BRITAIN must cut spending on welfare benefits or face a miserable cycle of repeated tax rises every year, JP Morgan, the world’s largest bank, warned the UK government on Thursday.
It warned Chancellor Rachel Reeves she must cut public spending in her November budget by targeting the rising number of pensioners and the one million out-of-work young people, instead of repeated tax increases to try to balance the UK’s finances.
Karen Ward, from JP Morgan Asset Management (JPAM) said: ‘If we were not willing to tackle the long-term structural problems we have in spending, we’re going to be talking about tax hikes every year. I think that’s miserable.’
Turning on pensioners, Ward condemned the ‘triple-lock’ increases in the state pension, already one of the lowest pensions in Europe, and attacked the inflation-linked state pension triple lock increases, blaming them for the UK government’s mounting debt crisis.
Ward also warned of ‘the blight’ of growing levels of unemployment among young people. ‘We’ve got an increasing number of people who aren’t entering the working force,’ she said, adding that the inability to cut welfare spending is why investors charge more to lend to the UK than rival nations.
‘We’ve got to have as a nation a conversation about how we’re going to get spending under control. By just fiddling around with all the different tax rates, we’re all missing the point of what our underlying problem is, and how to deal with it.’
Echoing recent warnings from Barclays Bank and the Institute for Fiscal Studies, she insisted that Britain must cut welfare spending to regain trust with gilt investors.
But such is the scale of the estimated £30-£50 billion fiscal crisis, the Chancellor could also be forced to raise income tax on the basic rate and break Labour’s election manifesto promises of no income tax increases, according to senior Treasury officials.
Overshadowing this mountain of debt, increasingly strident alarm warnings have been made in recent weeks, from the Bank of England and the International Monetary Fund of an AI bubble threatening a financial crisis which will crash the world’s dangerously overvalued stock markets.
Without any doubt, the huge financial and political crisis in the UK, and worldwide, is forcing the Labour government to launch and all-out assault, slashing public spending and increasing taxation, intensifying the developing social explosion which will see the working class taking massive strike actions to prevent millions of working class families going hungry.
Labour’s wipe-out in the Welsh Caerphilly by-election on Thursday lost them their 100-year- old safe seat, coming a distant third behind Plaid Cymru, winning its first seat, and also Nigel Farage’s Reform UK.
Workers are breaking with the Labour Party of the Labour government and are ending its 27-year unchallenged rule in Wales.
Labour’s panic ahead of its crisis budget exploded over the NHS resident (formerly junior) doctors 5-day strike called by the British Medical Association(BMA) this week, with Health Secretary Wes Streeting denouncing it for trying to ‘wreck the NHS recovery’.
After a decade during which hundreds of hospital beds were lost and whole hospitals closed, with patient waiting lists soaring, and with hospital ‘corridor care’ now common, there is a huge lack of resident doctor posts in the NHS for newly-qualified resident doctors to continue their training.
Raging at the BMA, Streeting accused it of trying to ‘wreck’ the health service’s recovery with a ‘rush to industrial action’, claiming it will only play into Nigel Farage’s hands in an ongoing row over jobs.
The BMA however claims that new doctors are left unemployed and struggling to find jobs.
What is clear is that the working class must not tolerate these cuts and a settlement of accounts between it and the ruling class of billionaires is rapidly approaching.
The working class must overthrow this dying capitalist system with a socialist revolution. This means building up rapidly a mass Young Socialists and new branches of the WRP all over the UK. History is knocking on the door. The time has arrived to organise and lead the British socialist revolution!
