NO NEED FOR DIVORCE

Tribune leader, 18 December 1992

The draft report of Labour's working group on relations between the party and the trade unions has had an un­justifiably bad press, largely because whoever first leaked it meant it to have a bad press.

The party is buzzing with accusations, counter-accusations and rumours about the report - despite Tribune's attempt last week to clear the air by publishing its most important sections verbatim. There is a real danger that, unless some­thing is done quickly, there will be a spectacular bout of internal feuding.

The immediate task is to bring forward publication of the report. Then the party must allow a reasonable period for real consultation, so that everyone has a chance to air his or her views. To rush through large-scale constitutional change is to invite disaster.

It is crucial for everyone to recognise that an immediate divorce of party and unions, even if it were desirable (which it is not), is simply not feasible. Labour can­not survive in the short to medium term without union funding.

It is inevitable that the unions will ex­ert an influence over Labour regardless of the formal relationship or lack of one. The question is how to ensure that the unions’ power is constrained. The answer is not to destroy the formal relationship but to democratise it.

Many of the suggestions in the draft working party report are eminently sen­sible if this is the aim, in particular the idea that trade unionists who pay the po­litical levy should be allowed to participate in party elections and selections as "registered supporters".

Other ideas are less attractive, particu­larly the retention of the block vote at party conference (albeit reduced to 50 per cent). There are also problems with the retention of electoral college systems for leadership elections and candidate se­lections: it would be more democratic to give registered supporters one-third of a vote each and add these to full members' votes in a single ballot.

Nevertheless, the working party is thinking along the right lines: there is no need for the discussion of its proposals to be other than friendly. Meanwhile, every­one involved should recognise that the party-union relationship is not the most urgent question facing Labour. Put sim­ply, it would do no harm for some of the energy now being put into internal Labour Party matters to be diverted into coming up with an election-winning eco­nomic policy.

GET RID OF THIS AFFRONT TO DEMOCRACY

Tribune leader, 11 December 1992

Wednesday’s announcement that the Prince and Princess of Wales are to separate could have come as little surprise to anyone who has seen even the smallest snatch recently of the low-grade soap opera that is the British royal family. It had been obvious for years that the marriage was on the rocks.

Equally unsurprising were the syco­phantic expressions of concern for the royal ex-couple to be heard from all in the House of Commons but a handful of left-wing Labour MPs after John Major had made the announcement. However repel­lent they find the candyfloss and waste of the House of Windsor, politicians of all parties feel the need to pander to what they perceive as widespread royal ism among the voters. Rather than say what they think about the monarchy, they keep quiet.

They would be better off speaking out. The monarchy's excesses in the past few years have combined with a general de­cline of deference to weaken popular sup­port for the institution.

The passenger on the Clapham omnibus knows that the breakdown of a long-term relationship is an unhappy experience for anyone. He or she also knows that it is far more easily bearable for someone with several homes and a massive income for life, paid out of public funds, for an unde­manding job with unlimited holidays.

There is a growing popular sense that the British monarchy's time is up – that if we are to have a monarchy at all it should be on the Scandinavian model, with the monarch an ordinary citizen and the relatives of the monarch required to earn a living like the rest of the popula­tion.

For Tribune, that does not go far enough. The underlying problem with the monarchy is not that it has become a farce, although it has, but the hereditary principle on which the whole institution rests. In a democracy, a person should not have political power simply on ac­count of who his or her parents were. Yet, as all the solemn discussion of the consti­tutional implications of the royal separa­tion made clear, that is, in the end, what the monarchy is all about.

By all means tax the parasites and make them travel around London by bicycle, but the solution is a republic with an elected head of state.

DEFENCE WORKERS ON THE DOLE

Tribune leader, 4 December 1992

This Wednesday, 300 trade unionists from Royal Ordnance, the arms com­pany privatised in 1987 and now run by British Aerospace, lobbied Parliament in a last-ditch attempt to stave off factory closures that will put up to 2,500 workers on the dole.

It is unlikely that their campaign will succeed. Royal Ordnance workers are just the latest in a long list of arms indus­try supplicants, for, in the wake of the ending of the cold war, the market for Britain's arms industries has collapsed. Aerospace, shipbuilding, fighting vehicles and fefence electronics have all been hit. Trade unions estimate that, since the Berlin Wall came down, some 120,000 workers in the defence industries have lost their jobs, half of them in aerospace alone. Another 120,000 or so in related in­dustries have lost their jobs as a result. Many thousands more redundancies are in the pipeline.

Unlike miners, defence industry work­ers do not readily command public sympathy for their plight. The arms industry is generally considered a nasty business. On the left, anti-militarism has often proved more deep-rooted than concern for workers losing their livelihoods.

Yet the crisis in the defence industry is not something that can be shrugged off or ignored. The military sector has taken a disproportionate role in the British econ­omy since the industrial revolution; in re­cent years, it has been the single most im­portant British manufacturing sector. Be­tween 1980 and 1990, the share of indus­trial production taken by the defence in­dustries grew from 6 per cent to 11 per cent.

Most crucially, the defence sector has been an oasis of high technology in the desert of "low-tech, no-tech" Britain. The defence jobs that are being lost are highly skilled: in aerospace, three professionally qualified engineers have been made re­dundant for every blue-collar worker. There is a real danger that the collapse of the defence sector will shrink for ever the skills base of the British economy.

Labour's response to all this has been entirely inadequate. Instead of arguing forcefully that the defence industry crisis shows the desperate need for an interven­tionist industrial policy, Labour front­benchers have done little but refer apolo­getically to the party's proposal for a de­fence diversification agency to manage the transition from military to civilian production.

The reason for this sorry story is simple: no substantial detailed work has been done on the policy for nearly a year and the Labour front bench knows it. The unions are quite right to be telling the party that it is time to get its finger out.

EURO-REFLATION?

Tribune, 4 December 1992

As Gordon Brown and his advisers chew over their options after Norman Lamont's autumn statement, Paul Anderson and Ben Webb take a look at what left economists are saying

In the wake of last month's autumn statement, Labour is having to do some serious thinking about its economic poli­cy. The party's line on Norman Lament's "recovery package" remains that it is no such thing. "Too little, too long delayed and too inadequate to boost confidence for more than a weekend," said Gordon Brown, the Shadow Chancellor.

But even at Labour's highest level there are worries that Lamont stole some of Labour's best ideas for his autumn state­ment: tax breaks for industrial investment, an end to car tax, lease-buying of trains, re­laxation of constraints on the use of re­ceipts for council house sales, easing of Treasury rules on capital spending, direct intervention in the housing market.

There is a consensus among Labour poli­cy-makers that, although the party can in the short-term make much of the small scale of Lamont's measures and attack the spending cuts that were the other side of his autumn statement, in the medium-term Labour needs to come up with some new ideas. This view is reinforced by a widespread belief that the economic poli­cies on which Labour fought the last elec­tion failed to convince voters that Labour would make very much difference to Britain's dire economic plight.

Brown is now taking soundings on the options from economists and advisers with a view to presenting a major new policy package early next year. What he will come up with is not yet clear, but there are indications of his direction in the policy document he launched immediately before the  autumn statement,  Labour’s Campaign for Recovery.

On one hand, the document calls for a "British New Deal for the nineties" with an emergency employ­ment programme at its core. This is, for the most part, familiar stuff except that it would be paid for not by income tax in­creases but by keeping stamp duty on share transactions and by slapping a one-off tax on the profits of privatised utilities.

Brown justified the abandonment of in­come tax increases by arguing that they would depress consumer demand at a time of deep recession, but he is clearly also looking for ways to raise money for public spending which do not leave Labour as vul­nerable to Tory attack as it was last April.

More significantly in macro-economic terms, the document also backs co-ordinat­ed international action to stimulate the economy (dubbed "new Keynesian") by the Group of Seven leading industrial countries and the European Community, According to aides, Brown is now taking very serious­ly the European recovery package proposed last week by Jacques Delors, the EC Presi­dent.

It is another matter whether Brown swallows the argument that reflation in one country will not work, as advanced by several influential Labour economists, in­cluding Meghnad Desai and Stuart Hol­land.

According to Desai, a Tribune columnist and a key Labour economic adviser in re­cent years, "capitalism has reconstituted it­self through its crisis in the seventies as a global system in which nation states are no longer able to exercise autonomous control over capital". The EC, however, as a rela­tively closed economy, might be able to in­stitute Keynesianism as applied by individ­ual nation states in the fifties and sixties.

Holland, the author of the most coherent outline of Labour's Alternative Economic Strategy of the seventies and early eight­ies, The Socialist Challenge, has long since abandoned the AES's package of "Keynesianism in one country" plus import con­trols and more public ownership. Most re­cently, the former MP for Vauxhall has been examining the possibilities of an am­bitious European reflation programme, far bigger than that suggested by Delors, which would see the EC gain borrowing and lending facilities and give a "social di­mension" to economic policy. His number-crunching is the basis for the European Re­covery Programme launched at Labour's Europe conference last month by Ken Coates, the Labour MEP for Nottingham.

According to the Coates manifesto, joint action for European recovery "should be led by the European Commission and co-ordi­nated with member Governments. Not only will this be easier than the arrangement of convergent national initiatives outside the framework of the EC, it will provide a nec­essary catalyst to cross-border flows which can be calculated to maximise development possibilities and the multiplier effect which these can exert."

The idea of a co-ordinated European re­flation, let alone an EC-based recovery pro­gramme, has plenty of critics. Most obvi­ously, there are many, particularly among Labour's Eurosceptics, who question the very premise that reflation in one country is no longer possible.

Bryan Gould, the MP for Dagenham and an unashamed advo­cate of "Keynesianism in one country” and interventionist industrial policies, says: “What the economy desperately needs is reflation. We are suffering  a ter­rible hangover from Thatcherite policies, and we ought not to be afraid to adopt Keynesian   policies,   which have a very respectable pedigree. We have to get back to the notion that monetary policy is not a given. For Labour to opt out of the debate on mone­tary policy is really quite remarkable. We are in danger of capitulating to the views of those who have always created recession and depression."

Further to the left, Seumas Milne, a Tri­bune columnist and one of the authors of Beyond the Casino Economy, a recent re­statement of the most left-wing version of the AES, argues that advocates of Euro-re­flation have massively underestimated the continuing role of the nation-state in macro-economic management.

According to Milne, a staunch opponent, like Gould, of the Maastricht treaty, Britain needs a lot more than old-fashioned Keynesian refla­tion: "The events of the last few months have forced back on to the agenda policies, such as exchange controls and public own­ership, that were previously suppressed in the name of realism".

But not all the critics of the European road to reflation are old-fashioned Eurosceptics or nationalisers: some even have Brown's ear. Dan Corry, a senior economist with the Institute for Public Policy Re­search who was one of the architects of Labour's economic policy in the run-up to the last election, says: "I don't think Europe will rescue us. If we could have co-ordinat­ed European expansion, I’d say: 'Fantastic!' But I'm not convinced. It would be simple if we all had the same problems but it's not very helpful to tell people to leave it all to Europe."

At the same time, however, Corry is scep­tical of home-grown cures. "Brown is being criticised for not being Keynesian enough," he says. "But he has to consider the compli­cations: a ballooning public sector borrow­ing requirement as well as balance-of-payments problems and a huge debt overhang. That said, he could be more relaxed, and use the space to explain the case for public investment. Then, the old anti-taxation rhetoric might not have such resonance."

According to Corry, the difficulty is as much political as strictly economic. "Ex­plaining multiplier effects to political jour­nalists is not easy, as I discovered in the last election. The alternative to making a case for investment was to go out of our way to sound decent and sensible, which is what we did. Today, it really comes down to whether Labour would put something like £10,000 million into the economy. If Labour proposes to do that, it will have to explain itself."

Corry's point of view is echoed by An­drew Gamble, a former AES supporter who has written several books on the British economy and was one of Marxism Today's main writers in the eighties. He is doubtful about the political possibility of a Europe-wide recovery programme and sees any plan for independent reflation as “extremely risky”.

"The British economy is much more vul­nerable than in the sixties or seventies," he says. "It was difficult enough then to pur­sue independent policies. The changes put in place through the eighties, particularly the removal of exchange controls, make it hard to conceive today. It is difficult to imagine a Labour government standing up to the pressures exerted through the finan­cial markets. A co-ordinated European re­flation is probably the most attractive route and should still be a priority for Labour, but the tactical problems in securing co-op­eration across Europe would be immense.

"There is also the domestic route. First, find a way of keeping the financial markets happy and devise a policy that puts all the emphasis on infrastructure and education and training, This would be a targeted poli­cy, fiscally prudent and crafted to direct money to particular areas of the economy that would yield disproportionate gains."

There would, however, be political costs in such an approach: spending would have to be held down, and so probably would pay claims. It is a project that Michael Heseltine would probably feel more comfortable with than Labour. Gamble believes that Labour could get away with it only if it sold the programme as part of a long-term strat­egy for transforming British society.

Andrew Glyn, an economist at Oxford University who was one of the main left critics of the AES in the early eighties, is also sceptical about the options available to Labour. Although "the worm is beginning to turn" in economic thinking and "the pro-marketeers are on the defensive", it is diffi­cult to work out what the left ought to be saying, he argues. While "it is very hard to dispute the view" that reflation in one country has become highly problematic, there are other ways of restoring high levels of employment.

"The alternative, which is hardly ex­plored, is to expand public services, in other words to redistribute income to the social wage. It is possible to have much higher levels of public spending. There's not some economic logic that puts a natural limit on public expenditure.

"This is precisely what was done in Swe­den in the eighties. But that case is instruc­tive, because it shows that you need popu­lar support to do it, and you can go too far. It reached a limit in Sweden, but at a huge­ly higher level of welfare than here. So if people object, and you lose political sup­port, you're up a gum tree."

Unsurprisingly, there is no consensus among left economists about the direction in which Brown should be moving: just about the only thing they can agree about is that, whatever Labour opts for, it will not provide a miracle cure for Britain's econom­ic malaise and it will be difficult to imple­ment. More than ever before, breaking with economic orthodoxy is more easily proposed than executed.

BOSNIA: WE CAN'T JUST WRING OUR HANDS

Tribune leader, 27 November 1992

The shabbiest performance by a gov­ernment minister this week – and, like most weeks recently, it has been filled with shabby performances – was provid­ed by Malcolm Rifkind, the Defence Sec­retary, on television last Sunday.

Questioned by Brian Walden about the government's policy on Bosnia, he ac­cepted that the war there was the worst thing to have happened in Europe since the Nazi Holocaust. But, he opined blithe­ly, there really was no point in trying to do anything serious about it. Military in­tervention to support "safe havens" for the besieged Bosnians like those provided for the Iraqi Kurds was out of the ques­tion.

On one hand, the situation in former Yugoslavia was a "civil war” and there was no precedent for United Nations mili­tary intervention in civil wars. On the other, any military intervention would in­volve the "probability, if not the certain­ty, of very large casualties". "We might very well be there for many years," he said. "I do not think it would bring the fighting to an end."

Mr Rifkind, in other words, has no re­grets about the obvious failure of the west's Bosnia policy in the past year and the government has no intention of changing tack now. The desperate plight of the Bosnian Muslims as winter takes its grip, the rising tide of refugees and the unchanging Serb policy of territorial aggrandisement and ethnic cleansing nuke not a blind bit of difference. All we can do is give a little protection to hu­manitarian relief convoys, maintain inef­fectual sanctions against Serbia and Mon­tenegro – and wring our hands.

The message is one that will confirm the Bosnians’ sense of hopelessness and isolation while giving the Serbian aggres­sors yet another fillip as they pursue their bloody goal. What Bosnia needs, what Bosnia has always needed, is the means to loosen the aggressors' strangle­hold.

Militarily enforced "safe havens" at this stage are not as good as international military guarantees of Bosnian borders would have been six or nine months ago. But they are the least that the international community should be insisting upon. Not to insist upon them (as a mini­mum measure) is to give up on Bosnia. That would be disastrous for the Bosni­ans, disastrous for the Kosovans and Macedonians who are next in line for Ser­bian ethnic cleansing and disastrous for the principle of self-determination of sovereign peoples, a cornerstone of democracy.

With notable exceptions, Labour has unfortunately still not recognised this. Af­ter a summer when the front bench wit­tered on about the complexity of the situ­ation when it should have been pressing for military intervention, it has treated the war as little more than a refugee is­sue.

Of course, the refugees are important, and the government's refusal to take in more is despicable. But the refugee crisis will not be solved unless Serbian aggres­sion is stopped. Unless the world acts now it will be too late. Labour should come out now both for the United Nations to create adequately defended safe havens in Bosnia and for an end to the arms embargo against Bosnia. If that means more deployments of troops and air power, so be it: the alternative is too horrible to contemplate.

TORY THEFT SHOULD MAKE LABOUR THINK

Tribune leader, 20 November 1992

There is, of course, plenty in Norman Lamont's public spending plans, an­nounced in his autumn statement last Thursday, with which Labour can make hay. It will give little in the way of a boost to the economy, as Mr Lamont's own growth projections testify. He decided not to increase taxes or borrowing but to stick to the public spending target set months ago by the Treasury. As a result, every pound of extra spending on one scheme is paid for by cutting spending elsewhere.

Spending will decline in real terms in several crucial areas: local government, the National Health Service, defence, ed­ucation and training, transport, legal aid and overseas aid. Because of inflation, the public sector wage freeze of 1.5 per cent next year is a programme of vicious pay cuts for some of Britain's worst-off workers. Millions will feel the pinch of Mr Lamont's measures.

In line with the general modesty of the statement, most of the positive elements of the package are not as positive as they might have been. The relaxation of the constraints on use of money from council-house sales should have covered past re­ceipts - all £5,000 million worth - as well as those for the period between now and the end of next year.

Similarly, Mr Lamont could easily have relaxed the Treasury rules on capital spending much more than he did and giv­en British Rail freedom to lease-buy trains where it needed them rather than arbitrarily limiting the concession. Mere generally, the measures in the autumn statement relating to transport favour read over rail, which is a ludicrous poli­cy, both on environmental grounds and because the railways have been starved of investment for so long.

Add the small scale of the tax-breaks for investment, of the export guarantee cover and of the direct intervention in the housing market, and it might seem that Labour should have no problem in savaging the Government's plans.

But it is not quite as simple as that. Whatever the many faults in Mr Lamont's approach, there is also no doubt that he has stolen many of Labour's best econom­ic policy ideas: interest-rate cuts, tax breaks for industrial investment, an end to car tax, lease-buying of trains, direct intervention in the housing market, free­ing of right-to-buy receipts.

That puts Labour in a difficult position. In economic policy, big differences in de-gree are differences in kind, and Labour's recovery package, announced last week by Gordon Brown, is significantly larger than Mr Lamont's exercise in trying to have it both ways.

But it will do Labour's credibility on the economy no good if it appears that all the party can say about most of the Gov­ernment's economic policy is that it would do the same only more so (or less bo in the case of spending cuts and con­straint).

It was Labour's failure to convince many working-class voters that its alter­native economic policy really would make any difference to their lot that lost the party the last general election. After Mr Lamont's big steal, Labour has an even bigger problem than it had in April in differentiating its approach from that of the Tories. More than ever before, Labour desperately needs an injection of radical new ideas.

MAJOR MUST CARRY IRAQGATE CAN

Tribune leader, 13 November 1992

Following the collapse of the case against the Matrix Churchill company executives accused of busting the em­bargo on military exports to Iraq, at least four government ministers should resign at once.

Michael Heseltine, the President of the Board of Trade, Kenneth Clarke, the Home Secretary, Malcolm Rifkind, the Defence Secretary, and Tristan Garel-Jones, a junior Foreign Office Minister, all signed "public interest immunity cer­tificates” designed to prevent evidence reaching court showing the extent of Government encouragement of military-related exports to Saddam Hussein's Iraq between 1987 and 1990. If their efforts had not been ruled out of order by the judge in the Matrix Churchill trial, the three defendants could well have gone to prison for long terms.

The ministers say that they were only following orders, that they were under a legal obligation to attempt to prevent the secret documents from entering the pub­lic sphere. That is hogwash. So too is their claim that signing the certificates was not motivated by any desire to sup­press relevant evidence. The only con­ceivable reason for their course of action was to cover the government's tracks. If any of the four culprits had any decency, they would already have quit.

Instead, of course, the government has adopted the time-honoured strategy of announcing a public inquiry into the whole affair. It hopes that this gambit win turn what is currently a govern­ment-threatening scandal into a dull, technical matter with which the public and the media will be bored rigid.

Labour's task is to make sure that this does not happen - and the way to do that is to make sure that the main story is kept constantly in the public eye.

The story, in case anyone has missed it, is simple. Despite having announced an embargo on sales of military equipment to both sides during the Iran-Iraq war, the government did everything in its power to maximise exports to Iraq, delib­erately turning a blind eye to what it knew were exports with a primarily mili­tary use and deliberately taking no notice at all of the brutality of Saddam's regime.

Meanwhile, it deliberately misled Parliament and the British people about its policy. Finally, since Saddam's invasion of Kuwait exposed its encouragement of military exports as, at very least, a monumental error of judgment, it has contin­ued to go out of its way to attempt to sup­press the truth.

The four ministers caught lying about the relevance of the secret documents to the Matrix Churchill trial should be only the first casualties of the scandal. Both the Prune Minister, John Major, and the Foreign Secretary, Douglas Hard, have played crucial roles in pulling the wool over the eyes of Parliament since the question of British exports to Iraq was first raised in the wake of the execution of the journalist, Farzad Bazoft, in 1990.

Even more crucially, Mr Major and Mr Hurd were the successive Foreign Secre­taries responsible for running the disas­trous "arm Iraq" policy from July 1989 to July 1990.

Given that it is extremely unlikely that the two most senior members of the gov­ernment will easily resign, let alone face charges for embargo-busting as they should, it is up to Labour in Parliament to hound them remorselessly until they are forced out of office. Mr Major's in­quiry should be treated as the attempt to cover up a cover-up that it really is.

WELCOME CLINTON – BUT EUROPE IS FUTURE

Tribune leader, 6 November 1992

The second most important elections for Britain took place this week. Bill Clinton won the American Presidency and, understandably, much of the British Labour Party is very pleased. His success proves that incompetent right-wing gov­ernments elected on free-enterprise, fam­ily-values tickets can be beaten.

But euphoria is not in order. Mr Clin­ton's programme for the United States is better than George Bush's but by no means an adequate answer to the serious­ness of his country's economic and social crisis. He is likely to be as bad as his pre­decessors for the people who are most di­rectly affected by American foreign poli­cy. He is radically pro-Israeli and shows no sign of deviation from establishment wisdom on Latin America or the poor countries of the Pacific basin. Apart from boosting the morale of European social democrats, his effects this side of the At­lantic will be minimal unless he starts a trade war or brings the boys back home.

Put bluntly, the US does not matter as much to Europe as it once did. If Ameri­ca's are the second most important elec­tions for Britain, the most important are Germany's - and the last ones, two years ago, were lost by the Social Democrats. After that, Helmut Kohl's ill-conceived programme for German unification plunged the whole continent into reces­sion. Mr Clinton has the power to make matters worse but is most likely to have no impact on Europe's economic predica­ment.

What will make a difference is the re­sponse of European Community govern­ments to the current mess. An immediate co-ordinated reflation of the EC economy is urgently needed, followed by rapid de­velopment of the democratically account­able EC institutions required to pursue employment-oriented macro-economic policies.

It is this message that Labour must press home at its European conference this weekend. After this week's (neces­sary) attempt to give John Major a bloody nose in the Maastricht "paving debate" in the House of Commons, which was still going on as Tribune went to press, the party must reassert its pro-European credentials and make clear its commitment to the process of European economic and political union laid out in the Maastricht treaty. Maastricht may not be perfect but the alternative, no progress at all towards European union, is even worse.

For too long, Labour has fudged its way through European policy, carefully avoid­ing mention of "federalism" and assuring us all that it believes Westminster to be where the most important decisions about Britain's future should be made. The party must show how it wants Eu­rope to evolve after Maastricht, in partic­ular how it would like to see the EC's "democratic deficit" addressed.

"Giving the principle of subsidiarity real force", "strengthening the appropri­ate powers of the European Parliament", "making the Commission more account­able" and "ensuring that the Council of Ministers is more open", the main propos­als in the policy document passed at last month's Labour conference, are not enough. Labour should embrace the idea of an EC in which an executive drawn from and answerable to the European Parliament takes control of macro-eco­nomic policy and sets a "level playing field" for social and environmental stan­dards. If that is "federalism", so be it.

Hitting the poor is no way out of recession

Westminster is buzzing with rumours that the government's brave new economic policy will have three key elements: increases in several of the supposedly index-linked welfare benefits well below the rate of inflation; a public-sector wage-freeze or something very close to it; and increases in public works programmes. In other words, spending on infrastructure will be paid for by some of the poorest in our society.

If this is indeed the government's plan, it is not only immoral: it also flies in the face of economic rationality. Keeping in­creases in benefits and public sector wages below the rate of inflation will cut the living standards of those who can least afford it: most public-sector workers are extremely low-paid. Worse, inflation is set to rise from now until this time next year because of the devaluation of the pound.

There is a morally preferable way which also makes economic sense: increasing taxes for those who can afford to pay rather than cutting real wages and benefits for those who cannot.

Poor people tend to spend rather than save their money and to buy goods pro­duced domestically rather than imports. Taxing the better off will have a less harmful effect on the level of demand in the economy than reducing the spending power of the poor. The Tories are clearly less concerned with growth than with not hurting their friends.

HEAD PREFECT: INTERVIEW WITH GLYN FORD

Tribune, 6 November 1992

The leader of Labour's contingent in the European Parliament talks to Paul Anderson

“I find it slightly strange that Jack Cunning­ham is responsible both for Outer Mongolia and for Europe," says Glyn Ford, the leader of the European Parliamentary Labour Party. "It's not his fault. But it really is a different ball game. With Europe we're talking about day-to-day legisla­tion. With Outer Mongolia you have a crisis every ten or 20 years."

Ford, at 42 one of the most senior Labour politi­cians of his generation, is deadly serious about the importance of Europe to Labour. He hopes that the party's first-ever European conference in Brighton this weekend will get MPs and activists to stop thinking about the European Community as a "for­eign policy" question. For Ford, as for a majority of his fellow MEPs, Europe is a central domestic issue - and the future of the EC is still something that too many in the Labour Party have either not thought about sufficiently or, worse, have approached as if nothing had happened to the Common Market since Britain joined in 1973.

An MEP for Greater Manchester East since 1984, he has been leader of Labour's MEPs since just after the 1989 European elections, which saw the party take 40 per cent of the vote and 45 of Britain's 78 seats in the European Parliament. He is an unashamed Euro-enthusiast who describes the cre­ation of a democratically accountable federal execu­tive for Europe as "the direction in which things are going and the direction in which we should be go­ing". Mindful, perhaps, of Labour's official hostility to what John Smith calls a "European super-state", he adds diplomatically that he does not see a federal Europe happening in his lifetime.

Unsurprisingly, he has little time for those Labour voices arguing that his Westminster colleagues should do all in their power to prevent rati­fication of the Maastricht treaty by voting against  the governments Maastricht Bill at Third Reading, although he backed the decision to vote against this week's Maastricht "paving motion".

He is in favour, he says, of ending the govern­ment's opt-outs on the social chapter and the single currency and is worried that the Tories are intent on watering down the provisions in the Maastricht treaty dealing with powers for the regions. But Maastricht "is the best we can get at the moment".

"Maastricht will allow us to move forward on eco­nomic and monetary, environmental and social is­sues," he wrote recently in Tribune. "Without it we will have a lopsided single market rather than a community, where the needs of business are paramount and the needs of citizens come a very poor second."

The core of Ford's case is simple: business is al­ready operating at a European level and, if the Left is going to have a hope of keeping capital under con­trol, it must create institutions at the same level. "What is done in a single member state does not control the multinational companies," he says. "We need economic and monetary union and political union, with elected politicians - that is the Euro­pean Parliament - having a much stronger say."

He dismisses the argument advanced by much of the Left that the conditions for economic and mone­tary union laid down by Maastricht are essentially deflationary. "The Treaty of Rome was written in the language of Keynesianism," he says. "Maastricht is written in the language of monetarism. But that's not actually a terribly important issue. The real problem in Europe is the balance of political forces -and the way to solve the problem is to get more so­cialists elected. We are in opposition in six out the 12 member states, in coalition in four and in power in two. The reality is that we don't have the majori­ty of voters on our side."

Instead of laying into Maastricht, says Ford, the left should be engaging with the reluctance of Europe's current governments to pursue co-ordinated economic policies to pull Europe out of recession. "What we should be arguing for is a pan-European reflation programme. If we win that argument, we have the capability, within Maastricht, to imple­ment those programmes. Maastricht in itself doesn't stop a Labour government from doing anything."

Of course, no one knows whether Maastricht will survive the Danish no vote in June's referendum - the reason Labour gave for voting against the Gov­ernment in this week's debate. Ford reckons that the Danes will find a way to ratify the treaty but the worst case could still just about happen: "a small in­ner core making a multilateral agreement, steaming ahead on economic and monetary union" and forget­ting all the social and environmental aspects of the Maastricht deal.

+++

He is confident that Labour will not treat this week's paving motion vote as a precedent for swinging against Maastricht. Last month's Labour conference gave an overwhelming endorse­ment to the pro-Europe position that has been de­veloped in the past five years, he says. "There's been a massive change of mood," he goes on, quoting the very existence of this weekend's conference as evi­dence.

It is difficult to disagree with this sentiment. While, five years ago, Labour's Euro-enthusiasts cloaked their enthusiasm with criticism of the EC, today it is the Euro-sceptics who feel that they have to camouflage their opinions by asserting defensive­ly that they are "pro-European but..."

Even in the past six months there has been no­ticeable movement towards acceptance of Europe as Labour's future, perhaps most significantly in John Smith's ready endorsement of plans to set up a Eu­ropean Socialist Party, largely to ensure better so­cialist co-ordination in the European Parliament. Neil Kinnock had always blocked any such thing, Next week, a meeting of EC socialist parties in The Hague is almost certain to back the Euro-party, of which the EPLP will become the British section.

It will, of course, be a long time before most Labour Party members see themselves as members of a British section of a European party. In the meantime Labour has some serious business to do. The next national elections that Labour faces are the 1994 European Parliament elections. As things stand, Ford is optimistic that the party can do well in them, even better than in 1989. "We're in the po­sition where we could conceivably gain seats," he says. "There are three seats which we lost by less than 3,000."

Before the polls in 18 months there is another, possibly more lucrative, challenge. Last month, after having his draft definition of "subsidiarity" rejected by EC governments, the president of the European Commission, Jacques Delors, offered £140,000 to anyone who could come up with a definition of the idea on one side of paper. Ford reckons that the prize would be easy money.

"I don't understand why Delors was so desperate­ly looking for a definition," he says. "In the Maastricht treaty there's a definition of subsidiarity which is that things should be done at (he appropri­ate level. That's perfectly logical. You do not empty dustbins at European level. Equally, you do not make foreign policy in the parish council. There are not insuperable problems in the US about what should be decided locally and what should be decid­ed. Why should there be in Europe?"

With Labour sacking headquarters staff and the trade unions broke, maybe Ford and his colleagues should enter Delors's competition.

LABOUR MUST PRESS FOR ELECTION

Tribune leader, 30 October 1992

It now seems that last weekend's head­lines suggesting that John Major would call a general election if he lost next Wednesday's Commons vote on the Maas­tricht Bill were the result of a misunder­standing.

We were assured this week that he had not intended to give the impression to "senior officials" travelling with him on his trip to Egypt that defeat would mean going to the country for the second time in a year.

What he (and they) meant to convey, ex­plained the self-same "senior officials" unashamedly, was simply that a defeat on Maastricht would be terribly serious. Mr Major would rather go for an election than give up the Tory leadership to some anti-Maastricht figure. An early election was not on the cards, they told journal­ists.

Nevertheless, the frisson of excitement that all those headlines sent down spines throughout Britain was significant. There is undoubtedly a growing feeling in the country that Mr Major and his govern­ment have run out of steam and that a general election should take place sooner rather than later.

It is easy to see why. In the past six months, Mr Major and his team have shown themselves to be incompetent al­most beyond belief. Instead of the recov­ery we were promised, Britain has suf­fered ever-deepening recession. Redun­dancies were making news even before the shocking announcement that 30,000 jobs would go in the pits.

Instead of a strong currency in the ex­change rate mechanism and zero infla­tion, Mr Major has presided over with­drawal of sterling from the ERM and a 20 per   cent   devaluation   which   will   in­evitably cause import prices to rocket.

The government's economic strategy is in tatters and Mr Major is giving the im­pression of having no idea of what to do next, apart from pinching a few ideas from Labour's economic policy. Tory backbenchers are in open revolt over Eu­rope. Public confidence in the govern­ment has collapsed.

In the circumstances, Labour should have no hesitation in going all out to force the government into an early election.

Voting against the government next Wednesday, on a Maastricht paving mo­tion or an adjournment debate, makes perfect sense. There is a real but slim chance that, with the Tories in disarray, defeat for the government could panic Mr Major to gamble on going to the polls.

At the same time, however, it is crucial both that Labour recognises that its ef­forts might not have the effect that it wants and that the party does nothing that compromises its integrity as a pro-European party.

No one should be too down-hearted if the attempt to bring the government down does not come off this time  – and the message that Labour sees Europe as the key to its alternative economic policy must be heard loud and clear above the hubbub of parliamentary manoeuvring.

TAKE MINERS' ANGER TO THE STREETS

Tribune leader, 23 October 1992

The government's change of tack on coal closures in the past week has not been a complete U-turn. Even though only 10 pits are now to shut at once, with the fate of the other 21 pits originally ear­marked for closure to be reviewed, the government's intention remains to imple­ment the whole closure programme as soon as it can.

Nothing that Mr Heseltine has said this week has even approached an admission that the root of the coal crisis lies in the idiotic blunder of electricity privatisa­tion. All that he offered on Monday was a moratorium on two-thirds of the pit clo­sures, pending examination of the com­petitiveness of individual pits in prevail­ing market conditions. He explicitly ruled out any review of the energy policy that has created those market conditions.

By Tuesday, the government had backed down in the face of continued criticism from its backbenchers. The re­view is now going to take in the question of Britain's strategic energy needs. John Major agrees with Labour that the Com­mons Select Committee on Trade and In­dustry should be given a key role in ex­amining the closure programme.

Labour has not got everything that it wanted. The government has pointedly refused to think again about the 10 pits which it still wants to shut at once. But with British Coal forced by the courts to keep even these pits open until mid-Jan­uary, the party can afford to be pleased with the first stage of its campaign against the pit closures. It has played an honourable part in winning time for the case to be made against the Government's plans. The question now is what it does with that time. Part of Labour's effort must, of course, be to pursue in Parlia­ment the case against the closures and for a coherent energy policy for Britain.

Labour can hammer the government for the disaster of electricity privatisation, with its protection for nuclear power and its de facto encouragement of the "dash for gas" by the electricity distri­bution companies. It can press home its insistence that the Government conduct a thorough examination of the long-term future of the coal industry and take ac­count of the social and economic costs of pit closures. But a wide-ranging assault on the government in Parliament is not enough. Labour must also do all it can to mobilise opposition to the pit closures outside the corridors of Westminster.

The change in popular mood since the pit closures announcement is tangible even in Fleet Street and the Tory home counties. Those who were prepared to give the Tories the benefit of the doubt after "Black Wednesday” a month ago, thankful that interest rates had not, after all, gone up to 15 per cent, have turned against them. For thousands of British people, the destruction of the coal mining industry is the last straw. The govern­ment has lost its credibility.

It is crucial that Labour articulates this change of mood, not just in Parliament but throughout the country. This Sun­day's demonstration in London against the pit closures should be a stepping stone towards a massive campaign of popular mobilisation, with Labour taking the lead, against the government's whole economic strategy.

People demonstrating in the streets will not remove Mr Major from Number Ten but, with the government drifting and its Commons majority vulnerable to back-bench rebellion, there is a real possibility that a sustained show of popular anger could force a genuine U-turn.

COAL SHOWS WHY MARKETS DON’T WORK

Tribune leader, 16 October 1992

The pit closure plan announced by British Coal on Tuesday is an unmiti­gated social disaster. Some 30,000 workers in the coal industry will lose their jobs, some of them today. Perhaps twice that number of workers in related industries will join the dole queue as the coal industry contracts. Large areas of Britain will be left jobless.

And all for what? According to British Coal, the closure plan is inevitable be­cause of lack of demand for its coal. Mar­ket forces dictate that it take drastic ac­tion to match its supply to the demand.

Yet the reason for this lack of demand is the way in which the Government pri­vatised electricity. It created two giant generating companies, PowerGen and Na­tional Power, with complete freedom to buy their coal where they like and to re­place coal with gas if they choose.

Unlike nuclear power, which was care­fully hived off and protected from the ravages of the market place, the coal in­dustry was earmarked for privatisation and deliberately exposed to a market in which two giant customers could dictate terms.

The generating companies’ decisions to buy cheaper imported coal and to "dash for gas" made British Coal's short-term position impossible. Or rather, it made it impossible until devaluation. The col­lapse of sterling in the past month has priced back into competitiveness many of the pits chosen for closure.

Even taking into account only short-term market factors, the closure list is ridiculously long. 

If one looks at the decision from a longer-term perspective, it looks com­pletely absurd. Gas is cheap right now, al­though not if the costs of building new gas-fired power stations are included. But domestic reserves of natural gas will run out within 20 years. Similarly, although imported coal is cheap now, there is no reason to expect that it will always be so. Then there are the deleterious effects of coal imports on the already burgeoning balance of trade deficit.

In short, coal is a classic case of an in­dustry that cannot simply be left to the ravages of the market. What it needed from the state was long-term strategic planning and investment. What it got from this government was, at best, ne­glect and, at worst, irrational hostility.

Miners are understandably angry at the way they have been treated, thrown on to the scrap-heap despite massive increases in their productivity. No one should be surprised if that anger expresses itself in support for in­dustrial action. If the miners do vote to strike, they will not only deserve the support of every other trade unionist in Britain but need it. They will surely be defeated if they are left to stand alone.

If, on the other hand, they decide that a strike would be unwinnable, that deci­sion too will deserve respect. In the depths of a slump, it would not be unrea­sonable for miners to see a decent redundancy pay-off as a better prospect than months on the picket line with nothing in the end to show for it.

THE BLOCK VOTE HAS TO GO

Tribune leader, 9 October 1992

Labour’s conference decisions last week on the party's links with the unions were a mixed bag.

Looking on the bright side, all of the conference votes insist on maintenance of strong links between party and unions. And none of them really ties the hands of Labour's working party on union links on the question of reforming the union role in parliamentary selections and leader­ship elections. Some sort of system which ensures that trade union members who pay the political levy are given individual votes is perfectly compatible with every­thing decided in Blackpool last week, and the working party should now push ahead with a report on the various feasi­ble options.

At the same time, however, the conference votes do limit the working party's deliberations when it comes to the block vote at Labour conference  - and that is anything but good news, for the block vote is the element of the party-union re­lationship most in need of no-holds-barred critical examination.

Of course, one problem with the block vote was addressed last week: its sheer weight, which has meant for years now that a handful of union leaders have had the ability to determine party policy re­gardless of what anyone else thinks. The unions will now control 70 per cent of conference votes rather than 90 per cent, But, welcome as this move is, it does not go very far. Even with just half of con­ference votes controlled by union leaders (the likely next stage), a handful of union leaders will still be able effectively to de­termine party policy, particularly if all the union mergers currently under dis­cussion go ahead. Even with one-third or one-quarter of the votes, the union lead­ers would have too much power. It is the block vote itself which is the problem: it is an essentially undemocratic institu­tion. By effectively voting to rule out abo­lition last week, the Labour conference did itself a grave disservice.

A missed opportunity on education

Quite the most stupid and craven de­cision at Labour conference last week was the little-noticed defeat of Com­posite 42, which called for abolition of the charitable status of public schools and demanded an end to religious segre­gation in education.

Why did the conference do it? There is no conceivable justification for public schools retaining charitable status: they are profitable businesses that do im­mense social harm and should no more be given tax breaks than tobacco conglomer­ates.

The idea that the state should sanction and subsidise the stuffing of children's brains with the nonsense of religion is equally offensive to all but those afflicted with religious belief. If parents want their children brain-washed, there is plenty of time for it outside school hours.

GOULD IS A BIG LOSS

Tribune leader, 2 October 1992

Not for the first time, the biggest excitement of this week's Labour conference came before it    formally opened. The dramatic resignation of Bryan Gould from the Shadow Cabinet has overshadowed everything else that has happened in Blackpool this week.

Although Tribune disagrees with Mr Gould over Europe and economic policy, the issues on which he decided that he could not accept Shadow Cabinet collec­tive responsibility, we regret his decision to go.

It is not that his position is incompre­hensible. Mr Gould's core beliefs about management of the economy (he remains a stalwart of the "Keynesianism in one country" school) are radically at odds with the "co-ordinated European refla­tion" approach taken by the Labour lead­ership and overwhelmingly endorsed by this week's conference.

It is hardly surprising that Mr Gould decided that a life of back-bench freedom was preferable to four years of sitting on his hands, particularly given his experi­ence between 1989 and last April. Then Mr Gould kept quiet in the face of what he saw as a disastrous Labour economic policy shift, away from the intervention­ist industrial strategy he had elaborated as trade and industry spokesman and to­wards an approach emphasising only "supply side" measures, mainly education and training.

The prospect of another frustrating pe­riod of not disagreeing in public with what he saw as party policy was under­standably unattractive for Mr Gould. What made it even worse was that, hav­ing been so roundly beaten in the Labour leadership contest this summer, he was in an even weaker position inside the Shad­ow Cabinet than he had been in the three years before the general election. Know­ing by last weekend that he was also cer­tain to lose his seat on the National Executive Committee, Mr Gould walked.

No one can blame him for doing so, but there is something deeply  disturbing  about   the   circum­stances. The impossibility of his predica­ment came about only because of the en­forcement last week of Shadow Cabinet collective responsibility on Europe and economic policy. Yet there was no need to foreclose Labour's debate on these issues, apart, possibly, for last week's emergency House of Commons debate on the econo­my. However essential it might be for any political party to present a show of unity in the couple of years before a general election, there is no convincing argument for Labour doing any such thing right now.

It is less than six months since the par­ty suffered a humiliating general election defeat. It has still only begun to chew over why it lost and what it should do next. Two years of free and frank debate, with the tolerance of the widest range of views at every level of the party is essen­tial if Labour is to have any hope of get­ting to grips with its predicament.

The departure of Mr Gould is a worry­ing sign that the Labour leadership thinks that the debate is not neces­sary. It also inevitably casts a shadow of doubt over the seriousness of John Smith's promise during the leadership campaign to operate a more relaxed disci­plinary regime than his predecessor. The least we should now expect from Mr Smith is a ringing declaration of the val­ue he places on dissent in the Labour Party.

THE ALTERNATIVE TO MAASTRICHT IS WORSE

Tribune leader, 25 September 1992

Even though the French referendum resulted in a narrow yes to the Maas­tricht treaty, the treaty is in deep trouble. No way has yet been found around the Danish no in June, and unless the Danes change their minds the treaty falls. More importantly, the exchange rate mechanism of the European Mone­tary System, which is at the heart of Maastricht's provisions for economic and monetary union, is in crisis. Last week's orgy of speculation ended with the pound and the lira dropping out of the ERM.

At the very least, it now seems in­evitable that the timetable for economic and monetary union in the Maastricht treaty will have to be revised. Most com­mentators reckon that, as the dust settles, the way that the ERM operates will be changed, with the German Bundesbank insisting on a reduction in its responsibil­ity for propping up other countries' cur­rencies. Many predict that some sort of "two-speed" arrangement for monetary union will replace the Maastricht ap­proach, with the core economies of France, Germany and the Benelux coun­tries moving rapidly to a monetary union which the rest will join at some point in the future or perhaps not at all.

In the circumstances, it is hardly sur­prising that many left opponents of the Maastricht treaty in Britain have the scent of blood in their nostrils. There is a widespread belief even among supporters of closer European integration that Maas­tricht will force austerity on the whole of the European Community and will do lit­tle to democratise EC institutions. What's more, the treaty seems to be even more vulnerable to a British no - either by way of a referendum or through defeat of the government's Maastricht Bill in the House of Commons - than it was after the Danish referendum, in June.

So is there any reason Labour should not go in for the kill? Unfortunate­ly for those who like their politics simple, there is.

+++

Maastricht is essentially a compromise among the French, German and British governments. The French gave way on German demands that the proposed Eu­ropean central bank be independent and that the convergence criteria for econom­ic and monetary union be austere in the extreme; the Germans gave way to French and British insistence that the deal on political union did not give very much power to the European Parliament. (The British also got their opt-outs on monetary union and the social chapter.)

Immediately after the Danish no, it was at least possible that a renegotiated Euro­pean union treaty would take account of the Danes' worries about EC democracy by including far greater powers for the European Parliament and would address their fears about the future of the welfare state by beefing up Maastricht's social side and ending the British social chapter opt-out.

If Labour had then swiftly announced that it was opposing Maastricht with the goal of replacing it with such a treaty and if it had persuaded other EC social demo­cratic parties to back its position, there might just have been a hope of Labour acting as a catalyst for a renegotiation on a more social democratic basis.

+++

In reality, however, nothing of the sort happened. Proponents of an anti-Maastricht pro-Europe position failed to win a majority in the Labour Party, let alone other social democratic parties, which all lined up in support of Maastricht. They argued that although the treaty was not perfect, it did contain enough - the social chapter for 11 out of 12 EC countries, the extra powers for the European Parliament and the regions, the commitment to social solidarity – to make it worthy of support. The

opposition camp in most EC countries was left to the xenophobes.

Meanwhile, it became clear over the summer that, if Maastricht fell, what came next would almost certainly be worse, particularly on political union. In the aftermath of the Danish vote, it was not the German government's position of strengthening integration by moving quickly to give more power to the Euro­pean Parliament that gained ground among EC governments as the favoured next step. Rather, it was the British gov­ernment’s idea of watering down integra­tion by maximising "subsidiarity" (code for continuing to carve up as much EC business as possible in closed intergov­ernmental meetings) that made the run­ning, a tendency that has been reinforced by the close French referendum result.

+++

Whether or not Maastricht sur­vives, there is now a real danger that, instead of making even small steps towards a Europe-wide democratic polity, governments will now pander to popular nationalism, dramatically slow­ing the pace of political integration. If Maastricht falls, it is likely that what re­places it as a pan-EC agreement will be little more than the status quo ante with a very different ERM and, perhaps, Ger­many, France and the Benelux countries going it alone with an economic and mon­etary union of their own.

This would effectively rule out the Eu­rope-wide strategies that are now Britain's best hope for effective long-term counter-cyclical economic management. Britain might gain temporarily from its current outsider status, allowing the pound to devalue and interest rates to fall outside the ERM. But, in the end, the past two decades show that it is impossi­ble in modern capitalism for a medium-sized country to get lasting benefits from "dash for growth" policies.

The upshot is simple: if Labour is seri­ous about Europe-wide alternative eco­nomic strategies, it has to be committed to European union - and the Maastricht approach to European union, however flawed, is the only one on offer. Labour should be arguing for a devalued sterling to be returned to the ERM (if not at once). More important, it should not vote against the Maastricht Bill when it eventually finds its way to the Commons. There will be plenty of opportunity to address the democratic deficit and to push for left European economic and social policies after ratification. Without ratifi­cation, the democratic federal Europe that the left desperately needs will be­come once again a distant dream.

DEVALUATION BEATS AN INTEREST RATE HIKE

Tribune leader, 18 September 1992

The president of the German Bundesbank, Helmut Schlesinger, might be insufficiently politically accountable; he certainly deserves to take a large measure of the blame for the recession now afflicting all of western Europe. If the Bundesbank, obsessive about the dangers of inflation, had not run such high interest rates in the past couple of years, life would undoubtedly have been easier for everyone.

But on one thing, he is undoubtedly right, unlike the elected politicians who control, or rather claim to control, Britain's monetary and fiscal policy. As Mr Schlesinger said in an interview published on Wednesday, sterling should have been devalued against the Deutschmark on Sunday, when the Italian lira devalued by 7 per cent, as part of a general realignment of currencies within the exchange rate mechanism of the European Monetary System. Instead, the British government decided pig-headedly to maintain the pound's parity with the Deutschmark, no matter what the cost to the economy.

After intervention in the currency markets to prop up sterling had failed, the government on Wednesday put up interest rates first by 2 percentage points – and then by another 3 percentage points after that had foiled to end the run on the pound. The government's hope is that these moves, which are guaranteed to make worse the already dire recession, will end the speculation against sterling. But it is apparent that the feeling on the currency markets is that the pound is overvalued. Devaluation of sterling, if it has not happened by the time you read this, is on the cards. If the French vote no to Maastricht on Sunday, it is a virtual certainty.

During what now seems to have been the inexorable drift towards devaluation, the Labour leadership has gone out of its way not to appear in favour of devaluing the pound – a position that has drawn heavy fire from within the party, particularly from the anti-Maastricht soft left, whose intellectual flag-bearer, Bryan Gould, has long been a proponent of devaluation.

That the argument has been had is no bad thing: for the first time in several years, Labour has had a free and frank political discussion in public, which is most refreshing. John Smith should resist the calls from Gerald Kaufman and others for the devaluationists to be gagged and "collective responsibility" to be enforced. Moreover, even if some arguments for devaluation are unconvincing, it is difficult to disagree with the case for devaluation if the choice is between devaluation and higher interest rates, as it has been this week.

But those who have attacked the leadership position of keeping quiet about devaluation are not tactically right. Having kept their remarks on the possibilities of devaluation to the bare minimum, Mr Smith and the Shadow Chancellor, Gordon Brown, are now in an optimal position to attack the Tories when devaluation actually comes. John Major and Norman Lamont, unable to say that they are doing only what the opposition recommended, look set to get a deserved political ducking.

More members good, no members bad

Labour is broke. It needs more money – and fast. Usually, in times of trouble, the party turns to the trade unions. But they are broke too. And there's no way that the party's direct-mail fundraising operation can bring in any more money than it already does.

In  the  circumstances,  it  is perhaps unsurprising that the party has decided the  only option   is   to increase membership subscriptions for a year for  ordinary members from the current  £15. An extra £3 a member would make a lot of difference to the party's finances.

The problem is that it's not quite as simple as that. Even with generous discounts for people who can't afford the full membership fee, if the proposed increase in subscription rates goes ahead, thousands of potential members will be deterred from joining and thousands of existing members will think twice about renewing.

Indeed, there is a danger that the numbers put off will be so large that the party will get no net financial benefit from putting up the subscription rates.

Given that Labour's membership is already at a post-war low, it seems utterly mad to take such a risk.

Of course, the reason that Labour's membership has declined is not simply that it has become too expensive to become or remain a member. But a far more sensible solution to Labour's financial crisis would be a dramatic cut in subscription rates and a vigorous national recruitment drive. Where Labour Party membership is concerned, more really is better.

DEVALUATION – TRICK OR TREAT?

Tribune, 18 September 1992

Paul Anderson examines Labour's differences on exchange rate policy

“The impossibly high exchange rate is pushing up interest rates and turning Britain into a rust-bucket economy," declared John Edmonds, general secretary of the GMB general union, at the TUC congress in Blackpool last week. "Most people in industry know that the pound is overvalued against the Deutschmark. Realignment is now in­evitable."

At the time, Edmonds was careful not to call explicitly for a unilateral devaluation of sterling, although it was clear that he thought that such a devaluation would be better than inaction. By Sunday, however, after the devaluation of the Italian lira, he came out explicitly in favour of similar treatment of the pound, describing the British failure to devalue at the same time as the Italians as a "missed opportunity".

What is most remarkable about this in­tervention is that Edmonds is not the usual sort of Labour devaluationist. He is a long-standing enthusiast for European eco­nomic and monetary union (the GMB tabled the pro-Maastricht motion at the TUC) and a firm believer in British mem­bership of the exchange rate mechanism of the European Monetary System. In recent years, Labour proponents of devaluation have typically been Euro-sceptics, oppo­nents of ERM membership (or at very least unenthusiastic about it) and believers in a national-Keynseaian approach to economic management.

Probably the most consistent and coher­ent spokesmen for this point of view have been Peter Shore, the veteran anti-EC Right-winger, and Bryan Gould, now Labour's spokesman on national heritage. Both of them start from a belief that ster­ling has been consistently over-valued for years. Gould made devaluation one of the cornerstones of his unsuccessful campaign for the Labour leadership and deputy lead-leadership earlier this year. “If we continue to defend an overvalued currency we will continue to crucify manufacturing in­dustry," he told Tribune in May.

Gould has moved away from advocating unilateral devaluation of sterling: he now favours devaluation as part of a general re­alignment of currencies within the ERM. But his position is still tied up with opposi­tion to the process of European monetary union laid out in the Maastricht treaty. His assault last weekend on "governments which persist in defending an overvalued pound" followed a swingeing attack on the deflationary implications of Maastricht. The same hostility to Maastricht charac­terises the other prominent Labour politi­cians who have spoken out in favour of de­valuation in the past week: John Prescott, David Blunkett and Peter Hain.

It is, of course, unsurprising that the question of devaluation has been linked with that of Maastricht. The ERM semi-­fixed exchange rate system is envisaged by Maastricht as a stage in the process that ends in a single European currency and a European central bank. Even if the thesis that sterling has historically been overval­ued is wrong (and it is notoriously difficult to prove either way), there is no doubt that the pound's value in the ERM has been sus­tained in recent months only by govern­ment intervention in the money markets and by high interest rates, which are hold­ing back the recovery of the British econo­my.

But what Edmonds's intervention indi­cates is that there is a growing belief even among Labour supporters of the ERM and the Maastricht treaty that the government's policy of maintaining sterling's val­ue is having a disastrous effect on the British economy and that it is not enough for Labour to respond by changing the sub­ject or by arguing that the Deutschmark should be revalued upwards against the other ERM currencies.

On the Edmonds view, the problem is not with the ERM, semi-fixed exchange rates or economic and monetary union in principle but with the attempt to maintain ERM par­ities despite Germany's decision to put up interest rates to dampen inflation in the wake of German unification. As a result, all the other ERM member countries, and all those with currencies “shadowing” the Deutschmark or the European Currency Unit, were forced to put up their own inter­est rates in order to maintain their curren­cies' value against the Deutschmark. The Bundesbank eased the pressure on interest rates everywhere except Britain with its minuscule cut in interest rates on Monday, but the Deutschmark remains undervalued against most of the other European currencies.

Although the simplest solution would be simply for the Germans to revalue the Deutschmark upwards against the other ERM currencies, the argument goes, the unwillingness of the Germans and French to sanction any such course means that Britain should devalue sterling just as the Italians devalued the lira on Sunday.

This position would have been anathema to the Labour leadership before the elec­tion, partly for tactical reasons - devalua­tion means price increases on all imported goods, which would be difficult if not impos­sible to sell to voters, and the very prospect of a pro-devaluation party coming to power would create turmoil on the currency markets – but partly because of scepticism among Labour's advisers about the useful­ness of devaluation as a tool of policy.

Devaluation, the sceptics argued, is not a means of cutting interest rates. It works (insofar as it does) by cutting real wages and could easily set off an uncontrollable spiral of wage and price inflation. Worse, in Britain it would not work very well. Domestic British manufac­turing was in such a dire state that British companies would not be able to meet the potential demand at home or abroad for competitively priced British-made goods. The priority for Britain was not devalua­tion but an effective strategy for overcom­ing the structural weaknesses of its econo­my: crumbling infrastructure, poor educa­tion and training and so on.

It is in this light that the reluctance of the Labour leadership in the past week to endorse devaluation must be seen. As Shadow Chancellor and trade and industry spokesman before the election, John Smith and Gordon Brown were wedded to an ap­proach to economic policy that eschewed devaluation; today, as Labour leader and Shadow Chancellor, they remain extremely cautious.

Smith responded to last week's calls for devaluation by saying that he was "not in favour of a devaluation of sterling because that would not assist in reducing interest rates", although he added that the EC should "not rule out a revaluation of the Deutschmark".

His remarks were echoed by Brown, who announced that "Labour is not the party of devaluation", emphasising the centrality to Labour's approach of "an emergency em­ployment programme", concentrated partic­ularly on housing and public works, and "concerted Europe-wide action" to bring down interest rates and end the recession. Brown reacted to the devaluation of the lira and subsequent Bundesbank decision to cut interest rates by calling for the British Gov­ernment to emulate not the Italians but the Germans.

Instead, after massive intervention by the Bank of England failed to stem specula­tion against sterling, the government put up interest rates by a total of 5 per cent on Wednesday. But sterling remains under pressure and many now believe that deval­uation is inevitable, particularly if the French vote no to Maastricht on Sunday. It would not take the most apocalyptic sce­nario now doing the rounds, complete col­lapse of the ERM following a French no, for Labour's arguments over the past fortnight to be entirely irrelevant within a few days.

STILL OUT IN THE COLD

Tribune, 4 September 1992


On the eve of the TUC Congress, Paul Anderson looks at the issues facing Britain's trade unions

Next week's TUC Congress in Blackpool was supposed to be the first in years that everyone took seriously.

With Labour in government, the unions would be back in the corridors of power, if not enjoying beer and sandwiches with Neil Kinnock at Number Ten.

Instead, Labour lost the election and the unions face four or five more years out in the cold. Far from being a celebration of a return to political relevance, Blackpool looks set to be dominated by rumination over the unions' long-standing problems.

The most obvious of these is that the number of union members is declining and has been for more than a decade. Accurate figures are difficult to come by because trade unions exaggerate their membership figures. But in 1979, the peak of union membership, there were 12,172,508 workers in TUC-affiliated unions according to the unions' own statistics. This year's figure has yet to be published, but the estimate is about 7,757,000, a drop of more than one-third. On these trends, membership of TUC-affiliates will be lower at the end of this year than at any time since the second world war.

Last year, the vast majority of affiliated unions saw membership decline. Of those with more than 100,000 members, only two gained members last year: NALGO and the CPSA. The AEU (now merged with the non-TUC EETPU in the AEEU) experienced a net loss of 99,000, 11 per cent of the 1991 total, and both the TGWU and the GMB suffered net losses of 8 per cent. All trade unions, but particularly the big general unions, experience a constant turnover of membership. The GMB, for example, which says that its loss rates are better now than six months ago, is currently recruiting 17,000 new members a quarter, but 25,000 are leaving.
Most unions blame the recession for declining membership. "While these figures are disappointing, they say more about the state of the economy than they do about trade unions," said Norman Willis, the TUC general secretary, when the January 1992 membership statistics were released.

But although the recession is part of the problem (when workers lose their jobs, they usually leave their union and no one joins a union when unemployed) it is not the whole story. With notable exceptions, union membership declined even during the boom years of the late eighties.

The reasons for this are many and complex, and differ from union to union. In the early eighties, the decline of manufacturing hit all the blue-collar unions hard, but particularly the TGWU and AEU. Membership of the NUM collapsed because of pit closures and the secession of the Nottinghamshire miners over the 1984-85 strike. The print unions declined as a result of changes in printing technology.


More generally, unions have always found it easiest to recruit and organise among full-time permanent workers in large enterprises with employers who recognise unions. Since the late seventies, however, employers have become increasingly reluctant to recognise unions, the average size of the workplace has shrunk and there has been a massive growth in the importance of part-time and temporary work.

Add the effects of 13 years of Tory hostility to trade unions, and it is perhaps unsurprising that the unions have fallen on hard times. The question is what they can do about it.

The process of small unions amalgamating with each other to form bigger ones is almost as old as the movement itself but it has noticeably gathered pace as unions have grappled with the financial problems caused by declining membership and looked to mergers as a way of reducing overheads. Since 1979, the number of TUC affiliates has fallen from 109 to 74.

The TGWU has swallowed the agricultural workers. What was the GMWU has swallowed the boilermakers, textile workers and garment workers and acquired a white-collar wing, APEX, to become today's GMB. Four print unions have been reduced to one, the GPMU; the SOPS and the CSU have become the NUCPS; ASTMS and TASS have created MSF; the NUR and NUS have formed RMT; and the AEU and EETPU have amalgamated into the AEEU. Next year, COHSE, NUPE and NALGO will merge into a giant public sector union, Unison, with around 1,400,000 members.


All this might be a mere taste of what is to come, however. The industrial logic of a merger between the TGWU and the GMB has long been apparent to many, but deep cultural and political differences have prevented it from being taken seriously by officials in either union. But now there are signs that the ice has been broken. No official merger talks are going on yet, but both unions are moving towards closer co-operation and have agreed to end their traditional rivalry.

With Unison in place, the creation of a giant "Transport, General and Municipal Workers Union", some 2 million strong, would mean that nearly half of British trade unionists were concentratectin two unions. It would also inevitably put pressure on medium-sized unions to merge, either with one another or with one of the big two.

It is not too ridiculous to suggest that, within a decade, four or five super-unions might account for 95 per cent of British trade unionists: say, a TGWU-GMB-RMTUSDAW-UCATT-NUM general union, a Unison-CPSA-NUCPS-IPMS-IRSF public sector union, a GPMU-BECTU-NCU-UCWSTE media and communications union, an NUT-NAS/UWT-NATFHE-AUT education union and a BIFU-MSF-AEEU manufacturing and banking union.

This is speculation, of course: plenty stands in the way of the development of super-unions. But they are certainly in the air, even if the TUC Congress will refer to them only obliquely in a debate on the future of the TUC. Even before the next round of mergers, many of the big trade unions are wondering whether they couldn't do on their own all that the TUC currently does for them. There has been constant off-the-record criticism from the big unions of the Willis regime at Congress House and several of them submitted Congress resolutions this year calling for the TUC to focus its work rather more on areas that individual unions cannot cover.

With money tight, a radical slimming-down of the TUC seems inevitable in the next eouple of years unless it can make itself indispensable in new ways. But financial pressures are not the only reason that trade unions are thinking big.


With the completion of the European internal market at the end of this year, and with the growing importance of the EC in determining the social and industrial context in which British unions operate, they are haying to develop European strategies for organisation and lobbying.

There are, naturally, divisions over tactics on the Maastricht treaty. Although the union movement is united in condemning the British Government's opt-out on the social chapter and in its enthusiasm for stronger links with continental unions, there is likely to be a big argument in Blackpool next week about whether the unions should press for ratification of Maastricht even without the social chapter (the GMB position) or whether they should oppose ratification.
In the longer term, however, the most fundamental disagreements over Europe are likely to focus on the question of how far the unions should go for a continental "works council" model of industrial relations in Britain. Some unions see works councils with legal rights to represent workers as a step forward for British trade unionism, particularly if the works councils follow the German practice of excluding management representation. (The French system is of joint worker-management works councils.) Others, particularly on the left, argue that works councils of any description would weaken union organisation and should be opposed.

It is difficult to discern which position currently has the upper hand, although there is no doubt that advocates of works councils have multiplied in the past few years as the unions' workplace strength has shrunk and the Tory Government has destroyed the last remnants of union influence in the corridors of power. The trend is likely to continue as the realisation sinks in that the April election result has ruled out the possibility for at least four years even of the partial return to corporatism promised by Labour's "National Economic Assessment".

Indeed, the outlook for the next few years of this Tory Government is bleak for the unions. The Conservative manifesto promised a raft of legislation to make life difficult and a new Employment Bill is one of the main pieces of business in the next session of Parliament.
The Bill is designed, in the words of the manifesto, to "make automatic deduction of union membership dues without written authorisation unlawful", to "give individuals greater freedom in choosing a union", to "legislate to require that all pre-strike ballots are postal and subject to independent scrutiny, and that at least seven days' notice of a strike is given after a ballot" and to give people who use public services "the right to restrain the disruption of those services by unlawful action".

What many unions fear most is the proposal to end "check-off payments of dues, although the GMB and others have long argued that this is a notoriously inefficient way of collecting subscriptions and should be replaced by a system of individual workers paying by bankers' order.

Almost as disruptive is the idea of giving individuals "greater freedom in choosing a union", by which the Government means the ending of the Bridlington Agreement among the unions not to poach members from one another.

This particularly affects the position of the non-TUC Electrical Section of the AEEU which (as the EETPU) was expelled from the TUC for poaching in 1988 and has since taken an unremittingly predatory attitude towards other unions organising in areas where it has members. The AEEU as a whole will be balloting soon on TUC affiliation and the big unions want the former EETPU back in the club. Critics of the electricians who want the former EETPU to give up its ill-gotten gains before it is allowed back are worried that a TUC without Bridlington will give the AEEU carte blanche to carry on as before.

Blackpool is likely to witness a lively debate on the question of re-admitting the electricians. Almost as spectacular will be the now annual showdown, between Arthur Scargill of the NUM and nearly everyone else, on Tory anti-union laws, with Scargill arguing for non-co-operation and the rest insisting that the Tories' legislation should be replaced with a positive framework for industrial relations legislation. As usual in recent years, however, the most interesting discussions at this TUC Congress will be the informal ones that take place in the bars and restaurants around the conference centre.

ALPHABET SOUP
AEEU: Amalgamated Engineering and Electrical Union; AEU: Amalgamated Engineering Union; APEX: Association of Professional, Executhss, Clerical and Computer Staff; ASTMS: Association of Scientific, Technical end Managerial Staffs; AUT: Association of University Teachers; BECTU: Broadcasting, Entertainment and Cinematograph and Theatre Union; BIFU: Banking, insurance and Finance Union; COHSE Confederation of Health Service Employees; CPSA: Civil and Public Services Association; CSU: Civil Service Union; EETPU: Electrical, Electronic, Telecommunication and Plumbing Union; GMWU: General and Municipal Workers' Union; GPMU: Graphical, Paper and Media Union; IPMS: Instibnion of Professionals, Managers and Specialists; IFtSF: Inland Revenue Staff Federation; MSF: Manufacturing, Science, Finance; NALGO: National and Local Government Officers Association; NAS/UWT National Association of Schoolmasters/Union of Women Teachers; NATFHE: National Associsdion of Teachers In Further and Higher Education; NCU: National Communications Union; NUCPS: National Union of Civil and Public Servants; NUM: National Union of Mineworkers; NUPE National Union of Public Employees; NUT: National Union of Teachers; RMT: National Union of Rail, Maritime and Transport Workers; STE Society of Telecom Executives; TASS: Technical, Aciministfative and Supervisory Staffs; TGWU: Transport and General Workers' Union; UCW: Union of Communication Workers; UCKIT: Union of Construction, Ailed Trades and Technicians; USDAW: Union of Shop, DIstriludive and Ailed Workers