The 30th November day of action, for all intents and purposes a general
strike of the public sector, is a turning-point in Britain. It
represents a re-awakening of the working class after years of relative
dormancy. Now there is a catching up with the workers in the rest of
Europe, as the Coalition unleashes an austerity regime not seen for
generations. Sections are being drawn into struggle who have never been
involved in action before, such as head teachers – the first time they
have been on strike in their union’s 114-year history.
The 30th November day of action, for all intents and purposes a general strike of the public sector, is a turning-point in Britain. It represents a re-awakening of the working class after years of relative dormancy. Now there is a catching up with the workers in the rest of Europe, as the Coalition unleashes an austerity regime not seen for generations. Sections are being drawn into struggle who have never been involved in action before, such as head teachers – the first time they have been on strike in their union’s 114-year history.
The public sector strike is not the end but only the beginning. Workers have no alternative but to fight back. This is no ordinary struggle, this is no ordinary crisis. The reason for the savage cuts by this ConDem Coalition is not just ideological, as many trade union leaders like to imagine, but arises from the dire crisis of capitalism in Britain and internationally.
Today, all talk of “green shoots” of recovery has disappeared in the face of a global slowdown that threatens to collapse into a new slump. “A eurozone recession – possibly severe – looks almost inevitable before the end of the year,” states the Financial Times, the organ of finance capital. This warning was echoed by Mario Draghi, the new president of the European Central Bank. The purchasing managers’ indices for the region fell from 49.1 to 46.5 in September, the sharpest fall since November 2008. Even German industrial production has fallen. In fact, output in Europe has been falling by 0.5% a quarter, and could rapidly deteriorate in face of a deepening financial crisis. The European Commission predict that for the whole of Europe, including Britain, “a deep and prolonged recession complemented by continued market turmoil cannot be excluded.”
The British economy has grown just 0.5% over the last 12 months. The Bank of England has downgraded its growth forecast for the remainder of this year to “close to zero”. According to the National Institute of Economic and Social Research, there is a 70% chance of another recession. The UK manufacturing sector deteriorated at the fastest pace in two years in October. The service sector in August saw the biggest monthly drop in ten years. The Institute says it is the slowest recovery since the end of the First World War.
Growth forecasts are being slashed. The European Commission expects the British economy to grow by no more than 0.1% a quarter over the next nine months, adding that a contraction, creating a double-dip, “cannot be ruled out.”
These estimates are wildly different from the rosy official UK government figures of 2.5% growth next year and the 2.9% produced by the Office of Budget Responsibility. The UK budget deficit will therefore be much bigger than originally estimated and fall short of Osborne’s figures published in March. The European Commission revised higher the UK structural budget deficit from 6.5% of national income to 8% in 2011. This means that Osborne will need to find an extra £22bn a year in tax rises or spending cuts to reach his targets. Over four years this will mean almost £90bn in extra cuts, which would continue well after the next general election. A further recession, which is inevitable under capitalism, would add to the deficit. A collapse of the eurozone would be a further calamity. So what we are looking at is permanent austerity on a capitalist basis.
“Living standards in both public and private sector have to be brought down” states former Tory cabinet minister, John Redwood. It was the exact same message of Tory Prime Minister, Stanley Baldwin, shortly before the 1926 General Strike. Of course, this only applies to the working class, where disposable incomes are at least £17bn lower than a year ago. On the other hand, directors of the FTSE 100 companies awarded themselves on average a 49% pay rise last year. Meanwhile, youth unemployment has officially exceeded the million mark as fears grow of a lost generation of jobless.
Given the severity of the crisis, there can be no half measures to deal with it. Higher taxes on the rich, while progressive, will not solve the problem. Calls for “growth” under crisis-ridden capitalism are wishful thinking. This crisis is going from bad to worse. There can be no solution on the basis of capitalism, a system which can no longer afford reforms. In fact, it demands austerity and counter-reforms. Ed Miliband’s appeal for “responsible capitalism” is completely wide of the mark. It has nothing to do with “responsible” or “irresponsible.” It is the laws of capitalism which dictates everything.
Unfortunately, Miliband accepts capitalism and all that it means. He admits that the next election will be fought in hard times. Instead of using the crisis as an opportunity to argue for a socialist alternative, he says “we are just not going to be able to rely on the old model [of spending]”, saying that the spending of the Blair-Brown years on schools and hospitals will not be possible. History has shown that trimming your programme to what capitalism can afford will be disastrous. The shipwreck of socialist governments in Greece, Spain and Portugal is testimony to this fact.
Only by doing away with capitalism by taking over the commanding heights of the economy, the big monopolies, banks and insurance giants under workers’ control and management can the economy be run in the interests of ordinary working people. A socialist plan of production, involving the mass of people, will put an end to unemployment and use our productive resources fully to ensure a dramatic rise in living standards.
On a capitalist basis, this nightmare of austerity will continue indefinitely.