Sept 21, 2023. An online public meeting organised by the South-East Branch of the Communist Party will discuss the local steps needed to build a united front against continued austerity. Thurs 21 Sept 19:30-21:00, Register Here.
- Alex Gordon President RMT
- Sara Green NEU
- Stewart McGill Convenor CPB Political Economy Commission
Inflation is about profiteering, not working people asking for higher pay.
Profit margins for the UK’s biggest listed companies jumped nearly 90% in the first half of 2022 over 2019; US profit margins reached a 70-year high; 60% of inflation was due to companies increasing their profit margins, only 8% due to labour costs increases (Unite, Economic Policy Unit). Even the IMF have estimated that corporate profits accounted for almost half the increase in European inflation since 2021.
The Government’s solution to inflation? Cut workers’ livelihoods. Increasing interest rates aims to choke the economy, hiking rents and forcing people to cut spending and businesses to lay-off staff.
MONOPOLY CAPITAL AND INFLATION
Real wages (wages after inflation) have fallen 7% since 2008, but the economy has grown 4% over the same time. Business pocketed the difference. Since 2008, average price mark-ups of UK’s biggest firms have risen from 58% to 82% (Competition and Markets Authority – CMA).
The oil refineries have increased their profit margin by 24p a litre of fuel since 2021. While diesel prices have recently fallen a little, retailer margin on diesel has increased to 22p a litre, three times its long-term average (CMA). British Gas owner Centrica will hand £450m to shareholders in a new buyback scheme after a nine-fold increase in net profits to £969 million from £98 million in 2022. Sainsbury’s profits doubled to £730 million in 2022 on the back of rocketing food prices. Unilever’s profits rose by 20% despite flat sales, by hiking prices.
IT DOESN’T HAVE TO BE THIS WAY:
Companies can easily absorb supply chain price rises without increasing prices and throwing people into poverty. Spanish inflation is only 2.3% compared to Britain’s 6.9%. They cut VAT on essentials, subsidised train travel and limited rent increases. France capped energy price rises to 4%. The government can freeze rents, energy and key food prices, if they choose to do so.
But this will only happen if we demand the rich pay for the crisis, not the poor. And we can only make this happen with wide support for organised workers demanding pay rises to roll back the increased cost of living. The current strike wave is a war to decide which class will pay for the crisis and mismanagement of the economy. Each strike and campaigning struggle is a contribution to the cause for workers. We urge each union to continue the fight for full funding of services, public ownership of key utilities including water and energy, rail, health and local government – backed by strike action and mass public campaigning for an end to this government of the rich.
Communist Party of Britain 