History History & Theory

Two Years of Labour in Government

By Ted Grant
Written in October 1947

It gives us great pleasure to republish one of Ted Grant’s most important writings on reformism in office, from October 1947. In the years after the Second World War the international Trotskyist movement had to reorient itself to a very different situation to that envisaged by Trotsky when he had founded the Fourth International in 1938. Trotsky’s perspective as outlined in his later works had in the interval after his death been falsified by events, capitalism in Western Europe and North America was at this time beginning to experience a boom which was later described as a ‘golden age’.  After the postwar revolutionary wave was seen off in the advanced capitalist countries, this made conditions for revolutionaries very difficult. Illusions that capitalism had solved all its problems began to develop quite widely and this vastly strengthened reformism in Britain. Ted later analysed the causes of this boom and why it would come to an end in his 1960 pamphlet ‘Will there be a slump?

Ted analyses the crucial differences between the second Labour government (1929 to 1931) and that of the first two years of the third Labour government (1945 to 1951). We feel that this timely reprint of an article, which was last republished in the mid-1980s, deserves to be studied carefully by all Marxists. Utilising the method of dialectical materialism, Ted’s writings, including this article written nearly 70 years ago, stand the test of time. Whilst the subject of this particular article is now largely of a matter of historical nature, we believe the insights contained within piece on the nature, for example of the Parliamentary Labour Party (PLP), contain all of their validity to this day. The recent right wing coup attempt by the PLP is in fact an echo of the situation Ted analyses in this article.

Ted’s grappling with the new situation unforeseen by Trotsky’s perspective in the postwar world led him to conclude that the fact that working class, having historically created mass political and trade union organizations will not easily abandon these organizations. This caused him to develop and flesh out the historical law understood by Lenin and Trotsky that when the workers begin to move, they must express themselves through the existing mass organizations of the class. It was this great development in the Marxist understanding of the mass organisations that subsequently enabled what began as a small handful of isolated comrades at the time this article was first written (1947) to build what would by the time of this article’s last reprint (1986) become the greatest Marxist force in the history of Britain’s labour movement. It is in this article that we can begin to trace the first steps in his thinking on the nature of the mass organisations that would eventually result in its more finished form in his 1959 work Problems of Enterism.

Two Years of Labour in Government
A Comparison between the Second and the Third Labour Governments

It is now more than two years since the Labour Party came to power. Developments inside the Labour Party and movement, the mood and attitude of the working class to the Government in the present period can be better understood by a comparison between the Second and the Third Labour Governments and the economic and political conditions in which they functioned, especially in the first two years. Despite cuts announced as a result of the dollar crisis, those cannot be expected to have immediate results in a fundamental transformation of the attitude of the working class, following the reforms granted by the Government in its first period of functioning in a period of “full employment” and shortage of labour.

The Second Labour Government functioned in a period of slump, mass unemployment, of offensive on the part of the employers against the standards of the working class, which rapidly led to a crystallisation within the Labour Party in the development of a left wing. The Third Labour Government came to power at a time of economic revival and full employment and the employers have difficulty in withstanding the offensive of the working class. This has necessarily delayed the inevitable differentiation within the Labour Party and the crystallisation of the left wing.

The Economic Background to the Second Labour Government

The whole life and activity of the working class and their attitude towards the Second Labour Government was coloured by the economic background of mass unemployment and world slump. Precisely because of this, the Labour Party came to power with tremendous enthusiasm from the basic section of the workers, who had high hopes that Labour would introduce extensive reforms, above all, abolish unemployment and alleviate the lot of the unemployed.

Unemployment was the main issue on which the Labour Government succeeded in rallying basic sections of the working class. In the election manifesto, “Labour and the Nation”, the Labour leaders boasted: “We can conquer unemployment.” In their election propaganda, the Labour leaders promised, apart from the provision of work, that the unemployed be treated in the traditional manner demanded by the labour movement: “Our palliative measures for dealing with unemployment are simple. We claim full and complete maintenance for those who cannot find work.” (Declaration by George Lansbury in election propaganda in 1929)

For the relief of unemployment, Lord Privy Seal, J.H. Thomas, announced that £6,500,000 would be made available for railway development and £43,000,000 on road development and bridges over 5 or 6 years!  This was greeted with ironical approval by the Tories, who jeered and baited the Labour leaders for their timidity.

Churchill greeted with malicious enjoyment, the King’s Speech at the opening session of the Labour parliament, as he gave Tory approval to the proposed measures, but deplored them as mere palliatives: “I am glad to see old parliamentarians whom I have known for a quarter of e century, who have played so distinguished a part in our proceedings, having at last their turn and their share in the responsibilities of Government, and testing what are called by those who have not long experienced them ‘the sweets of office’. I also look forward to having the Financial Secretary to the Treasury deliver to us a clear exposition of the gold standard and the solid advantages which it will
confer upon the country; and generally to defend orthodox views upon financial matters. No doubt Financial Secretary to the Treasury will be able to do this when his education by the treasury officials, the Bank of England, and the high financial authorities of the City of London has been completed…

“The creation of the Socialist Party has been an astonishing thing. I have seen it grow in the course of 30 years from a handful to the largest Party in the House of Commons… they have ranged masses of the British people under false and foreign conceived standards… They have built it up (power) by fomenting class hatred and organising industrial strife. They have dabbled in subversive agitation. They have pandered to rapacious appetites which they know they can never satisfy. It is now their fate, it is indeed their punishment, to have to disappoint those who have believed in them and have believed what they have said, and discard or explain away the doctrines by which they have risen to great power… As long as His Majesties ministers are content to administer and administering, to fortify the  capitalist system of civilisation on which we have grown great and on which the United States is growing greater, there is no reason why they should not enjoy, although they are a substantial minority in the country, a long tenure of office.”

He went on to explain that the moment the Labour Government adopted “Socialist” measures (i.e. nationalisation measures), they would be swept immediately from office by their opponents.

But the Labour leaders did not even attempt to introduce such legislation, using the excuse of their minority position in Parliament. Instead of introducing a bill on nationalisation, being defeated and then going to the country on the issue, the Labour leaders were only too glad to use the excuse to do nothing.

As a relief for unemployment, the Government announced it would assist the rationalisation of the iron and steel trades, of cotton, the mines and the railways. Unemployment in iron, steel, transport and cotton were the sore spots.

At the same time, Thomas announced brutal programme of emigration to the Dominions and the Empire, and the migration from the areas of the heaviest unemployment to other areas by direction from the Labour Exchanges. “Durham, Northumberland, Lanark, and places like South Wales have got this great mass of unemployed and, as far as one can see, there is no hope of dealing with those people unless we got them out of those districts.”

Commenting on Thomas’ speech, Lloyd George said: “It seemed to meet with the wholehearted approval of the late Chancellor of the Exchequer (Churchill) at any rate, he could not conceal the satisfaction it gives him, and he assured the Lord Privy Seal that “on the whole the schemes which had been sketched out would receive the support of the Conservative Party… I am not quite sure that the unemployed will be equally pleased.”

On the proposals for mining rationalisation and marketing, and concessions to the miners on hours, Lloyd George jeered: “I do not say they are betraying the miners, because they cannot carry out nationalisation. They are going to carry what they can, and I think it right, but I am bound to point out that they are proposing to do now what they rejected in 1919.”

During the course of the discussion, one of the Tory spokesmen dealing with the helplessness of the Government in face of the situation said: “In this atmosphere, we all practically avow that unemployment depends upon forces that this House cannot control.” (Lord H. Cecil, 3rd July 1929)

In commenting on Labour’s programme, the Tories openly proclaimed that the task of the Labour Government was to preserve capitalism intact. Robert Boothby in a speech reflecting the tone of the Tories said: “It may be one of fate’s little ironies that the principal task confronting the present so called socialist administration should be to make great Britain safe for the capitalists, although we all know that it has been one of the most cherished ambitions of the Prime Minister and the Chancellor of the Exchequer. All I would say is that I really think they can afford to be a little bold, to tackle the question a little more vigorously, without doing any very serious damage to the economic structure which they have abused for the last 30 years and which, they are now so pathetically anxious to preserve intact.” (4th July, 1929).

Despite the victory of Labour at the polls, the Tories and the Liberals still had tremendous confidence in their class and their ability to handle the working class, especially their leaders.

The programme of the Labour Government of 1929 was on orthodox capitalist lines. It was one, moreover, which could not be dressed up in palatable form as far as the more conscious elements in the working class were concerned.

In addition, the Labour Government came to power at a time of economic world crisis, which steadily deepened during their term of office.

In 1929, the production of coal reached 257,907,000 tons; steel 9,636,000 tons; railway freights handled amounted to 57,559,000 tons and the number of passengers on the railways was about 869,000. In the succeeding years, production dropped steeply, till in 1931 coal mined was 219,459,000 tons; railway freights handled 47,552,000 tons, and railway passengers carried numbered 848,000. Meanwhile, Britain’s trade with foreign nations dropped catastrophically.

Just before the Labour Government took office, the number of unemployed was 1,165,000 in May 1929. This was 9.7% of the insured workers. By February 1930, this had increased to 1,582,000, over 13% of the insured workers. And if all those who were deprived of benefits, or in receipt of assistance were added, the total would have been 2 million youths and adults. In the basic trades, there were 13.25% unemployed in the mines, 22.7%, in steel smelting, 24.6% in shipbuilding, 24.2% in cotton, 21.1% in woolen and worsted, and 18.3% in the building industry.

Under the conditions of world slump and crisis, the bourgeoisie wished to utilise the mass unemployment in order to drive down the standard of living of the working class. Throughout the period of the Labour Government, the emphasis was on the intensification of labour and the cutting down of wages. The miners, the railwaymen, the cotton and woolen workers, and others, suffered cuts. Hand in hand with the rising number of unemployed, went the intensified attacks of the employers. And the Labour Government went hand in hand with the employers in the attacks on the unemployed and the employed workers.

Then, as today, the Labour Government waged a similar campaign for “increased production”, but at lower rates of pay and at a time when, it had become clear to the advanced workers the capitalist system had resulted in the crisis of “over-production”. The Government was demanding sacrifices from the workers. In the fake conferences of the trade union officials and the employers called by the Labour Government, “sacrifices” was the main theme of the government spokesmen. Thomas announced to the House of Commons on April 4th 1930, in regard to these meetings: “The House will be pleased to know that I have found no difficulty there, but that on the contrary, there was a frank recognition on both sides that changes and sacrifices would have to be made in order to pull the country through.”

This campaign was being waged at a time when the 90,000 capitalist super-tax payers were deriving as revenue from the production of the workers, the staggering sum of £550 million a year.

The Political Reflections within the Labour Party

Right from the beginning of the Second Labour Government, pressure began to be exerted by the left wingers under the influence of the crisis and in response to the mood of the membership in the country. Maxton, speaking for the “Clyde Bloc” immediately began to reflect the disillusionment of the advanced elements within the labour movement.

“Frankly I would be dishonest to my right hon. friends if I did not express very plainly my complete dissatisfaction with the King’s speech, and with the speech of the right hon. gentleman the Lord Privy Seal in detailing one particular part of the King’s speech…

“I hope the legislation arising out of the King’s speech will not be as much whittled down, compared with the King’s speech, as the King’s speech was whittled down from “Labour and the Nation,” or there will not be very much left for us…

“About one week before the late parliament dissolved, the right hon. gentleman who is now the Home Secretary described the administration of the Employment Exchanges in their dealing with unemployed men as ‘administrative persecution’, I think. As far as I know, the methods of administering Employment Exchanges today is exactly the same as it was when that statement was made. Now that ought to stop. It is an administrative matter… There are 2,000 people packed into our great Poor House in Glasgow – now – with a Labour Government in office; told that they must either go into the Poor House, in which case their wives and children will be maintained, or they will be taken up for cruelty to children and put into gaol…”

The ILP, traditionally the organisation of the most advanced of the Labour workers, reflected immediately the growing ferment within the working class.

Right from the start of the Labour Government they raised a running fire of criticism, particularly on the issue of unemployment. The world situation was such as to encourage the growth of revolutionary aspirations and ideas among the working class. The complete incapacity of reformism to fulfill its promises of moving towards a socialist system by gradual measures through parliament was demonstrated in action to the advanced workers. Far from granting even mild reforms, the Labour leaders were compelled to launch attacks upon the standards of the workers. Naturally, this provoked dissolution, and under pressure of these events, the ILP bean to swing, left and to express the groping movement of the advanced workers in the direction of communism.

Nevertheless, among the mass of the workers, particularly the unorganised and backward sections, the first result of the growing unemployment, of the wage cuts, was to compare the result of five years of Tory Government with their deteriorated position under the Labour Government. As a consequence, we had the paradox that while the advanced workers were swinging left, the backward elements within the working class and middle class were swinging right towards the capitalist parties. Even in Labour strongholds, the vote of the Labour Party was falling, while that of the Tories and Liberals actually increased over their 1929 figures.

The ultra left tactics of the Stalinists tended to alienate the workers from the Communist Party, except among the ranks of the most desperate sections, above all the unemployed where they gained considerable basis.

In the municipal elections a like situation was reached. The Labour vote dropped, a section abstained, and bigger sections went over to the capitalist parties.

While this peculiar and temporary process was taking place within the broad masses, the trade union and Labour workers were disheartened and embittered, even though remaining loyal to the Labour Government as a minority government, the eyes of the more advanced strata within the Labour Party were opened. The left wing members grew bitter, their criticism of the Labour leaders more extreme; and this development among the rank and file pushed the ILP further to the left. Under the pressure of events, the ILP leadership swung also to the left.

The ILP as an organised opposition, led the struggle in the labour movement. However, despite the broad support and tradition, the number the ILP succeeded in attracting was never at any time large, in proportion to the numbers of organised workers generally. The mass of the Labour workers belonged to the Labour Party passively as individual members, or through their affiliation in the unions. The dues-paying  membership of the ILP in 1909 was 28,000; in 1914 it fell to 20,000, and in 1920 in the first post war wave, it reached its highest point at 37,000. At the time of disaffiliation from the Labour Party, the ILP had under 12,000 dues-paying members.

During the 1931 crisis, the bourgeoisie began a furious offensive against the Labour Government. They demanded economy cuts in the standards of the state employees, and a further reduction in the low standards of the unemployed. The Labour Party tops conspired with the capitalist class in order to prepare the way for a coalition government.

But the General Council of the TUC, expressing the pressure of the organised workers came out against the economy cuts and the ILP conducted a campaign against the acceptance of the recommendations of the Royal Commission which had been set up by the Labour Government to review the situation.

The TUC leaders demanded that the Labour leaders should rather resign than accept the economy cuts and make themselves responsible for an attack on the standards of the unemployed. Thus, the opposition of the masses to the reactionary measures of the Labour Government were reflected by the trade unions, which outwardly played the part of a semi-opposition to “their” Government, and tried to act as a safety valve to the opposition of the masses.

As a result of the feeble policy of the Labour Government, vicious role in assisting the employers in attacking the standards of the workers, the growth of the crisis, the enormous rise in unemployment to the greatest heights experienced in history, the masses became disillusioned.

The lack of a mass revolutionary alternative, the traditions of Britain, the peculiar electoral system, led the bourgeoisie, skilfully utilising the desertion of the top upper crust of the Labour Party, to panic the masses and crushingly defeat the Labour Party in the General Election of 1931.

The ILP supported the Labour Party at the General Election. But these events could not but lead to tremendous repercussions within its ranks. Despite the centrist vacillations of the leadership, the rank and file became more and more imbued with hostility towards reformism, and drove the leadership forward. In 1932, after the fall of the Labour Government, the ILP Conference decided by 241 votes to 142, to disaffiliate from the Labour Party. Because of its failure to transform itself into a Marxist Party, the ILP was doomed to vegetate with the political changes in the years that followed.

Thus, the Second Labour Government, in its two and a half years of office, functioned continually in the shadow of crisis, wage cuts, and unemployment. On this background, the measures adopted by the Labour Government characterised by orthodox capitalist timidity, had no power of attraction for the masses, especially the advanced strata. As a consequence, there developed a tremendous left ferment within the ranks of the Labour Party, which reflected itself in the move of the ILP in a revolutionary direction, resulting in the transformation of the ILP from a left reformist into a centrist current.

In such an atmosphere, the clashes between the reformist leadership and the rank and file led to a differentiation within the reformist organisation. A leftward development of the working class always finds its reflection in a period such as this, in the formation of centrist and left reformist currents and tendencies within the mass labour movement.

Two Years of the Third Labour Government

The background of the Third Labour Government both economically and politically, is strikingly different to that of the previous Labour Government. As a result, there has been a much slower tempo of developments. From unchallenged supremacy for four or five decades, British imperialism has dropped to the level of a second rate power. Her industrial supremacy has been largely undermined through technical backwardness in the basic industries of the country. The two world wars, especially the last, have enfeebled her hold on the Empire and former satellites in the sterling bloc, which Britain had established after 1931 in the endeavor to shelter from the competition of, above all, American imperialism.

A large part of the accumulated wealth which Britain piled up in the past centuries has been dissipated and lost during the war. Britain’s invisible exports have as a result, declined drastically. The unfavourable balance of trade payments still remains, and must remain. A great part of the investments and income which the City of London made on loans, commissions and insurance, has fallen into the hands of New York. Thus, the perspective of British imperialism is bleak indeed, faced as it is with the imperative need to reequip its basic industries by huge capital expenditure, and simultaneously increase its exports above prewar.

In contrast with the earlier confidence in their mission and their hold over the Empire, the British bourgeoisie of 1945 had lost complete confidence in themselves in face of the collapse of their world position. They were paralysed and saw no perspective for their class. The decay of the capitalist system and the obvious necessity for drastic measures emboldened the petty bourgeois leadership of the Labour Party. This, coupled with the radicalisation of the masses, imbued the Labour leaders with a greater confidence. They had a “plan”: the rationalisation and modernisation of the basic industries which the individual capitalists and trusts had brought to the brink of utter ruin. They saw as the cure for the ailing basic industries of British imperialism, nationalisation under the control of the capitalist state. They thought their programme of state capitalism, which they put forward as socialism, could reorganise British capitalism and save it from collapse.

The nationalisation measures of the Labour Government, unprecedented under capitalism before the outbreak of the last war (though paralleled by similar developments on the continent of Europe) provoked only the mildest opposition from the bourgeoisie. To have nationalised even the mining industry in 1929 would have provoked a movement among the bourgeoisie which would not have stopped short of the most violent reprisals and conspiracy. The opposition would have gathered around the House of Lords and the Monarchy, which remain reserve weapons in the hands of the ruling class, and which they would have used to block such a measure, even if the Labour leaders had had the overwhelming majority in the House of Commons. But today, apart from minor changes which they have introduced to demonstrate the powers they possess, the Lords have allowed these measures of nationalisation to go through without attempting to operate their right of veto, and the King has signed the nationalisation bills. Only in the case of steel was any real opposition offered by the capitalists, before which the Labour leaders retreated somewhat, although they have announced that steel nationalisation will be proceeded with.

Far from challenging these nationalisation measures, which in the eyes of the workers are the beginnings of the transition to socialism, the most representative Tories have announced that they will not undo the nationalisations that have taken place if they are returned to power in the future. The nationalisations put into operation so far will be beneficial to the capitalist class and as such, the Tories are prepared to accept them.

The shattering defeat which was inflicted on the Tories in the general election has forced them to bide their time. Only now are they beginning to recover from the effects of their defeat. Utilising the discontent of the masses and of the backward strata of the workers, the conservative representatives of British imperialism are beginning to recover their confidence and look towards the future with the perspective of being returned to power.

Background of Economic Upswing and “Full Employment”

The Third Labour Government came to power in a period of economic upswing in contrast to the experience of the Second Labour Government which was elected in the midst of worldwide overproduction, crisis, stagnation of production, and mass unemployment. The tremendous destruction caused by the war and the worldwide famine in capital and consumer goods created a seller’s market. Even America is not able to supply the internal and world markets with the goods which are in demand. The products of British industry find a ready market and have created the conditions for an economic boom. The American loan gave the Labour Government the possibility of maintaining the balance of payments and thus the elements of stability in its economy for the first two critical postwar years. Without it, the standard of living of the workers would immediately have dropped to catastrophic levels. But the loan, while it lasted, cushioned the shock and even afforded the Labour Government the possibility of introducing improvements in the standards of living of the working class. Under the pressure of the workers, the Labour leaders introduced a series of reforms. The workers adopted a sympathetic attitude towards the Government and have been prepared to wait and see, rather than launch into series of great industrial strikes and struggles. All this has led to a different tempo of development from the corresponding period of the Second Labour Government.

The overall production in the first two years of the present government has been 10 to 20 per cent higher than prewar. In fact, overall production has reached record heights. Far from being faced with the problem of mass unemployment, there has been a chronic shortage of labour. Unemployment is well below the margin of the industrial reserve army. The number of unemployed in August 1947 was less than 300,000. Compared to the figures of the past, this is negligible, and has served to strengthen the illusions in the minds of the Labour supporters that the Labour leaders are seriously coping with the unemployment problem.

The economic upswing constitutes a favourable period for the workers to exert pressure on the employers for wage increases and improved conditions. Especially does this hold good for the highly organised workers, who constitute the backbone of the support for the Labour Government. In the first two years, the wages of over ten million workers were increased on the average by nearly £1 per week. At the same time, six million had their hours reduced on the average by three hours a week without reduction in pay. Even after the breaking of the dollar crisis 840,000 workers received increased wages totaling £340,000, and 250,000 had their hours reduced on the average by three and three quarter hours per week. These gains were somewhat offset by the rise in prices. But they have made a profound impression on the consciousness of the British workers.

The nationalisation measures, the existence of full employment, the reforms and semi-reforms in the social services, have resulted in an entirely different mood to that which existed in 1929-31. In the eyes of the overwhelming majority of the Labour workers, the Labour leaders have attempted to carry out the programme on which they were elected.

The Second Labour Government, in the midst of a slump, slashed viciously at the standards of the masses all along the line. The existence of the boom, coupled with US aid, gives the present Government the possibility of bending under the pressure of the workers. Mass unemployment and the existence of the industrial reserve army acted as a leaden weight on the feet of the British workers during the Second Labour Government. The present condition of full employment creates favourable conditions to resist attacks. With US aid cushioning the blows at British capitalism, the bourgeoisie can still retreat in the face of a strong offensive on the part of the working class.

Political Reflection inside the Labour Party

Given these conditions, the British workers, while willing to struggle on the industrial field, have extended and are prepared to extend considerable credit end political loyalty to the Government. The striking difference between the position in 1929-31 and the present is that in the former case, powerful opposition developed within the Labour Party on home affairs, which assumed terrible urgency in the lives of the workers. In the previous Labour Government, the foreign policy was based on pacifist demagogy and was largely endorsed by the “lefts”. What feeble opposition has developed in the Labour Party and Parliamentary Labour Party today has been on the issue of foreign policy. But the opposition on foreign policy collapsed because of the weakness of British imperialism which resulted in the forced withdrawal from India, partly from Egypt, and now the government declaration regarding its preparedness to withdraw from Palestine! Moreover, an opposition, while it is confined in the main to foreign affairs, cannot hope to attract the support of the broad masses away from the right wing. Thus, the right wing Labour leaders have been able, owing to Britain’s weakness, to pose as “liberators” of the colonial peoples with a “socialist” foreign policy as against the blatantly imperialist  policy of Churchill and the previous Tory governments, and even the previous Labour Government.

The policy of the Government on home affairs has been largely endorsed by the so called opposition. A striking contrast to the situation in the Labour Party in the previous Government.  An instructive episode was the difference in attitude of the late James Maxton of the ILP, who welcomed enthusiastically the programme of the Third Labour Government and its suggested legislation.

The collapse of the “lefts” at the past two conferences of the Labour Party since the formation of the Labour Government, especially the miserable and ignominious defeat at the last one, was not at all accidental but rooted in the objective developments of events. In contrast to the previous Labour Governments, far from the lefts gaining in support, the present period has been marked, even during the dollar crisis, by a strengthening of the right wing leadership in the LP. It reflects the mass consciousness in the past two years. It is a law of development within the mass organisations of the working class, that left reformist or centrist currents develop on the basis of deep seated opposition to the right wing leadership on the part of the rank and file. Currents of opposition within the labour movement will not flourish without mass backing. The “leaders” are pushed from below by the pressure of the rank and file. It is thus that the processes in the country reflect themselves through the opportunist leaders inside parliament and within the mass movement. There deep seated processes of differentiation have not taken place; the “opposition” can only make the feeblest of gestures.

This mood of “wait and see” has had peculiar results inside and out of the LP. The masses are going through the experience without, up to the present time, directly participating in the life of the LP. In the last period the reflection of the economic and political situation has been a general political lull which has affected not only the LP, but all left wing organisations. The circulation of the left wing Labour press has dropped considerably. The rump of the ILP, incapable of withstanding the lack of political life in the workers’ movement, is fast disintegrating. The Communist Party has suffered heavy losses since Labour came to power. While losing support in the political field, they have however, entrenched their positions in the trade unions where they are preparing points of support for a surge forward in the period that lies ahead.

An important element in the stability of the Labour Government has been the fact that the Stalinists have consistently attempted to sabotage any movement of the workers in the direction of struggle, and have rendered powerful support to the Labour leadership. Had the CP come out in a full scale campaign against the Labour Government on a “left” programme, encouraging instead of sabotaging strike struggles, the difficulties of the Government would have been immeasurably increased.

After the first honeymoon period, the Labour leaders have been compelled to call a halt as a result of the drying up of the American loan at an unprecedented speed. They thought it would carry them through until 1950. After two years of reforms and semi reforms, they are now introducing counter reforms. With the ending of immediate American aid, resulting in the “gap” until the Marshall Plan is put into effect, the Labour leaders have embarked on a plan of “austerity”. They have begun to make cuts in the consumption of the masses. Beginning with the middle class, whose standards are effected by the basic ration cut in petrol and the restrictions on travel abroad, there has come the cut of 14 percent in the meat ration and a reduction in clothing, household and other consumption goods, which also affect the working class. At the same time, these are announced as only the first of more cuts to come. Freezing of wages, slashes in subsidies, longer hours, have been among the suggestions of the Tories and their representatives. However, under the pressure of the trade unions, the Labour leaders have retreated on the wage freeze, and while longer hours are being introduced, they are to be worked at overtime pay. A general intensification of labour is demanded of the working class.

But these attacks, coming as they do on the background of reforms introduced in the first two years, will not provoke immediate repercussions among the workers on a similar scale in the corresponding previous period. The reaction of the workers will first be seen on the industrial field, with a political reflection only at a later stage. This was clearly seen in Grimethorpe (near Barnsley South Yorkshire), where the miners evinced a bitter hatred for the capitalist Coal Board, but at the same time expressed their unshaken faith and confidence in the Labour Government. In two by-elections held soon after the crisis cuts were announced, Labour retained its seats, even in so marginal a constituency as Liverpool Edge Hill.

It is the US imperialists’ appreciation that Labour can “hold the line” in forcing sacrifices from the workers without serious immediate repercussions that has led them to the decision that Italy and France will be given immediate aid in the interim period and that Britain can wait. They gave Britain the biggest loan that any European nation has hitherto received, because Britain was their most important base in Europe. They know that there is no likelihood of an immediate turn of the masses against the Labour Government. If the pressure of the working class becomes strong, tile reserves of Britain pill have to be used and then America will come to her assistance.

As a result of the cuts, the struggles on the industrial field will be intensified. Any attempt to make far-reaching and serious inroads into the standards of the masses will be followed by series of strike struggles which will shake the Labour Government. But it is precisely the recognition of this factor which stays the hand of  the Labour leaders. In the last two years, the moment the workers took to militant struggle (dockers, transport, miners) important concessions are granted. In the period of counter-concessions, the moment the workers show evidence of strong militant resistance, the Labour Government and the employers will be compelled to retreat. The relationship of class forces in a period of economic boom and full employment, plus the foreshadowed loan, makes it more expensive to provoke a widening series of strike struggles, than temporarily to retreat, exert further pressure on the workers, and then, if necessary, retreat again.

While the Marshall Plan will further enslave the Western European countries, including Britain – and tie these countries to the needs and orientation of Wall Street, it will at the same time tend to balance the economics of these countries in such a way as ensure a rising curve of economic development in the next few years. In Britain, this will result in relatively stable economic and political relations; Sections of the workers will inevitably come into collision with the Labour Government on many questions. If further sacrifices are demanded from the workers large scale industrial struggles will result. Opposition to the leadership will spread inside the Labour Party itself. But no great breakaway can be expected during this period.

Reformism is deeply rooted in the ranks of the British working class. Before any large scale turn from Labour to more radical politics can be visualised, the Labour Party’s policy must be fully experienced by the working class. The total incapacity of the Third Labour Government to transform society and create stable economic conditions for the mass of the population will be most fully exposed in the period of the next worldwide slump of capitalism. Thus basis of reformism will be shattered. The Labour Party will be dent from top to bottom. The workers, especially the most militant and courageous, will seek radical and revolutionary solutions, whilst the capitalist class will really begin to subsidise and organise the fascist movement in preparation for a deadly reckoning with the working class.

All the illusions of the Labour leaders will come up against the stern realities of the decline of capitalism, above all the decline of British imperialism. The economic base for reformism will have its base cut away from beneath it. America, faced with her own crisis of overproduction and slump, will not be able to continue to bolster up British capitalism. The complete inadequacy of reformism to give lasting reforms will be revealed. In the upheavals that are impending in that epoch and with the active participation of Marxists  in the mass struggles and within the ranks of the trade unions and Labour Party, the ideas of the Marxism will find a mass response among the British working class.