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Editorial: Government intervention is welcome but it needs to go further

THE long-delayed, much-needed and finally conceded lockdown is not as comprehensive as it needs to be. 

It is finally implemented after a frightening rise in infection rates, itself a product of the government’s indecision, and in schools only after exemplary action by the National Education Union forced the government’s hand.

The Chancellor has brought out a new package of business subsidy for the retail, leisure and hospitality sectors most at risk. 

Local councils will get near £600 million in additional support for other businesses.

Not surprisingly the British Chamber of Commerce (BCC), representing over 100,000 local enterprises and 50-plus local chambers, welcomed this public subsidy but criticised the government's “drip-feed approach” and argued for “a long-term plan that allows all businesses of all shapes and sizes to plan, and ultimately survive.”

Socialists will smile at the irony entailed in a call for state planning from a sector that celebrates the hidden hand of the market as the essential spur to entrepreneurial enterprise.

But socialists should welcome this plea for decisive government action and go further. 

It may seem counter-intuitive to the thousands of small businesspeople, but socialist planning based on collective ownership is the best guarantee of their survival in the long term. 

In the short term they need a massive public subsidy and in the medium term they, like the rest of us, have a real interest in a shift to a less predatory economy.

The 2008 financial crisis highlighted the deeply damaging effect of the Thatcher-ordained shift to a parasitic financialised economy based on speculation and the ruination of industrial production.

The immediate effect of the long years of austerity on small- and medium-sized enterprises (SMEs) was that demand for the goods and services they provide was limited as wages lost their value. 

But beyond this the big banks — who themselves would not have survived without a taxpayer subsidy of uncounted and unprecedented billions — emerged more clearly as an oppressive factor in their commercial existence.

The one thing SMEs need in a predatory capitalist economy like Britain’s, where takeovers and acquisitions are hard-wired into business practice, is capital for investment. 

In the aftermath of the 2008 crisis the BCC told MPs that they faced a funding crisis and the banks — busily boosting their capital assets and hoarding money mountains — had created, by their unwillingness to lend, a credit crisis and a consequent “lack of trust between lenders and businesses.”

The BCC reported that SMEs alone faced a finance gap up to £59 billion. 

Their “firm belief” was that only a state-backed business bank could play both a pro-cyclical and counter-cyclical role to encourage access to finance. 

We see here today the bare bones of a shared interest. No-one, most especially the many thousands of low-paid employees of small businesses or super-exploited shopworkers facing unemployment, should think that the basic clash of interests between employers and workers will vanish with the wave of a magic wand and certainly not one wielded by the richest man in a Cabinet of the very rich.

But the owners of SMEs, whether inspired by lofty ideals or simply chasing profits in a system where low wages are the basis of their profitability, have a general interest in rising wages even if they regard this as essential for their customers rather than their employees.

For the moment the labour movement must campaign for full income security, mortgage relief and a rent freeze. 

But beyond that a renewed wage offensive coupled with a homes-for-all campaign for public housing construction and a catch-up education drive.


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