Osborne admits UK capitalism ‘critical’ in 2016-17

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IN a speech yesterday and in interviews with the BBC, the Tory chancellor, George Osborne, admitted that, contrary to everything he has said in the past about a healthy growing economy, ‘2016 is the year of mission critical’ for British capitalism.

In his Autumn Statement last year, Osborne announced a four-year plan to cut all public spending by 25% – shrinking the size of the state back to levels last seen in the 1930s before the introduction of the welfare state and the NHS.

Now even austerity cuts on this scale are not enough – Osborne is serving notice that all public spending on health, benefits and public sector workers’ pay must be cut till the working class bleeds. He said: ‘Today I want to issue this warning: unless we finish the job of fixing the public finances, to get Britain back into the black by finally spending less than we borrow, all of the progress we have made together could still easily be reversed.’

He poured scorn on the reformists in the Labour Party and TUC leadership who beg the Tories to ease up on austerity, saying they are: ‘irresponsibly suggesting that we can just go back to the bad old ways and spend beyond our means for evermore. Though the year is only seven days old, already we hear their predictable calls for billions of pounds more debt-fuelled public spending.’

The warning that Osborne was issuing is that the Tories are preparing to launch an all-out war against the working class and its unions in a desperate attempt to survive the rapidly developing world capitalist crash. Britain ranks as the weakest of all the major capitalist nations.

With manufacturing industry virtually destroyed, the entire economy is reliant on the financial, banking and service sectors which account for over 80% of the nation’s wealth. These will be wiped out in the face of the world crisis, a crisis which the World Bank yesterday described as a ‘perfect storm’.

The perfect storm being the simultaneous slowdown in the ‘emerging markets’ causing demand for raw materials and oil to plummet and the financial turmoil caused by the massive debt bubble directly linked to the policy of printing valueless paper money. This free money handed to the banks and speculators in an attempt to kick-start capitalism out of the crash in 2007/8 has only deepened the crisis, creating a debt time-bomb that has started to explode.

The spark was provided by the decision of the Federal Reserve to put up interest rates for the first time in over 8 years – a move that Osborne signalled will shortly be followed by the Bank of England.

This will spell disaster for British households which have run up an astronomical total debt of £1.47 trillion.

These debts were run up to offset the cuts in pay and benefits inflicted under Tory austerity. Any rise in interest rates will drive millions of families into poverty and starvation. On top of this, Osborne is now pledging to smash state expenditure completely to pay off the state debt of 1.5 trillion run up bailing out the banks. This cannot be achieved in any peaceful way.

The Tories are acutely aware that the working class will not sit back and passively see their health service destroyed through closures and privatisation and their very lives smashed apart to prop up a bankrupt capitalist system.

The perfect storm will revolutionise workers and young people even faster than before. Aware of this, the Tories are preparing to physically take on the working class. The anti-union laws will be used to declare all strikes illegal while the state’s police will be used to break strikes and bust up picket lines.

The decisive issue in 2016 will be that of the leadership of the working class. Capitalism in its historic crisis can offer only a future of poverty, destitution and misery for workers and young people.

The only way forward today is the building of a revolutionary leadership prepared to lead the working class to overthrow capitalism and seize power through the socialist revolution. This means building the WRP and Young Socialists.