BY JONATHAN SILBERMAN
LONDON - Anthony Blair, elected Labour Party prime minister on May 1, has signaled that a major assault on social benefits will be a high priority of the new government. Even before the election, Blair promised to "think the unthinkable" about welfare, accusing the Tory government of spending too much. Now he has appointed Labour Member of Parliament (MP) Frank Field, as second-in-command at the social security department. Field was the chair of the House of Commons social security committee when Conservative (Tory) prime minister John Major was still in office.

Field, who has been praised by Tory politician Margaret Thatcher, has been put in charge of long-term planning for "reform" of the social security budget. Last year Field published a pamphlet entitled How to pay for the future, calling for slashing the current 100 billion welfare bill (1 = $1.63). The essence of Field's proposals is to shift welfare payments away from state funding, out of the government treasury, and place the burden even further onto individual wage earners. Formal income tax would be cut, but the proposals amount to a major hike in taxes on workers' wages. National Insurance contributions would rise substantially, including a 7 percent "insurance tax" that would supposedly fund half of the National Health Service (NHS) expenditure.

Field's plan envisages a major overhaul of pensions, including abolishing the State Earnings-Related Pensions Scheme (SERPS) and forcing everyone to take out a second welfare policy covering unemployment, sickness and retirement.

To win support for his proposals, Field has tried to couch them in progressive sounding terms, such as a defense of "democratic socialist values" as opposed to means- testing, upon which much of current welfare payments are based. Field's opposition to means-testing isn't based on its use to erode universal benefits and foster divisions among working people. Rather Field opposes means-testing because, he says, it "promotes idleness, encourages dishonesty, and penalizes savings."

By "democracy," Field means that everybody pays. He says that it is vital to give even the poorest "a stake" in their pension and in the NHS, and proposes lowest wage earners - who currently don't have to pay National Insurance - be obliged to contribute. Anyone earning more that 10 per week would be levied 2 percent; those earning above 60 weekly would "contribute" 6 percent. Field proposes the creation of individually-owned funds in the private sector through which welfare would be administered. In addition, student grants would be replaced by loans.

Field and his boss, Harriet Harman, will not wait until the adoption of the welfare overhaul before starting their assault. They plan to immediately launch a "welfare to work" program and an attack on "benefit fraud."

"Work is the best form of welfare for people of working age and lone mothers," Harman said. "We need to reduce the obstacles that keep people out of work." The Sunday Telegraph quoted one government minister as saying, "The public will not support a social security system that appears to tell people they can sit in bed all day watching television and drawing benefits." Meanwhile, the official unemployment rate in the United Kingdom stands at 6.2 percent or 1.7 million people. The real unemployment is closer to 4 million.

Labour is already pledged to maintaining the stricter criteria on people claiming incapacity benefit and the new job seekers allowance that was imposed by the Tory government. It is now expected to introduce "workfare" - financial penalties for those deemed "workshy."

In another move, Chancellor of the Exchequer Gordon Brown announced May 6 that the new government was granting the Bank of England the power to set short-term interest rates without government approval. Now the government will set a target inflation rate - currently 2.5 percent - which the Bank of England will try to adjust monetary policies to meet. This is presented as one of the steps needed to keep the pound strong in relation to other European currencies. Kenneth Clarke, the former Tory Chancellor of the Exchequer, warned, "What you are going to see is, undoubtedly, tighter monetary policies than you might otherwise have" - in other words a willingness to raise interest rates high at the cost of deflation and higher unemployment. The government simultaneously raised short-term interest rates a quarter of a point to 6.25 percent, with the stated aim of dampening consumer spending, wage raises, and inflation.

In pre-election interviews, Blair promised that his government would be more "radical" than many envisaged. Whether or not his pledge was designed to give comfort to working-class voters, his welfare proposals show that it's cold comfort indeed. Financial markets remained buoyant throughout the election campaign, and following the election the FTSE stock market index reached an all-time high.

A number of trade union officials at London's May Day festival, including General Municipal Boilers (GMB) union president Mary Turner, declared that the new government's adoption of the European Union (EU) social chapter showed that workers would reap the benefit of a Labour victory. The agreement on social policy consists of seven articles, two declarations and a protocol on economic and social cohesion - broad statements of aims rather than policy. Foreign secretary Robin Cook has gone out of his way to reassure any doubters that UK government support for future EU social legislation will depend on whether it "promotes competitiveness" and the goal of a "skilled and flexible workforce."

At the same time, the bosses remain concerned with Labour's continuing links with the unions, upon which the hopes and expectations of working people are based. Labour's election victory was greeted by an air of celebration by working people when they went to work on May 2.

A group of rail workers at South West Trains watching the results in their break room on TV discussed how, with such a large majority, the government would be able to renationalize the railway. There was no renationalize proposal in Labour's manifesto, however. The railway was nationalized in 1948, and privatized by the Major government.

Labour increased its share of the vote in the main industrial centers, reflecting working people's association of the Tory government with two decades of attacks on their rights and living standards, and the hope that a Labour government could be used to defend their interests. Many workers expressed their delight that prominent Tory government members like Michael Portillo, who had been strongly tipped as a successor to John Major, were voted out.

But the size of Labour's 179-seat parliamentary majority was the result of something else: a substantial shift of middle class voters - some traditional Liberal voters, others traditional Tories - against the party that had, at least temporarily, lost the backing of decisive sections of the ruling class. The social base of the party built up by Thatcher's "share-owning, home-owning democracy" has been substantially eroded by the effects of the depression. Never before in post-World War II elections has such volatility been expressed in an election.

While Labour received 44.5 percent of the vote (to the Conservatives' 31.5 and Liberal Democrats' 17), it won nearly two-thirds of the parliamentary seats. In Scotland, the Tories won no seats even though the party received half a million votes, while the Liberal Democrats won 11 Scottish seats with a lower vote (about 360,000), and the pro- independence Scottish National Party won six seats.

Blair has made clear his administration's intention of advancing Labour-Liberal links, including having some Liberal Democrat MPs sit on cabinet committees.

The scale of the Tory electoral defeat reflected the deep- going crisis of the party. The Tories polled their lowest vote this century. They failed to win a single parliamentary seat in either Scotland or Wales. Seven Tory cabinet members lost what were considered safe seats. And even before the polls were closed, the recriminations had started and the knives were being sharpened.

Right-wing Tory MP Nicholas Winterton said that chancellor of the exchequer Kenneth Clarke had been "personally responsible for the poor conservative general election campaign... Mr. Clarke will be remembered, even reviled in history for his actions." Publicly confirming the election defeat, John Major also announced his decision to resign as Tory Party leader. The prospect of a party split is openly being discussed in television and radio chat shows.

Pushing forward his objective of regrouping with right- wing Tories, Referendum Party leader James Goldsmith declared that indeed the Tories are "dead." "All their leaders have always said it is either the party of the nation or it is nothing," Goldsmith said. "This one is not only not the party of the nation, it betrayed the nation."

Goldsmith announced that the Referendum Party would continue after the election. "We will be a conduit of mobilization against future betrayal," he announced.

In a television interview on election night, Goldsmith said he anticipated a low vote but that it was not the most important thing. Then when his Tory opponent, David Mellor, was defeated by Labour, Goldsmith led a barracking of Mellor, drowning him out as he tried to speak with shouts of "out, out, out!" Goldsmith has called the Referendum Party "the rabble army." The Referendum Party won its highest vote in coastal areas, where it campaigned against the European Union's fisheries policy. In Harwich, it won some 5,000 votes, nearly 10 percent.  
 
 
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