In Mid-May, almost exactly one year after the Catholic Holy Cross girls' school in North Belfast's Ardoyne was singled out as a target by UDA-UFF gangs, the mostly Catholic Short Strand area, in East Belfast, came under attack from the UVF.

This time, the loyalists' objective was crystal clear. It had nothing to do with "protecting" sectarian boundaries from alleged threats (the pretext used by the UDA last year in North Belfast). In this case, the UVF wanted to demonstrate its determination to drive the 3,000 or so inhabitants of this Catholic enclave out of the predominantly Protestant East Belfast.

It began with pipe bomb attacks against houses. Residents were pelted with stones, tiles and all sorts of other objects. Neighbouring shops, GP surgeries, pharmacies, post offices, etc.. were declared no-go areas for Catholics and loyalists thugs used threats and physical force to enforce the ban. Then, at the beginning of June, the queen's jubilee provided the UVF with a pretext for escalation. They staged a provocation by erecting flags outside the local Catholic church, leading to violent confrontations in the neighbouring streets. A large loyalist contingent invaded the area and went on the rampage, attempting to burn down houses. Several Catholic households were left with no choice other than to move out of the Short Strand. Many more people, on both sides, were treated for injuries, including some from gun shots. Later on, an unprecedented attack took place against a campus of the mixed Belfast Institute of Higher Education, in which masked loyalist thugs went to search for students living in the Short Strand - although, fortunately, they had to rush out before managing to find one.

The authorities' response was predictable enough. The NIPC (the rebranded RUC) was sent in together with British soldiers. They did very little to stop the attackers. But as soon as gun shots were heard in the area and unionist politicians started making hysterical noises about the IRA having broken the cease-fire, the residents were immediately subjected to house-to-house searches for weapons - as if being attacked by the UVF was not enough already. Of course, this did not stop the loyalists gangs from coming back again and again during the next days!

Ultimately the Executive came up with the same old "conflict-resolution" device invented long ago by the British army - more "peace lines". By now, the Short Stand area has been almost totally walled off from the neighbouring Protestant shopping streets, which means misery for its residents. Has it stopped thugs from coming back into the area, as security minister Jane Kennedy claimed it would? No, of course not, and why should it have? With the Short Strand sealed off from the rest of East Belfast, the UVF has won a victory and it can only be expected to try to push its advantage even further.

A return to the loyalists' turf war

One might wonder why, all of a sudden, the UVF has chosen to single out this Catholic enclave which has been there for so many decades. In fact, this is not the first time at all. Throughout the 1970s and 80s, the Short Strand has been the target of systematic attacks by loyalists, like most working class Catholic areas in Belfast, but even more often than most.

Since the beginning of the negotiation process, however, there has been a relative lull, with occasional surges of sectarian attacks, but nothing comparable to the recent events. The UVF, which is the strongest loyalist paramilitary group in the area, was busy consolidating its hold in the new context created by the peace process and the prospect of a political settlement. Its political front, the PUP, was striving to establish itself against the two main unionist parties. PUP figureheads like Billy Hutchinson - a former trade-union official at the Harland and Wolff shipyard, before doing time in jail for paramilitary activities - were using a social-democratic language designed to appeal to the working class electorate of the pro-Establishment unionist parties. In a bid to capture votes among the liberal electorate, the PUP even made token anti-sectarian gestures (like its condemnation of Castlereagh borough council for flying the Orange flag, on the grounds that it was "an affront to Roman Catholics and nationalists in the area") and posed as a champion of women's rights against the reluctance or outright opposition of all other parties (Sinn Fein included) to advocate the extension of the British Abortion Act to Northern Ireland.

To some extent these tactics worked, at least initially. The PUP managed to build a small but not insignificant electorate, winning seven seats in the 1997 local election. Even after Blair tightened the rules for the 1998 Assembly election, by eliminating the "top-up" system which had allowed the ten lists with the highest scores to gain additional seats, the PUP still managed to win two seats in the new Assembly. By contrast, the UDP, the other loyalist party linked to the UDA-UFF paramilitaries, which had stuck strictly to its tradition by promoting itself as the "voice of loyalism", was squeezed out altogether, after losing half of its votes between the Forum election, in 1996, and the Assembly election, in 1998. Clearly there was no space for a "voice of loyalism" as long as Paisley's DUP was there to whip up anti-Catholic prejudices for its own electoral benefit.

The institutional set-up that came out of the Belfast agreement had never been intended for the small players. And the two main unionist parties made sure that their lesser rivals were left high and dry on the doorsteps of the various bodies and quangos controlled by the Executive. With time the loyalists groups came to realise that they would never gain a share of the peace process "cake" through the ballot box only.

This realisation was probably one of the main factors behind the faction fight which broke out within the UDA, resulting in fierce battles in its Shankill stronghold. But the final blow to the UDA's institutional expectations came when it only managed to get two councillors elected in last year's local elections. After that, the UDA's "physical force" faction took the upper hand and the UDP was formally disbanded.

As to the PUP/UVF, it did not suffer quite as badly as its rival in the local elections. But out of the 7 seats it had won in 1997, the PUP only retained the four seats it held in the Belfast area.

Predictably what came next, was a return to the turf war between the two groups for their traditional bases, the poorest Protestant working class ghettos in Belfast. The UDA's offensive in Ardoyne, from June last year onwards, was an attempt to challenge the PUP/UVF in Billy Hutchinson's own stronghold (he is a councillor in the area and a representative in the Assembly). And the odds are that the UVF's present attacks against the Short Strand enclave are aimed at pre-empting a similar challenge by the UDA in an area which is the territory of the PUP president, David Ervine.

The "peace process" can live with it

If so, one can only expect the territorial fight between the two loyalist groups to escalate in Belfast in the coming period.

This means a very real threat for all workers in Belfast. It is a threat for those in the Catholic ghettos, in the first place, because they are bound to be targeted whenever one of the rival loyalist gangs decides to make a show of strength, as in the Short Strand today. It should be remembered that, in the 1970s in particular, it was the overbidding between loyalist groups, and their on-going internal factional fights, which resulted in some of the worst atrocities against Catholics. After all, the so-called "Shankill Butchers" were not a bunch of psychopaths out of a mad house, but a disgruntled faction of the UDA.

But the territorial fight between loyalists is also a threat for those in the Protestant ghettos, because it is for their estates that the loyalists are fighting, and they do not usually confine themselves to using propaganda with the locals. Their main weapon is and has always been terror, including in Protestant areas. How many people have paid dearly, sometimes with their lives, for their public opposition to the loyalists gangs in these areas? It is no coincidence if the UDA has killed roughly as many Protestants as Catholics since the Belfast agreement. As far as these thugs are concerned, for instance, mixed facilities like sports clubs, students' residences and workplaces, or even mixed households for that matter, are targets which are just as "legitimate" as "republican" homes.

Many commentators have speculated lately about the possibility of the "peace process" surviving in the context of this turf war among loyalists. However such speculation amounts to a hypocritical denial of the real nature of Blair's "peace process".

The "peace process" was never designed to protect the population of Northern Ireland's poor ghettos against sectarian thuggery, let alone to bridge the sectarian gap created by Britain's occupation over the centuries. It was designed first and foremost to relieve the British state of the political and economic cost of a civil war which was a burden on its budget and deprived British capital and its partners in Northern Ireland of the profits that could have been made out of this ready-made market and labour pool.

For a long time the attempts made by British governments in this direction failed, partly due to the bigoted determination of the Unionist establishment not to share power with anyone, but mainly due to London's determination to avoid any accusation of conceding to the IRA. This was a catch-22 situation, because after the explosion of the late 1960s, the British army was impotent against the resistance of the Catholic ghettos and only the Republicans had enough influence over these ghettos to impose on them a settlement on Britain's terms. In the end, it was the Republican leadership who made enough concessions to be admitted to the negotiations. Only then did the British state decide to twist the unionist parties' arm, and even then very gently.

Right from the start, the assumption on which the negotiations rested was this was a "partnership" between two sectarian blocks, with Britain as the game leader, in which the Republicans, with the assistance of the SDLP and the Catholic church, would police the future agreement in the Catholic ghettos while the unionist parties, including the loyalists, would do the same in Protestant areas. By implication the population of Northern Ireland was sliced into two sectarian entities and this split was enshrined in the institutions which came out of the Belfast agreement. So for instance, if a member of the Assembly refused to register as either unionist or nationalist, his or her vote would not count for most important decisions.

And how were the protagonists in the Belfast agreement meant to police the agreement among their respective self-proclaimed constituencies? With the same old methods with which they had controlled their territories in the past, of course! Despite all the noises made by British ministers and unionist politicians, the IRA's punishment beatings were just as much an implicit part of the settlement as the terror methods of the loyalists. Regardless of their political rivalry with the mainstream unionist parties, the loyalists were expected to serve, as they had always in the past, as convenient auxiliaries for these parties. And this is what they have done so far, by feeding the fears and siege mentality which are so indispensable for the unionist parties to retain their monopoly over the Protestant ghettos.

So why would the thuggery of the loyalists gangs endanger the "peace process", since it is in fact part of it? Only one thing could put the "peace process" into question - a decision by the Republicans to pull the plug. But why would they, as long as no serious rival is in a position to overbid them in the Catholic ghettos? Indeed what better perspective is there for Sinn Fein, now that it has succeeded in pushing the SDLP into second place via the ballot box and is enjoying the perks of constitutional politics, with two ministers in the Executive, 108 local council seats and a number of top positions in local government, including the highly-symbolic mayor's job in Belfast?

Capitalist profit on the rampage

Not only does the "peace progress" provide a political framework which perpetuates the sectarian divide, it also generates the social ferment on which sectarian hatred feeds. The loyalists gangs would be unable to find recruits, especially among the working class youth, if it was not for the degradation of social conditions in working class estates, which the peace process has done nothing to stop, quite the contrary.

In the run-up to the Belfast Agreement, in 1998, one of the British government's main arguments to win support for the "peace process" in Northern Ireland was the promise of a bright and affluent future thanks to what was described as the "peace dividend." Of course what was really meant by this was very different depending on the audience which was being addressed. But when Blair addressed a business conference called "Investing in peace", in Belfast that year, his view of Northern Ireland's future was that of some sort of European Singapore - i.e. a low-wage, low-cost, subcontracting economy for Western multinationals.

Four years on, despite the economic success story boasted of both by Northern Irish and British ministers, the promised flood of foreign investment has still to materialise. On the other hand, what has already materialised is the low-wage economy that Blair had promised his business audience. As to the "peace dividend", it has reached the pockets of a thin layer of rich shareholders and local capitalists. But for most of Northern Ireland's workers, the only "dividend" so far is a negative one.

According to the Economic Development Forum, a quango which brings together bosses, government officials and union bureaucrats to work out schemes to attract foreign investment, between 1996 and 2001 the province's manufacturing output increased by 25% in value while its manufacturing exports increased by 109% - and this during a period when a large part of Northern Ireland's traditional textile and food-processing industries was closing down. In fact, almost all the rise in output and exports is due to just two sectors - cable and aircraft manufacturing - with a very large chunk that is attributable to just one plant, the Canadian-owned Shorts factory in Belfast.

However these rosy figures actually conceal a very different story for the manufacturing workforce. Northern Ireland's traditional industries, which have now virtually closed down, were mostly labour intensive. But the so-called "new growth industries" are not. What is more, despite a full order book for executive jets and soaring production, Shorts has been cutting nearly 2,000 jobs over the past six months.

Officially the unemployment count has dropped dramatically since the introduction of the Jobseekers' Allowance, for much the same reasons as in Britain - people have been shifted onto other benefits, coerced into taking casual low-paid jobs or taken off the dole count for working just a few hours a week. The shift from full-time to part-time employment has rocketed as superstore chains like Tesco and Dunnes were becoming the largest employers. The construction boom generated by soaring housing prices and European funding for business is alleged to have created many jobs. But in fact, it merely provided an opportunity for a whole section of the "black economy" to surface into legality - and the "new" jobs offered by these cow-boy contractors are neither new nor even real jobs, as many of them carry a self-employed status.

The real content of Northern Ireland's alleged "success story" is best summarised by a few facts provided by official statistics. Firstly, Northern Ireland's ranking in terms of GDP/head among all European Union's regions has not changed since the beginning of the "peace process" - it is still in the bottom third of the list, barely better off than the poor Italian island of Sardinia. Second, compared with Britain, earnings per head in Northern Ireland are not going up but down: in 1996, average earnings per head in Northern Ireland were 89.5% that of Britain, but last year they had gone down to 84.5%. But this only reflects the situation for average earnings. The gap between the top and the bottom of the income ladder has been increasing very fast over the past few years, so that the Northern Ireland working class is a lot worse off, relative to its British counterpart, than is shown by these figures.

A recent academic report commissioned by Trimble's office gives an idea of the extent of the damage caused by this situation. It shows that a third of the population of Northern Ireland lives in deep poverty - that is in a household whose income is equal to or below 30% of the average income in the province. And out of the population of working age which lives in deep poverty, 26% actually have a full-time job while another 12% work part-time. Of course, the section of the population living in deep poverty is concentrated in the areas of highest unemployment - which are still the old working class ghettos of Belfast and Derry.

What is taking place in Northern Ireland is indeed the entrenchment of a low-wage economy for the benefit of capital in general and British capital in particular. According to some estimates labour costs can be as much as 40% lower in Northern Ireland than in Britain: this is the "peace dividend" for capital. But for many workers in the province, the "peace dividend" has turned out to be a drop in living standards if not outright poverty.

Enough of Blair's cynical hypocrisy!

Like in Britain, time and again Blair has declared war on poverty in Northern Ireland and there are countless schemes with flowery names officially aimed at addressing the problems faced by the poorest section of the population.

The most comprehensive of these schemes was recently denounced in a scathing report by the NICVA, a body which brings together the voluntary organisations operating in the province. This scheme is called "Targeting Social Needs", or TSN, and it is a typical example of the cynical hypocrisy displayed by British governments when it comes to dealing with social dereliction in Northern Ireland.

In fact this TSN goes back a long way. It was launched in 1991 by the then Tory Northern Ireland Secretary, Peter Brooke. Its "beauty" as a government scheme was that it was a "non spending programme". It was made up of guidelines which were to be followed by all departments with the view of channelling existing resources towards areas in which urgent needs had been identified. Above all it involved a comprehensive system of monitoring so that hands could occasionally be slapped for failing to target social needs. But of course, as no additional funding was provided (not even for the mountains of paperwork required for the monitoring itself) and budgets were usually too tight, the scheme was bound to be pretty useless. It was a perfect exercise in bureaucratic tokenism.

Nothing changed with Labour's return to power in 1997. The following year, the Belfast agreement included a commitment to "a new more focused social needs targeting initiative." So Blair did what he has done in so many areas: rather than changing the scheme, he relaunched it under a new name - "New TSN", of course! The only addition to the scheme was some more monitoring to assess how well-balanced its implementation was across the sectarian divide. As usual the Labour government embarked on a lengthy consultation exercise, involving a series of conferences, allegedly in order to improve the guidelines. Finally, in 1999, "New TSN" was relaunched once again, this time with a 268-page document entitled "Making it work" to back it up. This document included a long series of so-called "action plans" designed to implement the guidelines. Except that as the NICVA pointed out, this was hot air and rehashed old stuff: although presented as new initiatives, most of these "action plans" had been started long ago and many had even been completed!

One "action plan" quoted by the NICVA report gives a measure of the hypocrisy of the whole exercise. It involved taking 5% out of the budget of every school to be redistributed among the poorest. In other words the already inadequate budgets on which all schools are supposed to survive were to be cut without even bothering to assess the actual needs of the poorest schools, nor whether this bureaucratic redistribution did really help them.

This sort of tokenistic bureaucracy, purporting to "bridge the gap between communities" at no cost, by taking from hard- up Peter in order to help even poorer Paul, is always useless. But when it is used allegedly to create a "level-playing field" between Catholic and Protestant areas, it becomes deadly and ends up feeding resentment on both sides. The least badly-off feel that they are being deprived of what little they have by the others, while the worst off get nothing that can help to sort out their problems and blame the former for it. This is how these so-called "community policies" (which Labour and the new Northern Ireland Executive are so fond of, precisely because they can claim to be doing something at no cost) become a powerful mechanism feeding sectarian hatred in the working class ghettos, especially in the context of public services being increasingly run down everywhere.

It is the same kind of tokenistic bureaucracy - that is, plans drafted by the Northern Ireland Executive to provide lodgings, at minimum cost, in neighbouring areas for families on the waiting list in Ardoyne - which was used by the UDA to mobilise support for its attack on the Holy Cross school last year.

But the real cause of the worsening housing problem in Belfast has nothing to do with attempts by Catholics to take over Protestant areas or vice-versa. It is due primarily to Blair's housing policy, which involves on the one hand pushing housing prices up in order to boost artificially the purchasing power of the home-owning middle class, while, on the other hand, freezing all new construction of social housing and most urgent repairs programmes, in order to save on social expenditure. And, of course, the Executive is party to this attack on the living conditions of the Belfast working class.

Of course, there is still a degree of inequality and discrimination between Catholics and Protestants in Northern Ireland. The report on poverty quoted above finds for instance that 35% of the Catholic population is in deep poverty, as opposed to 21% among Protestants. And unemployment is still higher in the poorest Catholic areas. But these differences have long been marginal compared to the huge gap between the poor working class ghettos, Catholic and Protestant, and the increasingly affluent leafy suburbs of Belfast where the local establishment lives.

The real enemy is the capitalist class and its politicians who are driving the working class of Northern Ireland, as a whole, into a poverty trap and covering up their policy with the rhetoric of the "peace process" and the cynical hypocrisy of "community policies." And they are not just hypocrites who have nothing but contempt for working people, they are criminals who will stop at nothing to turn the screw of capitalist exploitation - even if it results in two sections of the working class being at each other's throats.

Fortunately the situation in Northern Ireland has not reached this stage, not yet in any case. But the present developments, with the loyalists' turf war, must be seen as a serious warning. Many workers, both Catholic and Protestant, are sick and tired of having to live behind the so-called "peace lines" and being subjected to the bigoted hate-mongering of the paramilitaries, just as they are sick and tired of the bosses' and politicians' attacks against their living conditions and of Blair's cynical ploys. The tragedy, today, is that they have nothing and no-one to turn to.

What is desperately needed is a political voice that expresses the common class interests of all working people and jobless in Northern Ireland, regardless of where they live and without making any excuses based on past antagonisms. The working class represents the future for society because it has the potential to end capitalist exploitation and the profit system. It needs a party that looks towards the future and is determined to defeat all attempts at using the old sectarian divide to split, imprison and paralyse its ranks.

1st July 2002