STARMER’S Labour government is in a state of complete meltdown, with the prime minister himself struggling to keep his job under the impact of the Peter Mandelson scandal, while his chancellor Rachel Reeves is trying to deal with the UK economy crashing into recession.
Yesterday the National Institute of Economic and Social Research (Niesr) warned that the UK is facing a £35 billion hit this year as a result of US imperialism’s war on Iran.
This is just the latest of dire warnings about the vulnerability of the UK economy following similar warnings from the International Monetary Fund (IMF) two weeks ago.
UK energy bills for households are expected to increase by as much as £300 a year from July 1st, and supermarkets are bracing themselves for the cost of food in their stores soaring, as the full effects of the closure of the Strait of Hormuz filters through into the economy.
David Aikman, Niesr director, said: ‘This is a serious blow to the government’s mission to get the UK economy growing again.’
In fact it is not just a serious blow. It is the complete destruction of the claims by the Starmer government that weak British capitalism could grow itself out of a crushing crisis.
Both Starmer and Reeves now face the issue of trying to hold back the anger and the determination of the powerful working class, not to be made to sacrifice their lives for a capitalist system that in its death agony is prepared to take workers down with it as it crashes.
Both Starmer and Reeves have made great play recently about taking measures to ‘protect the most vulnerable’ in society from being plunged into starvation levels of poverty.
Earlier this week it was revealed that Reeves had been considering imposing a one-year rent freeze on private sector landlords as part of her attempts to help households cut the soaring cost of living crisis.
The Guardian paper reported that any freeze on private rents ‘would mark a significant reversal for Reeves, who resisted a proposal to include rent control, as part of Labour’s renter’s right reforms’.
While Reeves was reported as leaving the door open to such a move, the Starmer administration dismissed the very idea of a freeze on private sector rents, with a spokesperson saying it was ‘not an approach we will be taking’, insisting: ‘Our focus remains on cutting bills and backing renters, alongside lower energy prices.’
How the Labour government intends to cut energy bills and support private renters faced with soaring rent increases, and a massive shortage of affordable housing, is completely ignored.
In the same way, Reeves has yet to come up with any proposal about how to deal with the massive £35 billion hit to a UK economy that is already drowning in over £3 trillion of national debt.
Two weeks ago the IMF warned Reeves that the UK cannot afford a big energy bailout, insisting she did not have the ‘fiscal space’ to support Britons through increased borrowing.
The unspoken threat to Reeves, from the IMF, was that any increase in the national debt, to offset the massive cost of living crisis, would result in a ‘Liz Truss’ moment, when the international financiers dumped buying UK debt, and brought the entire economy to the brink of bankruptcy.
What the international bankers are demanding is that any very limited help to the ‘most vulnerable’ be paid for out of savage cuts to the NHS and welfare budgets.
This policy is already being pursued with vigour by the Starmer government. The bankers are demanding that it becomes a savage austerity war on the welfare state, in a hopeless attempt to ‘save’ British capitalism from crashing into recession.
The working class have only one alternative to being driven into abject poverty, and that is to demand the TUC end its shameful silence and inactivity and call an immediate emergency meeting to organise the full strength of the working class in a general strike to bring down the Starmer government, and then take power by going forward to a workers government and socialism.
Join the WRP today, to build up the leadership required for the victory of the British Socialist Revolution!