THE immediate ending of the pensioners’ Winter Fuel Allowance was necessary to prevent an economic collapse and a run on the banks, declared Lucy Powell, MP and Leader of the House of Commons to justify it.
Some may have dismissed this as wild talk to reinforce the Labour Party’s mantra that it was necessary due to a £22bn ‘black hole in the UK’s public debt built up and concealed by their Tory predecessors.
However, the Office of Budget Responsibility’s (OBR) long-term outlook for the public finances states that the public debt crisis is SYSTEMIC, and very much part of the crisis of capitalism. This growing crisis is the essence of the growing row over Labour’s claim that the Tories left a £22bn black hole in the public finances after the Treasury refused to provide more details of the deficit.
Jeremy Hunt, the ex-Tory Chancellor, said: ‘This fictitious black hole is purely of Labour’s own making – simply a political smokescreen for their public sector pay awards and forthcoming tax rises’, which the weak Tory government failed to cut and impose on behalf of the banks, leaving it to the Labour Party in try and inflict by attacking the working class.
In fact, the UK capitalist economy is broken and unsustainable, faced with £2.5 trillion of government debt and £40 trillion of government spending cuts.
Rachel Reeves, the Labour Chancellor, is expected to raise taxes by an extra £20bn in next month’s Budget to try to keep the pound from nose diving.
The OBR’s long-run projections showed that getting debt back to pre-pandemic levels of around 85pc of GDP will require ‘an average fiscal tightening of 1.5pc of GDP per decade over the next 50 years’ – equivalent to around £40bn of tax rises or spending cuts, or both, in today’s money, to try to prevent a collapse of the pound.
The OBR highlighted the rapidly rising cost of the state pension, with the triple lock that guarantees payments always rise by at least 2.5pc annually, costing the taxpayer an estimated £30bn a year extra in today’s terms by 2074.
The cost of the state pension is already estimated by the OBR to rise to £158bn by the end of this decade.
David Miles, a member of the OBR’s executive committee, warned that Britain’s debt was at risk of ‘blowing up’ and that investors could lose faith in the UK’s ability to pay back its debts.
He said: ‘If governments continue to provide public services in line with rising demand and don’t pay for it in taxes, how much debt do they have to issue? The problem with that is, it’s almost certainly unsustainable.
‘At some point, sooner rather than later, it will blow up. You can’t just expect the rest of the capitalist world to keep on buying more and more UK government debt, that rises at an ever accelerating rate.’
Starmer’s policies of ‘growing the economy’ are clearly just rotten propaganda with the end of steel making in Port Talbot, replaced with recycling scrap in electric furnaces and shedding 2,000 jobs with the economy in recession, just one example.
What more can be sold off to raise cash but the NHS, alongside raising taxes from the working class.
Meanwhile, banning the use of cheap Russian oil and gas has virtually bankrupted the whole EU and impoverished workers in Britain and elsewhere.
The only thing that Starmer is promising is ‘painful choices’ and an NHS in crisis with hospital closures, underpaid doctors and nurses, patients dying on trollies in corridors and worse. ‘The NHS must reform or die’, he declares, following a damming report of the NHS by Lord Darzi. It is to be back to private medicine.
‘There will be no more money without reform,’ he said, but what are those reforms?
1. Move patients from hospitals. 2. Digitalise the service (increase productivity and reduce staff). 3. Preventing illness
Speaking on Thursday, Starmer accepted it was not ‘possible to build an NHS for the future if we don’t fix social care as we do it’.
However, he failed to mention the £10 million weekly paid to private health contracts for a year and the outsourcing of whole GP groups and hospital services, and whole hospitals, and the PFI-built hospitals which continue to drain billions from the NHS.
The only way to defend and develop the NHS is to bring down the Starmer government with a general strike and establish a workers’ government.
This will nationalise all banks, utilities and major companies like big pharma and build hospitals as required. Most crucially it would cancel all state debts to banks and money markets.
The UK workers must organise the British socialist revolution to put an end to capitalism. This is the only way forward!