Brown cuts workers’ pay to underwrite the bankers

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YESTERDAY was an historic day, with Prime Minister Brown pledging to bail out the banks.

At the TUC Congress, Labour Party leader Brown told the trade unions that they could not have above-inflation rate wage rises, and would have to put up with staged wage rises, which are in fact wage cuts, because the fight against inflation is the absolute number one priority.

To this end, Royal Mail workers are being threatened with wage cuts, pension cuts, casualisation and privatisation, with the loss of 40,000 jobs.

As the managers of Royal Mail have spelt out, there is to be no calm in the industry until the bosses get their way.

On Monday evening the same premier agreed to hand the Northern Rock bankers £29 billion in the event of the run on the bank continuing by depositors desperate to get their hard-earned cash back.

This was after his independent Bank of England governor had told the same bank, and bankers in a similar position, that those who had put their financial institutions at risk by their reckless behaviour, which confused debt and promises to pay with money, could not be expected to be rescued at the expense of the taxpayer.

Any rescue would be appalling, stated the governor of the Bank of England, who was backed by the government, since it would give the bankers the idea that they could construct even bigger South Sea Bubbles and that the state and the taxpayer would always bail them out, using taxes provided by the working class to do so, out of fear that otherwise there would be an economic catastrophe, like the 1929 crash.

Now both the government and the Bank of England have been tested out, and both have capitulated, giving the bankers the green light to proceed. In fact, their agreement is to underwrite the deposits of the bankers, £29 billion in the case of Northern Rock, and hundreds of billions no doubt, if the true position of other dodgy British banks were known.

What the Brown government has done is to put the British government and state at the centre of the financial crisis and opened up the door for the bankrupting of the entire British state, and all of its assets.

It is opting for debt, more debt and yet more debt, in a way which will ensure that the banking crisis leads to a massive run on the currency which will require sky-high interest rates to defend it, with all the consequences that this will have for those millions of people that have already got huge mortgages and other debts to pay.

The other side of this policy, of the state using the taxes provided by the working class to try to rescue the banks from the capitalist crisis that they have created, is that there will have to be an even more furious assault on the working class and the trade unions, in the form of higher and higher interest rates, and benefit and wage cuts, at the same time as food and petrol and all energy prices are rising.

A Labour government alone will not be able to carry through this policy.

Brown will need to move to a national government alongside Cameron, and has already prepared the way for this by bringing in a group of serving Tory MPs to advise him on policy matters.

Faced with this critical situation, of a Labour government determined to bail out the bankers and pauperise the workers, the working class needs a new and revolutionary leadership.

This must fight all wage cuts, and resist mass sackings with a policy of occupation, and demand the nationalisation under workers’ control of all industries threatened with closure.

The trade unions must develop their own cost of living index in order to fight for real wage increases that truly reflect the massive rises in basic necessities, and are adjusted to keep pace with inflation.

To deal with the debt and housing crisis the trade unions must demand the nationalisation of the banks and the building societies and also the building industry so that a programme for building millions of council houses can be organised.

Above all, the trade unions have to be organised for a general strike to bring down the Brown government and to go forward to a workers’ government.

This will expropriate the bosses and the bourgeoisie, and bring in a socialist planned economy at home, while carrying out socialist policies abroad, including the withdrawal of all British troops from the Gulf, the Middle East and central Asia.

Only the Workers Revolutionary Party, its daily paper the News Line, and its youth movement the Young Socialists are fighting for a socialist revolution to deal with the capitalist crisis.

The WRP is building the new leadership that the working class requires.

All workers and youth who are serious about the struggle for a real future should join it today.