Mehdi Hasan has a powerful piece in today's Guardian attacking liberal "defeatism", and pointing out that the majority of the public are well to the left of New Labour and most of the political and media classes. It's true. People see what's coming. More people are frightened of deep cuts than are worried about the deficit. They should be frightened. The level of public sector cuts being entertained by all mainstream parties are extraordinary, unprecedented. Labour's spending plans, in light of most independent analyses, amount to deep cuts across all government departments. Leaked treasury documents disclosed that the cuts would amount to 9% across all departments, even higher than most experts estimated. If the NHS was ringfenced to protect it from cuts, the impact on other departments - education, social security, transport, etc. - would be much bigger.

Cuts and jobs lesses are already being forced through several departments, which is why the civil servants have been on strike and why lecturers are also taking action, complementing a wave of strike action in private sector businesses like British Airways and Network Rail. The difference between New Labour and the Tories on this question is not enormous, but Cameron and Osborne plan to be more aggressive with cuts, and will cut taxes for the richest and pay for that with more spending cuts (an extra £5bn). The Liberal Democrats say they disagree with the government's formula of paying for the deficit with 80% spending cuts and 20% tax increases, and prefer to cover it with 100% spending cuts.

Let's be clear about this. No government in UK history has ever embarked on such a radical attack on the public sector in this country. The social misery likely to be unleashed is incalculable. If there is something it could be compared to, it might be Labour's deep cuts to wages in the latter half of the 1970s, or Thatcher's deliberate destruction of manufacturing in the early 1980s. And like those comparable instances, it is a class attack. There's a growing recognition of this, I suspect, especially as the impact of the recession - softened as it is by stimulus spending - sinks in. And this is undoubtedly, as Hasan says, a reason why the Tory lead has collapsed, including in the marginals, though it is still hovering around 3-5%, and the swing in most marginal seats would be big enough for the Tories to win. The mirage of 'progressive' conservatism, based on a few 'John Lewis'-style businesses and cooperatives (privatization by another name), is unlikely to compensate for the Tories' cuts. If anything, I would imagine that experimenting with public services is the last thing that is likely to appeal to voters at this point when a dose of good old-fashioned statism seems to be precisely the remedy that is needed.

And it's true that as a result of this, the neoliberal vision that underpinned New Labour is in crisis. The trouble is that for this to become a "progressive moment", the Left would have to grow. Whatever public opinion says, the question ultimately comes down to what kind of agency is in place to support or oppose certain demands. If the majority favour nationalisation of key utilities, that isn't going to happen unless a political machinery is in place that can pressure the government to make it happen. And the Left is not growing in this recession, yet. The Labour left is as moribund as it has ever been, and its new members are likely to be refugees from the extra-parliamentary left, which is also not growing. The fragmented electoral initiatives of the left, essential though they are, are sure to be squeezed by a rush back to Labour, as working class voters seek to keep the Tories out. It is the far right, not the Left, that is presently capitalising most effectively on the recession. Racism, not class politics, has so far been winning the battle of ideas.

That is not irreversible, and things can change very suddenly in politics. But it reminds us that the dilemma of the Left is more intractable than Hasan's diagnosis might allow. I admit that there are those on the liberal-left for whom the phrase "class politics" might seem passe, an historical curiosity to be either nostalgic or condescending about. But without talking about class, and putting it at the centre of the analysis, the Left would deprive itself of both its distinctive analytical tool and its most powerful social agency. It is within the context of a confident working class movement that the Left has previously flourished, and won many of its demands. This has fallen victim to Thatcherism and its successors, as well as the processes of class dislocation and reconstitution that shattered some previously powerful unions. Cooperative, activist cultures of resistance that were once integral to working class experience were diminished by years of neoliberalism, and responses to social distress and deprivation were increasingly individualised. That is the wreckage upon which New Labour was built and its crisis doesn't come at a time when there are mature institutions capable of either replacing it or seriously pressuring it from the Left. This, among other things - to wit, government policy and media hysteria - is why racism and the far right pose such serious challenges today.

Parenthetically, not as a proof but as an example, think about a certain morbid symptom of neoliberalism, that being the emergence of a bowdlerised and racialised kind of 'class politics', in which a fictitious "white working class" is conjured into existence as a passive object for pity or disdain. This is the return-of-the-repressed, in which the disavowed reality of a class-riven society is admitted by mainstream capitalist ideology in the only way that it can be admitted, ie in a racist way that deprives class of its content. Taking the Freudian metaphors further, one could charge that the patronising 'concern' evinced for this "white working class" is just a reaction-formation, recoding the seething fear and loathing that capitalists have for workers as a kind of overbearing and protective love. I maintain that this hollow mockery of the working class as an active subject of politics says a lot about the social psychology relationship between racism and class politics.

At any rate, I'm not selling doom. The materials exist for a renewal of the Left. One sees hope in the resistance of workers to job cuts, the success of initiatives such as Right To Work, the student occupations, and the vital antifascist and anti-racist work of UAF. From public sector resistance to spending cutbacks, one could see a very broad coalition led by trade unionists and the left developing to oppose the cuts. The success or otherwise of TUSC, Respect, et al, might give us some clue as to how viable a future left-wing electoral challenge is likely to be. But the immensity of what has to be reconstructed can't be in doubt, and the possibility of a right-wing backlash with organised racists as its cutting edge cannot be discounted. I don't believe this is a progressive moment. I think that's something we have to build.