March for the Alternative . . . but what alternative?

It is vital that trade unions take a more active role in defining the anti-cuts movement.

The demonstration in London on 26 March was billed by the organisers, the TUC, as the "March for the Alternative". The march did, as the unions hoped, "give a voice" to those affected by the cuts and it showed that "people reject the argument that there is no alternative". What is still missing is a clear sense of what the alternative is, or might be.

The ambiguities created by the relationship between the labour movement and the Labour Party didn't help. The organisers decided not to give a platform to anyone from UK Uncut, for example, though that group has done more than anyone else to popularise an alternative to public-sector cuts. It has done this by using direct actions to focus attention on offshore finance and the large-scale tax avoidance and evasion it enables.

UK Uncut has recognised that an alternative to the cuts must be understood in terms of an alternative political economy, one in which the interests of large concentrations of capital do not trump considerations of the public good.

That this campaign group was absent from the schedule of speakers, while Ed Miliband was given a platform to present an "alternative" to the cuts that is itself a programme of cuts, highlights the problem organised labour now faces. In the past, the unions have sought to focus on issues of distribution within a capitalist economy and left the Labour Party to handle the politics – parliament was where the responsible and informed representatives of the working class would preside over a gradual, indeed sometimes imperceptible, move towards social transformation.

But once New Labour dropped even a rhetorical commitment to socialism, the trade unions' efforts to separate the political from the economic would come to seem increasingly irrational and self-destructive. One can only wonder what trade unionists thought when they heard a Labour prime minister boast in 2000 that Britain had "the most restrictive trade union laws in the western world". This is surely not what the unions had in mind when they set out on the long road to political power.

There is a choice

The Labour Party the unions created now believes that there is no alternative to a financialised economy run by privately owned, but publicly guaranteed, banks. Those who control credit must be given every encouragement and inducement and nothing can be proposed that might unnerve the financial markets.

That is the position of the leader of the opposition and his front bench. Union leaders can call on the support of the Parliamentary Labour Party as much as they like. They will not get it while the Labour Party, like the rest of the political class, remains overwhelmingly committed to the neoliberal settlement.

The vast majority of people in the country can see that there is something wrong with this settlement. They can see that Britain's industries have not flourished in the years since 1979. They can see that the public sector has not been improved by the introduction of market mechanisms.

The privatisations that were advertised as a way of introducing vigorous competition and innovation have instead created lazily piratical cartels in one sector after another. Above all, people can see that the financial sector has not used its control of credit to build viable businesses that deliver well-paid jobs to the working majority. Instead, it connived in a vast Ponzi scheme that combined the ethics of organised crime with some bewilderingly complicated mathematics, to devastating effect.

Those who belong to trade unions now have a choice. They can either remain committed to a defensive agenda, which leaves the question of political economy untouched. Or they can begin to ask what an alternative would actually look like.

The UK Uncut movement is a useful place to start. But as one begins to consider taxation, one soon becomes aware that the demand that large businesses pay more tax has profound political implications. Besides, as Ann Pettifor and others have pointed out, the debate must extend beyond taxation and expenditure to embrace the structure of the enterprise, the system of credit and the communications industry.

The British economy is in trouble. The cuts agenda will make things worse, certainly. But it isn't enough to resist them. The model of economic and social organisation adopted in 1979 has failed and will continue to fail.

Fiddling while Rome burns

As for the leaders of the trade unions, they too have a choice. They can remain committed to a narrowly wage-and-conditions agenda and pretend that they have no control over the political party that they bankroll. Or they can begin to re-create their institutions as venues for debate about the common good.

It is workers that create value – both marketable goods and the commonwealth of hospitals and schools and clean streets and safe drinking water. It is workers who must now meet and decide how best to reform matters. Parliament is not responding to the needs of the country. It is fiddling its expenses while putting on a serious expression and insisting that there is no alternative . . . and anyway, it is the other side's fault.

The trade unions have the infrastructure and the organisational ability to host this debate. It also offers them their best chance of survival. This will mean an intense period of discussion and conversation. The relationship with the Labour Party will have to be reconsidered. The role of the unions will need to be reconsidered, too.

The unions can grow and reassert themselves in the national life only if they are able to articulate an account of political economy that addresses both how we distribute private spoils and how we secure the common wealth. It must discover this account in the free conversations and deliberations of its members and it must create the institutional means to share it with the wider nation. The unions will have to go back into the publishing business and will have to stop leaving the politics to others.

If the unions accept, and attempt to negotiate with, the neoliberal settlement they will die. Because capital, aided and abetted by the Labour leadership, will kill them.

Dan Hind is the author of "The Return of the Public" (Verso, £14.99). He blogs here and is on Twitter here.

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There are risks as well as opportunities ahead for George Osborne

The Chancellor is in a tight spot, but expect his political wiles to be on full display, says Spencer Thompson.

The most significant fiscal event of this parliament will take place in late November, when the Chancellor presents the spending review setting out his plans for funding government departments over the next four years. This week, across Whitehall and up and down the country, ministers, lobbyists, advocacy groups and town halls are busily finalising their pitches ahead of Friday’s deadline for submissions to the review

It is difficult to overstate the challenge faced by the Chancellor. Under his current spending forecast and planned protections for the NHS, schools, defence and international aid spending, other areas of government will need to be cut by 16.4 per cent in real terms between 2015/16 and 2019/20. Focusing on services spending outside of protected areas, the cumulative cut will reach 26.5 per cent. Despite this, the Chancellor nonetheless has significant room for manoeuvre.

Firstly, under plans unveiled at the budget, the government intends to expand capital investment significantly in both 2018-19 and 2019-20. Over the last parliament capital spending was cut by around a quarter, but between now and 2019-20 it will grow by almost 20 per cent. How this growth in spending should be distributed across departments and between investment projects should be at the heart of the spending review.

In a paper published on Monday, we highlighted three urgent priorities for any additional capital spending: re-balancing transport investment away from London and the greater South East towards the North of England, a £2bn per year boost in public spending on housebuilding, and £1bn of extra investment per year in energy efficiency improvements for fuel-poor households.

Secondly, despite the tough fiscal environment, the Chancellor has the scope to fund a range of areas of policy in dire need of extra resources. These include social care, where rising costs at a time of falling resources are set to generate a severe funding squeeze for local government, 16-19 education, where many 6th-form and FE colleges are at risk of great financial difficulty, and funding a guaranteed paid job for young people in long-term unemployment. Our paper suggests a range of options for how to put these and other areas of policy on a sustainable funding footing.

There is a political angle to this as well. The Conservatives are keen to be seen as a party representing all working people, as shown by the "blue-collar Conservatism" agenda. In addition, the spending review offers the Conservative party the opportunity to return to ‘Compassionate Conservatism’ as a going concern.  If they are truly serious about being seen in this light, this should be reflected in a social investment agenda pursued through the spending review that promotes employment and secures a future for public services outside the NHS and schools.

This will come at a cost, however. In our paper, we show how the Chancellor could fund our package of proposed policies without increasing the pain on other areas of government, while remaining consistent with the government’s fiscal rules that require him to reach a surplus on overall government borrowing by 2019-20. We do not agree that the Government needs to reach a surplus in that year. But given this target wont be scrapped ahead of the spending review, we suggest that he should target a slightly lower surplus in 2019/20 of £7bn, with the deficit the year before being £2bn higher. In addition, we propose several revenue-raising measures in line with recent government tax policy that together would unlock an additional £5bn of resource for government departments.

Make no mistake, this will be a tough settlement for government departments and for public services. But the Chancellor does have a range of options open as he plans the upcoming spending review. Expect his reputation as a highly political Chancellor to be on full display.

Spencer Thompson is economic analyst at IPPR