Money for wages not missiles

13th March 2022

Homelessness – likely to increase due to the current crisis

Tenant referencing agency, HomeLet, indicated recently that the average rent across the UK rose to £1,069 per month in February, up 8.6% on the same month last year when the figure stood at £984 per month.  This average masks regional variations, with Greater London rents up by 11.8% over the year, to an average £1,757 per month at the highest end of the spectrum.

Over the same period lender Nationwide have indicated that house prices have hit a high during February, with the average passing the £260,000 mark for the first time.  The increase of almost £30,000 over the past year is, according to Nationwide, the biggest cash increase in house prices in the past 30 years.  The cost of buying a house is now equivalent to 6.7 times average earnings, an increase from 5.8 in 2019.

As inflation rises, the Bank of England base rate also increases, with added pressure to be faced by those on variable rate mortgages.

At the same time those struggling to cope with the increase in energy bills, most of whom will not be living in £260,000 houses, are facing quotes as high as £3,500 a year for fixed price tariffs.  British Gas have dropped fixed price tariffs completely on the basis that it cannot offer customers “fixed prices based on this price volatility right now.”

While British Gas are clearly hedging against the impact of current events in Ukraine the rent, house price and current energy cost rises cannot be laid at the door of the Russians, however much the government may which to deflect blame in that direction.

Osama Bhutta, campaigns director at Shelter summed up the situation for many stating,

“Our emergency helpline is taking call after call from people who just don’t know how they’re going to keep paying sky high rents and make ends meet.  People on lower incomes are being squeezed so hard they’ve got nothing left, and when people can’t afford their rent they face eviction and the very real threat of homelessness.”

The TUC have called upon the government to address the squeeze on wages faced by most workers by ignoring calls from Andrew Bailey, Governor of the Bank of England, for pay restraint but by adopting a programme of boosting wages for the lowest paid.   In a statement ahead of the Treasury’s Spring Statement on 23rd March, the TUC stressed,

“…that workers are now being asked to bear the brunt of rising global prices, having already borne the brunt of a decade of austerity, the hardship of the pandemic, and the longest pay squeeze since the Napoleonic wars.” 

The TUC statement calls for a different approach, which recognises that boosting workers pay will also boost the economy, without leading to an inflationary spiral.

The TUC statement outlines a means by which the government could choose to tackle the crisis within the confines of the capitalist economy and can be found in detail here

However, while the measures outlined by the TUC form the basis for putting pressure upon the government to change course, they by no means go far enough.

The current crisis is fundamentally one of the capitalist system, which is based upon inequity and exploitation, which is making private landlords, energy companies and arms manufacturers rich at the expense of the many, who generate that wealth through their labour.

The danger for working people does not come from increased wages, it comes from spiralling rents, inflated house prices and the threat of war, which has become more of a reality through the combination of the provocations of NATO and the expansionist designs of the oligarchs in Putin’s Russia.

The crisis in the Ukraine has resulted in calls from leading Tories to increase military spending, already at obscene levels in Britain.  This can only add a further burden upon working people as more money for guns and missiles will mean less for health, homes and education.  An increase in profits for arms manufacturers will also do nothing to bring about a diplomatic settlement to the crisis in Ukraine, vital for both the people of that country and for the Russian people, hoodwinked by the nationalist designs of Putin and his cronies.

There is little doubt that Boris Johnson and his cronies in Britain will do all that they can to use the crisis in Ukraine to divert attention away from the domestic issues which continue to plague workers in this country. 

On the international front, war in Ukraine has undoubtedly generated a humanitarian crisis which must be responded to, as there should be a response to the Saudi bombing of Yemen, using British missiles; the daily tribulations and land grab faced by the Palestinians; the migrant crises resulting from NATO interventions in Afghanistan, Libya and Syria; and the illegal 60 year long blockade initiated by the United States against the people of Cuba.

The only one of the above, about which the British establishment see fit to express outrage, is the situation in Ukraine.  Nothing about this conflict should be taken at face value.  The agenda is very much about re-aligning the security architecture in Europe and that will not benefit the working people of any of the nations involved.   In the short term more emphasis upon peace talks and a negotiated settlement, rather than pouring weapons into Ukraine, would at least be a start.

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