FEARS over the alleged ‘fiddling’ of government debt figures by Chancellor Rachel Reeves ahead of Wednesday’s budget panicked the money markets yesterday as interest rates on government debt of £1 trillion soared to 4.5 per cent.
Oblivious to warnings from the IMF of the dangers of changing so-called debt rules, interest rates are to stay higher for longer to unleash a borrowing spree of up to £50bn.
Helge Berge, deputy director of the IMF European department, said that changing debt rules did not give economies a licence to borrow. Berge said: ‘This needs to be looked at carefully in any of these circumstances. Since assets come with revenue streams that can be uncertain, a certain degree of conservatism when looking at this is helpful.’
Some UK mortgage lenders have already raised the cost of borrowing amid the uncertainty ahead of the October 30 budget.
Labour is faced with a public debt mountain of £1 trillion, equal to the whole GDP of the UK, which Reeves is determined to cut to 78.7 per cent within 5 years, or £50 billion in cash terms as forecast by the Office for Budget Responsibility.
Addressing reporters at the IMF annual meeting in Washington DC, Reeves declared: ‘Debt as a share of our economy today is very high and we spend a very large chunk of taxpayers’ money every year servicing that debt. So it is important to get that debt on a downward trajectory, and we will do that during the course of this Parliament.’
Any borrowing will be for investment only, the Chancellor was adamant. The truth is that the regime in Downing Street is about to cut the debt by slashing public spending on the NHS, benefits, council services education, and death, inheritance and council taxes.
It is a crisis government determined to force austerity and penury on the working class to rescue the bankrupt economic system of capitalism.
It is the NHS which is in the greatest danger of savage cuts, leading to closures and privatisation from this government. Health secretary Wes Streeting’s boast that the NHS is ‘broken’ and Starmer’s ‘reform or die’ threat is leading to a desperate attempt to totally privatise the health service.
New figures reveal that the value of the UK’s private healthcare market rose to a record £12.4bn last year, boosted by long NHS waiting lists of 7.7 million in September. The NHS paid private providers £3.5 bn to help ease the backlog.
Of 1.3m procedures carried out by private hospitals and clinics in 2023, nearly 445,000 were funded by the NHS, as private medical insurance boomed.
Talk of growing the British economy with investment is a sick joke, with the UK now ranking number 12 on the list of leading industrial producers globally. Huge industries, necessary for an advanced economy, like steel, have been terminated with the closure of the two remaining blast furnaces in Port Talbot.
Britain is essentially bankrupt. Major public utilities like the privatised water companies are now demanding water charge increases of up to 70 per cent and more, after the siphoning off revenues to pay millions to shareholders, while polluting the country’s rivers and coastlines to save money on sewage treatment.
Military chiefs are scaremongering that Britain cannot defend itself in a major war and more spending on war is needed. Indeed, PM Sir Keir Starmer has promised billions of pounds annually to fund the Zelensky regime in Ukraine to prosecute NATO’s war on Russia.
As for the British youth, plans are afoot to bring in conscription to the army to resolve that problem of army numbers.
Andrew Griffith, the former City minister, compared Ms Reeves’s plan to borrow more, to ‘breaking promises like a runaway horse charging through jumps at the Grand National’.
Reeves also pledged to get debt falling by the end of this parliament, in an effort to reassure nervous investors that she will not go on a borrowing binge.
All this is declaring war on the working class.
Millions of trade unionists must send a message to the TUC, that it must call a general strike to bring down the Starmer government and bring in a workers government that will expropriate the bosses.
This is the only way forward!
