Deepen Slump

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So acute is the crisis of British and world capitalism that its survival now depends on policies which on top of heaping untold misery onto the working class, will bankrupt whole sections of weaker capitalists.

This is the message from the Tory decision last week to raise the Bank of England's Minimum Lending Rate to a record, crippling 17%.

The effect, after a week in which the Treasury itself had already forecast a drastic rise in unemployment, 20% inflation and a slump in output of 1-2% next year, will be shattering.

As one banker told the Observer, "This is the signal that the recession has now arrived and the consumer boom is at an end." What does the new rate mean?

*Mortgages must rise to 14% or even 15%-further cłobbering those workers struggling to keep a roof over their heads. At the same time rates and rents will firms face interest rates of up to 20% on borrowed money. Other firms struggling on the boderlines of profitability will be driven to the wall. Thousands of jobs will be axed.

*This new constraint or employers is consciously designed to force -them intr resisting pay claims that seek tr protect workers' living standards. In this sense it is the counterpart to the savage cast limits imposed on local council: last week by Environment Secretary Heseltine, which will also axe some 150,000 jobs.

*And the 17% lending rate will also bring about a renewed round of spending cuts in the social services as the cost ol local authority borrowing is driven up.

Many of the bigger employers have loyally wel comed this latest Tory mor:Chancellor Howe intending to step up their propaganda campaign threatening workers with redundancies if they press "excessive" pay claims.

Nor have there been any complaints from the bankers, who stand to profit from the increase in interest rates (and possibly also from the new opportunity to borrow funds at lower rates abroad to lend out at 20% or more in Britain).

The main employers to suffer from the new measure will ironically be in those small firms which Thatcher has promised to assist!

But the full brunt of the attack' will fall of course upon the working class, which on every side now faces the ravages of an economic system which in Britain and on a world scale is quite obviously wildly out of control.

Indeed while British capitalists complain about their "inadequate" profits and demand workers sacrifice jobs by the thousand in order to restore "viability" , giant US corporations such as Chrysler and Ford are running colossal losses, and waging exactly similar attacks on their workforce!

The crisis is not a "British" ot an "American" -crisis. It is the outcome of the anarchic world capitalist system-a system which produces commodities not to satisfy social neea, but to accumulate private profit.

When that profit is not available in sufficient quantities, the capitalist system turns to the wanton destruction of whole sections of the productive forces, and human progress is thrown into reverse in the quest

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INTERNATIONAL-

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02! New investment plans in industry will grind to a halt, as