British capitalism is gravely ill! We need emergency services.

Cameron's Guardian article (Nov 17) is cynical. It tries to undermine Labour-voting, white-collar public sector workers who read the Guardian, by emphasising how bloody foreigners look set again to wreck Britain's economic progress so far achieved under the Coalition government. This is designed to reduce any possible confidence that a Labour government would have the means to restore public services and that the priority is still the much more basic need to 'save' the economy and therefore to vote for a 'steady pair of hands.'

The British economy is shakier than Cameron admits. In 2014 the Coalition have increased the government's spending deficit, despite deficit reduction being the government's number one purpose, despite falling unemployment, despite the low rate of inflation and low interest rates, despite wage increases creeping above inflation in the last quarter for the first time in 4 years and despite all the cuts. Why? Because British working class people have had the greatest reduction in the value of their incomes over the shortest period since records began. (For example 4 million people now 'work for themselves.' They are, on average, two-thirds poorer, not including pension and holiday benefits, than they were when they were employed.) And the British system has still managed to saddle them with the highest personal debts of any European country. So, their taxable income is less than it used to be historically, and the Treasury miscalculated.

The deficit is here to stay. It is not only the poor who pay less taxes. Besides the hacking away of services, of welfare payments and of incomes of the working and non working poor, the rich are also not paying much tax and they are certainly not investing. In the case of the rich it is the increases in their incomes that has led to their reduction of tax payments. The spectacular concentration of wealth in the hands of the rich in the last ten years, notwithstanding the 2008 banking bust (which saw precisely no brokers or bankers jumping from office windows) has led to immense new centres of wealth in tax havens, amounting, according to a recent UN report, up to $40 trillion. (The wealth of everybody in the world, including all of their possessions, is estimated to be $241 trillion.) In addition, none of the big corporations based in Britain pay anything like their national tax bills, as these giant companies are now technically located behind a brass plaque on a post office door in a Swiss village called Zug (in the case of Boots) or Luxembourg (in the case of Vodaphone) or Monaco (in the case of Top-Shop.)

Additionally big corporations in Britain are on investment strike. They are holding vast reserves of Capital estimated at £75 billion. Why? Because Britain is a mainly low tech, service economy. Speculative enterprise on the stock exchange (boosted as it was by huge injections of Quantitative Easing) and investment in the BRIC economies seemed to be the ticket, but even these possibilities are now fragile. The idea that there will be sizable private investment in new technologies and production is laughable. Just look at the profits guarantee over 20 years that the pro nuclear government needed to make in order to get one power station built.

What all this boils down to is that the government's deficit spending can only be resolved through further cuts and tax rises on essential spending. And so the Tories are winding up for a new package as severe or more severe than the last. (Labour says it will reduce the deficit but 'more fairly.') Britain will then become a country where for a decade (at least) major social services were cut to a half or less of their size, and the new, shrivelled provision that emerged after this decade becoming a permanent fixture, but one dealing with an older and larger population. And of course even this prediction may be optimistic. There is no reason to assume that productivity (fuelled by investment) or incomes (fuelled by stronger bargaining power of workers) or increased taxes from the rich (fuelled by law and coercion) will rise to a point where the government's overall tax base stops dwindling. No. The total reconstruction of British capitalist society, towards the privatisation of all essential services, in the direction of the USA, or more realistically Japan, may well be well underway and will shortly become irreversible. They may have to be rebuilt from the ground..

Which means that austerity, whoever promotes it, and however they present it, is the road to hell. The reality emerging after the first five years of this policy is that it is, and has to be, a virtually permanent priority for our rulers. They are prescribing a revolutionary change to the world of the workers, the sick, the old, indeed the whole of the working and non working poor. They are rolling back all the main social gains of the struggles of the 20th century.

Equally radical measures are as required to reverse this future as those being used to create it. Only the boldest government, determined to reduce inequality by direct measures like removal of all anti-union laws, which would increase the power of workers to expand their portion of national income and therefore their tax payments, and to force open investment in new production by law and by punitive seizure in the event of recalcitrance, can reverse this destructive process.These and other far reaching inroads into the tremendous resources and power that big capital has now built up will be required.

The first step in this direction will be taken as a truly politically independent, mass movement against austerity emerges that will provide the engine room for the political developments needed. The Peoples Assembly is the best step yet taken in that direction. Its growth and success can be a real factor in changing our future.