THE International Monetary Fund (IMF) made it clear yesterday that the Labour government must stop all this idle talk about ‘regeneration’ and ‘growth’ and prepare for a full-scale class war to drive workers and their children into starvation in order to save bankrupt capitalism.
While not naming the UK directly, the fact that the IMF chose to make this intervention just two weeks before Chancellor John Healey’s budget pointed to the Labour government being at the centre of the IMF warning.
The IMF, in its latest world economic outlook, insisted that there is an ‘urgent’ need to bring down the government debt and curb borrowing and this means that measures to help with the cost-of-living crisis faced by workers and their families must be used ‘sparingly’ by all countries.
Healey has for weeks floated the promise that his budget will provide a ‘breathing space’ for households and businesses reeling under the impact of the energy crisis on the cost-of-living.
He promised temporary schemes to cut fuel bills while insisting this relief would be strictly limited to the most impoverished benefit claimants.
Even this promise to limit any relief to the most needy was met with horror by the IMF, which warned that ‘broad-based fuel subsidies’ or price controls would inevitably lead to increases in public spending and drive up the interest charged by the hedge funds and international financial markets who buy up the UK debt.
The IMF said: ‘Any new spending increases or tax cuts should be well-funded to secure the necessary fiscal adjustment paths.’
It continued: ‘Fiscal support measures should be used sparingly, designed in a way not to complicate the task of monetary policy, and unwound rapidly as the shock dissipates.’
In plain language, the IMF is telling the Labour government, and every other capitalist government in the world, that any attempt to provide relief for families facing acute poverty must be paid for by cuts to the welfare state, and had better be temporary until the energy crisis ‘dissipates’.
Failure to carry out this programme will, it warns, plunge the UK into bankruptcy as the bond ‘vigilantes’ flee from financing the government’s debt pile of £3 trillion.
The IMF warned that drastic cuts in public spending are the only option for countries like the UK, which are being strangled by the sky-high debt of the capitalist system, if they are to have any hope of survival.
In the same report, the IMF shot down any hope that the energy crisis would be a temporary blip saying that the global economy ‘could soon test the limits of resilience’ as emergency oil stocks run to historically low levels.
The IMF warned that ‘a prolonged stalemate or further escalation in the Middle East’ would inevitably lead to higher energy and food costs with no end in sight for the inflationary spiral gripping the global economy.
Capitalism has hit the end of the road, and is collapsing under the weight of massive debt and inflation driven by the failed imperialist wars carried out to try to reconquer the world for super-exploitation by the capitalist class.
The working class in the UK and across the world is expected to pay the full bill for this crisis.
In the UK, the Labour government is preparing to obey the instructions issued by the IMF to drive tens of millions of workers and their families back to the days of 19th century poverty, relying for meagre state hand-outs to feed themselves.
The powerful working class will never accept being made to sacrifice their lives to keep capitalism from crashing into bankruptcy.
The working class has the power to resolve this crisis. It must demand that the TUC stop its inactivity and immediately call a general strike to bring down the Labour government and replace it with a Workers Government and socialism.
Trade union leaders who refuse this call must be removed and replaced with a new leadership prepared to organise the working class to take the power and overthrow capitalism with the victory of the socialist revolution. Join the WRP and Young Socialists to build up the leadership required for victory – there is no time to lose.
