THE OECD has warned that the British capitalist economy is the sick man of the capitalist world and is currently experiencing a record fall in production, a record and growing indebtedness, and by implication is heading for revolutionary upheavals, as the capitalist class endeavours to force the working class and the middle class to pay the total bill for their crisis.
The OECD report warns that while in the 30 most developed economies the fiscal deficit in 2010 is expected to average 8.75 per cent; in the UK it is expected to be 14 per cent.
In his Budget speech, Chancellor Darling said the budget deficit would amount to 12.4 per cent of output in this financial year, falling to 11.9 per cent next.
The OECD predicts that the UK economy will contract by 4.3 per cent this year, worse than the government’s predictions of a 3.5 per cent fall in output.
Recent official figures showed UK overall net debt stands at a huge £774.8 billion, about 54.7 per cent of national output – the biggest proportion for more than 30 years.
In fact, Britain’s national debt is set to reach £1.4 trillion under the 2009 Budget, and after that to reach over £2 trillion in 2010.
In 1999 – when Brown ended New Labour’s 1997 election pledge to match Conservative budgets – government spending was just 36 per cent of the nation’s income. Now it is a third more – 47.5 per cent this year – and rising.
Bank of England chief King in his evidence to the House of Commons Treasury Select Committee spoke earlier this week about the scale of the ‘truly extraordinary’ deficits. He said that this situation ‘reflects the scale of the global downturn, but it also reflects the fact that we came into this crisis with fiscal policy along a path that wasn’t in itself sustainable, and a correction was needed’.
He then revealed that there had not been any meetings between the Treasury, the Bank and the Financial Services Authority concerning the White Paper on new legislation to regulate the banks.
This is because the Brown-Darling axis does not want a stronger regulation of their banking friends. It wants a new banking ‘culture’.
King complained: ‘I have not been consulted on what will be in the White Paper and I haven’t seen a draft of it, but no doubt at some point I will. There is still time to be consulted on it before it appears.
I’m sure the Chancellor will show it to me before it appears.’
He warned that he expected new banking ‘bubbles’ and complained that they may well burst.
He said: ‘All we can do at present, before a bank is deemed by the FSA to have failed, is to write our Financial Stability Report and give speeches. If you’re content with that, that’s fine by me. What you can’t do is turn around afterwards and say “You have the statutory responsibility, why didn’t you do something?” when there is nothing we can actually do.’
The truth about the current political situation is that the Labour government has been reduced to a confused and confounded rabble. It is unwilling to serve the interests of the working class, and is unable to carry through the massive cuts that the ruling class, the OECD, the World Bank and the IMF are demanding if British capitalism is to avoid a Zimbabwe-style future.
The Tories are already discussing that ‘when they return’ their first two years will be dedicated to slashing and smashing the Welfare State, with their own ‘shock and awe’ campaign, so as to balance the books of British capitalism.
The working class, as the principled struggle of the Lindsey workers proves, is stiffening up and is ready for action to defend its basic gains and rights from the bosses and the bankers.
What is required in the period directly ahead is for the working class to bring down the Brown government with a general strike, and to bring in a workers government and socialism, dumping capitalism into the dustbin of history.
Only the WRP is preparing for this prospect. Join it today.