economic life. In Britain, one only needs to think of the great oil and mineral extraction companies like BP and Shell, for example. The great monopolies use their domination of resources and markets to hold prices of their products up, forcing capital of all sizes to increase the exploitation of their own workforces.

Finally, the dominance of monopoly capitalism also saw the emergence of finance capital. From being a means of facilitating takeovers and mergers, the big banks, insurance funds and trusts became sources of profitable investment in themselves. As capital seeks more profitable investments, it drives towards the highest returns over the shortest period, often abandoning investment in industrial capital or the production of real commodities for trading in financial products.

These tendencies were given their freest rein from the late 1970s, in the form of neoliberal economics. Neoliberalism was the ideology that the market was the most efficient way of distributing resources effectively, but what it concealed was an agenda driven by the interests of monopoly capital and finance capital in the UK and USA.

·         Free trade in capital permitted the even greater exporting of capital abroad and facilitated the growth of a trade in financial products on top of this: securities, derivatives and other products that are in essence bets on future stock prices and claims to profits as yet unmade.

·         Privatisation and attacks on the welfare state provided banks and investment vehicles with new speculative investments and facilitated the growth of monopolies in services, with profit based on the steady draining of tax revenue into shareholders pockets.

·         State sponsored attacks on workers rights, coupled with the assertion of free markets for capital and labour and the restructuring of capital led to the creation of flexible workforces, lean management, the undermining of trade unions and the exporting of jobs, all raising the exploitation of working people.

British capitalism saw a particularly aggressive experiment in neoliberalism. Under the Thatcher governments in particular, the City of London was given even greater dominance over the economy, industry was starved of long-term investment to redevelop, going into exponential decline, foreign companies bought up British companies and banks, while UK capital was invested overseas, there was an unprecedented state-led attack on the organised working class, while privatisation allowed finance capital and services monopolies to make deep inroads into the public sector.

None of this was substantively reversed by New Labour. The result was the ever greater financialisation of capital and social life in Britain. Industrial capital came to be dominated by ‘private equity’ style investment, with its concentration on short-term shareholder value; workers wages were expropriated by finance capital in the form of privatised pensions markets and a speculative mortgage market; privatisation entered every sphere of the public sector in various forms.

When the crisis broke, with the collapse of the speculative market in dodgy mortgages to US workers, the financial sector was propped up with a massive subvention of taxpayers money, showing in a moment how monopoly and finance capital depend on the state and how the state has come to represent a tiny fraction of society.

In this context, George Osborne’s budget represents the latest and most brazen attempt by the representatives of monopoly and finance capital to resolve this crisis in their favour and at our expense. At the heart of the CSR, the NHS white paper, the education bill, the Browne report and various other pending pieces of legislation lies a programme to cut the deficit to reassure UK, EU and international finance markets and to offload the costs of this onto the working class through regressive taxation, more attacks on organised labour, savage cuts to public services and a new round of privatisation – all in the name of restoring the speculative profits of finance and monopoly capital.

No part of our lives will remain untouched by this latest, most savage attack. It will have a disastrous effect on working people. It will also affect large sections of the private business community however – witness the FOSB’s dismay at the CSR.

What does this mean for us, here and now, fighting the cuts?

We have an obvious and immediate priority:

 To build vibrant, broad based local campaigns to protect public services and working people from the symptoms of this attack wherever they manifest themselves. These campaigns must draw on the broadest sections of society in our communities – it must be a people’s resistance, but with the working class at the heart.

Organised labour has a critical organising and coordinating role to play. If it is to play that role we have to make sure that there is a link between trades unions, resisting the attacks on jobs and conditions and the working-class communities that depend on these services. The trades councils have a key role to play in this struggle.

But if the campaigns are to win anything more than partial, temporary and fleeting reprieves for individual services in the face of an unremitting offensive, we must link them up and build them into a movement.

That means giving them a coherence based on a common analysis of what is happening and what’s wrong and then a common sense that there is an alternative, that we know where we have to go.

There are two national initiatives that are giving expression to this, linking up local campaigns and giving them a common focus – the Coalition of Resistance and the People’s Charter. The CoR has already mobilised a broad, left-oriented response, based on a common understanding of the class orientation of the attack, while the People’s Charter represents an attempt to project the alternative to the cuts consensus at a common-sense level. The Charter includes six points around which it is possible to unify the broad trade union movement and now also potentially, the anti-cuts movement, and which mount a challenge to the dominance of monopoly and finance capital.

The Communist Party urges the maximum support for these initiatives and is working to unify them as far as possible.

However, the Party also argues that with their growing confidence, the labour and working-class movements of resistance must mount a more fundamental challenge to the dominance of monopoly and finance capital. That’s why we outline a Left Wing programme and an alternative economic strategy that have as their main target, the specific nature of British capitalism and in particular its dependence on parasitic finance capitalism. It is a programme for cumulative advance toward democratic control over capital through publicly controlled investment in new industries, public ownership of finance capital and the mass media. In this way, the Party argues, the road can be genuinely opened up for socialism. But perhaps more importantly, for today, without such a strategy, without a fundamental challenge to the basis of British monopoly capitalism, anything we win today will be stolen back from us tomorrow.