THE HUMILIATION heaped on prime minister Keir Starmer and his chancellor Rachel Reeves by the rebellion of backbench Labour MPs over their plans to ‘save’ £5 billion by slashing benefits for the sick and disabled are reverberating across the capitalist financial system and amongst economic commentators.
In the immediate aftermath of Starmer’s abrupt retreat last Tuesday and the sight of Reeves breaking down in tears in Parliament the following day, the international bankers and money markets were driven into a blind panic.
Interest rates on government borrowing increased immediately while the pound fell against the dollar in a sell-off sparked by fears that Starmer’s government had lost control and could no longer be relied upon to impose on workers the economic devastation required by a capitalist system drowning in debt.
The panic has not subsided but increased, as the capitalist class are forced to face the reality that the powerful British working class will not sit back and allow Starmer’s government to drive them back to the poverty of the 1930s Depression era to keep a bankrupt capitalist system from collapse.
This dread was expressed in an article in Sunday’s Telegraph newspaper by Jeremy Warner, headed: ‘Labour’s colossal failure shows Britain is heading for disaster.’
Warner articulates the fears that are stalking the ruling class when he writes: ‘If a government with an overwhelming majority cannot even get a relatively minor adjustment to a plainly unsustainable welfare budget through its backbenches, what hope for anything more substantive?’
Leaving to one side the question of whether cutting off benefits that provided a vital lifeline to the thousands of disabled people could be dismissed as a ‘relatively minor adjustment’, the inference is that what Starmer should have done was carry out the complete destruction of the welfare state to pay down the national debt of around £3.2 trillion and growing by £5,170 per second.
After all, as Warner implies, that was the reason that the Labour government was welcomed by the bosses and bankers when elected with a vast majority one year ago.
The Tories collapsed, unable to impose the brutality demanded by capitalism on workers, and Starmer was elected on the promise of being a business friendly government that would slash public spending to the bone.
A government that enjoyed the complete support of the TUC leaders who could be relied upon to keep the working class, if not completely submissive, diverted away from any mass action that would threaten the government.
Bought off with vague promises of legislation to protect workers’ rights, the TUC has been unswerving in its support for Starmer’s government.
But the working class has shown that it is not to be duped into accepting the destruction of all the gains of the NHS and Welfare State to rescue the profits of the ruling class.
This dream of a Starmer government able to do what the Tories failed to achieve was shattered last week, leading Warner to conclude his article by saying: ‘Labour’s inability to carry out even the most basic of fiscal reforms points to a broken system heading even more unavoidably towards disaster. When the rioting starts, a penny to a pound the state will be woefully unprepared for it. The failure is colossal, and they don’t even know it.’
The massive crisis of capitalism means that for the ruling class the only way out of this unavoidable disaster and economic collapse is to move to a police state to impose the dictatorship of the bosses and bankers over the working class.
The working class alone has the power to resolve this crisis by taking power and advancing to a workers state and socialism.
The treacherous TUC leaders must be removed and replaced with a leadership prepared to organise the strength of the working class in a general strike to kick out Starmer and bring in a workers’ government and a socialist planned economy.
Join the WRP and Young Socialists to build up the leadership required for the victory of the British Socialist Revolution. There is not a moment to lose.
