Austerity: There IS another way, says Scottish Government

‘ … not only are these cuts ideologically driven, they are also unnecessary’ – First Minister Nicola Sturgeon

First Minister Nicola Sturgeon has set out an alternative option for a UK wide fiscal mandate that would ensure sustainable UK public finances while releasing additional investment in public services and infrastructure compared to the UK Government’s planned cuts.

The illustrative figures show that the austerity proposed by the UK Government is not required to secure a current budget balance.

Under an alternative fiscal plan, the UK’s current budget could be balanced from 2019-20, with public sector net investment increased to 2 per cent of GDP over the same period.

As an illustration of the scale of unnecessary reductions being pursued by the UK Government, this would allow an additional £150 billion in cumulative investment in public services across the UK between 2016-17 and 2019-20 compared to the UK Government’s current plans – which could see Scotland receive around £12 billion.

In contrast, the fiscal targets set out by the UK Government in its summer budget require a significant reduction in public spending, with cuts of £12 billion to welfare and potential cuts of around £20 billion to public services expected by 2019-20. UK Government reductions in spending go beyond what is necessary to balance the budget.

The work, published by the Scottish Government yesterday, shows that UK Government plans, which would see a significant reduction in public spending, with cuts of £12 billion to welfare and potential cuts of around £20 billion to public services expected by 2019-20 are not required.

The Scottish Government example would ensure that public sector debt and borrowing were on a downward path every year from 2016-17 to 2019-20. Net borrowing would continue to fall each year from 4.9 per cent in 2014-15 to 2 per cent in 2019-20 – below the average deficit of 3.6 per cent seen in the UK over the past 40 years.

The First Minister said: “This week, the UK Parliament will vote on the Chancellor’s proposals for what are unnecessary and ideological cuts to public spending.

“The pain of the UK Government’s austerity agenda is already having an impact on some of the poorest and most vulnerable in our society, and is beginning to bite across the country. But the UK Government’s latest fiscal targets mean even more painful austerity is ahead for people across the UK, with further cuts to public services and welfare planned over the next four years.

“As our alternative proposals demonstrate not only are these cuts ideologically driven, they are also unnecessary.

“Our paper published today – which updates our fiscal mandate proposals following the UK Government’s summer budget – outlines an alternative to ensure the debt and deficit are put on a downward path while allowing up to an additional cumulative £150 billion of investment across the UK by 2019-20 – with around £12 billion in Scotland.

“The Scottish Government has consistently demonstrated that the deficit and debt can be brought down without the need for the huge public spending reductions that have been set out.

“As this alternative option shows, not only could we maintain investment in public services and protect the poorest and most vulnerable in society, the UK current budget would be balanced by 2020, with limited borrowing set aside for capital investment to increase the country’s productive capacity.

“There is a different path to austerity available – as our alternative option shows, it is a viable path and it is an opportunity that the UK Government should grasp.”

The alternative options are set out in the paper –http://www.gov.scot/Topics/Economy/Publications/Options-for-the-UK-Fiscal-Mandate

“Britain deserves a pay rise and Britain is getting a pay rise”

“The Budget today puts security first. The economic security of a country that lives within its means. The financial security of lower taxes and a new National Living Wage.

“The national security of a Britain that defends itself and its values. A plan for working people. One purpose. One policy. One nation. And I commend this Budget to the House.” – Chancellor of the Exchequer George Osborne

Every Chancellor loves a little drama; that opportunity to produce a rabbit from a hat and wrong-foot political opponents and leave them floundering. George Osborne took centre stage today, delivering the first Conservative budget since 1996, and in the finest traditions of vaudeville conjurers he kept something up his sleeve, saving the best ’til last – the big finish.

Yes, there was the expected £12bn cut to welfare – although over a longer time frame – and there were small giveaways here and clawbacks there, nothing too remarkable or unexpected. And then …

“In the last five years we’ve taken the tough choices to drive down our borrowing, make our business taxes competitive and reform welfare.

“It’s because we’ve taken these difficult decisions, and overcome the opposition to them, that Britain is able to afford a pay rise.

Because let me be clear: Britain deserves a pay rise and Britain is getting a pay rise.

I am today introducing a new National Living Wage.”

Now you can call it a new National Living Wage if you want, or just an increase to the National Minimum Wage if you prefer, but whatever you choose to call it, it’s a sizeable hike: more than either Labour or the SNP offered in their respective manifestos, the government has set it to reach £9 an hour by 2020.

Working people aged 25 and over will receive it, starting next April, at the rate of £7.20p.

Along with the slashing back of public expenditure through swingeing cuts to the welfare budget, the setting of a compulsory ‘National Living Wage’ is clearly designed to get the message out that this government intends to make work pay. The announcement delighted the massed Tory ranks, with architect of the benefits reforms Iain Duncan Smith (below) particularly enthusiastic. Rarely has the ‘quiet man’ been quite so animated!

Responding for the Labour Party, acting leader Harriet Harman said: “When you’re in opposition, the temptation is to oppose everything the government does – and believe me, I feel that temptation. But we best serve this country by being a grown-up and constructive opposition.

“So while we will fiercely oppose policies that hit working people, and we will expose policies that are unworkable, where the government comes forward with ideas that are sensible we will be prepared to look at them.”

On Scotland, Mr Osborne said very little: “But what really drives this government, is building up other parts of our United Kingdom, as a balance to London’s strength.

“For Scotland, we’re now delivering – as promised – major devolution of tax and welfare powers.

“The Scottish Government will soon have to answer the question; “you’ve got the powers, when are you going to use them?””

And that was it.

Scotland’s Deputy First Minister John Swinney called the Budget a ‘con trick’ which particularly hits low income households and young people.

He said the announced freeze in working age benefits and cuts to tax credits will see the most vulnerable in our society continue to be hit the hardest whilst the revised minimum wage fails to deliver a real living wage.

Mr Swinney said: “The reality is this budget is an attack on the low paid, the young and those entering the jobs market. This budget is a series of con tricks to try and hide the fact that individual households will now bear the brunt of austerity cuts.

“I support a meaningful living wage paid for by business – one that pays what people need to live, not one that fails to compensate for cuts to valuable tax credits.

“The Chancellor has not even promised to meet the current living wage of £7.85 and under 25’s will face the brunt of cuts but receive no increase in wages.

“As the Resolution Foundation – cited by the Chancellor – make clear the real living wage is based on people receiving tax credits and housing benefit so any new living wage must be far higher to compensate for it. The Chancellor’s con trick does not come close to meeting those costs.

“The Chancellor is cutting from the poor whilst paying out to the rich, he is short changing those on low incomes whilst giving tax breaks to the better off.

“There has been no easing up on austerity – he has simply shifted some of the balance from public services to the public themselves. The Scottish Government has faced a 10% cut in our overall budget for the last five years and the Chancellor today said deficit reduction would take place at the same pace in the future. Overall the scale of austerity being imposed by this UK Government remains unchanged.

“Despite revising down productivity and export figures in each of the next four years there was little in this budget to boost productivity or to set out a strategy for growth.

“The reality is that in delivering his emergency budget the Chancellor has simply exacerbated the emergency situation faced by many on low pay and low incomes.”

The Budget in summary:

1. Introducing a new National Living Wage of over £9 an hour by 2020

From April 2016, a new National Living Wage of £7.20 an hour for the over 25s will be introduced. This will rise to over £9 an hour by 2020.

2. The government will run a surplus in 2019-20

The deficit will be reduced by around 1% of GDP (the value of the economy as a whole) on average in each year, which is the same pace as over the last 5 years. This means a surplus (where more tax is raised than is spent) will be achieved in 2019-20, and debt will fall in every year. Included in this is:

£12 billion by 2019-20 through welfare reforms
£5 billion by 2019-20 from measures to tackle tax avoidance, planning, evasion, compliance, and imbalances in the tax system

Plans for the remaining savings will be set out in the autumn following the spending review.

3. The tax-free Personal Allowance will be increased from £10,600 in 2015-16 to £11,000 in April 2016

The tax-free Personal Allowance – the amount people earn before they have to start paying Income Tax – will increase to £11,000 in 2016-17.

Increases to the Personal Allowance since 2010, when it was £6,475, mean that a typical taxpayer will be £905 a year better off in 2016-17.

The government has an ambition to increase the Personal Allowance to £12,500 by 2020, and a law will be introduced so that once it reaches this level, people working 30 hours a week on the National Minimum Wage won’t pay Income Tax at all.

4. Protecting defence spending

The Ministry of Defence’s budget will rise by 0.5% (above inflation) each year to 2020-21. Up to an additional £1.5 billion a year will also be available by 2020-21 to fund increased spending on the military and intelligence agencies.

The government will meet the NATO pledge to spend 2% of national income on defence every year of this decade.

5. Reforming the welfare system to make it more affordable

The welfare system will be reformed to make it fairer for taxpayers who pay for it, while continuing to support the most vulnerable. Changes include:

working-age benefits, including tax credits and Local Housing Allowance, will be frozen for 4 years from 2016-17 (this doesn’t include Maternity Allowance, maternity pay, paternity pay and sick pay)
the household benefit cap will be reduced to £20,000 (£23,000 in London)
support through Child Tax Credit will be limited to 2 children for children born from April 2017
those aged 18 to 21 who are on Universal Credit will have to apply for an apprenticeship or traineeship, gain work-based skills, or go on a work placement 6 months after the start of their claim
rents for social housing will be reduced by 1% a year for 4 years, and tenants on higher incomes (over £40,000 in London and over £30,000 outside London) will be required to pay market rate, or near market rate, rents.

6. Reforming Dividend Tax

The dividend tax credit (which reduces the amount of tax paid on income from shares) will be replaced by a new £5,000 tax-free dividend allowance for all taxpayers from April 2016. Tax rates on dividend income will be increased.

This simpler system will mean that only those with significant dividend income will pay more tax. Investors with modest income from shares will see either a tax cut or no change in the amount of tax they owe.

7. Taking the family home out of Inheritance Tax

Currently, Inheritance Tax is charged at 40% on estates over the tax-free allowance of £325,000 per person. Married couples and civil partners can pass any unused allowance on to one another.

From April 2017, each individual will be offered a family home allowance so they can pass their home on to their children or grandchildren tax-free after their death. This will be phased in from 2017-18.

The family home allowance will be added to the existing £325,000 Inheritance Tax threshold, meaning the total tax-free allowance for a surviving spouse or civil partner will be up to £1 million in 2020-21.

The allowance will be gradually withdrawn for estates worth more than £2 million.

8. The amount people with an income of more than £150,000 can pay tax-free into a pension will be reduced

Most people can contribute up to £40,000 a year to their pension tax-free. From April 2016, this amount will be reduced for individuals with incomes of over £150,000, including pension contributions.

9. The higher rate threshold will increase from £42,385 in 2015-16 to £43,000 in 2016-17

The amount people will have to earn before they pay tax at 40% will increase from £42,385 in 2015-16 to £43,000 in 2016-17.

10. Corporation Tax will be cut to 19% in 2017 and 18% in 2020

The main rate of Corporation Tax has already been cut from 28% in 2010 to 20%, in order to boost UK competitiveness. It will now fall further, from 20% to 19% in 2017, and then to 18% in 2020, benefiting over a million businesses.

11. The annual investment allowance will be set at its highest ever permanent level at £200,000

The annual investment allowance, which has previously been increased temporarily, will be set permanently at £200,000 from January 2016.

The allowance means businesses can deduct the full value of certain items, including equipment and machinery, up to a total value of £200,000 from their profits before tax. This helps them with cash flow because it means the full tax relief is given in the year items are purchased, rather than over several years.

This permanent increase will help businesses plan their spending on longer-term investments.

12. The Employment Allowance will increase by a further £1,000 to £3,000

Businesses will have their employer National Insurance bill cut by another £1,000 from April 2016, as the Employment Allowance rises from £2,000 to £3,000. The Employment Allowance gives businesses and charities a cut in the employer National Insurance they pay.

This means, next year, businesses will be able to employ 4 people full time on the National Living Wage and pay no National Insurance at all.

13. The standard rate of Insurance Premium Tax will increase to 9.5%

From November 2015 the standard rate of Insurance Premium Tax will be increased from 6% to 9.5%. Households’ insurance prices are falling and the standard rate remains lower than that of many other EU countries.

14. Clamping down on nuisance calls from claims management companies

The amount that can be charged by claims management companies – such as those that encourage claims for payment protection insurance (PPI) or personal injury insurance – will be capped, reducing nuisance calls to potential customers.

15. Restricting tax relief for wealthier landlords

Currently, individual landlords can deduct their costs – including mortgage interest – from their profits before they pay tax, giving them an advantage over other home buyers. Wealthier landlords receive tax relief at 40% and 45%. This tax relief will be restricted to 20% for all individuals by April 2020.

In addition, from April 2016, the ‘wear and tear allowance’, which allows landlords to reduce the tax they pay (regardless of whether they replace furnishings in their property) will also be replaced by a new system that only allows them to get tax relief when they replace furnishings.

16. Ending permanent non-dom status

Non-domiciled individuals (non-doms) live in the UK but consider their permanent home to be elsewhere. The UK rules allow non-doms to pay UK tax on their offshore income only when they bring it into the UK.

Permanent non-dom status will be abolished from April 2017. From that date, anyone who’s been resident in the UK for 15 of the past 20 years will be considered UK-domiciled for tax purposes.

17. Reforming the way banks are taxed

Following increasing bank profits, and to reflect changes in bank regulation, the government is:

introducing a new 8% tax on banking sector profits from January 2016
introducing a phased reduction in the rate of the Bank Levy (which is charged on banks’ balance sheets) from 0.21% to 0.1% between 2016 and 2021
excluding UK banks’ overseas subsidiaries from the Bank Levy from January 2021

18. 3 million new apprenticeships

3 million new apprenticeships will be created by 2020, funded by a levy on large employers. Firms that are committed to training will be able to get back more than they put in.

19. £30 million of funding for Transport for the North

Cities and counties in the North will be given even more control over local transport. Transport for the North (TfN) will be supported by £30 million in funding over 3 years, and will have more responsibility for setting out policy and investments.

20. 30 hours of free childcare for 3 and 4 year olds

From September 2017, working families with 3 and 4 year olds will receive 30 hours of free childcare – an increase from the 15 hours they’re currently offered.

21. Student maintenance grants will be replaced with loans

From the 2016-17 academic year, cash support for new students will increase by £766 to £8,200 a year, the highest level ever for students from low-income households. New maintenance loan support will replace student grants. Loans will be paid back only when graduates earn above £21,000 a year.

22. Road tax will be reformed and the money raised spent on the road network

The road tax system will be revised to make it fairer and sustainable. From 2017, there will be a flat rate of £140 for most cars, except in the first year when tax will remain linked to the CO2 emissions that cars produce. Electric cars won’t pay any road tax at all and the most expensive cars will pay more.

Existing cars won’t be affected – no one will pay more for a car that they already own. The money brought in from road tax in England will be spent on England’s roads from 2020.

The government will extend the deadline for the first MOT of new cars and motorcycles from 3 years to 4 years.

23. Public sector pay will increase by 1%

Public sector pay will increase by 1% a year for 4 years from 2016-17.

24. Making sure individuals and businesses pay what they owe

The government will continue to clamp down on tax avoidance, planning and evasion, as well as increasing resources for HM Revenue and Customs (HMRC) so they can make sure people pay the tax that’s due. This includes:

extra investment between now and 2020 for HMRC’s work on evasion and non-compliance
tripling the number of criminal investigations HMRC can undertake into complex tax crime, concentrating on wealthy individuals and companies
allowing HMRC to access more data to identify businesses that aren’t declaring or paying tax
clamping down on the organised crime gangs behind the illicit trade in tobacco and alcohol
stopping investment fund managers from using tax loopholes to avoid paying the correct amount of Capital Gains Tax on their profits from the fund (this is known as carried interest)
making sure international companies pay tax on profits diverted from the UK
introducing a ‘general anti-abuse rule’ penalty and tough new measures for serial avoiders, including publishing the names of people who repeatedly use failed tax avoidance schemes

Greens on Greece: ‘a crisis caused by the rich’

Greens stand with people of Greece as economic crisis deepens

The Scottish Greens have pledged to stand shoulder to shoulder with the Greek people in their fight against austerity. They have also urged both the UK and Scottish governments to put pressure on financial institutions to negotiate a fair debt restructure for Greece.

City councillor Maggie Chapman, Co-Convenor of the Scottish Green Party, said:
“We are in the midst of a crisis caused by the rich. The great economic challenge of our time is ending their power to punish the rest of us for a crisis we did not cause. Austerity is the mechanism they use and the place that has borne the brunt of austerity more than anywhere is Greece.

“We know austerity is doomed to fail, but in that failure it will only extend the economic pain felt by the most vulnerable people in society. All around Europe we must stand with the people of Greece in their stand against austerity, for a decent future and for democracy.

“The election of an anti-austerity SYRIZA led government in January was a clear signal that the people of Greece have rejected austerity. Greece’s creditors, represented by the so-called Institutions – the European Commission, the European Central Bank and the International Monetary Fund – are trying to subvert that democracy. Their actions have been counterproductive and destructive.

“After five and a half years of brutal austerity Greek debt is higher, while the Greek people have suffered untold harm.

“As a democratic party and a party opposed to austerity the Scottish Greens stand with the people of Greece. As Co-Convener of the Scottish Greens I stand in solidarity with my SYRIZA & Ecologist Greens comrades in the the Greek Government as they lead Europe’s opposition to austerity. We call on the Scottish and UK Governments to intervene with the Institutions to secure the substantial restructuring of Greece’s debts and an end to austerity.”

‘Scotland must unite against austerity’

‘We need to present a united front against these measures and I would encourage every organisation working to tackle inequalities and fighting poverty, to add their voice to this debate’ – Social Justice Secretary Alex Neil

Third sector organisations need to stand united to fight Westminster’s proposed £12 billion cuts, Social Justice Secretary Alex Neil told conference delegates yesterday.

Speaking at the Child Poverty Action Group Scotland’s annual conference, the Cabinet Secretary encouraged delegates and welfare workers to work together to bring the UK Government’s austerity agenda to a halt.

He said the first of the cuts is the UK Government’s Full Employment and Welfare Bill which will freeze the main rates of the majority of working age benefit tax credits and child benefit for two years from 2016-17, and reduce benefit expenditure in Scotland by around £130 million.

The Institute of Fiscal Studies (IFS) estimate that 11 million families in the UK, including an estimated one million families in Scotland, will be affected by the plans to freeze benefits.

Mr Neil said: “The UK Government’s proposed £12 billion cuts will have a detrimental impact on Scotland and will do nothing to tackle the scourge of child poverty.

“We need to present a united front against these additional measures and I would encourage every organisation working to tackle inequalities and fighting poverty, to add their voice to this debate.

“Through our Child Poverty Strategy we are already working with partners to reduce levels of poverty amongst households with children and to break inter-generational cycles of poverty, inequality and deprivation.

“The Scottish Government, alongside CPAG and others wants a more equal society, we want to create jobs and lift people out of poverty, and we will continue to listen to the advice of organisations who are working directly with families across the country.

“However if we are having to fund mitigation then we have a much harder challenge ahead of us. Our resources should be used to take positive action and tackle existing inequalities, not fight just to keep people at a standing position.

“The Smith Commission proposals gave the Scottish Government limited powers to make real inroads into child poverty outcomes. We will work with all concerned to make sure that the new powers we have will lead to better results for people in Scotland.”

John Dickie the Director of Child Poverty Action Group in Scotland said: “With key areas of social security set to be devolved to the Scottish Parliament today’s Child Poverty Action Group conference brings together over 180 frontline advisers to get the latest details on what exactly is being proposed and share ideas on how new powers might be used to improve benefit support and tackle poverty more effectively.

“The discussion is crucial coming as it does against a backdrop of rising child poverty and the threat of further cuts to the UK benefits that families both in and out of work rely on.”

Life on the edge: fears over latest austerity cuts

Proposed round of welfare cuts could plunge many more into crisis

Social Justice Secretary Alex Neil today expressed concern at the further suffering and negative impact that will be caused if the UK Government carries out proposed £12 billion cuts to benefits.

Mr Neil spoke following the publication of the Welfare Reform Tracking Study, which showed that many people accessing benefits are living in constant fear of further cuts. The Social Justice Secretary said he is worried that Scotland’s most vulnerable people would be pushed further into poverty and desperation.

The Scottish Government commissioned Edinburgh Napier University to carry out the Welfare Reform Tracking Study with interviews with participants carried out between September 2013 and March 2015. The aim of the study is to explore the impact of on-going welfare changes on a range of households in Scotland over time.

The study, which looks at on-going changes to working age benefits, revealed all respondents, including those in work, found themselves in very difficult financial situations and therefore felt an underlying sense of ‘precariousness’. Many were anxious that changes to their circumstances or entitlements would push them into crisis situations.

Many participants also said they received poor and sometimes conflicting communications from benefits agencies and that there is often a lack of clarity over information provided, causing more stress and uncertainty.

Disabled participants also felt they had to present themselves in a negative light and focus on their limitations rather than their capabilities, while the challenges of work capability assessments and repeat assessments for people with permanent disabilities were also highlighted in the study.

Mr Neil said the findings of the study outlined exactly why the UK Government should urgently rethink their plans to further cut the welfare budget.

He said: “The UK Government’s austerity agenda and benefit cuts are having a very damaging effect on people in Scotland. Their approach is slashing the incomes of some of our poorest households and pushing 100,000 children into poverty.

“The Welfare Reform Tracking Study is further evidence that people are living in constant anxiety about changes to their entitlements and are already suffering from the effects of around £6 billion of cuts taken from Scottish Welfare expenditure over the last five years. This is hugely concerning as the UK Government should be looking to lift people out of poverty not push them further into it.

“Despite these frustrations we will do all we can to use our new powers to make our system fairer and simpler and work to improve the experience for people.

“We will work quickly to implement these changes and base our social security system on how best to support people and tackle inequalities and not on crude opportunities to save money.”

The report is available at: http://www.gov.scot/Publications/2015/06/7394 and the appendices:http://www.gov.scot/Publications/2015/06/6817

Austerity: the fight will go on

‘Sadly, all of the mainstream parties in Scotland – including the SNP – appear to have accepted ‘austerity-lite’’ – Phil McGarry, Chair of the People’s Assembly Against Austerity Scotland.

A non-party campaign group set up to challenge austerity says it’s ‘heartened’ by the number of general election candidates to have pledged to commit themselves to oppose all austerity cuts – but warns that politicians’ words must be matched by deeds.

Sixty-two out of 220 candidates contacted responded to the People’s Assembly Scotland’s petition against austerity and most of those have also signed up to it.

Top pledgers were the Greens (14), next came Labour (11) and in third place was the SNP, with 9 of its 22 responders agreeing to sign up to oppose all austerity cuts while the others issued a statement which included: ‘We believe we can manage the deficit down, but without destroying the social fabric that holds us together.’

Six TUSC candidates signed, along with one each for the Communist Party of Britain, The Liberal Democrats, and Class War. Colin Fox signed on behalf of the SSP, but the only Conservative who responded asked what austerity was and didn’t sign.

Launched in January 2014 in Scotland, The People’s Assembly is a broad united national campaign against austerity, cuts and privatisation in our workplaces, community and welfare services, based on general agreement with the signatories’ Founding Statement http://www.thepeoplesassembly.org.uk/draft-statement.

It is linked to no political party, committed to open non-sectarian working and dedicated to supplementing, rather than supplanting, trade union, student, pensioner and community opposition to austerity measures.

“With austerity right at the front of so many parties’ election campaign, we are surprised more candidates didn’t take the chance to publicly confirm their opposition to austerity. Given the public campaigning, we are even more surprised at how few SNP candidates were willing to actually pledge to oppose all austerity”, said Phil McGarry, Chair of the People’s Assembly Against Austerity Scotland.

“Nevertheless, It is heartening to see that a good number of candidates across the parties (apart from the Tories) have been prepared to stand up and say they will fight the austerity that has created so much poverty and inequality.

“However it also shows that there is a long way to go before politicians’ actions match their words. Sadly, all of the mainstream parties in Scotland – including the SNP – appear to have accepted ‘austerity-lite’ with the Tories intent on even more austerity”, he added.

“No matter what the election outcome, campaigns like the People’s Assembly, trade unions and community organisations will still have to push politicians to address the real issues facing people on the ground.

“The irony is that the austerity that cuts jobs, cuts the money available in local communities and cuts the tax that is available, leads to a vicious circle of even more austerity. Apart from the human cost with food banks being the only growing industry, local economies are being pushed further into stagnation. We will continue to campaign against a system that punishes the poor and lines the pockets of the rich”.

62 candidates out of the 220 candidates contacted by the People’s Assembly Scotland responded and of those 44 signed up to the 38 Degrees Petition https://you.38degrees.org.uk/petitions/an-end-to-austerity.

The list of those responding and their comments is at https://drive.google.com/file/d/0B7viJVThyeghZXItVlgwakNQTTQ/view?usp=sharing

Austerity: There IS an alternative, says First Minister

Nicola Sturgeon’s plan puts fairness at the heart of economic growth

First Minister Nicola Sturgeon has set out an alternative plan to tackle the economic deficit, by putting fairness at the heart of economic growth, increasing investment and maximising the skills of Scotland’s population.

In a major economic speech at University College London, the First Minister said there should be no ‘trade off’ between reducing the deficit and having a fairer society, with a clear link between economic growth and reducing inequality.

Ms Sturgeon highlighted how successful economic policies such as gender equality and the living wage “have a sense of fairness at their heart” and help grow the economy by ensuring that Scotland maximises the skill and innovation of all its people.

The First Minister set out an alternative to austerity, and said that real term increases in government department spending, limited to half a per cent each year, would see debt reduce as a share of GDP over four years, but allow a further £180 billion investment in infrastructure, skills and education to further boost the economy.

The First Minister also renewed her calls to scrap the renewal of Trident, with the £100bn savings over the next 35 years to be invested back into public services.

The First Minister said: “The Scottish Government has balanced its budget every single year and that’s something which has required genuinely tough decisions. But by and large, we’ve carried people with us because the policies we’ve adopted have clearly had a sense of fairness at their heart.

“In terms of the UK economy, we believe that debt and the deficit should be reduced as a percentage of GDP but more gradually than either of the largest UK parties is proposing.

“For example, if you limited real terms growth in departmental spending to half a per cent each year it would reduce debt as a share of GDP in every year from 2016-17. But it would also permit a further £180 billion of investment across the UK over the next four years.

“We could protect the infrastructure, education and innovation which will support sustainable growth. And we could take a different approach to the crude cuts that reduce work incentives and impact directly on disabled people and families with children. We could manage the deficit down, without destroying the social fabric.

“We could also release savings through some more straightforward choices. Deciding not to renew Trident, for example, would save around £100bn, at 2012 prices, over the next 35 years. That is money that could be – and should be – invested instead in health and education.

“By taking a different approach – by offering an alternative to the austerity agenda – we would ensure that fiscal consolidation is consistent with a wider vision of society. A society which strives to become more equal, as part of becoming more prosperous.

“We simply don’t accept that there’s a trade-off between balancing the books and having a balanced society; fairness and prosperity can go hand in hand. It’s basic common sense that as a society, we will do better if we can benefit from the skill, talent and innovation of all of our people.

“But there are other reasons too. Higher incomes would increase demand and boost the revenues needed for investment in infrastructure and education. More equal economies are more resilient and less likely to depend on borrowing and credit.”

The First Minister continued: “But one thing we’re already very clear on, is that we see the private sector as being an essential partner in all of this. They are not only vital to but will also benefit hugely from helping to build a fairer society. And so we’re also encouraging and supporting business to contribute to a fairer society – because that’s clearly in their own best interests.

“Gender equality is a good example of that. The Scottish Government is leading by example – the Scottish Cabinet is one of only three in the developed world to have a 50/50 gender split. But we’re also launching a major drive – called 50/50 by 2020 – to encourage gender equality in public, private and third sector boardrooms.

“And we have a clear focus on the quality of work – people’s experience in the workplace. The Scottish Government already pays the living wage to all our employees; and we’re using procurement policy, where we can, to encourage its use in all public sector contracts. Now we are funding the Poverty Alliance to run a scheme for accrediting living wage employers.

“Essentially, we are appealing to companies’ sense of enlightened self-interest. In doing so, we are encouraging them to commit to good business practices – such as innovation or internationalisation – and to good employment practices; such as the living wage, gender equality or supporting workforce engagement.

“So we will make the case for a more rational economic policy at Westminster. And we will use the powers we have in the Scottish Parliament to pursue a different approach; one based on partnership, fairness and prosperity.”

Budget cuts could be avoided, say Edinburgh Greens

‘residents are well aware of the cuts that come from the council tax freeze and general reduction in council funding’ – Cllr Gavin Corbett

Budget cuts of £28.5 million could be avoided if Edinburgh had similar powers to councils elsewhere in the UK and Europe, according to the capital’s six-strong group of Green councillors. The city council sets it’s budget tomorrow and councillors look likely to approve swathing cuts to public services.

The Greens have published an alternative budget paper which shows how £25.7 million of extra income could be raised by giving the council modest extra powers such as a visitor levy and greater flexibility with council tax.

This, say the Greens, would mean extra priority for care for older people, funding for charities and community learning as well as new investment in school conditions and sports facilities.

Green Finance Spokesperson Cllr Gavin Corbett said: “Less than a year ago the Commission for Local Democracy showed that, across Europe, councils with comparable responsibilities to Edinburgh typically control 50-60% of their income, through local taxes and charges.

“In Edinburgh, those powers have been reduced to almost nothing, with dire consequences for local services. Indeed, the council’s biggest-ever budget consultation exercise showed that residents are well aware of the cuts that come from the council tax freeze and general reduction in council funding.

“So what I propose today is modest and affordable – less than 4% of overall spending – asking for the right to put to Edinburgh residents a choice to raising a bit more income in order to strengthen budgets for swimming pools, care services, community centres, homelessness charities and schools.

“I’m confident that, given that choice, investment in services would come ahead of an austerity-driven race to the bottom.”

The City of Edinburgh Council budget is set on 12 February 2015. A package of £28.5 million of cuts or savings has been proposed from a £962 million budget. Of the£28.5 million package, £5.2 million non-frontline cuts have already been approved last October.

Services under threat include:

– £4.3 million cut to charities and other third-party service providers

– Over £5 million cut to health and social care at a time of increasing demand

– £1.4 million cut to Edinburgh Leisure which runs swimming pools and sports facilities.

– £0.6 million cut to community learning and development

Other likely cuts include the closure of public toilets, reduction in library hours, nursery and childcare funding.

Agenda_of_12_February_2015

Letter: bearing the burden

Dear Editor

When Chancellor Osborne made his autumn statement I believe he did his best to confuse most people with his ‘percentages of this and percentages of that’ but he did make one thing perfectly clear: the cost of closing the deficit will continue to be passed on to the working population by cutting public services and benefits, holding down wages below inflation and telling people to work harder and longer.

THe crisis we are in was cused by financial institutions, speculators and banks worldwide, but of course the blame is put on to others: stories are being repeated over and over again to get people to accept them as truths. First the Labour government was to blame, then it was the scroungers, the work-shy, the disabled, people living longer, families having one bedroom too many – all of these stories designed to set once section of society against another, enabling crippling policies to be imposed on all whilst constantly repeating: ‘it’s the only way’, ‘it is in the national interest’ and ‘we are all in this together’.

It is the classic Tory approach of divide and rule, enabling them to impose drastic cuts on 90% of the population; I say 90% because the top wealthy 10% are not affected or bothered.

If money was borrowed creating a deficit that has to be repaid, from whom was it borrowed? At what interest rate was it borrowed? Was it at a fixed rate or was money lenders’ method used? We need to know, but whatever the answers there is no need to inflict such damage on people’s lives – with promises of more to come.

The 90% of the population didn’t create the problem but are being made to bear the burden.

A. Delahoy

Silverknowes Gardens

City protesters say no to sanctions

City protesters to take action against benefits cuts and austerity

Protesters opposing benefits sanctions and work-for-your-benefits schemes are set to take action in Edinburgh city centre tomorrow (Saturday 7 December). Edinburgh Coalition Against Poverty (ECAP) have called people to gather at noon in Festival Square on Lothian Road to “say no to sanctions, workfare and austerity.”

The demonstration is part of the Britain-wide Boycott Workfare Week of Action against benefits sanctions and the government’s controversial “work-for-your-benefits” schemes.

“580,000 sanctions were imposed in the 9 month period up until June 2013 – that’s over half a million people (thousands of them officially recognised as sick or disabled) denied even the pittance of benefit payment in the sixth richest country in the world,” said Ethel MacDonald of ECAP.

“Jobcentre workers are being threatened with disciplinary action if they don’t sanction more claimants. People are being left penniless for absolutely no good reason. This week a man who had arrived on time for his fortnightly signing was delayed within the Jobcentre by the absence of staff – and then had his money stopped for being allegedly two minutes late!

“Another claimant had his benefits stopped because he had not written down the name of every single job seekers website he had looked at. When he started to tell the adviser the names of the websites, she claimed that was not good enough and his money would be stopped.”

“Unemployed people are being forced to work for nothing on schemes like the Work Experience scheme, Mandatory Work Activity and the Work Programme. Research has shown these schemes do not help people find jobs. In fact they increase unemployment – why should employers pay people if they can get free labour?

“People are actually being told they have to stop doing voluntary work at charities, in order to work for nothing at another charity! Even people on Employment and Support Allowance who have been found unfit for work are being forced onto the Work Programme – with their benefits stopped if they are unable to comply. We have been supporting a claimant whose official diagnosis is “chronic intractable pain “ who was without benefits for months due to sanctions. He was too ill to attend the Work Programme but the DWP and private workfare company Ingeus combined to leave him penniless and dependent on food banks.

“Workfare, the DWP’s sanction campaign, ATOS’s hounding of the sick and disabled, and the vile narrative of scroungers and work shy, are all part of the State’s campaign to drive down the cost of labour so companies can make more profits, ” said Ethel MacDonald of ECAP. “We call on everyone, in or out of employment, to take a stand against policies which are robbing the poor to make the rich even richer.

“Following Britain-wide protests, many charities and companies have already pulled out of the workfare schemes, and we urge those still involved to do the right thing and stop exploiting claimants.”

Edinburgh Coalition Against Poverty www.edinburghagainstpoverty.org.uk ecap@lists.riseup.net
Boycott Workfare www.boycottworkfare.org