WILSON, AT AN
IMPASSE
BRITAIN In the first ten weeks of the new Labour government in Britain the trade-union and Labour party bureaucracy have been attempting to give some credibility to the "Social Contract" strategy that was Labour's main plank in the election. But so far all Wilson and company hove proved is that under the present social, economic, and political conditions in Britain it is impossible to recreate a credible integrationist strategy of the type that Labour pursued after it electoral victories in 1964 and 1966. The Economic Crisis The basic concept of the Social Contract is that the Labour government will make concessions to the working class on the social field in return for which the trade-union bureaucracy will agree to a voluntary incomes policy - The first basic obstacle to the Social Contract is that the present economic situation of British capitalism allows no room for making any significant concessions to the working class. The economic crisis in Britain has reached very severe proportions. Projections for the rate of inflation are as high as 15-20 percent. The balance of payments deficit this year will probebly exceed £3,000 million. Unemployment is rising and is expected to reach 800,000 or 1 million by Christmas. Some sectors, for example construction and auto, are already in recession. Industrial output this year will fall by around 2Most important of all, the profits and liquidity situation is disastrous. At the height of the 1970-71 recession the net deficit on flow of funds for British capitalist industries was slighrly over E900 million. This year already the projected deficit is £5,000 million. The Economist spelt out very clearly the implications of this for British capitalism. It stated that Firms "will be unable to borrow anything like E5, 000 million. ... Instead they will be forced to scrap investment, declare redundancies, and sometimes declare themselves bankrupt." The economic situation is now producing something close 10 despair inside the ruling class. The influential National Institute of Economic and Social Research noted in its March report: "It is not often that a government finds itself confronted with the possibility of a simultaneous failure to achieve all four of its main policy objectives -- of adequate economic growth, full employment, a satisfactory balance of payments and reasonably stable prices." This prognosis is clearly shared by the central apparatus of the state. This April, in an unprecedented move, the Treasury refused to publish its projections for the evolution of the economy next year. The most dramatic expression of the views of the ruling class has been given by the stock market. Since the high point of May 1972 the value of the stock market has Fallen by 50% Under these conditions the economic concessions the Labour government has made to the working class -- freezing rents for one year, cutting milk and bread prices, increasing pensions -- are merely drops in the ocean, no matter how populor in the short-term. The real living standard of the working
_by JOHN ROSS _ class is alreody falling. It will drop by about 2-5 percent this year. For some sections of the workers, it will fall still further. This is quite apart from the massive cutbacks that are now hitting housing, health, education, and all areas of social expenditure. and the Workers Response Despite the extremely small concessions the Labour government can make to the workers, the trade-union bureaucracy is of course making valiant efforts to sell the Social Contract to the masses. Len Murray, Secretary of the Trades Union Congress (TUC), declared that the new Labour government had "put forward a very positive and coherent programme" and warned: "If we have nothing to give government they will have nothing to give us." In line with this view the TUC has already pledged to try to keep wage increases (except for the lowest-paid workers) down to the rate of increase in the cost of living and to try to intervene to prevent strikes, particularly wildcat strikes. But the problem for the government is twofold. First, the real power in the trade-union movement does not lie with the TUC but with the individual unions. While the individual bureaucrats also try to support the Social Contract, the relationship of forces between the mosses and the bureaucracy within the individual unions is far less favourable to the leadership than that between the masses as a whole and the TUC. Second, the relationship of forces has been turned against the bureaucracy by the working-class victories won against the bourgeoisie in the miners strike, in the fall of the Heath government, and - - since Labour came to power -- in the successful strike of engineering workers against the seizure of their union's assets by the National Industrial Relations Court. All these struggles demonstrated to very wide layers of the working class, including those that did not enter the fight against the Tory incomes policy, that militant struggle pays. Because of the economic and social crisis and the relationship of forces that now crists between the classes, the return of the Labour government has not been followed by a cessation of real struggle. While there has been a slackening of mass struggle compared to the period before the election, there has been no downturn on the order of the ones following the elections of 1964 and 1966, Nor has there been a slackening of wage demands. Despite the fact that most unions have accepted Phase Three of the Incomes Policy, there have been at least four important actions by sections of the working class on basic trade-union questions since the Labour government was elected. The first was a strike and demonstration of 15,000 Landon teachers on their claim for payment for the high cost of living. The second is the strike of local government workers in London on the same issue. The third was the strike by engineering workers. The fourth was a demonstration of 5,000 nurses. This is in addition to certain smaller actions like the strike of bank employees. What is significant about all these struggles is the extremely minimal influence the Labour government has been able to exert in getting them called off. Employment Secretary Michael Foot did persuade the engineering union to call off its
3
BRITAIN overtime ban and to accept the employers pay offer -- that had been expected anyway. But Foot totally failed to persuade the same union to break its policy of non-recognition of the Industrial Reiations Court. Pleas by the Labour government were also rejected by the local government workers and Labour has also had no success in persuading the union conferences to reduce their pay claims for the autumn and winter. The electricians union voted against the advice of its executive to re-open negotiations on the wage agreement it had concluded under Phase Three of the Incomes Policy. The teachers union is putting in for a 37 percent increase on the basic rate. The Post Office workers and seamen have decided to ask for massive increases. The miners and engineering workers will almost certainly decide to put in for very lorge wage increases -- between 25 and 100 percent -- at their conference later in the year. BAc. Th Плія Lins A further cause of concern for the Labour government is a possible clash on the so-called threshold agreements. These are a very distorted form of sliding scale of wages whereby for every increase in prices in a year over 7 percent workers receive a small increase in pay. These have now been negofiated by about 4 million workers. Although these agreements do not offer much protection for the workers wages, for the bourgeoisie they are absolutely disastrous in a situation of 15 or 20 percent inflation. The March 29 Financial Times reported that the Confederation of British Industry, the main employers' association, was terrified of a "threshold bandwagon" with as many as 10 million workers negotiating for threshold agreements. Certainly pressure is mounting in the working class for some form of profection against inflation. Labour is worried about this prospect; Dennis Healy, Chancellor of the Exchequer, went out of his way in his budget speech to attack threshold agreements.
While the most likely prospect is not an immediate upsurge on the wages question, it is nevertheless clear that the central point of the Social Contract, the Incomes Policy, is already gravely undermined. A moss of combustible material is gathering which in the autumn or more probably in the spring will almost certainly lead to an even bigger working class explosion than that of 1972 or of last winter. Chile, Ireland and the Common Market But if Labour is already running into problems on the wages front, this is nothing compared to the contradictions it is alreody caught in on other fronts. The first flash point has become Chile. When it was in opposition, the Labour party adopted a demagogic leftist position on Chile. It pledged to cut off aid and to end diplomatic recognition of the junta. Allende's ambassador was given a standing ovation at the Labour party conference. But once in office, Labour found itself in a very different situation. Washington is undoubtedly exerting very big pressure. Diplomatic relations with Chile have not been cut off. At the meeting of the Club of Paris representatives of the Labour government did not vote against the decision to let the junta postpone repayments of more than £300 million in internafional credits. Labour's decision to cut off direct British aid, which amounts to less than £500,000, has not succeeded in disguising its real policy. The issue came to a head with Labour's decision to allow £50 million worth of naval ships and equipment to be delivered to the junta. This decision has been widely condemned inside and outside the Labour party. Two junior ministers, Eric Heffer and Joan Lestor, have attacked Labour's policy publicly, as has the general secretary of the Labour party. Meanwhile, two members of the Cabinet, Michael Foot and Tony Benn, are known to be leading a fight inside the government against the decision. Workers repairing aero engines in East Kilbride and building frigates in Clydeside have blacked military orders for Chile, and on May 5 some 8,000 to 10,000 people demonstrated in London against the government's decision. The second flash point has bocome Ireland. The results of the general election in the North of Ireland were disastrous for the policy of the British ruling class. Of twelve seats in the North only one was won by a candidate supporting the Sunningdale agreement drawn up by the British government and the Dublin regime. The election was also followed by a new military offensive by the Provisional IRA, half a reaction against Protestant and army violence and half an attack to force Labour's hand. This campaign reached as high a level as any in the last five years and refuted the myth that the military capacity of the IRA has been broken by the repression. In this context, the British government was unable to increase its concessions to the Loyalists, thus precipitating the Loyalist general strike and the fall of the Northern Ireland Executive. Labour is now in an impossible position. IF it imposes direct rule with new concessions to the Protestant Loyalists this will both further cement the Republican masses around the IRA and will almost certainly be unacceptable to sections of the Labour party. On the other hand if Labour goes for the withdrawal of troops, which is most unlikely, this policy would result in the government being brought down in Parliament, signaling the complete defeat of the British bourgeoisie's political strategy for Ireland. Labour is caught in a dilemma by these developments. On the one hand there is increasing pressure in Britain for the withdrawal of the troops from the North of Ireland. Labour has been forced to fly certain kites on this issue. Defence Minister Mason is reported to have stated that the troops
could not be kept in Ireland indefinitely. On the other hand the Labour government has refused even such minimal concessions os transferring the Price sisters, the main Irish political prisoners in Britain, to jails in the North of Ireland where their relatives could visit them. It has also refused to really end internment -- let alone withdraw the British troops. The only significant concession more has been to legalise the political arm of the Provisional IRA. But even this was counterbalanced by legalising the Ulster Volunteer Force -- a Protestant orgonisation, formerly terrorist. While the political (es opposed to military) weakness of the IRA is still o big problem in the situation, criticism of Labour's policy in Ireland is mounting steadily. On the key issue of British membership in the Conmon Market, Labour is caught in almost insoluble contradictions. For the dominant sections of the British ruling class staying in the EEC is o life-or-death question. But for electoral reasons, when it was in opposition Labour pledged itself to ronegotiate the terms of British entry and to hold a referendum on the outcome of the renegotiation. It is not likely that either the ruling class or the Labour party could allow such a referendum to take place. It is openly acknowledged that the overwhelming majority of the working class and a substantial majority of the population as a whole favours withdrawal from the Common Market. Labour is therefore trapped. To allow the referendum would be to completely break with the immediate interests of the bourgeoisie. The ruling class would at once bring down the government and would mount enormous pressure to split the Labour party. The Labour leadwhich does not at all want to withdraw from the EEC, is therefore very carefully avoiding coming out openly against the Market. Foreign Secretary Callaghan said in the House of Commons on April 3 that "we are trying to see whether the others will enable us to get a fair bargoin which, when put to the British people, will enable us to stay in. " If Labour does nat allow a referendum on EEC membership, the anger of the working closs and even of the left of the Labour party will be enormous. The Labour government will try to buy time on this. It will try to continue the negotiations with the EEC until at least after the next general election. But the Common Market issue is a time bomb that could explode at any time and could fear the Labour party apart. In addition to these central questions there is also o series of repressive acts that Labour is either supporting or carrying out itself. Six workers imprisoned at Shrewsbury for picketing are still in jail. The fines levied on various unions under the Industrial Relations Act are not being repaid. Labour councillors fined at Clay Cross for defying the Tory's Housing Finance Act are still being fined and disqualified from office. The armed special patrol groups are still in existence. And finally, although Labour has announced repeal of the retroactive force of the Immigration Act, it has refused to allow the husbands of immigrant women workers into the country -a truly despicable rocist decision that has been condemned even by sections of the liberal bourgeoisie. To complete the situation, an important series of bribery and corruption scandals have broken out that directly and indirectly involve Labour politicians, including the deputy leader of the party and the leader of the House of Commons. These contradictions and struggles reflecting the objective crisis of British imperialism all have an extremely important effect on the tempo and development of the class struggle. First they mean that Labour, far from getting two years of relative class peace as it did after 1964, has been almost immediately confronted with a series of struggles - struggles that show clearly the qualitative decline of Labour's organisational hold over the working class since the early 1960s. Second, it makes it extremely unlikely that Labour will be able to repeat the 1964 and 1966 experience of turning a very small majority in Parliament (in this case a little less than a majority) into a large majority and completing five years of rule. But if Labour is already running into opposition from the working class, its relation to the ruling class is no better. Wilson's plan when he came to office was quite clear. He hoped that by granting concessions to the working class he could secure on Incomes Policy and thus win ruling class support of his government. But the ruling class remains profoundly unconvinced that the Labour government can control the working class. Day after day this is spelt out by organs of the ruling class. In the April issue of its monthly industrial relations bulletin, the Confederation of British Industry wrote: "It is, of course, well understood that the Labour Party has a special relationship with the trade union movement.... If indeed the proposals (for the Social Contract -- INPRECOR were successful in bringing about industrial harmony, which was not achieved at the cost of bribery and inflation, it would be a worthy prize. Employers will, however, be scoptical and past history could not make them otherwise. " It also accused the government of "octing simply as the political arm of the TUC. "Similarly, the Financial Times commented on the first negotiations between the government and the TUC: "This is encouraging as far as it goes; how far it goes only experience can demonstrate. It is worth bearing in mind however that on the previous day the general secretary of the TUC had stated that it could commend policies to its members but not instruct or command them. " The Government and the Ruling Class Most forthright of all has been The Economist, which openly condemns the Social Contract as unworkable. In its March 30 issue it wrote, "The TUC will not keep any social contracts." And in its April 19 issue, commenting on the outcome of the electrical trade union's conference, it wrote: "Mr. Wilson has been shown that the rank and file clectricians have no use for the social contract. No union has moderated its wage claims since he took office. ... the surrender to the miners is being widely quoted not only by the traditional militants but by such ultra-moderate union officials as Mr. Geoffrey Drain of the local government officers and Mr. Sidney Weighell of the railwaymen." In this situation the chances of Labour winning any significant ruling class support for its government is just about nil. Ever since Labour failed to integrate the unions in 1964-70, the fundamental evolution of bourgeois strategy has been towards a strong state; and Labour does not fit into that perspecfive as a governing party. In the present conjuncture not merely a leftist government but even a weak and vacillating one is unacceptable to the ruling class. The only condition that the ruling class wants satisfied before it removes Labour from office by a perliamentary manoeuver is ensuring that no massive working-class response, either electoral or extraparliamentary, will follow the defeat of the government. This condition has not yet been met, and the ruling class is holding back. But the bourgeoisie calculates quite consciously that the rightist policies of Labour will demoralise the working class and create the conditions whereby the Labour government can be safely overturned. Thus the Financial Times reported that "the Conservative hierarchy now believes that its best chance of winning a general election is if it can keep the government in office until at least next March when Mr.
BRITAIN Dennis Healy, Chancellor of the Exchequer, would be forced by economic and international pressures to produce a really draconian budget. " In an attempt to prevent Labour from calling and winning a summer general election, the Tory party is retreating on the parliamentary front, for example on the Industrial Relations Act, while digging up scandals, for example on land speculation, to hurl at the Labour party. Meanwhile integration has already broken down at so many social levels that the logic of repression and the move towards the strong state continues. Only the form of the advance has changed. Under the Tories the cutting edge of the bourgeoisie was central, governmentally-organised repression. Under great pressure from the masses, Labour in office is for less able to carry out such a policy. The cutting edge of the repression has therefore been transferred to hundreds of individual bourgeois and their agents. Thus we have seen in the last week real acts of repression by judges (imprisonment for long terms of black youths arrested for resisting the police in London), by the Industrial Relations Court (E47, 000 fine against the Engineering Union), by the police (over 150 students arrested on picket lines at the University of Essex), by university authorities (suspersion of eighteen students at the University of Oxford), etc. These constitute the beginning of the bourgeois counter-attack, an attack which will undoubtedly culminate in the ruling class making a determined effort to remove the Labour government. The problem for the bourgeoisie is not whether it wants to get rid of Labour but what it can credibly replace it with. A Liberal-Conservative coalition would result in the electoral annihilation of the Liberals at the next election. A simple Tory government might lead to a violent working-class response, and in any case Heath has shown no ability in the last few years to make serious inroads into the organised strength of the working class. A grand coalition of Labour and Tories is probably impossible given the pressure of the masses on the Labour party. An openly right-wing Labour government for a few years could lead to an electoral annihilation of Labour, but this strategy relies on the bureaucrats agreeing to commit political suicide, which is not likely. The Bonapartist manoeuverings of Powell are too dangerous for the main sections of the ruling class to see in them a solution at present. It is therefore not likely that the political deadlock reflected in the election results (with no party gaining a majority) will be rapidly overcome. For Labour to resolve the deadlock and create a mass dynamic it would be necessary to complete a reorientation to the left. This is unlikely to occur while Labour is in office. For the ruling class fo create a mass dynamie in its favour it would be necessary for it to overcome its internal divisions. But that presupposes the bourgeoisie overcoming the economic crisis to some extent. And a precondition for that is weakening considerably the organisational strength of the working class. But the ruling class is in crisis precisely because it has not been able to achieve this. The only perspective is therefore of a definite period of bourgeo is political deadlock and paralysis. The Economist, in commenting on the engineers strike, summed up its view in the following way: "Mr. Wilson's Government has had the first of what will be its many confrontations with the question 'who rules Britain' and... Mr. Foot and a donor with
€65,000 more money than constitutional sense have persuaded Mr. Hugh Seanlon (the Engineering Union leader) to accept their assurance that, so far as can be made legally possible, four left wing trade union leaders meeting in Peckham do. The question and the trouble will therefore recur. • • • "This raises the gravest questions of where Britain is going constitutionally, but nobody likes to ask these questions. ... Industrially, if is inviting a lot of strikes next winter. The unions have shown that even an illegal strike against the rule of law brings the government and anonymous capitalist peacemakers hastening to bear gifts: so it will be even harder next winter for moderate leaders to resist militant demands for electricity strikes, water strikes, other power strikes, sewage strikes, hospital strike, the lot. "Politically, this coming groundswell of strikes reinforces the danger to Mr. Wilson that Labour . . will find iself losing the next election after all; but its fall would not do much national good because the chastened Conservatives -reading how the country reacted to confrontation - now have little or no intention of resisting trade union dictation either. The militants would continue with their plans for disruption at exactly the same pace against the Conservatives as against Labour, while saying that the return of the wicked Tories had caused them to heat their actions up." The Economist probably underestimates the temporary effect the fall of the Labour government would have on the working class. But the sour, cynical, and despairing nate of this editorial well sums up the current views of the more thoughtfyl representatives of the ruling class. ERRATUM
The article Political and Economic Crisis of the Saigon Ragime, " published on pp. 15-18 of INPRECOR No.0, contains two errors. The population of South Vietnam is referred to as 27 million. The proper figure is 17 million. On page 18 the article cites NF leader Nguyen Hue Tho as insisting on the
"necessity for defining the representatives of the third force as nondemocratic." The sentence should read "necessity for defining the representatives of the third force according to their attitude toward the democratic road."
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