Trade union action to beat ‘stagflation’

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TODAY 800,000 local council workers, members of the UNISON and UNITE trade unions, begin a two-day strike against a government-imposed wage cut, an offer of 2.45% outstripped by inflation.

UNISON said: ‘With everyday essentials like food and petrol going up, as well as gas and electricity bills, our members cannot afford to take another pay cut.’

The unbearable situation confronting, not just local council staff, but about five million workers across the public sector, including teachers, lecturers, civil servants and staff in the National Health Service, was highlighted by inflation figures published yesterday.

Figures published by the Office for National Statistics (ONS) reveal that inflation has become endemic and is getting worse month by month.

The Consumer Prices Index (CPI), favoured by the government because it gives a lower figure, reached an 11-year high of 3.8% in June, compared with 3.3% in May. This is way above the Bank of England 2% target set by the government.

The Retail Prices Index (RPI), which includes mortgage and housing costs, went up in June by 4.6%, up from 4.3% in May. Within these figures food and non-alcoholic drinks went up at an annual rate of 9.5% last month. A price comparison website monitoring supermarkets has found that the price of a basket of 21 staple foods has increased by 20% over the past year.

Earlier this week, the ONS revealed that the prices of manufactured goods (producer prices) are rising at an annual rate of 10% and their input prices of raw materials are up 30%.

Inflation has taken off and is about to rocket out of control. At the same time, jobs are being axed in construction, manufacturing and retail sectors. Last week, housing giants, including Taylor Wimpey, Barratt, Persimmon, Bovis, and Redrow, announced at least 4,000 redundancies.

‘Stagflation’ is returning with a vengeance in a more virulent form than that of the 1970s.

In response to this situation Prime Minister Gordon Brown and his Chancellor Alistair Darling are making clear that, while they are bailing out the banks with at least £100bn of taxpayers’ money, they want to make working-class and middle-class families pay for the present crisis of capitalism.

The Chancellor said yesterday: ‘Whether you are in the private sector, or public sector, whether you are sitting in the board room or working on the shop floor, we cannot allow inflationary wage increases because that would mean that everyone, especially people on lower incomes, would suffer.’

This is the government’s ‘Big Lie’. Everyone knows that workers’ wages are not the cause of inflation.

Speculation by major banks, mortgage lenders, private equity groups and hedge funds, using billions of dollars and pounds in cheap credit over recent years, has led to the so-called ‘Credit Crunch’ (debt crisis), the decline of the dollar and the present wheeling and dealing in commodities like oil, metals and staple foodstuffs, like rice, wheat, maize, etc.

The five million public sector workers, battling against government-imposed pay cuts, must demand their trade unions, organised in the Trades Union Congress, develop their own cost of living index.

There must be a fight for a sliding scale of wages, where wages increase automatically in line with this index. Job sharing, with no loss of pay, must be the trade union policy in the fight to stop sackings.

Workers must demand their unions form a public sector alliance that will organise a general strike to put an end to the government’s pay cuts and win inflation-proof wage rises.

This means defeating and replacing the Brown government, which has decreed that the banks will get billions, while slashing workers’ living standards.

A general strike by millions of trade unionists will force the Brown government out, block any return of the Tories and create the conditions to bring in a workers government that will implement socialist policies to defend people from the threatening catastrophe of the capitalist crisis.

Such a struggle means building a new revolutionary leadership in the unions to replace those leaders who have refused to organise the struggle against pay cuts and defeat the Brown government. Join the Workers Revolutionary Party today and take part in the fight to build this new leadership in the unions!