The attack on public sector pay continues with Brown imposing the worst pay settlement on the sector for a decade. More than one million workers were offered average increases of 1.9%, (though for some the increase will only be 1.5%) in April with the balance worth up to 2.5% coming in November. With inflation currently running over 4% and rising, the cuts will, as ever, hit the poorest workers hardest. Despite Labour’s promises to bolster the NHS, nurses will not be offered above 1.9% and junior doctors 2.2%. Members of the armed forces though will get an average of 3.3% in full from April, an indication of where Labour’s priorities really lie.

End poverty now?

This is Gordon Brown’s legacy as Chancellor, the overseer of a low wage, low pension economy bolstered by cheap illegal labour (with many immigrants in Britain working in appalling conditions for very low wages) and helped by an international fall in prices due to the increase in manufactured imports from China, produced by some of the most exploited workers on the planet. This all makes Brown’s grandiose pledges to end global poverty ring a little hollow. The truth is that capitalism creates and thrives on the poverty of workers and its internal logic means it needs to reduce ever increasing numbers of the working class to absolute poverty in order to bolster its declining profit rates. As the economic crisis worsens across the planet, so too does the misery it brings.

Brown: overseer of a strong economy?

The extent of the attack on the public sector shows that the British economy is not as strong as Brown would have us think. As he exits from the Chancellor’s post the current consumer price index is at 2.7% and the retail price index is 4.2%, while income from corporation tax was, as the FT delicately put it “disappointing”. Brown looks set to miss his borrowing forecasts for the seventh year running in the Budget, raising questions about long-term stabilitiy. So far the financial flows have cushioned the UK economy from the knocks of trade deficits. The UK was the biggest receiver of inward investment in 2006 ⁽¹⁾ and the third biggest overseas investor, but as the global crisis intensifies Brown’s options for balancing the budget shrink. And because he is staging the wage settlement, deferring the increases above 1.5% for health workers, the judiciary and civil servants, he is artificially holding down the pay bill for half of the year, which means the next chancellor will have to pull the same trick or face a higher pay bill than next year’s published settlement. The inevitable result, behind all the smoke and mirrors, will be poverty wages for thousands of workers. Of course the mantra is that higher wages lead to higher inflation. It’s odd this wasn’t a consideration when multi-million pound city bonuses were being handed out like confetti. Cutting the wages of public sector workers will save the Treasury £200 millions per annum but with inflation at a ten-year high and a trade deficit the biggest since 1997 at $5.5 billions, more attacks lie ahead.

The union response

Attacks on public sector workers have been going on for years, with cuts in jobs, wages, attacks on pensions and plans for privatisation. The PCS, led by Mark Serwotka, was slow to respond but eventually organised a strike in 2005 when 1.2 million workers were due to walk out in protest at Government attacks. It was called off at the eleventh hour so as not to damage the Labour party on the eve of a general election. The one-day strike in January hardly hit the headlines and the one-day walk out on May Day, followed by a two-week overtime ban had much the same effect. The PCS, like all other unions, did not pay its members strike pay during the strikes it called, so the net result for most people has been the loss of a days wage and a load of work to catch up on. In other ways too the PCS has behaved like a typical union: it conducts its negotiations behind closed doors away from its members and it protects the industry it operates in first and foremost. It ensures that disputes are kept to a minimum and always within the rules. In short, its job is to ensure the smooth running of relations, keep any struggle in check and persuade its members ultimately to accept the increasingly bizarre and unpalatable logic of capitalism.

The fightback

As long as the union controls the situation, workers will be vulnerable to increasing attacks by the Government and by their immediate employers. Leaving any kind of organisation to the union, no matter how militant it’s rhetoric, means giving away all power and any chance of success. The most the PCS will come up with is a compromise suitable to the Government which will inevitably mean wage cuts and job losses. It’s only a matter of time before Serwotka tries to make workers “see sense and be realistic”, in other words roll over and take a beating. The truth is that unions divide workers and isolate them. They stand in the way of any real solidarity with other sections of the class and fragment any real fightback. If public sector workers have any chance of fighting their corner they will have to find a way of working outside the control of their unions by setting up open and genuinely democratic mass meetings to decide what steps to take and how best to link up with other workers in a similar position. As long as the unions control the situation workers will remain divided sector by sector and all areas of disagreements will be split up so that each issue is fought over separately. One-day strikes never lead to victory, only to a bigger overdraft. Public sector workers have shown they have the stomach to fight, but their real power will only kick in when they free themselves from the rules of their unions and start the fightback themselves.

(1) See text on “Tata takeover of Corus” for further details of this inward investment.