We need a budget for jobs and public services

March 21, 2012 11:21 am

If the Chancellor was acting in the national interests with this year’s budget the issues that would be at the forefront of his mind would be jobs and fairness.

For every minute of every day since the Coalition took office someone has been made redundant. With 80% of George Osborne’s spending cuts still to come things are going to get far worse. Women especially face a tough time unless there is change of direction, as they make up the largest share of the public service job losses that the OBR forecast will now reach nearly three quarters of a million.

Of course the growing number of jobs losses have a devastating impact on the people and families facing redundancy. But they also have serious consequences for the communities that rely on the hundreds of colleges, police stations, libraries, careers centres, and Sure Start centres that have already closed since the 2010 General Election.

Coupled with rising unemployment and the closure of public services, austerity measures are resulting in an unprecedented squeeze on family incomes. Tax credit changes will result in hundreds of thousands of hard-working parents losing thousands of pounds a year. On top of this, the government continues to ignore the negative impact of public service job losses and measures that drive down pay in our public services.

The line they have spun ever since coming to power is that the public sector has to take a dose of the tough medicine that the private sector has already had to swallow. But the big mistake with this approach is that it misses the huge number of households that have both a public and a private sector earner. Nearly half of working households have more than one earner. Of those households with more than one earner, over 40% will include someone with a public service related job.

Cutting jobs and driving down pay in the public services spells disaster for family budgets. It also sucks demand out of the economy by cutting off spending in local businesses and shops. In the NHS nurses, paramedics, therapists and midwives are among the workers suffering for a second year without any increase in pay, to compensate for rising costs. Local Government workers already face a third year without a pay rise. A combination of two further years of restraint, local pay, and outsourcing jobs to employers whose selling point is that they pay less will take many more families onto the breadline and onto benefits.

So, rather than a budget which does nothing for rising unemployment, squeezes the incomes of households on lower incomes and rewards the super rich with a tax cut – we need an alternative budget for jobs , public services and fairness.

This should involve creating jobs and investing in the infrastructure and services our economy needs. An independent state investment bank, similar to those that exist in Germany or across the Nordic countries, would complement a modern industrial policy and could target credit to where it is needed as an aid to boosting growth. This isn’t about being bigger spenders, but about being wiser spenders.  Reversing decline and having an economy that works for ordinary people, not just the rich.

At the same time the government should call a halt to policies which damage services that our communities rely upon and needlessly put those that deliver public services out of work. The Government’s disastrous pay policy should be reversed and tax and benefit changes that reduce the incomes of those on low to middle incomes shelved.

This is about policy choices.  Any additional public spending required to put this alternative policy in practice could be found from making tax fair and tackling real waste. Instead of rewarding wealthy multinationals by again cutting corporation tax to record lows, a move that the Chancellor promised would demonstrate “Britain is open for business”, perhaps the Government should have tackled the £70bn of lost revenue from tax evasion – such as the £6bn the HMRC let Vodafone off paying.

The Coalition Government sold their plan for the UK economy as the only option – but in the United States of America, where President Obama has made shallower reductions in public spending, unemployment is at a three-year low, private sector employment has grown for 23 straight months and the US economy has grown for the last 10 straight quarters by an average of 2.4%. In the UK, lower growth resulting from the Government’s austerity measures mean the UK will borrow £154bn extra over the next five years.

It is increasingly clear that the government need to change their policy. Austerity should be ditched in favour of a pro-growth policy.

For a list of revenue raising proposals please see UNISON’s alternative budget

Dave Prentis is the General Secretary of Unison

  • derek

    Osborne has said he’ll raise 28Bn from selling off royal mail to the private sector which he’ll use to reduce the deficitt? so who many more will become unemployed through that initiative? rising the deficit.

  • Jeremy_Preece

    I think that this is a detailed article which says what I have been saying and why I voted against this government in 2010. I really hope that the message that austerity has never done anything other than cause recession and depression and shrink the economy is getting through to the British public.
    Back in the dark days of Thatcher, Lord Young famously said that “unemployment was a price well worth paying to tackle inflation”. So no change there. The Tories actually use unemployment as a weapon to drive down wages of the lower and middle earners, but particularly the lower earners.  The cut from 50% to 45% for the top earners in UK to make them better off at the expense of everyone else only shows the true intent of the Tories, and shows that Cameron feels so confidant that they can get away with anythng, and at worst the LibDems will take the blame.
    Yes the LibDems should and will be wiped out, but let’s not get distracted away from what the Tories are doing.

    Labour needs to get the message across out there that the Tories are not about controlling the deficit, but about widening the gap between rich and poor, and pampering the highest earners. The deficit is a smoke screen and excuse to get away with things that normally would have been unacceptable.
    We really need some concrete proposals of what we would do instead. This week Burnham’s comments that Labour would reverse the health bill is the first answers to “what would you do”.

    I think that it is a sad reflection of the state of the Labour party that the Conservatives are not now about 20-25 points behind in the polls. We need to be on the attack by being ready to be the next government.

  • http://twitter.com/gonzozzz dave stone

    “With 80% of George Osborne’s spending cuts still to come things are going to get far worse.”

    For ideological reasons the Tories won’t admit how interlinked the public and private sectors are. I personally know two previously thriving businesses, one of which has existed for over 100 years, that are closing, these businesses were dependent on local demand and that is being driven down as a consequence of the government’s unnecessarily severe austerity measures.

    Only the corporations and millionaires are laughing.

  • Nigelwootton421

    http://labourlist.org/2012/03/we-need-a-budget-for-jobs-and-public-services/

    Dave Prentis,
    Gen. Sec. of UNISON provides his excellent analysis of what damage the
    Coalition is doing people’s jobs and the economy, and what economic remedies
    are needed in Britain
    to buck the trend of rising unemployment and restore economic growth.

     

    In spite of the
    global financial crisis, where scarce liquidity is starving enterprise of
    investment, banks currently have substantial capital available to invest in
    British business. The stumbling block is that George Osborne has allowed the UK
    GDP growth rate to decline and flat-line since he took office in May 2010. It
    is too risky for investors to disburse the bulk of that available investment
    capital, because the possibility of Britain dipping into recession is
    currently an unacceptable risk. Because unemployment has been rising since
    Osborne took office to 2.67 million, Britain no longer able to pay her
    way and the soaring National Debt is a further risk to investment.

     

    George Osborne
    will not create real paid jobs for Britain’s one million unemployed
    young people for ideological reasons. In his delusional greed he, his political
    colleagues and donors fink they can get rich quick on forced slave labour,
    internships and the imaginary “Big Society” doing sacked council worker’s jobs.
    The Coalition calls their workfare schemes “getting people back to work” and “work
    activity,” which I fink is unrealistic and mean. The economy is therefore
    flat-lined, and sales margins are very disappointing for businesses unless they
    are exporting their goods and services! Business owners are pining for custom,
    and for the UK
    public to have more money in their pockets to spend!

    I fink that the
    only way to get debt down, and get Britain open for business is to
    have Parliament dissolved and a better government elected.

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