THE AIM of every government in 2008 is to ‘maintain stability through the world economic slowdown’, said Chancellor Darling yesterday in his budget address.
In other words, the common strategic aim is to survive the developing banking collapse and slump in the only way known to capitalism – by heaping the entire burden of the crisis onto the middle class and the working class.
Darling added that ‘Britain with its central role in the world’s financial system is no exception.’ In fact, its central role, in the now bankrupt world banking system, makes Britain the most vulnerable of the major capitalist countries, to the tremors, shocks and earthquakes to come, both economic and political.
The development of the crisis has forced Darling to ditch, without trace, the former Chancellor Brown’s stupid boast, that he had conquered the tendency of the capitalist system to go from boom to bust and vice versa.
Darling styled his budget ‘a responsible Budget that will secure stability in these times of global economic uncertainty’. He however immediately countered this certainty with its opposite, ‘uncertainty’, continuing, ‘And we will do everything in our power to maintain stability – keeping inflation and interest rates low and maintaining our record of growth.’
In fact keeping wages and inflation low means suppressing wage rises and cutting wages as a rule. This is why there was no assurance for the TUC trade unions that the public sector pay cuts policy, of keeping wage ‘rises’ below the government’s rigged official inflation rate would be abandoned. Instead Darling stated that the inflation target would remain two per cent, and that he will confirm this to the Bank of England.
Darling continued to stress that Britain, the world banking centre, had seen ‘Turbulence in global financial markets – which started in the American mortgage market – has affected all economies from the United States to Asia, as well as Europe.
‘We have seen significant disruption across many credit markets: with a number of them barely functioning at all.
‘And since the turn of the year, global stock markets have also been affected. This poses a major risk to the world economy.’
How is the British capitalist government going to face up to this ‘major risk’ of a complete capitalist economic collapse? – it will do so by bailing out the banks from the public purse, putting the banking system on a publicly funded ‘life support system’ – at the same time as prices and the rising cost of living is pauperising the working class!’
Darling insisted: ‘Here, the action we took last autumn to support Northern Rock and protect depositors and savers mean that – despite seeing the worst period of financial disruption for a generation – we have maintained confidence and stability in the banking system.
He added amazingly that this £150 billion bail-out of Northern Rock proved that while ‘between the early 1970s and the mid 1990s the UK was one of the least stable economies in the G7. Today we are the most stable.’
All that is proven is that the Brown government will stop at nothing in its efforts to save the bosses and bankers from collapsing.
Darling forecast a growth in the British economy of between 1.75 per cent to 2.25 per cent, and made a pledge that he will live to regret – with food prices rising at a rate of 7 per cent and energy prices by 15 per cent that ‘There will be no return to the inflation rates of the early 1990s.’
He declared that ‘As is happening in many countries because of commodity prices, inflation in the UK will rise in the short term as higher oil and food prices feed through into domestic inflation.
‘But inflation is forecast to return to target in 2009 and remain on target thereafter.’ This is just Darling in Wonderland!
Darling reserved his immediate spleen for the workers and the middle class. From midnight on Sunday, alcohol duty rates will increase by 6 per cent above the rate of inflation. Beer will rise by 4p a pint, cider by 3p a litre, wine by 14p a bottle and spirits by 55p a bottle. While cigarettes are up 11p on a packet of 20 cigarettes.
The real crisis measures are being held in reserve. They are going to be forced by events, and much sooner than the Chancellor thinks.