JUSTICE Secretary, Jack Straw, yesterday dismissed Tory claims that Labour is facing its own Black Wednesday, over Northern Rock and the missing data discs crisis, when Brown’s centralised state apparatus lost 25 million people’s records and kept quiet about it for a month.
Black Wednesday was when international speculators sold sterling, and pushed it down and out of the EU’s Exchange Rate Mechanism. In the process, hundreds of thousands of mortgage holders were ruined by the high interest rates that Tory Chancellor Lamont imposed to defend the currency.
In fact, the present Tory leader, Cameron was one of the treasury team that was advising Lamont, who subsequently told the world that he had whistled in his bath at the news that the pound had been forced out of the ERM, because he was in favour of weakening Britain’s links with the EU.
Lamont and Cameron were helpless in the face of the collapsing pound in 1992, and today Brown and Darling cannot halt the worsening of the world crisis of the capitalist system, which is now much more severe than it was in 1992.
In fact, the government has loaned £24 billion to the Northern Rock bank without the slightest prospect of being able to get it back. The government made the gigantic loan knowing that £53 billion of its mortgages – over 70 per cent of the Northern Rock mortgage portfolio – were not owned by the bank but by a Jersey offshore company, and that these assets had already been used as collateral to raise cash for the bank.
The £24 billion was always a million miles away from being ‘safe’, as the government knew at the time it made the loan.
The loan was made by a government in a state of panic and terror that a run on the British banks had begun which would be unstoppable unless a massive ‘loan’ was made, strictly as a holding operation – until some new shock emerged out of the world capitalist crisis.
Now the call has gone up that Brown must nationalise the Northern Rock bank so that the state bails out the bankers, the shareholders and all their debts, which will see the government spending the equivalent of the defence budget on a small group of capitalists, something that will not go down too well with the already demented army chiefs and ex-army chiefs who have declared war on the government.
However, Brown will not nationalise the bank, since the demand that he must nationalise industries that are destroying tens of thousands of jobs would be adopted by every trade union, and fought for by millions of workers.
The crisis of capitalism is worsening by the hour with production falling and inflation, including food prices, rising rapidly, while the pound sterling has begun to fall, even against the feeble dollar which is being sold off all over the world.
Ahead are some enormous economic and political shocks for world and British capitalism, and already the bosses and different sections of the capitalist state are demanding that their cash demands be satisfied at the expense of the working class. Yesterday, an almost demented group of ex-military commanders were demanding in the bourgeois media an immediate massive rise in military spending and predicting that if this was not done the British army faced certain defeat in Afghanistan.
The capitalist inflationary boom has given way to slump, banking and industrial crashes, a drive to wars, and a huge sharpening of the class struggle.
The bankers and military are demanding that they should be the beneficiaries of the state budget and that the workers’ Welfare State be smashed.
British workers in alliance with the workers of the world must organise to defend their jobs, wages, pensions and basic rights.
The capitalist crisis can only be resolved by a socialist revolution that expropriates the bankers and bosses, smashes the capitalist state, including the officer corps, and goes forward to socialism and planned production to satisfy people’s needs.
This is the only way forward.