Economy in recession

Defend workers’ jobs and pay

Socialist policies needed

“Buy one car, get one free”, was the desperate offer of a Colchester car sales broker. Nationally, car sales have fallen to a level not seen since 1966. And now falling consumer spending and the credit crunch are impacting heavily on jobs; British businesses have laid off 300,000 workers in the last three months. Finance, property and construction have been worst hit.

Judy Beishon

News like this led the Bank of England to drastically cut its interest rate by a third – the biggest percentage cut in over half a century – and to warn of a coming “severe contraction”. The talk everywhere is of a deep, prolonged recession.

Further interest rate cuts are likely and other emergency measures are being seriously discussed, such as tax cuts. But these limited measures won’t stop the recession from worsening. Too many people are massively overburdened with debt or insecure about their jobs for some extra pounds delivered via tax or interest cuts to reverse the downward trend in spending.

The disgusting, short-term greed and arrogance of the top bankers was shown when all but two of the major banks had to be dragged kicking and screaming by the government into passing on the 1.5% interest cut to their customers. This does not mean that New Labour has changed its fundamental stance to one of acting in favour of ordinary people. Despite the hundreds of billions of pounds of public money that he has made available to several banks, chancellor Alistair Darling has repeatedly said that he does not want to interfere in banks’ “commercial decisions”.

The ungrateful bank chiefs still asserted that they will not be “brow-beaten” into passing on interest rate cuts next time, moaned that they are “not charities” and that base rates are now so low that their “margins are desperately small”. While the Bank of England base rate has been falling, many banks have actually increased the interest they charge on credit cards, instead of passing the benefit on.

They want fat ‘margins’ so that they can continue to pay themselves obscene salaries and bonuses and so that their shareholders can go on receiving huge dividends. They are raking off public money for this, at the expense of working and middle class people who are losing their homes and jobs, and of many more who will bear the burden of increased government debt in the future.

The only people who should lose their jobs are the top banking bosses and government ministers who are in league together to benefit the fat cats at workers’ expense. If the banks can be given billions, why can’t the hundreds of thousands of workers’ jobs be saved?

And it is abhorrent for the government to take an arm’s length distance from the banks’ decision-making when the public money put in justifies – to most people – taking complete control. All the banks should be fully nationalised immediately, and run by democratically elected committees of workers’ representatives from the finance industry and from wider society.