Britain: Truss Government in Deep Crisis

By Laurence Humphries, RCIT Britain, 18 October 2022, www.thecommunists.net

 

On the 23rd September Kwasi Kwarteng, Liz Truss’s new Chancellor presented a mini-budget to the House of Commons. It was a typical Thatcherite Budget to increase capitalist wealth and effectively cut taxes for the very rich. There was an immediate uproar from the Bank of England, investors and bankers. Sterling, the British currency, fell to a new low against the Euro and the Dollar and it was obvious to all the Financiers and major capitalists that the Truss government was in a huge crisis.

The Bank of England sought to quell the fire-storm in Britain's bond markets, saying it would buy as much government debt as needed to restore order after new Prime Minister Liz Truss's tax cutting plans triggered financial chaos. Having failed to cool the sell-off with verbal interventions over the previous two days, the British central bank announced on Wednesday the immediate launch of an emergency bond-buying programme aimed at preventing the market turmoil from spreading. "Were dysfunction in this market to continue or worsen, there would be a material risk to UK financial stability," the BoE warned. Since finance minister Kwasi Kwarteng outlined a plan on Friday for tax cuts on top of an energy bill bailout, all funded by a huge increase in government borrowing, UK mortgage markets have frozen, pension funds have dumped gilts and corporate borrowing costs have leapt.” [1]

 

Results of bond markets crash

 

Because the major bankers and capitalists have lost confidence in the way that Kwarteng had slashed taxes for the rich the Truss government had to announce a U-turn, a reversal of cutting taxes for the rich. This was a humiliating climb-down for the new regime. Truss is not trusted at all, and it was evident from bourgeois commentators that Liz Truss would lose all confidence of investors and markets. With the bond markets crashing and pension fund administrators worried the future of British capitalism was thrown into doubt.

British Prime Minister Liz Truss was forced on Monday into a humiliating U-turn after less than a month in power, reversing a cut to the highest rate of income tax that helped spark turmoil in financial markets and a rebellion in her party. Finance minister Kwasi Kwarteng said the decision was taken with "humility and contrition", after some lawmakers from the ruling Conservative Party reacted with fury to suggestions that public and welfare spending could be cut to fund tax cuts for the richest. Kwarteng will also bring forward publication of his plan to cut Britain's debt, alongside forecasts for economic growth, a government source said, in another apparent climb-down amid calls from some Conservatives that the action was needed quickly to reassure the markets. Addressing his party's annual conference where lawmakers and supporters had gathered, Kwarteng acknowledged the "little turbulence" of the last week, but argued the government needed to press ahead with a new course to revive growth.” [2]

 

Kwasi Karwteng dismissed as chancellor of the exchequer

 

On the 14th October 2022 Kwasi Kwarteng was dismissed and sacked by Liz Truss as he returned from an IMF meeting. Jeremy Hunt, a seasoned Tory politician, was appointed in his place. The Truss government is in enormous crisis and ready to fall. Many Tory MP’s want her gone.

“Kwasi Kwarteng has been sacked as chancellor three weeks after his mini-budget unleashed chaos on the economy and Jeremy Hunt appointed in his place. Mr Kwarteng was appointed to the role by Liz Truss only 38 days ago, making him the second-shortest serving chancellor after Iain Macleod, who died a month after being handed the job by Edward Heath. Number 10 announced an hour after his sacking on Friday afternoon that former foreign secretary Mr Hunt was replacing him.” [3]

Even now Sterling has dropped to an all-time low in competition with the other Imperialist Economies. As the RCIT has stated on many occasions since 2009 there has developed within the capitalist system extreme inter-imperialist rivalry where Great Powers are discovering the laws that Karl Marx and Frederick Engels stated in all their writings the tendency of the profit rate to fall. This is happening at a terrific rate producing convulsions, protests, strikes and revolutionary upheavals all over the world. In Britain this is reflected by the crisis of imperialism in Britain with the possibility that this unstable government could fall.

 

The prospect of a Labour government in 2024

 

During this crisis of the Sterling collapse the Labour Party was meeting in Liverpool. Bourgeois commentators and political pundits revealed the latest opinion polls that Keir Starmer was 33% ahead of Liz Truss in the polls. Sir John Curtice, a political scientist, forecast a Labour Government with a hundred seat majority over all other parties. Starmer, the arch-Zionist and pro-capitalist leader of the Labour Party, is being touted as the new Prime Minister. Starmer is a Blairite opposed to any industrial action by workers, disciplining members of his party through purges and expulsions for any deviation from his role as a good servant of capitalism. His tenure as a lawyer for the criminal prosecution service makes him also trustworthy in the eyes of the capitalist class.

“Labour has widened its lead over the Conservatives to 33 points after days of financial turmoil following Kwasi Kwarteng’s ‘mini-Budget’, according to YouGov. In a poll published by YouGov this evening, of 1,712 British adults, 54% of adults told researchers on Wednesday and Thursday that they would back Labour in a general Election YouGov joins others predicting a large lead over the Tories for the Labour Party. Survation puts the opposition’s lead at 21 points, Deltapoll recorded a 19-point lead for Labour and Redfield & Wilton Strategies put the gap at 17 points. The polling followed the Chancellor’s mini-Budget last week, during which he announced sweeping tax cuts including scrapping the 45p rate of income tax, abolishing the cap on bankers’ bonuses and abandoning the planned rise in corporation tax. Since the statement, his first in the job, sterling has hit its lowest ever level against the US dollar and the government has been criticised by the International Monetary Fund (IMF), which warned that its policies will result in greater inequality.” [4]

“A newly elected member of Labour’s national executive committee (NEC) has revealed that she has received a ‘notice of allegation and administrative suspension’ for appearing at an event organised by a group proscribed by the party. Sharing the news of her suspension on social media this afternoon, Naomi Wimborne-Idrissi confirmed that she had been told she had “committed a prohibited act” contrary to Chapter 2, Clause I.5.B of the party’s rule book. Her suspension for speaking at the event last September means that she is not allowed to attend meetings of the NEC, the party’s governing body to which she was elected earlier this month including the annual general meeting (AGM) of the committee due to take place during Labour’s conference in Liverpool next week. Wimborne-Idrissi was elected to the NEC as a Constituency Labour Party (CLP) representative on September 1st in the 14th round of voting after standing on a slate of left-wing candidates”. [5]

This then is further proof of the pro-capitalist and pro-Zionist nature of the present Labour leadership under Starmer who flatly refuses to support any action by the working class and the oppressed.

 

Industrial strife continues in Britain

 

The dialectical opposite of the capitalist class is of course the working class and the masses. The actions of Truss and Kwarteng have produced an outpouring of strikes and protests. Rail workers from the RMT, ASLEF, TSSA and Postal Workers and BT Engineers went on strike for 24 hours. Unite, the Union, has virtually closed the docks at Liverpool and Felixstowe with continual mass pickets. NHS workers including Nurses and Doctors and teachers are balloting for strike action. Environmental groups like Just Stop Oil are using direct action to blockade streets in London and other places. The country is obviously in ferment. Threats of homelessness, poverty wages and starvation are forcing the masses onto the streets.

The RCIT has analysed this situation showing that we are facing a pre-revolutionary situation here in Britain and throughout the world.

“The starting point of our strategy is the recognition of the peculiar nature of the current phase in the world situation. The food and energy crisis does not exist in isolation but is rather closely related with the Ukraine War and the acceleration of the Great Power rivalry. However, it is important to understand the concrete relationship between these factors. Socialists need to recognise the extraordinary gap between the outrage of the masses about the dramatically rising living costs, on one hand, and the crisis of leadership. As a matter of fact, the official leadership of the trade unions and other workers organisations are extremely reluctant to organise defensive battles. At best, the bureaucrats limit themselves to organise one-day strikes or demonstrations.

However, it is evident that such limited protest activities can neither make the bosses accept a massive rise in payment nor can it force the capitalist governments to impose meaningful price caps. For this we need much more radical actions!

This is why socialists have to work towards the creation of committees of action in the workplaces and neighbourhoods. Such committees – which should integrate all activists as a first step and broader masses as a second step – can serve as pressure groups to force the bureaucrats to organise more radical actions than they are inclined to.

If the bureaucrats refuse to fight to the extent necessary (which can be taken for granted), such committees of action should take the struggle into their own hands. They should elect delegates and create a national coordination body.

However, as long as such committees do not exist or are not strong enough, socialists need to apply the united front tactic and call the existing leadership of the workers and popular organisations to organise the struggle against the deteriorating living conditions. [6]

 

The crisis of centrism

 

The major centrist groups in Britain are totally unprepared for the world political situation unfolding between our very eyes. The SWP, CWI, and the IMT all take a tailist position. While they correctly advocate more strikes protests and direct action against the Truss Government, they fail to recognise the treacherous role of the trade union bureaucracy, the agent of capital in the workers movement. Thus they provoke illusions that all we need is a bit more action without a correct Marxist method which is to prepare the masses with a programme for the seizure of power. On the war in the Ukraine they adapt to a social-imperialist position refusing to recognise that Russia is an imperialist power and refusing to support the struggle of a semi-colonial capitalist country against an imperialist bully.

Leon Trotsky, co-leader of the Russian Revolution had this to say about the centrist method

“The main feature of socialist centrism is its reticence, its mediocre, and half and half nature. It keeps going so long as it does not draw the ultimate conclusions and is not compelled to answer the basic questions set before it point blank” [7].

The RCIT in Britain puts forward the following transitional demands to prepare the masses take power and overthrow this outmoded and anarchic system of capitalism. Urgency is the order of the day there is not a moment to lose. The task is to unite all revolutionaries in a single combat revolutionary party.

* Follow the example of French workers in the CGT trade union in the energy sector who are on strike. For an indefinite general strike. TUC Leaders who meet on 18th October at their congress must get off their knees and start organising coordinated action leading to a country-wide stoppage and general strike!

* Reject Truss’s Thatcherite plan of cutting taxes for the rich and pauperising the poor. Reject also the right-wing leadership of the Starmer regime in the Labour party with its pro-capitalist views! For an new Workers Party!

* No evictions in the housing market - reduce rents. For a rising scale of wages to match inflation. Reject below inflation wage deals. For occupations strikes and protests to remove this reactionary government!

* No to racism and Islamophobia! Open Borders for all migrants from semi-colonial countries!

* Nationalise all multi-national and capitalist enterprises under workers control without compensation. Workers to be elected to draw up a plan of action on how basic foodstuffs and fuel can be supplied to the masses!

* For an armed defence guards to protect communities from police or racist provocation!

* For a workers government! Join the RCIT!

 

Footnotes

1) Bank of England moves to calm bond market rout after tax cut storm | Reuters

2) Truss forced into U-turn on tax after week of market turmoil | Reuters

3) PM appoints Jeremy Hunt as chancellor after sacking Kwasi Kwarteng | Politics News | Sky News

4) Labour has 33-point lead over Conservatives, YouGov poll finds – LabourList

5) Labour NEC member suspended for speaking at proscribed group’s event – LabourList

6) Food and Energy Crisis: For a Strategy for Popular Uprising - RCIT - Revolutionary Communist International Tendency (thecommunists.net)

7) Leon Trotsky: Where is Britain going, in: Trotsky’s Writings on Britain, Vol. 2, New Park Publications 1974, p.112

 

Britain: Rishi Sunak replaces the Incompetent Liz Truss after her Government falls

By Laurence Humphries, RCIT Britain, 15 November 2022, www.thecommunists.net

 

Liz truss lasted 45 days as Prime Minister and then Rishi Sunak, one of the youngest Prime Ministers ever took office on the 25th October 2022. Boris Johnson, the former Premier, tried to enter the race but the bankers and the rest of the bourgeoisie were determined that this charlatan should not stand, so he was forced to withdraw. Sunak will be the 5th Prime Minister since the 2015 election. This is a government of crisis in free fall and unable to satisfy the bourgeoisie, especially the bankers. Sunak made it plain that there would be no general election. He knows that if one was called, the Tories would be wiped out.

 

Jeremy Hunt was reappointed as Chancellor of the Exchequer. Hunt has said that he will raise taxation and there are difficult decisions to be made for the poor and the oppressed but not for the rich parasites that have been protected by Tory Governments. Suella Braverman was also reappointed by Sunak as Home Secretary. Braverman resigned as Home Secretary in the Truss Government because she allowed personal and sensitive data information to be seen by interests outside of government. Sunak may come to regret his decision to appoint her.

 

The crisis of world imperialism is also seen in the repeating political and economical crisis in Britain.

 

Mothers protests and meanwhile Bankers raise interest rates...

 

The Bank of England has raised interest rates in Britain while the Federal Reserve has done the same in the United States. 

Another Bank of England decision and another pummelling for the Pound. The Bank of England raised Bank Rate by 75 basis points to 3.0% but sent a clear signal a move to 5.0% and above was not likely, a message that resulted in a knee-jerk sell-off in the Pound. The decision to go 75bp came off a solid 7-2 vote by the Monetary Policy Committee (MPC) according to a statement released by the Bank, but this unusually large hike looks to be a one-off.

The Bank says further rate hikes are necessary but, crucially for FX markets, they won't be delivering as many as investors had previously expected or thought necessary to bring inflation back towards 2.0%.” [1].

 

This reflects the crisis of the capitalist system and basic foodstuffs and energy prices are and will be affected. Poverty and homelessness for masses of the urban poor and working class is the consequense. Runaway inflation is endemic, leading to enormous financial worries for poor families. Recently a protest reflecting those events took place: the March of the Mummies which was organised by mothers and carers of young families, demonstrating about the cost of child care and other increased living costs. The economic crisis is here but those who feel the crisis are not those who created it.

Rail Strike Suspended thanks to Betrayal by Bureaucracy

 

The TSSA and RMT who were due to have 24 hour strikes on November 5th, 7th and 9th announced in a statement that they have suspended their actions. They explain that ‘The Rail Delivery Group’ Employers representing Network rail and the individual rail companies want to conduct negotiations with both the RMT and TSSA Bureaucracies. No offer has been made. The RMT bureaucrats also suspended their action over ‘Poppy Day’ (!) the celebration of Imperialist war. The Communication Workers Union and their members in BT are rumoured also to be in negotiations with BT. Marxists have correctly characterised the trade Union bureaucracy as agents of the capitalist class. Their role is to seek a compromise with employers at all times. Trade unions in Britain today are purely defensive organisations who collectively defend workers and represent them. The rank and file is our class, but the bureaucrats are alien to them, being neither revolutionaries nor socialists. Some are elected by the membership but most are appointed and remain part of the bureaucratic apparatus whose role is mostly to police the workforce for the capitalist class.

 

Lenin in his various elaboration on Imperialism explains that this epoch created a privileged position for a section of workers. They were craft workers in the 19th century but they became the kernel of the modern trade union bureaucracy.

 

Leon Trotsky, founder of the Fourth International summed up the role of the bureaucracy in his essay ‘Trade Unions in the epoch of Imperialist decay’: “This position is in complete harmony with the social position of the labour aristocracy and the labour bureaucracy who fight for a crumb in the share of the super profits of Imperialism Capitalism. The Labour bureaucrats do their level best in words and deeds to demonstrate to the ‘democratic’ state how reliable and indispensable they are in peacetime and especially in War.” [2]

 

Betrayal by Centrists too

 

Most Centrist groups in Britain with few notable exceptions make no comment on the suspension of the rail strikes because they are the bag carriers of the bureaucracy. When unrests and strikes take place they follow the bureaucracy. Unfailingly most notable of these kinds is the IMT and the CWI as well as their later split product International Socialist Alternative. The only critical position on the abandonment of the rail strikes in the bigger centrist forces comes from the Cliffite Socialist Workers Party who at least offer some criticism on the decisions of the bureaucracy.

 

Large numbers of rail workers are suspicious or openly angry after the RMT union called off all their planned national rail strikes on Friday. The union said it had suspended planned strikes on Saturday and next Monday and Wednesday. It said it “will now enter into a period of intensive negotiations with Network Rail and the train operating companies”.

It added, “Through a strong industrial campaign so far, RMT has secured unconditional talks on Network Rail and the promise of an offer from the train operating companies. The current dispute remains very much live, and the union is continuing its re-ballot of members to secure a fresh mandate for action with the result due on 15 November.” 

Calling off the strikes without even a concrete offer is a mistake. The union had already called off action scheduled for Thursday this week because of London Poppy Day collections.” [3]

 

In times of deep economic crisis, the missing of criticism on the pacification of workers struggle is especially harmful. It is a typical development that betraying the working class interests is rather the norm than the exception even in centrist (not to speak of reformist) circles.

 

However, the political dimension of the capitalist crisis is also seen in certain developments in Britain. As it was already done in the past, racism and especially islamophobia is nurtured by the imperialist bourgeoisie to deflect from their political troubles.

Islamophobia and Racism at the Heart of this Government

 

Recently, there was a firebomb racist attack at a centre for migrants in Dover. Many migrants housed in an asylum centre lived under terrible conditions inside these centres. Even Bourgeois commentators would know that the standards of these camps are not different to concentration camps. Braverman is however stoking the fire of racism, speaking of an ‘invasion’ while referring to migrants fleeing from imperialist meddling in Syria and the Middle East. Racism and Islamophobia is rife and people of colour are treated like dogs and vermin. This is the nature of the British imperialism and its government under Rishi Sunak.

 

As she fought for her political survival in parliament on Monday, Suella Braverman claimed the south coast of England is being invaded by asylum seekers. Her claim has been refuted by migration experts, who believe it falls down on a number of fronts.

Madeleine Sumption, the director of the Oxford Migration Observatory, said: “This is not an invasion – it’s not an army. But if instead she is referring to the number of people coming, we can compare the figures to other countries and see that the numbers coming in to the UK are relatively manageable.” [4]

 

Eventhough, the managable numbers of refugees are treated hostile and inhuman by the capitalist beast. “Ahmed - not his real name - said people at the Manston processing centre were treated like "animals" with 130 people forced to share a single large tent. More than 4,000 migrants have reportedly been held at the camp - meant to host 1,600 - in recent days. The Home Office says it is providing for "all the basic needs" of migrants.

Immigration Minister Robert Jenrick previously insisted the number of people at Manston is coming down. Ahmed - who left the centre on Monday after 24 days there - described being forced to sleep on the floor, and being prevented from going to the toilet, taking a shower or going outside for exercise. He told the BBC that he fled his home country of Iran in search of freedom and to avoid persecution, saying that he had been living in fear for his life.

But after arriving in the UK and at the centre, Ahmed said people were prevented from calling their families to let them know they had made the crossing to the UK safely.” [5]

 

In an incident at Harmondsworth (another facility) all the lights were off, letting the people live in cold darkness. The migrants in utter provocation and anger fought back, using clubs and any weapons they could find.

 

The disorder took place at the premises following an "unprecedented and sustained" loss of power overnight at the detention facility in Harmondsworth, near Heathrow Airport. It holds hundreds of men, including adult male asylum seekers, foreign offenders awaiting deportation and men who are in the UK illegally. The Home Office said no detainees had left the premises and those involved had since been returned to their rooms.” [6]

 

Here we see the cruel deflection of the political crisis of the imperialist system. It forces people to flee their home, risking to lose family and life only to be treated as animals when they have survived the horrendous dangers of their refugee route.

 

Behind the deflection a number of crisis symptoms are to find: The USA, Europe and Japan face crises of the second slump (big recession) where the rate of profit is falling as predicted by Marx. Further, the deep political crisis throughout the world ist reflected with inter imperialist rivalry between the Western imperialist forces and the Eastern imperialists China and Russia (the latter engaged in a colonial war against the Ukraine). Last but not least, the potential for uprisings has increased for a huge number of countries while it already started in some (like Iran). The Era of Capitalist Crisis must be turned into the Era of Revolutionary Victory.

 

Revolutionary Ation Programme for Britain

 

The RCIT in Britain is conscious of the class actions taking place, especially as Health Workers have recently balloted to reject the miserable wage increase that was offered to members of the RCN, Unite the Union, Unison and other Unions (all who are engaged in strikes over pay and conditions). The poor and the destitute face innumerable hardships feeding their families and earning enough to get the basic essentials. The poor are getting poorer while the rich are getting richer. The energy giants BP and Shell posted huge profits for their shareholders in the billions. Meanwhile they pollute the earth at a fast space, pushing the dramatic course of human extinction through natural disasters. Now is the time to act. Urgency is the key!

 

The RCIT Britain puts forward a programme of action to overthrow capitalism, seize power and build socialism. The RCIT Britain calls on everyone to study our demands and to unite with us in building a revolutionary force of the future, preparing the struggle for power!

 

* Nationalise the railways and all public utilities under workers control without any compensations for expropriated capitalists! Several public plans have to be initiated to redistribute food parcels to all in need. Charges of electricity and gas which harm the living standard of the workers and poor must be taken back immediately!

 

* Immediate stop to any increase of rent! All rents must be frozen and tenants must be allowed to democratically elect their own representatives. Private landlords must be dismissed and replaced by public housing!

 

* Fossil Fuels have to be phased out systematically by a nationwide emergency plan to save the planet! All homes and workplaces need to be provided with alternative sources of energy, financed by the expropriation of the multinational corporations of the Energy sector! No price increases for the people! Profits of fuel companies like BP and Shell must be confiscated and redistributed to the poor!

 

* No to Islamophobia and all other forms of racism! All People of colour and every ethnicity should have the unconditioned right to wear their own clothes, speak their own language and practice their own customs in public! Open all Borders! Border police and immigration officials must be removed and dismissed immediately!

 

* All refugees and migrants incarcerated in asylum centres must be released and housed in decent accommodations as well as provided with suitable work and all social benefits!

 

In order to achieve all of this, we call for:

 

* Strikes and workers unity! Fight for an indefinite general strike against the government and for solving of the food and energy crisis! This must be organised and run by the masses of the rank and file! For trade union democracy where all elected officials are accountable to the membership directly and at all times. Replace the bureaucratic apparatus by accountable trade union leaders, democratically elected by the rank and file, willing to fight!

 

* Prepare a revolutionary constituent assembly to discuss the road to a Workers government!

 

The imperialist bourgeoisie will not accept the independence and freedom of revolutionary struggle, therefore we have to prepare ourselves. Organising of popular armed defence committees protecting the youth, migrant communities and all fighting workers from police violence and fascist provocations will become crucial in the struggle for a Workers Government.

 

Join the RCIT to build a Revolutionary Party which will help to unite all revolutionary forces in the Struggle for Socialism via the armed uprising, the revolution of the workers and oppressed!

 

 

 

Footnotes

 

[1] Bank of England Sinks Pound Sterling after 75bp Rate Hike is Overshadowed by its Severe Economic Warnings (poundsterlinglive.com), https://www.poundsterlinglive.com/gbp-live-today/17746-pound-to-euro-and-dollar-bank-of-england-november-mpr

 

[2] Trotsky. L, ‘Trade unions in the Epoch of Imperialist Decay’, Pg. 40, Pathfinder Press 1969

 

[3] Rail strikes shouldn’t have been called off for talks, https://socialistworker.co.uk/news/rail-strikes-shouldnt-have-been-called-off-for-talks/

 

[4] ‘Invasion’ of the UK? Experts dubious of Suella Braverman’s claim | Immigration and asylum | The Guardian, https://www.theguardian.com/uk-news/2022/nov/01/bravermans-invasion-claim-not-backed-by-facts-say-experts

 

[5] Manston migrant centre like a zoo, says asylum seeker - BBC News, https://www.bbc.co.uk/news/uk-63481151

 

[6] Robert Jenrick: 'Unacceptable' violence at Harmondsworth centre - BBC News, https://www.bbc.co.uk/news/uk-63525332