THE dust had barely settled on Tory chancellor George Osborne’s Autumn Statement on the state of the British economy before the gaping holes in his boast that ‘the economy is healing’ became glaringly apparent.
A close inspection of his figures tells a completely different story and reveals Osborne to be relying solely on accountancy tricks to try and fool the gullible.
These include counting in the government finances the massive Royal Mail pension fund.
In anticipation of privatising Royal Mail the government took over responsibility for this fund (over £28 billion) in order to make the service attractive to the privateers – Osborne now wants to include these assets which belong to Royal Mail workers as government money belonging to the state.
Also, the government is taking over the income the Bank of England derives from the quantitative easing schemes.
Basically, the Bank ‘creates’ electronic money with which it buys government bonds, the government in turn pays interest on this loan. Instead of this interest being paid to the BofE, Osborne now wants it back in the government coffers to count as income.
The sheer nonsense of non-existent money with absolutely no value being used to claim that capitalism can overcome its historic crisis is breathtaking.
Lastly, Osborne has factored in the money raised through the auction of 4G telecoms licences, a one-off event.
When these three accountancy tricks are removed from the scene, the public debt, far from falling, is actually rising.
Osborne’s manipulation of the figures cuts no ice with the worldly-wise economic forecasters.
The international ratings agency Fitch was clearly unimpressed with Osborne’s sleight-of-hand: they announced that they would in all likelihood be downgrading Britain’s AAA credit rating because of the dire state of the economy.
The removal of triple A status will drive up the cost of government borrowing and drive yet another nail in the coffin of bankrupt British capitalism.
All this trickery and deception had only one aim – to act as a cover for the all-out war against the working class and the majority of the middle class.
For workers the statement held out the pledge to impose a three-year cut in benefits by holding them down to a miserable 1% increase per annum, well below the inflation rate.
Pay rates for public sector workers would similarly be frozen while a further £31 billion will be cut from public expenditure.
At a time when food and energy prices are soaring, these cuts will inevitably drive not just the unemployed but the millions of low-paid households into the kind of abject poverty not seen since the days of the 19th century.
The response of the leadership of the Labour Party and trade unions has been disgraceful.
When challenged to come out in opposition to the cuts in benefit, Labour shadow chancellor Ed Balls refused to be drawn on the subject, signalling his and Miliband’s complete agreement with Osborne and Cameron that workers must pay for the crisis of capitalism.
The general secretary of the TUC, Brendan Barber, while lamenting the fact that over a million civil service jobs could go as a result of the cuts, and that families were being driven to the wall, restricted himself to calling for a ‘change in direction’ on the economy.
There can be only one change in direction that meets up to the severity of this crisis and that is for the TUC leaders to be sacked by their members for their gross treachery, so that a new revolutionary leadership can be put in their place to immediately call a general strike, to kick out this government and bring in a workers’ government and socialism.
This is the only way forward. Only the WRP is fighting for this course of action – join us today.
