The economic crisis, which was expressed most forcefully in the “credit crunch” of September 2009, is starting to have devastating effects on the already fragile economy of our Region.

Over the year to January 2009, North East unemployment rose from 73,000 to 104,000, reaching 8.2%, the highest rate in Britain.  Cumbria is slightly lower than the British average, but still saw the claimant count rate rise from 5009 to 7369, the highest since July 2001.

It is a sign of the times that Nissan, the flagship of North East manufacturing industry, has sacked some 1600 workers out of a total of 5000 – and then called for state help.  Reducing the labour bill in “high-cost” countries forms a key part of Nissan’s strategy for dealing with the crisis.  Its production cutback threatens further job losses in the North East supply chain, and indeed Unipres in Sunderland has recently axed nearly 300 jobs.  
Elsewhere, US transnational Caterpillar recorded record sales of £36.4 billion but made 300 workers in Peterlee and Stockton redundant in 2008.  In the current year, up to 500 remaining staff were laid off for 5 weeks on 75% pay.  CAV Aerospace in Consett has axed 40 jobs (one twelfth of the total), frozen incremental pay increases and cut hours across 3 production lines while sending new contracts to Poland.  NSK Bearings has dismissed up to 80 staff, while TRW Automotive in Peterlee has asked workers to choose between a 4-day week or further job cuts.

In Teesside’s chemical industry, 300 jobs are to go at the Invista Textiles’ Wilton plant, while a further 200 are in the balance at the Petroplus oil refinery.  On Tyneside, the closure of the Findus factory at Longbenton has meant redundancy for 360 workers, while 150 jobs at the National Grid’s business centre are under risk from outsourcing.

Cutbacks in Cumbria have been smaller but are nonetheless significant in view of the size of the county’s economy.  30 jobs have gone at Cumbrian Seafoods, Maryport, and 40 at newspaper publishers CN Group.  In Carlisle, Pirelli announced redundancies, temporary shutdowns and a cut in working hours in response to the global slump in car sales.

The crisis, which broke through first in the financial sector with the crash of Northern Rock, has rapidly spread to the productive economy and – through the combined effects of workers’ reduced purchasing power and companies’ difficulty in raising credit – to the High Street, where chains such as Woolworth and Zavvi have been liquidated.
 
Meanwhile, despite the bursting of the property price bubble, there remains a scarcity of decent affordable homes, and house building is at an all-time low.  Gateshead is planning to construct 91 new council homes but, across the North East and Cumbria, over 103,000 households are on local authority waiting lists for social housing.  Sunderland housing privateer Gentoo claims to have been forced to slow plans for 3600 new houses – half for rent – because of the collapse in the housing market.

Even before the recent crunch the North East had a gross value added per head of 81% of the national average while Cumbria’s was only 76%.  The chance of boosting these figures to the North East target level of 90% by 2016 must now be regarded as woefully overoptimistic within the current economic strategy.
Average earnings in the North East were, before the credit crunch, the second lowest of UK countries or regions, at 88% of the national average.  Cumbria was only marginally higher.  These net figures hide some wide variations, with real pockets of deprivation across our region.  Wards in Barrow, Carlisle and the west of Cumbria are among the most deprived in the country, and overall some 16,000 children live in “income deprived” households.  The North East displays a similar picture, with some 17% of the population living in Lower Super Output Areas which are ranked as being among the 10% most deprived in England, and only 3% living in the 10% least deprived areas.

It is well recognised that people living in deprived areas are more likely to experience fuel poverty, poor housing, crime and problems related to drugs and alcohol, and to suffer from poor physical and mental health.  Both Cumbria and the North East have some of Britain’s worst death rates from heart disease and cancer.  Children born in Moss Bay, Workington, can expect to live nearly 20 years less than those just 30 miles away at Greystoke in the Eden valley.

The key to lifting people out of poverty and deprivation is the provision of decent well-paid jobs.  This requires government action in terms of job creation, not the tinkering at the edges involved in training schemes and apprenticeships.  The latter measures are of little benefit right now when there are 10 people chasing every vacancy nationally.

Government policies have brought us to the present situation.  It is the culmination of years of subservience to the so-called “free market”, privatisation of public services and the liberalisation of credit, to encouraging personal rather than public sector borrowing.  At root, Gordon Brown and his government have failed to abolish the “bust” phase of the capitalist economic cycle, which is precisely what we are witnessing at the moment – though much the more severe since it is international in scale and was delayed for years by the expansion of individual credit.  The origin of the crisis is in the extraction of enormous quantities of surplus value out of the expenditure of workers’ labour power.  Without reclaiming back that surplus value, and investing it in the domestic economy, the chance of Britain’s escaping from the crisis in a short period is very slim indeed.
The government is continuing with the same failed economic policies that have led us to this situation.  £1.2 trillion has been thrown at the major banks, to keep them afloat without direct government control, but little is offered to sustain manufacturing industry or to enable those under threat of home repossession to keep their heads above water.

Reduction of interest rates by the Bank of England has made it cheaper for the banks to borrow money, but they remain committed to safeguarding the interests of their shareholders rather than enabling manufacturers to get the credit they need in order to remain in business.

Meanwhile the government is persisting with promoting the privatisation of public transport, the postal and civil services, sections of the National Health Service and with the break-up of the comprehensive education system.  Much of this is related to EU directives and policy directions taken by the European Commission.
In Tyne & Wear, the highly successful Metro light rail service is under threat of being handed over to bidders from the private sector, as part of the price of a government-sponsored modernisation package.  Members of the Passenger Transport Authority claim it is not privatisation since they will still control the fares but that is self-deception at best.

The quality of the postal service available to the public has already been cut back through the closure of many post offices, and is likely to get worse through Mandelson’s plan to part-privatise Royal Mail, quite apart from the potential impact of that on wages and conditions of the postal workers.

At a time when so many workers are being thrown on the dole, it is a tragedy that Jobcentre work is being handed over to private agencies, who will make profit allegedly for placing people in jobs, but in practice for compelling workers to take jobs under threat of losing benefit.

Behind the scenes the government is forcing through a massive new drive towards fragmentation, privatisation and marketisation in the NHS, targeting primary care and community care services through “World Class Commissioning”, which is intended to ensure that a variety of providers compete for contracts to deliver services.  There is a clear threat here to the wages, conditions and pensions of NHS staff: workers who are obliged to transfer to the so-called “social enterprises” may be able to continue in their NHS pension scheme, but that will not apply to new staff.

New Labour is persisting with the elitist “city academy” scheme in secondary education, despite the damning Ofsted report on the Unity Academy in Middlesbrough and the disastrous situation around the Richard Rowe Academy in Carlisle, and the opposition of parents and teacher trade unions.  The “Save Our Schools” campaign in Barrow is campaigning against academy proposals.

The crisis is providing fertile ground for the projection of race hatred on the part of fascist organisations, and it is no accident that the BNP has recently stepped up its activities nationally and within our District, particularly in Sunderland, Newcastle, Carlisle and Penrith – where they have been leafleting outside local schools.  In a recent Council by-election in Fenham, Newcastle, the BNP candidate gained a massive 829 votes.

Trade unions to their credit have taken a leading role in combating the BNP and its ideology, but unless a clear alternative is offered addressing working class concerns it is inevitable that support for the fascists will continue to rise.

It is therefore highly significant and timely that The People’s Charter – A Charter for Change, was launched in March of this year.  Supported by a number of labour movement organisations, including our Party, the Charter campaign sets the aim of gaining a million signatures for a programme of policies to meet the crisis in the interests of working class people.  It originated out of a proposal from our own Party, and expresses in a popular form some of the policies of the Left Wing Programme, which is the essential first step in putting Britain on the road to socialism – the only real solution to the capitalist crisis.  It needs to be taken into trade union branches, workplaces, pensioners’ organisations, the peace movement, street corners and door-to-door in order to be publicised far and wide and to garner the necessary support.  This is more than just a petition: it is a mobilising campaign to build a movement which will build the pressure for real change.  And time is short – the next General Election is at most just a year away, and a Tory government is on the cards.

Tasks for the Communist Party

The present situation provides the Party in the Northern District with a number of key responsibilities:

•    Campaigning within and outside the trade union movement for support for The People’s Charter, as part of the campaign to win the movement for the policies and objectives of the Left-Wing Programme.
•    Campaigning within and outside the labour movement for support for the objectives of Trades Unionists Against the EU Constitution and the Campaign Against Eurofederalism, whether or not this is reflected in an electoral formation locally.
•    Working with others in the labour and progressive movement to oppose the far right.
•    Supporting all campaigns against privatisation and for the defence of public services.
•    Building paid daily circulation of the Morning Star, as the key vehicle which can provide the overall political perspective and give leadership to these campaigns.
•    At the same time building the strength of the Communist Party and the Young Communist League.

Over the past two years we have scored some significant successes within our own organisation: the development and strengthening of our Cumbria Branch; the ensuring of regular meetings in Darlington/Teesside and Sunderland/South Tyneside Branches; the holding of the first Communist University of the North; expansion of our public activity including street stalls, sales of Communist Review; serious consideration to extending our electoral work into Cumbria; significant fund-raising for National Appeals; and the establishment and development of the Northern Communists web site.  We now set the incoming District Committee the following tasks for the next two years:

(1)    Developing the cadre base, membership numbers and organisational strength within Cumbria to enable the establishment of North Cumbria and South Cumbria Branches, while maintaining regular Cumbria Aggregate meetings.
(2)    Developing activity, organisation and recruitment within the Darlington & Teesside area to enable the establishment of separate self-reliant Darlington and Teesside Branches.
(3)    Developing the activity and cadre base in the Sunderland & South Tyneside Branch, so that the Branch becomes self-reliant.
(4)    Developing the cadre base of the Newcastle & Gateshead Branch so that comrades with District responsibility can be relieved of routine aspects of branch work.
(5)    Mounting, with the Executive Committee’s permission, a Parliamentary campaign in the anticipated 2010 General Election, in the Newcastle East constituency, and ensuring Communist participation in local election contests in Newcastle, Sunderland and Carlisle, in 2011 if not 2010.
(6)    Holding a new and prospective members’ school and a Communist University of the North each year, whenever logistically possible.
(7)    Appointing a web master for the Northern Communists site and making use of the site to market the stock of Clarion Books.
(8)    Making a conscious effort to win more women for Party membership, through printed materials and the web site.
(9)    Building the sales and subscriptions of Communist Review, both inside and outside the Party, to at least 50 per issue.
(10)    Winning 20 new paid daily sales of the Morning Star each year, promoting the raising of at least £500 annually for the Peoples Press Fighting Fund, and increasing share ownership of the Peoples Press Printing Society to 50% of Party members.