JUST 50 days after being elected with an unassailable landslide 141-seat majority, the Labour government has replaced the hated Tory austerity cuts with Labour austerity cuts, announcing that the British state has a £22 billion ‘black hole’ in the government finances – effectively the state is already bankrupt.
Chancellor Rachel Reeves said on Wednesday that she was ‘shocked’ that the Tory government borrowed £5bn more than expected over its last four months. In fact, her Treasury chief secretary immediately suggested a rise in employers’ Nation Insurance (NI), and actively discouraging the hiring of new employees.
Economic analysts are predicting that the freezing of the wage threshold when the NI rise starts will ensnare workers in a higher rate of NI tax, a ‘stealth tax’ on jobs.
PM Sir Keir Starmer’s manifesto boast of reducing public spending by £20bn within years will be paid for by the working class and middle class. Chancellor Rachel Reeves has already begun this process. On day-one of her ministry she cut the winter fuel payment for pensioners.
Borrowing by the state rose to £3.1bn last month. This was inflated partially by the rising costs of expenditure on public services and benefits, as inflation rose. However, the capitalist state spent billions more on arms for the Ukraine, a process that is to continue ‘for as long as it takes’, said Starmer, plus a general increase of billions more on increasing military spending to the NATO requirement of 2.5 per cent of GDP.
The UK ruling class in now involved in a feverish rearmament for a war with Russia, as the only way out of the capitalist crisis, a case of ‘out of the frying pan, into the fire’, if ever there was one.
Meanwhile, while rearmament continues, the Labourites seek to reduce the national debt, which is the highest since since the early 1960s and is practically 100 per cent of GDP, more massive cuts and tax rises are required – by a savage attack on the UK working class.
Starmer’s claim that his regime will grow the economy to pay for services and benefits, is clearly an unbelievable propaganda line.
The UK capitalist economy is clearly not working and is barely crawling off the floor, with world stock markets sliding on a daily basis, wiping tens of billions from share prices like Apple and other giant multi-national corporations.
Ford is the latest car company to cancel its new electric SUV model on the grounds they are too expensive. It is taking a $1.5 billion hit and blaming more efficient Chinese rivals, with their nationalised economy driving forward.
Amid a rapidly deepening worldwide capitalist economic crisis Starmer’s policy of ‘growing the economy’ is unfounded and unrealistic. Various think tanks are putting forward ways of taxing property, meaning mainly domestic houses which are valued at £8.7 trillion in the UK as a way of keeping the banks from going under.
There is to be an annual land tax and an outright extortion of simply raising council tax rates.
The working class will never submit to such extortion and, there is no doubt, will take action against the Labour government.
At the centre of the world economic crisis, driving it forward looms the economic and political crisis of US capitalism, which has a totally unsustainable debt of $35 trillion and is now being challenged around the world.
It has just been divulged that in the US, in March, President Biden approved the Nuclear Employment Guidance plan to use against China, Russia and North Korea. Capitalism is not going to go down without an attempt to destroy the great gains of the Russian and Chinese revolutions.
Meanwhile, the UK and the US back Israel’s attempts to physically liquidate the entire Palestinian nation but the masses of the working class support Palestine!
The time for working class action is now here! The Trades Union Congress meeting on Monday 9th September must be lobbied by thousands, demanding that it calls a general strike in support of Palestine and that Britain bans all supplies of arms for Israel, and instead arms the Palestinian masses so that they can found their state ‘from the river to the sea’.
Forward to Palestine! Forward to the British and World Socialist Revolutions!
