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It mostly covers my work as UNISON Scotland's Head of Policy and Public Affairs although views are my own. For full coverage of UNISON Scotland's policy and campaigns please visit our web site. You can also follow me on Twitter. I hope you find this blog interesting and I would welcome your comments.

Tuesday, 22 June 2010

Emergency UK Budget

We are all in this together according to the Chancellor. However, when you look at the detail some are more "in this" than others.

The VAT increase, cuts in welfare benefits, public sector pay and service cuts, all hit the lowest paid and the disadvantaged hardest. An increase in tax allowances is small compensation. In contrast the Chancellor (or more accurately his Liberal coalition partners) has bottled the capital gains tax tax loophole and done nothing to plug the other tax dodging scams. The Council Tax freeze in England will have the same impact as it has had in Scotland - a tax cut for the better off.

Plenty of corporate welfare as all the evidence shows that Corporation Tax cuts go straight into the bottom line. And the bankers, yet again, getting off lightly with a modest bank levy that will cost them a fraction of the effective public sector insurance scheme's value. The share price recovery no doubt reflects the champagne corks popping in the city - bonuses all round again boys. What we need is a ‘Robin Hood” tax on financial transactions that could raise £30bn, making a significant dent in the country’s deficit.

The real kick in this budget are the planned spending cuts. It looks as if we will have to await the autumn spending review to calculate the full Barnett consequentials for Scotland. However £17bn of cuts at UK level means real misery. Adding 500,000 public service workers to the dole between now and 2015 will cost around £10 billion in lost tax and increased benefit payments. This would almost entirely cancel out the reduction in the pay bill, as well as dealing a massive blow to local economies and communities.

The real aim of this budget is not to cut the deficit. It's about cutting back the role of public services and restricting benefits to a modest safety net. An ideological drive to create a Conservative dreamland. In reality it will restrict growth and cause misery for millions. 

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