Yesterday, Roger Bootle, a senior advisor to Capital Economics, wrote in the Daily Telegraph an article headlined ‘Basket case Britain is back – and a recession is inevitable.’
Bootle informs his readers that it has been some time since he has heard the expression ‘basket case Britain’ used, but it has become a regular description amongst financial experts of an economy gripped by spiralling inflation and with no way out except for the Bank of England to continually push up interest rates and bring on recession.
The core rate of inflation in the UK – the rate which doesn’t include increases in food and energy – has increased to 7.1%, the highest in 31 years.
The most ‘salient factor’ in this increasing core inflation rate, according to Bootle, is ‘pay inflation’ which he claims is running at 7.2%.
What Bootle doesn’t mention, is that according to official figures from the Office for National Statistics (ONS), this rate is achieved not by pay increases of workers but by pay rises for the top 10% of UK earners, including City bosses, mainly in the financial sector.
For 90% of workers, wages have been slashed by inflation to the extent that millions are forced to rely on food banks to feed their children and go regularly without meals to pay the rent.
This is not enough pain for capitalism, and the only way out for the ruling class, Bootle says, is to ‘persuade workers to accept lower rates of increase in their pay’.
But persuasion alone, he admits, will not be enough to make workers accept being driven further into poverty.
What is needed, he maintains, is to make ‘the balance of supply and demand in the labour market’ looser.
Bootle spells it out: ‘That means higher unemployment – and probably some sort of recession.’
This ‘will be painful, but the Bank will have to carry on increasing interest rates to bring this about.’
Economic recession has now been embraced by the Tories and the Bank of England as the only way to impose the capitalist crisis onto the backs of the working class by creating a ‘climate of fear’ amongst workers through mass unemployment.
The ruling class is determined to let all the ‘zombie’ companies, that exist only through debt, collapse – creating an army of unemployed that will be forced to accept being turned into nothing more than wage slaves for the bosses and bankers.
Not by persuasion but by the brutal use of mass unemployment backed up by anti-strike laws and legislation giving the police absolute powers to ban protests to drive workers into the gutter, is the only future that capitalism holds for workers and young people today.
This policy of class war has been faithfully taken up by Keir Starmer’s Labour Party who are in total agreement that workers’ wages must be driven down in the ‘national interest’ of the bankers and bosses.
At the weekend, Labour Shadow Chancellor Rachel Reeves refused to rule out blocking public sector pay rises saying: ‘Labour’s fiscal rules are absolutely non-negotiable.’
Labour’s fiscal rules are the same as the Tories – to bring down inflation and halve the massive government debt by imposing pay cuts on workers.
With the Sunak government too weak to carry out a war to impose recession on a powerful working class, Starmer is desperate to ride to the rescue of capitalism by entering a coalition government of National Salvation with the Tories, under special measures imposed to prevent the complete collapse of the political and economic ‘basket case’.
The working class has shown time and again that it is prepared, indeed eager, for a real fight against the Tories, held back only by the craven timidity of the trade union bureaucracy who are terrified of unleashing the revolutionary strength of workers.
The time has come to deal with these leaders by forcing the TUC to call an indefinite general strike to kick out the Tories, bar the way for any national government, and bring in a workers’ government and socialism.
The way forward is for the working class to take power – join the WRP and Young Socialists today to build up the leadership prepared to organise the British Socialist Revolution.
