The significance of this election is that it will formally open up the debate around why Labour lost and where it is going. The right wing of the party are keen to stitch the election up and will be determined to prevent the left in the party from presenting an alternative. But things have changed significantly in Britain and within the working class since the last time Labour held a leadership election. When Blair resigned the intention of the leadership was to hand power over to Gordon Brown in a seamless transition; something akin to a coronation and then the economic crisis hit.

At the time of the last leadership election the Labour bureaucracy and the parliamentary Whips Office did their best to keep John McDonnell the left candidate and chair of the Labour Representation Committee off the ballot paper. They succeeded at that time. Now, after a general election defeat and in the face of a budget crisis on a similar scale to that in Greece and in Ireland it is inevitable that questions will be asked. The general election has been lost; the right wing policies of the New Labour Project gained less votes than the Party did under Michael Foot in 1983. At the time (or rather in hindsight) the right wing called Labour’s manifesto for the 1983 General Election the “longest suicide note in history”. The truth is that they squandered the opportunity that they were granted by a huge majority in 1997 and 2001 and a substantial one in 2005. Once the crisis broke out internationally the Brown leadership who were tied to the coat tails of big business could not provide a socialist alternative.

The different tendencies within the Labour Party are re-orientating themselves to being in opposition and the election is more open than before. A major factor in the situation is the state of the party after the election. Labour’s defeat was contradictory and reflected important political shifts within the working class. Labour lost a lot of seats, but in many of the big cities and the industrial areas Labour’s vote increased numerically and in some cases there were swings towards the party even when there was a national swing to the Tories. There was in other words something of a polarisation, with the Lib Dems being squeezed.

Now that the Lib Dems and the Tories are in coalition there is a new mood developing among the active layers in the unions and within the working class. Even inside the Labour Party, the defeat was lighter than anticipated and there were even some gains on a local level, the mood is not as flat or subdued as might have been anticipated a year or so past . The phoney war over the cuts and other attacks on the working class has now ended, the axe is about to fall. So the mood in the movement is changing and the formation of the new coalition government has if anything made that process more distinct.

It is interesting to note that in the first week after the General Election some 8-9,000 people joined the Labour Party, within a fortnight 21,000 had joined. In fact the website was jammed at times. Given the fact that the Party has been quite empty for some years this is significant, particularly since the Tories attacks on the working class haven’t actually started yet.

There are six candidates for the leadership elections with the brothers Milliband; David and Ed. There’s Ed Balls an ally of Gordon Brown, Andy Burnham and potentially two left candidates John McDonnell and rank outsider Diane Abbott. John McDonnell is the leading left in the parliamentary Labour Party, he has a good track record of supporting workers in struggle and has been instrumental in establishing the Labour Representation Committee a broad left organisation that despite its many failings  has become the most significant Labour left group since the 1980’s in Britain. The LRC has affiliations from national trade unions and local branches and combines groups working both inside and outside of the party. McDonnell’s influence has spread beyond Britain, in fact the Irish Labour Youth Conference in 2009 voted to send a delegation over to London to support his campaign. A number of Labour Youth members attended the national LRC conference in November 2009.

The support from John McDonnell within the Irish Labour Party and the Labour Youth reflects the pressures building up within Irish society. This demonstrates a political expression of the political and economic situation. At present there is a substantial support for Eamon Gilmore in the Irish Labour Party, he is after all swimming with the stream, but the prospect of a coalition with the Fine Gael means that the contradictions within the coalition will come to the fore sooner rather than later. Socialist ideas will gain a much bigger echo in the party over the next period, particularly under a Fine Gael/Labour coalition.

The programme of the LRC is ambiguous and contradictory. While the LRC conference voted almost unanimously for the position advocated by the Marxists around the Socialist Appeal Newspaper it also voted for the reformist “People’s Charter”. This contradiction illustrates the low base of the Labour Left after years of Right Wing domination in the party and a period of relative social peace up until fairly recently. But it also partially reflects the pressure on movement from below. That pressure will only develop over the next period as the axe begins to fall.

The perspective of the Marxists in Britain has been that the process of differentiation in the Labour Party would take some time to develop. As such the current leadership election is a bit early on in the process. It is likely that the tops of the party will jostle for position over a period, with eventually one or more of the leadership breaking cover and turning towards the left under the pressure of events. Jon Cruddas, seen as a possible soft left contender and a possible focus for a broader move to the left at a certain stage ruled himself out of the contest early on. Before the process emerges fully it is likely that the trade union leaders will be first forced into opposition to the new coalition. The experience of Ireland is that this sort of process is likely to be contradictory and confused. But pressure from below will inevitably have an effect on the union tops.

Doubtless the Party hierarchy would prefer a bland election with no choice other than which Milliband to support. But the crisis of capitalism and the pressure of the Labour movement and the working class on the party could significantly cut across the “ambition” of the Right Wing.  Already the Party Leadership have been forced to extend the period for nominations and there is some evidence already in the unions of pressure on MPs to back John McDonnell.

The key task for John McDonnell has to be to patiently explain why Labour lost the election and to fight for a socialist programme, a fighting left campaign popularising socialist ideas would act as a poll of attraction within the party and within the working class as a whole. The economic situation in Britain is as grave as that in the Eurozone and the working class are going to be in the firing line as in Ireland and Greece. Under these conditions a clear position that links the day to day experience of workers with a programme capable of challenging the Tories, the Lib Dems and capitalism would connect with the most advanced layers of the working class and would represent an important factor within the trade unions and the Labour Party itself. After years of right wing domination there is now a far more favourable perspective for building the ideas of socialism, in Britain and likewise in Ireland and throughout Europe also. In that respect John McDonnell has a great opportunity.