ON MONDAY shock figures from the Office of National Statistics (ONS) showed that Britain is £490 billion poorer than it was thought to be by the Tory government. A surplus of £469 billion has turned into a net deficit of £22 billion. Under the Tories, the so-called natural rulers, the UK has no reserves, the cupboard is bare!
This crisis and collapse of UK capitalism, where a run on the pound will be unstoppable and lead to three figure Zimbabwe-style inflation, is the major achievement of the Cameron and May Tory governments.
However, the UK crisis is part of the world crisis of capitalism. The International Monetary Fund (IMF) has just issued another warning that the world capitalist financial system is on the verge of a gigantic crash as the debt pile reaches a historic high of $135 trillion in the G20 wealthiest countries.
The IMF warns that this colossal debt, run up by companies and consumers, will be impossible to service if there is any increase in interest rates. In fact, rates are about to go up, and the system with them. Currently, millions of British workers and their families are stuck in debt. The numbers of people living off food banks and sleeping on the streets is growing rapidly.
Yesterday’s ONS figures showed the Consumer Price Index (CPI) measure of inflation rising to 3% last month, up from 2.9% in August. The UK’s key inflation rate has hit its highest for more than five years, driven up by increases in transport and food prices. The CPI, including owner-occupiers’ housing costs (CPIH), was 2.8% in September, up from 2.7% in August.
The rise of inflation raises the likelihood of an increase in interest rates next month, driving mortgage holders out of their homes and onto the streets in their thousands, in a bigger crisis than the 2007 sub-prime mortage crisis that brought down the banks.
At the same time, state pension payments from April 2018 will rise in line with September’s CPI. Under the ‘triple lock’ guarantee, the basic state pension rises by a rate equal to September’s CPI rate, earnings growth or 2.5%, whichever is the greatest. Today’s CPI inflation figure means that pensioners will get a 3% rise next April.
In fact, the November Tory budget is set to launch an attempt to undo the triple lock, to push the pensioners back into poverty, backed up by a plan to make pensioners sell their homes to pay for their own health care, rather than ‘selfishly’ relying on state care, and then handing down their homes to their children.
Pensioners are about to be demonised since the Chancellor is desperate to consider tax concessions for younger people, paid for by their parents, to try to win them back to the Tories. However, the Tories have lost the youth for good!
For workers, the prospect is that what is left of their living standards will be destroyed by inflation, while the continuing collapse of UK, EU and worldwide capitalism will rob them of their jobs.
For the working class, for the youth and for the pensioners of the UK and the world there is only one way forward and that is to replace bankrupt British and world capitalism with workers’ governments and socialism.
In Britain trade unions must tell the government that the working class and the youth have had enough of forced sacrifices while the rich get richer and richer. The trade unions must defend every job and demand that instead of mass sackings there must be a sliding scale of hours and no sackings.
In the face of galloping inflation there must also be a sliding scale of wages and pensions. This means that the TUC must draw up its own cost of living index and see to it that wages and pensions rise by every point that the trade union cost of living index rises.
The trade unions must tell the government that youth must be set free from massive indebtedness and that education must be free, with student debt and fees abolished and replaced by the restoration of grants. When the bankrupt Tory government says that this is not possible, then the trade unions must reply that capitalism will have to go and be replaced by a workers’ government that will expropriate the bosses and bankers, and bring in a socialist planned economy capable of satisfying the needs of the people.
The only way forward is through a socialist revolution!