PRIME Minister Gordon Brown justified pay cuts for workers in the public services and the billions handed over by the Treasury to the bankrupt Northern Rock bank at his monthly press conference yesterday.
He declared: ‘The interest rate has been able to come down because inflation is low. . . . The measures we have taken this year, including unpopular measures, on public sector pay have been necessary to ensure low inflation and the stability of the economy.’
At the same time, the day after the government increased the total funds available to Northern Rock bank to £56bn, the Prime Minister insisted his government would do everything in its power to secure the future of the bank.
Standing next to his Chancellor, Alistair Darling, Brown said: ‘We are doing everything in our power to help Northern Rock find the right buyer for the future. We do not rule anything out for the future.’ He made clear he still hoped to sell Northern Rock to a major financial group, but did not rule out nationalisation.
The message of Brown and Darling could not have been clearer. Public sector workers are paying for the crisis of British capitalism, while the Labour government hands over billions to bail out bankers, whose speculative dealing in suspect debt packages led to the downfall of Northern Rock.
The £56bn made available to Northern Rock by the Treasury is almost the same as the annual budget for education and two thirds of the spending each year on the National Health Service, which employs 1.2 million people.
It is staff in schools, hospitals, in local councils and in the civil service who are suffering a cut in their living standards as a result of Brown’s diktats on pay. Their anger can only be intensified by the spectacle of exponents of ‘casino capitalism’ being given guaranteed government hand-outs that amount to £1,800 for every taxpayer in the country.
So why are Brown and Darling opening the coffers of the Treasury to guarantee not only the Northern Rock deposits of small savers, but to repay money owed to huge multinational financial institutions?
It is because of the severity of the international crisis of capitalism which finds its sharpest expression in Britain, an old major capitalist country that is in relative decline and is home to the world’s second largest financial centre, the City of London.
Last week an economist at Ernst and Young referred to the Wall Street Crash in 1929 as ‘a walk in the park’ compared with the impending financial catastrophe today.
Five million workers in the public sector know that they are in a fight against the Brown government to maintain their living standards. A million and a half people in Britain face huge increases in their mortgage repayments next year as their fixed mortgage repayments come to an end.
In the past many workers and middle class people may have regarded a Labour government as a friend, but now, as ‘the party of business’ making a bid to be ‘the party of order’, it is their enemy.
It is time for workers in the public sector to demand their trade unions forge a public sector alliance as a fighting force to organise a general strike across the public services to bring down this Brown government, which is ruling on behalf of the bankers and privateers.
Such an action will win the backing of the whole trade union movement and wide sections of the middle class, who face rising prices for basic necessities, mortgage defaults and home repossessions, and the destruction of essential services, like education and the NHS.
The Labour government must be replaced with a workers’ government that will carry out socialist policies, including the nationalisation of banks and financial institutions without compensation, guaranteeing individual savers’ deposits.
Public ownership of the banks will enable a workers’ government to cancel mortgage debt and provide funds to build council houses to solve the housing crisis, and rebuild the education system and the NHS.
This struggle cannot be carried forward by the present union leaders, many of whom backed Brown’s leadership bid. They must be replaced by new leaders. So join the Workers Revolutionary Party today and build a new revolutionary leadership in the unions.
