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Banks demand cuts on unprecedented scale

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Kwasi Kwarteng prepares to cut huge amounts of public spending, hitting working class people hardest.
Issue 2826
Kwasi Kwarteng

Conservative chancellor Kwasi Kwarteng. (Picture: Policy Exchange)

Chancellor Kwasi Kwarteng is preparing a Halloween nightmare of cuts that will wreck millions of lives. On 31 October he will follow up his disastrous mini-budget with measures designed to reassure the vultures of finance that he can pay for handouts for the rich by rinsing the working class.

Bosses expect him to lay out a battle plan for £62 billion of cuts over the next few years. This is more than a third of annual health and social care spending. The Institute for Fiscal Studies says it will mean slashing more than 220,000 public sector jobs if he wants to stay within spending plans. 

The Tories want to slash and burn as the NHS is in crisis, local government and education are stretched to their limits and other key services crumble. And Kwarteng might mix in a new version of the assault on benefits. 

Linking working-age benefits to earnings rather than inflation would rob people of  £7 billion next year and £13 billion from 2024-25. Behind all these drab figures is the reality of increased poverty, illness, hunger and deaths.

If Kwarteng isn’t seen to be hard enough, the financial markets will again tear into the value of the pound and jack up interest rates. Already on Tuesday the Bank of England had to give an assurance that further cash would be available for the bankers.

The bank’s next meeting to set interest rates comes days after Kwarteng’s announcement. If interest rates do hit 6 percent in May next year as predicted, the increase would add around £445 a month to repayments on a typical £200,000 loan. And that will mean soaring rents as landlords pass on the cost.

Cuts on this grotesque scale could be carried through only by breaking resistance and spreading fear that if you fight back, you lose. The coming recession—which means job losses—will be used as one way to hold down wages even more. Another raft of anti-union laws could be unveiled at any time.

That’s why widening, escalating and uniting strikes is so crucial. It is the most effective weapon workers have to win in their particular battles and to send a broader message that the Tories won’t be allowed to win.

This is a vicious government, but it’s also vulnerable. It floats brutal measures and then withdraws some as it senses opposition. It makes U-turns when the resistance is strong enough.

Our side can win, but as the Tories escalate their attacks, so must we. The union leaders must step up the strikes and unite them to hurl back the Tory attacks.

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