THE UK inflation rate has leapt to an 11-year high of three per cent according to the government’s Consumer Prices Index (CPI) which grossly underestimates the real cost of living increases as far as working class families are concerned.
For example, these families now have to pay huge increases in gas, and electricity charges, along with bus and rail fares.
The Retail Price Index (RPI) which includes mortgage interest rates also shot up from 3.9 per cent to 4.4 per cent. Again this is a massive underestimation of the real rise in the essential commodities that working class families must have to live.
The real inflation rate has been calculated, by even bourgeois authorities, to be at least four times that of the official government figures.
Last week’s increase in the bank rate to 5.25 per cent is expected to be followed by another 0.25 per cent increase next month.
The impact of the two increases is expected to push unemployment up, as companies find it much more painful to borrow at the higher interest rates, and also to see wages slashed as the government holds down wage rises in the public sector to two per cent.
Mortgage interest rates, and credit card interest rates will also be pushed higher. With consumer debt at £1.4 trillion, the working class and the middle class face being pauperised.
The end result of these increases is going to be tens of thousands more bankrupts, and tens of thousands more homeless, as the banks and building societies move to repossess the homes of those who cannot keep their heads above the water.
Already, the banks are moving in to get rid of fixed rate mortgages and to cushion their profitability by imposing additional banking charges in relation to mortgages.
Capitalist Britain’s crippling level of debt, plus its massive £80 billion plus goods trade deficit for 2006, in a situation where interest rates are rising all over the world, is preparing the way for a major run on the much overpriced pound sterling. This will see interest rates move very sharply upwards, with all of the suffering that this entails for the working class and the middle class.
The working class and the trade unions need a programme and a leadership to meet the challenge of this rapidly approaching crisis.
First of all, the trade unions must protect the value of workers’ wages. They must draw up their own cost of living index, to win real wage increases, and demand a sliding scale of wages, that is a threemonthly rise in pay to keep pace with increases in the trade union cost of living index.
Employers who demand mass sackings must be told that not a single worker will be allowed to go. Instead working hours must be reduced to avoid redundancies without any loss of pay.
Closure of factories must be answered with trade union organised occupations to prevent the equipment being moved out, and with campaigns for their nationalisation under workers control.
Attacks on the health service must be answered by occupations to keep general hospitals open.
Trade unions must resist banks who seek to repossess homes and put families onto the streets with demands for their nationalisation. The trade unions must demand a programme of public works, including a building programme to build millions of new council homes to end the housing crisis, and to provide jobs for unemployed workers and youth at trade union rates of pay.
If we are told that capitalism cannot afford this programme and that unemployment, slave labour wages, homelessness, and pauperism is the best that is on offer, we must reply that if bankrupt capitalism cannot satisfy the basic requirements of the working class then it must be put out of existence by a socialist revolution that will bring in a workers’ government.
That this programme of action requires the building of a new leadership inside the trade unions is obvious.
The current crop of reformist misleaders, who believe in capitalism and are opposed to socialism must be removed and be replaced by the leadership that only the WRP is building. Workers and youth who want a future must join the WRP today.
