THE International Monetary Fund (IMF) has delivered a thinly veiled instruction to the Tory chancellor, Philip Hammond, to scrap his autumn budget statement due to be delivered next week.
In a report by its Fiscal Transparency Evaluation unit the IMF expresses its fears that the Autumn Statement has since 2010 moved away from being a ‘mid-year update’ on the health of the British economy and the progress made by the government in achieving the targets set out in its Annual Budget in April.
The IMF is worried that the Autumn Statement has become ‘an effective mini-budget’, pointing out that: ‘In recent years it has taken on increasing importance, in some instances eclipsing the Budget itself.’
The reason the IMF has taken the unprecedented step of openly intervening and telling the Tories how to run the economy is the fear of ‘instability’ saying that taking decisions on the economy throughout the year prevented ‘comparison on trade-offs and comparisons across decisions’ which left businesses exasperated by the frequency of changes.
The fact that since 2010 every single target set by the former Tory chancellor George Osborne in his Annual Budget was spectacularly missed, forcing him to bring in even more savage austerity cuts every autumn, is scaring the daylights out of the IMF.
It throws a spotlight on the disastrous failure of every single economic policy to overcome the collapse of British capitalism. Much better, the IMF insists, for just one budget a year so workers hopefully won’t start making ‘comparisons’ about the rosy future painted in the Spring and the stark reality that hits home a few months later – a reality that is forcing millions of workers and youth to the conclusion that capitalism is bankrupt and heading for one almighty crash.
Even the attempts by the IMF to sugar the pill for British capitalism, by offering faint words of praise for the UK’s ‘underlying strength of fiscal institutions’ and the ‘ongoing efforts to improve the transparency of public finances’, were completely contradicted in the same report.
It said that British banks posed the biggest financial risk to the UK economy and remained ‘extremely large and highly leveraged’, a code for drowning in a sea of debt that they stand no chance of repaying.
The Royal Bank of Scotland was picked out as still being a ‘fiscal problem’ eight years after having to be nationalised, that is its debts nationalised while its bankers still carry on unhindered. RBS is now facing a $13 billion fine for its role in the US sub-prime mortgage crash that precipitated the banking crash of 2008.
This is just the latest of fines imposed on British and European banks for various misselling scams. All of the banks are facing collapse with the working class expected to pay. The IMF’s unprecedented move to impose its diktats on the Tories is a desperate attempt to shield the banks from the anger of workers who are rising up across the world against austerity and poverty forced on them to save the bankers.
In this process, an air of complete unreality has come to dominate, where virtual PR stunts like this are relied upon to cover up the fact that capitalism is bankrupt and on the edge of collapse.
Adding to this sense of unreality, is the spectacle of a contestant on Strictly Come Dancing offering advice to the Tories on how to run the Bank of England. Failed Labour MP and shadow chancellor Ed Balls, who has found his true calling in life as a reality TV star dancer, has written that the independence of the Bank, a move he was responsible for as Labour chancellor, has ‘gone too far’.
His answer to the chaos and financial meltdown of capitalism is more political control over central banks, warning that their drive to save capitalism through increasing austerity has led to ‘popular discontent towards central banks’ growing throughout the US, UK and the Eurozone.
An uprising against the rule of the bankers scares Balls and the IMF but, for the working class, socialist revolution is the only way out of the chaos of capitalism.