Cuts in thirties Britain

The setting is the UK in the 1930s. It was hoped that depression in basic exporting industries – and, thus, working class unrest – would soon disappear and output be even with production. In short, it was hoped the UK could be more like the US, where reduction in socially necessary labour time was matched with an abundance of goods to sell on the market and where consumers consumed en masse (Fordism, not Marxism).

Instead, unemployment in Britain reached 3 million – 23% of all insured workers – in 1933 while output was commensurate with the slow and erratic recovery. There were restrictions placed on production rather than a more desirable reduction of costs, tariffs and cartels for fear of over-production, and a country pulling its hair out.

An economy assisted by the state became very appealing to members of parliament on both sides of the house. Harold Macmillan – then a backbench Tory MP – remarked of the mood in the thirties: “the structure of capitalist society in its old form had broken down, not only in Britain but all over Europe and even in the US”.

No, he wasn’t advocating socialism, but he, like so many then, and so many today, did feel that in order for capitalism to remain, it must be helped out by a very visible hand. I’ll no doubt have my knuckles slapped for this, but Marx was right when he asserted capitalism would come to destroy itself; perhaps what he didn’t anticipate was that government would periodically come to its rescue.

The tendency of British investors to export capital into the colonies meant that many industrial plants in this country were left to dry; much the same argument can be said about manufacturing now as it could both in the seventies and the thirties – basic industries were not moving fast enough to maintain pace with the rest of the world. As such, manufacturing was left lacking while Japan, Germany and the US reaped all market rewards.

Even when production saw a recovery in 1934, unemployment remained relatively high to the extent that one in every eight people able to work could not.

This was a reality for the high skilled too, not to mention the so-called middle class. Noreen Branson and Margot Heinemann in their book Britain in the Nineteen Thirties point out the rise of the Middle Class in the mid-thirties was, strictly speaking, the increase of clerical, technical and administrative jobs, still affected by unemployment and of comparable wages to more traditional skilled labour.

Nobody can deny it is to the credit of trade unions at the time that real wages remained pretty steady after the crisis prior to the 1930s. Employers were simply unable to make wage cuts in line with the fall in prices – it would have been poison. Much like Britain of the seventies, the streets could be awash with concerned peoples at the drop of hat. On 21 September 1931, striking teachers caused the government to retreat on reducing wages in the public sector, and admit certain “classes of persons” were unfairly affected, while everybody was “in this together” to quote that familiar phrase.

Surprisingly for the government at the time, action had been taken by the Royal Navy after having their wages cut from 4s to 3s. Whitehall realised the error of their ways, backtracked, and further strike action called off on the promise no pay cut exceeded 10%, with no victimisation.

The latter promise was subsequently broken when 36 ringleaders were sacked and the Incitement to Dissatisfaction Act was later realised, with the aim of curbing subversive influences in the armed forces. In spite of this, however, the affair had a lasting effect on the working class movement who used it as proof of industrial action effectiveness.

The unfortunate grouping at the time were the unemployed. They were promised cut to benefit would not exceed 10%, though according to Branson and Heinemann it was more in the region of 20%. In June 1931 the Royal Commission advocated heavy reductions to benefit payments in their interim report (it was from this report too that a reduction in real wages was floated – in spite of unsettled opinion on it. The Macmillan report of July, which advocated this position on wages, even had as signatories Sir T. Allen of the cooperative movement and Ernest Bevin of the TGWU/TUC). It wasn’t until November 1933 that the Unemployment Bill, Part II restored the standard 10% cut in benefit.

Worse still, agricultural workers and domestic servants who lost their jobs were entirely excluded from benefit and would have to apply to the local Poor Law Authority – making times extremely tough had they no other means of securing money.

The cuts at the time were carried out so as to save the pound from collapsing, and as per usual everybody was in it together. Though, of course, some more than others. Strike action was the method of choice for keeping the government to check on the fairness of cuts, and indeed they were forced on some occasions to revise their sums and admit they had come down over-zealously on some over others.

It’s early days yet, but who can say what will happen in the future when people start to question the legitimacy and fairness of the cuts set by today’s coalition government.

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0.8% growth Q3 still needs to be viewed with caution

Unfortunately, today’s growth figures act as a Rorschach test; the coalition government and its supporters see growth at 0.8% in the third quarter of 2010, and growth for the last six months at 2%. What the opposition will see is a drop of 0.4% when between April and June growth was positioned at 1.2%.

Since growth was forecasted far lower than expected, many – such as Vince Cable, who was said to have a big smile on his face this morning, possibly after finding out the data – are probably just pleased to see a higher figure, not because it is necessarily a good sign for the economy, but simply because it will make for easy smoke and mirrors. Look we can cut and grow, it’s easy.

Others may note that the worst of the cuts have not been factored into the figures yet. It’s important to note that cuts will have been factored in already; the squeeze for many councils started a while ago, redundancies are a reality now, and small and medium businesses (SMEs) are already checking their books with a grimace.

Construction was the real winner with contributions of 4% (p. 3), compared with an increase of 9.5% in the previous quarter, and 11% since Q3 2009 and Q3 2010.

Read in a certain way, today’s figures will prove politically opportune for the Tory/Lib Dem government, which may set back Labour’s current lead in the polls. But it is not mere politicking to point out that the severity of the cuts, spelt out in the CSR last week, have not been entirely factored in, and that growth really needs to be sustained and sustainable.

There is even tension within the government about the road to growth. Vince Cable has recently slammed David Cameron’s optimism, saying that the “sunlit uplands” strategy will not necessarily be the case. If he has any sense about him, Cable’s supposed smile this morning will be matched by caution.

In Cameron’s “new economic dynaims” vision, he wants to “make sure we have a banking sector that is really focused on small business lending … rather than the banks thinking how [they] can become bigger and bigger investment banks.”

Cameron hopes to get those banks which the government has a stakeholder share of, to start lending again and fuelling a private sector revolution.

According to a recent NEF report entitled Where did our money go? the 2009 budget noted that RBS needed to lend an additional £25bn (£9bn – mortgage / £16bn – business); Lloyds an additional £14bn (£3bn – mortgage / £11bn – business); Northern Rock an additional £5bn in 2009 / £3-9bn from 2010 onwards.

After the bailout, there was disappointment that the banks were increasing the bonus pot without actually kickstarting small businesses with money. In an ongoing discussion I had with an acquaintance, I was reminded that the bailout was paid in order to cover liabilities at the time, but the reason behind doing so, and not allowing them to fail, was so they could start lending again – for this is the reason why those banks are too big to fail.

Opposing cuts: the need for strategy

Sunny Hundal today talks about the need for a strategic approach to opposing the cuts agenda, one that isn’t simply preaching to the converted, or the left talking among themselves.

I rather agree. So I put forward my own suggestions.

First of all we have to ask whether the cuts programme is fair and necessary. Answers to both I feel are no, and are backed up by fantastic polemics laid out by compass and Nick Isles on, among other things, the real nature of “capital flight”.

Second of all we must ask is opposition to the way in which the cuts programme has been meted out a solely left wing issue. The answer of which is: no of course not; this isn’t merely political tennis, these are issues affecting the lives of people who perhaps have no interest in political factions.

Third: should we allow the “usual suspects” of the left wing, trade union activists and leftist fringe parties for example, to voice their opinion, and to help appeal to a popular audience by engaging in a left narrative? Definitely, though if we are to make it a popular narrative, not simply a left wing one, appealing those people assumed in my second point, it cannot be too dogmatic, which is why I both share Sunny’s concern about certain trade union plans, but hope also that trade unions will work to counter the cuts agenda.

Fourth and last: Can we expect to build a movement that has one commonality – that of an anti-cuts agenda? Not necessarily, and this is neither doomy nor impossible, but a movement cannot be predicated on what it is not alone, it has to assert ideas into how it will produce, not simply counteract. This will be tricky (and always has been for the left since the peasants revolt, to the Spanish civil War through to opposition over the Iraq war) without having a narrative and will require some thinking.

Providing that the movement is not too evangelicising to begin with, it will not simply preach to the converted, it will ask questions as to why the agenda for cuts has been carried out so disproportionately for working and struggling middle class families. It will be a popular movement, but it will have a left wing backbone too, and though this latter point should not be forgotten, it ought to be remembered throughout how off-putting it can be if the politics sounds too preachy.

The Tory cut narrative vacuum

George Parker of the FT says today:

George Osborne, the chancellor of the exchequer, has ordered most ministers to carry out the most fundamental review of public spending seen in Britain for a generation, including options for departmental budget cuts of up to 40 per cent.

Perhaps I’m missing something, but the Tories are not defining what waste is, they are not telling council leaders how to cut between 25 and 40 per cent, they are just identifying waste as something to be gotten rid of, for the sake of oncoming and harsh austerity measures.

Now, it’s not likely that I’m going to agree with how they define waste, but this so far is only judged by some of the non departmental bodies they have cut, which I wouldn’t have necessarily seen as wasteful, sharing the opinion of Chris Keates, general secretary of the NASUWT, who said recently :

“The seemingly arbitrary way in which the QCDA and other bodies are being culled without any critical analysis of the impact of removing these functions is not acceptable.

“To put staff at the QCDA on notice of dismissal before the legislation to remove their function has been considered by Parliament is an arrogant and reckless way to conduct Government business.

“The decision is not supported by any detail of how core functions undertaken by the QCDA will be carried out in future and at what cost.”

These cuts to funding show the same level of thinking than do saying to council leaders you get on with it.

Of course what the Tories will say is this is an expression of their trust for local leaders, and my goodness do they want that, when you think how much pressure will be put on local workers set to lose their jobs expressing dismay at the Tories’ budget package.

The Tories don’t appear to have cut on the basis of waste alone, VAT rises seem ideological, they haven’t signed up to any local spending programme such as Total Place to show some method to their madness, but they do look like they are passing the buck to councils themselves.

The choice of choosing between 25 and 40 per cent cuts seems like being shown a table full knives for which one can choose from to stab out ones own eyes.

Lets not skirt about, Tory austerity measures will be laden with ideology, the emergency budget demonstrated that, but yet ways in which to cut waste from local budgets is met with a central vacuum. No matter how dishonest, I wish the Tories would stick with a narrative already.

(I have started using the Tories where I should be using Tory/Lib Dem coalition government quite naturally now, funny that).

What if the Coalition succeeds?

In June 2009 Nick Cohen scared us into thinking that:

the shattered Brown administration, whose manifest failings could destroy Labour’s chances of winning another election – maybe forever, if the Liberal Democrats and Greens take over what remains of the centre-left.

Luckily enough the Liberal Democrats and the Greens did not take over what remains on the centre-left, instead the Liberal Democrats stepped into the home of the centre-right.

Some people have pointed out that this coalition might be good for the left; that the social democrat vote will no longer be split between MPs of two parties who claim to sometimes wear that badge and that the left therefore can reposition itself and expose a coalition of its cracks while being ready to pounce in time for the next election, which will inevitably be in a year a two.

Although the worst, and least considered, outcome that could happen is probably the most likely; that the coalition is durable and goes on to remain the set up until 2015.

John McDonnell, on the Radio 4 programme Any Questions? has said that overall the coalition will do both parties involved some good; for the Tories, he argues, it should keep at bay the right wing, for the Liberal Democrats, it should keep at bay the left wing. A sensible case that rings quite true.

Coalition compromises are being made to appease left, right and centre. And look at the agreed negotiations on civil liberties for example. Though it’s part of an oppositions’ political duty to exploit the cracks in the incumbent (something the Labour party has the privilege of engaging in again after 13 years), the most pressing issue to address is what to do if, when a so-called “orange booker” meets a compassionate conservative, they actually meet head on.

Of course there will be cracks, and this has no more been shown in the last week by the tense relationship between George Osborne, the Chancellor of the Exchequer, and Vince Cable, the Business Secretary. On the same day as the Clegg/Cameron press release Vince Cable was awaiting confirmation of the equal patch he will have with George Osborne as chair of the committee in charge of banks, only to find that those were not the plans at all.

Osborne’s sources were quick to brush the incident aside by saying there had been some confusion on the matter, but it is clear why Osborne would want to keep Cable at arms length from controlling reform of banking. Our new Chancellor finds some of Cable’s tough plans for banks dubious, such as his measures to encourage banks to lend more.

In spite of crucial differences in the week Cable has not kicked up a fuss, in fact, as Will Hutton points out in, he has gracefully accepted now his role as deputy of the key cabinet sub-committee and has agreed to jointly chair the commission in charge of decisions on how banks should be broken up as well as overseeing bank competition, consumer protection and the lending targets.

Addressing the class similarities Nick Cohen last week in the Observer has stated of the coalition that:

Far from adding grit to an administration dominated by the children of the rich, [the Liberal Democrats have] toffed it up and raised the average cabinet member’s net worth by tens of thousands of pounds.

It is what Cohen identifies here which will be the real challenge for the left; countering the unrepresentative make-up of the government as it is today, and the similarities of the coalition, not the differences. For this reason the left should hold back basing their attack on the coalition as one which is destined to fail, one where the differences are too drastic, just in case this is totally, and worryingly, misjudged.

Prison ships: Float your boat?

Prison hulks, the last of which the government sold in 2005 owing to lack of fresh air and lack of promotion of exercise, are the new in-thing for (half of the) Tories. The idea, said to be floated by that timely wonderboy Andy Coulson, or so some Conservatives are saying.

The Tories in support, seeing it as a way of to fulfill David Cameron’s statement on the shortage of prison space, want to raise dosh for the so-called nautical nicks. But appointing places for such an arrangement will be met with much antagonism, especially or those places said to be fit for the hulks. Tilbury, in Essex, is said to be one of those target places. Labour councillor Carl Morris, who is hoping to replace Andrew Mackinlay, noted that “We successfully fought these stupid ideas in both 2004 and 2006. In the first instance I think the ship was even brought to the Thames but never used.”

Frances Crook of the The Howard League  for Penal Reform, noted that Alan Duncan spoke at a seminar in Oxford last week floating (!) rather “colourful” language about what the Tories will do about overcrowding etc., but urged readers of her blog not to conflate this with support from the front bench.

The prison boat “practice was popular with the British government in the 18th and 19th centuries” and we were evidently good at sinking Nazi prisoner boats, but as for investing once again, I’m not convinced.

Another vague notice is the “target” areas that will have prisons closed in order to fund the boats. Where they? Personally, I don’t think Cam will have it, and the idea is supposed to be one of many just being thrown out there, probably just hype. I might not even write a blog post about it.

Tristram Hunt, Karl Marx and the pregnant Maid

I don’t know how to take Tristram Hunt’s comment on marriage and the left today. He notes Marx and Engel’s aversion to the bourgeios institution of marriage as a hinderance to labour freedom and as a reiteration of the Master/Slave dichotamy. But he concludes that they can’t have thought it was all that bad:

Karl Marx remained happily wedded to Jenny von Westphalen for 40 years. And even Engels the great Bohemian granted his partner Lizzy Burns her final wish with a death-bed marriage. Clearly, there was more to the family form than private gain.

Though is this a concealed knock at marriage anyway? He’s no idiot, is our Tristram, on the subject of Marx and Engels, we know this because of the book he has written recently on the subject of Engels – a subject mysteriously left out hitherto. In one review of Hunt’s book, criticism that the book was a “hatchet job” claims:

 Tristram Hunt repeats the canard that Marx fathered a baby with Helene Demuth (the Marxes’ maid-housekeeper, and later Engels’ maid-housekeeper). This unsubstantiated rumour was put in motion by Louise Freyberger (first wife of Karl Kautsky) in 1898 once everyone concerned (Engels, Marx and Helen) was safely dead and unable to refute it. The rumour gained a purchase with some bourgeois historians who wanted to reinvent the hen-pecked Marx as something more akin to Che Guevera. Tristram Hunt uses it to blacken Marx as a Deadbeat Dad (not a good 21st century image).

The rumour is little more than hot air, as Francis Wheen has shown in his biography of Marx, but here the illustration is to show that Hunt has used the rumour in his book, and has not attempted to question its legitimacy. So, if he knows, and buys into this rumour, what does this now reveal about the conclusion of his article? Is it a wry commentary fit for the hermeneuticians?