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I was the Head of Policy and Public Affairs at UNISON Scotland until my retirement in September 2018. I now work on several policy development projects, so all views are very definitely my own. You can also follow me on Twitter. I hope you find this blog interesting and I would welcome your comments.

Thursday, 5 December 2013

Autumn Statement misses the point

No joy for the workers in today’s Autumn Statement, the very title is a joke given the weather. But then we don’t expect much joy from the shop steward for the super rich.

The small scale fiscal measures play at the fringes of household expenditure and are paid for by other spending cuts – a further 0.2% from the Scottish budget. They do nothing to reverse the diversion of wealth from the bottom and middle to a super rich cabal and company profits. If the economy is now slowly growing, we will not forget that this has been the longest and deepest recession for generations, caused by the Chancellors austerity economics. The delayed proceeds of economic growth have to be shared equally and that means real wages, not tax cuts for the rich.

The STUC summed it up with: “There is nothing today’s statement to help embed the recovery and create decent jobs. While recent growth is largely attributable to consumer spending, real wages continue to fall at rate unprecedented in modern times. Yet the Chancellor brazenly adopted a triumphalist tone just as the Office for Budget Responsibility (OBR) revised down its forecast for wages growth. He continues to ignore the glaring disconnect between growth and living standards.”

This highlights the Office for Budget Responsibility forecasts attached to the Statement. Households are now expected to spend more but earn less than was the case in March. Osborne once promised a ‘new economic model’ built on savings, exports and business investment. As the election draws near, he is returning to the ‘old model’ of consumption and household debt.

On living standards UNISON General Secretary, Dave Prentis, said:
The Chancellor can produce this mirage of an economic recovery and massage the figures as much as he wants, but it doesn’t mask what is being felt in the real world. Prices have risen faster than wages for 40 out of the 41 months in the past years. Average earnings are £1600 lower in real terms than when they came to power. There has been a massive explosion in the number of people forced to work part-time, on zero hours’ contracts and stuck on low pay.”

UNISON members will be particularly concerned over the bringing forward of the state pension age. The state pension age is already rising to 66 by 2020 and 67 by 2028. It was then expected to go up to 68 between 2044 and 2046. Now that rise to 68 is going to come in earlier - in the mid-2030s - meaning that millions more people will retire later. This change also applies to public sector pension schemes in Scotland as the retirement age is now linked to the state pension age.

This change is entirely cost driven and a particular concern in Scotland with our lower life expectancy. However, I wonder if the Chancellor has done all the calculations as savings in pensions will be offset by higher sick pay, benefits and the cost of early retirement pensions. It is also another unequal measure, as the affluent will still be able to afford to retire early, while the poor work on and die earlier. It could also add to youth unemployment as older workers block young workers getting jobs. This was highlighted in the recent Audit Scotland report on Scotland’s public sector workforce that showed the only workforce age group that is increasing is 50-59yrs, up by 5%.

Scotland will benefit from the Barnett consequentials of the additional funding in England for child care and free school meals. However, the £308m headline is not all recurring revenue spending. It will no doubt spark a debate in the Scottish Parliament over spending priorities. Improved child care now I wonder?

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