THREATENED Government spending cuts will weaken the economy, throw hundreds of thousands of people on to the dole, hit the poorest hardest and leave an even deeper deficit, according to a new report published by the North West TUC today.
All Pain, No Gain: The Case Against Cuts examines what has happened in the past – recession-hit Britain in the 1980s, Canada in the 1990s and present day Ireland – and finds that the end result for Britain in 2010 will be damaged public services, rising unemployment and increased suffering for the most vulnerable.
Nor will cuts reduce the deficit, according to the TUC report.
Spending cuts will hit the Government’s tax receipts as companies pay less tax on their profits and newly unemployed public servants will not pay income tax. As unemployment rises, so too will the benefits bill.
The TUC report urges the Government to support an international growth package, raise taxes for the richest and abandon the cuts timetable which demands that the deficit is halved by 2014.
North West TUC Regional Secretary Alan Manning said: “The huge spending cuts threatened by the Government will bring a great deal of pain for people – especially those at the bottom – for no gain.
“Cuts are the worst way to plug the hole in the public finances. They have not worked in Ireland and did not work in 1980s Britain.
“And the Government’s obsession with cuts is more likely to worry the markets as a double-dip recession looms. Business confidence, order books and consumer demand is all very fragile.
“The Government’s cuts programme increasingly looks like a deliberate project to reduce the role of the state and roll back support for the poor and vulnerable and the services on which we all depend.
“Voters did not vote for cuts in health, education, pensions, the police and for privatising the road under their feet.”
The report also attacks the myth of so-called “frontline services” because backroom jobs cannot be done away with, without affecting services. Cuts to human resources, finance or administrative staff will make life much harder and more stressful for those working directly with people.
The report also dismisses claims that services can be run more efficiently or cheaply by the private sector. Many ‘out-sourced ‘projects go massively over budget, without any democratic control, with service quality declining and poor value for money.
The report also looks at the experience of governments in Canada and Ireland to make the case against cuts:
- Canada aggressively cut back on spending in the 1990s, slashing the budgets of key departments like education and health. Over 265,000 jobs were lost in the public sector but many economists agree that the halving of its deficit came about more as a result of healthy global growing economy than the programme of spending cuts.
- The Irish Government embarked on a severe programme of spending cuts soon after the country entered recession in 2008, affecting child and unemployment benefit, education and transport, as well as public sector pay and pensions. Despite the cuts, the economy didn’t improve, unemployment went up and the deficit has remained the same.
All Pain, No Gain urges the Coalition Government to turn away from its £60 billion cuts programme and manage the public deficit by:
- Accepting that growth is the only way to tackle the deficit and work with governments around the world to maintain levels of public spending and prevent the return of another economic slowdown.
- Increasing taxation, especially for those most able to pay; introducing a Robin Hood Tax on financial transactions between banks; closing the tax loopholes that wealthy individuals jump through.
- Abandoning the timetable which demands the deficit is reduced by a half by 2014.
- All Pain, No Gain is available at www.tuc.org.uk/all_pain_no_gain
Related posts:
- CON/DEM COALITION GOVERNMENT’S FOCUS ON THE DEFICIT IS ‘A HUGE MISTAKE’
- NORTH WEST FAMILIES TO LOSE £1,284 A YEAR AS REGION HIT HARDEST BY COALITION CUTS
- HEALTH WORKERS DEMONSTRATE OUTSIDE THREATENED ROYAL AT LOOMING PUBLIC SPENDING CUTS
- YouTube video: Newsnight report on public spending (Part 2)
- Britain’s top female trade unionist visits Merseyside to see impact of cuts
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