Union leader says emergency budget fails the fairness test

Union leader says emergency budget fails the fairness test

By staff writers
22 Jun 2010

The Budget got the big judgement about the economy wrong and cannot live up to substantial claims to be fair, says the Trades Union Congress General Secretary, Brendan Barber.

Mr Barber was responding to the long-awaited Emergency Budget statement from the Chancellor, George Osborne, which was delivered on behalf of the new Coalition Government in the House of Commons at lunchtime.

"The economy is still fragile, and today’s measures will certainly slow recovery and could well stop it in its tracks," said Mr Barber in a response on the TUC's group ToUChstone blog (http://www.touchstoneblog.org.uk/).

"Spending and benefit cuts together with the VAT increase will take much needed spending power out of the economy. The private sector has been hit as hard as the public sector," he said.

The trade union leader continued: "Nor does the budget live up to any claim to be fair. The unexpectedly big cuts in benefits will hit not just the poor but middle income families too. Unemployment will continue to be high, and anyone leaving school or college in the next five years faces a bleak future.

"The rich have largely been let off. They will hardly notice the VAT increase. The bank levy is less than half the £5-8 billion predicted – and is a fraction of city bonuses. The CGT increase is full of loopholes, and won’t stop tax dodging.

"Some of the really bad news is yet to come. Unprotected departmental budgets will be savaged. Local government will need to slash services if they are to freeze council tax.

"Public servants did nothing to cause the slump but are being asked to bear an unfair share of the burden. A wage freeze when inflation is high is a real cut in living standards – and the small concession for the low paid is still less than inflation.

"This budget was economically dangerous and socially divisive. The one thing we can now say is that we are very definitely not all in this together. Those on middle and low incomes have done worse than expected, and the rich have been let off much of what they feared. But we will all suffer from an economy that is now likely to be sluggish at best, and with a double-dip recession at worst," concluded Barber.

[Ekk/3]

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