The coalition government will be forced to accept this month that the bank bailout has more than doubled the size of the Public Debt to a level never seen before.
The £1.5 trillion used to prop up the Royal Bank of Scotland (RBS) and the Lloyds banking group will send the Public Debt – that is the total amount owed by the country to private bondholders and companies – from just under £1 trillion to £2.5 trillion.
The public now own 84 per cent of RBS and 41 per cent of Lloyds.
The Office for National Statistics is set to include this vast sum in the official figures for the first time this month, although they have been known for a number of years, just conveniently left ‘off-the-books’ as if it did not matter.
Other items that are still left off-the books include the massive sums still owed for the disastrous Public Finance Initiative.
When bourgeois economic commentators blandly remark that these huge sums will increase the pressure on the coalition to make further cuts in public sector spending, what is really meant is that the Tory programme of destroying over a million jobs in the public sector, cutting wages through pay freeze and privatising the welfare state is not enough to meet the crisis.
What is required for capitalism to survive is the complete destruction of all the reforms and gains made by the working class in two hundred years of struggle.
One of the first effects of this national debt crisis will be pressure on the Bank of England to immediately raise interest rates from the historically low level of 0.5 per cent to at least 1 per cent.
Even this slight increase will have a devastating effect on workers and those of the middle class with average mortgages.
Around eight million families in the country have ‘tracker mortgages’ – that is mortgages tied to the Bank of England interest rate.
Any increase in interest rates by the BoE will immediately be passed on to the borrower with devastating consequences.
With unemployment rising and inflation moving steadily up to over 3 per cent – a figure that will be exceeded when the full effects of rises in the price of oil to nearly $100 a barrel works its way through to food prices – plus the recent hike in VAT to 20 per cent – any increase in mortgage repayments will trigger a mass of repossessions.
With massive rent rises being imposed on council tenants and security of tenure being taken away, the question of homelessness is now something not confined to society’s unfortunates but is a very real prospect for millions of workers, the middle class and young people.
In order to pay for the banks, capitalism is demanding that the working class pay not just with a few hardships or a bit of belt tightening, but pay in blood.
All those reformist trade union leaders who echo Labour leader Ed Miliband in calling for the Tories and their Lib Dem allies to ‘think again’ and reconsider their policies are whistling in the wind.
What drives this government is the enormous debt crisis of capitalism, a crisis that means that in the second decade of the 21st century an advanced country like Britain cannot afford even the most basic human requirements of food and shelter.
All the reforms won by workers cannot be defended today in any way except through the socialist revolution to overthrow this historically bankrupt capitalist system and replace it with socialism.
This requires, above all, the building of a new revolutionary leadership within the working class, the building of the Workers Revolutionary Party.
