Alex Snowdon on the impending economic crisis and Blairism’s place in history

The crisis that arises from coronavirus is entering a new phase in this country. The first phase, beginning in March, revolved around the numerous public health issues linked to the pandemic: introducing lockdown, the provision of PPE, the need for mass testing and tracing, NHS underfunding, etc.

This morphed into the second phase in May. This was when the questions around lifting the lockdown became central to political debate. This found a particular focus in the contentious issue of wider school re-opening on 1st June, but that reflected a wider conflict over safe returning to work and ‘re-starting the economy’.

The third phase involves the economic crisis becoming the main focus.  This does not mean, I should add, that the public health crisis is resolved. After an estimated toll of over 60,000 deaths, there are widespread concerns about a ‘second wave’ this winter.

More immediately a number of European countries are currently experiencing a spike in new infections and having to re-establish some lockdown measures, at least at the local level. This is sharpest in Spain, but France, Germany and Belgium are all seeing at least some resurgence. In England the virus has never been suppressed to the level that almost all other European countries managed.

The economic crisis has been deferred for some time, but it comes out of everything else that has happened since March. The massive drop in economic activity and output happened during the peak lockdown period of late March, April and May. But the knock-on effects have been largely postponed by massive state intervention, in particular through the furloughing scheme, so that only now are we moving into a really severe situation for millions of working class people’s jobs and livelihoods. An established slump in economic activity, with a slower-than-expected recovery since retail reopening in mid-June, is now set to make a big and immediate impact on millions of people.

This is not to suggest there have not already been economic problems. For example, those who were furloughed on 80% of pay have been struggling on substantially less pay – and many of those people are already low-paid. Some people have already lost their jobs.

Nonetheless we are about to see a turn for the worse. Although furloughing is officially in place until 31 October, the onus for covering staff costs will shift to employers from next weekend onwards. It is forecast that hundreds of thousands of jobs will immediately go when that happens, likely to be followed by many more in the months ahead.

Many employers have already decided that jobs will have to go. In sectors like catering, hospitality, culture, tourism and entertainment the picture is extremely bleak. These sectors are struggling to get going again, as people are still justifiably wary of returning to their old lifestyles and habits.

The government’s poor handling of ending the lockdown has in some ways made matters worse economically. Lifting restrictions too early has made it harder to suppress the virus, hence the public caution about going out again and spending money in pubs, restaurants and so on. Falling public trust in government information is a big part of this. That is rooted in repeated government failures.

Under-employment and insecure work have been problems for a long time, but we haven’t had mass unemployment since the first half of the 1990s. It is about to make a comeback. It is thought that those in low-paid jobs and precarious work will be especially badly hit. They will be desperately trying to find work in an extremely grim jobs market.

In addition to unemployment, we can expect attempts to cut pay for many workers. Unemployment has traditionally been a convenient weapon for attacking pay. Fear of the dole can make workers more willing to accept the erosion of pay and conditions. There is also the threat of a new round of austerity.

Stopping the jobs massacre and preventing a plunge into poverty, whether for those made unemployed or for some of those in work, will require large-scale solutions. That means bringing areas of private business into public control, cancelling debts, proactive job creation by the state, properly funded mass childcare, and new wealth taxes.

These are solutions unlikely to be countenanced by the Tories, It will fall to trade unions and social movements, such as the People’s Assembly, to champion them. We will need to rapidly strengthen the unions and build the combativity and confidence of trade unionists to take action, as well as campaigning on the streets and in communities, to force a radical break from a failed status quo.

Sadly, Labour (‘under new management’) is little better than Johnson’s government. There are still some illusions in Starmer’s Labour on the left, but these have been further eroded by the events of the last week. We are becoming accustomed to the absence of real opposition to the government and the failure to articulate the kind of demands I’ve referred to.

But the decision by Keir Starmer to settle with the so-called whistleblowers is really sickening. These are some of the mostly Blairite officials who were referred to in a leaked 850-page Labour Party report earlier this year. The report suggested that they were complicit in allegedly sabotaging Labour’s efforts to deal with antisemitism complaints. Starmer should be challenging the narrative they have been peddling, not acquiescing in it.

This indicates the leadership’s willingness to trash the reputations of Jeremy Corbyn and those who supported him. It speaks volumes about the determination to smash the left. We should not underestimate how bad things are going to get in Labour.

New Labour: never forget  

Two new documentaries (both currently available on BBC iPlayer) have reminded me of something we are collectively at risk of forgetting: just how awful New Labour was.

The first part of ‘The Rise of the Murdoch Dynasty’ reminded us of how utterly craven the Blair administration was towards the Murdoch empire – and how corrosive that was. In fact Blair and his coterie were desperate to appease Murdoch even before taking office in 1997. The other series is the immensely powerful and hard-hitting ‘Once Upon a Time in Iraq’, which must leave any viewer with no doubts that the 2003 invasion of Iraq was a terrible and unjustifiable catastrophe.

The first Murdoch episode brought back the sheer venality of the relationship between New Labour and the media. Murdoch has only ever really cared about his own business interests. His concern was with getting government policy that would be highly favourable to those interests. The Blairite clique – represented in the programme by Alastair Campbell, who was interviewed for it – was desperate to get favourable media coverage. This is typical, if in rather extreme form, of the relationship between the political class and big corporate interests during the neoliberal era.

It had an added dimension, though, because of the highly ideological role played by the media in our society. Murdoch is immensely powerful, not merely as a corporate boss but as someone who shapes ideas through his media empire.

One example highlighted strongly in the programme was his ardent support for the war in Iraq, communicated via the editorial line and coverage in his newspapers globally. This is thought to have been a major form of pro-war pressure on the Blair government. The utterly unaccountable and undemocratic power of his media were a counterweight to the mass anti-war demonstrations and growing anti-war public feeling. It was mentioned that Blair supposedly consulted Murdoch, during those crucial days leading up to the invasion, as much as he liaised with his own foreign and defence secretaries.

That connects the Murdoch series with ‘Once Upon a Time in Iraq’, a series that almost entirely avoids the overtly political level – whether that be the politicians responsible for going to war or the anti-war movement that, on a huge scale, contested their disastrous decisions. Its focus is instead on the human stories of those caught up in Iraq’s hellish descent from 2003 through to the ISIS Caliphate – Iraqi citizens, soldiers, journalists – with lots of relevant context.

The horrors of invasion, state collapse and chaos, insurgency and counter-insurgency, occupation and finally the rise of ISIS are conveyed through sometimes shocking personal testimony and archive film footage. Although not directly engaged with the elite political decision-making, whether in Washington or London, the series leaves viewers in no doubt that Iraq’s many disasters should be traced back largely to the 2003 invasion. The numerous different perspectives and the catalogue of disasters add up to a devastating indictment of those responsible for the war.

The entire series constitutes a vindication of all those who tried to stop the war from happening. And it certainly provides no support for those in Labour who are keen to destroy Corbyn’s efforts to make Labour an anti-war party.