A SHATTERING collapse of the British economy has taken place. It has fallen 20.4% in a single month, in April, and it is still in free fall. This is ‘historic’, the Office for National Statistics (ONS) said, with a fifth of the entire economy wiped out.
The coronavirus crisis has exposed the bankruptcy of capitalism, and has tipped it over the edge of the cliff.
This current crisis dwarfs the worldwide banking crash of 2008, and dwarfs the effect on the UK of the 1929 Wall Street crash, which led to the ‘hungry thirties’. During the 2008 crash, from February 2008 to March 2009, a total of 13 months, GDP shrank by 6.9%. Today, the economy shrank by 20.4% in April alone!
Since the 2007/8 banking crash, the working class has been made to pay a very heavy price for crisis-ridden British capitalism. The ruling class of bankers and bosses bailed the banks out to the tune of £2 trillion of taxpayers’ money, turning their banking debt into national debt to be paid for by the working class.
Over the course of the next decade, a vicious programme of severe austerity was imposed onto the backs of the working class, with men, women and children being made to suffer.
Rents soared out of control. Gas, electric and water bills were hiked up. Food prices spiralled. Workers and their families were driven to depend on food banks, and driven to taking out pay-day loans to pay their bills and rents to avoid being turned out onto the streets.
The ruling class said no more austerity. Now, just a few months later, after the ‘end of austerity’, it is to be super-austerity! Debt charity StepChange says that 4.6 million households are facing a ‘personal debt tsunami’ having already seen their finances hit by the pandemic. According to YouGov research, on average each worker has already accumulated an additional £1,076 in rent arrears and £997 of debt as of late May.
Now that the coronavirus pandemic has thrown capitalism over the cliff, the government is imposing a much bigger debt onto the backs of the working class.
Government borrowing surged to £62bn in April, the highest monthly figure on record, with Treasury figures showing that 8.9 million workers have been furloughed. In March 2020, UK public sector net debt was £1,791.5 billion (or 79.1% of GDP). In fact, the end of furloughing will bring 11 million unemployed!
The Tories are hell-bent on saving capitalism at all costs. The banks are demanding that they be propped up by the state to the tune of hundreds of billions of pounds.
Entire industries are readying to sack even more workers. The capitalists are declaring an all-out war on the entire working class and middle class to slash wages and millions of jobs and to pauperise the middle class
We are being told repeatedly that there will now be a ‘new normal’, that ‘we will have to have new conditions of work’. Those ‘new conditions of work’ are not only hand-washing and social distancing but wage cutting and mass sackings.
British Airways are leading the field with their announcement that they will sack their entire workforce of 42,000. Only 30,000 of the sacked workers are then to ‘re-apply for their old job’ on worse pay and conditions.
Heathrow airport has joined the trend announcing that a third of the airport’s 7,000 jobs are at risk. British Gas are axing 5,000 jobs, Rolls Royce is to sack 9,000, Aston Martin 500 jobs, BP 2,000 jobs, Bentley 1,000 jobs and this is to mention but a few!
And what are the union leaders going to do about it?
Heathrow began their programme of mass sackings on Thursday with Heathrow boss John Holland-Kaye declaring: ‘Throughout this crisis, we have tried to protect front-line jobs, but this is no longer sustainable, and we have now agreed a voluntary severance scheme with our union partners.’
The trade union leaders have found their role – in partnership with the bosses to help decide who gets the sack!
There is only one way out of this historic crisis for the working class and the majority of the middle class, and that is to overthrow the bankrupt capitalist system with a socialist revolution and bring in a socialist planned economy.
This task requires rapidly building a new leadership in the trade unions. It needs mass recruitment to the Young Socialists and the Workers Revolutionary Party. This is the only way to provide the necessary revolutionary leadership for the working class to take the power.
There is no other way out of this crisis for the working class!