Date:Tue 22 June 2010
“This budget signals that the battle for Britain’s public services has begun with the Government declaring war. Public sector workers will be shocked and angry that they are the innocent victims of job cuts and pay freezes.
“Freezing public sector pay when inflation is running at 5.1% and VAT is going up, will mean a real cut in living standards for millions of ordinary workers and their families - already struggling to pay rising bills.
“Nurses, social workers, midwives, paramedics, police community support officers, housing and environmental officers who provide vital public services, are amongst those who will be hit hardest by the two year pay freeze. And for local government workers this comes on top of this year’s freeze.
“A 25% cut in departmental public spending will decimate our public services. The budget will do nothing to restore confidence or kick-start the recovery, but will push local economies into the ground, raising the spectre of breadline Britain.
“They haven’t even bothered to consider any other option but slash and burn. What of the bankers who caused the recession and the super-rich who evade tax? They must be breathing a sigh of relief that they got away so lightly. The bank tax levy is a poor substitute for a serious ‘Robin Hood” tax on financial transactions. It is a missed opportunity to raise £30bn which would have made a significant dent in the country’s deficit.
“Throwing tens of thousands of public sector workers on the dole will cost the country billions in lost tax revenue as well as piling billions onto the benefits bill.
“The Chancellor dreams of a private sector recovery but how can that be on the back of brutal cuts to public services workers. Local businesses, shops, hairdressers, restaurants will go to the wall as spending dries up. No amount of fiscal stimulus will do any good if they have no customers
“Vital services that the poor, the sick and the vulnerable rely on, are in the firing line. There is no compassion in this coalition.
“Freezing council tax is a useless gesture saving people pennies but cutting tens of millions from council budgets, trhreatening jobs, losing services and undermining the local economy.
“Raising VAT affects the poor the most as they spend a higher proportion of their meagre incomes on goods and services.
“Meanwhile major utility companies spend money sponsoring sporting events whilst attacking pay and conditions – that cannot be fair.”
Adding 500,000 public service workers to the dole between now and 2015 – which the CIPD says would be the likely effect of Osborne’s spending plans – 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.
UNISON’s Save Our Services alternative budget:
£4.7bn could be raised every year by introducing a 50% tax rate on incomes over £100,000
£10bn could be raised every year by reforming tax havens and residence rules to reduce tax avoidance by corporations and ‘non-domiciled’ residents
£14.9bn could be raised every year by using minimum tax rates to stop reliefs being used disproportionately subsidise incomes over £100,000
£30bn could be raised every year by introducing a Major Financial Transactions Tax on UK financial institutions – the Robin Hood Tax
At least £1.5bn could be raised this year by bringing back the windfall tax on bankers’ bonuses.
£4bn could be saved this year by cancelling Trident, the project could cost as much as £100bn.
£500m could be saved every year by eradicating healthcare acquired infections from the NHS – the extra cleaners would cost half this.
£495m could be saved every year by adopting measures to improve the health and well-being of NHS staff, thereby reducing sickness absence
£1bn could be saved every year by halving the local government agency bill, as has been achieved by high performing councils
£5bn could be raised every year with an Empty Property Tax on vacant dwellings. This only exaggerates housing shortages and harms neighbourhoods.
£2.8bn could be saved every year by ending the central government use of private consultants who bring little discernable benefit
£3bn could be saved in user fees and interest charges every year if PFI schemes were replaced with conventional public procurement
Total – 77.895bn.
from UNISON UK news release