YESTERDAY the Royal Bank of Scotland (RBS) announced the largest annual loss in UK corporate history of £24.1bn, made up of a £7.9bn trading loss and a £16.2bn write-down of the bank’s assets.
It also reported that it is to put a further £325bn of toxic assets (worthless paper) into a government insurance scheme that is guaranteed by the taxpayer.
As well, the Brown government is to hand over £13bn, with the RBS having access to another £6bn, in exchange for shares, on top of the £20bn that it handed over last year.
The Brown government is to have an 84 per cent share in the bank, but will have no vote! The taxpayers are providing the billions, and the bankrupt bankers remain in charge.
RBS has confirmed that it will be making ‘sweeping’ changes to its structure, closing many banks and slashing its workforce by at least 20,000!
Meanwhile the RBS’ former boss, Sir Fred Goodwin, has been receiving £650,000 pension annually since his 50th birthday.
The Asset Protection Scheme, backed by taxpayers, aims to strengthen banks with the working class taking all of the risk.
Banks are now forming a queue to join the scheme.
The Lloyds Banking Group has announced that it is interested in taking part in the government-sponsored insurance scheme. This will see the working class and middle class guaranteeing up to £600bn worth of toxic debt, doubling the UK’s national debt at a stroke!
The Bank of England’s interest rate is now at one per cent, and the pound is collapsing on a daily basis along with what is left of industry.
Unemployment is racing upwards towards three million while home repossessions are expected to reach 75,000 this year.
Abroad and at home financiers are urging that the only thing to do with the pound sterling is sell it as quickly as possible.
One result of this is that while house prices and petrol prices are dropping, the weakening pound sterling is still pushing up food and other prices creating the conditions where the official inflation rate fell last month by just a tenth of a percentage point to three per cent.
Meanwhile the Bank of England has begun its policy of ‘quantitative easing’ that is printing money for the banks, adding another big reason for the collapse of sterling to be accelerated.
While the government is letting inflation rip for the benefit of the banks, the working class is being told that it must accept zero pay rises plus wage cuts, hours’ cuts and job cuts.
To emphasise the bourgeois lunacy of the situation – while the bankrupt banks are being nationalised, with the bankers still in control, the profitable Royal Mail is to be privatised!
The programmes of Brown and the Tories are the same. It is that every kind of cut imaginable must be heaped onto the working class, to save the bankers and the bosses from the crisis they have created.
At a certain point of the capitalist collapse they will join together to form a national government to cut wages, the dole, all benefits and pensions to save the banks, as the bosses have begun to do in Ireland.
The working class has no option but to fight – or go under.
This is why a new and revolutionary leadership must be built in the trade unions prepared to take on and defeat the Brown government and the bankers and bosses.
The Brown government must be brought down by the trade unions and a workers government brought in that will put an end to the capitalist madhouse by expropriating the bosses and the bankers and bringing in a socialist planned economy based on satisfying people’s needs.
Capitalism has reached the end of the road. It can only continue to exist by destroying the lives of the working class and the middle class.
Marx identified the working class as the gravedigger of capitalism. It must now be organised to bury capitalism for all time.