TORY chancellor Rishi Sunak, at a cabinet briefing before unveiling his latest spending review in Parliament yesterday, warned that the forecast for the UK economy made for ‘sobering reading’.
This was a massive understatement – the forecast from the government’s tax and spending watchdog, the Office for Budget Responsibility (OBR), which was revealed after Sunak’s speech, showed that British capitalism went crashing into the biggest slump in over 300 years in 2020, with a drop in gross domestic product (GDP) of more than 11.3%.
Sunak was forced to make some reference to the massive debt crisis that is engulfing the country, blaming it on the coronavirus which has forced a dramatic increase in government borrowing and debt, which this year has reached £394 billion – equivalent to 19% of GDP.
In comparison – at the height of the financial banking crisis in 2009 the UK borrowed £157.7 billion or 10% of GDP. He admitted this represented the ‘highest level of borrowing in our peacetime history’ and the ‘economic damage is likely to be long lasting.’
This, Sunak said, is ‘unsustainable over the medium term’ and that ‘We have responsibility, once the economy recovers, to return to a sustainable fiscal position.’
In fact Sunak announced that he has already started on paying off the debt by carrying out a pay freeze for the 5.5 million of public sector workers in England.
Sunak dressed this up as a pay ‘pause’ and insisted that frontline NHS workers would be exempt but millions of key workers in the public sector will suffer yet more pay cuts after years of previous pay freezes under Tory austerity.
After a decade of austerity public sector pay is 1.5% lower after accounting for inflation, and at the lowest level relative to the private sector in decades.
Sunak’s wage freeze for public sector workers is designed to drive their pay down to the minimum levels in the private sector – poverty levels paid out by gig economy employers.
The Tories of course are in mortal fear of using the word ‘austerity’ as Sunak made clear before yesterday’s announcement, trying to dress it up as temporary pauses. They know full well that the working class hate the austerity inflicted on them for over a decade to bail-out the banks after the financial crash of 2008 and will rise up against any more attempts to make workers pay for the capitalist crisis.
This was underlined yesterday when the Guardian newspaper revealed that the Tory cabinet received a confidential briefing that economic chaos from coronavirus pandemic and the world capitalist crisis raised the risk of a ‘breakdown in public order.’
But austerity, wage-cutting and mass unemployment are the only means open to the Tories to pay off the debt run up to ‘save’ bankrupt capitalism.
Unison general secretary Dave Prentis said this ‘is austerity plain and simple’ while TUC general secretary Francis O’Grady said: ‘For all the government’s talk of levelling up, this spending review will level down Britain, hitting key workers’ pay and breaking the government’s promises to the lowest paid. After a decade of standstill pay, yet another pay freeze is a kick in the teeth for the key workers in the public sector who kept the country going in this crisis.’
What else did they expect from a Tory government that can find £16.5 billion for the military while the NHS is to get a meagre £3 billion for NHS England to help tackle the backlog in operations delayed due to Covid!
All Sunak’s pledges of a ‘levelling-up fund’ and help for the millions of workers facing unemployment to find non-existent jobs cannot disguise the fact that this spending review was a declaration of war against not just public sector workers but the entire working class and young people.
Union leaders warned the Tories before Sunak’s announcement that they could not rule out strike action if the Tories imposed a pay freeze.
Now that Sunak has done this, these leaders must be made to take action or face being kicked out and replaced by a leadership that will immediately organise a general strike to bring down this Tory government and bring in a workers government and socialism.