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