THE DEMANDS for the Labour government to slash all government spending on welfare is reaching a crescendo in the run-up to Chancellor Rachel Reeves’ budget next month.
Last week, one of the bosses at the world’s largest bank JP Morgan instructed Reeves to cut public spending, singling out pensioners as a prime target for being driven into poverty in order to ‘balance’ the UK’s finances.
This week it was the turn of the Daily Telegraph to weigh in with an article by Roger Bootle headed: ‘We must cut pensions to get Britain out of debt – even if it causes anguish’.
Bootle is a senior independent advisor to ‘Capital Economics’ and a senior fellow at Policy Exchange. His article is a direct reflection of the pressure the bankers and speculators are bringing to bear on a government that is on the political rocks with Starmer’s future as prime minister now the subject of fevered speculation amongst Labour ministers.
Bootle’s latest article has the merit of being absolutely blunt in demanding that instead of raising taxes on the wealthy, which Reeves is reported to be ‘considering’, state pensions must be hammered.
Bootle writes: ‘Going into this winter the UK is facing a significant twin-pronged fiscal headache’. The first of these ‘prongs’ is the massive national debt, fast approaching £3 trillion and increasing by the day, as the government pays interest to the speculators who buy up government bonds. The second ‘prong’ that Bootle targets is ‘inordinately high’ levels of tax.
Bootle has a plan to rescue British capitalism from collapse outlined in a report he co-authored called ‘Beyond our Means: A Plan to Tame Public Spending.’
The four main ‘culprits’ for the British debt time bomb are pensions, welfare, health and debt interest being paid to the international financiers.
Now as Bootle insists Britain cannot reduce or cut the debt repayments, the only way is to ‘persuade the markets that we are now fiscally responsible’ which will inevitably lead them lending to the government at lower rates of interest.
The only way to ‘persuade’ the markets is to slash all public spending, starting with pensions. Dropping the pensions triple-lock is not enough, Bootle insists, state pensions must be frozen for three years.
This will be met with hostility from workers but, Bootle says, this hostility to singling out pensioners will be more than offset when it becomes clear that they will not be alone in their suffering.
He proposes working age benefits should also be frozen for three years, while spending on the NHS cut by ‘refashioning the system to put it on a social insurance basis.’
While the shift from a free NHS paid for out of taxation to an insurance-based health system cannot be achieved immediately, Bootle proposes charging for GP appointments and for some luxurious hospital beds – impoverished workers can remain on beds in corridors presumably.
Bootle acknowledges that: ‘Our proposals will run into stiff opposition from those who say that they will inflict pain on lots of people – which is true.’
Bankrupt British capitalism and its loyal Starmer government will run into more than just stiff opposition from a powerful working class determined not to be driven into the gutter of abject poverty and the destruction of all the gains of the welfare state in order to satisfy the bankers and bosses.
While Bootle and the world bankers are demanding that the Labour government take on the working class to inflict the pain of capitalist collapse on their backs, the working class has shown it is breaking with the Labour Party and Starmer’s government – as demonstrated in last week’s Caerphilly by-election.
Now is the moment for the working class to seize the initiative by forcing the TUC to call a general strike to bring down Starmer’s government and go forward to a workers’ government that will expropriate the banks and major industries placing them under the management of the working class.
With capitalism dying on its feet the only future for workers and youth is to put it out of its misery with the victory of the British Socialist Revolution.
