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In April 1988, a special congress of delegates from CCG and existing Party organisations declared the re-establishment of the Communist Party in Britain on the basis of democratic centralism, Marxism-Leninism and The British Road to Socialism.

The rules were amended to drop the word 'Great' from the Party's name and restore support for the Morning Star, while the programme was updated soon afterwards and renamed Britain's Road to Socialism.

In particular, the Party unambiguously identified the working class, broadly defined, as the leading force for revolutionary change. It proposed a democratic anti-monopoly alliance which could win a 'new type of left government, based on a Labour, socialist and Communist majority in the Westminster parliament, one which comes about through the wide-ranging struggles of a mass movement outside parliament, demanding the kind of policies contained in the Alternative Economic and Political Strategy'. This would require a stronger Communist Party, together with a decisive shift to the left in the trade unions and the Labour Party, making possible future forms of Labour-Communist cooperation including through CP affiliation. 

The Communist Party of Britain (CPB) executive committee elected Mike Hicks as general secretary and Derek Robinson as chair. The latter position was later filled by leading NALGO lay official Richard Maybin. The Party recommenced publication of a theoretical journal, the Communist Review, and an inner-party paper Communist News.

Whilst a significant number of Communists remained in the old Party to continue the struggle against the revisionist leadership, the fight to recapture it, would prove to be forlorn. At successive congresses, the leadership completely removed the Party’s commitment to Marxism-Leninism and the establishment of a socialist system in Britain. Two months after the collapse of the Soviet Union, at its final Congress, the old Party by this time down to 4,742 members, dissolved itself into the 'Democratic Left', followed by the 'New Times Network', then the 'New Politics Network' and oblivion. The heavily subsidised—and by then misnamed—journal Marxism Today was shut down at the end of 1991; its ideological legacy soon resurfaced, albeit in a distorted form, in the anti-working class politics of New Labour.

From the outset, the re-established Communist Party involved itself heavily in the strike against redundancies, pay cuts and longer hours at the P&O ferry company. Communists were among the rank-and-file leaders of the dispute and Party branches and trade unionists—especially on Trades Councils—helped set up local support committees. The employers used court injunctions and sequestration orders to block solidarity as the 16-month struggle went down to defeat.

Other campaigns included the fight against the Poll Tax—where the Party backed every form of opposition including non-payment—and cuts in Welfare State provision. Communists also played an active role in the 'Time To Go' campaign alongside Clare Short MP and the Labour Committee on Ireland, which linked British military withdrawal from the Six Counties with the need for a comprehensive political settlement between all parties involved.

Another priority was the work of the Committee Against War in the Gulf, as Saddam Hussein refused to withdraw his occupation forces from Kuwait. In January 1991, the aerial bombardment of Iraq began as the prelude to direct intervention, adding more civilian deaths to the hundreds of thousands already killed by the United Nations trade embargo. The committee mounted local and national demonstrations, demanding “No More Bombings! Lift the Sanctions!”

In the midst of this turmoil, the Party’s Youth Section re-established the Young Communist League, which would later re-launch its journal Challenge and became an active affiliate once again of the World Federation of Democratic Youth.

Initially, the re-established Communist Party welcomed 'glasnost' (openness) and 'perestroika' (restructuring) in the Soviet Union under Mikhail Gorbachev. As these twin processes fell prey to forces favouring marketisation, privatisation, national separatism and the restoration of capitalism, the CP organised a series of large public meetings in alliance with former London mayor Ken Livingstone, Socialist Action, Labour Party Campaign Group MPs and others on the left.

The downfall of the Soviet Union and the socialist states of Eastern Europe in the early 1990s compelled Britain's Communists—and serious Marxists everywhere—to analyse the reasons for counter-revolution. The reconvened 41st congress of the CP in November 1992 made its assessment:

“The root cause of the collapse lay in the particular forms of economic and political structure which developed in the Soviet Union. Specifically, the great mass of working people came to be progressively excluded from any direct control over their economic and social destiny. This erosion of the very essence of socialism increasingly affected all aspects of Soviet society”.

The CP and Morning Star had also been involved in the formation of the Anti-Racist Alliance at the end of 1991. Against a background of multiplying racist attacks and police harassment, the ARA united black community leaders, trade unions and sections of the Labour left including the Socialist Action group. A series of conferences, demonstrations and marches on police stations highlighted aspects of institutional racism, including the nature of Britain's immigration, nationality and asylum laws.

The election of the first fascist BNP councillor prompted the TUC to organise a massive 'Unite Against Racism' march through east London in 1994, lifting morale and helping Searchlight and others to mobilise the fight-back in working class communities.

Although the ARA did not succeed in its campaign to make racist violence a specific criminal offence, the law was eventually changed to recognise racism as an aggravating factor that would attract additional punishment. But divisions within the ARA grew over the question of black leadership, not helped by sectarian manoeuvring on the part of some left-wing groups.

However, the Party swam against the tide in the labour movement to oppose notions of 'social partnership' and a 'social Europe'. European Commission president Jacques Delors had wooed the TUC with his progressive-sounding alternative to Tory government policies.

Almost alone on the left in Britain, the CP echoed Lenin in warning against the drive to construct an imperialist 'United States of Europe' aimed at rival imperialisms, peoples in developing countries and at the workers of Europe itself. One by one, trade unions began to be won over beginning with the local government officers in NALGO. The Morning Star worked with left Labour MPs to demand a referendum against the 1992 Maastricht Treaty, while Party activists took the campaign into shopping centres and onto motorway bridges.

The CP was further strengthened by a Communist Unity process in 1995, which completed the process of building a unified Communist Party in Britain by bringing in comrades who had remained in the old Party until dissolution. The CP began to rebuild its influence in the trade union, peace, pensioners and international solidarity movements, its work guided by a range of advisory committees.

For example, with unemployment rising above two million again—almost 10 per cent of the workforce—Communists and their allies were central to the ten-day 'March for Full Employment' from Liverpool to Sheffield in 1995. Much of the drive came through the National Combine of Unemployed Workers Centres, which helped ensure official TUC endorsement.

Unlike many on the left and in the labour movement, the CP insisted throughout the 1990s that Labour could again win a majority at a General Election, and without a coalition with the Liberals. The prospects for doing so improved when new leader John Smith—a social democrat who had replaced ex-left wing failure Neil Kinnock—committed the next Labour government to full employment, public ownership of the railways, reform of the anti-trade union laws and devolution for Scotland and Wales.

Even after the 'New Labour' faction led by Tony Blair dropped the socialist Clause Four from the Labour Party constitution, following Smith's untimely death, Britain's Communists continued to argue against defeatism and breakaways.

The CP therefore welcomed the overwhelming defeat of John Major's Tory government in 1997—while warning that New Labour would not execute a qualitative break from big business policies without mass pressure from below.