Lindsey German on the Truss implosion and its aftermath

The spectacular implosion of Liz Truss’s government is something to behold. It’s only October and already Britain is on its fourth Chancellor in a year and will be on its third prime minister of 2022 within days or weeks. Peter Oborne, the one-time Tory journalist, has pointed out that the country has never been worse governed. The thing that really astonishes me about Truss is how anyone in close contact with her could possibly think that she could be prime minister. The crazed sect that she and Kwarteng represent has seen its ideas face the cold light of day and immediately crashed and burned. The brutal defenestration of Kwarteng and her imminent demise demonstrate how ruthless rule by the bankers and the ‘markets’ can be.

It is clear however that while the dynamic duo are toast, the fallout from their mini-budget is being used by those same bankers to impose further attacks on workers through public spending cuts and tax increases. This will result in even greater pain in a society where services have been cut to the bone and where inequality and falling wages have long been the norm. The new chancellor, Jeremy Hunt, who is effectively running the show, has made clear that his new budget, appropriately delivered on Halloween, will be harsh. He talks of ‘very difficult’ decisions that will have to be taken on tax and spending, and says that all government departments will have to ‘find efficiencies.’

The Bank of England governor, Andrew Bailey, and the markets more generally have succeeded in corralling a government and will now be determined to stay in the saddle. Hunt is clearly their choice and Bailey told reporters at the weekend that theirs was a ‘meeting of minds’ on the question of ‘fiscal sustainability’. What we are seeing here is straightforward: the British economy is not growing and is faced with problems of inflation and low productivity, the IMF predicts global recession, there is a growing mood of desperation among many households over the cost of living crisis, mortgages are going up. The ‘solution’ to all these problems will be not to tax the rich or to rein in the hedge funds, not to deal with growing inequality and real misery, but to impose further burdens on working-class people. These will include further cuts in education and health, already in extreme crisis this winter, a probable ringfencing of defence spending (which already receives above-inflation increases) and attacks on pensions and benefits for the poor, disabled and sick. At the same time, pay packets which have been already hit by a decade and a half of falling real-terms wages will face the double whammy of high inflation and tax rises.

This deliberate strategy of impoverishment is being implemented by a man whose record in the NHS was dire and helped lead to the understaffed, underfunded service which is now in acute crisis. His appeals for ‘national unity’ in ‘difficult times’ should be rejected. The city bankers brought us the last economic crisis in 2008 – for the most part they emerged unscathed while the rest of us are still paying the price. The very wealthy have piled up their billions, refuse to part with any of it and are indifferent to any suffering. They will do anything to resist the most minimal encroachment into their wealth, and applauded the abolition of the top tax rate.

The Tories and the bankers will also try to resist the rising tide of industrial action which is in the pipeline. Alongside the budget we can expect further anti-union legislation, including maintaining essential services and forcing a new ballot every time an offer is put. We are already seeing scapegoating of strikers and this will get worse as the Tories try to deflect the blame for this crisis onto divisions between workers. Suella Braverman is also planning further legislation to stop protests such as those from XR or Just Stop Oil. So state repression is there to deter anyone who wants to protest.

The first question here is one of democracy. Unelected bankers should not have the power to wreck governments, yet they have. We can only imagine what would have befallen a Corbyn government which tried to implement even fairly modest reforms such as nationalisation. Nor should the Tories be allowed to continue in office for another two years after the appalling shambles of first the Johnson then the Truss prime ministership. There must be a general election now. And – since the Tories know they are certain to lose this election – there must be agitation from outside parliament to force them out.

Keir Starmer’s Labour is getting record levels in the polls. This has little to do with him and very much to do with his strongest asset: he is not Liz Truss. Nevertheless, he is going to be the beneficiary of her failure. He is already preparing for government by continuing his purge of the left, with left candidates suspended, barred from shortlists and in the case of two left MPs facing reselection (one, Sam Tarry, has already lost that battle). His ultimatum to the Campaign group of MPs over association with Stop the War back in February was designed to prevent any serious left challenge in parliament in the event of a Labour government.

Much of the ruling class has given up on this Tory government, and even Tory MPs are resigned to being out of office for a long time. Some of them even talk about the end of the Tory party. So Starmer is a suitable plan B for the ruling class, and he won’t disappoint, stressing patriotism, national interest and fiscal rectitude. Starmer’s government will have echoes of the Ramsay Macdonald Labour government, when in 1931 he supported a budget attacking the poorest at the behest of the bankers.

The second question we have to face is how does the left respond? While many are looking for an alternative electoral party now, it seems to me this will be hard to establish while Labour looks like a viable government, on however right wing a basis. But after an election, that will change rapidly. We prepare for that now by supporting all the struggles going on. This is particularly important with the strikes taking place and those being balloted for. In particular, we have to argue for escalation and coordination of the strikes. The employers are so far not prepared to increase their offers, and in the case of Royal Mail have launched an intimidatory threat of job losses to deter the strikers. We can’t afford to just dig in and wait. There would be massive support for further including indefinite strike action by a group of workers.

The People’s Assembly demo on 5 November is crucial here. Supported by many of the main trade unions, and key campaigns, it can be a show of working-class strength through London and force real political change onto the agenda. That can help build confidence in localities and among the union rank and file who are balloting for strikes.

There is a third issue however and that is the need for political organisation of the far left, which is what Counterfire stands for, which argues that the key to change does not lie in parliament. The Russian revolutionary Vladimir Lenin made the point that the real power in society does not lie in its elected institutions but in the unelected forces of capital and the state. We have had a great case study in that over the past week. This left needs to grow quickly in the face of the mass upheaval we are going to see.

This week: On Tuesday I will be going to the showing of John Pilger’s film, The Coming War with China, where he will be doing a Q and A. I will also be following closely the debates at the TUC, where a motion on supporting increased arms spending is on the agenda. If you’re in Brighton please join the Stop the War/CND lobby against it. On Saturday I’m going to see a Harlem Renaissance play at the National Theatre, Blues for an Alabama Sky – should be interesting.