British Socialism

British Socialism: Long Dead, Now Buried Hamza Alavi British Election Results The landslide election victory of the Labour Party, renamed New labour by Blair, and the defeat of the Tories, were not entirely unpredictable. But the scaleof the Labour's victory was above expectations. New Labour won 419 seats as against 165 seats of the Conservatives and 46 of the Liberal-Democrats. In the British 'first past the post' electoral system, the number of seats won by rival parties are not in the same proportion as the votes cast. The Tories polled no less than 73% of the votes secured by New Labour but won only 39% of the New Labour seats. The Tories won no seats at all in Scotland and Wales, although they got 18% and 20% of the votes, respectively, in those two regions. The 1997 election victory, and the rise of what Blair insists on calling 'New Labour', to contrast it from what he disparagingly calls 'Old Labour', marks a very dramatic shift in orientation of the British Labour Party. It has moved away decisively from any commitments to socialism or, for that matter, the working people. Business magnates have displaced Trade Union leaders in the affairs of the Party. But it might be said that this consolidation of a very right wing Party leadership, is the end of a cumulative process that has been taking shape over many decades.

Roots of the Rightwing in the Labour Party The movement of the British Labour Party away from socialism, that Blair's 'New Labour' represents, has appeared on the political stage in a dramatic way. But the fact is that the rightwards shift of the Labour Party leadership is rooted in its long history. What has happened today is the end of a long cumulative process, which was shaped by reaction to Stalinism in the inter-war period and the ideological climate of the Cold War that followed. The Labour Party originated as The Labour Representation Group' (LRG) which emerged in 1900 as a coalition of a number of liberal and left-wing groups, that brought together the nearMarxist 'Social Democratic Federation', Keir Hardie's 'Independent Labour Party' and, much further to the right, the 'Fabian Society'. These political organisations were born out of working class struggles. Trade Unions were an integral part of that movement. But Ramsay MacDonald, who was the first Secretary of the LRG, espoused a paternalistic attitude towards working people and rejected concepts of 'class' and 'class struggle'. He rejected any commitment to socialism. In Blair's New Labour, MacDonald's ideological legacy has at last borne fruit. During World War I, LRG member, Arthur Henderson was made a Minister in the wartime coalition government. His job was to exhort workers to enlist for the killing fields of that bloody war, in the name of patriotic duty. That was a time when Lenin was calling for all working class leaders to resist that Imperialist War. In 1923 Ramsay MacDonald formed a minority Government with Liberal support but was defeated in the following year. In 1929 he formed his second ministry that lasted until 1931. There was nothing 'socialist' in MacDonald's

governments. It was powerless in the face of British Capitalism. In the words of A.J.P. Taylor, MacDonald was in office but not in power!

Attlee and Socialism In 1945 the Labour Party won a landslide victory that is comparable to the New Labour victory in 1997. In 1945 the Labour Party, led by Clement Attlee, won 393 seats with a clear majority of 146 seats over all the other Parties taken together. The experience of the Attlee Government left an indelible mark on modern Britain by creating the Welfare State. That was thought to be a high water mark of socialism in Britain. The mythology surrounding that claim needs to be examined. Attlee was a product of Christchurch College, Oxford, the home of Alice in Wonderland. His 'Rightwing Labour' background was shaped when he joined the Fabian Society in 1907 at a formative time in his life. His negative outlook on colonialism was, likewise, shaped by his experience as a Member of the notorious 'Simon Commission', which was appointed to examine the question of a future Constitution for India. The Commission was universally condemned and boycotted by almost every shade of Indian political opinion, including the Indian Liberals as well as the Indian National Congress and the Muslim League. That experience put its stamp on Attlee's colonialist outlook. Later he served as Deputy Prime Minister in Churchill's Wartime Government. That too was a formative influence in its own way. Attlee's political background was never very radical. But he was the architect of the Welfare State in Britain! Was that a fruition of the Party's socialist commitments? Let us look at it a bit closely.

Welfare Socialism? By 1945, the ideological impact of the war against fascism, on the minds and aspirations of ordinary British workers, was quite far-reaching. Declarations of politicians during the war had held out prospects of a better future after the war. Glossy images of the Soviet Union, that were projected through the media and films during the war, opened up in the minds of ordinary working people the idea of a better society that they could strive for. Memories of the great depression of the Thirties were still fresh in their minds. No less important at the time was a fear that prevailed amongst the ruling classes about the possibility of a communist revolution in Western Europe, which has been documented so well by Isaac Deutscher. If Britain itself was not ripe for revolution, the fear of unrest was very real. It was against such a background that Attlee's 1945 Labour Government set about laying the foundations of the Welfare State in Britain. One would not wish, even for a moment, to diminish the value of what the Welfare State provided or the importance of that achievement, nor ignore the sustained efforts of the Tories in the Thatcher years to erode it (but not to overturn it). But it must be clear that it was not socialism. The intellectual roots of the Welfare State do not lie in socialist ideology. The idea was first mooted by none other than Winston Churchill himself, who, in 1942, commissioned a Report by W. H. Beveridge, on 'Social Insurance and Allied Services'. That Report was to be the blueprint of the Welfare State. Beveridge followed it up with his report on 'Full Employment in a Free Society', in 1944. He was a Liberal Member of Parliament in 1944-45 and was elevated to the peerage in 1946. Beveridge was not a socialist and all this had nothing to do with socialist concerns of the British Labour Party. Today, looking around Europe, we can see the Welfare

State firmly in place everywhere, as a necessary component of contemporary capitalism. In Germany it was installed under the aegis of right wing governments of the Christian Democrats. That said to offers a far more comprehensive and generous example of the Welfare State than the British original. The Welfare State is therefore by no means hostile to modern capitalism. Nor is it socialism, however desirable it might be. The Attlee government also nationalised the Bank of England, the coal industry, electricity, railways, inland waterways, docks and harbours, and a large chunk of road transport. This was statism, not socialism. Statism was built into the ideology and the constitution (clause 4) of the Labour Party, which Blair has rescinded. The Tories under Thatcher embarked on a wholesale privatisation of the nationalised enterprises, which poured great wealth into the pockets of private investors. That also helped the cash-flow position of the Tory governments, for the receipts from nationalisation helped them to fund mounting current account deficits, to reduce Public Sector Borrowing Requirements (PSBR) and also to free resources to cut income tax on the rich. Blair and his colleagues, having taken Conservative policies on board, are committed to further privatisation. But there is not much left to privatise. Blair's New Labour has speculated on the possibility of privatising Air Traffic Control!

Labour's Colonial Policy 1. Potsdam and Vietnam For those of us who are from the colonised world, it is important to examine the role of the Labour Party towards colonial rule. The sad fact is that its 'socialism' did not extend to the idea of decolonisation. The Attlee government worked not only to reinforce Britain's own colonial rule but also that of Britain's ally, France. Vietnam is a blatant case of this. Deals were made by Stalin with Attlee, Churchill and Truman at the Potsdam Conference that had little to do with principles. Between them, they allocated territories and respective spheres of influence over the world! The Conference took place between 17th July to 2nd August 1945. The Labour Government was elected while the Conference was still in progress and Attlee was able to join Churchill and Truman in the horse-trading that took place there. The Potsdam agreement of the Western leaders with Stalin included a commitment to restore French rule in Vietnam (IndoChina), although Stalin and the others were fully aware at the time that the Viet Minh, under the leadership of Ho Chi Minh, had already liberated their country from the Japanese. Stalin's betrayal of the Vietnamese could not have been more cynical. Attlee, Churchill and Truman were the principal authors of that disgraceful conspiracy with Stalin to restore French colonial rule over a people who had successful fought against the Japanese and liberated themselves. The Vietnamese had therefore to fight for their freedom once again, this time against the French. They were soon to prove that no colonialist power could keep them down. When the Japanese over-ran Viet Nam (Indo-China) its French Administrators stayed at their posts, operating under Japanese orders, nominally under the collaborationist Vichy government. In September 1940 Adm. Jean Decoux, the Vichy recognised Governor General of Indo-China, formally signed an agreement that legitimised Japanese occupation of the country and placed the French Administration under Japanese military authority. Towards the end of the War, in March 1945, the Japanese became concerned that the French bureaucracy might switch its allegiance to

the Free French. Therefore they installed in their place a puppet government under Bao Dai, who was the last French appointed 'Emperor' of Indo-China. Bao Dai formally proclaimed the 'independence' of his country, with the Japanese forces behind him. In the meantime the Viet Minh had become a formidable anti-Japanese resistance force, their liberation army spread throughout the countryside. They soon liberated their country from the Japanese. The French were nowhere to be seen. In August 1945, the Viet Minh formally took over power in liberated Viet Nam. When the Attlee, Churchill and Truman deal with Stalin was struck at Postdam, to restore liberated Viet Nam to French rule, French forces were as yet unavailable to do the job. Attlee therefore undertook to provide British forces to expel the Viet Minh government and prepare the ground for his fellow colonialists, the French, to take over. The Potsdam deal was that British forces would suppress the Viet Minh in the South and Kuomintang forces from China would do the same from the North. Accordingly British forces, under General Sir Douglas Gracey, arrived in Viet Nam on 12 Sept 1945. Later, they were joined by a token force of French soldiers. After several weeks of fighting they succeeded in driving out the Viet Minh Government from the capital. French Government in Viet Nam was formally installed. But they could control only the cities and the main highways. The Viet Minh, who had retreated into the countryside, carried on guerrilla struggle, for the freedom of their country. The Viet Minh continued their armed guerrilla struggle until they finally defeated the French, decisively, at the historic battle of Dien Bien Phu in May 1954. It was a dramatic victory that reverberated throughout Europe. The Viet Minh had finally liberated their country. Sadly the Vietnamese people were soon to be faced with the devastation inflicted on their small country by the massive US aggression that was to be let loose against them. In Britain rank and file members of the Labour Party campaigned on behalf of the Vietnamese, for an end to the American aggression. But the unswerving sympathies of the leadership of the Labour Party remained with the Americans. In any case it was the Attlee Government that had started the ball rolling for the restoration of colonial rule in Viet Nam. Its 'socialism' did not extend to the right of colonised people to independence and freedom. 2. Malaya In Malaya, which used to be a lucrative British colony before the war, the pattern was a little different. On the day after Pearl Harbour was attacked on December 7, 1941, on December 8 Japanese forces poured into Malaya. Within a week the Japanese victory was complete. The British just ran away from the country without a fight. Malaya was ethnically divided between Malays who were predominantly rural and the Chinese who predominated in the urban society and tended to be more radical. There were also Indian labourers and few professionals. The Japanese inducted Malays to fill the administrative jobs vacated by British bureaucrats. On the other hand they persecuted the Chinese. The seeds of ethnic conflict between the Malays and the Chinese were firmly planted. Many fled into the jungle and joined the Communist-organised the 'Malayan People's Anti-Japanese Army' (MPAJA) whose leadership was mainly Chinese, although the MPAJA was by no means exclusively so. It was the MPAJA who fought the new invaders and finally liberated the country from Japanese occupation. No British were in sight.

After the Japanese were gone, Attlee's Labour Government, instead of recognising the hard won Malayan independence, decided to re-impose colonial rule there. British forces were despatched to Malaya to take over. The MPAJA were pursued and persecuted. Their armed resistance was to continue for many years. The MPAJA fought from their bases in the jungle. Faced with the Malayan resistance movement, the Attlee Government declared a 'State of Emergency', suspending all civil rights. That cleared the ground for total military repression in the country. John Strachey, who was Attlee's Defence Minister and author of many books on 'Socialism', presided over the suppression of the Malayan people. Nevertheless, the popular base of Malayan Resistance was strong enough to enable the MPAJA to continue the struggle for many years. Their forces were still resisting stubbornly when, in 1951, the Labour Government was defeated. The unfinished job in Malaya was taken over by the Tories. The Malayan operation was entrusted to General Sir Gerald Templar who was a cunning as well as a ruthless General. His success owed much to his decision to follow the Japanese precedent in dividing the Malayan resistance along ethnic lines, winning over the backward rural Malays and concentrating his fire against the Chinese who provided most of the leadership of the Resistance. Ethnic conflict is far too often a valuable weapon that ruling classes exploit. 3. India and Pakistan It is often said that decolonisation in India was brought about peacefully because of ideological, 'socialist', commitments of the Labour Party. That is a myth, a blatant lie. We shall look at the circumstances in which the post war Labour Government was forced to move towards the Independence of India and Pakistan. But first we might consider a prior event, namely the sending of the unproductive Cripps Mission to India in 1942. Japan had struck like lightening against British and French colonial possessions in South East Asia. The sheer speed and the extent of the Japanese victories rang alarm bells in New Delhi and London. Would India be the next to fall? The Japanese had cut their way through the dense jungles of Northern Burma and were entrenched in Kohima and Imphal, across India's eastern borders. That immediate danger galvanised the British Government into action. Its principal object was to find ways to induce the Indian nationalist leadership to throw their weight behind the War against fascism and to impress upon them the threat posed by Japan. The British were ready to make some political concessions if necessary. In February 1942 Churchill's War Cabinet set up an 'Emergency India Committee' under Deputy Prime Minister Attlee, his India expert! The India Committee included, several conservatives, Sir Stafford Cripps, a senior member of the Labour Party, and Attlee's friend, Sir John Simon of the ill-fated 'Simon Commission'. In the following month the India Committee despatched the Cripps Mission to negotiate with the political leadership in India, to get them to back the war effort. The Congress Party offered to do so, but only if an Indian 'National Government' was set up. It was a condition that the British refused to concede. The Cripps Mission only succeeded in deepening mutual suspicion. The struggle for national independence led by the Indian National Congress and the Muslim League continued. The decisive moment that sealed the fate of British colonial rule in India and transformed the fortunes of Indian nationalists, was a Mutiny of the Royal Indian Navy in February 1946. It is a forgotten chapter in Indian history for neither British nor Indian nationalist historians have

written much about it. The fact is that it was a crucial turning point in Indian history. Its importance in precipitating the developments that followed it, can hardly be overestimated. The Mutiny occurred when Attlee had been Prime Minister for a year. But until that moment he had made no moves whatever to negotiate with Indian nationalist leaders. It was not until his government's hands were forced by a crisis of military power of the first order, that was precipitated by the historic Indian Naval Mutiny, that Attlee decided to move. He was left it with no other option but to make a deal with Indian nationalists. The Naval Mutiny came as a total surprise to everyone. It was a remarkably well-organised and meticulously planned operation. At a precise moment, as arranged, the mutineers struck simultaneously in every ship of the Royal Indian Navy, before their officers could be alerted. The strike was initiated in Castle Barracks in Bombay, which was the HQ of the Royal Indian Navy. I was then an official of the Reserve Bank of India, which was just across the road from Castle Barracks. From an upper story window of the Reserve Bank we could look down into Castle Barracks. We watched with excitement as the mutineers broke down the door of an armoury and handed weapons to their comrades. It was an unforgettable sight. Some units of the Punjab Regiment were then sent to storm the Castle Barracks and take it. But the Punjabi soldiers, who came to the scene, refused to attack their erstwhile comrades in arms who had fought besides them in the recent War. That second mutiny of the army put a seal on the situation. A profound crisis of military power had been precipitated. There were spontaneous worker's strikes in Bombay and other cities. But the Communist Party of India, under the leadership of P.C. Joshi did nothing to seize the initiative to launch a nationwide struggle. Kusum Nair, whom I met at the Michigan State University in 1971, told me that the Naval Mutiny was planned in minute detail in her Bombay home. She was a member of the Congress Socialist Party and her husband a naval officer. Be that as it may, the roots of the Mutiny lay much deeper, and its significance was much wider. The country was like a tinderbox, seething with discontent. There was a danger of a conflagration that could set the whole country ablaze. The Government of India was faced with a most profound crisis of power. If other units of the Indian Army were to mutiny also, the consequences would be incalculable. To forestall such a possibility, all Indian units of the army were immediately disarmed and confined to barracks. That left only a very small number of war-weary British units in place. That small force was not nearly large enough to rely on to keep India in bondage in that inflammable situation. What made things worse for the Government was the low morale of British troops. After the long years of war, now that war with Japan had ended and they had nothing to do in the unbearable heat of India, British soldiers could not wait to return home. There was a great deal of unrest among them. There was at least one mutiny, in the Royal Air Force at Karachi that we know about. I would be most surprised if there had not also been other similar incidents elsewhere in India, of unrest or probably even mutiny. The basis of British military power in India had been shaken to the core. The colonial government could no longer rely on its armed forces, whether Indian or British. The moment of reckoning had arrived for British Imperial rule in India. It was not the socialist convictions of the ruling Labour Party that brought about the end of colonial rule. The Attlee Government's hands were forced by its inability to continue with colonial rule in India because of a crisis of military power.

The highly fraught and utterly unpredictable situation quickly persuaded the Attlee Government that a deal had to be struck with Indian leaders. The Indian political leadership, for their part, was no less worried about the unpredictable consequences that might follow. The profound crisis of power that affected the entire military machine on which colonial rule rested, was not a kind of crisis that was likely to resolve itself as other crises had done before. The situation for the colonial government in India was rarely quite so grave. The first task before the Government of India was to get the mutineers to lay down their arms. The Government had realised that it was beyond its own powers to get the mutineers to do so. For the mutineers, equally, there was a problem, for they could do little more unless there was a parallel mass uprising in India, which did not occur. Needless to add, neither the British nor our national leaders wanted to see such an eventuality. The Government was easily able therefore to persuade the leaders of the Congress Party and the Muslim League to come to their help. They were to appeal to the mutineers to call off their action. Nehru declined to have anything to do with it. It was therefore left to Sardar Patel for the Congress Party and Mr Jinnah for the Muslim League, to broadcast an appeal to the naval mutineers on All India Radio. They commended their patriotic gesture but told them that, having done so, it was their patriotic duty to end their mutiny at once and leave the matter in the hands of their responsible national leaders. Without a nationwide political movement to take their action further forward, the only option for the mutineers was to respond to that appeal. So they surrendered. They were given a promise by the leaders that there would be no victimisation. But victimisation there was, especially of officers who had joined the mutiny. Attlee soon got a 'Cabinet Mission' ready to go to India to make a deal with the Indian leaders. Mountbatten was to follow. We were on our way to our Independence, which was wrung belatedly from the unwilling hands of the British Labour Government. India and Pakistan owe their independence not to their non-existent socialist conscience but to the bravery of the naval mutineers.

Labour Party and the Cold War A profound mark was left on the ideology of the British Labour Party by decades of the Cold War, especially by the rise of McCarthyism in the 1950s and the witch-hunts that followed it. It rose like a storm in the US and became a force from which the Western World as whole could not remain immune. It was no less monstrous than Stalinism. Fear engendered by global McCarthyism distorted and undermined the meaning and purpose of socialism in Britain. Labour Party leaders and activists would now bend over backwards to demonstrate that they were not crypto-communists. They were always looking over their shoulders. They would make sure that they did not support any idea or policy which, in any way, could be interpreted as being 'communist'. Within Britain itself, the Communist Party was virtually irrelevant and the issue of 'Reds under the Bed' was long dead. But it was different when it came to the Third World. Labour Party hypocrisy was particularly evident when it came to the question of military dictatorships. When we campaigned against Ayub Khan's military dictatorship, the first question that I was invariably asked in Labour Party circles was if the opposition to Ayub Khan was not really communist-

inspired! We had pretty close contacts at the highest levels in the Labour Party in the 1960s. It was disgusting that while pretending to be socialists, they were, nevertheless, prepared to support a military dictatorship because the Americans supported it. American propaganda in support of their protégé Ayub Khan was that opposition to that military government was communist inspired. One quickly realised that all the rhetoric of the Labour Party about its commitment to democracy was sheer humbug when they had so little hesitation in backing one of the first military dictatorships in the Third World.

Socialists and Trade Unionists in the Labour Party There were of course individuals and groups in the Labour Party who were committed to socialism. But the ideology of many in the Party who thought that they believed in socialism, was not socialism but statism. Their objective was 'nationalisation' under a centralised state, 'to seize the commanding heights of the economy' as it was put. That objective was enshrined in the famous Clause 4 of the Labour Party, which was one of the first items in the Party constitution that was thrown overboard by the onslaught from Blair and his co-conspirators. Nevertheless, there were indeed many still in the Labour Party who did believe in socialism. They joined the Party with few illusions about its leadership. But they hoped that one day they would be able to take the Party over and march on to socialism. That idea was called 'entryism'. It was the idea that the Party could be 'captured' from within. Most of these were Party members and activists at the local level. Few left leaning persons made it to Parliament, not to say the Cabinet. MPs like the irrepressible Dennis Skinner or mavericks like Tony Benn, are ineffective exceptions. Ken Livingstone, another senior left leaning MP, who was the leader of the Greater London Council for many years before it was abolished by Thatcher, has also been sidelined, notwithstanding the fact that he made Blairite noises during the election campaign. Left-wing activists have been useful for the Party. One might even say that they were indispensable. It was they who, without any payment, trudged round from door to door, canvassing for Party candidates, distributing leaflets and doing all they could to mobilise support for the Party. There was not much joy for them in serving the rightwing leadership of the Labour Party in this way. But they were kept going by the hope that one day their turn would come. They would be in command of the Party. Thus the Labour Party came to be a coalition, in which leftwing activists provided the grass roots cadres, who mobilised electoral support behind the reactionary leadership, which always remained in effective control of the Party at the Centre. When local Constituency Labour Parties became too leftwing and assertive, they were dissolved by diktat of the Centre. Trade unions used to be at the heart of the labour movement. They provided much needed Party funds. But, it is arguable that in a very real sense they had become a necessary institutional component of modern capitalism, mediating relationships between capital and labour. Large companies would be at a loss without effective trade unions. It is through trade union leadership that they make deals and conduct orderly relationships with their workforce. The worst situation for them is that of 'unofficial strikes', strikes that are out of the control of 'responsible' trade union leadership. Employers have found it difficult to handle such situations. So over the years, most 'progressive' employers cultivated a cosy relationship with the trade union leadership. Trade

union leaders, for their part, often take pride in being 'responsible' leaders. They have looked for rewards from the capitalist state by way of 'honours', such as Knighthoods and Life Peerages. Trade unions have had a special role in the organisation of the Labour Party with special voting rights. But, despite their useful functional role in the running of modern capitalism and the fact that by and large (since the 1960s) the leadership of the Unions was largely right-wing, the British media had always demonised trade union leaders. This in turn became a hang-up for the rightwing of the Labour Party, of which Blair is the ultimate incarnation. They have striven to distance themselves from the Unions and to erode their links with the Party. Even in Blair's rhetoric, while he goes out of his way to emphasise how leaders of big business are happy with him, he pointedly avoids any references to the Unions. He has appointed a succession of leaders of big business to senior government positions. But, until now (six weeks since the election) no trade union official has been appointed to a government post. The unions are out in the cold. During the Thatcher era many of the traditional trade union rights, which had been won over a century of struggle, were abolished. Soon after the election, a delegation of six senior trade Union leaders, led by John Monks, the General Secretary of the TUC, sought to meet Blair to discuss the question of legislation to restore to the Unions recognition rights which they had lost under Thatcher. Blair declined even to see them! Instead, as reported by the Guardian, 'They slipped quietly into the Trade and Industry Department, to meet Margaret Beckett, of the Board of Trade. She listened to them but made no promises'. That was a calculated and very public rebuff, intended to convince business magnates that Blair's New Labour was a truly 'reformed' Party that they could trust. Following that infructuous meeting, 'Union joy at Labour's victory turn(ed) to doubt. … What, if anything at all, would Blair deliver?' The fact of the matter is that by the time the trade unionists were even allowed finally able to meet Beckett, the Blair government's legislative programme had been set in stone for the next 18 months. The trade union recognition Bill that the Unions had long sought had no place in it. The Blair team has been going out of its way to establish its anti-union credentials!

Beginnings of 'New Labour'-The Right Turn ! With such diverse elements in the Party, there was a perpetual ongoing struggle within it. The main confrontation was between left-wing activists of Constituency Labour Parties (CLPs) and the well-entrenched right wing leadership in command of the Party's central apparatus. Confrontations between them come up regularly at Annual Party Conferences. Proceedings of Labour Party Conferences tended to be dominated by radicals and leftwing delegates because of their numbers. In recent years the Party Constitution was changed to minimise that danger. But in any case, when radical resolutions were passed, such as those for Nuclear Disarmament, the Party Leadership adopted the doctrine that Conference resolutions were not binding on them. The Annual Party Conferences therefore became little more than annual opportunities for the radical Party activists to let off steam. Despite their repeated defeats, illusions of the Left in the Labour Party wishfully persisted. They failed to get even a token representation in the leadership-except for Tony Benn who was Minister for Energy in the Wilson Government. His is a strange case, for he has ended up as the bette noir of the establishment media. One of the most dramatic moments in its recent Labour

Party history was when Tony Benn stood for election for Deputy Leadership of the Party. He challenged the right winger Dennis Healey who had served as Foreign Secretary and Chancellor of the Exchequer in the Wilson Government. He was Deputy Leader of the Party and was standing for re-election. The Left lined up behind Benn's candidature against Healey. At this point the pseudo-Left leader, Neil Kinnock played a crucial role in defeating Tony Benn by declaring that it was perfidious on Benn's part to stand as a candidate in the election, because Party unity required that Healey should be 'elected' unopposed! Benn's supporters asked 'What were democratic elections in the Party for?' But 'left-leaning' Kinnock succeeded by his ploy in disrupting the unity of the Left and undermining Benn's candidature. Kinnock secured Healey's re-election as Deputy Leader. By his betrayal of the Left, and of democratic principles, Kinnock's made sure that his own career in the Party was made. He promptly became a darling of the right and was, in due course, elected as Party leader. That was the moment when the foundations of New Labour were laid, the basis on which the Blair, Brown and Mandelson team, the 'gang of three', were able to build. From that time on, there began a systematic process of restructuring the Party that would place barriers in the way of activists in local Constituency Labour Parties (CLPs), isolating what was left of the Left in the Party and also cutting down the influence of the Unions. In a few years the Party Constitution was changed beyond recognition. During the 1980s British Trade Unions suffered a sharp decline in their fortunes. When Thatcher came to power, in 1979, Trade Union membership was 12.1 million. By 1996 it had declined to 7million. Trade unions were tied down in the straitjacket of new Thatcherite restrictive laws and they lost many of their legal privileges, which had been won through a century of struggle. True, the Unions were already, by and large, under the control of right wing leaders. But now they were totally debilitated. During the Thatcher era their power was smashed in two ways. Mass unemployment made the working class docile and less inclined towards the Unions and militancy, for the fear of dismissal was powerful. We can recall that it was during the Macmillan era (1957-63) of full-employment that British Trade Unions were at the peak of their power in the post-war era. The second factor (which was possible precisely because of the weakening of Trade Union power) was their systematic emasculation by Thatcher's anti-Union legislation (which Blair is committed not to repeal). The Unions, therefore, are now a shadow of what they once were. New Labour has continued with Thatcherite policies concerning trade unions. The position of Trade Unions within the Labour Party was also eroded by changes in the Party constitution. That has brought about a substantial curtailment of the role and voting power of the Unions in Party affairs. Blair has bent over backwards to demonstrate to the business magnates, whom he as been wooing, that the Unions have little power or influence in his Party. Union leaders have been studiously bypassed in Blair's appointments, for which he has sought people exclusively from a big business background. Left wing ideological influence was always far greater in Constituency Labour Parties (CLPs). A big campaign was launched denouncing radical CLP activists, who were declared to be unrepresentative of the rank and file. To minimise their influence in the Party, new procedures were introduced. A concept of 'Direct Democracy' by postal voting by rank and file members was

introduced. Members of the Party, like everyone else in society, were always subject to the powerful influence of the media. But when they went to local Party meetings to vote, they had an opportunity to hear issues debated. They could arrive at an informed view. The postal voting system cut out the mediation of discussions at Party meetings with like-minded comrades. They were isolated from contact with CLP activists and their informative and educative influence. The third element in the structure of the Labour Party, besides the trade unions and the CLPs is, of course, the PLP, the Parliamentary Labour Party, made up of all Labour MPs. The power of Blair's New Labour is entrenched here. The National Executive of the Party has over-riding powers over the selection and de-selection of parliamentary candidates. By virtue of constitutional changes, parallel with curtailment of the powers of the Unions and the CLPs, the power of the PLP has been greatly enhanced. The Parliamentary Labour Party, composed of MPs, is overwhelmingly right-wing-there are only a few who could claim some kind of left-wing credentials. The huge new intake of 1997 has greatly increased Blairite influence in the PLP. Blairites have been inducted in large numbers as Ministers, both as Cabinet Members and as junior ministers outside the Cabinet. The Prime Minister's powers of patronage and thereby influence over the Parliamentary Labour Party are very extensive. The transformation of the Labour Party had already begun before Blair. The balance of power had already changed when Blair got elected as leader of the Party. But Blair made a most dramatic impact at a Party Conference when he threw over-board key parts of the Labour Party constitutional commitments to statism and social welfare. Soon Blair was to denounce, contemptuously, what he labelled as Old Labour. Blair, Brown and Mandelson, the gang of three, coined the name New Labour, to underline the fact that they had nothing to do with the Labour Party as it had been before them. Their mission, quite clearly, is to manage British capitalism more efficiently than the Tories have been able to do. 'New Conservatives' rather than 'New Labour' would be the most appropriate name for the Party that they have created.

The New Conservatives ? What is quite remarkable now is the extent to which Blair, Brown and Mandelson, the creators and the creatures of New Labour, have taken on board policies and projects of the discredited and defeated Tories! The Tories complain that they have stolen their policies! The only issue on which they differ from the Tories is New Labour's more positive approach to Europe, which is what multi-national capital badly wants. The Tory anti-Europeans, who were mainly responsible for the defeat of the divided Tory Party, are too deeply entrenched in the Party to allow it to adopt a positive and pragmatic approach to Europe. Leaving aside the issue of Europe, on which the Tories are caught up in petty bourgeois nationalism, everything else that they have stood for has been inherited by New Labour. The creators of New Labour set about assiduously to woo leaders of big business a long time ago. Blair even made a pilgrimage to Australia to kow towbefore Rupert Murdoch, the global newspaper magnate who gave them the full backing of his powerful media empire. The apparatus of what Noam Chomsky calls the 'Manufacture of Consent' was in place. Media support played no small part in the New Labour's election victory. At home the Blair team cultivated its contacts with the business world quite assiduously. Left-wing colleagues and trade union leaders missed

the significance of this entirely, for they initially put it down to mere electioneering. It is only after the first few weeks after the elections that they came to realise that Blair was dead serious in his pro-Business rhetoric. New labour is therefore best thought of as the New Conservatives. Where it differs from the defeated Conservative Party is in the dynamism and drive that New Labour has injected in its project to regenerate British Capitalism. The Tories, by contrast, are not only a deeply divided and demoralised Party, with no sense of direction and purpose. They are paralysed by deeprooted internal dissension. Judging from the way in which the battle for succession to John major is shaping up, it does not appear that they will ever emerge as a viable Party again. Moreover, the Tories are also an ageing and decrepit Party. The average age of its members is 64! Unless they can regenerate Party membership quite radically (which looks unlikely) they run the risk of vanishing altogether. That was the fate of the old Liberal Party of Gladstone and Lloyd George, which disappeared after World War I. The Conservative Party today has ceased to be an efficient instrument for managing the capitalist state in Britain and, given its present disarray, it seems to be destined for the dustbin of history. Blair's New Labour has inherited its mantle.

Future of British Capitalism New Labour has come on the scene at a critical moment for British capitalism. Under extreme right wing nationalist pressure, John Major's government moved away from positions that could serve British capitalism well. The legacy of the Thatcherite revolution of the 1980s has dominated the fanatic ideology of the Tory Party. A large part of the Tory Party, equally, is wedded no less fanatically to petty bourgeois nationalism which has stood in the way of the Party being free to pursue British interests effectively in the European Common Market. New Labour, by contrast, is free from ideological constraints and is pragmatic in its policies. The Conservatives have ill-served the needs of British industry. In the name of the supremacy market forces, Margaret Thatcher instituted policies, which might have been favourable to the trading and financial interests. But those policies devastated British industry. Thatcherism fostered a short-term outlook and a get rich quick mentality. It discouraged long term investment. Large swathes of British industry were destroyed. Over the years there was a systematic 'deindustrialisation' of Britain. During the 1980s the British people could watch the death of British industry on the TV, as factory after factory closed down and the equipment was sold for scrap. De-industrialisation of Britain is one of the most remarkable achievements of Thatcherism in Britain. Industrialists felt betrayed. It was quite a remarkable sight to see the Chairman of the CBI (Confederation of British Industries) declare at their conference that the time had come for 'a bare knuckle fight' with the Thatcher Government. Thatcherism was destroying them and they had to fight back. It is difficult to imagine the depth of feeling of that senior member of the British Industrial establishment, who was driven to use such language. The CBI kept up its pressure though it was not effective enough. Now Brown and Blair have lined up behind the CBI and given it new heart. As against the CBI, there is the Institute of Directors, which represents mainly trading and financial interests. They were enthusiastically behind Thatcher. Her policies of privatisation for example put vast assets into their grasping hands. One should add that the policy of privatisation

also put huge amounts of liquid assets into the hands of the Government. That allowed them to lower the Public Sector Borrowing Requirements (PSBR) and reduce direct taxes on the rich. It must be said though that the 'tax cutting' rhetoric of the Conservatives has concealed a huge regressive shift in the burden of tax. They increased in indirect taxes (that bear more heavily on lower income groups) that more than made up for what they gave away by reductions in direct taxes, that benefited the rich more. In the conditions created by Thatcher there were quick profits to be made on the stock market. Banks and financial institutions made a killing. A decade and more of Tory government has widened the gulf between the rich and the poor in Britain. With the decline of British industry, unemployment has risen and Britain has plummeted down to the bottom of the European prosperity league. British capital now wants conditions created for its regeneration. Blair has promised it that. An excited spokesman of the CBI (The Confederation of British Industries) who was commenting on BBC TV on the election results, as they came through, could not restrain his joy when the results indicated a landslide victory for New Labour. He did emphasise though that the New Labour government would have its work cut out, after the decades of neglect. The infrastructure of the British economy had to be revived and rebuilt. He put great emphasis on education and technical training. The Thatcher-John Major years of cutting down government expenditure, has resulted in serious erosion of the social and economic infrastructure, including schools, technical colleges and universities. Rates of literacy and numeracy are bad and the stock of trained personnel available in Britain is alarmingly low. The lack of skilled manpower is a major obstacle in the way of British industrial expansion. Tony Blair had already announced education as his first priority. The CBI man on the TV was worried about was Blair's electioneering promise that New Labour would not increase taxes. He has given those on higher incomes special assurance. That, the CBI man said, was a mistake. Extra money is badly needed for the renewal of Britain. It was not a question of how much tax we have to pay, he said, but a question of what the money is spent on. The decision of New Labour to remain within the constraints of Tory fiscal policies might well turn out to be the rock on which the Blair Government flounders. It is quite contradictory on the part of New Labour to declare that more funds will be available for cash starved schools and hospitals and so on, while promising at the same time that they will keep within the Tory spending limits and not increase taxes. The Chancellor of the Exchequer, Gordon Brown, has modelled his style on Tory orthodoxy and promises to be tight fisted. But the ruined educational system in Britain, the cash starved National Health Service and much else that needs repair will not be renewed without more cash. Moreover, the Blair-Brown team do not seem to realise that the Tories were able to make do with low taxes because of huge sums of money that were coming into their treasury through privatisation of publicly owned enterprises. New Labour does not have that option. It is quite remarkable to see the extent to which Blair and his cohort have identified with the policies of the defeated Tories! On virtually every issue, they not only adopted the existing rightwing Tory policies but in many cases they have even out-bid them in pushing to the Right! The only issue on which they have a relatively different stance is their relative greater (but not unqualified) commitment to Europe.

Old and New Labour There is a solitary survivor of Old Labour in the Blair-Brown outfit. He is John Prescott, the Deputy Prime Minister. His partnership was indispensable in the early days to enable Blair to carry the rank and file of the Party with him. Prescott was in good standing with the Unions and Constituency Party activists. Now that Blair finds himself in an unchallengeable position of power, he has much less need of Prescott, though it is probably too early for him to get rid of him altogether. Blair has sidelined him effectively. Prescott has been put in charge of the Ministries of Transport and the Environment. That should keep him busy. Prescott's Tory predecessor, Michael Heseltine, who was John Major's Deputy Prime Minister, had no departmental responsibilities. He had an office inside 10 Downing Street itself, so that he might be close to the Prime Minister, liasing with him constantly on a full range of policies, taking an active part in the making of government policy. By contrast, John Prescott has been given an office half a mile away, to be buried under his departmental responsibilities, isolating him from any prospect of day to day involvement with the making of overall policy; well out of harm's way. He does not even have a place in the key '9 O'clock Committee' with which Blair meets routinely every weekday (at 9 am). In place of Prescott, Blair has installed within 10 Downing Street Peter Mandelson as 'Minister Without Portfolio'. Mandelson is ideologically and personally very close to Blair. They are of one mind. Mandelson, though a relatively junior figure in the Party, has emerged as L'Eminence Grise, of New Labour. For all practical purposes he, not Prescott, functions as Deputy Prime Minister. According to the Guardian Mandelson 'could be more influential and potentially more powerful than many senior Ministers'. Ensconced inside Downing Street, constantly at Blair's side, he will facilitate Blair's penchant for centralising policy making and implementation. Blair is able to use Mandelson to intervene in the affairs of any Ministry (undermining the Minster's authority and autonomy) as Blair chooses. For that he has established institutional machinery in the form of the 9 O'Clocj Committee', as we shall see below.. That suits Blair's authoritarian predisposition.

Blair's Boardroom Blitz ! Having left the working class and trade union leaders far behind him, Blair and Brown have been busy 'recruiting some of the brightest stars of the business world', to take over senior government positions. The first such appointment was that of Sir David Simon, the controversial Chairman of BP who has been made 'Minister for Trade and Competitiveness in Europe'. He is to act as Blair's supremo in Europe. Simon, a multi-millionaire, will draw no salary. He is believed to have received a most generous 'golden handshake' from BP to enable him to turn to 'public duty'. He has been rewarded by elevation to the Peerage. The list of people like Simon, senior men from the world of business who are appointed to key Government positions, is growing day by day. Martin Taylor, Chief Executive of Barclays Bank, has been appointed to head a task force that will examine the tax and social security benefits system. Alan Sugar, self-made multi-millionaire and embodiment of Thatcherite values, is another. New names turn up every day. One more 'catch' is Peter Jarvis, Chief Executive of the Whitbread group, who earns a salary of a mere £600,000 a year, who will head the Government's 'Low Pay Unit! One man who is tipped as a

possible successor to the present Governor of the Bank of England is an old and close personal friend of Blair and Brown. Gavin Davies is a multi-millionaire and an associate of a big firm of stockbrokers. Davies recently spent a mere £3 million on a cliff top holiday home in Devon. Blair and Brown admire him greatly. Davies's wife, Sue Nye, holds an important position in Brown's Treasury team. Davies himself was one of a group of men who were nicknamed 'The Wise Men' who served on a panel of advisers to Ken Clark, the Tory Chancellor of the Exchequer. Commenting on Davies, The Guardian said 'He travels light, ideologically'. The same could be said of Blair and Brown. According to the newspapers 'Blair's search for more business names on the Government team is set to continue.' Blair and Brown's boardroom blitz has stuck in the union leaders' craw, who are very sore at having been left out in the cold. One of the first major acts of Blair and Brown and a dramatic one at that, was the grant of autonomy to the Bank of England in setting interest rates. Until now interest rate policy was the exclusive prerogative of the Government, even though the Governor of the Bank of England was consulted. But it was the Chancellor who had the authority to decide. Now the New Labour government has abrogated these powers and has left it entirely up to the Bank of England to manage interest rates. A Committee of 9 senior members of the Bank, under the Chairmanship of the Governor will meet monthly to review the position and make changes in the Bank Rate on its own discretion, without involving the government or even referring to it. This, Brown has said is to 'remove politics from financial policy making'! For the Governor of the Bank of England this generous offering was turned just a little bit sour by the arrogant and discourteous manner in which he was told of the change. He had not been consulted in advance nor even been given an advance indication of what was in the offing. Called to a meeting with Brown at 9 am one Monday morning Eddie George, the Governor, 'was both shocked and delighted' to be told about it. This step, in handing over the power over determining interest rates to the City of London's financial hierarchy, is a major retrograde step. This was totally unexpected. It was never brought up even for discussion at any time before, let alone getting Party approval for it or being put into the Party's Election Manifesto nor was it tabled as a statement in Parliament. There is no Party or Parliamentary sanction for it. Blair has treated both with disdain. It is a step of unprecedented magnitude, but taken entirely by Blair and Brown, of their own bat. They have given up a most potent instrument of monetary policy, into the unfettered hands of the financial hierarchy of the City of London. A great step for British Socialism indeed, but sadly a huge step backwards! The autonomy that has been granted to the Bank of England to manage interest rates, without reference to the Government, has already brought serious problems to the forefront. In the name of restraining inflationary pressures, the Bank of England has recently raised interest rates. That has been done at a most inopportune time for the Governments aim of reviving industry and boosting employment. It has put up the cost of raising capital and therefore it is a new disincentive for industrial investment. Moreover, it has had a most undesirable effect on the foreign exchanges by creating upward pressures for an already over-valued pound. This has made British exports more expensive in foreign markets and greatly cheapened imports into Britain, competing more effectively with local industry. In all these ways, the Bank of England decision has been taken in total disregard of the difficult task of regenerating British industry,

which is the most important task before the new Government. But Blair's Government has already thrown away that most potent instrument of economic policy.

Autocratic Blair Finally, one must add a word about Blair's autocratic and authoritarian style. He has contempt for his party, which, for him, is no more than an instrument necessary for his rise to power. He expects his colleagues to grovel before him. As he greeted the new contingent of Labour MPs for the first time, he told them 'We are the servants of the people'. In Blair's self-centred eyes, he himself embodies 'the people'. 'Blair Lays Down the Law to his MPs' said the Times headline, accurately summing up that meeting. If anything the 'landslide' victory has made Blair's authoritarianism worse. Blair has institutionalised his personal control over the Party and the Government. Normally, Ministers who are responsible for different Departments bring their proposals before the Cabinet where the policies are negotiated with colleagues, presided over by the Prime Minister who naturally does have a special weight in the process but cannot just dictate unilaterally without taking account of his colleagues. Blair has found a way to by-pass this. He has set up a special team of five 'Special Advisers' (nicknamed the 'New Mandarins') who are based in his office at 10 Downing Street and work under his trusted lieutenant Peter Mandelson. All policy initiatives, press briefings etc from every Ministry have to be submitted to this '9 O'clock Committee' to be vetted and cleared, as a matter of routine. Blair meets with the Committee at 9 am every weekday. That is Blair's central power house, that enables him to direct, from day to day, the ongoing work of every Ministry on every important issue. The decisions already having been settled through the 9 O'clock Committee, the Cabinet itself is left with very little do but to rubber stamp decisions that are already made with Blair's authority. Even Blair's friends in the Board Rooms have begun to show disquiet because of his arrogant and supercilious manner. He and Brown seem to take some childish delight in springing surprises on everyone, without consultation or discussion. They ruffled some feathers when they set up a new body that is to oversee and regulate all financial institutions. It was an overdue step that in itself is not unwelcome to the City, in the light of numerous scandals in recent years. The new body will take over some of powers of the Bank of England in supervising Banks. In taking that step Blair and Brown neither consulted nor even informed the Governor of the Bank of England whose role was most directly affected. He knew about it only when the announcement was made. The Governor and the entire City of London establishment are quite appalled at Blair and Brown's persistent cavalier conduct. Lord Alexander, Chief of Natwest Bank and doyen of the City financial hierarchy, fired a shot across the bows in a politely worded but quite plain speech, a warning to Blair and Brown that they must learn the etiquette of public office and check their arrogance. The ruling elite of the city reminded them that they are, after all servants of the 'people' who rule the world of British capitalism!