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.

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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.

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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.

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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.