ON MONDAY, the new Labour Chancellor Rachel Reeves announced her shock and horror that no one had told her about a £22 billion ‘black hole’ in government finances.
Reeves blamed the policies of the last Tory government for creating this black hole and for keeping quiet about it.
But, Reeves insisted, she was now going to tell the truth to the public about how she will ‘fix’ this and rescue a British capitalist economy drowning in debt.
As an article in yesterday’s Daily Telegraph pointed out, Reeves’ shock and surprise is simply not credible given that the Office for Budget Responsibility had already laid out the figures on ‘all the financial pressures on the government and she promised during the election campaigns that she had enough information to rule out any major tax increases.’
Either Reeves was not being truthful or she hadn’t bothered to read the OBR’s books that she claimed to have examined.
Claiming ignorance acted as a cover for Reeves to blame the Tories for the bombshell she dropped on the working class when she announced the ending of the £300 universal winter fuel payment to all pensioners.
Around 10 million pensioners and seven million pensioner households will lose the £300 lifeline that they relied on to help towards the escalating costs of heating homes during winter.
A cut that puts £1.4 billion into the government coffers will be at the expense of pensioners going cold, and the very real possibility of freezing to death in the winter months.
Not that this worries Reeves, despite her insistence that it was a ‘hard choice’ she really didn’t want to make but was forced into by the previous government.
Equally, she isn’t concerned about prime minister Starmer’s pledge to give £3 billion a year (for as long as it takes) to the Ukrainian fascist-supported regime to carry on with the imperialist war against Russia.
Reeves intends to plug this £22 billion black hole by forcing pensioners to freeze, while her plans to cut the massive black hole of UK national debt will require even ‘tougher choices’.
In other words, savage austerity cuts greater than the Tories were able to impose on workers.
The national debt was run up to finance government spending by selling government bonds to the international financial speculators. In June, the ‘UK National Debt Clock’ recorded that the debt then stood at over £3 trillion – and growing at a rate of £5,170 per second!
This year the UK is expected to pay £89 billion in interest alone for this debt to the international financiers.
The national debt was massively inflated following the world banking crash in 2007/8. Between 2007 and 2009 the UK government spent £137 billion of public money bailing out the banks.
At the peak of the bail-outs, UK taxpayers’ direct subsidy to the banks was more than £1 trillion, according to the official National Audit Office.
Hundreds of billions were spent propping up the bankers and for imperialist wars across the world, with the working class expected to pick up the bill.
Reeves and Starmer have nailed the colours of this Labour government to the mast of a British capitalist ship that is drowning in debt, and with no way out for the capitalist class but to wage a class war against workers to drive them back to the conditions of the 1930s Great Depression.
The Tories were too weak to carry this war through so now the ruling class is relying on Labour to do the job for them.
Ending the winter fuel allowance and refusing to end the cap on child benefits is just the start for the Starmer right-wing Labour Party.
The Telegraph article sets out the minimum expected to ‘save’ British capitalism including ending state pensions replacing them with private pension schemes, ending student loans, and bringing in charges for NHS treatment.
The working class will never tolerate being driven into the gutter to rescue the bosses and bankers by a Labour government.
Workers must demand the TUC convene a Special Congress to organise a general strike to bring down the Starmer government and replace it with a workers government and socialism.
This is the only way forward.
