Governor of BoE blames workers for inflation – Only a sliding scale of wages can defend the working class


WITH INFLATION in the UK running at over 7% and gas and electricity bills shooting up by 54%, millions of workers face being driven into destitution – eat or heat is today becoming the choice for workers and their families.

Last week, the Bank of England announced it was heaping even more pain when it doubled the interest rate with promises of further increases during the year, a move that will hit mortgages and the repayments on the debts people have run up on credit cards and payday lenders just to survive.

The Bank is responsible for ‘managing’ the capitalist economy and today their massive problem is how to try and prevent inflation from spiralling out of control.

Increasing interest rates, by a tiny amount, is one means the Bank is employing, but on Thursday the Bank’s governor Andrew Bailey revealed the weapon that capitalism is preparing to unleash on workers in order to rescue the profits of the bosses.

In an interview with the BBC, Bailey spelt out bluntly that workers and their trade unions must not demand big pay rises to defend their wages from being destroyed by inflation.

Bailey stated that wage rises needed to be ‘moderate’ and that firms should show ‘restraint’ in pay talks.

When asked if he was calling on workers not to demand big pay rises to combat inflation, Bailey replied: ‘Broadly, yes – we do need to see a moderation of wage rises. Now that’s painful. I don’t want to in any sense sugar that message. It is painful. But we need to see that.’

This is not the first time Bailey has raised the issue of holding wages down to prevent what the Bank economists call a ‘wage-price spiral’ where wage increases are passed on to consumers forcing up the price of goods and ‘entrenching inflation’ in the economy.

In other words, workers’ wages are responsible for inflation and the way to hold it back is by driving wages down to poverty levels.

While Boris Johnson tried to distance himself from such an open declaration of war, saying it’s not something he is calling for, Bailey got support from within the Treasury department run by Johnson rival and ex-merchant banker Rishi Sunak, with Treasury Chief Secretary Simon Clark insisting it was ‘important that pay restraint is observed.’

The trade union leaders reacted to Bailey’s blunt threat with predictable rage.

Unite general secretary Sharon Graham said: ‘Yet again workers are being asked to pay the price, this time for inflation and the energy crisis. Inflation has not been caused by workers. Why should they be expected to pay for the failures of the energy market and the total shambles of government policy.’

She added: ‘Enough is enough, we will be demanding that employers who can pay, do pay. Let’s be clear, pay restraint is nothing more than a call for a national pay cut.’

The fight for wages increases to protect the living standards of workers and their families has reached an explosive point today and it must not, as Graham maintains, be restricted to those employers who ‘can pay’.

The working class must take a warning from Bailey’s statement of intent to wage a war on workers.

With inflation soaring and wages already falling by 2% this year, the only policy that can protect workers from inflation is the fight for a sliding scale of wages – automatic increases in wages as inflation drives up the cost of living.

The bosses, bankers and the economists at the Bank will howl that capitalist profits cannot afford a sliding scale of wages. In which case the working class will reply if capitalism cannot afford to provide anything more than destitution then capitalism must be overthrown and replaced with a socialist society.

The urgent issue confronting workers and young people is to build a leadership in the unions and working class that is prepared to lead this fight to victory.

Only the WRP and YS are building the revolutionary leadership required. Join today.