7 February 2006 

JM Thorn

Peter Hain has once again stated the intention of the British government to reduce the level of public spending in the North.  This came in a speech to the annual conference of the Fabian Society, which was hosted in Stormont last week.  The theme of his speech was how the North would have to adapt to realities of competition in the global economy.  Hain claimed that the concentration of political debate on the constitutional question for so long had meant that other areas, such as the economy, had been neglected.  It was therefore incumbent upon him, in the absence of agreement between the local parties, to bring this agenda forward.

Rebalancing the economy

At the base of his argument on the future of the economy was the threat of globalisation.  He painted a bleak scenario in which the North ’s economy would be unable to cope under the “competitive threats from China and India in the future, or Eastern Europe today.”  Its industrial sector would be eroded and jobs in its service sector outsourced abroad.  Of course, this is a process that has already been underway for some time now, with regular news reports of closures and redundancies in areas such as the textiles industry.  The impact of this industrial collapse has been mitigated by the fact that the North’s economy is dominated by the public sector.  It has provided a degree of stability and underpinned basic living standards.  However, the British treasury is no longer prepared to bear the cost of that stability.  After ten years of a ‘peace’ process, the British want their peace dividend.  Hain spelt this out bluntly in his latest speech: “a dominant public sector hugely subsidised from London,” means that the economy is  “unsustainable in even the medium, let alone the longer, term.”  According to Hain this looming crisis means that there is a need to “rebalance the economy”. 

To this end the government was prepared to make “tough decisions and painful choices.” In practice this entails a sharp reduction in the size of the public sector and the level of public spending in the North. 

This has been British policy from at least 1998, with the signing of the Good Friday Agreement, and the establishment of new political institutions.  However, since the collapse of these institutions, and the receding possibility of them being restored, this agenda has moved up a gear.  The British are not prepared to wait for local parties to bring forward the economic offensive, but are forging ahead with it themselves. 

A good example of what this agenda will entail is the reform of the Water Service, with the introduction of water charges and the movement of the water service towards privatisation.  This epitomises the double whammy of privatisation and service charges.  With increasing financial burdens, and the erosion of wages and working conditions through privatisation, working class people in the North face a significant reduction in their living standards. 

This neo-liberal attack has been coming from all sides in recent months, with the announcement of a 19 % rates rise, a massive 50% rise in the cost of gas, a projected 20% increase in electricity prices and the publication of the report of the Review of Public Administration (RPA).  The RPA, which envisages the reorganisation of how health and education services are administered, and how local councils operate, is potentially the most far reaching element of the Government’s strategy.  The reduction of public bodies, and cuts in the budget of these services by £200 million annually could cost up to ten thousand public sector jobs.

Education

Hain restated his commitment to the objectives of the RPA.  However, in this latest speech he also set out more of the details on how the education sector would be administered.  He said that the education debate had to move away “from segregation and statistics and on to skills”.  He then went on to list the costs of having four separate education systems in the North, and the costs of keeping the current number of schools when pupil numbers were falling.  Some people interpreted this as pointing towards a more integrated system.  Their hope was that a reduction in the number of schools would force the remaining ones to enroll pupils from both sides of the community.  However, under Hain’s plans, which will retain the traditional “ethos” of schools, we are liable to get the worst case scenario of school closures and staff redundancies, while religious segregation and church control is maintained, even if Catholics and Protestants do share the same campus. 

Hain also announced the establishment of a review of all spending on educational provision for 14-19 years olds.  He said that this would be along the lines if the Appleby Review of the health service last year. That report recommended the centralisation of health services, hospital closures, and the introduction of regional pay.  More of the same for the education sector can be expected from this new review; it will provide a rationale for continued spending cuts – in fact the government has announced in advance of the review that regional pay will be applied to teachers. 

In terms of the curriculum, Hain signalled a shift away the academic towards the vocational.  This means the school curriculum being subordinated to the demands of industry at any particular time, rather the intellectual development of pupils.  He raised the prospect of pupils making decisions about their future carers at the age of fourteen.   This would mean removing many pupils from a broad academic curriculum onto a narrow skills-based one administered through newly created specialist schools.  Under this system, pupils would just be fodder for business. 
 

Year Zero Spending Review

Hain topped off his speech with the announcement of on Comprehensive Review of all government expenditure in the North.  He said that this would be a ‘Year zero’ review – “no existing expenditure should be assumed to continue. No specific funding stream or programme exempt.”  Every area of public spending is likely to be subject to cuts.  While this was dressed up in the usual phoney populism of shifting resources to “front line services”, there is no doubt that it is an agenda for severe cuts in public spending which will actually fall most heavily on those who deliver and use those services.  We have already seen this with the cuts in funding to education boards, which have resulted in the redundancies of teachers and special needs assistants, the removal of essential services such as crossing patrols and the threatened total closure of a number of schools.  Under Hain’s plan, this process is likely to accelerate across all areas of the public sector.

The working class in the North is facing a massive assault on its living standards.  It is no longer just water charges, but a range of attacks across the board.  Hain justifies this as made necessary by the forces of globalisation, but in fact the processes he outlines are exactly the processes of globalisation – the processes of deregulation, dismantling of the public sector, privatisation and wage cuts which across the world are transferring wealth from the workers to ever more obscene concentrations of private capital. The outcome would not be to protect workers here, but convert a low-wage economy into a starvation economy in the interests of capital.

The local political parties are either silent or rumble with dishonest populism.  None of them have ever denied signing up to an economic programme built into the Good Friday agreement that aimed to cut public services. 

The response should be a generalised fightback by the trade union movement.  We are not going to get that with the present leadership. NICTU’s campaign against water charges vanished without trace when the British announced that it would be introduced in stages with some cosmetic changes. The teachers union, INTO, actively supported the attacks on the education and library boards.  Civil servants accepted a 0.2% pay increase, in part because of the failure of their union leadership to successfully fight the last attack and the absolute absence of any form of solidarity from other public sector workers.  Nationally ICTU have responded to defeat in the Irish Ferries dispute by signing up to discussions about a new partnership with the forces of government and employers pushing a programme of wage cuts and the outsourcing of jobs.

It is incumbent upon socialist and trade union activists to help build opposition but to the cuts and to the collaboration of the union leaderships.  This is a task that takes on a greater urgency with every government announcement.  Year zero, the glib phrase used by Hain that evokes visions of the genocide of Cambodia, is wildly inappropriate, but it does give a flavour of the savagery of Government intentions. If the government successfully implements its plans the future will be bleak. It is a case of fight or go under.