RECOVERY FRAUD CRASHES workers' pay

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Despite their stories of the economy having finally turned the corner, of light at the end of the tunnel and a new period of stability and expansion, workers are now being presented yet again with the bill for yet another series of "rescue" measures designed to bale out British capitalism.

The package of measures announced last week by Chancellor Healey contains three lines of attack on workers and the middle class, aimed at cutting real wages and halting any expansion of capitalist production:

*A 22% increase in the national insurance surcharge on employers will now be imposed in October, thus giving an added boost to existing mass unemployment, and encouraging employers to increase prices.

*Bank interest rates are raised to - 10%-thus forcing building societies to increase mortgage rates by £2.50 per week on the average £10,000 loan.

This increase, plus the likely price increases flowing from Healey's measures, is already enough to wipe out the entire value of the pay settlements proposed for Phase 4!

*A clampdown on bank deposits is designed to put a squeeze on lending-thus hitting those seeking or holding loans and overdrafts and striking another blow at economic crisis.

Bogged down

In fact while workers have had a drop in living standards unparallelled since the 1850s forced upon them by Labour leaders, British capitalism remains bogged down in the midst of a growing international crisis.

At the centre of this crisis is the US economy, which has expanded production at the expense of running this year an astronomic $37 billion per year deficit on balance of payments.

In an effort to prevent this deficit leading to a run on the dollar and to prevent the latest sharp increase in US prices leading to a new round of inflation, US banks have now raised interest rates to the highest level for three years.

These interest rates will have a depressing effect on every other capitalist economy.

But US employers, concerned at their failure to compete with foreign industry, are also calling on leading industrial nations to limit state financial backing to ailing industries.

Imperialism

Such limits would threaten the very existence of sectors of industry in Britain as well as in France and Italy, while furthering the interests of US imperialism in penetrating the European market and enabling multinationals US to defeat such state-backed competitors as British Leyland and Rolls Royce.

Meanwhile the steel industry remains a focal point of the capitalist crisis.

US steel firms are demanding the Carter government impose still stricter protectionist measures against steel imports.

Cutback

Now the EEC commission is calling for a 20% cut in steel output-from 36 million tonnes per quarter to 29 million tonnes.

This will have the effect of intensifying the drive towards speed-up and closure throughout the steel industry internationally.

But the cut back in this basic commodity-a raw material for so many industries-is perhaps more important as an indicator of the stagnant or declining level of production internationally.

The capitalist system has no regard to the unmet material needs of workers and the exploited peasant masses throughout the world: it is a system in which production takes place only for private profit.

Now that those profits are threatened by the internal contradictions of capitalism itself, the ruling class in each country is resorting to protectionist measures, cutbacks in production, 'austerity' measures, wage-cutting and speed-up in order to increase the rate of exploitation of the working class.

These are exactly the policies now being implemented by the Lib-Lab coalition government.

Labour leaders see their task as restoring the "health" of British capitalism in the hopes of eventually winning a few concessions for the working class.

The last four years have confirmed how reactionary and false are these hopes.

In defending British capitalism at a point of crucial weakness the Labour leaders and their cronies in the TUC have launched the most vicious attacks on the working class.

There. is no solution along this path. The defence of jobs, conditions and living standards can only come in the struggle to

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Two weeks ago the "Trotskyists" of the French LCR (sister organisation of the British IMG) organised two extraordinary days of debate in Paris, on May 1968 and "Eurocommunism". The event attracted 10,000 people and turned out to be a discussion not between leading LCR members and other political currents claiming to be Trotskyist, but between the LCR and an assortment of Stalinist and bourgeois politicians! Dissident right wing CP intellectual Jean Ellenstein was there, with right wing ex-member of the CP Roger Garaudy. The Spanish CP sent no less than its head of international affairs, Malo de Molina, to the debate. The mostmastonishing platform, however, was composed by representatives of the LCR and its paper 'Rouge' (left) alongside General Becam (third from left) and deported. Hugo Blanco Admiral Sanguinetti (right), representatives of the "left wing" bourgeois forces in the popular frontist Page Z It is stil not certain whether Peru's elections to "constituent assembly" that were postponed two weeks to June 18, in response to the general It is significant 'that no member of the Communist Party appears to be among those The CP supported the Velasco regime but has since cooled towards its successor. Union of the Left.

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deported Peruvian leaders