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Nick Chaffey, Socialist Party national committee

As the economic implications of Coronavirus emerge, Tory chancellor Rishi Sunak has proposed Project Birch. This is a plan to bail out ‘strategic’ companies which could involve ‘as a last resort’ buying shares in those companies.

Forced to shut down the economy to contain the spread of coronavirus, the previously neoliberal, free-market Tory juggernaut spectacularly hit reverse and shifted to massive state intervention to prop up the economy – effectively nationalising the wage bill of 8.5 million workers, costing £15 billion.

Despite talk of a recovery as lockdown ends, each capitalist is looking ahead to a serious recession in the economy, already in the making, and taking measures to protect its wealth, profits and position in the market. What that means is mass redundancies, already announced at P&O ferries, British Airways (BA) and other companies. With less demand for products and services, workers are seen as ‘unnecessary labour’ that can be thrown out of work as the easiest way to cut costs.

Some of the first to announce mass redundancies have been in the transport sector, with 12,000 in BA and 1,100 in P&O. Others from part of the supply chain are following closely behind, such as Rolls Royce, which manufactures airline engines, announcing 9,000 job cuts. The car industry, already in trouble, produced just 197 cars in April, down 99.7%, and is calling for government assistance.

Job loss wave

On a capitalist basis, as one company falls and lay-offs increase, others follow like a wave of dominoes. Where will it stop? Large manufacturers and employers making mass job losses will have a big knock-on effect on the supply chain, devastating local working-class communities.

At this stage, the Tories have quietly implemented partial nationalisation, notably underwriting all private passenger rail franchises. But these are considered short-term measures, to protect capitalism in the immediate situation. In the future, the Tories hope these shares will be sold off cheaply, and companies returned to the private sector.

In the meantime, the crisis will be used to justify cost-cutting, not in the boardrooms but on the shop floor, in cuts to jobs and pay.

On a capitalist basis this policy solves nothing. On the contrary, it makes matters worse, further reducing demand, and adding to the downward spiral of economic recession. On top of the piles of debt that already act like a heavy coat on a drowning man, the prospect of a longer-lasting global depression places the future of tens of millions of workers, and especially young people, on the line.

Workers returning from the war in 1945 said ‘no return to the 30s’. Many workers will now be wondering if we are going to see a return to the 1980s-style mass unemployment of Thatcherism, and are preparing to resist.

We call for an end to economic secrecy: companies should be forced to ‘open the books’ to trade union scrutiny to see where the profits have gone.

We say: “don’t subsidise, nationalise”. We need socialist policies to avert an economic crisis. If the government is going to invest public money, those industries should be run in the public interest, under democratic workers’ control, as part of a plan of production to meet the needs of society, not producing for the profits of a few.

On a socialist basis, nationalising the transport infrastructure, air, road, rail and bus would mean a rational, integrated transport policy, protecting jobs and pay, and the environment.

It would mean protecting the industrial supply chain, through nationalising Rolls Royce, Honda and any others threatening job cuts. It would mean linking up with the universities to research and invest in developing environmentally sustainable transportation for the future.

What could be applied to transport could work for every field of the economy. A policy of socialist nationalisation, linked to a national plan of production, would go hand in hand with policies to nationalise the banks and the 100 big corporations that dominate 80% of the economy. These measures would ensure workers themselves could democratically direct the development of the economy.

Reverse austerity

Rather than falling into a new economic depression, leading to another lost generation, we could then reverse the previous decade of austerity by resourcing a mass public works programme to rebuild society. Council-run care homes for the elderly, affordable council housing for all, leisure centres, youth clubs, new schools and hospitals could be funded with the vast hoards of cash lying idle in the bank accounts of the big corporations. It is estimated the top 100 or so companies currently hold £750 billion in cash reserves.

On the basis of democratic control and workers’ management, not only could we protect jobs, industries and services, but truly make them efficient by investing in new technology that could vastly increase productivity, through robotics and 3D printing, for example.

On a capitalist basis this leads to mass unemployment, misery and wasted human resources. But on a socialist basis the benefits would be socialised, leading to a shorter working week with no loss of pay, allowing workers to play a full role in the day-to-day running of a new society.

As the capitalist crisis unfolds, we face a vital task of linking up with organised workers in the trade unions looking to fight back, and providing a socialist programme to protect jobs and transform the economy.

Trade union leaders have echoed the idea of some state intervention as a means to protect jobs and industry. But experience will quickly prove the limitations of such policies in terms of government funding and ending the economic downturn.

Workers will see that subsidies don’t protect jobs or wages, just boardroom pay and perks, and look for more effective policies to fight for. It is inevitable that some will take action in the form of strikes and factory or workplace occupations. These struggles will rapidly transform the unions, pushing leaders to the left, or replacing them from below by those who are prepared to fight.

Unions transformed

We are on the brink of a new era of workplace struggle that will transform the trade unions from top to bottom. The Socialist Party will seek to actively assist this process, developing broad lefts where they exist, or establishing new militant rank-and-file organisations that can offer real leadership to the working class.

Out of these struggles it will be much clearer who is on our side, as the capitalists and their state use all the anti-trade union legislation to try and obstruct an effective fightback. Many workers will see the need not just for industrial action, but also a political voice that can win support for their struggles and advance a revolutionary programme and strategy for a new socialist society run on entirely different lines to the capitalist profit system.