Peter Latham and Ted Knight: showing the way

In the wake of the resignation of Croydon Council’s CEO and now its leader Tony Newman, Croydon Council’s auditors, Grant Thornton, have issued a report about Croydon’s weak ‘financial resilience’. You can read the full report by following the link here.

The Council set its 2021/21 budget prior to the Covid-19 pandemic being declared. The auditors complain that there was insufficient challenge from councillors on the financial risks of the budget for 2020-21. From their lofty position and advantage of hindsight, they chide the council that budget setting and monitoring was simply “not good enough”. The pressure points, aside from lacking a crystal ball over Covid-19, arose in their view from over-spending on children and adult social care and the failure to deliver “real savings” in this area.  The auditors were miffed that their warnings in the two preceding years were ignored. It is the nature of the auditing profession, however, to seek to cover themselves by issuing such warnings while continuing to collect their not unsubstantial fees. As a profession their ability to predict real financial collapses is practically non-existent  and for which the collapse of Carillion in 2018 is merely the latest example.

The real problem with local government, including that in Croydon, is not over-spending on social services, it is the absence of tax raising powers and democratic control. As Peter Latham described so vividly in Who Stole the Town Hall, (Policy Press 2017), local government has been reduced to being a mere supplier of subcontracted services under control of a central government intent on lining the pockets of big business who, in return, finance their political party.

Earlier this year we mourned the death of Ted Knight. Ted was Leader of Lambeth Council when Thatcher imposed a cap on the local rate that councils could levy. Ted led a national campaign against the policy and in 1985 refused to set a capped rate because it would have resulted in large-scale cuts. As a result councillors were personally surcharged £125,000, removed from office and banned from standing again. Ted would have been bankrupted had not the surcharge been paid off by the local labour movement. Ted remained politically active for the next 35 years and ended his life as a leading light on Croydon TUC where I was privileged to work with him.

If we are to attain the kind of democratic local government that Peter Latham had in mind, we need more councillors and council leaders of Ted Knight’s calibre  – ones who are prepared to face down the government and set the budgets they know, as our democratically elected representatives, are needed  

A HEALTHY WELL-ORDERED SOCIETY?

In a healthy, well-ordered society, in order to achieve safety, efficiency, fairness  and innovation, activities would be under the control of those workers who possess the relevant direct experience and knowledge to run them. Thus, for example

  • Running trains would be determined by train crew, station staff and maintenance engineers.
  • The fire service would be run by fire fighters
  • Schools would be under the control of teachers.
  • Universities would be under the control of those who research and teach in them.
  • Hospitals would be run by doctors and nurses with suitable input from those who provide the essential support services – cleaning, food etc.

They would need, of course, a few advisers to assist them, but this would be on the basis of ‘on tap but not on top’; and some exceptions would be necessary. The armed forces, police and security services would still need close, democratic monitoring as their activities are too intrusive to be left to generals, police commissioners and shadowy chief spooks.

As we were reminded again this week, our society is neither healthy nor well-ordered.

  • RMT and TSSA opposition to removing  guards from trains and reducing platform staff is  ignored. Whether this had an effect on the Aberdeen train crash this week remains to be seen.
  • Three years after Grenfell, the FBU’s concern about inflammable cladding continue to be ignored.
  • Schools are set to re-open in the autumn while concerns expressed by the NEU are swept aside  and NEU itself is attacked in the yellow press by stooge Tory MPs. Meanwhile, teacher assessments in lieu of exam results are amended by a  government that consistently behaves as if it knows more about teaching than do teachers.
  • Universities are displaying more concern about the loss of income from fees from foreign students than the quality of the education they will be proving in the autumn to students from the UK.

Furthermore, as we emerge from the Covid-19 pandemic and respond to the ensuing recession, ‘business as usual’ is no longer an option. We face a global climate crisis that, unaddressed, could dwarf the effect of the pandemic. We cannot expect the rich and powerful, or the governments that promote and protect their interests, to come up with solutions. They are too well insulated, financially and physically, from the consequences. Workers lack this insulation. Without their input, the current mess we are in will be nothing compared with what is to come.

COVID 19: WHAT HAPPENS NEXT?

History teaches us that pandemics do end; but in their wake huge social change can follow.

The Antonine Plague in the second century, thought now to be smallpox , caused the expansion of the Roman Empire to falter; and the Justinian Plague in the sixth century halted the attempt, successful up to that point, to re-establish that empire in the west. The Black Death in the fourteenth century accelerated the dissolution of feudalism and the transition to a wage economy. Recurrences of plague in the seventeenth century heralded the dawn of merchant capitalism and colonial exploitation and then the eventual emergence of the real thing as the Industrial Revolution took off. The assessment by bourgeois economists is that the Influenza Pandemic of 1918 had few social or economic consequences, at least in the developed economies of the day – see link below for a typical  assessment – but in its wake the world did, nevertheless, experience the start of the first attempt anywhere to build a socialist economy. Coincidence?

Whether the Covid-19 pandemic will have comparable social consequences remains to be seen. Our rulers are prone to reassure us that, like World War 1, it will be ‘over by Christmas’ – or at least under control thanks to our supposedly “world class test and trace system”. As this system is run Serco and based on call centres, its only conceivable ‘world class’ aspect is its ability to extract revenue from government. But even if the pandemic were to be brought under control by 2021, a prolonged recession appears inevitable and the tools this government is prepared to employ to end it are inadequate:  printing money and using it prop up the corporate sector in the hope that they will make the capital investment needed to resuscitate the economy.  There is no historical evidence that such a policy will work. What is actually needed is public ownership and massive government investment; but to embark down that road is to risk opening the door to socialism. Lose control of the government after making this investment, however temporary, and it might no longer be possible to shut and bolt the door again. The danger is that our government or its successor will prefer anything to that including war and fascism. Unfortunately, unlike printing money and propping up the corporate sector, these are well tried strategies that have been demonstrated to work  – for capital but not, of course, for workers.

https://www.stlouisfed.org/~/media/files/pdfs/community-development/research-reports/pandemic_flu_report.pdf

NO SAFETY WITHOUT UNIONS

Writing in the Morning Star last month under the heading No Safety Without the Unions (links below), John Hendy and Keith Ewing of the Institute of Employment Rights (IER) argued that, in the absence of ‘proper consultation’ with unions on the return to work and a clear statement of the legal obligations on employers to safeguard employees returning to work while Covid persists, workers face the cruel dilemma of either risking their (and their families) health or earning a living.

In a better world than the one we currently inhabit, a union rep in any workplace where workers were at risk would be able to immediately withdraw workers, informing only the local management and secure in the knowledge that, if necessary,  she could call on support from other workers in other workplaces.

This power for local trade union reps would immeasurably improve the lot of workers everywhere. What would it take?  ‘Only’:

  • the re-introduction with active government support of the ‘closed shop’ under which workers were automatically enrolled in a trade union and employers could not tamper with collection of dues by checkoff;
  • the right to withdraw labour without notice and free from the threat of prosecution or damages under statute or common law, including the right to take secondary or solidarity action;
  • abolition of all the anti-trade union laws that have been enacted by successive governments, Labour and Tory; and
  • the re-introduction of collective bargaining.

 

The IER currently prioritises the last of these measures.  Perhaps they are right to do so for tactical reasons. It is difficult to image a Keir Starmer led Labour administration adopting any of the other  measures. Indeed, the first two would probably give most Trade Union General Secretaries sleepless nights! However, unless we press for them  all – and by ‘we’ I mean the Communist Party,  its allies and what’s left of the Left in the Labour Party – we will never secure them. The first step towards doing so – our very own Long March – is to articulate and call for them.

 

Links:

https://www.ier.org.uk/comments/no-safety-without-the-unions/

https://morningstaronline.co.uk/article/f/no-safety-without-the-unions

CAPITALISM’S STRUGGLE TO SURVIVE

The Guardian yesterday (14 May) quoted from the Daily Torygraph an internal report by HM Treasury officials leaked to that paper outlining the options for re-starting the economy after Covid-19. As readers will appreciate, it would be asking too much of me to read the odious Torygraph – reading the Guardian is bad enough – but here is the gist of the summary of the leaked document as the Guardian reported it.

• A forecast budget deficit for 2020-21 of £337 billion, up from pre-Covid forecast of £55 billion

• A possible intensification of the austerity programme, including an inevitable extension of the public sector pay freeze. As public sector pay is already depressed by years of pay
freeze, this would, however only save a paltry £6.5 billion over two years.

• “Broad based” tax rises, which is Treasury-speak for increasing VAT and National Insurance.

• Borrowing – but here the report is said to have warned of a “sovereign debt crisis”. Thus, despite record low interest rates and, thankfully, still with our own currency, borrowing is dismissed as a longer-term strategy.

• Cutting the state pension – but abandoning the triple lock would only generate modest savings. Not mentioned by the Guardian is the obvious strategy of ensuring that no state pensions need be paid. Encouraging an early return to work and opening schools before the Summer Break may well suffice to kill everyone currently receiving the state pension, but, if not, increasing the state pension retirement age to 75 should complete the job.

• Cutting welfare spending. Again, no mentioned was made of the obvious strategy of ensuring that poor people die in large numbers, thus saving most of the £130 billion previously spent on welfare.

Government strategy could be seen as already starting down the roads suggested by the last two strategies. Schools are to re-open in the teeth of opposition from NEU and other teaching unions while the mass media and, most shamefully of all, the BBC , seek to assure us all that this will be quite safe. In the private sector that may well be true, but not in most of the state sector. Funding that keeps the homeless off the streets is to be cut which will ensure that they will die within weeks. Return to work by low paid workers, i.e. those who cannot work at home using a PC, is being encouraged and, in effect, enforced. Many of these workers have no trade union to speak up for them, the result of policy by a succession of Tory and Labour governments.

Capitalism is threatened and these are desperate measures intended to shore it up. It can only survive if the current social relations on which it depends are maintained. Banks must be allowed to enforce their security. Landlords must be allowed to evict and sue their tenants. Creditors must be paid. Employees must work and obey their employer. The message from the government will be that, if these social relations are not maintained, there will be anarchy.

Not necessarily! There is an alternative: working class power and socialism.

AFTER COVID-19

In a month or two

• retailers and home mortgage borrowers won’t be able to service their loans from the banks
• private landlords won’t be able to service their loans from banks as their tenants are unable to pay their rent.

As a result property prices will collapse, rendering banks insolvent as much of their lending that isn’t dependent on vanishing future profits is secured on property. While central banks will continue to pump huge amounts of liquidity into the banking system, liquidity is not the same thing as solvency. Banks will inevitably go bust, necessitating governments to rescue them again, as it did in 2007-8, and, as they did post 2007, seek to re-balance the economy with a further round of ‘austerity’ for workers.

My speculation? No, it’s effectively what Larry Summers, the celebrated economist and former director of the National Economic Council under President Obama, was saying today on Bloomberg.

Summers predictably declined to predict how all this would all turn out. The aim for communists surely has to be to socialism. We allow banks this time to go bust while securing continuance of their money transmission and their other, essential i.e. non-speculative activities – something the Vickers Report should have ensured but which it failed to do. We close down tax havens. We appropriate the appropriators.

Meanwhile, the immediate need when Covid-19 has been brought under some control will be to hold the UK government to account. Why is our death rate heading to be the highest of any developed nation? Why were Johnson and Prince Charles tested when others were left to die? Why was the warning from the SARS outbreak ignored? Why has the government been closing hospitals and A&E, including the threatened closure in our area of Epsom and St Helier Hospital? Why has the NHS been used as a bargaining counter in trade negotiations with the USA? Why did the government fail to protect NHS staff with PPI?

We need more than just whistle blowing for the NHS every Thursday at 7 pm. We need immediate accountability post Covid-19, then to start building a better world.

Doing capitalism differently?

Professor Mariana Mazzucato is a heterodox economist at the UCL some way from Marxism but she shares with Marxists recognition of the importance of “value” in economic analysis. In neoclassical economics, the kind they currently teach in universities, a marginalist approach is adopted and value is synonymous with markets and market prices. For Marxists, value is the labour time consumed in producing a commodity, whether directly or through the consumption of other commodities in its manufacture.

Professor Mazzucato argues in an article in the Guardian today that neoclassical economics goes a long way to explaining the mess the world finds itself in today and the Covid-19 pandemic will provide an opportunity to abandon it and do capitalism differently . Since the 1980’s, she argues, it has resulted in: weakened institutions like the NHS that are needed to respond to crises; a loss of confidence in what governments can achieve; the destruction of the social safety net; and growing inequality.

There was, however, no golden age prior to the 1980s, just a brief period after the War when the mere existence of the USSR required western capitalists to treat their workers a little better.

Professor Mazzucato believes capitalism can be reformed provided governments

• invest in and, if necessary, create institutions to prevent and manage future crises.
• co-ordinate research and development, steering them to “public health goals”.
• structure public-private partnerships to ensure “both citizens and the economy benefit”.
• attach conditions to bail outs of private business to ensure that the firms we save with public money become part of a new economy delivering lower carbon emissions and “investing in workers”.

A version of “soft capitalism” that incorporated these features would certainly be a great improvement on the current version, but it ain’t gonna happen. Capitalism is a system whose sole purpose is the accumulation of capital. Until it is itself overturned, all obstacles that impede this accumulation will be swept away. When the current crisis is over, public institutions like the NHS that restrict capital accumulation will continue to be under-funded and undermined; private sector R&D will continue to be driven by profit, not social need; public-private partnerships will continue to rip off workers; and, while there are still hydrocarbons left in the ground that can be extracted and burnt at a profit, CO2 levels will continue to rise. This is how capitalism works. The only solution is a social revolution that ends it.

The Coronavirus Pandemic: a view from Croydon

The coronavirus pandemic and its social consequences are moving so quickly that anything we write today is likely to be rendered obsolete tomorrow, especially when it is written from the narrow perspective and vantage point of Croydon and its local Communist Party branch. Nevertheless, here are a dozen recommendations that we might have been discussing at our AGM on Thursday had it not been postponed.

1. A government of national unity. It is unacceptable that someone as unsuitable, untrustworthy and clearly as out of his depth as the Fat Controller should be heading up a Tory government at a time of national crisis.

2. Full disclosure of the government’s modelling of the epidemic in England, Scotland and Wales so that it can be scrutinised by the wider medical and academic community. Remember how wrong were the government’s narrow pool of medical advisers over mad cow disease?

3. More comprehensive reporting and publication of the numbers of infections and deaths at the local level.

4. Responsibility for managing the epidemic in Northern Ireland to be transferred to the Republic. A single, unified strategy is called for in the island of Ireland. Covid-19 does not respect borders, least of all ones as porous at that between the North and the South of Ireland.

5. Compulsory requisitioning of private hospitals. It is simply unacceptable that the government should be further subsidising these parasitic institutions by hiring their facilities at commercial prices.

6. Nationalisation without compensation of UK retail banks, i.e. those behind the ring fence set up following the Vickers report, before they fail.  They should then be supervised by the Bank of England, which itself should be brought completely under government control. We must learn from the mistakes in the 2007-8 bail out of banks and not use public funds to protect bank shareholders and their over-paid senior management while leaving their customers to suffer. We can then ensure that banks support socially useful activities rather than prioritise building up their own reserves as they did following the 2008 financial crisis. If necessary, relevant parts of UK industry should also be taken over to preclude profiteering, co-ordinate manufacture of respiratory equipment and promote not-for-profit vaccine research and distribution.

7. The homeless should be taken off the streets immediately and properly housed. The acquisition of vacant properties and second homes could be undertaken to facilitate this.

8. Food banks should be run down as quickly as practicable and replaced with adequate levels of social payments. To this end, Universal Credit should be immediately transformed into a more generous and less restrictive system and workers on zero hours contracts and others in the gig economy brought within its ambit.

9. The government should disregard the bleating from Richard Branson and other UK airlines to bail them out. If they are failing, they should be put into administration and their fleets mothballed. The opportunity this would provide to formally abandon Heathrow expansion should be taken.

10. The wealth of UK citizens held abroad in tax havens should be re-patriated and further flight of capital abroad halted by the immediate imposition of capital controls. A comprehensive wealth tax should be imposed to help finance the crisis.

11. Evictions and mortgage foreclose on individual’s primary homes should be made illegal.

12. A mandatory role for trade unions in every workplace. This would ensure that exposure to infection by employees is related to social need and is fairly distributed. Employers cannot be trusted to carrry this out unchecked.

This list of recommendations isn’t comprehensive; nor does it necessarily represent current, official CP policy. In essence, a social revolution is called for – and that is CP policy. These recommendations are how we view things from Croydon. If you agree or disagree with any or all of them, let us know.