The UK economy shrank by 20.4% this April, according to data from the Office of National Statistics. This is the largest monthly fall on record, coming straight after the previous record of a 5.8% contraction in March.
Indeed, Britain is expected to experience the worst economic downturn of any advanced capitalist country in the world, according to the OECD club of rich nations. The UK economy is forecast to shrink by 11.5% overall in 2020, or 14% with a second wave.
To put this into perspective, the economy shrank by 6% during 18 months of crisis in 2008-09 – and we’re still paying for this through austerity.
This collapse is due, in large part, to the late actions of the government in enforcing lockdown, along with the overall lack of preparation for the pandemic.
The reluctance of the Tory government to shut down the economy has, ironically, caused even more damage overall. Now Britain faces both a public health crisis and a deep economic crisis.
Another reason for the severity of the crisis is the long-term decline of British capitalism. Once the workshop of the world, the British ruling class has largely abandoned industry in favour of financial speculation, and exploiting low-paid precarious workers in the service sector.
Now coronavirus, Brexit, and a looming worldwide depression are creating a perfect storm for British industry. Aviation has been hit particularly hard, with major firms such as Airbus and EasyJet announcing cuts to thousands of UK jobs in recent weeks.
The special crisis of British capitalism is also visibly reflected on UK high streets. Last week, household names such as Harrods and Philip Green’s Arcadia Group were amongst those announcing a total of 12,000 job cuts in the space of 48 hours. And this is only the start.
This leads to the questions: How will the economy recover? And who will pay the price for the failings of the system?
Last week, donning his obligatory hardhat, Boris Johnson announced plans for £5 billion of government infrastructure spending, to create jobs and stimulate the economy. Citing FDR’s 1930s New Deal in America as inspiration, the Prime Minister promised that his government would “build, build, build” in order to “unite and level up” across the country.
But both big business and trade union leaders were left unimpressed. Most of the funding allocated is just reheated from existing commitments. And both the CBI and the TUC – representing the bosses and workers, respectively – criticised Johnson’s plan for lacking the scale and scope required.
The real problem, however, is that Keynesian measures cannot and will not work. We are facing a deep depression; an organic and global crisis of capitalism. The system cannot be ‘stimulated’ out of this, nor can it be patched up. In place of capitalist chaos, we need socialist planning.
Importantly, we must also ask: who is to pay for these measures? No doubt the Tories will promise big spending now to save their system – only to add this to the bill that the working class will be presented with in the future.
Today’s ‘stimulus’ will be tomorrow’s debt. And it is workers, the youth, and the poor who will be asked to pay through cuts and attacks on jobs, conditions, and services.
In short, the bosses and billionaires, whilst sitting on their accumulated millions, will attempt to put the full burden of the crisis onto the working class and poor. The working class will be victims of further massive austerity and job cuts.
Over the course of seven years, there have been an estimated 130,000 deaths caused by austerity. Are we supposed to believe that the same Tory government will bat an eyelid at causing countless more working-class deaths?
We cannot allow this to happen. The labour movement must fight to ensure that the bosses who hoard such vast sums of money are the ones made to pay for the crisis. The working class must not be sacrificed for the profits of the rich!