Nigel Smith
Following the collapse of two conservative governments within two months, the positioning of Rishi Sunak as Prime Minister has had a similar amount of time to be tested. Sunak was appointed by the Conservative Party in an entirely undemocratic way, giving the members of the Party little option but to rubber stamp his appointment and the British people no say whatsoever in the composition of the UK government. Sunak came along to restore order to the chaos created by both Johnson and Truss, but especially the first Truss budget, which was savaged by the City of London and US bankers.
This piece is written as an up-date on the situation in Britain since the Truss debacle, which was covered by Internationalist Standpoint in November.
The state of the economy
The British economy is in a period of stasis, with a more-or-less zero rate of growth. Trade with the EU has fallen as have imports from the EU. Following Brexit, it was envisaged that the British economy would grow through increased trade with the rest of the world, especially China and India, but complications in relations between Britain and China precipitated by the USA’s hostile trading attitude towards China has compelled Britain to follow the US lead and shy away from open free trading measures. There are currently numerous trade contracts between China and the UK, left unsigned because the UK government won’t send a cabinet level minister to China to sign them. India has moved closer to Russia and used the Ukraine war to benefit from cheaper Russian oil and gas. It’s very difficult to measure the effect of Brexit on the UK economy and this is especially complicated because of the effects of Covid and the war in Ukraine. Prior to the war there were predictions being made that the UK economy would grow significantly. Statista forecasted that the UK economy would grow by 4% in 2021 and 7.3% in 2022 because of the UKs successful vaccination programme allowing the economy to return to normal levels of activity. However, the war in Ukraine and the energy crisis has put a break on any growth and the UK economy currently stands at the level it was in 2015.
At the tail end of the Truss regime, there was panic in the housing market. As things stand, house prices are predicted to fall between 6% and 10% in 2023. Landlords are also using the situation to increase rents, with rents increasing by 4% in 2022, more than twice as quickly as in the previous two years. It should be born in mind that 65.2% of UK homes are privately owned. The current high levels of interest are therefore making it harder for people to buy and are pushing the cost of rents up. The base rate of the Bank of England currently stands at 3%; with the rate of inflation at 10.7%, there is a huge deficit between savings rates – typically less than 2% and the value of those savings. With mortgage rates rising from an average of 3.5% to 6.5% in 2022, it is becoming more difficult for people to find the funds to pay the mortgage and this alongside the cost-of-living crisis will lead to increasing levels of foreclosures.
Pensions were at one time threatened by the end of the triple lock protocol. The triple lock represents the highest of three indicators: annual inflation in September, annual earnings growth in July or 2.5%. However the Sunak government was forced to honour the triple lock and award a rise in pensions of 10.1%. This indicates the need for the very low UK pensions to be honoured but also is suggestive of a strong base of support for the Conservative Party from people over retirement age.
Rates of poverty in the UK continue to increase with 14.4 million living below the poverty line, including 4.3 million children. Parents are increasingly finding it difficult to feed themselves and their children and to properly heat their homes. The numbers of people on pre-payment metres is increasing with the numbers of people temporarily losing their electricity supply counted in the millions. The numbers of food banks are increasing but with the onset of austerity donations to those banks decreasing. Teachers, nurses and even police officers are being forced to go to food banks in order to keep their families fed.
Shifts in UK politics
In November we predicted that austerity would be firmly back on the agenda under a Sunak led government. However, Sunak has pushed further swinging austerity measures down the road until after the next election in nearly two years time. This is to try to mitigate the government’s current unpopularity, but it will also act as a boost to the Labour Party, who will be able to avoid inflicting additional austerity by Labour councils – one of the main factors in their losing support in the so-called “red wall” seats. We also predicted the possibility of cutting spending on the Sizewell nuclear power station. However the government has recently pledged to support it to the tune of £100 million. At the same time, they are allowing a free for all in the increase in the mining of fossil fuels in spite of COP 26 pledges. Permission has been granted to open a new coal mine in the North West. They are also planning to increase production of natural gas and oil.
In November, Labour held an average lead of 20% over the Conservatives according to politics.co.uk. However this was reduced from 25% in the last week of the Truss administration. Early on in his premiership, Rishi Sunak seemed relatively popular against Keir Starmer. However a recent poll (Poll Tracker) put Starmer on 46% compared to Sunak on 36% when people were asked who would make the best PM. Therefore Sunak’s popularity has crumbled since he became Prime Minister. The Lib Dems stand at 9%. The Reform Party, born out of the UKIP Party, now stands on 7%. The Reform Party is taking votes away from the Conservatives with a right -wing populist agenda. Nigel Farage is making far too much money elsewhere to give it his full support, but if he were to take over a position of leadership, then this would propel the Reform Party forward in the polls. There also continues to be a lot of talk about Boris Johnson making a come-back as support for Sunak continues to fall and Conservative policies are seen as increasingly unpopular. The above polls show a clear shift in UK politics, especially in England with the Labour Party being seen as the party of government.
Cost of living crisis
The coming winter is proving to be a difficult time for the British people. Inflation and prices are rising and wages, especially in the public sector, remain adrift of inflation. According to Statista, wage rises are well behind inflation. The average wage rise is just over 5% but in the public sector it is around 2%. Workers in the public sector are being asked to keep wage rises to 2% with inflation over 10%. It was recently reported that CEOs awarded themselves an average pay rise of 39% last year. The windfall tax raised the levy on profits of oil companies from 25% to 35% and on energy companies from 25% to 45% on a temporary basis. This hopes to raise £14 billion. Sunak and Hunt (the chancellor) say that nothing is off the table, but a real effort to increase taxes on the rich has not taken place. Instead, the rich sit on their massive wealth while everyone else bears the burden.
The Sunak government has shown an amazing level of crass stubbornness in its approach to the current wave of strikes in the public sector. They insist that the findings of the various pay review bodies should be stuck to. The Pay Review Bodies are all instructed by the government on the level of wage settlements that are awarded. They have therefore recommended settlements way below inflation and miles away from what workers are asking for. Up until now the government has refused to negotiate at all over wages, simply repeating that they will honour the recommendations of their own pay review bodies, when these recommendations are producing wide-spread and determined strikes.
Anti strike bill
The TSSA, ASLEF and the RMT (transport) are still in negotiations and continue with strikes as do the CWU (postal workers). However, nurses for the first time ever are on a national strike, alongside ambulance workers, civil servants and bus drivers. Teachers and doctors are currently balloting for strike action although the second largest teaching union (NAS/UWT) failed to reach the 50% threshold. Other groups including OFSTED (school inspectors) and junior doctors are balloting.
The government’s latest employment bill, which is being presented to parliament this week, is aimed at insisting that strikes in key industries promise a minimum level of service. In other words, strikers would be compelled to work. Unions are rightly mobilising to oppose this law and talking more openly of breaking the law if it comes onto the statute book. This law would make the existing rights of workers to strike almost useless. These changes to the law are providing an impetus to resistance and could become the catalyst for further industrial action.
Labour not a solution
At long last there are significant moves from the TUC and health unions for coordinated days of action on 28th January for the TUC and February the 1st for health unions. The TUCs day of action falls short of a demand for a general strike but it is a step in the right direction. It is the responsibility of trades unionists and trades council delegates to attempt to radicalise these movements. Let’s hope that the new movements do not sap the energies of new people coming into struggle as they have in the past. Let’s also hope that the TUCs day of action is not simply a gesture, like the mass mobilization in 2011. This was used as a device to let workers let off steam with no intention of building a movement. On speakers platforms however, voices of criticism of Labour and demands for a new workers party are seldom voiced. However, with the unpopularity of the Conservative Party and the surge in support for Labour born out of the ineptness of the Conservatives, there has never been a better time for the launch of a new left party. Reform is being pitted against the Conservatives on the right. There needs to be a left option that will throw down a socialist challenge and give workers a radical option. This doesn’t seem possible at the time of writing because the unions critical of Labour are focussed on strikes and getting rid of the Conservative government.
The current shadow health secretary, Wes Streeting, has shown a shocking level of contempt for health workers. In November he vetoed the health service workers demands on pay out of hand and in an interview made attacks on doctors by emphasising their lack of openness to change, with not a mention of the fact that NHS trusts are run by boards of directors, who carry the real power. He and Rachel Reeves (shadow chancellor) also criticised the degree of access patients have to GPs. These criticisms are not in themselves incorrect, but to lead with these ideas, when the whole fabric of the NHS is under threat is crass at the very least. It is also clear that there is no commitment by a Labour government to get rid of the private sector from the NHS. However, the Streeting proposal to nationalise GP practices whilst welcome, smacks of a top-down bureaucratic approach. On spending, Reeves and Streeting talked about training more professionals but bordered on contempt for the profession when Streeting said that, “I’m not going to Rachel saying that I need billions more for the NHS until I can be certain that we are spending every penny on the NHS already.” Quotes like this put me in mind of the Blair, New Labour government, which sought to blame the workforce rather than the system. To demonise the workers in order to soften them up to change. To impose change on the workforce rather than find the best solutions alongside them. It is also a fact that it is Streeting’s job to understand the needs of the NHS and prepare in advance of a Labour government for the increased spending that will be required.
The above example is just one aspect of the fact than when listening to the New, New Labour, under the tutelage of Keir Starmer, we are dealing with a fully realised, neo liberal agenda. As we have written before, the working class can have no faith in the Labour Party to do anything other than manage capitalism better than the Conservatives – not in itself a difficult task.
Strike wave
The strikes, especially the nurses being on strike, are starting to move consciousness in the British people. The glaring failures of the NHS to provide basic services are being revealed by the strikes. Striking ambulance workers are able to point out just how bad the service is, and how it has deteriorated under this Conservative administration. Nurses are showing that conditions in hospitals are at a critical juncture, with too few beds, increasing waiting lists and huge numbers of avoidable deaths as a result of continued under- funding. The Conservatives have governed for twelve years, the people can see the mess they have made. The media, especially independent TV channels, are starting to turn on the government with ITV news making a clear attack on the inept handling of the NHS by the Tories on their 6pm news on 12.01.23.
There are developments such as Enough is Enough, which could lead to an increased level of political consciousness, but will not if they take an uncritical position on Labour as the People’s Assembly did. Enough is Enough groups are getting across to picket lines and are attracting striking workers to their groups. Alongside trades councils this could lead to further radicalisation. The calls for mass days of action are also welcome. However, as mentioned above, it seems to us that now is the best time in a long time to call for a new worker’s party. However, the voices echoing this call seem few and far between. The popular hope is to get rid of the Conservative government and pressure a Labour government to grant concessions – a forlorn hope in our view.
At the same time as all of this is happening the climate change movement is not gathering any momentum and Extinction Rebellion has abandoned its more radical actions, such as blocking roads and encouraging its activists to risk arrest – not a policy we agreed with.
The Left remains weak and divided. However it is possible that new left forces will emerge from the strikes and the fight for the right to strike. We in the UK are in an historic period in this sense. Workers are fighting for the survival of the unions and rights won over generations. Everyone on the left should be calling for unity, but demanding that the leaderships of the unions work together as well. An uncritical support for Labour at this time will lead to further disillusion, especially of the youth in the coming period.
