Britain: Austerity… Anger… Action!

TUC must set date for 24-hour general strike

Asked what he wanted to achieve in 2013, Tory (Conservative Party) Chancellor George Osborne is reputed to have declared: "My main aim this year is to avoid f-ing up the budget."

But no matter what rabbits he pulls out of his Bullingdon boy top hat, this next budget is guaranteed to be another ’f-up’. Last year’s budget included the cut in the top rate of income tax. That killed any lingering perceptions that we are ’all in this together’ and impressed upon the majority that this is agovernment for the rich, determined to drive the rest of us into the dirt.

Economic commentators debate the likelihood of a triple-dip recession but the reality is that there has been no real return to growth. Prolonged stagnation – ’bumping along the bottom’ – is the best scenario on offer.

Moody’s (ratings agency) long-anticipated downgrading of the British government’s credit rating will form the backdrop to this year’s budget. It is a graphic illustration that – as the Socialist warned – Con-Dem (Conservative and Liberal Democrat coalition) austerity has made the economic crisis worse. Not that we have faith in Moody’s or the other capitalist ratings agencies – these are the same companies that happily gave the sub-prime mortgage companies an AAA rating!

But the Con-Dems worship at the altar of the finance markets. From day one this government has justified austerity by the necessity of keeping the Credit Ratings Agencies happy. The rest of us can go to hell in a handcart.

Before the 2010 general election Osborne made maintainingBritain’s AAA credit rating one of eight benchmarks by which to judge whether a Conservative government is delivering.

The wheels are coming off the Con-Dem coalition – it could fall at any time, particularly if faced with a mass movement of the working class. Osborne will continue to attempt to blame the previous government and the economic disaster in the eurozone but in reality he and his cuts-coalition have no solutions – other than making us suffer.

It is not the loss of Britain’s AAA rating which is making this government ever-more unpopular, but the austerity policies that were meant to prevent it taking place: the 15% fall in real wage levels since the economic crisis began, the brutal cuts in benefits, the deepening housing crisis and the axe which is being taken to the NHS and other public services.

All of this is creating burning anger among the working class – but also wide sections of the middle class – as our living standards plummet. As the Bank of England’s chief economist, Spencer Dale, noted: "The harsh but inescapable reality is that households and families are worse off – much worse off."

But while most of us tighten our belts a few households and families are gorging on a feast of riches. The Sunday Times rich list reached record highs in 2012. The combined wealth of Britain’s richest 1,000 people swelled by almost 5% to £414 billion, reaching the highest amount ever recorded by the 24-year old survey.

The TUC is currently considering submissions from the unions on the question of a general strike. The latest episode in the crisis makes it clearer than ever – the TUC must urgently set the date for a 24-hour general strike against austerity. This would be the most effective way of channelling the burning anger into a movement capable of kicking out this hated government.

No to austerity, or austerity-lite – fight for a socialist solution

While a tiny minority increase their wealth at the expense of the majority, for the rest of us there is no end in sight to the economic crisis. Britain only maintained its AAA rating for as long as it did because, to the world’s financial markets, sterling appeared a safer bet than the eurozone.

But sterling has been falling since the start of 2013. In other words in the last months the financiers have felt that Britain was a riskier prospect than the euro, despite there being more than 50% youth unemployment and profound political instability in a whole swathe of the eurozone.

There are no safe havens for world capitalism. British capitalism, and therefore the working class, faces a bleak future. Five years into the economic crisis, UK gross domestic product (GDP) is still 12-15% below the pre-crisis trend. It’s been estimated that one in six high street shops is lying empty, with 20 stores closing every day. Such is the lack of jobs that 1,700 people applied for eight ’Barista’ jobs at one Costa Coffee branch.

Osborne is under pressure from sections of the capitalist class to increase state investment in infrastructure, and he may make some proposals in the budget. Even if this is the case, Osborne has made it clear that this will be combined with continued austerity for the majority.

New Labour is deriding Osborne for the economic crisis and calling for a change of direction, a ’Plan B’, but has no real alternative. Writing in the Independent (25 February 2013), Owen Jones hopefully declared that: "Labour do have the outlines of an alternative". Jones quotes Ed Balls when he stood for the Labour leadership and asked Labour Party members to imagine if the 1945 Labour government had "decided that the first priority was to reduce the debts built up in the war, there would be no NHS, no rebuilt railways and housing, no welfare state." Jones, however, is forced to mournfully comment: "if only he [Ed Balls] had stuck unrelentingly to this script."

Labour – no alternative

The 1945 Labour government, under mass pressure from below, did carry out ’a quarter of a revolution’, creating the foundations of the public services which are now being destroyed. Today, Labour, however, is a willing prisoner of the straitjacket of capitalism. Never mind promising to strengthen public services or increase workers’ living standards, it refuses to even promise to reverse the cuts being carried out by the Con-Dems.

The labour movement needs its own mass party – which the Trade Unionist and Socialist Coalition (TUSC, see page 8) is working to lay the foundations for – campaigning for a ’Plan S’ for socialism. What would such a programme include? Take one issue – the growing housing crisis. Homelessness has increased by 26% over the last two years and is set to increase further. While housing benefit is cut, the cost of housing is rocketing.

House prices have gone up 40 times since 1971 whereas prices in general have gone up tenfold. One in 12 families is now on waiting lists for social housing, the complete absence of which, combined with deregulation, is allowing private sector landlords to increase rents.

The private rented sector has increased by 86% in three years. Rents have risen by an average of 37% since 2007. Younger people are faced with a future of shared accommodation, living with their parents, or sofa-surfing, with some ending up sleeping on the streets.

Even the right-wing IEA think-tank drew the conclusion that a mass house-building programme could almost halve the £21 billion that is spent on housing benefits and mortgage relief. However, their means to achieve this end was to get rid of even the current minimal planning regulation in order to allow the construction companies to chuck up jerry-built substandard housing.

A socialist solution would be to implement a mass council house-building programme – creating high-quality, affordable, secure, environmentally-friendly housing – for all those who need it. This would solve the housing crisis and provide secure, well-paid work for the many tens of thousands of unemployed construction workers. Such a policy would not only stop at housing but also be used to build the schools, hospitals, libraries, care homes and other necessary facilities and utilities to service the population.

How can such a policy be paid for? We favour massively increasing taxes on the super-rich. However, this can lead to the capitalists taking production abroad, as the hysterical reaction of a section of the French capitalists to François Hollande’s puny taxation proposals indicates. Attempts to secure even minimal reforms, never mind a substantial reformist programme to change the lives of working people, come up against the inherent limits of capitalism, the system based upon production for profit and not social need.

Does this mean we should retreat? No! But it poses the need to go further with the demand for nationalisation, under democratic workers’ control and management, of the banks and the summits of the financial system together with the big monopolies that dominate the great majority of the economy. Compensation could be paid to those capable of proving their need for it.

Among other measures a socialist programme would also require control of all foreign trade, through democratic nationalisation of all incomings and outgoings, in order to prevent sabotage as big business will attempt to move its resources abroad.

In short, in place of Osborne’s ’plan A’ we do not need a minimalist ’plan B’, but a bold ’plan S’ for socialism.

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February 2013