SHRINKING UK trade figures released yesterday of a decline of 0.1 per cent of GDP in May, following a 0.3 per cent fall in April, shattered a ‘disappointed’ Chancellor, Rachel Reeves, and her claims of being able to cut the fast growing UK public debt of £2.7 trillion without tax increases, and without savage cuts to welfare spending and the public sector.
Panicked cries of ‘reverse the tax onslaught’ came from the Tory Shadow Chancellor and alarm that ‘the economy is turning sour’ from financial analysts.
The pound crashed 0.3 per cent against the dollar amid demands for the Bank of England to cut interest rates again and again in a desperate attempt to ‘stimulate’ economic growth.
The reality is that Starmer’s anti-working class government has been stopped in its tracks, and forced to amend its bill to cut PIP disability benefits to the ill and most vulnerable, and its proposed reinstatement of the pensioners’ winter fuel payment.
Workers’ hatred of this Labour government forced scores of MPs in parliament to rebel and oppose the bill despite ferocious intimidation from the Labour whips with threats such as deselection, leading to a statement that to rely on Tory party offers of support to suppress a potential defeat would bring down the government.
Starmer and Reeves are now faced with a head-on irreconcilable clash with the working class, now mobilising to defend the welfare state, jobs and living standards in a fight to the finish with the ruling class over who rules the country.
NHS Resident (formally Junior) doctors have voted by more than 90 per cent to take strike action over their ‘non-negotiable’ pay claim. Striking refuse collectors in Birmingham are still on strike after several months, and are totally intransigent over the Labour council’s £8,000 annual wage cuts.
Yesterday, the Unite union suspended Labour’s Deputy PM Angela Rayner of her Unite membership, over her lack of support for the Birmingham binmen, and for urging the strikers to accept a deal to end the dispute. The bin workers walked out in January and started their all-out strike in March.
After an emergency motion at its Brighton conference, the union said it would also re-examine its funding relationship with Labour.
Meanwhile, the owners of the collapsed Prax Lindsey oil refinery in Lincolnshire were being sought by liquidators over £250 million unpaid taxes due to HMRC, according to the Financial Times yesterday, in another blow to Reeves’ ‘economic growth’ plan.
Labour’s Energy Minister has written to the owners calling on them to ‘do the decent thing’ and financially support affected workers after the company filed for insolvency.
Michael Shanks MP said they had a responsibility to staff, and the government was ‘urgently exploring what support can be offered to the workforce at this difficult time’.
At least 420 jobs are at risk at the refinery in North East Lincolnshire, with 120 HGV drivers made redundant from the company’s main delivery firm on Monday.
Shanks said the liquidator was ‘urgently assessing whether a sale of the refinery is possible’.
According to Unite the union, 1,000 jobs could be affected when taking into account contractors and the supply chain, after the Prax Group collapsed.
Even with the tax burden at a 75-year high, the watchdog describes the finances as ‘vulnerable’, with a ‘daunting’ outlook and ‘growing pressures’.
Richard Hughes, the OBR boss, warns: ‘The UK public finances are in an unsustainable position in the long run. The UK cannot afford the array of promises that it has made to the public.’
The British state is living beyond its means and the problem is only getting worse.
That is the conclusion of the Office for Budget Responsibility (OBR) in its latest assessment of Britain’s long-term public finances – a document that sets out a series of nightmares for Rachel Reeves.
While the Chancellor is battling to repair her Budget after a series of costly about-turns on winter fuel payments and disability benefits, the OBR’s forecasts show this is just the start.
The government has three options: defy backbench rebels to cut spending, risk confrontation with bond vigilantes by raising borrowing, or raise taxes. Given Labour’s recent record, the first two look implausible.
However, the working class has only one option, and that is to end this bankrupt warmongering capitalist system with a socialist revolution.
Workers must force their trade unions and the TUC to defend jobs with occupations, and nationwide general strikes to take the political power and establish a socialist government to nationalise the economy and banks and plan production for workers’ needs, not profits for capitalists.
This is the only way forward!