Pound soars: business slumps

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Deing SOlE dories, Just as tne "sterling tion by the Tories-the chance crisis" under the Labour governto buy into lucrative sections of ment equally signals an attack In the midst of a gathering world recession, the Tory government has embarked on policies that will create a devastating slump in the British And while certain sections of British capitalism-in particular the bankers and certain big monopolies-feel confident that they can actually strengthen their position, boost profits and grow fatter despite this threatening slump, other, weaker, sections are far less enthusiastic.

They see in the swingeing cuts in public expenditure and the consequent wholesale increase in unemployment the prospect of falling markets, falling profits and eventual ruin.

Threat to profits

Other sections of capitalists, dependent for their profits on export. markets, see the Tory policy of keeping the value of the pound artificially high in the foreign exchange markets as a threat to their profitability.

The higher the value of the pound, the more British exports cost on the world market.

This not only makes them less competitive than • the products of international competitors, but also because of this makes it much harder for employers to pass on the effects of British inflation in increased prices-thus further squeezing profit margins on exported goods.

This squeeze is not merely affecting small producers.

Top managers of both ICI and Courtaulds have taken to news conferences recently to deter the Tories from their high interest rate policy-which they see as part of their strategy to curb inflation.

They plainly regard the exposure of British capitalism to the full brunt of international competition as a necessary form of treatment-similar to the 'cold turkey' withdrawal of heroin from a long-time addict.

Rationalisation

The Tories look to the 'strong pound' to spur on employers in each industry to new and urgent steps to increase exploitation on the shop floor through rationalisation and speed up-and thus drive up the rate of profit.

It is no coincidence that ICI, Courtaulds and CBI spokesmen have all concluded their moans and groans about the 'strong pound' with firm statements that the only answer is "more efficiency" at the point of The Tories in other words are using the strength of sterling to speed up the process of 'natural selection' in industry, and to weed out the weaker, least efficient, most antiquated sections of British capitalism, which will inevitably go to the wall-at the cost of thousands of jobs.

EN YON SAO Mixed feelings in the Stock Exch But the paradox is that they are consciously doing this at present at the expense of the balance of payments-since attractive, modern imported goods are made relatively cheaper by the strength of the pound.

imported cars last month took over 50% of British sales: other imported goods are outselling their British competitors both on price and quality.

The Tories' purge, in other words is to be ruthless and thorough-and one from which all but the most determined employers are inclined to pull back-particularly at a time of world-wide recession.

This accounts for the gathering pessimism amongst British industrialists as reflected in the CBI's latest quarterly survey, which predicts a further drop in the rate of return on capital (to around 3%), a decline in industrial activity and a drop in industrial investment over the next year.

Frighteningly bad

Even the Chancellor, Sir Geoffrey Howe, has been stalking the country proclaiming that the immediate outlook for British capitalists is "almost frighteningly bad."

But of course if certain employers run into crisis with their own companies they are haina affarar enma ramnoncanationalised industry.

The Commonwealth Conference has produced a state of hysteria among the news editors and leader writers of the capitalist press.

Not only have they had to endure the 'insult' of the Queen being lectured on politics by a town mayor in Zambia, but they have actually received pictures which clearly show Nkomo sitting in the same room as Thatcher-without apparent rufflement on either part.

The analogy drawn by most of the press beneath these shocking pictures was that of the IRA sitting down with Tory ministers. They muttered about murderers being invited to share When Nigeria nationalised BP's oil production and refining processes the howls of rage reached a crescendo.

It seemed that the Lion of Britain had travelled to darkest Africa only to have its nose pulled.

Lastly it became clear that Mrs Thatcher had begun to realise that the Owen Plan to sell out the black masses of Zimbabwe had many attractive features which she ought to adopt.

For the Express and Mail it was too much. Both papers reached the same conclusion on the same day.

If the choice lay A new devastating slump BP, British Airways , British Aerospace, chunks of NÉB holdings and property in the New Towns are just some of the plum offerings being sold off by the Tories.

No such options are available to the working class. The future for workers if the Tories are allowed to operate for five years is absolutely frightening.

Unemployment will soon reach 2 million: inflation continues to soar unabated. On the shop floor, savage' and desperate employers will be waging a relentless struggle to take away hard-won working conditions.

Signals attack

A 'strong pound' under the on the working class. recognising Muzorewa and preserving the Commonwealth, then the Commonwealth should be ditched.

This was a historic point for both papers which have always regarded the Commonwealth as a faded reminder of imperial Britain.

But if the bitterest pills were being swallowed in Africa the angriest outbursts were reserved for the United States and nearer home as the US State Department suspended the sale of magnum revolvers and other weapons to the RUC in Northern Ireland.

Candidly, the Telegraph said:

"Ulster has proved in many respects to be a training ground of inestimable value: military morale in the Province remains astonishingly high, probably because it is the only place where a British soldier can now expect to hear a gun fired in anger."

But it pointed to the decline in army recruitment, the resilience of the IRA and the wavering of sections of the British bourgeoisie as major danger signals.

"The only feasible atternative to the static policy now being pursued is a deliberate intensification of the security campaign plus political measures designed to emphasise Ulster's status as an integral part of the Kingdom."

The oniy way forward under such conditions is for workers to wage the most tenacious fight -through strikes, occupations and mass class action-to defend existing jobs, public services and living standards, and to prepare for the political struggle necessary to bring down the Thatcher gang of bankers and profiteers.

Socialism

This requires the construction of a revolutionary party capable of advancing a clear programme that exposes the collaboration of trade union and Labour leaders with the employers and directs workers towards the necessity for a planned, socialist. economy as the only means of defending and improving the working class against the ravages of the capitalist class.

These measures turn out to be an old story. The reintroduction of internment and the physical blockading of the border between Ireland north and south are the measures which the Telegraph advocates.

The Observer-under Conor Cruise O'Brien, every bit as militantly reactionary on Northern Ireland as the Telegraph-called the arms ban "significant and disquieting"

The press likes the rules to be simple. Murderers are those who oppose British imperialism, such as Nkomo and the IRA. All other deaths have different labels attached.

A clear example in Britain itself completes the picture. Last winter while the public sector workers were taking action over pay, a consultant had only to hint at a decline in standards for the press to indict the hospital workers for murder.

Now when Joseph and Jenkins launch an attack through the cuts on the lives and health of the working class those same papers have suddenly become worldly wise about the whole affair.

The Telegraph summed this : dn "It does not need to be said that the hooligan propaganda about the cuts being likely to cause 200 deaths, to take patients off kidney machines and so on is pure agitprop for the unwary."