ON Monday, the Office for National Statistics (ONS) published its latest updated figures which showed that the average person now has £38 less to spend each month than they did a year ago.
Labour Chancellor Rachel Reeves’ November budget drove up the cost to workers when she increased taxes by a further £30 billion by freezing tax thresholds.
This freeze on the threshold at which people become liable for increased tax rates has thrown millions of workers, including those living on pensions or benefits, into paying increased taxes.
Those in the bottom 30% of earners will be hit hardest with the Joseph Rowntree Foundation estimating that the average household will be £850 poorer in 2029.
The ONS findings were followed by the release of Centre for Economic and Business Research (CEBR) annual league tables on the economies of the world which predicted living standards in Britain would fall behind that of the island of Malta by 2035.
The CEBR predicted that living standards in the UK would be the second weakest in the G7 list of countries, exploding the claim by Keir Starmer that the Labour government would secure the fastest growth in living standards amongst the richest economies in the world.
Pushpin Singh, managing economist at CEBR, said that the UK economy faced a triple challenge of high inflation, high debt and low growth.
He warned that countries with lower taxes and low regulations were eroding Britain’s competitiveness.
The CEBR also said that an ‘inability to shrink state spending’ in the UK and other European nations was also harming economic growth.
The CEBR predicted that the US would continue to hold on to its status as the world’s biggest economy in the next ten years, but warned that US president Trump’s strategy of running up a massive national debt risked ‘painful financial market correction’ that could send the UK’s borrowing costs soaring.
UK workers experience the reality of dramatic cuts in real terms pay and the effects of increased taxation every day.
Since the 2008 world banking crash, the average pay for workers is way below the levels prior to the collapse, following years of pay cuts and freezes, as the bankers demanded the working class pay for the crisis through savage austerity cuts.
Following the election of the Labour government in 2024, average weekly earnings, excluding bonuses, have risen by just £3.80 in real terms – not enough to cover the cost of a cup of coffee.
It comes as no surprise that the CEBR, founded by a former Chief Economic Advisor to the Confederation of British Industry, should place the blame for UK capitalism’s dive into bankruptcy and recession on its ‘inability to shrink state spending’, alongside regulations that restrict economic growth.
The full scale destruction of spending on the NHS and the entire welfare system is the key for the capitalist class in bringing down the massive national debt, currently approaching £3 trillion.
The British national debt has almost tripled between 2005 and 2025 and now costs £100 billion a year more in interest payments to the international financial speculators who fund government debt through bond purchases.
As the CEBR notes, this crisis will only accelerate as US capitalism attempts to solve its own huge debt of over $37 trillion, and growing rapidly, by waging economic war on its capitalist allies and enemies.
The world capitalist system has reached the point of collapse into bankruptcy and recession from which the only way it can hope to escape is to force the working class to pay through the destruction of all its previous gains, mass unemployment and poverty.
The working class in the UK, Europe and the US will never stand for being driven back to the starvation days of the 1930s Great Depression era.
The time is ripe for the UK working class to unite with workers from across the world to force their trade union leaders to act by calling general strikes to bring down their governments and bring in workers governments, replacing bankrupt, backward capitalism with socialist planned economies.
