I was just walking down to Aldwych to get the bus, thinking I might drop in on the protest in Trafalgar square and see how it was going, when suddenly I heard a loud roar and saw a stream of protesters coming down from Kingsway. That's Britain for you these days. You can't go anywhere without walking into a protest. Police were forming a line to try to gently guide the protesters back down the Strand and toward Trafalgar Square, but they were having none of it. They pushed through the cordon and suddenly thousands of protesters were dashing toward Fleet Street, laughing and cheering. I caught up with some of them and asked what was happening.

They told me that marches from a number of different universities had congregated near Oxford Street, proceeded toward Trafalgar Square and parliament, then - noticing the vast numbers of police vans and riot squad gathered in anticipation like a big neon spider's web - had decided to go off on an ad hoc tour across the city to escape being kettled. So I joined them. We first made our way to the City, marching and dashing, blocking roads and roundabouts, up to St Paul's cathedral, then to the Barbican, and beyond. Police were stretched thin, and only a small number kept up with us to keep an eye on the situation. Cries went up, formless hollering, cheering, whistling, slogans: "Students and workers, unite and fight!", "Tory scum!", "Nick Clegg, shame on you, shame on you for turning blue!" And so on. Bus drivers tooted, and office workers cheered. A lot of them were amazed to see us dashing helter skelter around their office buildings, as we deliberately took the march through some of the more obscure back streets as well as the main roads. We got a few taxi drivers cheering us on, and a few others driving a bit too aggressively into the rear end of the protest. As a rule, the more expensive the car, the more eager they were to be getting a bloody move on, and the more frustrated they were that they couldn't simply drive over this proletarian scum.

We marched back toward Bank with the intention of going to Trafalgar Square. I had received a few messages warning of the pre-emptive 'kettle' set up at Trafalgar Square, as I'm sure others had. Some of the protesters discussed what to do about this. I think the decision was to see what was happening, so we marched back in that direction anyway, not completely sure of our intentions. There was the possibility of dropping in on the occupation at KCL. On the way to Trafalgar Square, though, City police blocked the road suddenly with armoured vehicles. Christ knows what they were doing. Anxious to retain our liberty, we took evasive measures, running down a side-street toward Embankment. Police were rather put out by this simple tactic, having failed to anticipate that protesters could move in three dimensions. More tooting horns and yells of support came our way as we surged onto the Victoria Embankment and charged back toward the Strand. A cabbie with a wealthy couple sitting uncomfortably in the back applauded enthusiastically and pounded his fist in the air. There's a surprising number of people who like nothing more than the site of a good protest.

The set up as we got to Trafalgar Square was glaringly apparent. Police vans blocked off Whitehall, Pall Mall, and Charing Cross road, and a fleet of vehicles - including the aforementioned armoured vans - started to move in behind us. Row upon row of riot cops stood with a curious mixture of boredom and tension etched on their faces, expectantly fingering their riot helmets. They were waiting for something to happen, to justify the kettle, to start . But they had missed the point. The protesters had been marching across the capital for hours - cheerfully blocking roads, touring byways, bringing the message to workplaces and shops, and basically avoiding all attempts to shut down, kettle and freeze the protest into frightened timidity. There was nothing more for the police to do, as they had already been completely out-witted, out-paced and out-manouevred. And yet... well, wouldn't you know it? Hundreds of students are being kettled in Trafalgar Square even now in freezing temperatures. There's no reason for this. They haven't done anything illegal, hurt anyone or damaged anything. They certainly didn't 'riot'. But the police are exacting revenge, punishing the protesters. This is what kettling is for.

Across the country, though, the same combination of militancy and spontaneity has prevailed. In Cardiff, protesters occupied Lloyds TSB, then Vodafone, then staged a sit-down at a main junction. Thousands have marched through Brighton and Bristol, and school students occupied Oxford County hall. In Aberdeen, protesters took over the Conservative Association's headquarters. In Birmingham, they turned up at the council chamber and a number of students got in and occupied. In Belfast, Queen's University went into occupation. In Cambridge, school pupils and sixth formers staged a sit-down in the shopping centre. In Leeds, hundreds of students occupied again, although police have turned up to evict them again. In York, hundreds of protesters tried to storm the council chamber but, blocked by police, blockaded the main bridge instead. And so on, and on. More protests, more occupations, and the momentum behind this anti-cuts movement refuses to die down, even in the freezing cold and the miserable snow and sleet. And no one who has anything to do with these cuts can relax and think the movement won't bother them. If you're a town hall, a Vodafone outlet, a bank, a Tory HQ, a Lib Dem HQ, anywhere in the country, there's a protest, a sit-down strike, or an occupation with your name on it.

The IFS have, predictably, torn the Tories' 'progressive' claims for their Comprehensive Spending Review to ribbons. The headline is: the spending review is overwhelmingly regressive, with the poorest 10% suffering most. The 'total consolidation', including Labour's measures, will bite more into the income of the richest 2% - but only because of the previous government's tax policies. (Follow Faisal Islam's tweets on the IFS's briefing). Far from being progressive, it's quite a deliberate assault on the poorest, and "risks" - so says this economist - "spiralling poverty". The cuts to social housing, for example, will result in a trebling of rent for new council house tenants. It's also worth mentioning that the bank levy, raising a miser's sum of £2.5bn, will coincide with corporation tax cuts, leaving the biggest banks better off. Note that even the solitary figure of £2.5bn is much lower even than the total sum of expected bonuses, which will rise to £6.8bn this year.

Relatedly, check out China Mieville's 'letter to a progressive Liberal Democrat'.

Overall, public spending is being cut by about a fifth in this spending review. Let's have a quick look:

*£7bn additional cuts in welfare spending. That's a huge figure. Total welfare spending including income replacement benefits and social exclusion spending is £60.4bn. If it's coming out of the whole, it's more than 10% cuts. If it's just coming out of income replacement benefits, it's closer to 26% cuts. Judging from the BBC's coverage, it's mainly coming out of income replacement benefits. Either way, it's going to be extremely messy if you're disabled, on the dole, or on low incomes.
*7.1% a year reductions in council spending for four years, which I think is a total of 28.4% cuts - that's your libraries, rubbish collection, street lighting, paving, all the basic quality of life stuff, savaged. Social housing is to be 'reformed', which basically means torn to pieces.
*7.1% cuts a year in the Department of Business Innovation and Skills, which deals with higher education, investment in R&D, consumer protection, trade issues, etc. Over four years, I guess that amounts to 28.4% cuts.
*40% cuts to higher education are included in that figure. This was anticipated by the Browne review, which basically recommended tearing up funding for teaching, while keeping most research funding.
*3.4% cuts in the Department of Education, with 40,000 teaching jobs lost.
*Higher rail fares, which will raise by 3% above the rate of inflation until 2012, presumably to make up for a shortfall in investment. Rail fares in the UK are already among the highest in Europe, especially in London - where the system is going into chaos under Boris Johnson.
*Retirement age to rise to 66, thus saving on pensions in the long-term. The Hutton review, which has already recommended cuts to public sector pensions, is cited in support of this measure - thanks again, New Labour.
*490,000 public sector job losses are expected, and if this government's track record is anything to go by, that's an optimistic assumption.

There are also a whole swathe of cuts coming in environment, justice, the foreign office, and the department for energy and climate change. Apart from everything else, this is not a green budget. Let's also take a quick look at police and defence. The police are going to lose 16% of their budget over the next four years. That's quite shockingly high to my mind, more than I would have expected, and it takes a risk with the police's political support for the administration - which I would have thought they would want to safeguard in a potentially turbulent era. The MoD is going to lose 8% of its budget - way lower than the 20% initially flagged up, probably due as much to US pressure as to pressure from the military brass itself. But it does mean fewer troops, and a delay in the replacement of Trident. For Cameron, this probably means not a break with the 'special relationship', but much more dependence on the US.

Well, that's it. The Tories, of course, have tried to sell this as 'progressive' in that they claim it will affect the rich more than the poor, and are massively overselling a puny bank levy which they claim will raise £2.5bn a year. No one is going to buy the progressive sell, beyond the dippiest of Liberal loyalists. I await a fairly comprehensive trashing of this dubious cover from the Institute of Fiscal Studies or a similar think-tank. The situation could not be clearer: either we stop them or they finish us off.

Just a couple of election book recommendations, as this issue of equality is going to be vital in rebuilding the Left after New Labour's meltdown this Thursday. Getting a firm grasp on the topic is also going to be important in unmasking the pseudo-egalitarianism of the Cameronites. Notwithstanding some of Brown's last minute attempts to talk up his egalitarian credentials, it is reasonably well established that the New Labour project that he co-founded has been positively harmful to the cause of equality. It actively shifted the agenda on this question to the right, away from equality and toward a nebulous conception of fairness and social inclusion. This in turn has fed into Cameron's 'Big Society' agenda. (Actually, the story goes back further than that, as readers of my unreasonably inexpensive little book will discover).

Fortunately, there is an intellectual backlash against this trend underway. Two recent books make an explicit and compelling case for egalitarianism: The Spirit Level by Richard Wilkinson & Kate Pickett, which has been widely celebrated and even cited by David Cameron to the authors disdain; and Injustice by Danny Dorling. Each deals with different aspects of the argument. While Pickett and Wilkinson, experts in health and social epidemiology, deal with forensic statistical analysis of inequality and its baleful effects on various aspects of social well-being, Dorling, a geographer at Sheffield University, tackles the corrosive beliefs which support inequality, and which the powerful go to great efforts to reproduce through various institutions from education to the media.

So, while The Spirit Level makes the case for equality on the basis of the social advantages it brings, Injustice makes the case for equality as a demand for political justice. Not to lapse into caricature, I should stress that it is clear that Pickett and Wilkinson believe that inequality is inherently unjust aside from being disadvantageous, but that is not the focus of their treatise. Their main focus is to show that almost every aspect of our lives, including educational attainment, our susceptibility to imprisonment, mental and physical health problems, community relations, and everything that makes up for the quality of life, is related to inequality. The authors note that in the last 'epidemiological shift', the focus of healthcare moved toward seeing stress as a major factor in long-term and fatal illnesses. And stress, as an occupational hazard, is something that mostly affects the majority who are lowest in the hierarchy, and who have the least control over their work. So, there's a multi-dimensional account of inequality here - it isn't just about inequalities of wealth; it is also about status and power, especially power over one's own destiny. They attack politicians for attempting to decouple the symptoms of inequality from their cause, thus leading to moralistic, socially authoritarian drives to get people to change their behaviour. Whether it is an insistence that parents be more feckful, or the heart disease-prone get more exercise, policies built in such a basis have consistently failed in their objective. Only a materially more egalitarian society will produce the desired effects.

Dorling argues that there are five chief kinds of inegalitarian belief that are encouraged by the powerful, perhaps only really believed by the powerful, but which exert real social effects because of their role in shaping official doctrines and policy. Worse is that they come in a language that deliberately softens their edges, prettifies them, and neutralises their political charge. Thus, Dorling engages in a sustained attack on the intellectual bases for inequality, from the superstition that elitism is efficient to the claim that prejudice is natural. All of the arguments he discusses are ones that have become, in different ways, hegemonic, and all of them have been involved in one way or another in this election campaign. Moreover, the effects that such beliefs have are evident in the arrogant self-satisfaction of the rich, their contempt for the poor and unemployed, and their belief that any government interference with their wealth is a betrayal of the extraordinary few who make things work for the rest of us. Given that the rich don't believe they should be forced to pay for any of the recession for which they are chiefly responsible, from the proceeds of the growth that they did least to create and most to benefit from, making the case against public sector cuts and for a socialist response to the crisis requires a fundamental break from the ruling dogmas of the past generation.

Ingratitude, if Madeleine Bunting's apologia for New Labour is any guide, is what is the matter with Sunderland. The city has been ploughed with an avalanche of development cash. A school is to be rebuilt every year for the next fourteen years. Health centres, children's centres, business parks, new development zones with the marina (below right), fancy apartments and coffee shops... And the locals react by sputtering "you've done nothing for me", slagging off immigrants and voting Tory. There is some weird "disconnect" between Labour's actually loveable behaviour toward one of its most loyal constituencies and its dismal status in the popular perception. Working class Toryism, in the form of support for a set of sentiments including 'individual self-reliance' and 'community' and 'family values', is on the rise once more, a la 1979. The obvious conclusion is that the left must rally behind the government. Some version of this is likely to be the overall diagnosis of the soft left as Labour loses its so-called heartlands: regardless of all the disappointments and betrayals, despite the warmongering, privatization, pandering to employers and union-bashing, the real problem is the basic inability of the working class to recognise its true allies. The root problem is its affectless indifference and disloyalty, its susceptibility to racism and nationalism, and its gullibility as regards Tory propaganda.

So, what is the truth of the matter? What is the matter with Sunderland? What might Madeleine Bunting have found out had she not been relying upon the word of Chris Mullins MP? One of the most pressing issues facing working class areas in this country, without question, is housing. In Sunderland, as elsewhere, the government has been pressing for the complete privatization of housing stock. Sedgefield Borough Council, for example, having lost a vote in favour of transfer in 2005, has been trying to persuade residents yet again to go with privatization. What is causing the residents to doubt the word of council chiefs is that the company that would take over the houses - Gentoo, formerly the Sunderland Housing Group (eulogised here) - has a track record of failure. The company was awarded an £80m contract in 2002 to regenerate a poor estate called Doxford Park, some six years ago, and it has only recently begun work. Similarly, when thousands of council houses were transferred to the group in 2001, Gentoo/SHG invested millions in new private homes, and neglected to build the rented accomodation it was obliged to build. 6,200 council houses were demolished, sold off or left empty, but the company only built 111 new houses over the next four years. The number of people seeking a home rose from approximately 5,000 to over 19,000. Meanwhile, it did successfully build the private developments, including maritime housing and the Athanaeum - the sort of investment and development that Bunting lauds, albeit with a grudging admission that "critics say" it may not seem of much use to single mothers and those on incapacity benefit.

Bear in mind that Gentoo/SHG is a Registered Social Landlord (RSL), exactly the kind of landlord that the government says we have least to fear from. An RSL is answerable to the Housing Corporation, and supposedly behaves better than other private landlords. If the Housing Corporation doesn't hold them accountable, then those co-responsible for sealing the deal should. In fact, the behaviour of Gentoo/SHG had been noted before by local Labour councillors Mike Tansey and Brynley Sidaway, and they did try to alert residents and fellow councillors to the problem. Both Sidaway and Tansey rejected stock transfer because the result, where the government had been able to impose its scheme, was a rise in rents and an increase in homelessness. However, by 2006, they had been driven out of the Labour Party for their pains. They became independents, and on the back of a successful campaign against stock transfer a lively local Respect group was built. What they had to say was important, and their actions benefited the people they represented. By contrast, Labour policy at both a local and national level pitted it against its traditional working class supporters. There is a clue right there: those elected Labour Party members who try to represent their constituents effectively have been punished and expelled.

It is important to understand the rationale behind the government's transfer policy. It wants to fund housing, but it is committed to a taxation structure that cannot raise the necessary funds without hitting the poor harder. So, either local authorities would have to borrow, thus breaking the government's fiscal rules, or they would have to neglect housing, thus destroying the working class voting base. By transferring homes to private housing groups like Gentoo/SHG, they can allow huge amounts of money to be borrowed for investment, because the costs will be formally borne by the social landlord. If the government were not so committed to a neoliberal policy mix, it could raise taxation on upper income brackets and on corporations, to fund such investment. The ugly side of this neoliberalism is a tendency to blame the poor for their plight. One of the government's recent proposals, dreamed up by Housing Minister Caroline Flint, was to compel unemployed recipients of council housing to sign degrading "commitment contracts" which compelled them to agree to actively seek work if they wanted to be allowed a council house - thus blaming the unemployed for their situation and forcing them to humiliate themselves in a lifeless labour market at pain of losing their home. Local Labour Party loyalists felt compelled to distance themselves from Flint's ideas. There is another clue: the government has been complacent about its core working class vote, assuming that they had nowhere else to go, and therefore has scapegoated working class people for its failures.

Another of the government's prominent policy agendas, so dear to its heart that it made this a central plank in the 2001 election despite over 80% public disapporval, is the private finance initiative. I have written enough about its obscene wastefulness here before. Once again, the rationale behind the policy is that it appears to provide something for nothing: money for investment without incurring debts or driving up taxes in the short-run. But the net result is almost invariably a poorer quality of service and a higher cost. For example, in Coventry, two hospitals were replaced by one hospital, with fewer beds and staff overall, and a final cost of £900m, 30 times higher than it would have been to simply renovate the two existing hospitals and keep the beds and staff. In Northumberland, four fire stations were closed and replaced with two under a £10m PFI scheme. One could go on at some length. In Sunderland, as elsewhere, local government functions including in health, education, road-building, street-lighting and waste management have all been outsourced to private companies under expensive PFI and PPP schemes.

Perhaps the most controversial application of the PFI model is in the national health service. Patricia Hewitt announced in 2006 that there would be big cutbacks in public spending on the NHS. She said that the reason was that generous government investment had not been spent on reforms but on salaries for greedy public servants. In fact, as Allyson Pollock pointed out, the government's market-driven reforms had created the crisis. The costs of this marketisation consumed between 6% and 14% of the NHS national budget, on a conservative estimate. As a result, thousands of NHS staff were shed in hospitals up and down the country. The impact has, predictably, been to alienate Labour's usual supporters. One of the main campaigners against the government's NHS cuts in Sunderland has been a well-known local nurse named Kathy Haq, who had been lauded in 1999 for embarking on an unpaid, voluntary mission to improve healthcare in Bangladesh and who had run a support network for victims of a doctor who had raped patients. Haq might have been exactly the sort of person whom New Labour would wish to win over: a devoted public servant and campaigner, who had worked for the NHS for forty years. But she joined Respect when it was launched in the area in 2006, and became the branch secretary. One reason is that City Hospitals Sunderland Foundation Trust ran up debts of over £5m and therefore made plans to shed 10% of its staff, particularly in the Sunderland Royal Hospital. Patients were also angered when local hospitals started to charge for parking, following the lead set by PFI hospitals across the country. Problems within the NHS have been a prominent theme in the local press. In fact, although Bunting refers to the Tory capture for the Ryhope constituency in a bye-election with a low turnout, she does not notice that a surprisingly large component of Labour's vote, perhaps more than a third, appears to have been redistributed over some years to an independent local campaigner and former journalist known as Patrick Lavelle, who made his name by campaigning on the NHS. Another clue, then: investment isn't the same thing as provision, and one cannot disaggregate the money supplied from the way it is spent and the policies underpinning it. If working class voters experience a decline in service, the fact that a large amount of money has been spent on producing the decline makes it even worse. The PFI was originally a Tory policy, but by adopting it, the government has handed the Tories one of their main propaganda planks: higher spending equals more bureaucracy and less efficiency.

Sunderland is one of the poorest places in England. Mainly as a result of the destruction of its extraction and manufacturing industries, it has suffered a declining population, particularly among working age males, and this trend is projected to continue at least until 2023. That means a smaller tax base for the city, especially as those who remain are likely to be those with the least resources. More than fifty percent of its children live in low income families, according to the Child Poverty Action Group, which is well above the national average. Even official unemployment is almost double the national average according to the Office for National Statistics, while a total of 31% of the working age population is estimated to be out of work. Large numbers of people are kept on long term incapacity benefit to conceal the real rate of unemployment, albeit incapacity among older males in former mining areas is in fact quite widespread. The government has a number of solutions for the industrial hinterlands, but among them is not a revival of the manufacturing base or of the unions that can maintain decent incomes. One of the few big manufacturers in Sunderland is the Nissan car plant, which was built in 1986. The plant is symbolic of a supposedly 'new' high-tech economy vaunted by neoliberals of all stripes. But Nissan has repeatedly threatened to close the plant or slash thousands of jobs, and has repeatedly been bailed out with millions in government grants. And while it does employ thousands of local people, who are unionised, it is hardly a substitute for the massive industries of the past. The government is committed to a City-based growth policy with a strong pound, and as a consequence has seen well over a million manufacturing jobs lost on its watch. As has been widely noticed by now, this is one reason why the UK economy is particularly exposed to the chaos in the financial markets, and why it stands least prepared to withstand a crash.

Under New Labour, the remaining mining pits in Sunderland were allowed to disappear, with nothing to replace them. Today, the biggest employer in Sunderland is the government, while the services industry is the biggest sector of employment in the city. The council has sought to rejuvenate the economy by gentrifying it, making it into a more tourist-friendly zone, and building up a financial services industry, which is today almost as big as the manufacturing sector. All of these factors make Sunderland particularly susceptible to the toxic situation that we now face: public sector pay cuts, cuts in spending, a crisis in the financial sector, and higher food and energy prices. In addition, while Bunting mentions a disproportionately high rate of single motherhood and incapacity in Sunderland, she does not mention the government's policies of rolling back single mother benefits and incapacity benefits. These, in addition to a vindictive plan to force the long-term unemployed to do 'community service' as if they were criminals, are poison for a local Labour Party seeking to gather votes. Further, in a city with life expectancy well below than the national average, the government's plans to raise the retirement age and privatise the pension system - while demanding that people save money they don't have to invest in a pension scheme that floats on the oh-so-reliable stock market - is asking for trouble. To that should be added a recent rise in pensioner poverty, when a fifth of pensioners already lived on less than £5,000 a year.

Sunderland is supposedly an example of where the government has genuinely tried to help the poor, yet is losing support from voters who fail to recognise New Labour's loyalty to them, while imprudently flirting with the Tories. In truth, while New Labour has delivered some very mild reforms, there could hardly be a more dramatic example of its policies failing the working class on the one hand, and punishing them on the other. The story of Sunderland is typical in this respect. There remains one question: will Sunderland go Tory, and if so, will it be for the reasons Bunting suggests? Sunderland still has a majority Labour council, and will probably return a Labour MP even on a relatively low turnout. The worst wipeouts for the government will be in the south-east, while the polls show the Tories making least headway in core Labour areas. Further, there is nothing to support the claim that once heartland Labour constituencies are won over to right-wing sentiments, and Bunting offers no evidence for this assertion. There is certainly nothing comparable to 1979, when Thatcher won on a platform of aggressively right-wing and anti-union policies. David Cameron is successfully appropriating the centrist language and sentiments of New Labour, even positioning themselves to the 'left' of the government on some questions. In Wales and Scotland, where there are centre-left and sometimes radical left alternatives, the Tories are not reviving at anywhere near the rate that they have been in England. And while the Tories are likely to be the beneficiaries of government unpopularity in England, the process of party identity breaking down is advancing rapidly for both Labour and Conservative parties. What is the matter with Sunderland is what is the matter with the UK as a whole. The system is failing, the neoliberal solution doesn't work, parliament is increasingly impervious to our needs, and we're facing a crisis in which we find elected officials happy to pour money into the City, but extremely reluctant at best to do anything which alters the fundamentally unfair distribution of wealth and power in the society.