Seumas Milne's Blog, page 11

In Ukraine, fascists, oligarchs and western expansion are at the heart of the crisis

The story we're told about the protests gripping Kiev bears only the sketchiest relationship with reality

We've been here before. For the past couple of months street protests in Ukraine have been played out through the western media according to a well-rehearsed script. Pro-democracy campaigners are battling an authoritarian government. The demonstrators are demanding the right to be part of the European Union. But Russia's president Vladimir Putin has vetoed their chance of freedom and prosperity.

It's a story we've heard in one form or another again and again not least in Ukraine's western-backed Orange revolution a decade ago. But it bears only the sketchiest relationship to reality. EU membership has never been and very likely never will be on offer to Ukraine. As in Egypt last year, the president that the protesters want to force out was elected in a poll judged fair by international observers. And many of those on the streets aren't very keen on democracy at all.

We need a counterweight to City and corporate power

Any further weakening of Labour's links with the unions will only deepen the crisis of representation in the political system

Our political system is increasingly in the grip of corrupt corporate power. Whether it's the food industry dictating public health policy, school academy chains stuffing the pockets of directors' relatives, or the revolving-door appointments of politicians and civil servants to companies they previously favoured with contracts, it's the banks and corporations that call the shots in Whitehall and Westminster.

Most of David Cameron's Conservative party funding comes from the City. Former New Labour ministers, such as Alan Milburn the ex-health secretary advising a venture capital firm involved in NHS privatisation, as well as both government and opposition have won lucrative private sector contracts on the back of their years in office.

A 'pause' in centuries of British wars is not enough

Britain's record of continuous conflict has no parallel. Now the elite is panicking that they can't get away with it any more

The generals are beside themselves, Whitehall's in a panic. After generations of continuous warfare, the British public has had enough. They're war-weary, the mandarins fret, and believe the occupations of Iraq and Afghanistan have been bloody failures.

Worse, multicultural Britain is increasingly hostile to troops marching into countries from which British citizens or their families came, defence ministry officials complain, especially as one war after another has been waged in the Muslim world.

Climate change deniers have grasped that markets can't fix the climate

The refusal to accept global warming is driven by corporate interests and the fear of what it will cost to try to stop it

It's an unmistakable taste of things to come. The floods that have deluged Britain may be small beer on a global scale. Compared with the cyclone that killed thousands in the Philippines last autumn, the deadly inundations in Brazil or the destruction of agricultural land and hunger in Africa, the south of England has got off lightly.

But the message has started to get through. This is exactly the kind of disaster predicted to become ever more frequent and extreme as greenhouse gas-driven climate change heats up the planet at a potentially catastrophic rate. And it's exposed the David Cameron who wanted to "get rid of all the green crap" and who slashed flood defence spending by £100m a year as weak and reckless to his own supporters.

The clash in Crimea is the fruit of western expansion

The external struggle to dominate Ukraine has put fascists in power and brought the country to the brink of conflict

Diplomatic pronouncements are renowned for hypocrisy and double standards. But western denunciations of Russian intervention in Crimea have reached new depths of self parody. The so far bloodless incursion is an "incredible act of aggression", US secretary of state John Kerry declared. In the 21st century you just don't invade countries on a "completely trumped-up pretext", he insisted, as US allies agreed that it had been an unacceptable breach of international law, for which there will be "costs".

That the states which launched the greatest act of unprovoked aggression in modern history on a trumped-up pretext against Iraq, in an illegal war now estimated to have killed 500,000, along with the invasion of Afghanistan, bloody regime change in Libya, and the killing of thousands in drone attacks on Pakistan, Yemen and Somalia, all without UN authorisation should make such claims is beyond absurdity.

Now we see what was really at stake in the miners' strike

Thirty years on, the costs of the gutting of trade unions are obvious. That's why demonising Bob Crow was a failure

As a rule, the most effective trade unionists have to die before the mainstream media and politicians will say anything decent about them. That's certainly what has happened to the rail and seafarers' leader Bob Crow.

Instead of the industrial dinosaur, political throwback and strike-happy hypocrite demonised for more than a decade, it now turns out that Crow was in fact a modern and effective workplace champion. The scourge of the London commuter didn't just drive up rail workers' living standards, we are told, but fought successfully for low-paid contract cleaners into the bargain.

Budget 2014: George Osborne's record is a dismal failure even in his own terms

The chancellor's claim to be 'winning' is bizarre. He has presided over the longest fall in living standards since the 1870s

Most budgets have little impact on either the economy or most people's lives, and are soon forgotten. Ministers love them, of course, because they provide an unmatched opportunity to parade in front of the cameras and dominate the news for days on end. Titbits are leaked in advance to a pliant media, as a vision of economic plenty and technocratic cunning is conjured up in what amounts to a glorified government spinfest.

Marginal changes to duty on this or that, far outweighed in real life by day-to-day corporate decision-making, are heralded as acts of high drama, while economic forecasts revealed every year to be as good as worthless are hailed as the work of prophecy. So it was yesterday, as George Osborne threw off the burden of his omnishambles budget, to claim the mantle of fiscal triumph.

Budget 2014: George Osborne's record is a dismal failure even in his own terms | Seumas Milne

The chancellor's claim to be 'winning' is bizarre. He has presided over the longest fall in living standards since the 1870s

Most budgets have little impact on either the economy or most people's lives, and are soon forgotten. Ministers love them, of course, because they provide an unmatched opportunity to parade in front of the cameras and dominate the news for days on end. Titbits are leaked in advance to a pliant media, as a vision of economic plenty and technocratic cunning is conjured up in what amounts to a glorified government spinfest.

Marginal changes to duty on this or that, far outweighed in real life by day-to-day corporate decision-making, are heralded as acts of high drama, while economic forecasts revealed every year to be as good as worthless are hailed as the work of prophecy. So it was yesterday, as George Osborne threw off the burden of his omnishambles budget, to claim the mantle of fiscal triumph.

"We have won," the chancellor has been telling "friends" in private, his fists clenched in victory, as he manoeuvres to see off the threat from Boris Johnson to his hopes of becoming the next leader of the Tory party. But even on the basis of the notoriously unreliable projections from the Office for Budget Responsibility, it's difficult to work out why.

Any sort of growth, it seems, along with the prospect that the British economy might this year return to the size it was six years ago, is now enough to count as a political breakthrough. As living standards continue to fall for the majority in the slowest and shallowest economic recovery for over a century, it's hard to see that being accepted as a "win" across most of country.

Even by their own yardsticks, Osborne and David Cameron have failed abysmally. Whether it's the debt and the deficit, borrowing, growth, or the "rebalancing" of the economy away from finance, personal credit and the south-east, the pair have not even come close to meeting their own targets. This is a "long-term plan" that has already flopped.

Osborne promised to have slashed the deficit from £149bn to £60bn by now. Instead it's expected to be £108bn, and he's now planning to cut another £62bn to meet his original target – two years later than promised. The single most important reason was that the coalition choked off the recovery under way in 2010 with a savage programme of austerity that delivered a double-dip recession and three years of stagnation.

The chancellor has since been trying to get round the impact of his own calamitous "fiscal consolidation" – £210bn of lost output and every household an average £2,000 poorer as a result – by pumping cash into the financial sector and subsidising mortgages, deepening the very "imbalances" that made the crisis so deep in Britain in the first place. Osborne and Cameron rightly damn New Labour's failure to regulate the City – as well as the "bad luck" of the eurozone crisis for knocking them off course.

But both Conservatives and Liberal Democrats also backed the disastrous "light-touch regulation" of finance (along with Gordon Brown's spending plans before the crash), while the eurozone was turned into a basket case by the very same insistence on cutting during a slump that has done such damage in Britain.

Not that austerity has been a disaster for everyone, of course. Corporate earnings have soared and inequality has widened still further as benefit cuts bite and foodbanks multiply. Coalition politicians boast that employment has never been higher. But four out of five jobs created under Osborne have been in sectors where average wages are less than a quarter of average earnings. Just under 80% are in London and most are involuntary part-time, zero hours or enforced self-employed: the flexible labour market in action.

That's one reason real earnings have fallen continuously for four years, the longest decline in living standards since the 1870s. Behind that lies the slump in British productivity. While the productivity of other advanced economies has bounced back since the crash, Britain's has stagnated as employers have switched to low-wage, low-skilled labour, rather than invest to raise output and efficiency.

That failure to invest is what lies behind the "productivity puzzle", the fall in real wages and the feebleness of Osborne's much acclaimed recovery. Low investment has long been the Achilles heel of the British economy, running far behind other comparable economies. But the collapse in private-sector investment has been by far the greatest factor in the crisis of the past six years and is still 15% down in real terms.

Meanwhile, UK corporations are sitting on a £750bn cash mountain, while paying out a record £65bn in shareholder dividends last year. Small- and medium-sized businesses still face a credit squeeze seven years after the start of the crisis, and public investment is down 35% on pre-crash levels.

Unless that changes – and the evidence of the past couple of years is that increased investment allowances and corporate tax pampering certainly won't do the trick – the prospects for a sustainable recovery in the economy and living standards are zero. Osborne is banking on increased household borrowing and pumped-up house prices – as well as tying the crash round Labour's neck – to get the Tories through the election.

That's what today's budget was really about: support for better-off pensioners and savers to solidify the Tory vote against the threat from Ukip, and the skewing of tax allowance rises to ensure that the greatest benefit goes to higher rate taxpayers. Whether that will be enough to get round the fact that most people's living standards are still falling seems doubtful. Real wages are now expected finally to pick up before the election. But if housing costs are included, the latest forecasts don't expect real earnings to return to pre-crash levels until 2018-19.

That's a measure of how dismal the coalition's economic record really is. The scale of investment needed to turn the economy round – in infrastructure, social housing, supply chains and the green economy – is going to demand large-scale public intervention and regulation if the private sector continues to sit on its cash piles (including, say, the taxation of dividends and unused cash reserves). Clearly, the Tories will countenance nothing of the kind and Labour has barely shown its hand. But that is the least that's needed.

Twitter: @SeumasMilne

Budget 2014BudgetGeorge OsborneAusterityEconomic growth (GDP)Economic policySeumas Milne
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Tony Benn: 'a giant of 20th century politics' - video

Guardian writers Giles Fraser, Seumas Milne, Anne Perkins and Michael White pay tribute to Tony Benn who has died at the age of 88

Seumas MilneMichael WhiteAnne PerkinsPhil MaynardElliot SmithGiles Fraser

Now we see what was really at stake in the miners' strike | Seumas Milne

Thirty years on, the costs of the gutting of trade unions are obvious. That's why demonising Bob Crow was a failure

As a rule, the most effective trade unionists have to die before the mainstream media and politicians will say anything decent about them. That's certainly what has happened to the rail and seafarers' leader Bob Crow.

Instead of the industrial dinosaur, political throwback and strike-happy hypocrite demonised for more than a decade, it now turns out that Crow was in fact a modern and effective workplace champion. The scourge of the London commuter didn't just drive up rail workers' living standards, we are told, but fought successfully for low-paid contract cleaners into the bargain.

Part of that is about not speaking ill of someone cut off in their prime, of course. But it also reflects establishment awareness of the chord that an authentic workers' leader strikes with a public living the reality of the race to the bottom in pay and conditions – and a public life purged of working-class figures and populated by plastic political and corporate professionals.

As it happened, Crow died on the eve of the 30th anniversary of the start of the miners' strike. It is doubtful that even death will win Arthur Scargill the national treasure treatment currently being given to Crow, given the scale of his vilification and the extent of the challenge he represented to political and economic power from the 1970s to the 1990s.

But the 1984-5 strike, the decisive social and economic confrontation of Britain's postwar era, is how we got where we are today. A generation on, it is now even clearer than it was at the time why the year-long struggle over the country's energy supply took place, and what interests were really at stake.

The Thatcher government's war on the miners – her chancellor Nigel Lawson described preparations for the strike as "like re-arming to face the threat of Hitler" – wasn't just about class revenge for the Tories' humiliating defeats at the hands of the miners in the early 1970s. It was about using the battering ram of state power to break the single greatest obstacle to the transformation of the economy in the interests of corporate privilege and wealth that Margaret Thatcher was determined to carry out. The offensive ushered in the full-blown neoliberal model that has failed to deliver for the majority, generated inequality and insecurity on a huge scale, and imploded with such disastrous consequences five-and-a-half years ago.

For the miners, the strike was a defensive battle for jobs and communities. But it also raised the alternative of a different kind of Britain, rooted in solidarity and collective action. The crippling of the country's most powerful union opened the way for the systematic deregulation of the labour market – and the zero-hours contracts, falling real wages, payday loans and food banks we are living with today.

Every couple of years, evidence emerges to underline the unparalleled nature of the state onslaught and ruthless rule-breaking to overcome resistance in the mining communities, bought at a cost of £37bn in today's prices.

In January, newly released cabinet papers confirmed that, just as Scargill had warned at the time, there was indeed a secret hit list to close 75 collieries with the loss of 75,000 jobs when the strike began. Thatcher lied about it and planned to send thousands of troops into the coalfields, as her government faced imminent defeat.

In media and establishment mythology, of course, it was the insurrectionary incompetence of the miners' leadership that led to the breakneck destruction of the mining communities, rather than the government that ordered it. That is abject nonsense.

There was simply no option of a gentle rundown of the industry in 1984, with or without a national ballot, as the treatment of pits that worked during the strike demonstrated. The only choice was between the certainty of mass closures and the chance of halting the assault.

To achieve its goal, the government unleashed the full force of the state: a militarised police occupation of the coalfields, a commandeered and manipulated criminal justice system, mass sackings and jailings – and the use of MI5, GCHQ, the NSA and special branch to bug, infiltrate, smear, manipulate the media, and stage dirty tricks against the union and its leaders.

Since the Guardian first reported leaks about security service operations against the miners in the 1990s, much more has emerged and been confirmed by former officials. MI5's "counter-subversion" role has been largely transferred to a string of notorious undercover police units, now the subject of an official inquiry; global blanket surveillance by GCHQ and the NSA is on another scale entirely from their then unprecedented operations against the miners' strike; while state collusion with mass corporate blacklisting of trade unionists has continued, despite the enfeebled state of the labour movement.

Thirty years on, the argument about coal is now focused on the threat of global warming and carbon emissions, rather than the tiny workforce that still mines it or the social wreckage in the coalfields left behind by Thatcher's social vandalism.

But the battle over coal in the 1980s was in any case really about power and class, not fuel – just as the argument about its legacy is more about the future than the past. Success for the miners could not, of course, have turned the neoliberal tide, which was a global phenomenon. But it would certainly have at least weakened Thatcher, reined in her worst excesses, and put a brake on Labour's rush for the "third way", which eventually turned into New Labour's embrace of the Thatcherite settlement.

As the strike fades into history, the miners' stand has been vindicated by the experience of that failed model. Profound economic change means such an industrial conflict will never be repeated in that form; but its experience can speak to our times.

Among its lessons are that you can't always fight on terrain and at times of your choosing; division can be fatal; and the higher the stakes, the dirtier that employers and governments will play. And as Crow demonstrated, militancy may not guarantee success – but passivity will asphyxiate unions when the workforce needs them to be stronger than ever.

• An updated edition of Seumas Milne's book, The Enemy Within – The Secret War Against the Miners, is published this week and is available from Guardian Books

Twitter: @SeumasMilne

Bob CrowThe miners' strike 1984-85Trade unionsPolitics pastSeumas Milne
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