Carried at our AGM on January 19 2023
Considering that, with regard to the world economy…
- global debt – of households, private firms and governments – now equals 355% of global GDP, up from 120% in 1980 and 230% in 2000;
- capitalist economic growth, in the UK and around the world, has for 40 years been predicated on ever-increasing debt, on a vast expansion of super-exploitation of low-wage workers in so-called developing nations, and on vast environmental destruction;
- the return of inflation signifies that what Claudio Borio, head of the Bank of International Settlements called the “debt-fuelled growth model” has come to an explosive end—the market value of companies traded on the world’s stock markets tumbled $25tn (a fifth of their value) in 2022, while government and corporate debt lost $9.6tn (16% of their value);
- with Europe, North America and China now simultaneously heading into recession, and with their central banks compelled to confront the inflation monster with higher interest rates, this wealth-destruction has only just begun, and the coming global recession is likely to be far deeper and long-lasting than our rulers dare admit, even to themselves;
- even before the US Fed, BoE and ECB began sharply hiking interest rates in mid-2022, the IMF reported that more than 60% of ‘developing countries’ were suffering acute ‘debt distress’;
Considering that, with regard to the UK economy…
- the U.K.’s current account deficit (exports minus imports, plus net cross-border flows of profit) over the next five years will average 3.9 per cent of GDP, according the IMF. This is higher than any other G7 economy, and can only be financed by borrowing from overseas lenders—who are sure to demand a juicy ‘risk premium’;
- the UK government’s budget deficit (total govt spending less total tax receipts) during the current financial year is set to top 8% of GDP, according to the National Institute of Economic and Social Research. This exceeds the budget deficit of any other G7 economy, and is higher than at time since WWII (except for 2008-9, the height of the global financial crisis, and 2020-21, during the covid lockdown).
- without spending cuts and/or tax rises, this huge deficit is set to increase, since the recession now in its early stages will increase spending (more people on the dole) and reduce tax income;
- as a result of ‘quantitative easing’ (QE)—whereby the Bank of England buys debt issued by the government in order to force interest rates lower and to pump money into the economy—half of the £1.5tn added to the national debt since 2008 has been bought by the BofE. But now, under pressure from finance capitalists, the government has announced the end of QE, thus all deficit spending going forward must be financed by borrowing from private lenders;
- In contrast to the big falls in stock markets around the world reported above, the FTSE 100 ended 2022 slightly ahead—this reflects the huge weight of planet-destroying oil and mining companies in the London stock market, and also of pharmaceutical companies boosted by vast fortunes made from the Covid pandemic;
Sheffield Left therefore concludes…
- that the centrepiece of any attempt to stabilise the U.K.’s capitalist economy, whether by the Sunak government or one headed by Keir Starmer, will necessarily be a savage and brutal attack on the living standards and democratic rights of working people. Conversely, any successes in defending ourselves from this assault, however partial, will inevitably deepen the economic and political crisis in this country;
- that the planet-destroying oil and mining corporations headquartered in the UK must be confiscated and dismantled;
- that all debt owed by so-called developing countries to imperialist governments and private investors must be cancelled;
- that no peaceful, parliamentary, capitalist solution to the crisis we face is possible—however unlikely or even far-fetched a revolutionary solution to this crisis might seem, it is precisely this that is dictated by the nature of the crisis itself;
- that, in the words of 19th-century Cuban independence fighter José Martí, “a people that cannot come to the defence of another will never be able to defend itself”— internationalism and international solidarity must be the bedrock of the movement we are seeking to build;
Sheffield Left therefore resolves to connect its participation in strike battles, campaigns to defend the NHS and social services, campaigns in defence of democratic rights and against environmental destruction, fights against racism and fascism, and solidarity with migrants and asylum seekers, with patient explanation of the truths summarised in this resolution; and to seek united action with all who agree with its premises.