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Editorial: Shrinking real incomes are government policy – and the working class needs to fight back

STORM clouds are gathering over Britain.

Consumer confidence is the lowest since records began. Shop sales have plummeted as uncontrolled inflation begins to bite, with households reeling under the impact of soaring energy and food prices. 

And it is just beginning. The figures frightening economists reflect activity in March, before the 54 per cent leap in energy bills, before Chancellor Rishi Sunak ramped up our National Insurance payments. 

Next month will be worse. So will the month after that, if the war in Ukraine continues to play havoc with the global grain trade — and with the United States bedding in to supply a “protracted war” there rather than push for a negotiated peace, it will. 

There’s no respite after the summer; analysts expect further rises in the energy price cap in the autumn. 

The cost-of-living crisis is set to be worse than the lost decade for pay growth inflicted on Britain by the “austerity” drives of the Conservative-Liberal Democrat government from 2010. 

Like that government, the Tories will try to blame someone else for the pain. 

Today’s culprits will be the Russians (“the Putin price hike,” to quote Joe Biden) and the after-effects of the pandemic. 

Neither can explain why the government cannot limit price rises, as the French government with its publicly owned energy sector has (to 4 per cent compared to the 54 per cent here), or tax the ballooning profits of oil and gas extractors or the swollen fortunes of a billionaire class who have got richer than ever during Covid to fund some relief for ordinary people and invest in cash-strapped public services.

For now, jittery Tories are focused not on the big lie — the idea that government is powerless to protect living standards — but on the little ones, the misleading accounts Johnson has offered of his lockdown-breaching shenanigans in No 10. 

That matter is serious, given the enormous sacrifices imposed on the rest of the population during lockdowns, but it is not the key question for the left. 

Given the scale of the threat a significant hit to living standards poses to Tory fortunes, we have to ask why ministers are so determined not to act — not to bring in the emergency Budget called for by the TUC, not to ban fire-and-rehire tactics that are forcing down pay in the private sector while they do that by government fiat in the public.

The pandemic did dangerous things. It forced millions onto social security, an eye-opener for many who had no idea how punitive and inadequate the system is. 

Clapping for carers and ministerial tributes to “key workers” raised expectations that years of being undervalued and underpaid would soon be addressed. 

This attitude built on the shift left in British politics driven by the Corbyn movement from 2015, when the popularity of public ownership and wealth redistribution became clear, forcing the Tories to adopt the rhetoric of “levelling up.” 

Labour shortages as we came out of the pandemic placed market pressure on wages to rise, and determined action by trade unions is continuing to win big pay awards at individual workplaces. 

That is not the bargain-basement economic model pushed by Britannia Unchained, the prescription to slash public spending and allow corporations to set pay rates unchallenged by unions, whose authors include the current home, foreign and business secretaries. 

If expectations have been raised, they need to be lowered. Falling living standards are government policy. Wages must go down so that profits can keep going up.

This is an attack on a huge scale. The official opposition is nowhere, far more concerned with stamping out socialists in its own ranks and opposed to a fightback on wages or privatisation. 

The counterattack will not come from Westminster. We have to organise it in our workplaces and on our streets.

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