YESTERDAY morning, Tory ministers had to submit to the Office for Budget Responsibility (OBR) their plans to impose the cuts demanded by Chancellor Jeremy Hunt on their departments.
Hunt has the job of pushing through cuts of at least £35 billion in public spending out of a total of £60 billion that he will be announcing at his much-delayed Autumn Statement on Thursday 17th November.
According to sources at the Treasury, such is the chaotic state of the UK economy that decisions on whether to cut benefits by breaking the link with inflation or breaking the triple lock on pensions are all up in the air even at the last minute.
Instead, the OBR is waiting to see just how bad the economic crisis has become in the coming days before it even attempts to make any forecast about Hunt’s budget which is designed to plug a black hole of around £40 billion in government finances.
They fear that by the 18th the scale of the cuts demanded to prevent British capitalism plunging into bankruptcy will be even greater than £40 billion.
The uncertainty which is creating a massive crisis at the heart of the British economic and political system was massively increased last week when the Bank of England admitted that the UK economy is in recession and that its decision to push up interest rates to 3% will push the country into the longest and deepest recession since the 1930s.
If the Bank of England’s warning was dire, it was completely eclipsed by a warning, also last week, from one of the world’s biggest hedge funds, Elliott Management.
In what the Daily Telegraph described as an ‘apocalyptic’ warning to its clients, these international financiers stated that the world is ‘plunging towards societal collapse’ as the era of ultra-cheap money and zero interest levels is abruptly ended by the capitalist central banks.
The Financial Times reported that Elliot, in its letter to clients, stated that the world economy faces an ‘extremely challenging’ outlook and hyperinflation could result in ‘global societal collapse and civil or international strife’.
In effect, Elliot is warning the speculators that a massive crash, dwarfing the banking crash of 2008 and right up there with the Great Depression of the 1930s, is happening today with hyperinflation and recession leading to what it euphemistically calls ‘societal collapse’ – more correctly, a revolutionary uprising by a working class refusing to be driven back to the ‘hungry thirties’.
With this crisis breaking around the ears of the Tory government, Hunt and Sunak are preparing for super-austerity cuts to wages and every public service in order to dump £60 billion of savage cuts on workers and their families.
At the same time, the working class is fighting back against a capitalist future of hunger and freezing as inflation drives the cost of living through the roof at the fastest rate in 40 years.
Today is not the 1930s, when British workers had suffered a massive betrayal by the TUC leaders who called off the 1926 general strike and capitulated to the capitalist class.
The working class has not suffered this betrayal. It is a powerful undefeated working class determined to fight – as seen in the wave of mass strikes and ballots for action from nurses, teachers, postal and telecoms workers across the entire country.
Millions of workers and young people are demanding real action from the trade unions, not useless appeals to the Tories to call a general election, but the demand for the TUC and union leaders to organise an immediate, indefinite general strike.
A general strike will bring down this Tory government and bring in a workers’ government that will nationalise the major industries and banks placing them under the management and control of the working class as part of a socialist planned economy.
Capitalism has reached the end of the road, and, as the hedge fund speculators now realise, the time to put it out of its misery through socialist revolution is now.
Only the WRP and its youth section the Young Socialists fight for this policy and perspective. Join the WRP and YS today to organise the British socialist revolution – there is no time to lose.
