THE manufacturing sector of the British economy shrank last month at the fastest rate for 17 years, that is since 1992, according to figures published by the Chartered Institute of Purchasing and Supply (CIPS) yesterday. This is the fifth consecutive monthly contraction.
The CIPS survey came a day after the Office of National Statistics published data that showed that there was no growth in Gross Domestic Product (GDP) in the second quarter of this year, following a meagre 0.3% growth in the first quarter.
Unemployment is rising dramatically, with the latest official jobless rate up from 5.3 to 5.5% – 1.72 million workers. Inflation is also taking off, with the Retail Price Index up from 4.8 to 5.00%, with some food and fuel prices rocketing by more than 20%.
Ford announced this week that 1,100 workers at its Transit plant in Southampton will be put on a four-day week, GM Luton truck plant is laying off workers periodically, Jaguar is shutting its plant in Halewood for a week and Land Rover is scrapping Friday working.
British capitalism is in recession, with workers in manufacturing industries bearing the brunt of job losses and short-time working, and inflation is taking off.
All of this is taking place before the full effects of the banking crisis, which is making credit unobtainable or exorbitantly expensive for industrial companies and retail customers.
What is in prospect is a full-blown slump, a dramatic drop in the exchange rate of the pound and hyperinflation.
In this situation, Prime Minister Gordon Brown has rallied the leaders of the other bourgeois parliamentary parties to back his moves to bail out the bankers and make the working class and middle-class people pay back the debts of the City of London, run up in the speculative orgy of recent years.
Brown, Tory leader David Cameron and Nick Clegg from the Liberal Democrats are operating as a de facto national emergency government, with Chancellor Alistair Darling discussing his plans with Tory George Osborne and Liberal Democrat Vince Table.
Cameron has said: ‘We’re in this together.’ Echoing Brown he added: ‘We must set aside our differences and work together with the government in the short term to ensure stability.’ Clegg said his party would also support measures to tackle the financial crisis, and ‘come together in the spirit of compromise in the interests of the British people’.
Brown, Cameron and Clegg are united in the British ‘national interest’, which is that of the ruling capitalist class.
The Labour government has demonstrated repeatedly that it is a ‘pro-business’, ‘pro-market’ capitalist government, determined to do everything to try to save decrepit British imperialism. It is handing billions to banker’s that are going bust, while sanctioning thousands of job losses, cutting public sector pay, and slashing and privatising public services.
In this situation, many workers are looking to their trade unions and the leaders of these unions to organise a fight to defend them from the catastrophe being inflicted on them by capitalism in its death agony.
Yet, in response to the CIPS figures, Trades Union Congress General Secretary Brendan Barber could only say: ‘Today’s figures from the CIPS are depressing . . . An interest rate cut next week would give a welcome boost to manufacturing.’
Barber’s policy is like Brown’s, to allow the bankers on the Bank of England’s Monetary Policy Committee to decide the future of millions of workers.
The TUC leader, Unite chiefs Tony Woodley and Derek Simpson, and UNISON leader Dave Prentis all support Brown, acting as the ‘left wing’ of his national emergency government. They blocked moves at the recent TUC conference for strikes to defend union rights and to defeat public sector pay cuts.
It is clear that Brown’s government must be kicked out and be replaced by a workers’ government that will implement socialist policies in the interests of millions of workers and middle class people, whose jobs, pay, homes and essential public services are being decimated by the capitalist breakdown.
This means building a new leadership in the trade unions that will replace those who serve as agents of the Labour leader, ensure that there is union political representation again, and organise a general strike to get rid of the Brown government.