THE 2008 financial crisis sent a shockwave through global capitalism which is still reverberating today.

The major economic blocs are in trouble, despite constant optimistic media hype, and another crisis is on the horizon. The eurozone in particular is sinking into a deflationary vortex which will have an impact on Britain, and the major economies remain fragile.

What happens when crisis strikes is that governments intervene, the state gets involved, and, after 2008, public ownership proved a vital weapon in avoiding catastrophe, a complete collapse of the financial system.

It was a clear signal that socialism was far from dead and that socialist measures, state management of economies, were the only forces which could counter capitalism’s inherent instability.

Indeed, since the drive to modern neoliberal capitalism was kick-started by the Tories under Thatcher in the late 1970s there has been a series of damaging recessions, low and sometimes negative growth and a dramatic rise in inequality and social deprivation.

Only the very rich have benefitted, with grotesque sums of money filched from the pockets of working people and the poor.
It is time now for Labour — and especially our leaders — to recognise that there is a need for a democratic socialist agenda, a programme to rebuild the state, a state responsible to and working for the millions of ordinary people.

Such a state was constructed by Clem Attlee’s 1945-51 Labour government and sustained by the Wilson governments of the 1960s and ’70s.

During that postwar era, full employment was the norm, working-class living standards rose at an unprecedented rate, the welfare state and the National Health Service were firmly established and there was growing equality.

The next Labour government must begin rolling back privatisation across the board.

Railways, water and the energy sector are obvious priorities. The McNulty report concluded that Britain’s privatised railways were up to 40 per cent more expensive to run than continental nationalised railways.

The contrast with formerly nationalised British Rail was extreme. A Catalyst report has found that British Rail remarkably had been the most efficient railway network in Europe, starved of funding but “working miracles on a pittance,” according to one former rail regulator.

The success of the East Coast Main Line putting millions into the Treasury’s coffers each year clearly demonstrates the success of and need for public ownership.

A GMB report on water recorded that over 90 per cent of the world’s water industries are publicly owned and that in Britain water prices since privatisation had doubled in real terms.

As for energy, two-thirds of Britain’s energy sector is now foreign-owned, with British consumers being exploited for excessive profits.
Indeed, EDF is actually 85 per cent owned by the French state, so that bizarrely British consumers are subsidising French taxpayers.
Taking the public utilities and public services progressively back into public ownership is just one component of a necessary and practical new socialist programme.

Another component must be to re-establish and strengthen democratic local government with a reversal of funding cuts.

A massive expansion of council housing and widespread in-sourcing of services would be welcomed by workers and local communities across the country.

Transferring PFI schemes back into public ownership is necessary and would also be popular, saving billions of pounds to the public purse over time.

But fundamental to a new democratic socialist era must be to get finance under control.

Margaret Thatcher’s first act was to abolish exchange controls, allowing globalised billionaires and corporations to take their cash out of the country, to gamble on the foreign exchange markets and hide their ill-gotten gains in tax havens. At some point governments have to rein in the global financiers, although it may take the next crisis to force them into action on that front.

In Britain, the next Labour government must take serious steps to stop tax evasion and tax avoidance, to close the tax gap, if funding for its programme is to succeed.

That tax gap is vast, over £100 billion a year in reality. Even half of that would transform government finances and enable Labour once again to sustain and advance the livelihoods and lives of Britain’s working people.

Labour must seek once again to regain democratic control of all the levers of macroeconomic management.

Interest rates, exchange rates, currency flows, taxation and public spending — revenue and capital should all be accountable ultimately to Parliament.

Steps must be taken to rebalance foreign trade and revive manufacturing, and income must be redistributed to reduce inequality and poverty.

Such a world worked after 1945 and it would work again. If Labour is bold and sets out a radical programme, working people will flood into the polling booths to vote Labour and the party could secure office for the foreseeable future.

Kelvin Hopkins is Labour MP for Luton North.