Hold onto your seats. It’s going to get a damn sight worse, according to the mouthpieces of capitalism.
With inflation proving stubborn, worse than most other advanced economies, the Bank of England has raised interest rates even further, by 0.25 percentage points, to a new 15-year high of 5.25%.
As borrowing costs soar, businesses and households will be pressed even harder. Bankruptcies beckon. Unemployment levels could leap. Today, for example, homeware chain Wilko announced that it is on the verge of collapse, putting 12,000 jobs at risk.
The aim of the ruling class is to keep squeezing the working class like a lemon until the pips squeak. Austerity and attacks are the order of the day. The slow strangulation of rising prices is to be exchanged for death by a thousand cuts.
With inflation persistent and recession looming, we are facing another, deeper crisis. This time we will get the worst of all worlds, a combination of both: slumpflation.
Age of insecurity
Many will ask: How much more of this can we take?
As one mother, at the end of their tether, explained: “The children are fed, but my husband and I rarely are. I’ve not paid my water bill. But by the end of the month I’m going to stop paying another bill, as food prices are rising fast.”
She worries about the gas and electric running out, as they are on meters. “Then that’s it until Monday, even with no lights on and tech kept to a minimum. I’m handwashing everything outside in buckets to save money.”
According to the Joseph Rowntree Foundation, between 2017-19, destitution rose in Britain by 54%. It is certainly rising much faster today.
One UK charity alone reported providing three million food parcels last year, with one million of these for children. This was a 37% increase on the number of emergency parcels handed out the previous year.
No wonder politicians are talking about this being the ‘age of insecurity’.
“Your income’s not stable, your work’s not stable, your housing’s not stable”, explained one Citizens Advice aide. “Everything is built on sand.”
In 1959, Tory leader Harold MacMillan stated that “we have never had it so good”. Today, everyone knows that “we have never had it so bad”.
Since that time, British capitalism has fallen further and further behind. The ruling class has failed to invest in production. Instead, the capitalists have moved their money overseas or gambled it away in speculative activities.
As a result, British capitalism has gone to the dogs – unable to provide even the meagre standards of the past. Instead, the system and its representatives demand greater and greater cutbacks and sacrifices.
The working class is still paying for the slump of 2008, fifteen years ago. Meanwhile, the bill for the last few years of crises – the corona-crash, rocketing energy prices and inflation, the latest recession – hasn’t even been presented yet. But it is certainly coming.
Mountain of debt
Despite their supposed adoration of the ‘free’ market, the ruling class has repeatedly intervened to save the capitalist system and put it on life support.
In 2008, the government bailed out the banks. During the pandemic, they propped up big business with handouts. And over the last year, the state has subsidised the profits of the energy giants.
Consequently, UK national debt has risen above 100% of GDP (annual economic output) for the first time in over 60 years. And the Office for Budget Responsibility (OBR) projects that this figure will rise to an eye-watering 300% of GDP by 2070.
In the here and now, with interest rates rising, the weight of this mountain of debt is becoming ever-more crushing. The Treasury is set to spend £110 billion this year on servicing its debts. This represents over 10% of government revenue – the highest level of any high-income country.
This money will be wrung out of the working class through increased taxes, cuts to services, and more austerity.
British capitalism can therefore only be sustained by attacking the incomes and living standards of the working class. But this means cutting the demand for capitalism’s goods. And a shrinking market will only accelerate the crisis, throwing workers out of work.
It is a catch-22 situation for the ruling class, as they seek to rescue their system on the backs of workers and the poor.
The events of the last year show that the working class – in Britain, as elsewhere – will not take this lying down.
We have seen a revival of the class struggle. A fresh layer has entered onto the scene. The new generation will not tolerate the crisis-ridden future that capitalism has to offer.
Any thought of a return to ‘better times’ has completely evaporated. All that young workers and their families have known is crisis and austerity. Large numbers of youth are therefore drawing explicitly communist conclusions.
Britain is becoming like a pressure cooker, but without any escape valves. Society is a powder keg ready to explode.
The Tory government is hanging on by its teeth, completely discredited and divided. Starmer’s Labour Party, meanwhile, only offers more of the same.
‘Sir’ Keir Starmer and the other right-wing Labour leaders are desperate to show how ‘responsible’ they are. They will not spend any money on services, as the cupboard is bare. On the contrary, they are urging ‘restraint’.
On the basis of capitalist crisis, a Starmer government will act little differently from the Tories. It will be big business that will dictate to them, not the other way round. But this will bring them into collision with the working class.
Prepare for battle
The stage is set for mighty class struggles. Workers’ backs are already against the wall. There is no room for manoeuvre.
Under the hammer blow of events, consciousness is being transformed. The working class will rediscover its revolutionary traditions – like those of the Chartists, who dared to defy the domination of the ruling class.
Revolutionary upheavals are being prepared in Britain. Millions will be looking for a way out of the capitalist crisis. But out of these struggles, the working class will rise to its historic task: the overthrow of this dog-eat-dog system of exploitation.
Our task is to lay the foundations for a strong revolutionary party, in Britain and internationally – one that is prepared and determined to lead the working class to power.
We say: Buckle up! We are in for a rough ride. Join the International Marxist Tendency, get organised, and prepare for battle!