Autumn statement 2023 an economic quagmire

On 2 November, The Economist grimly forewarned that ‘The foundations for today’s growth look unstable. Peer ahead, and threats abound’. So it was that the Tory Chancellor Jeremy Hunt saw three main challenges to be met by his 22 November Autumn Statement: first, how to placate the right wing of his party before the 2024 general election campaign period opens, as they vociferously press for tax reductions; second, how to appease the broader electorate after a period of falling real incomes resulting from Conservative government austerity and more recent inflation; and third, how to keep to his rule of reducing the national debt within five years of his announcements. In short, the statement was a showcase of how to give with one hand and take back with the other. James Martin reports.

 

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The crisis of working class leadership

Keir Starmer

The heavy defeats of Tory candidates in the Selby & Ainsty and Somerton & Frome by-elections on 19 July reveal widespread loathing for a corrupt, racist, anti-working class government. That the Tories retained Boris Johnson’s former seat in Uxbridge and South Ruislip by a mere 495 votes was attributed to local opposition to the extension of the Ultra Low Emission Zone (ULEZ) into Outer London in August. Whether or not this leaves Labour in a position to win a general election in 2024 should not distract from the fact that in government Labour would maintain the current offensive on working class living standards, preserve the growing number of repressive powers available to the state, and seek to add ‘efficiency’ to the ever-expanding range of anti-migrant laws and make them even more inhumane. Labour would be as reactionary as the Tory government it replaces, yet there is no indication of any serious working class movement emerging to challenge the Tories, let alone the Labour Party. ROBERT CLOUGH reports.

 

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Bank collapses reveal profitability crisis

Storms over the City of London

The collapse during March and April of four major banks in the US, and the forced merger of Credit Suisse with UBS underline the continuing crisis facing imperialism today. This is the existence of stubborn barriers to further capital accumulation. Imperialism must raise its rate of exploitation of the working class worldwide in order to raise its profitability. The task of soundly defeating the working class, to solve capitalism’s ‘productivity puzzle’, demands a massive increase in the production of commodities containing ever more expropriated labour, and consequently more to sell. A terrible inter-imperialist struggle for markets must inevitably follow. JAMES MARTIN reports.

 

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No respite for the poor

Household incomes are set to fall by a record 4.3% this year. Prices have risen rapidly, with food inflation reaching a near-record level of 19.1% in April. The result is a drastic reduction in the standard of living for increasing sections of the working class. Meanwhile, despite rising taxes, public services are being butchered in the face of a deepening crisis of the capitalist system. This means the British ruling class is no longer willing to provide a safety net for the poor. The grim consequences are all around us: lengthening queues at food banks, a housing crisis that has forced 100,000 households in England into temporary accommodation, a National Health Service on the verge of collapse.

 

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Cryptocurrencies: rotten, speculative capital run amok

Cryptocurrency coins

The current banking crisis which began on 8 March is uniquely characterised by its relation to high-tech start-ups and industries whose business models are high-growth, high-risk, rendering them unreliable for investment from typical banks (see Banking article). Silicon Valley Bank and Silvergate Bank were known for providing services to venture capital firms and tech companies focused on all types of tech from biotechnology, solar power, and semiconductors to streaming services, online gaming, and cryptocurrencies. In particular, Silvergate Bank, whose failure triggered the ongoing crisis, was known as the crypto bank, notorious for financing the now bankrupt cryptocurrency exchange and hedge fund company Futures Exchange (FTX). In fact, the origins of the current banking crisis can be traced all the way back to FTX’s collapse in November 2022.

 

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Brexit disaster

Two years after Britain left the EU single market and customs union in January 2021, it is now widely accepted by the British ruling class that Brexit was a major mistake. ‘Economists have reached a consensus: Brexit has significantly worsened the country’s economic performance. They agree that the vote to leave the bloc has made households poorer, that negotiating uncertainties have taken their toll on business investment and that new barriers to trade have damaged economic links between the UK and EU.’ (Financial Times, 30 November 2022). RIA AIBHILIN reports.

 

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The crisis of British capitalism

City of London under a stormy sky

Edited and expanded version of a speech by David Yaffe to the RCG conference 29 October 2022.

I am going to start with a quote from Marx written in 1852. 

In The 18th Brumaire of Louis Bonaparte Karl Marx writes:

‘Hegel remarks somewhere that all facts and personages of great importance in world history appear, as it were, twice. He forgot to add: the first time as tragedy, the second time as farce’ (CW Vol 11, p103).

Today the ‘tragedy’ for us is that Johnson could be Prime Minister for almost three years and the ‘farce’ was his replacement as Prime Minister, Liz Truss.

 

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Britain’s capitalist crisis: stagnation and poverty the norm

Rishi Sunak and Jeremy Hunt

On 17 November 2022, the ruling class opened a new round of the war against the working class with the Rishi Sunak government’s Autumn Statement. The Statement’s provisions will punish the mass of the working class with a record 7.1% fall in household disposable income over this year and the next. Overall, household income will return to its 2013 level, while real wages in 2027 will be no more than they were in 2008, prior to the financial crisis. Those on Universal Credit will have to survive the next four months of winter before benefiting from a promised uplift of 10.1% to the pittance they receive. The Financial Times headline the following day read ‘Hunt paves the way for years of pain’, while the Resolution Foundation spoke of Britain ‘getting poorer’, an opinion shared by the Institute for Fiscal Studies, which added ‘We are in for a long, hard, unpleasant journey; a journey that has been made more arduous than it might have been by a series of economic own goals.’ ROBERT CLOUGH reports.

 

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Truss Government: a runaway train

The 23 September ‘mini-budget’ betrayed a level of desperation by the Truss-led Tory government which has set off alarm bells among wide sections of the ruling class. Its notion of ‘trickle-down’ economics has been completely discredited by decades of experience, and when Truss advanced it during the Tory leadership election campaign she could find only one economist who supported the theory. On the day that Chancellor Kwasi Kwarteng presented his statement the IPPR think-tank had to point out that Britain had the lowest business investment rate among G7 richest countries, despite also having the lowest rate of corporation tax. Yet the scale of tax cuts that Kwarteng set out was enormous, and nakedly no more than handouts to the wealthy. Among the changes were:

 

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Shamefaced socialism

The depth of the crisis today is such that new movements are being thrown up which purport to represent the interests of the working class. Enough is Enough is one example; it has been organising rallies and demonstrations across the country against the cost of living crisis. Yet while they are led by those who regard themselves as socialists, there is no socialism in the aims of these movements. This is at a time, however, when every political question facing the working class must be approached from the perspective of the immediate need for socialism. Socialism must not be treated as some abstract possibility, but as the only valid outcome of every struggle of the working class. This does not mean that socialism is realisable at any given moment, but its reality has to be the starting point for establishing a political perspective on every issue or struggle of importance: how does it pose the necessity for socialism, how is it to be directed towards that end?

 

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Cocaine capitalism: reloaded

The City of London launders money from the international drugs trade (photo: FRFI)

In December 2021 Boris Johnson announced a new ‘war on drugs’ in Britain, with a ten-year plan to reduce drug use by targeting supply chains and recreational users. The government is considering new draconian punishments for those caught using drugs including taking users’ driving licences and passports. The finalised measures will be released in a White Paper later this year. Just days before the new crackdown was announced, cocaine was found in 11 out of 12 places tested in Westminster – including in the bathrooms adjacent to offices of Johnson and Home Secretary Priti Patel. The Prime Minister and members of his cabinet are on record admitting drug use. ‘Wars on drugs’ have always been deceitful campaigns that disproportionately target black, Asian and poor people both within Britain and around the world. Proposed measures outlined in the ten-year plan will give the state more power to punish oppressed groups while the City of London will remain unscathed as a world centre for laundering vast amounts of dirty drug money. RIA AIBHILIN reports.

 

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COP26 and the Autumn Budget and Spending Review

Less than a week before delegates gathered for the COP26 United Nations Climate Change Conference in Glasgow, the British government’s Chancellor of the Exchequer presented the Autumn Budget and Spending Review. For all Prime Minister Boris Johnson’s declarations about saving the planet, if you follow the money then you can see where the priorities really are.

 

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Energy crisis: poor left to freeze

Protest against fuel poverty

Wholesale natural gas prices have skyrocketed by 250% since the start of 2021. Energy firms in Britain have been going bust on an almost daily basis and energy bills have gone through the roof: gas bills rose by 28.1% in the year to October, while electricity climbed by 18.8%. It is the poorest sections of the working class who are being made to pay for capitalism’s inability to rationally plan society to meet long-term need. MARK MONCADA reports.

 

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The Pandora Papers: it’s a small world

Tropical island in the shape of a dollar sign

We were served the Luxembourg Leaks in 2014, the Panama Papers in 2016, the Paradise Papers in 2017 and now we have the Pandora Papers. What they have in common is that ‘The leaked records vividly illustrate the central coordinating role London plays in the murky offshore world’ (The Guardian 3 October 2021). While the previous leaked papers focused on offshore tax evasion (illegal) and tax avoidance (legal) the Pandora Papers focus on offshore trusts and shell companies used by the rich and powerful to conceal their wealth and escape taxes. While that wealth takes many forms, for example as yachts and works of art, more often it is held as land and buildings. TREVOR RAYNE reports.

 

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Energy crisis fuels winter of discontent

Gas ring (photo: Lee Haywood, Flickr | CC BY-SA 2.0)

In mid-September, CF Fertilisers, a US company and the largest fertiliser producer in Britain, abruptly closed down production. Soaring natural gas prices had made it unprofitable to continue. Carbon dioxide (CO2) is a by-product of fertiliser manufacture and the company supplies 60% of the British market. CO2 is needed among other uses for the production of fizzy drinks including beer, making dry ice to keep food fresh for storage and transport, for stunning animals before slaughter and for nuclear power where it is used as a coolant. CF Fertilisers makes CO2 as a by-product of its fertiliser production at two plants, one at Billingham in Teesside and another in Cheshire. Emergency talks were held with the government in an effort to get CF Fertilisers to restart production. Late at night on 21 September, it was announced that production would restart immediately at the Billingham plant. DAVID YAFFE reports.

 

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Harvesting Hunger: big business and the food trade

Fight Racism! Fight Imperialism! No.110, December/January 1992

In September 1990, Dr Maurice King wrote in the medical journal The Lancet that children dehydrated from diarrhoea in the Third World should be denied medical treatment and left to die. Curing them was pointless, he argued, when there was not enough food to feed them. His view was supported by an editorial which observed that even if an atom bomb was dropped every day on the Third World, the rate of population growth meant that problems of malnutrition would recur.

 

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Meltdown

Fight Racism! Fight Imperialism! No. 127, October/November 1995

 ‘The harvest is past, the summer is ended, and we are not saved.’

THE PROPHET JEREMIAH

A hurricane threatens to blow through the world’s financial system. Not since before the Second World War have the portents looked so ominous for international capitalism. A mountain of debt overhangs a stagnant production base. Vast speculative sums send currencies careering on a switchback ride. Something big and very dangerous is happening. TREVOR RAYNE examines the prospect of a meltdown.

 

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A precarious victory for gig workers

Uber drivers protest over pay and conditions

On 19 February the British Supreme Court found that 25 former Uber drivers were legally ‘workers’ in 2016, not ‘self-employed’ as claimed by Uber, meaning they are entitled to the minimum wage. The unanimous judgement also found that the drivers were ‘workers’ not only when transporting riders, but also whenever they were logged into the app and awaiting fares.

 

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Pandemic exposes class and racist division in capitalist/imperialist Britain

A man wears a mask reading 'racism is a virus' at a Black Lives Matter protest (Photo: Steve Eason)

An edited and extended version of a talk given by David Yaffe to a Fight Racism! Fight Imperialism! meeting, ‘Coronavirus - who will pay?’ on 10 March 2021. Main article image credit: Steve Eason.

Speaking at a Downing Street press conference on 26 January 2021, with the death toll involving Covid-19 in this country reaching more than 115,000, Prime Minister Boris Johnson insisted that he took ‘full responsibility’ for the government’s handling of the pandemic. He claimed: ‘We truly did everything we could’ to minimise loss of life from coronavirus. 

 

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The Covid gravy train

Business suit hands shake in front of brief case of money

On 18 February a High Court judge ruled that Health Secretary Matt Hancock 'acted unlawfully' by failing to publish multi-billion-pound Covid-19 contracts, issued by the government, within the thirty day period required by law.

 

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Sunak’s budget: a war chest for capitalism

Chancellor Rishi Sunka holds up his red briefcase outside Downing Street as a police man stands in the background

Announcing the government’s budget plans for 2021-22 and beyond, Chancellor Rishi Sunak on 3 March claimed that the British state would continue spending to support workers and businesses hard-hit by the Covid-19 pandemic. But Sunak warned that, ‘not popular, but honest’ plans for future tax rises were now needed for managing the growing public debt. Far from supporting ordinary people, Sunak’s budget paves the way for the government to continue as it has throughout the pandemic: using the state’s resources to save capitalism. WILL HARNEY reports.

 

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Brexit trade deal: Johnson’s gamble

Boris Johnson signs trade deal with the EU

The Brexit saga was a fight between sections of the ruling class in Britain. The noisier jingoistic faction, sustained by its media supporters retailing its false facts, won the day, a familiar story of bourgeois elections. Irrespective of the UK’s withdrawal from the European Union single market and customs union, the needs of British capital are the centre of this factional struggle within the ruling class. JAMES MARTIN reports. 

 

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Brexit and the City of London

City of London

For almost 60 years the City of London has absorbed a large proportion of the EU’s capital markets as it competed with New York for the title of the world’s dominant financial centre. Brexit will almost certainly threaten its ranking. 

 

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British government targets Chinese investment

Huawei

In April 2020, the British government blocked a Chinese firm, China Reform, from taking control of the Apple iPhone chipmaker Imagination Technologies, based near Watford, and in July banned the Chinese company Huawei from contributing to Britain’s 5G telecommunications network. On 11 November, the government announced the National Security and Investment Bill to ‘target potentially hostile foreign investments’; the main target is China. Then, on 24 November, the government presented its Telecommunications (Security) Bill, intended to force the likes of BT, Vodafone and Three to get rid of any Huawei software, routers or antennas they use by 2027. This reverses a previous government policy of allowing companies to keep existing Huawei equipment but preventing them from buying anything new from the firm. Conservative and Labour politicians are joining the US anti-China campaign.

 

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Brexit trade deal: much ado about nothing

British and EU flag on flagpole

The idea that either the European Union or the United Kingdom wanted to engage in a self-destructive bout of negative exchanges over visible trade (the trade in goods) as a result of the Brexit decision, runs counter to the immediate economic interests of both parties. The smoke and noise emanating from four years of discussions between the two sides, was designed to manage their respective chauvinists, a significant constituency, whose allegiance is important for the governing parties to retain. Nevertheless, competition between capitals tolerates no truce, and both sides of this squabble will seek commercial advantages as soon as the opportunity arises.

 

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Coronavirus crisis: who will pay?

Rishi Sunak

The health emergency created by the coronavirus pandemic is not yet over and the economic devastation it is causing has barely begun. Global debt increased by $15 trillion this year and is on the way to exceeding $277 trillion in 2020, 365% of global GDP after rising from 320% at the end of 2019. This is unsustainable. In emerging market economies debt has risen by 26 percentage points so far this year to approach 250% of GDP. In mid-November Zambia became the sixth country to default or restructure debts in 2020. More defaults are likely as the impact of the pandemic mounts. The IMF expects global growth to be negative this year and the worst since the Great Depression of the 1930s. Britain cannot escape such developments. DAVID YAFFE reports.

 

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British economy: covid, Brexit, crisis

'Shop closed due to current crisis' store front

During the first half of 2020 the coronavirus pandemic drove the British economy into the deepest recession since records began. The second wave of the pandemic will ensure that the recession continues well into next year as the number of coronavirus cases rapidly rises and the government places new restrictions on businesses and social activities in an attempt to control its spread. DAVID YAFFE reports.

 

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Lockdown leaves precarious workers out in the cold

Deliveroo riders and IWGB members in York picketing Five Guys (photo: Twitter @IWGBunion)

The latest employment statistics show the devastating impact of the coronavirus lockdown on precarious workers. Six months since restrictions ground work almost to a halt in sectors like hospitality, cleaning and childcare, economic shocks on the labour market continue to cause job losses and underemployment on a record scale. ADAM GREY reports.

 

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Covid-19 ‘mini-budget’: Delaying the inevitable

Sunak announced a further £30bn of spending to manage the coronavirus crisis

On 8 July, Chancellor of the Exchequer Rishi Sunak declared himself ‘unencumbered by dogma’ as he announced a further £30bn of government spending to manage the economic fallout of the Covid-19 pandemic. It is the latest step by the government to shore up decaying British capitalism; this time by slowing down the enormous wave of job losses which the crisis will inevitably unleash on the working class. Séamus Padraic reports.

 

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Britain’s fast fashion sweatshops

Women working in a garment factory (photo: marissaorton | CC BY-SA 2.0).

As the government attempted to take the country out of lockdown in June, the lingering high rates of coronavirus infections in Leicester brought new scrutiny to the city’s short-order clothing industry. Rife with illegally low wages, forced overtime and irregular working hours, there are over 1,500 known sites of garment production in Leicester. Often small workshops with poor ventilation, crammed with machinery and textiles alongside exposed wiring and blocked fire escapes, throughout the lockdown these sites have been operating at full capacity filling orders from ‘fast fashion’ brands, chiefly Boohoo Group Ltd, which accounts for 80% of production in Leicester.

 

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Video: Coronavirus and state monopoly capitalism

David Yaffe, editor of Fight Racism! Fight Imperialism! discusses the present dire situation for British capitalism and imperialism under the Covid-19 pandemic. He argues that the crisis has forced the British ruling class to adopt, not socialist policies, but the model of state monopoly capitalism. Only a revolutionary fightback can establish workers’ control over the economy. From the RCG public meeting, ‘What next for British capitalism in a pandemic world?’ 23 June 2020.