Socialist Worker

Divisions at top can help our fight

by Chris Bambery
Issue No. 2148

What matters most – spending cash to rescue the banks and revive business confidence, or trying to stem Britain’s escalating public deficit?

This question goes to the heart of ruling class debates on how to deal with the fall-out from the recession.

On one side stands Gordon Brown and chancellor Alistair Darling – champions of fiscal stimulus measures aimed at reversing the economic slump.

On the other side stands the Tory shadow chancellor George Osborne issuing a battle cry for savage cuts in public spending.

The division extends beyond Britain. Barack Obama has demanded that China, Germany, France and other countries spend in order to boost the global economy. Their refusal to act on his plan shows the depth of the international divisions.

A few months ago the Tories seemed out on a limb as they warned that Britain faced bankruptcy. They have historically opposed spending public money on pretty much anything other than the military and “law and order”.

Now opinion in business and financial circles is rallying around them.

Last month Mervyn King, the governor of the Bank of England, broke the gentlemen’s agreement by stating there should be no more state spending to bail out the economy. King was joining a chorus which includes the International Monetary Fund (IMF) and the CBI bosses’ organisation.

But the battle lines have not yet been drawn.

Recouped

The chancellor has made it clear that the money spent on bailing out the bankers will be recouped from ordinary people in the form of extra taxes and cuts in spending.

Darling’s spin doctors have promised £15 billion of “efficiency” cuts in public spending. It is expected he will announce much tougher cuts to hit us in two years’ time, after the next general election.

This will mean forcing us all to contribute more towards our pensions, raising the retirement age and bringing in massive cuts in welfare.

The Financial Times warned that, “fiscal austerity will be the dominant feature of UK politics for a decade”.

The real choice to be made by the ruling class is whether working people will have to foot the bill for Brown’s rescue packages now or in a couple of years’ time. That we will have to pay for a crisis we did not cause is simply taken for granted.

New Labour has continued to target some of the poorest and most vulnerable people.

It has pushed through welfare reforms, demanding single mothers and those on incapacity benefits get into work, and reducing the availability of care for the elderly.

Bosses and the right wing media have attacked public sector workers’ “excessive” pay and pensions. But the reality for these workers is very different.

We should demand that state spending is used to save jobs and to protect those being hardest hit by the recession.

For instance, why not bring the miserly Jobseekers’ Allowance up to the current level of the state pension and end the situation where under 25s get less?

Meanwhile, the CBI has warned that unemployment will hit 3.25 million.

Across the Atlantic, Obama is considering whether to rescue General Motors to maintain car production in the US. This would leave GM plants in Britain and elsewhere in the lurch.

The business secretary Lord Mandelson this week warned against state aid for ailing industries in Britain.

The governor of the Bank of England, the IMF, CBI and all other such hyenas sense that this is a weak and divided government that can be panicked and pressurised.

Yet if this is a government that can be forced to act then our occupations against closure, demonstrations for jobs and social unrest against attacks can also force Brown and Darling to act to save our jobs, pensions and services.


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Tue 21 Apr 2009, 18:29 BST
Issue No. 2148
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