RICHARD SHARP, a member of the Bank of England’s Financial Stability Committee has warned that the UK is heading for a Venezuelan-style economic crash and bankruptcy, unless borrowing is further slashed, insisting that public debt and public spending are the problem.
Sharp is giving the Tory party the ammunition to justify the next round of their savage cuts as a ‘necessary evil’ to save the UK from economic armageddon. To keep the Tories in power, permanent austerity and ever more brutal cuts are necessary is the message of these these bankers – or you will have a Labour government which will borrow even more and crash the capitalist economy forever.
International banking giant Morgan Stanley has also joined the chorus warning that a Labour election victory poses a ‘bigger threat to British business than Brexit’. Both Sharp and the Morgan Stanley bank have broken ranks with the Bank of England governor Mark Carney who is still saying, as the storm and the crash develop, that the UK banks are ready to withstand a hard Brexit and that for the first time since they began in 2014, all of the UK’s major banks have passed their stress tests.
As far as the bankers are concerned, Brexit is not the main problem. The main problem is the working class, and forcing it to accept shredded living standards in the face of even bigger public spending cuts made necessary by the gathering financial storm. That will mean putting an end to the NHS, and slashing jobs, council housing, schools, nurseries libraries, and all benefits!
Morgan Stanley’s European Equity Strategy team said that the UK’s ‘domestic political situation is at least as significant as Brexit, given the fragile state of the current government and the perceived risks of an incoming Labour administration that could weaken the austerity drive.’
Responding to this bankers’ attack, Labour leader Jeremy Corbyn said: ‘The bankers want to keep the Tories there, because their rigged economy and their tax cuts for the richest work for them. These are the same speculators and gamblers who crashed our economy in 2008. And then we had to bail them out. Their greed plunged the world into crisis and we’re still paying the price, because the Tories used the aftermath of the financial crisis to push through unnecessary and deeply damaging austerity.’
He added: ‘Labour is a growing movement of well over half a million members and a government-in-waiting that will work for the many. So when they say we’re a threat, they’re right. We’re a threat to a damaging and failed system that’s rigged for the few.’
This poses the question: If Labour is a government-in-waiting, what exactly are they waiting for? While they are waiting, the working class is being hammered: thrown into zero-hours employment, thrown into debt and thrown out of their homes and onto the streets. How much longer does the working class have to wait for Labour to move to bring the Tories down?
Secondly, what threat does Labour really pose? They say that they will ask the rich to stop being so greedy and pay a bit more tax while keeping the system of capitalism intact. The ruling class in this country will never ‘change their ways’. They will never run society for the benefit of the ‘many rather than the few’. This is the stuff of fairy tales.
The threat that a Labour government poses to the bosses is that a Labour victory will encourage the working class to make a much bigger push for revolutionary change than it did in 1945 and that British capitalists and their bankrupt banks and industries will be overthrown, and the ruling class expropriated in a British socialist revolution.
The UK’s public debt is dwarfed by its national debt which is currently estimated to be £1.83 trillion or 87% of the Britain’s entire Gross Domestic Product (GDP). When a country’s debt surpasses 100% of its GDP, it is state bankrupt. France’s debt to GDP ratio is currently 96.9%, Spain is on 98%, Portugal is 127.8%, Italy 131.6% and Greece is bankrupt almost twice over with its debt at 177% of its GDP.
The only way forward for the UK working class is to abolish the UK debt with a socialist revolution, that will spread like wildfire throughout Europe and the rest of the capitalist world. It must now build up the revolutionary leadership of the WRP and the Fourth International to lead the completion of the world socialist revolution that was begun by Lenin and Trotsky and the Russian working class in October 1917.