Saving the Establishment

In 2019, after Boris Johnson had replaced the insipid Theresa May, the movement which brought about that result was unceremoniously crushed. Not, it is worth reminding ourselves, by a middle-of-the-road coalition of the sensibles, but by a populist campaign which declared that ‘austerity was not the way forward.’ Johnson fought that election on a platform of ‘levelling up’ by investing in the parts of the country he argued had been abandoned by successive governments.

This, of course, did not happen. Instead, we got a government committed to relentless culture war and immigrant bashing. But it wasn’t a traditionally Thatcherite government either, committing to an additional £150 billion in spending over the course of parliament—a reminder to the Left that state spending alone was not necessarily progressive, particularly if it was designed to enrich the vast array of outsourcers and privateers.

It remains the case, however, that Boris Johnson’s government was shaped by the same public consensus against austerity which had propelled Jeremy Corbyn to the Labour leadership and, in turn, almost delivered the 2017 election. Boris Johnson was a kind of Tory immune response to Corbynism: a populist leader who could channel widespread discontent at the establishment into a right-wing culture war and away from the possibility of genuine social change.

He defeated us and, in doing so, to steal a line from Othello, he has ‘done the State some service; they know’t.’ Boris Johnson’s departure is meant to signal a new period in British politics—one in which the populist insurgencies which have threatened to overrun the establishment in recent years are vanquished, and order is restored.

Reviving the Old Myths

One development that the establishment is particularly keen to row back is that public consensus against austerity. Since late 2021, lobbying has intensified for a campaign of cutbacks to ‘balance’ the spending increases brought about by the Covid pandemic. This clearly influenced the Tory leadership contest, which swiftly deteriorated into a battle into who could cut furthest and fastest.

The fact that the market economics behind austerity have been thoroughly debunked on their own terms by the past decade doesn’t matter. They were never really supposed to work, in the sense that they would result in rising living standards, or improved infrastructure, or lower levels of poverty, or better quality jobs. Their function was simple: to provide a mask of legitimacy to an economy in which the rich relentlessly get richer at the expense of the majority.

The ruling class never really believed the stories they told us about the economy. They never believed that trickle-down economics would benefit everyone, or that a rising tide lifts all boats, or that austerity was about ‘balancing the books,’ or that we were all in it together. These were all myths designed simply to legitimate their rule. 

We see the same today in the cost of living crisis. We are told by the government and the governor of the Bank of England that we are experiencing a ‘wage-price spiral.’ In other words, that rising prices are caused by rising wages. But how could that possibly be the case? Just last month the Office for National Statistics found that the average wage fell by the largest amount since records began.

In 2018, research by the Trades Union Congress found that Britain had experienced the longest wage stagnation since the 1800s. But you don’t need to rely on the trade union movement. Even the Financial Times has found that wages in this country would be forty-seven percent higher if they had continued their post-WW2 trajectory after the Financial Crash. That is an astronomical loss for workers.

So, there is absolutely no way that we could be in a wage-price spiral. If anything, we are experiencing the reverse: a price-wage spiral, where rising prices are forcing workers to demand wage increases merely to keep their heads above water. And that is no exaggeration—in this economic crisis the fight for a real pay rise is, for many, a fight to survive.

At the time of writing, the retail price index (RPI) stands at 11.8 percent, the highest level since the 1970s. And all the signs suggest that the crisis is only beginning. Market analysts Cornwall Insight expect the cap on energy bills to rise by a further sixty-four percent in October then take another leap in January—meaning that it would increase from £1,138 this time last year to £4,200 by 2023. 

This economic crisis will be historic. It is worth putting into context what it means. 14.5 million people were already living in poverty in Britain, according to the government’s own numbers, before this year. In March, the New Economics Foundation reported that 23.4 million people were living beneath the Minimum Income Standard, or in relative poverty. That is one-third of the country and that was when RPI was only 9 percent.

Organised Wealth, Organised Robbery

But even the price-wage spiral doesn’t accurately reflect what is happening in our economy. It doesn’t, after all, explain why prices are increasing. Part of the problem is a supply shock over energy costs, that much is clear. However, that doesn’t tell the full story. When you look at the performance of big business, you see that we are living through something quite specific: a profit-price spiral, where grotesque corporate profiteering is driving a cost of living crisis.

Recent research by the IPPR and Common Wealth think tanks show that the profits of Britain’s biggest corporations were up thirty-four percent on pre-pandemic levels by the end of 2021, running far ahead of both RPI and wage growth. So it isn’t wage restraint we need to get this crisis under control, it is profit restraint—something which no-one is allowed to call for in our media.

And the media is a big part of the problem. When it comes to the economy, it functions only to transmit the views of major corporations. That’s why there is business news in almost every major outlet but hardly ever news from a workers’ perspective. In the 1970s, there were more than fifty full-time industrial correspondents in Britain. Today, you can count them on one hand. One of the reasons the recent interventions by RMT general secretary Mick Lynch were so powerful is that workers’ voices have been systematically excluded from our media.

If we had a media which covered the economy from a workers’ perspective, it wouldn’t come as a surprise that inflation was driven by big business. Instead, it is only in alternative outlets like Tribune where this simple statement of fact can be written: in a capitalist economy, it isn’t workers who determine prices—it is businesses. They are the primary culprit when it comes to inflation.

If input costs rise, corporations don’t have to increase prices. They can choose to produce more to cover the costs. Or they can choose to limit profits, which have been running at record levels. They can choose to pay out less in dividends to shareholders. They can choose to cut executive salaries.

But they rarely choose to do any of these things. And the reason why is remarkably simple but hardly ever permitted to be said: we live in a class society in which a minority own the wealth and a majority work for them. And that minority will choose, wherever possible, to squeeze to the majority of workers in order to protect themselves. That’s how Organised Wealth operates.

The Upsurge of Labour

There is only one force on earth that Organised Wealth fears, and that is Organised Labour. For the first time in many years, that sleeping giant is beginning to awaken. In the entirety of 2017, only 33,000 workers took strike action—the lowest since records began. But this summer alone, we will see more than 200,000 workers taking strike action.

The RMT’s role in labour’s hot summer can’t be overstated. As the best organised and most willing to fight of all our trade unions, they led the way in taking 40,000 rail workers out on the largest national rail strike since at least the 1980s. The Tories clearly intended to rebuild popularity on the back of this confrontation with union ‘dinosaurs.’

Instead, they found that public opinion swung towards backing the strike the longer it went on and the more trade union leaders appeared in the media. In fact, the rail strike itself has grown—with RMT workers who had previously failed to meet the threshold for action in Govia Thameslink Railway (GTR) and thousands of ASLEF train drivers also voting to join the strike.

This has emboldened other workers across the country. Next in line in the strike wave is the CWU, who won their ballots in BT and Openreach to take 30,000 engineers and call centre workers on strike. They also won a commanding vote in Royal Mail, which means 115,000 posties will join them later this month—bringing almost the entire union onto the picket lines.

It is highly possible we will see industrial action spread to the public sector. Already this year, university staff in the UCU have undertaken prolonged action, now they are balloting again. They will be joined by teachers in the NEU and the nurses in the RCN. The firefighters in the FBU will be next, after rejecting their ‘insulting’ two percent pay offer.

Public and civil service trade union PCS has already announced that it will hold a national ballot on industrial action this September. And why wouldn’t they? Even before the circus of the Tory leadership election, the government had announced a plan to cut 91,000 civil service jobs. There could also be strikes in the NHS, with junior doctors, nurses, porters, cleaners and administrative staff all potentially taking action over years of stagnant pay and deteriorating conditions.

Unite, meanwhile, is waging a battle over wages on multiple fronts—with multiple bus and bin strikes, British Airways forced to relent after a ballot and a massive 17.5 percent pay rise secured for manufacturing workers in Cadbury. We have covered GMB disputes in the refuse sector and on buses too, along with their action at Budweiser. These have now been joined by Amazon walkouts.

A New Movement

This revival of the labour movement is the reason why the Tories are so determined to reintroduce the language of austerity. Their plan is to repeat the approach they pioneered in the wake of the 2008 Financial Crash, telling workers to take a temporary pay cut now while the economy recovers and promising that it will work out better for everyone in the long run.

But workers have seen how that played out last time. They are not minded to try it again. The problem is, too few have clear avenues to fight back. Most are not in unions and even many who are won’t be in workplaces that are well organised and capable of waging strike action. This will mean the fightback during this crisis will be uneven.

Nor will it be possible for even well-organised workers to fight price increases through pay rises alone. The sheer scale of the proposed energy price hike in October will wipe out many of the advances that have been won to date this year, and make many more workers desperate to accept whatever increases they can get to cover bills this winter.

Another danger in the months ahead is that workers are turned against each other, with the media portraying pay rises for those with decent incomes as a threat to those who are low paid, or trying to pit public and private sector workers off against each other. The need for solidarity between struggles will grow with every new picket line.

In the months ahead, we need to be clear that there are only two ways the cost of living crisis can be tackled: either workers pay for it through wage cuts and price rises, or big business pays for it through reduced profits and price caps. 

We need to build a movement that can rally people behind a set of popular demands: a real pay rise, restoring the old energy cap, an end to food poverty, a decent home for all, and proper taxes on the rich to limit their ability to monopolise society’s resources. That is the only way to unite our struggles, change the national conversation and build pressure for concessions from the government.

The months to come will be the most difficult in many years. Westminster politics isn’t coming to save us—we can only turn the tide in our workplaces and our communities.

It’s time to turn anger into action. It’s time to say ‘enough is enough.’