Yesterday, the Telegraph newspaper confirmed a massive milestone in the collapse of British capitalism into bankruptcy when it pointed to the latest official figures from the Office for National Statistics (ONS).
The latest official figure from the Office for Budget Responsibility (OBR) for the UK national debt in June showed it reached £2.989 trillion.
As the Telegraph pointed out, the Labour government borrowed an average of £13 billion a month last year, meaning that the UK economy has certainly gone over the £3 trillion.
The article by Liam Halligan headed: ‘Claims of debt hitting £3tn must be a wake-up call,’ highlights the fact that the UK national debt first broke the £1 trillion mark following the world banking crash and subsequent global financial meltdown in 2008.
The banks demanded to be saved from bankruptcy through a massive bail-out by the capitalist state driving up the national debt as governments borrowed to pay to keep them from crashing.
At the same time, the working class was forced to pay through the savage austerity regime imposed by the Tories.
In 2020, the UK ramped up the national debt to over £2 trillion, a fact that Halligan attributes to ‘the madness of the Covid lockdown’ with its ‘ruinously expensive furlough and business support schemes’.
It’s OK for the state to pile up a debt mountain to bail-out the bankers but not OK to support workers who refused to put their lives on the line during a deadly health crisis.
Today, six years on, the UK national debt has soared to over £3 trillion and Halligan has no doubt that this is ‘mainly down to soaring welfare bills and an escalating debt interest bill’.
The interest charged by the hedge funds and international financial speculators who buy up the UK government debt is the highest amongst the G7 group of major economies.
£120 billion a year is paid out to these speculators ‘more than the state spends on education, twice the defence budget’ according to Halligan.
The reason why the UK pays significantly higher levels of interest on its debt is not hard to fathom.
These speculators, mainly heavily in debt themselves, are buying up ten-year government bonds in the expectation of making huge profits.
All the pledges by the previous Starmer government about fiscal responsibility, bringing down the national debt and cutting spending have evaporated – not least due to the rebellion of Labour MPs against Starmer’s attempt to slash disability benefits.
The new Prime Minister Andy Burnham is promising to rescue British capitalism, and along with his Chancellor John Healey, is advancing all kinds of ‘innovative’ measures to cover up the fact that British capitalism is bankrupt and can only struggle on through driving up the debt pile.
These measures involve disguising the vast amount of borrowing by reclassifying it as spending on ‘infrastructure’ projects turning them into government ‘assets’ not financial liabilities.
As Halligan points out ‘no serious bond trader cares that money is being borrowed for some government pet project that may or may not boost growth in ten years’ time’.
These financial vultures only care about getting the money in their pockets and will sell out and bankrupt the UK when the cash flow stops.
The question for Halligan is: Can the Labour government borrow enough in the next month to pay the interest on the debt or will the UK be plunged into bankruptcy?
British capitalism is fast crashing into a historic recession that will make that of the 1930s look like a walk in the park by comparison. This is indeed a wake-up call to the TUC leaders who have remained silent over this historic crisis rapidly unfolding.
The time has come for the working class to act by demanding the TUC immediately convene an emergency meeting to call a general strike to bring down the Labour government and bring in workers government, a workers government that will nationalise the banks and major industries, placing them under the management of the working class and building a socialist planned economy.
Put an end to capitalism with the victory of the British socialist revolution – this is the way forward.
