TO DESCRIBE the forced decision by Tory Chancellor Kwasi Kwarteng to abandon his plans to end the 45% top rate of income tax to those earning over £150,000 a year as a ‘U-turn’ doesn’t do justice to the catastrophic collapse of the Tory government under Liz Truss.
This plan to hand millions more each year to the rich was the centrepiece in Kwarteng’s mini-budget sprung on the UK economy just eleven days ago.
It was designed to prove to the ruling class that Truss is committed to tax cuts that she proclaims would ‘grow the economy’ by attracting even more multi-billionaires to set up shop in Britain.
As late as last Sunday, Truss was telling the Sunday Telegraph that she was confident in the mini-budget and that the entire package, including the tax cut, would remain.
This emphatic assurance led to the Daily Telegraph editorial on Monday proclaiming: ‘Liz Truss is not for turning’ and that she ‘is clearly not a leader easily buffeted by events if she thinks she is right.’
By early Monday morning, Truss and Kwarteng performed not just a U-turn but crashed and burned after it became clear that the overwhelming majority of Tory MPs were terrified at the economic and political consequences of a mini-budget that had seen the world’s financial markets dumping the pound and forcing the Bank of England to take emergency measures to prop up sterling.
The money markets were not upset by scrapping the top rate of tax, estimated to cost a loss of about £2 billion a year to the Treasury, but by the entire package of tax cuts to corporations and businesses of around £45 billion.
On top of that, Kwarteng’s cap on energy prices will cost the Tories around £140 billion to recompense the energy companies for any dip in their profits.
All these billions are unfunded and will have to be found through increased national debt – already around £2.4 trillion.
This debt would have to be paid for by savage cuts to government spending on the NHS, education, benefits and a drive to hold wages down far below inflation.
The tax cut for the wealthy became a tangible expression of the Tory contempt for workers and their families struggling to feed their children and heat their homes as inflation and the cost of living spiral out of control with no end in sight.
Such was the fear, that it spelt the end of the Tory government and even the existence of the Tory Party, that over 70 Tory MPs were estimated to be prepared to vote the tax cuts down when it came to a vote in Parliament.
This was despite the threat from Truss that any MP voting against her would be thrown out of the party.
Tory MPs are more scared of the working class rebelling and bringing down the government than they are of threats from the increasingly pathetic Truss.
But even this last minute U turn to try to avert the meltdown of the Truss government will not make the slightest difference, as all the other parts of Kwarteng’s package to rescue bankrupt British capitalism through the most vicious austerity war on workers remain in place.
What it does mean, however, is that this class war to the finish will be waged by a Tory government that is disintegrating.
With the working class driving forward, determined to fight against being driven into the gutter and the ruling class in chaotic disarray, there has never been a better time for the working class to force the TUC to take action to bring down this Tory government.
Thousands of workers and young people must lobby the TUC Congress on Tuesday 18th October and force the TUC to mobilise the full strength of the working class in a general strike to kick out the Tories and bring in a workers’ government.
A workers’ government will expropriate the bosses and bankers placing the major industries and banks under the management of the working class and building a socialist planned economy.
Join the lobby on the 18th – Forward to the British socialist revolution.
