- Tuesday, 03 July 2012
- Written by Socialist Appeal
Not for first time, Cameron has again laid into the “unemployed scroungers” as a pretext for more cuts, while protecting his cosy relationship with the millionaire scroungers, press barons, and tax dodgers.
The threat to take away housing benefit from under 25-year olds and cap the benefits of families with more than two children is the latest ploy to save £2bn from the welfare budget, as the government’s deficit reduction plans have gone awry. There is also an attempt placate his right-wing supporters following the U-turn shambles of our multi-millionaire Chancellor George Osborne.
Unsurprisingly, the latest Oxfam report again confirms the poor are bearing the brunt of the government’s “all-in-it-together” austerity programme. Since the slump of 2008, 830,000 permanent full-time jobs have been lost while 500,000 part-time jobs have been created. The numbers in temporary work because they are unable to find permanent jobs have risen by 73%, producing what the report calls 1.4m “frustrated part-timers”. The number of older workers past retirement age has doubled in the last 20 years.
At the same time, the gap between top bosses and workers has grown massively. In 1980, the chief executive of Barclays earned 13 times the pay of the average worker. In 2010, Bob Diamond earned 169 times the average pay, with a package of £4.4m.
The rise of finance capital has been astonishing. “The City has conducted its equivalent of a military coup, a silent affair that required no tanks on streets,” states Larry Elliott and Dan Atkinson, “but saw an elite take control of the country and a disproportionate share of its wealth.”
In fact, a rich elite has always ruled Britain whether from industry or from finance and has always constituted a privileged ruling class. This time, the balance of power has shifted towards finance capital, represented by the likes of the “posh boys” Cameron and Osborne. They represent “casino” capitalism, based on rampant speculation and short-termism. Barclays bank, a typical client of this class, has been caught and fined £290m for attempting to manipulate the inter-bank interest rates. They admit “misconduct”, namely, deliberately flouting the law.
Even the big business newspaper, the Financial Times, was forced to admit that “this was market-rigging on a grand scale. It is hard to think of anything more damning – or more corrosive of the reputation of capitalism.” (29/6/12)
While Barclays got off embezzling millions with a slap on the wrist, London bus workers asking for an extra £500 for the pressures of working during the Olympics (and a fraction of the bonuses being paid to Transport for London bosses) are branded as blackmailers “holding the country to ransom.”
“Militant unions should be banned from striking”, says Mr Dominic Raab, Tory MP from Esher & Walton. “In 2011, Britain lost more working days to strikes than any other year since the poll-tax riots – hurting the economy at its most vulnerable.” He then adds, referring to the November strike, “that does not count the cost of concessions made over the barrel of a gun.”
We say the fight-back is long over due. Millions are suffering from wage cuts and increased pressures at work. Cuts in services are beginning to bite, but 80% of the cuts are still in the pipeline. Well done to the bus workers, council workers, doctors and others for sticking up for themselves. It is a fine example for all workers.
We believe the TUC demonstration on 20th October should be the launch pad for further industrial action against the attacks of the Coalition, including a one-day general strike of all workers.
The British economy has taken a further dive into recession. The construction industry has ground to a halt, falling by 13.2% from March to April. The Office of National Statistics reports that house building in the first 3 months of 2012 was 20% down on a year earlier, 50% down on 2005, and 80% down on the levels of the late 1960s.
This is the weakest recovery in Britain for 180 years, but things are going to get much worse. “According to official projections for the UK, this contraction will be longer than the Great Depression, even assuming the Euro holds together”, writes Tony Jackson in the FT. “Other forecasts suggest that real earnings will be lower in 2015 than they were in 2002. In the period from 1929 to 1939, according to the website measuringworth.com, they rose by more than 10%.” (5/12/11) That was for those in work! Nevertheless, it shows how bad things are becoming even compared to the 1930s.
The Rowntree Foundation revealed that we have just experienced the largest one-year fall in median income since 1981.
Despite the cuts, the new recession has meant that government borrowing was higher in May than in the same month a year ago! According to economic columnist Chris Giles, “The situation will require greater austerity than the seven years already planned as we cannot expect growth to do as much to eliminate the deficit.”
British exports have been falling as the world economy judders to a halt, with the trade deficit widening to £10.1bn in April from £8.7bn in March.
According to the FT/Brookings Tiger index, world growth is stalling with growth in the US slowing, much of Europe is in recession, China’s growth outlook has weakened, the reform process in India has stalled and other large economies have slowed dramatically.
“The engines of world growth are running out of steam while the trailing wagons are going off the rails”, states Professor Prasad.
“Before now, I had never really understood how the 1930s could happen. Now I do”, explained Martin Wolf, chief economist at the FT.
What the workers are suffering in Greece, where living standards have been slashed to the bone, and people have to scavenge for food in rubbish bins, is what is in store for workers here.
This is not due to some nasty “ideological agenda” of the Coalition, but reflects the very real, deep, and on-going crisis of capitalism. And this crisis is about to get a whole lot worse. Mervyn King, the governor of the Bank of England, has warned of many years of pain. If they get their way, the ruling class will drive us back to the 19th century in order to save their system.
Unfortunately, our trade union leaders are lagging behind. While they oppose the austerity of the Coalition, they instead call for “growth” and reforms that simply tinker with the capitalist system.
Capitalism in crisis will not deliver growth, as can be seen.
It means cuts, falling living standards and growing unemployment. While we want more jobs, housing, schools and increased pay, capitalism can now no longer afford these things. In fact, the system is destroying the reforms of the past.
The Unite leader, Len McCluskey, quoted Marx at the union’s national conference and called for a “radical alternative”. We agreed. But such an alternative can only be based on socialist policies and not measures to patch up a dying capitalism. He talked about “values that go beyond profit”. Again, we agree, but say this can only mean the socialist transformation of society. He pointed to Spain and Greece and said “we know we could be looking at our own future.” We say, no. This is our future on a capitalist basis.
We applaud the decision of Unite to take the fight into the Labour Party and to get more trade unionists as Labour MPs. “We want a PLP that looks like the Labour electorate in class terms”, said McCluskey. It is about time the trade union ranks took back the Labour Party for the working class. That is the first step.
A Labour movement rearmed with a bold socialist programme to nationalise the banks under workers’ control, as was passed by the Unite conference (UCU also adopted at their conference a policy of public ownership of the banks and finance houses under democratic control) together with the giant companies that dominate the economy, can mean harnessing the resources to abolish unemployment, build a million homes a year, rebuild our social services, guarantee everyone a living wage, and lay the basis for a massive rise in living standards.
Such a programme would reach out to the workers of Greece, Spain, France and elsewhere. This would be the programme to change the world.