Britain is in turmoil, with the crisis in the economy spreading at relentless speed, affecting one sector after another – from empty shelves and food shortages, to supply chain disruption and fights at petrol stations.
In his speech at Tory Party conference today, Boris Johnson blustered on, oblivious to the calamity unfolding. Meanwhile, millions of families face a daunting and uncertain winter.
Interviewed by the BBC, the Prime Minister denied that there was any economic crisis. “On the contrary,” Johnson asserted; it was in fact “an extremely interesting moment” for the country.
He has all the presence of the captain of the Titanic. As the Financial Times, the bosses’ paper, explained:
“Johnson, a leader with a reputation for being a lucky general, will need to keep his fingers crossed this winter that two other potential problems – COVID-19 and a critical gas shortage – do not compound his woes.”
But the energy ‘market’ is already in meltdown, with wholesale gas prices rising fivefold in the last year. As a result, households have seen energy prices rocketing to previously unimaginable levels.
Ten energy firms, which previously supplied millions of households, have gone bust since the start of August. And this is just the beginning – well before the winter has even started.
On top of this is the ever-present danger of a new flare up of the pandemic, which could force the government to bring in another lockdown.
Kwasi Kwarteng, the Tory business secretary, has had to reassure MPs that there is “no question of lights going out”. But a cold snap could very easily shatter this rosy perspective.
According to James Huckstepp, head of Emea Gas Analytics: “We’re not talking about a one-in-100-year bad weather event, we’re really talking about a one-in-three.”
“We are still very much uncertain how we will make it through this winter without the UK running into very severe supply issues,” Huckstepp ominously added.
Winter of discontent
Millions are experiencing a ‘cost of living’ crisis, with cuts to Universal Credit and inflation predicted to climb above 4% by the end of the year. In addition, around one million workers are being shifted off furlough into an uncertain future, with many likely to join the dole queue. National insurance contributions – a tax on workers – are also rising.
A number of economists are worried about a return to stagflation: rising prices alongside stalling economic output.
Such a scenario would be a nightmare for the ruling class, leaving the government with no option but to attack the working class even further, paving the way for a wave of unrest and struggle.
One Tory MP, David Morris, warned of a new “winter of discontent”: a story period of industrial battles, like that seen under the Callaghan Labour government in 1978-79.
“I can remember the winter of discontent,” Morris explained, “and I remember what was building up to it; and this – to me – feels very, very reminiscent.”
It was the build up of frustration and anger – especially amongst the low-paid – that resulted in this explosion of class struggle in the 1970s. And the same conditions are being prepared today.
Coming on top of a decade of falling real wages, workers are already in the process of voting for industrial action.
Recently, for example, health workers organised by Unite overwhelmingly voted to reject the government’s 3% pay offer for NHS staff. They were joined by GMB and Unison members in rejecting this proposal, putting the question of strike action firmly on the agenda.
Head in the sand
The captains of industry are already warning the government that their measures (issuing temporary visas for overseas HGV drivers; extending driver hours; coaxing retirees back to work) are a case of ‘too little, too late’ when it comes to avoiding further chaos and disruption in the run-up to Christmas.
Lady Ruby McGregor-Smith, the president of the British Chamber of Commerce, described the government’s visa package as “the equivalent of throwing a thimble of water on a bonfire”.
Farmers are ploughing food back into the ground, as they don’t have the necessary labour to harvest their crops. Next year they will plant less.
Elsewhere, a cull of pigs has begun, due to a lack of abattoir workers and lack of space on farms, evoking memories of the foot-and-mouth crisis of 2001.
Asked about this dire situation on Times Radio yesterday, Johnson nonchalantly replied: “I’m afraid they’re eaten very often in this country – I don’t know, do you have a bacon sandwich?”
In reply to the crisis, the Tory government has doubled down on Brexit and told businesses to find their own solutions. In the meantime, supply chains are breaking down and transport costs are going through the roof.
Despite the pandemonium, the Prime Minister is saying that this is all just a blip, and that everything will soon right itself.
“I don’t think there will be much risk at Christmas time,” says one member of the Johnson government. “There’s a transition period which we are experiencing. The low-skill, low-wage, high-immigration model was essentially voted out in the Brexit vote.”
This is called burying your head in the sand.
Backlogs and breakdown
COVID-19 continues to disrupt global supply chains and dampen demand. Shipping rates from Asia to Britain are now 14 times pre-pandemic levels, at $18,000 per container, while transit times have doubled.
The shortage of semiconductors has caused car plants to close. Warehouses are full. Backlogs at ports are at a breaking-point. “I wouldn’t be surprised if the ports come to a standstill,” says Alan Williams, director of one of the largest independent freight companies.
David Jinks, the head of consumer research at ParcelHero, an express delivery company, says the UK’s supply chain is now “riddled” with holes.
The result is a destructive domino effect throughout the economy, at a time when supposedly ‘Global Britain’ has broken its ties with the European Union.
In a further twist, there are threats of a trade war over French fishing rights and the Northern Ireland protocol, which could lead to dire consequences.
Footing the bill
The question of further austerity in Britain is one of when, not if. Last year, in a 12 month period, GDP fell by an unprecedented 10%. In comparison, in the whole of the 1930s, the British economy fell by 5%.
This is the deepest crisis of capitalism in 300 years. Government debt and deficits have gone through the roof. And – while the ruling class hide their wealth in off-shore tax havens – the working class is being asked to pay the bill through falling living standards and wage cuts.
It is clear that Johnson and his corrupt government have no solutions to this endemic crisis – a reflection of the crisis of British capitalism and his beloved ‘market economy’.
The whole nature of capitalism is to cut costs and cut corners, in order to boost profits. For decades, supply chains have been based on ‘just-in-time’ production, leaving them vulnerable and exposed to any accident or disruption. One break at any point would ripple through the entire system.
Fight for revolution
The pandemic has only added a further layer of uncertainty to the process. As a consequence, capitalism has driven us into a perfect storm, the likes of which we have never seen.
This is a recipe for intense class struggle. On a capitalist basis, the working class faces years of blood, sweat, and tears.
Millions will draw the conclusion that there is no way out on the basis of capitalism. Many, especially the youth, will draw revolutionary conclusions. The ideas of Marxism will increasingly find an echo amongst this radicalised layer.
All attempts to reform capitalism or to make it ‘nicer’ and ‘kinder’ have completely failed. It is impossible to change the nature of capitalism: a system of exploitation based upon extracting the maximum surplus value from the labour of the working class.
Only through the overthrow of this bankrupt system and its replacement with a socialist planned economy – under workers’ control and management – can we resolve this crisis in the interests of our class. Nothing more, nothing less.