Tuesday, 22 June 2010

The Budget: A response from Northampton Trades Union Council

Northampton Trades Union Council today issued the following press release in response to the budget. I agree with it whole-heartedly:

Today’s budget does not, as the Chancellor claims, support recovery or protect the most vulnerable. A combination of £11 billion from benefits, 20% VAT and 25% cut in government departments, will cause a rise in unemployment, a huge reduction in both front line and backroom services and poverty for those who are already hard hit by local cuts.

The coalition government is carrying out an enormous con-trick on the British Public by attacking public services. They are doing this despite the fact that the banking crisis is to blame for our rise in debt, despite the fact that our debt in relation to our GDP is relatively good compared with other countries, and despite there being plenty of alternatives to cuts. The reality is that the Conservatives, which has over 200 MPs connected to the financial sector, has its own political agenda when it attacks the welfare state and is shamefully being aided and abetted by the Liberal Democrats.

The government has perpetuated myths about the size of public sector pay and pensions to justify cuts. The combination of a pay freeze, possible pension cuts and a rise in inflation will see pay levels fall. This will in turn affect the economy as workers have less to spend. Job cuts will force a rise in unemployment and benefit payments alongside a fall in tax income, which could easily force the country into deeper recession.

The average pension of a female NHS worker is £5,000 and that of a local government worker is just £4000 – hardly gold-plated! People pay into these schemes all their working lives – if they didn’t, they would have to rely on state benefits, funded by the taxpayer.

Most public service workers earn less than £22,000 a year, and 20% of them – more than 1.5 million people – earn less than £7 an hour. Since 1997, public sector pay has risen less than private-sector pay, and for the past few years, public sector pay deals have been below inflation.

The private sector needs the public sector. The two parts of the economy are closely linked. Cut public services and you cut procurement and infrastructure as well as income from public sector workers, who are themselves consumers. Some regions in the north depend heavily on public sector jobs since the collapse of manufacturing industry.

Trade Unions call for an alternative vision for recovery. Money should be invested in both manufacturing and the public sector. Expensive projects such as Trident which will cost £100 billion to renew, and Private Finance Initiatives, which have committed the taxpayer to over £200 billion of payments, at a rate of £10 billion a year, should be cancelled. A Robin Hood tax on financial transactions would generate literally billions worldwide. We call on the British public not to be conned by politicians but to support us to retain local and national services, which once lost, will be gone forever.

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