Monday, October 27, 2014

The Return of the Dark Times

by Nick Davies

‘A naked people under an acid rain’ was how historian Gwyn Alf Williams, in closing his 1985 book When Was Wales?, memorably summed up the predicament of Wales and the Welsh.  The description encapsulated the Westminster-imposed de-industrialisation which was leaving Wales poor, the environmental cost to its people of Wales’ industrial past and the democratic deficit, famously encapsulated by the graffiti, ‘We voted Labour, we got Thatcher’.

Twenty years later, those dark times must have seemed a long way away. Wales had its own devolved government, a budget settlement from Westminster which,  by courtesy of a sympathetic government in London,  was increasing year on year,  and,  for the  more gullible, Gordon Brown  was announcing that he had re-written the laws of motion of capitalism and ‘put an end to boom and bust’.

We know what has happened since and two recent events remind us that, updated from the 1980s, the dark times are back with us.

The first event is the announcement of the Welsh Government’s provisional budget for 2105-16 under which Wales’ 22 local authorities will, between them, receive £146 million less: a 3.4% cut and a cumulative reduction of 10% in real terms from the settlement of  2010-2011.

Welsh council leaders have correctly warned that these cuts will result in the dismantling of key services and will test the ‘very fabric’ of communities.  Some of these are communities which, despite the interventionist efforts of the Welsh Government since 1999, are still poor after the 1980s and have been hit hard by Westminster’s attacks on social security – in particular, due to the nature of much of the housing stock, the bedroom tax.

Labour councilors are in an invidious position; they appreciate only too well the impact of these cuts on the poorest and most vulnerable in their communities, the people that voted them in and put their trust in them.  They have to try to preserve jobs and services. But they also, by law, have to set a balanced budget, otherwise, officers could simply step in and do the job, with a result that would almost certainly be worse. Those who managed to get through the last budget round without too much damage now find they have to do it all over again, only more so.

However, it is irresponsible, in the present circumstances, to demand that a Labour council should stand alone and set a deficit budget. Neither is it realistic to expect the Welsh Government, presently without the powers to borrow or raise taxes, to set a deficit budget. Councils might feel emboldened to consider such an approach in response to action from the labour movement and communities against the cuts – but, unfortunately, no such action is forthcoming at the moment.

The Welsh Local Government Association (WLGA) has complained that, for the second year running, local government has been ‘bottom of the pile’. The tendency among some in Labour local government circles, particularly those with residual anti-devolutionist sentiments, will be to blame the Welsh Government. No doubt many will be quick to see public services minister Leighton Andrews – widely regarded, while education minister, as having a centralising agenda and little time for local government – as the villain of the piece. However, it is necessary to look past Leighton, and the ongoing discussions about whether local authorities in Wales have the capacity to deliver public services effectively, to identify exactly where these cuts are coming from. And that, of course, is the Westminster Government, which has cut once again the block grant paid to the National Assembly.

Moreover, local government has been relatively well served by devolved budgets.  Welsh councils have, until the last two years, been free from the ‘English’ cuts imposed by Pickles over the past five. Further, for two years now, the Welsh Government has plugged the gap left by abolition of council tax benefit, saving Welsh councils from having to chase the poorest for arrears. Welsh governments are, under the present financial system, engaged in a constant juggling of priorities – in the present budget, robbing Peter (local government) to pay Paul (the NHS).

The government of  millionaires who serve the interests of the their paymasters in the City, and whose constituencies include Witney, Maidenhead and Epsom and Ewell, are happy to see Labour politicians in Wales blaming each other for cuts which threaten the health, well-being and life chances of some of the poorest communities in Western Europe. Their ability to divide and rule in this way reflects the fact that, notwithstanding the laudable efforts of both the Welsh Government and various Labour local authorities to alleviate the hardship faced by Welsh communities, there is no broad, all-embracing labour movement-based campaign against austerity.

The other recent event that makes the 1980s seem more contemporary was Cameron’s announcement that there would be no change in the formula by which the Welsh government receives its funding from Westminster. Devised in 1978 as a short-term solution and now disowned by its author, the former Labour treasury minister Joel Barnett, the Barnett formula adjusts funding on a per capita basis, rather than in relation to need. According to the economist, Gerry Holtham, in the way spending is allocated to correspond with spending in England, Wales, loses out by £300 million per year.

This is an argument that has been rumbling on for some years now, but the immediate context was  Cameron’s moment of panic that he might be the leader of the Conservative party who ‘lost’ Scotland and a series of on-the-hoof promises to keep Scotland in the UK. The events around the Scottish referendum saw Cameron at his most cynical: wheedling and sentimental in his overtures to the Scots but quick to turn the ‘Vow’ into a devious manoeuvre to appease his back-benchers (and UKIP), promising ‘English-only’ votes in Parliament. Those same back-benchers were up in arms about any possible increased funding for Scotland (already proportionately better funded than Wales).  Therefore, stripped of all the unctuous rhetoric about the ‘UK family’ and Wales being ‘at the centre of the debate’, the chances of fair funding for Wales were always going to be slim and the fact that there is no question even of reviewing Barnett says everything about the contempt the Tories have for Wales.

There are, of course, proposals to give the Welsh Government tax raising powers: control over stamp duty, business rates and landfill tax and – subject to a referendum – control over income tax. In fact, recent changes have promised more manoeuverability for a Welsh Government by removing the ‘lock-step’ requirement that would mean that changes in one tax bracket would have to correspond with changes in the others.  First Minster, Carwyn Jones has insisted that the powers have to be linked with a revision to the Barnett formula. His fear, widely felt within Welsh Labour, is that Wales could be ‘cut loose’ by a Tory-dominated England: given more power but without the resources to use that power effectively, with Westminster keeping control of benefits and pensions, effectively marginalizing Wales, but cynically presented by the Tories as a new devolution ‘settlement’.

The £300 million shortfall is not the end of the matter, of course, and in the grand scheme of things it is not a financial magic bullet.   There is the wider issue of reparations for the Westminster policy, during the 1980s and 90s, of deliberately stripping Wales of its industrial infrastructure and the need to restructure Wales’ economy along sustainable lines, involving investment in renewable energy and integrated public transport. However, the Tories’ stance on the Barnett formula, echoed by the Labour leadership, living in terror of ‘unfunded’ promises, suggests that there is little chance at the moment of proceeding past first base.

This takes us back to the need for a Wales-wide campaign against austerity; linking the issues of the cuts and of devolution and funding, and tackling the crisis of representation faced by working people. The price of failure to build such a resistance movement could be catastrophic. Many of the measures taken by Welsh Labour in government have been a massive improvement on New Labour’s record: a publically funded and publically provided NHS, state education and no ruinous PFI schemes. However, on the ground, in the communities, Labour is weak. The absence from the British party leadership of a convincing, clear anti-austerity narrative and any challenge to the anti-immigration rhetoric and myth peddling of the media and the Tories make some Labour majorities vulnerable to the threat of UKIP’s right-wing populism.

The small print of UKIP’s actual policies is less important than the desire for a rejection – more a spasm than a political choice – of the Westminster consensus and a reaction against the closing-off in many communities of any chance of secure employment or affordable housing. UKIP at its most folksy and populist can sound disturbingly like the more benign conservatism of ‘old’ Welsh Labour.

We have already had a ‘dry-run’ in the Euro-elections, where the mistakes of an inept and muddled Labour campaign – which saw UKIP as a threat only to the Tories – were replicated in Wales. A sign of how wrong the party leadership got it was the result in Merthyr Tydfil, where UKIP was a close second. The Tories are an irrelevance in Merthyr; those UKIP votes must have come from Labour supporters.  Another example: in Blaenau Gwent (which has a population 99.1% white), UKIP scored 30.2%.

The trade union leadership in Wales condemns austerity and is pinning its hopes on the general election. However, the Westminster Labour leadership is pursuing a cautious, defensive ‘core vote’ strategy, with one small snag: its core vote hasn’t a clue what its message is. The party gives a strong impression of having forgotten how to think. A clear anti-austerity message, a challenge to the anti-immigration rhetoric, a commitment to bringing public utilities and transport under state control and to building council houses could, come May, rescue the communities of Wales from the grip of austerity and the poisonous embrace of UKIP.

Thursday, October 16, 2014

The Scottish Referendum

By Peter Rowlands    

I couldn't get to the WLG meeting on this but I have read the pieces by Gordon and Nick and would like to offer my own thoughts, partly in order to redress the balance of the debate, which here and elsewhere appeared to reflect majority support on the left for 'Yes'.

Let me say first of all that 'Yes' had a strong case. Although Scotland (and Wales) have had a Labour majority at every general election since 1964, they have been subjected to Tory governments for over half the period since, while North Sea oil and a relatively diverse economy made independence credible. Scottish Labour post 1999 appeared Blairite and anti-devolution, thus playing into the SNP's hands, as opposed to Welsh Labour's ‘Clear red water’ and pro-devolution stance, although change from the previous Kinnock anti-devolution line was hard-fought. However, it is, I think, reasonable to assume that, had Welsh Labour's approach been adopted in Scotland, the SNP would never have formed a government and there would have been no referendum.

The debate itself was conducted in a largely negative manner by the 'No' side, which emphasised fear and risk rather than positive arguments, and, implicitly at least, argued an imperialist nostalgia (shades of Andy Stewart’s Scottish Soldier), although the violent intervention of the Orange Order perhaps indicated what this really represented. Labour, however, largely went along with this and did not attempt to promote any sort of left-wing case, which was left to a few MPs and trade unions and never really surfaced.

The build-up to the referendum saw an intense national debate in Scotland, which included large public meetings and resulted in an exceptionally high turnout of 85%. No supporter of democracy could fail to be impressed by this, although this was hardly the attitude of the establishment and main parties as it became clear that the effect was an increase in the 'Yes' vote.

The net effect of all of this was a greater degree of support for the 'Yes' campaign from the left that might other wise have been the case. In my view this was wrong, and the left should have campaigned for the 'No' vote, although as I said above, the left case for this barely surfaced.

Let us look at some fundamentals. Socialists generally oppose nationalism on the grounds that it obscures the real class divisions in society. Where national self-determination has been supported, it has been because the resolution of the national question is of such significance to the people concerned that it is judged that without it there can be no development of socialist consciousness. This was the basis of left support for anti-colonial struggles, or of other repression of minorities (yes, this is a gross simplification of a complex picture, but I believe broadly right).

Today, that certainly means support for an independent Kurdistan, and probably for a united Ireland. (Sinn Fein have obviously decided that demography will deliver what semtex couldn't). There is even a case to be made out on these grounds for Wales, although the requisite level of national feeling required is not there, being confined to a minority in the North and West.

But it doesn't apply to Scotland, where union with England was mutually agreed in 1707. Rapid industrial development in the nineteenth century based on heavy industry saw the rise of a powerful labour movement, enhanced after the decline of the Conservative/Unionist vote in the 1960s and the rise of the SNP.

The SNP have been successful for reasons described above, because of Salmond's political talents in seeming to be able to face in different political directions at the same time without losing credibility, and because sections of the left who should know better have supported the 'Yes' campaign. The far left have done so for opportunistic reasons, to maintain a high profile, but many in ‘Radical Independence’ seem to have built up enormous illusions in the possibilities for radical change following independence. What they have done, in fact, is to have supported nationalism. It may be a fairly acceptable sort of civic nationalism, with xenophobia and 'Braveheart' bollocks kept in check, but it is nationalism nevertheless, and to repeat the point it weakens the left by obscuring the class divisions which are as strong in Scotland as elsewhere in the UK. The left generally would be weakened by independence, as Salmond's business friends are well aware. Exhortations to forgo wage increases and accept cuts would all be ‘for the sake of our new nation’, and would make the task of trade unionists and socialists harder, particularly because of the lack of control over the economy because of remaining with sterling. Meanwhile, the rest of the UK would lose 50-odd Labour MPs and a significant part of the activist cadre within the trade union movement. It would make electing a Labour government much harder, particularly if Wales followed suit with a further loss of 30-odd MPs. Scottish independence would, therefore, be disadvantageous to both Scotland and the rest of the UK (and to Wales, in the unlikely event of it happening there).

The growth of nationalism is, in part, a reflection of dissatisfaction with the prevailing political set-up, as is the growth of parties like UKIP, who want to leave the EU. But neither supply any real answers. They are distractions, blind alleys. In my view, the only credible way to begin to create a social-democratic, and hopefully eventually a socialist, society which is able to challenge global capital is on an EU-wide basis.

What is ironic is that the struggle for Scottish independence has actually resulted in (a promise of) a form of ‘home rule’, ‘devo max’, which most Scots would have voted for anyway had they had the choice! (Was this what the wily Salmond had in mind all along?) And, of course, that means not only its extension to Wales, but the opening up of a renewed debate about federalism and devolution for the whole of the UK, including the regions of England. If that results in a real devolution of power away from the stranglehold of a metropolitan elite in London, then much will have been achieved.

Sunday, October 5, 2014

Europe, the UK and the Left

By Peter Rowlands

Once again, a European election has come and gone, with marginally more interest having been paid than usual by the left in the UK, mainly due to the rise of UKIP and its likely effect on current and future British politics.  Along with the French Front National, they did exceedingly well and media comment on the rest of Europe, such as it was, gave the misleading impression that there had been a general move to the nationalist/populist right. This was true, but only in relation to the centre-right, mainly Christian Democratic parties, who lost out heavily to them. On the left, the Social Democratic parties more or less held their own, while the parties of the left made substantial advances, although not as spectacularly as those of the right. (It is interesting how the right occupies different positions: UKIP was not prepared to go in with the FN, who equally wanted to distance itself from open Nazis like Golden Dawn or the dreadful Jobbik.)

The parties of the left in the EU, mainly grouped under the umbrella of the Party of the European Left (PEL), are a substantial force in a number of countries, where, along with Green parties, they often gain 15% of the vote or more, but this is much less true of countries which do not have a developed system of proportional representation, particularly the UK, where it has proved difficult for parties to the left of Labour to establish themselves. Countries where left parties are strong are Germany, the Netherlands, Finland, Denmark, Spain, Portugal, Ireland and Greece. These are constitutional parties in that they stand for election and are to be distinguished from the revolutionary left, which is much smaller and has its own European organisation to which the SWP et al in the UK belong. Some parties are members of both. It is generally true to say that the policies of the left parties, as outlined in the manifesto of the PEL, are more in line with the outlook of most of those on the left of the UK Labour Party than with the Labour Party itself or similar social democratic parties in the EU.

Historically, it was the left, in the Labour and Communist Parties in the UK in the 70s and early 80s who were most strongly opposed to the EU in Europe but, while few now want to leave, there is little enthusiasm for the EU within the Labour Party or its supporters and correspondingly little interest. This is borne out by the very limited response to Kate Hudson’s article on the EU elections (in Left Unity, reprinted in Left Futures), and very little other coverage. Similarly Kate’s book, ‘The New European Left’, published in 2012, was largely ignored, as was a review I wrote of it in ‘Chartist’ magazine.

There is no positive perspective on the EU on the left in the UK. A minority still cleave to the outright withdrawal line of NO to EU, but there is plenty of indifference and hostility short of that. The previous Labour policy of withdrawal in 1983, which would probably have been disastrous, still casts its appeal, combined with an older , insular tradition of ‘building Jerusalem in England’s green and pleasant land’.

But of course it is, since the 1990s, the right that has taken the lead in opposing the EU, witnessed by the growth and flowering of UKIP and of Euroscepticism among Tory MPs and MEPs and what remains of their local parties.

It is interesting to consider what  interests are being represented here, because they certainly aren't those of big business, who are terrified at the prospect of a British exit from the EU (Brexit), particularly the financial sector which fears that it may lose its place as Europe’s financial centre.
They are undoubtedly correct in terms of their apprehension, although many small businesses believe they could benefit from less regulation and employment rights.  However, a misplaced and xenophobic nationalism, born of World War Two triumphalism and nostalgia and aided by decades of lies and distortions promoted by the right wing press, has persuaded many that membership of the EU is now our key problem. UKIP’s appeal, as some commentators have pointed out, goes beyond this, although it is about nostalgia for a mythical past rather than policies, which remain incoherent, and would appear to be most potent for a group who are among those who have arguably prospered least in recent years, notably the older white working classes, particularly those who had previously voted Tory. This, combined with a virulent xenophobic nationalism among sections of the more right wing, and often small business middle classes - well represented on the Tory benches at Westminster - makes for a considerable force.  It is no accident that the UK is more hostile to the EU than almost any other member state, as measured in many polls. What UKIP represents is a form of populist nationalism, or ‘Poujadism’, although its appeal is to the same social groups attracted to fascist and neo-fascist movements in the past. But its neoliberal economics and desire to present itself as non-racist differentiates it from other right wing groupings in the EU, although how it develops remains to be seen. Its simple policies of leaving the EU and ‘taking back control of our country’ have gone largely unchallenged by the Tories because so many of their supporters agree, and only in muted form by Labour, for the same reasons.

It is worthwhile looking at this for a moment, because there does appear to be a large amount of misunderstanding of what is entailed in ‘Brexit’. There are essentially three options: to remain an EU associate through the EEA, like Norway; to negotiate individual trade agreements, like Switzerland; or to completely sever links with the EU. The first two involve some freedom from EU regulation, including agriculture and fisheries, but would presumably be unacceptable to UKIP because they would involve accepting most EU regulations, including - crucially - the free movement of people, without any say in their formulation. This would mean a complete break, which would not necessarily mean the retention of a trade agreement, as UKIP says it wants. Most commentators think that this would result in a huge rise in unemployment, as markets in the EU are lost and inward investment falls as firms, including banks, which established themselves in the UK because it was a gateway to the EU market, leave because it no longer is. The UK would become vulnerable to the favours of international capital over which it would have little control. A formal recovery of sovereignty would in fact mean its real decline.

Yes, there are huge problems in the EU, primarily related to the Euro, but  a break up of the EU, made much more likely by the recent success of the right wing parties, can only benefit the nationalist right, probably leading to competitive devaluations and increased division between the states of an ex EU, with little or no collective voice in the world. The only viable alternative is a strong, and eventually federal, EU - the only basis, because of its size and strength, for the establishment of a social-democratic, and eventually socialist system that will be able to successfully challenge and control at least a sizeable chunk of  international capitalism. Socialist, or at least social-democratic, traditions, weakened and compromised though they have become, are still stronger in Europe than in any other part of the world, but can only be realised through a radically reformed EU.
The left should accept this, rather than continue with its detached attitude towards the EU. It should decide to actively engage with the left in the EU, to  look at the policies of both the PEL and the PES and to seek to develop some positive policies for Labour on EU issues rather than wishing that it would all go away!

Whoever wins next year’s election, and it could be close, there is a possible scenario which might allow both Labour and the pro EU-Tories to claim that the UK’s position is far more satisfactory than hitherto, even from a mildly Eurosceptic point of view. This is because of the ‘banking union’, due to come into effect next year and which effectively creates a far more centralised control over banking and finance than before for Euro member states and those obliged to join, which includes all members, and any new members, except for the UK, Sweden and Denmark. The latter might therefore be able to retain EU membership but without many of the controls that would apply to those within the ‘banking union’. Such a change would require a referendum as it would mean a treaty change, although the Tories are committed to one anyway. UKIP and their supporters would still campaign for a ‘Brexit’, but a majority would probably accept a renewal of membership on these terms, particularly as some of the Eurosceptic newspapers are likely to move to a position more sympathetic to that of big business as the referendum neared.

But none of this is certain and there is now a need for the left in the UK to campaign against Brexit and for a reformed EU, alongside parties and groups in the EU with a similar outlook.