Socialist Party
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29 May 2013

Even the cutters say cuts aren't working!

Becci Heagney

Chancellor George Osborne has been warned: his austerity package is "playing with fire". Working class people know all too well the effects of the cuts - the painful slashing of our living standards, the hated bedroom tax, the hell of not being able to find a job.

But this warning has come from the International Monetary Fund (IMF), a body which has been responsible for austerity, exploitation and attacks on workers' rights around the world.

Osborne's claim that there is 'no plan B', which is used to insist on savage cuts, is being undermined.

Ongoing crisis

It is hardly surprising that there are questions about the Tories' economic policy. Britain's GDP is still 2% less than it was in 2008.

The private sector has shrunk for the last 15 consecutive months. Prices are rising at 2.4% a year while wages are basically standing still.

Osborne himself has had to extend his deadline for deficit reduction twice and has failed to reach his own growth targets. His solution? Pile on more misery for the working class.

But the IMF is not calling for restraint out of sympathy with us. David Lipton, deputy managing director of the IMF, made a speech on an assessment of the British economy.

He called for plans for investment into infrastructure to be brought forward, in an attempt to balance the 10 billion worth of cuts being made this year.

No friend of ours

But the IMF says this should be done by "streamlining the planning application process and removing regulatory uncertainty", ie removing democratic rights, as well as devolving responsibility to local authorities.

It also recommends that the government should hand bailed out banks RBS and Lloyds TSB back to the private sector.

The IMF is desperate for some sort of growth in the economy. Despite the government's optimism that a triple-dip recession was avoided, in reality the economy is stagnating and the much talked about "green shoots of recovery" remain to be seen.

The IMF's suggestions for growth also include more investment and more exports and a reduction in corporation tax.

However, they also warn about the effects of the ongoing eurozone crisis on the UK economy. If Britain is going to export more, who will buy the exports?

Plan S for socialism!

It is clear that the IMF criticisms reflect the panic among some in the ruling class. It's increasingly apparent that none of the capitalist governments or institutions have a solution to the acute crisis of their system.

The Socialist Party calls for investment in jobs, infrastructure and services but the capitalists are not prepared to do this because they see no profits to be made. We need to build a mass movement to demand governments carry out this investment.

But we have to go further too - we want nationalisation of the biggest companies and the banking system under democratic working class control and management, and a socialist plan of production and services to meet the needs of all.