AT THE end of last week the Tory chancellor, George Osborne, announced that all his stated austerity plans in last autumn’s budget statement were not enough.
Speaking at the G20 meeting in China, Osborne admitted that his predictions about the economic revival of British capitalism were basically a pack of lies. He was forced to make this humiliating admission because of official figures published last week that, far from growing, the British economy is shrinking.
The Office for Budget Responsibility (OBR) had just produced figures showing that in cash size the economy will be 2% smaller this year than they predicted just three months ago.
The effect of this is that Osborne’s pledge last year to cut the national debt mountain of £1.5 trillion, through cuts of 25% in public spending and shrinking the size of the state back to that of the 1930s, has been trashed.
All the austerity cuts to public spending and all the wage freezes and pay cuts that have seen the real value of wages for full-time workers fall to by 14% across the country (23.2% in London) have not even dented the national debt.
In fact the opposite has taken place. The national debt mountain is growing daily and set to swamp weak British capitalist economy. According to financial experts at Bloomberg Intelligence, Osborne will need to ‘find £17 billion over the next two weeks from the back of the sofa’ if the Tories are to stay on track to bring down the budget deficit and to start making inroads on the £1.5 trillion national debt.
Osborne does not have a big enough sofa to find this amount of money. It will come from only one place – cuts to public spending on a scale never seen before. It means that spending on the NHS and welfare state will be cut not just by 25% but, according to some analysts, by 50% or even more in order to meet the demand to pay off the debt run up by bailing out the banks from the crisis that first erupted in 2007/8 and that is set to explode with even greater ferocity any time now.
Osborne admitted that ‘storm clouds’ in global capitalism were going to hit British capitalism hard and that the working class would have to pay. He said: ‘So we may need to undertake further reductions in spending because this country can only afford what it can afford and we will address that in the budget.’
This means cuts that will turn the clock back not just to the 1930s but to the 19th century, a time when the state spent nothing on health and welfare leaving the working class to rot on the streets. This was a time when trade unions were illegal and workers had no rights at all except the right to be exploited for their labour.
The working class refused to accept this as their fate and fought tremendous battles to form unions and take on the employers in mass confrontations and strikes that had a revolutionary content.
British capitalism in the 19th century was wealthy beyond belief and the ruling class could afford to make concessions to avoid revolution. Today, bankrupt British capitalism can no longer afford the NHS, welfare state or any of the gains made over the years by workers.
It is forced to attempt to destroy all these gains and smash the trade unions through the Tory anti-union law designed to make striking once again illegal. The hatred of austerity cuts implemented so-far has already created a revolutionary mood amongst workers and youth and this will grow into a tidal wave when Osborne tries to implement even more savage cuts.
The only answer to this crisis is to demand that the TUC stop grovelling to the Tories and call a general strike to bring them down and go forward to a workers government and a planed socialist economy which will nationalise the banks and industry and repudiate all the bankers’ debts.
Those leaders in the TUC who refuse to fight must be removed and replaced with a new, revolutionary leadership prepared to lead this struggle for power.
