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From Militant, No. 492, 29 February 1980.
Transcribed by Iain Dalton.
Marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
Andrew Glyn reviews Labour and Equality edited by Nick Bosanquet and Peter Townsend
There is a tendency among some Labour activists to argue that with the battle against the Thatcher government under way it would be divisive to rake over the experiences of the last Labour government.
This is mistaken, however, as there are vital lessons to be learnt and this book brings to the discussion a lot of information about different aspects of what happened under Labour, and a certain amount of analysis of why it happened.
A vital part of the “fundamental and irreversible shift in the balance of power and wealth in favour of working people and their families” promised by Labour’s 1974 Manifesto was to “eliminate poverty wherever it exists in Britain”, to “achieve far greater equality – in income, wealth and living standards” and to “increase social equality by giving far greater importance to full employment, housing, education and social benefits.”
These are the issues which this Fabian volume discusses in great detail. Pretty depressing it is too, of course, with the best that can be said being that the Labour government spread out the misery more equally (while presiding over an increase in the total amount).
Take the question of low pay. Between 1975 and 1977, the first two years of the Social Contract, the lowest paid did increase their pay a per cent or two in comparison with the average, but this was in the context of cuts in the average of 7–8%; so all the lower paid gained was a smaller cut! At the same time, the spending cuts reduced by one half the number of visits by wages inspectors checking on employers paying less then wages council minimums!
To its credit, the Labour government did increase the real value of pensions by 20%. This helped to reduce the number of pensioners on supplementary benefit. But nothing was done about improving the dole (which stayed at around 50% of average earnings) and the rise in unemployment helped to increase the number of people living below the official poverty line 1.4 million to 2.3 million between 1974 and 1976 (later figures are not yet available).
Although estate duty was replaced by a supposedly more effective capital transfer tax, it was still possible, as Michael Meacher shows, for parents to leave up to £150,000 to each child free of tax! In 1976 taxes on wealth contributed the princely sum of 3% of total tax revenue.
Nearly one thousand comprehensive schools were established between 1974 and 1979; but school building was cut by one half and current spending rose less than 10% in real terms so that many of these schools had inadequate facilities and staffing. The rent of the average council house fell in real terms by one quarter (in relation to average earnings); but the number of houses started by councils and housing associations fell by one third between 1975 and 1979 to a level below that achieved under the Tories.
And so it goes on. But post-mortems should explain as well as dissect. The Fabian book is particularly feeble in this respect. Peter Townsend says:
“In 1974 there was an unprecedented opportunity to develop the ‘social contract’ into a reasoned socialist manifesto. It really did seem that previous policies of wage restraint, masquerading as incomes policies, were going to be replaced by a plan to reconstruct wealth and incomes ... The collapse of the social contract ... remains one of the mysteries of recent Labour history.”
It is only a mystery, however, if you do not appreciate the depth of the economic crisis facing British capitalism, and the enormous pressure which this brought on the Labour government to abandon its policies (profits are not mentioned in the index to the book at all). Townsend’s favourite target is the Treasury, which he says bears an “enormous responsibility for the failure of the Labour government.
He goes on:
“It has adopted economic policies which have created more unemployment than was necessary. In particular its crabbed and irrational [our emphasis – AG] attitude to public expenditure has prevented the employment of thousands of people and stunted the services for the most vulnerable in society. In reducing real standards of living it failed even to confine them to those who could bear them easily ...”
But no tinkering with the machinery of government – for example his suggestion of importing more Labour supporters as advisers to ministers – will make any real difference while economic power stays in private hands. From the capitalists’ point of view, cuts in public spending are not irrational.
Paul Omerod points out that the City and business had forced the Labour government to plan for cuts in the share of government spending in the national income well before the IMF negotiations, and he calls these policies “politically motivated and misguided.”
“Misguided” they are from the point of view of the working class, of course, but that is hardly the point. At the LYPS Rally this February Tony Benn said that the 1976 spending cuts marked the end of the idea that public spending was a substitute for socialists policies. Unfortunately this traditional Fabian view obviously dies slowly in some circles.
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Last updated: 29 March 2016